<PAGE>
As filed with the Securities and Exchange Commission on January 24, 1997
Registration No. 333-
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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
INTERNATIONAL META SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0146747
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 NORTH SEPULVEDA BOULEVARD, 90245
SIXTH FLOOR (Zip Code)
EL SEGUNDO, CALIFORNIA
(Address of Principal Executive Offices)
INTERNATIONAL META SYSTEMS, INC.
1996 STOCK OPTION PLAN
(Full title of the plan)
GEORGE W. SMITH, PRESIDENT
INTERNATIONAL META SYSTEMS, INC.
100 NORTH SEPULVEDA BOULEVARD, SIXTH FLOOR
EL SEGUNDO, CALIFORNIA 90245
(Name and address of agent for service)
(310) 524-9300
(Telephone number, including area code, of agent for service)
Copies to:
DAVID A. EBERSHOFF, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
865 SOUTH FIGUEROA STREET
TWENTY NINTH FLOOR
LOS ANGELES, CALIFORNIA 90017
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed maximum
Amount to be maximum offering aggregate offering Amount of
Title of securities to be registered registered price per share price registration fee
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<S> <C> <C> <C> <C>
Common Stock, $.00001 par value 4,500,000(1) $1.7187(2) $7,734,150 $2,344
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</TABLE>
(1) Includes an indeterminable number of shares of Common Stock issuable as a
result of the anti-dilution provisions of the 1996 Stock Option Plan.
(2) Pursuant to Rule 457(c) and (h), the proposed maximum offering price is
estimated, solely for the purpose of determining the registration fee, on
the basis of the average of the bid and asked prices of the Common Stock on
the OTC Electronic Bulletin Board on January 21, 1997.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
International Meta Systems, Inc. (the "Company" or "Registrant")
incorporates by reference in this Registration Statement the following
documents:
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1995.
(b) The Registrant's quarterly report on Form 10-QSB for the
quarter ended September 30, 1996.
(c) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since December 31, 1995.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, subsequent to the date of the
filing hereof 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 a part hereof from the date
of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 70,000,000
shares of Common Stock, par value $.00001 per share. At November 30, 1996, the
Company had 37,467,249 shares of Common Stock issued and outstanding.
All outstanding shares of Common Stock are, and the shares to be issued as
contemplated herein will be, fully paid and nonassessable. As a class, holders
of the Common Stock are entitled to one vote per share in all matters to be
voted upon by the stockholders. Holders of Common Stock are entitled to receive
such dividends when and as declared by the Board of Directors out of the surplus
or net profits of the Company legally available therefor, equally, on a share
for share basis, however, the Company does not anticipate paying dividends in
the near future. In the event of a liquidation, dissolution or winding-up of
the Company, the holders of Common Stock are entitled to share equally on a
share for share basis, in all assets remaining after payment of liabilities,
subject to prior distribution rights of any other classes or series of capital
stock then outstanding. The Common Stock has no preemptive rights and is
neither redeemable nor convertible, and there are no sinking fund provisions.
As of November 30, 1996, the Company's 37,467,249 shares of Common Stock
outstanding were held by 810 stockholders of record.
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<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Restated Certificate of Incorporation contains a
provision that eliminates the personal liability of a director to the Company
and its stockholders for monetary damages for breach of his fiduciary duty as a
director to the extent currently allowed under the Delaware General Corporation
Law. If a director were to breach such duty in performing his duties as a
director, neither the Company nor its stockholders could recover monetary
damages from the director, and the only course of action available to the
Company's stockholders would be equitable remedies, such as an action to enjoin
or rescind a transaction involving a breach of fiduciary duty. To the extent
certain claims against directors are limited to equitable remedies, the
provision in the Company's Restated Certificate of Incorporation may reduce the
likelihood of derivative litigation and may discourage stockholders or
management from initiating litigation against directors for breach of their
fiduciary duty. Additionally, equitable remedies may not be effective in many
situations. If a stockholder's only remedy is to enjoin the completion of the
Board of Directors' action, this remedy would be ineffective if the stockholder
does not become aware of a transaction or event until after it has been
completed. In such a situation, it is possible that the stockholders and the
Company would have no effective remedy against the directors. Under the
Company's Restated Certificate of Incorporation, liability for monetary damages
remains for (i) any breach of the duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) payment of an
improper dividend or improper repurchase of the Company's stock under
Section 174 of the Delaware General Corporation Law, or (iv) any transaction
from which the director derived an improper personal benefit.
Under Article V of the Company's Bylaws as currently in effect, each
person who is or was a director, officer, employee or agent of the Company, or
is or was serving at the request of the Company as a director, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall be indemnified by the Company to the full
extent permitted by the Delaware General Corporation Law.
Under Delaware law, to the extent that a person is successful on the
merits in defense of a suit or proceeding brought against him by reason of the
fact that he is or was a director or officer of the Company, or serves or served
any other enterprise or organization at the request of the Company, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred in connection with such action.
Under Delaware law, to the extent an indemnified person is not
successful in defense of a third party civil suit or a criminal suit, or if such
suit is settled, such person shall be indemnified against both (i) expenses,
including attorneys' fees, and (ii) judgments, fines and amounts paid in
settlement 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, had no reasonable cause to believe his conduct was
unlawful, except that if such person
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<PAGE>
is adjudged to be liable in such a suit for negligence or misconduct in the
performance of his duty to the Company, he cannot be made whole even for
expenses unless the court determines that he is fully and reasonably entitled to
indemnity for such expenses.
The Company maintains insurance to protect officers and directors from
certain liabilities, including liabilities against which the Company cannot
indemnify its directors and officers.
The Company has entered into indemnification agreements with each of
the directors of the Company. Pursuant to such agreements, the Company will
agree to indemnify and hold each such director harmless to the fullest extent
permitted by law, from any loss, damage or liability incurred in the course of
his respective service as a director of the Company. The amount paid by the
Company is reducible by the amount of insurance paid to or on behalf of such
director with respect to any event giving rise to indemnification. Each such
director's right to indemnification is to survive his respective death or
termination as director.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Restated Certificate of Incorporation of the Registrant.
4.2 Bylaws of the Registrant.
4.3 International Meta Systems, Inc. 1996 Stock Option Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P. as to the legality of the
securities being registered.
23.1 Consent of Fulbright & Jaworski L.L.P. (included as part of
Exhibit 5.1).
23.2 Consent of Singer, Lewak, Greenbaum & Goldstein LLP.
24.1 Power of attorney (contained on page 7 hereof).
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;
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<PAGE>
(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
hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to
such information in this Registration Statement;
Provided, however, that paragraphs (i) and (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 Registrant pursuant to Section 13 or 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 herein, 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 into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered herein, 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling 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 of whether such
indemnification by it is against public
-5-
<PAGE>
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints George W. Smith and Paul Sefchek, and
each of them, either one of whom may act without joinder of the other, his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective 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, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully 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, and each of them, or the substitute or substitutes
of any or all of them, may lawfully do or cause to be done by virtue hereof.
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<PAGE>
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 El Segundo, State of California on the 16th day of
January, 1997.
INTERNATIONAL META SYSTEMS, INC.
By George W. Smith
-------------------------------------
George W. Smith
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- ---------------------- -------------------------- --------------------
- ---------------------- -------------------------- --------------------
George W. Smith President, Chief Executive January 16, 1997
- ---------------------- Officer and Director
George W. Smith (Principal Executive
Officer)
Paul Sefchek Vice President-Finance January 16, 1997
- ---------------------- and Chief Financial
Paul Sefchek Officer (Principal
Financial Officer)
Martin Albert Director January 16, 1997
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Martin Albert
Sigmund Hartmann Director January 16, 1997
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Sigmund Hartmann
-8-
<PAGE>
Frank LaChappelle Director January 16, 1997
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Frank LaChappelle
Philip Neches Director January 16, 1997
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Philip Neches
Masahiro Tsuchiya Director January 16, 1997
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Masahiro Tsuchiya
-9-
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page Number
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4.1 Restated Certificate of Incorporation of
the Registrant.
4.2 Bylaws of the Registrant.
4.3 International Meta Systems, Inc. 1996
Stock Option Plan.
5.1 Opinion of Fulbright & Jaworski L.L.P.
as to the legality of the securities being
registered.
23.1 Consent of Fulbright & Jaworski L.L.P.
(included as part of Exhibit 5.1).
23.2 Consent of Singer, Lewak, Greenbaum &
Goldstein LLP.
24.1 Power of attorney (contained on page
7 hereof).
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
-----------------------------------------
I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "INTERNATIONAL META SYSTEMS, INC.", FILED IN THIS OFFICE ON THE
ELEVENTH DAY OF FEBRUARY, A.D. 1994, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
William T. Quillen
--------------------------------------
[SEAL] WILLIAM T. QUILLEN, SECRETARY OF STATE
2124865 8100 AUTHENTICATION: 7039781
944019904 DATE: 02-25-94
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
INTERNATIONAL META SYSTEMS, INC.
This Restated Certificate of Incorporation of INTERNATIONAL META SYSTEMS, INC.
(the "Corporation"), originally incorporated on April 29, 1987, under the name
of San Diego Funding Inc., was duly adopted by the Board of Directors of the
Corporation on September 1, 1993, and the vote of the stockholders of the
Corporation on January 10, 1993, in accordance with the provisions of Sections
242 and 245 of the General Corporation Law of the State of Delaware.
FIRST: The name of the corporation is INTERNATIONAL META SYSTEMS, INC.
The original Certificate of Incorporation was filed on April 29, 1987, and,
thereafter a Certificate of Amendment to the Certificate of Incorporation was
filed on December 19, 1988.
SECOND: The address of the registered office of the Corporation in the
State of Delaware shall be at The Corporation Trust Company, 1209 Orange Street,
County of New Castle, Wilmington, Delaware 19801. The name and address of the
Corporation's registered agent in the State of Delaware is The Corporation Trust
Company, 1209 Orange Street, County of New Castle, Wilmington, Delaware 19801.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may now or hereafter be organized under the
General Corporation Law of the State of Delaware.
FOURTH: 1. The total number of shares of stock which the Corporation
shall have authority to issue is Fifty-One Million (51,000,000) shares, of which
Fifty Million (50,000,000) shall be in Common Stock, par value $0.0001 per Share
and One Million (1,000,000), par value of $0.0001 per Share, shall be in one or
more classes of Preferred Stock.
2. Shares of Preferred Stock may be issued from time to time in one or
more series as may be established from time to time by resolution of the Board
of Directors of the Corporation, each of which series shall consist of such
number of shares and have such distinctive designation or title as shall be
fixed by resolution of the Board of Directors prior to the issuance of any
shares of such series. Each such class or series of Preferred Stock shall have
such voting powers, full or limited, or no voting powers, and such preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated in such
resolution of the Board of Directors providing for the issuance of such series
of Preferred Stock. The Board of Directors is further authorized to increase or
<PAGE>
decrease (but not below the number of shares of such class or series then
outstanding) the number of shares of any series subsequent to the issuance of
shares of that series.
FIFTH: In furtherance and not in limitation of the powers conferred by
statute and subject to Article Sixth hereof, the Board of Directors is expressly
authorized to adopt, repeal, rescind, alter or amend in any respect the Bylaws
of the Corporation (the "Bylaws").
SIXTH: Notwithstanding Article Fifth hereof, the Bylaws may be adopted,
rescinded, altered or amended in any respect by the stockholders of the
Corporation, but only by the affirmative vote of the holders of not less than
eighty per cent. (80%) of the voting power of Common Stock (as defined in
paragraph (f) of Section 3 of Article Fourteenth hereof) PROVIDED, HOWEVER, that
where such action is approved by a majority of the Continuing Directors (as
defined in paragraph (a) of Section 3 of Article Fourteenth hereof), the
affirmative vote of a majority of the voting power of all outstanding shares of
Common Stock shall be required for approval of such action.
SEVENTH: The business and affairs of the Corporation shall be managed by
and under the direction of the Board of Directors. The exact number of
directors of the Corporation shall be determined from time to time by a Bylaw or
Amendment thereto provided that the number of directors shall not be reduced to
less than three (3), except that there need be only as many directors as there
are stockholders in the event that the outstanding shares are held of record by
fewer than three (3) stockholders. Elections of directors need not be by
written ballot unless the Bylaws of the Corporation shall so provide.
EIGHTH: 1. At the first Annual Meeting of Stockholders of the Corporation
(the "Annual Meeting") after the authorized number of directors is eight (8) or
more, the Board of Directors shall be divided into three (3) classes: Class I,
Class II and Class III. The number of directors in each class shall be the
whole number contained in such quotient obtained by dividing the authorized
number of directors by three (3). If a fraction is also contained in such
quotient, then additional directors shall be apportioned as follows: If such
fraction is one-third, the additional director shall be a member of Class III;
and if such fraction is two-thirds, one of the additional directors shall be a
member of Class II and the other shall be a member of Class III. Each director
shall serve for a term ending on the date of the third Annual Meeting following
the Annual Meeting at which such director was elected; PROVIDED, HOWEVER, that
the directors first elected to Class I shall serve for a term ending on the
date of the first Annual Meeting following their election, the directors first
elected to Class II shall serve for a term ending on the date of the second
Annual Meeting
2
<PAGE>
following their election and the directors first elected to Class III shall
serve for a term ending on the date of the third Annual Meeting following their
election.
Whenever the authorized number of directors shall be reduced to less than
eight (8) directors, the existing directors shall serve out the remainder of
their terms based upon their respective classes and each subsequently elected
director shall serve for a one (1) year term. At such subsequent time as the
authorized number of directors is eight (8) or more directors, the prior
paragraph shall again become operative.
2. Notwithstanding the foregoing provisions of this Article Eighth: each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal; no decrease in the authorized number of directors
shall shorten the term of any incumbent director.
NINTH: Newly created directorships resulting from any increase in the
number of directors, or any vacancies on the Board of Directors resulting from
death, resignation, removal or other causes, shall be filled solely by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of directors in which the new directorship was
created or the vacancy occurred and until such director's successor shall have
been elected and qualified or until such director's death, resignation or
removal, whichever first occurs.
TENTH: Any director may be removed from office only for cause and only
by the affirmative vote of the holders of not less than eighty percent (80%) of
the voting power of all outstanding shares of Common Stock PROVIDED, HOWEVER,
that where such removal is approved by a majority of the Continuing Directors,
the affirmative vote of a majority of the voting power of all outstanding shares
of Common Stock shall be required for approval of such removal.
ELEVENTH: Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called Annual Meeting or at a
special meeting of stockholders of the Corporation, unless such action requiring
or permitting stockholder approval is approved by a majority of the Continuing
Directors, in which case such action may be authorized or taken by the written
consent of the holders of outstanding shares of Common Stock having not less
than the minimum voting power that would be necessary to authorize or take such
action at a meeting of stockholders at which all shares entitled to vote thereon
were present and voted, provided, all other requirements of applicable law and
this Restated Certificate of Incorporation have been satisfied. Except as
specifically set forth in this Article Eleventh, no action may
3
<PAGE>
be taken by stockholders by written consent.
TWELFTH: Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by a majority of the Board of
Directors or by the Chairman of the Board. Special meetings may not be called
by any other person or persons. Each special meeting shall be held at such date
and time as it requested by the person or persons calling the meeting within the
limits fixed by law.
THIRTEENTH: Meetings of stockholders of the Corporation may be held
within or without the State of Delaware, as the Bylaws may provide. The books
of the Corporation may be kept (subject to any provision of applicable law)
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the Bylaws.
FOURTEENTH: 1. Subject to the provisions of Section 2 of this Article
Fourteenth, in addition to any vote required by law, no Business Combination (as
defined in paragraph (b) of Section 3 of this Article Fourteenth) shall be
consummated unless approved by the affirmative vote of the holders of not less
than:
(a) eighty per cent. (80%) of the voting power of all outstanding shares
of Common Stock; and
(b) a majority of the voting power of all outstanding shares of Common
Stock, other than shares held by any Interested Stockholder which is
(or the Affiliate or Associate of which is) a party to such Business
Combination or by any Affiliate or Associate of such Interested
Stockholder.
(c) The affirmative votes referred to in paragraphs (a) and (b) of this
Section 1 shall be required notwithstanding the fact that no vote may
be required, or that a lesser percentage or proportion may be
specified, by law, or in any agreement between the Corporation and any
national securities exchange or any other person, or otherwise.
2. Notwithstanding the provisions of Section 1 of this Article
Fourteenth, a Business Combination may be approved if all of the conditions
specified in either of the following paragraphs (a) or (b) have been satisfied:
(a) both of the following conditions specified in clauses (i) and (ii) of
this paragraph (a) have been satisfied if:
(i) there are one (1) or more Continuing Directors and a majority of
such Continuing Directors shall have approved such Business
Combination; and
(ii) such Business Combination shall have been approved
4
<PAGE>
by the affirmative vote of the Corporation's stockholders
required by law, if any such vote is so required; or
(b) all of the following conditions specified in clauses (i) through (vii)
of this paragraph (b) have been satisfied if:
(i) such Business Combination shall have been approved by the
affirmative vote of holders of a majority of the voting power of
Common Stock;
(ii) the aggregate amount of (A) the cash and (B) the Fair Market
Value (as defined in paragraph (i) of Section 3 of this Article
Fourteenth), as of the date of the consummation of the Business
Combination (the "Consummation Date"), of consideration other
than cash received or to be received, per share, by holders of
shares of Common Stock in such Business Combination, shall be at
least equal to the higher of the following:
(I) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting
dealers' fees) paid or agreed to be paid by the Interested
Stockholder which is (or the Affiliate or Associate of
which is) a party to such Business Combination for any
shares of Common Stock (x) within the two (2) year period
immediately prior to and including the date of the final
public announcement of the terms of the proposed Business
Combination (the "Announcement Date"), or (y) in the
transaction in which it became an Interested Stockholder,
whichever is higher; or
(II) the Fair Market Value per share of Common Stock (x) on the
Announcement Date, or (y) on the date on which the
Interested Stockholder became an Interested Stockholder
(the "Determination Date"), whichever is higher;
(iii) the aggregate amount of (A) the cash and (B) the Fair Market
Value, as of the Consummation Date, of consideration other than
cash received or to be received, per share, by holders of shares
of any outstanding Common Stock other than common stock in such
Business Combination, shall be equal to the higher of the
following whether or not such Interested Stockholder (or such
Affiliate or Associate) has previously acquired any shares of
5
<PAGE>
Common Stock):
(I) if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid or agreed to be paid by the Interested
Stockholder for any shares of Common Stock (x) within the
two (2) year period immediately prior to the Announcement
Date, or (y) in the transaction in which it became an
Interested Stockholder, whichever is higher; or
(II) the Fair Market Value per share of such class Common Stock
(x) on the Announcement Date, or (y) on the Determination
Date, whichever is higher;
(iv) the consideration to be received by the holders of Common Stock
shall be in cash or in the same form as the Interested
Stockholder has previously paid (or agreed to pay) for shares of
such Common Stock; if the Interested Stockholder has paid for
shares of Common Stock with varying forms of consideration, the
form of consideration to be received by holders of shares of
Common Stock shall be either cash or the form used to acquire
the largest number of shares of Common Stock previously acquired
by such Interested Stockholder; and the price determined in
accordance with clauses (ii) and (iii) of this paragraph (b)
shall be subject to appropriate adjustment in the event of any
stock dividend, stock split, combination of shares or similar
event;
(v) after such Interested Stockholder has become an Interested
Stockholder, and prior to the consummation of such Business
Combination, neither such Interested Stockholder nor any of its
Affiliates or Associates shall have become the beneficial owner
of any additional shares of Common Stock, except (A) as part of
the transaction which resulted in such Interested Stockholder
becoming an Interested Stockholder, or (B) or as a result of a
stock split or a PRO RATA stock dividend;
(vi) after such Interested Stockholder has become an Interested
Stockholder, neither such Interested Stockholder nor any of its
Affiliates or Associates shall have received the benefit,
directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees,
6
<PAGE>
pledges or other financial assistance or any tax credits or
other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination
or otherwise; and
(vi) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, rules or regulations) shall be mailed to stockholders
of the Corporation at least thirty (30) days prior to the
consummation of such Business Combination (whether or not such
proxy or information statement is required to be mailed pursuant
to such Act, rules or regulations or such subsequent
provisions).
3. For the purposes of this Restated Certificate of Incorporation, the
following definitions shall apply:
(a) "Continuing Director" means: (i) any member of the Board of Directors
who (A) is not an Interested Stockholder or an Affiliate or Associate
of an Interested Stockholder and (B) was a member of the Board of
Directors prior to the time that an Interested Stockholder became an
Interested Stockholder; and (ii) any person who is elected or
nominated to succeed a Continuing Director, or to join the Board of
Directors, by a majority of the Continuing Directors.
(b) "Business Combination" means any one or more of the following
transactions referred to in clauses (i) through (vi) of this paragraph
(b):
(i) any merger or consolidation of the Corporation or any Subsidiary
(as defined in paragraph (h) of this Section 3) with or into (A)
any Interested Stockholder or (B) any other corporation (whether
or not itself an Interested Stockholder) which immediately
before is, or after such merger or consolidation would be, an
Affiliate or Associate of an Interested Stockholder;
(ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder, Affiliate
or any Associate of any Interested Stockholder of any assets of
the Corporation or any subsidiary where such assets have an
aggregate Fair Market Value of One Million
7
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Dollars ($1,000,000) or more;
(iii) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of
any equity securities of the Corporation or any Subsidiary to a
person which, immediately prior to such issuance or transfer, is
an Interested Stockholder or an Affiliate or Associate of an
Interested Stockholder, where such equity securities have an
aggregate Fair Market Value of One Million Dollars ($1,000,000)
or more other than a PRO RATA distribution;
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation;
(v) any reclassification of securities (including any reverse
stock split) or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any similar transaction (whether or not with
or into or otherwise involving an Interested Stockholder),
which has the effect, directly or indirectly, of increasing
the percentage of the outstanding shares of any class of
equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder or by any Affiliate or Associate of
any Interested Stockholder; or
(vi) any agreement, contract or other arrangement providing for
any of the transactions described in clauses (i) through (v)
of this paragraph (b).
(c) A "person" means an individual, firm, partnership, tenant, corporation
or other entity.
(d) "Interested Stockholder" means any person who or which, together with
its Affiliates and Associates, as of the record date for the
determination of stockholders entitled to notice of, and to vote on,
any Business Combination, the removal of a director or the adoption of
any proposed amendment, alteration, recision or repeal of any
provision of this Restated Certificate of Incorporation or any Bylaw,
or immediately prior to the Consummation Date:
(i) is the beneficial owner (as defined in paragraph (e) of this
Section 3), directly or indirectly, of ten per cent. (10%) or
more of the voting power of (A) Common Stock or (B) all
outstanding shares of
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the capital stock of a Subsidiary having general voting power
("Subsidiary Stock"); or
(ii) is an assignee of or has otherwise succeeded to any share of
Common Stock or Subsidiary Stock which was, at any time within
the two (2) year period prior thereto, beneficially owned by any
person who at such time was an Interested Stockholder, and such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933, as
amended, and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or regulations);
PROVIDED, HOWEVER, that the term "Interested Stockholder" shall
not include (A) the Corporation or any Subsidiary, (B) any
profitsharing, employee stock ownership or other employee
benefit plan of the Corporation or any Subsidiary, or any
trustee of, or fiduciary with respect to, any such plan when
acting in such capacity or (C) any beneficial owner of ten per
cent. (10%) or more of the outstanding Voting Stock on the
effective date of this Restated Certificate of Incorporation.
(e) A person is the "beneficial owner" of any shares of capital stock:
(i) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such person or any of its Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by any
other person with which such first-mentioned person or any of
its Affiliates or Associates has any agreement or understanding
for the purpose of acquiring, holding, voting or disposing of
any shares of capital stock of the Corporation or a Subsidiary,
as the case may be.
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(f) "Common Stock" means the capital stock of the Corporation having
general voting power. For the purpose of determining whether a person
is an Interested Stockholder pursuant to paragraph (d) of this Section
3, the number of shares of Common Stock or Subsidiary Stock, as the
case may be, deemed to be outstanding shall include shares deemed
owned by a beneficial owner through application of paragraph (e) of
this Section 3, but shall not include any other shares of Common Stock
or Subsidiary Stock, as the case may be, which may be issuable to any
other person pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options, or
otherwise.
(g) "Affiliate" and "Associate" have the respective meanings given to
those terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended, as in effect on
January 1, 1990.
(h) "Subsidiary" means any corporation of which a controlling interest of
any class of equity security is owned, directly or indirectly, by the
Corporation, or which is otherwise controlled, directly or indirectly,
by the Corporation.
(i) "Fair Market Value" means (i) in the case of stock (A) the highest
closing sale price during the thirty (30) day period including and
immediately preceding the date in question of a share of such stock on
the Composite Tape for New York Stock Exchange Listed Stocks, or (B)
if such stock is not quoted on the Composite Tape, the highest closing
sale price during such thirty (30) day period on the New York Stock
Exchange, or (C) if such stock is not listed on such Exchange, the
highest closing sale price during such thirty (30) day period on the
principal United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, on which such stock is
listed, or (D) if such stock is not listed on any such exchange, the
highest closing bid quotation with respect to a share of such stock on
the National Association of Securities Dealers, Inc. Automated
Quotation System or any system then in use during any such thirty (30)
day period, or (E) if no such quotations are available, the fair
market value on the date in question of a share of such stock as
determined in good faith by a majority of the Continuing Directors (or
if there are no Continuing Directors, then by a majority of the Board
of Directors), and (ii) in the case of property other than cash or
stock, the fair market value of such property on the date in question
as determined in good faith by a majority of the Continuing Directors
(or if
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there are no continuing Directors, then by a majority of the Board of
Directors).
(j) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash received or to be
received" as used in clauses (ii) and (iii) of paragraph (b) of
Section 2 of this Article Fourteenth shall include the shares of
Common Stock or the shares of any other class of Voting Stock
retained by the holder of such shares.
4. A majority of the Continuing Directors shall have the power and duty
to determine, for purposes of this Article Fourteenth, on the basis of
information known to them, (a) whether a person is an Interested Stockholder;
(b) the number of shares of Common Stock or Subsidiary Stock beneficially owned
by any person; (c) whether a person is an Affiliate or Associate of another
person; (d) whether a person has an agreement, arrangement or understanding with
another person as to the matters referred to in clause (vi) of paragraph (b), or
clause (ii) or (iii) of paragraph (e), of Section 3 of this Article Fourteenth;
(e) whether any particular assets of the Corporation or any Subsidiary have an
aggregate Fair Market Value of One Million Dollars ($1,000,000) or more; or (f)
whether the consideration received for the issuance or transfer of securities by
the Corporation or any Subsidiary has an aggregate Fair Market Value of One
Million Dollars ($1,000,000) or more. In furtherance and not in limitation of
the preceding powers and duties set forth in this Section 4, a majority of the
Continuing Directors shall have the power and duty to interpret all of the terms
and provisions of this Article Fourteenth.
5. Nothing contained in this Article Fourteenth shall be construed to
relieve any Interested Stockholder or any Affiliate or Associate thereof from
any fiduciary obligation imposed by law.
6. The fact that any action or transaction complies with the
provisions of this Article Fourteenth shall not be construed to impose any
fiduciary duty, obligation or responsibility on the Board of Directors or any
member thereof to approve such action or transaction or recommend its adoption
or approval to the stockholders of the Corporation, nor shall such compliance,
limit, prohibit or otherwise restrict in any manner the Board of Directors, or
any member thereof, with respect to evaluations of, or action and responses
taken with respect to, such action or transaction.
FIFTEENTH: To the maximum extent permissible under Section 262 of the
General Corporation Law of the State of Delaware, the stockholders of the
Corporation shall be entitled to the statutory appraisal rights with respect to
any Business Combination involving the Corporation and any Interested
Stockholder (or any Affiliate or Associate of any Interested Stockholder),
which requires the
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affirmative vote specified in paragraph (a) of Section 1 of Article Fourteenth
hereof.
SIXTEENTH: The provisions set forth in this Article Sixteenth and in
Articles Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth,
Fourteenth and Fifteenth hereof may not be repealed, rescinded, altered or
amended in any respect, and no other provision or provisions may be adopted
which impair(s) in any respect the operation or effect of any such provision,
except by the affirmative vote of the holders of not less than eighty per cent.
(80%) of the voting power of all outstanding Common Stock and, where such action
is proposed by an Interested Stockholder or by any Associate or Affiliate of an
Interested Stockholder, the affirmative vote of the holders of a majority of the
voting power of all outstanding shares of Common Stock, other than shares held
by the Interested Stockholder which proposed (or the Affiliate or Associate of
which proposed) such action, or any Affiliate or Associate of such Interested
Stockholder; PROVIDED, HOWEVER, that where such action is approved by a majority
of the Continuing Directors, the affirmative vote of a majority of the voting
power of all outstanding shares of Common Stock shall be required for approval
of such action.
SEVENTEENTH: The Corporation reserves the right to adopt, repeal,
rescind, alter or amend in any respect any provision contained in this Restated
Certificate of Incorporation (the "Certificate") in the manner now or hereafter
prescribed by applicable law, and all rights conferred on stockholders herein
are granted subject to this reservation. Notwithstanding the preceding
sentence, the provisions set forth in Articles Fourth, Fifth, Sixth, Seventh,
Eighth, Ninth, Tenth, Eleventh, Twelfth, Fourteenth, Fifteenth and Sixteenth may
not be repealed, rescinded, altered or amended in any respect, and no other
provision or provisions may be adopted which impair(s) in any respect the
operation or effect of any such provision, unless such action is approved as
specified in Article Sixteenth hereof.
EIGHTEENTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the Delaware General Corporation Law,
or (d) for any transaction from which the director derived an improper
personal benefit.
NINETEENTH: No contract or other transaction of the Corporation with any
other person, firm or corporation, or in which this corporation is interested,
shall be affected or invalidated by: (a) the fact that any one or more of the
directors or officers of the Corporation is interested in or is a director or
officer of
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such other firm or corporation; or, (b) the fact that any director or officer of
the Corporation, individually or jointly with others, may be a party to or may
be interested in any such contract or transaction, so long as the contract or
transaction is authorized, approved or ratified at a meeting of the Board of
Directors by sufficient vote thereon by directors not interested therein, to
which such fact of relationship or interest has been disclosed, or the contract
or transaction has been approved or ratified by vote or written consent of the
shareholders to whom such fact of relationship or interest has been disclosed,
or so long as the contract or transaction is fair and reasonable to the
Corporation. Each person who may become a director or officer of the
Corporation is hereby relieved from any liability that might otherwise arise by
reason of his contracting with the Corporation for the benefit of himself or any
firm or corporation in which he may in any way be interested.
TWENTIETH: The officers, directors and other members of management of
the Corporation shall be subject to the doctrine of corporate opportunities as
to areas in which the Corporation has expressed an interest as determined from
time to time by resolution of the Board of Directors. When such areas of
interest are delineated, all such business opportunities within such areas of
interest which come to the attention of the officers, directors and other
members of management of the Corporation shall be disclosed promptly to the
Corporation and made available to it. The Board of Directors may reject any
business opportunity presented to it, and thereafter any officer, director or
other member of management may avail himself of such opportunity. Until such
time as the Corporation, through its Board of Directors, has designated an area
of interest, the officers, directors and other members of management of the
Corporation shall be free to engage in such areas of interest on their own and
the provisions hereof shall not limit the rights of any officer, director or
other member of management of the Corporation to continue a business existing
prior to the time that such area of interest is designated by the Corporation.
This provision shall not be construed to release any employee of the Corporation
(other than an officer, director or member of management) from any duties which
such employee may have to the Corporation.
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IN WITNESS WHEREOF, INTERNATIONAL META SYSTEMS, INC. has caused this
Restated Certificate of Incorporation to be executed by its President and to be
attested to by its Assistant Secretary as of January 11, 1994.
INTERNATIONAL META SYSTEMS, INC.
By: /s/ George W. Smith
--------------------------------------
George W. Smith, President
By: /s/ Richard A. Hahn
--------------------------------------
Richard A. Hahn, Secretary
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BYLAWS
OF
INTERNATIONAL META SYSTEMS, INC.
(a Delaware corporation)
The foregoing are the Bylaws of INTERNATIONAL META SYSTEMS, INC. a Delaware
corporation (the "Corporation"), effective as of September 1, 1993, after
approval by the Corporation's Board of Directors and stockholders:
ARTICLE I
Offices
Section 1.01. PRINCIPAL EXECUTIVE OFFICE. The principal executive office
of the Corporation shall be located at 23842 Hawthorne Boulevard, Suite 200,
Torrance, California 90505. The Board of Directors of the Corporation (the
"Board of Directors") may change the location of said principal executive
office.
Section 1.02. OTHER OFFICES. The Corporation may also have an office or
offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
Section 2.01. ANNUAL MEETINGS. The annual meeting of stockholders of the
Corporation shall be held at a date and at such time as the Board of Directors
shall determine. At each annual meeting of stockholders, directors shall be
elected in accordance with the provisions of Section 3.03 hereof and any other
proper business may be transacted.
Section 2.02. SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be called at any time by a majority of the Board of
Directors or by the Chairman of the Board. Special meetings may not be called
by any other person or persons. Each special meeting shall be held at such date
and time as is requested by the person or persons calling the meeting, within
the limits fixed by law.
Section 2.03. PLACE OF MEETINGS. Each annual or special meeting of
stockholders shall be held at such location as may be determined by the Board of
Directors or, if no such determination is made, at such place as may be
determined by the Chairman of the
<PAGE>
Board. If no location is so determined, any annual or special meeting shall be
held at the principal executive office of the Corporation.
Section 2.04. NOTICE OF MEETINGS. Written notice of each annual or
special meeting of stockholders stating the date and time when, and the place
where, it is to be held shall be delivered either personally or by mail to
stockholders entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of the meeting. The purpose or purposes
for which the meeting is called may, in the case of an annual meeting, and
shall, in the case of a special meeting, also be stated. If mailed, such notice
shall be directed to a stockholder at his address as it shall appear on the
stock books of the Corporation, unless he shall have filed with the Secretary of
the Corporation a written request that notices intended for him be mailed to
some other address, in which case such notice shall be mailed to the address
designated in such request.
Section 2.05. CONDUCT OF MEETINGS. All annual and special meetings of
stockholders shall be conducted in accordance with such rules and procedures as
the Board of Directors may determine subject to the requirements of applicable
law and, as to matters not governed by such rules and procedures, as the
chairman of such meeting shall determine. The chairman of any annual or special
meeting of stockholders shall be the Chairman of the Board. The Secretary, or
in the absence of the Secretary, a person designated by the Chairman of the
Board, shall act as secretary of the meeting.
Section 2.06. QUORUM. At any meeting of stockholders of the Corporation,
the presence, in person or by proxy, of the holders of record of a majority of
the shares then issued and outstanding and entitled to vote at the meeting shall
constitute a quorum for the transaction of business; PROVIDED, HOWEVER, that
this Section 2.06 shall not affect any different requirement which may exist
under statute, pursuant to the rights of any authorized class or series of
stock, or under the Certificate of Incorporation of the Corporation, as amended
or restated from time to time (the "Certificate"), for the vote necessary for
the adoption of any measure governed thereby.
In the absence of a quorum, the stockholders present in person or by
proxy, by majority vote and without further notice, may adjourn the meeting from
time to time until a quorum is attained. At any reconvened meeting following
such adjournment at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified.
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Section 2.07. VOTES REQUIRED. The affirmative vote of a majority of the
shares present in person or represented by proxy at a duly called meeting of
stockholders of the Corporation, at which a quorum is present and entitled to
vote on the subject matter, shall be sufficient to take or authorize action upon
any matter which may properly come before the meeting, except that the election
of directors shall be by plurality vote, unless the vote of a greater or
different number thereof is required by statute, by the rights of any authorized
class of stock or by the Certificate.
Unless the Certificate or a resolution of the Board of Directors
adopted in connection with the issuance of shares of any class or series of
stock provides for a greater or lesser number of votes per share, or limits or
denies voting rights, each outstanding share of stock, regardless of class or
series, shall be entitled to one (1) vote on each matter submitted to a vote at
a meeting of stockholders.
Section 2.08. PROXIES. A stockholder may vote the shares owned of record
by him either in person or by proxy executed in writing (which shall include
writings sent by telex, telegraph, cable or facsimile transmission) by the
stockholder himself or by his duly authorized attorney-in-fact. No proxy shall
be valid after three (3) years from its date, unless the proxy provides for a
longer period. Each proxy shall be in writing, subscribed by the stockholder or
his duly authorized attorney-in-fact, and dated, but it need not be sealed,
witnessed or acknowledged.
Section 2.09. STOCKHOLDER ACTION. Any action that may, or is required to,
be taken at any annual or special meeting of the stockholders of the
Corporation, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
Section 2.10. LIST OF STOCKHOLDERS. The Secretary of the Corporation
shall prepare and make (or cause to be prepared and made), at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of, and the number of shares registered in the name of, each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the
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meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the duration thereof, and may be inspected by any
stockholder who is present.
Section 2.11. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint Inspectors of Election to act
at such meeting or at any adjournment or adjournments thereof. If such
Inspectors are not so appointed or fail or refuse to act, the chairman of any
such meeting may (and, upon the demand of any stockholder or stockholder's
proxy, shall) make such an appointment.
The number of Inspectors of Election shall be one (1) or three (3). If
there are three (3) Inspectors of Election, the decision, act or certificate of
a majority shall be effective and shall represent the decision, act or
certificate of all. No such Inspector need be a stockholder of the Corporation.
Subject to any provisions of the Articles of Incorporation, the Inspectors
of Election shall determine the number of shares outstanding, the voting power
of each, the shares represented at the meeting, the existence of a quorum and
the authenticity, validity and effect of proxies; they shall receive votes,
ballots or consents, hear and determine all challenges and questions in any way
arising in connection with the right to vote, count and tabulate all votes or
consents, determine when the polls shall close and determine the result; and
finally, they shall do such acts as may be proper to conduct the election or
vote with fairness to all stockholders. On request, the Inspectors shall make a
report in writing to the secretary of the meeting concerning any challenge,
question or other matter as may have been determined by them and shall execute
and deliver to such secretary a certificate of any fact found by them.
ARTICLE III
Directors
Section 3.01. POWERS. The business and affairs of the Corporation shall
be managed by and be under the direction of the Board of Directors. The Board
of Directors shall exercise all the powers of the Corporation, except those that
are conferred upon or reserved to the stockholders by statute, the Certificate
or these Bylaws.
Section 3.02. NUMBER. The number of directors shall be fixed from time to
time by resolution of the Board of Directors but shall not be less than three
(3) nor more than eleven (11).
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<PAGE>
Section 3.03. ELECTION AND TERM OF OFFICE. At the first annual meeting of
stockholders after the authorized number of directors is eight (8) or more, the
Board of Directors shall be divided into three classes: Class I, Class II, and
Class III. The number of directors in each class shall be the whole number
contained in the quotient obtained by dividing the authorized number of
directors by three (3). If a fraction is also contained in such quotient, then
directors shall be apportioned as follows: If such fraction is one-third, the
additional director shall be a member of Class III; and if such fraction is two-
thirds, one of the additional directors shall be a member of Class II and the
other shall be a member of Class III. Each director shall serve for a term
ending on the date of the third annual meeting following the annual meeting at
which such director was elected; PROVIDED, HOWEVER, that the directors first
elected to Class I shall serve for a term ending on the date of the first annual
meeting following their election, the directors first elected to Class II shall
serve for a term ending on the date of the second annual meeting following their
election, and the directors first elected to Class III shall serve for a term
ending on the date of the third annual meeting following their election.
Whenever the authorized number of directors shall be reduced to less than
eight (8) directors, the existing directors shall serve out the remainder of
their term and each subsequently elected director shall serve for a one (1) year
term. At each such time as the authorized number of directors is eight (8) or
more directors, the prior paragraph shall again become operative.
Notwithstanding the foregoing provisions of this Section 3.03, each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal, no decrease in the authorized number of directors
shall shorten the term of any incumbent director, and additional directors
elected in connection with rights to elect such additional directors under
specified circumstances which may be granted to the holders of any series of
Preferred Stock shall not be included in any class, but shall serve for such
term or terms and pursuant to such other provisions as are specified in the
resolution of the Board of Directors establishing such series.
Section 3.04. ELECTION OF CHAIRMAN OF THE BOARD. At the organizational
meeting immediately following the annual meeting of stockholders, the directors
shall elect a Chairman of the Board from among the directors who shall hold
office until the corresponding meeting of the Board of Directors in the next
year and until his successor shall have been elected or until his earlier
resignation or removal. Any vacancy in such office may be filled for the
unexpired portion of the term in the same manner by the Board of Directors at
any regular or special meeting.
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Section 3.05. REMOVAL. Any director may be removed from office only as
provided in the Articles of Incorporation.
Section 3.06. VACANCIES AND ADDITIONAL DIRECTORSHIPS. Newly created
directorships resulting from death, resignation, disqualification, removal or
other cause shall be filled solely by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board
of Directors. Any director elected in accordance with the preceding sentence
shall hold office for the remainder of the full term of the class of directors
in which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
Section 3.07. REGULAR AND SPECIAL MEETINGS. Regular meetings of the Board
of Directors shall be held immediately following the annual meeting of the
stockholders; without call at such time as shall from time to time be fixed by
the Board of Directors; and as called by the Chairman of the Board in accordance
with applicable law.
Special meetings of the Board of Directors shall be held upon call by
or at the direction of the Chairman of the Board, the President or any two (2)
directors, except that when the Board of Directors consists of one (1) director,
then the one director may call a special meeting. Except as otherwise required
by law, notice of each special meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least three
days before the day on which the meeting is to be held, or shall be sent to him
at such place by telex, telegram, cable, facsimile transmission or telephoned or
delivered to him personally, not later than the day before the day on which the
meeting is to be held. Such notice shall state the time and place of such
meeting, but need not state the purpose or purposes thereof, unless otherwise
required by law, the Articles of Incorporation or these Bylaws ("Bylaws").
Notice of any meeting need not be given to any director who shall attend
such meeting in person (except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened) or who shall
waive notice thereof, before or after such meeting, in a signed writing.
Section 3.08. QUORUM. At all meetings of the Board of Directors, a
majority of the fixed number of directors shall constitute a quorum for the
transaction of business, except that when the Board of Directors consists of one
(1) director, then the one director shall constitute a quorum.
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In the absence of a quorum, the directors present, by majority vote
and without notice other than by announcement, may adjourn the meeting from time
to time until a quorum shall be present. At any reconvened meeting following
such an adjournment at which a quorum shall be present, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 3.09. VOTES REQUIRED. Except as otherwise provided by applicable
law or by the Articles of Incorporation, the vote of a majority of the directors
present at a meeting duly held at which a quorum is present shall be sufficient
to pass any measure.
Section 3.10. PLACE AND CONDUCT OF MEETINGS. Each regular meeting and
special meeting of the Board of Directors shall be held at a location determined
as follows: The Board of Directors may designate any place, within or without
the State of Delaware, for the holding of any meeting. If no such designation
is made: (a) any meeting called by a majority of the directors shall be held at
such location, within the county of the Corporation's principal executive
office, as the directors calling the meeting shall designate; and (b) any other
meeting shall be held at such location, within the county of the Corporation's
principal executive office, as the Chairman of the Board may designate or, in
the absence of such designation, at the Corporation's principal executive
office. Subject to the requirements of applicable law, all regular and special
meetings of the Board of Directors shall be conducted in accordance with such
rules and procedures as the Board of Directors may approve and, as to matters
not governed by such rules and procedures, as the chairman of such meeting shall
determine. The chairman of any regular or special meeting shall be the Chairman
of the Board, or, in his absence, a person designated by the Board of Directors.
The Secretary, or, in the absence of the Secretary, a person designated by the
chairman of the meeting, shall act as secretary of the meeting.
Section 3.11. FEES AND COMPENSATION. Directors shall be paid such
compensation as may be fixed from time to time by resolution of the Board of
Directors: (a) for their usual and contemplated services as directors; (b) for
their services as members of committees appointed by the Board of Directors,
including attendance at committee meetings as well as services which may be
required when committee members must consult with management staff; and (c) for
extraordinary services as directors or as members of committees appointed by the
Board of Directors, over and above those services for which compensation is
fixed pursuant to items (a) and (b) in this Section 3.11. Compensation may be in
the form of an annual retainer fee or a fee for attendance at meetings, or both,
or in such other form or on such basis as the resolutions of the Board of
Directors shall fix. Directors shall be reimbursed for all reasonable expenses
incurred by them in attending meetings of the Board of Directors and committees
appointed by the Board of
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Directors and in performing compensable extraordinary services. Nothing
contained herein shall be construed to preclude any director from serving the
Corporation in any other capacity, such as an officer, agent, employee,
consultant or otherwise, and receiving compensation therefor.
Section 3.12. COMMITTEES OF THE BOARD OF DIRECTORS. To the full extent
permitted by applicable law, the Board of Directors may from time to time
establish committees, including, but not limited to, standing or special
committees and an executive committee with authority and responsibility for
bookkeeping, with authority to act as signatories on Corporation bank or similar
accounts and with authority to choose attorneys for the Corporation and direct
litigation strategy, which shall have such duties and powers as are authorized
by these Bylaws or by the Board of Directors. Committee members, and the
chairman of each committee, shall be appointed by the Board of Directors. The
Chairman of the Board, in conjunction with the several committee chairmen, shall
make recommendations to the Board of Directors for its final action concerning
members to be appointed to the several committees of the Board of Directors.
Any member of any committee may be removed at any time with or without cause by
the Board of Directors. Vacancies which occur on any committee shall be filled
by a resolution of the Board of Directors. If any vacancy shall occur in any
committee by reason of death, resignation, disqualification, removal or
otherwise, the remaining members of such committee, so long as a quorum is
present, may continue to act until such vacancy is filled by the Board of
Directors. The Board of Directors may, by resolution, at any time deemed
desirable, discontinue any standing or special committee. Members of standing
committees, and their chairmen, shall be elected yearly at the regular meeting
of the Board of Directors which is held immediately following the annual meeting
of stockholders. The provisions of sections 3.07, 3.08, 3.09 and 3.10 of these
Bylaws shall apply, MUTATIS MUTANDIS, to any such Committee of the Board of
Directors.
ARTICLE IV
Officers
Section 4.01. DESIGNATION, ELECTION AND TERM OF OFFICE. The Corporation
shall have a Chairman of the Board, a President, Treasurer, such senior vice
presidents and vice presidents as the Board of Directors deems appropriate, a
Secretary and such other officers as the Board of Directors may deem
appropriate. These officers shall be elected annually by the Board of
Directors at the organizational meeting immediately following the annual meeting
of stockholders, and each such officer shall hold office until the corresponding
meeting of the Board of Directors in the next year and until his successor shall
have been elected and qualified or until his earlier resignation, death or
removal. Any vacancy in any of the above offices may be filled for the
unexpired portion of
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the term by the Board of Directors at any regular or special meeting.
Section 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors shall preside at all meetings of the directors and shall have such
other powers and duties as may from time to time be assigned to him by the Board
of Directors.
Section 4.03. PRESIDENT. The President shall be the chief executive
officer of the Corporation and shall, subject to the power of the Board of
Directors, have general supervision, direction and control of the business and
affairs of the Corporation. He shall preside at all meetings of the
stockholders and, in the absence of the Chairman of the Board, at all meetings
of the directors. He shall have the general powers and duties of management
usually vested in the office of president of a corporation, and shall have such
other duties as may be assigned to him from time to time by the Board of
Directors.
Section 4.04. TREASURER. The Treasurer shall keep and maintain, or cause
to be kept and maintained, adequate and correct books and records of account of
the properties and business transactions of the Corporation, including accounts
of its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable
times be open to inspection by the directors.
The Treasurer shall deposit all moneys and other valuables in the name and
to the credit of the Corporation with such depositaries as may be designated by
the Board of Directors. He shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, shall render to the President and
directors, whenever they request it, an account of all of his transactions as
the Treasurer and of the financial condition of the Corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the Bylaws.
Section 4.05. SECRETARY. The Secretary shall keep the minutes of the
meetings of the stockholders, the Board of Directors and all committees. He
shall be the custodian of the corporate seal and shall affix it to all documents
which he is authorized by law or the Board of Directors to sign and seal.
He also shall perform such other duties as may be assigned to him from time to
time by the Board of Directors or the Chairman of the Board or President.
Section 4.06. ASSISTANT OFFICERS. The President may appoint one or more
assistant secretaries and such other assistant officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as may be specified from time to time by
the President.
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Section 4.07. WHEN DUTIES OF AN OFFICER MAY BE DELEGATED. In the case of
absence or disability of an officer of the Corporation or for any other reason
that may seem sufficient to the Board of Directors, the Board of Directors or
any officer designated by it, or the President, may, for the time of the absence
or disability, delegate such officer's duties and powers to any other officer of
the Corporation.
Section 4.08. OFFICERS HOLDING TWO OR MORE OFFICES. The same person may
hold any two (2) or more of the above-mentioned offices.
Section 4.09. COMPENSATION. The Board of Directors shall have the power
to fix the compensation of all officers and employees of the Corporation.
Section 4.10. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Board of Directors, to the President, or to the Secretary
of the Corporation. Any such resignation shall take effect at the time
specified therein unless otherwise determined by the Board of Directors. The
acceptance of a resignation by the Corporation shall not be necessary to make it
effective.
Section 4.11. REMOVAL. Any officer of the Corporation may be removed,
with or without cause, by the affirmative vote of a majority of the entire Board
of Directors. Any assistant officer of the Corporation may be removed, with or
without cause, by the President or by the Board of Directors.
ARTICLE V
Indemnification of Directors, Officers
Employees and other Corporate Agents
Section 5.01. ACTION, ETC. OTHER THAN BY OR IN THE RIGHT OF THE
CORPORATION. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee, trustee or agent of another
corporation, partnership, joint venture, trust or other enterprise (all such
persons being referred to hereinafter as an "Agent"), against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
and with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The
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termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which 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, that he had reasonable cause to believe that his conduct was
unlawful.
Section 5.02. ACTION, ETC., BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was an Agent against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit 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, except that no indemnification shall 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 by a court of competent jurisdiction, after exhaustion
of all appeals therefrom, unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper.
Section 5.03. DETERMINATION OF RIGHT OF INDEMNIFICATION. Any
indemnification under Sections 5.01 or 5.02 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the Agent is proper in the circumstances
because the Agent has met the applicable standard of conduct set forth in
Sections 5.01 and 5.02 hereof, which determination is made (a) by the Board of
Directors, by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (b) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (c) by the
stockholders.
Section 5.04. INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article V, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any action, suit or proceeding referred to in Sections
5.01 or 5.02 hereof, or in defense of any claim, issue or matter therein, such
Agent shall be indemnified against expenses, including attorneys' fees actually
and reasonably incurred by such Agent in connection therewith.
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Section 5.05. ADVANCES OF EXPENSES. Except as limited by Section 5.06 of
this Article V, expenses incurred by an Agent in defending any civil or criminal
action, suit, or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding, if the Agent shall
undertake to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified as authorized in this Article V.
Notwithstanding the foregoing, no advance shall be made by the Corporation if a
determination is reasonably and promptly made by the Board of Directors by a
majority vote of a quorum of disinterested directors, or (if such a quorum is
not obtainable or, even if obtainable, a quorum of disinterested directors so
directs) by independent legal counsel in a written opinion, that, based upon the
facts known to the Board of Directors or counsel at the time such determination
is made, such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interest of the Corporation, or,
with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe his conduct was unlawful.
Section 5.06. RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any indemnification or advance under this Article V
shall be made promptly, and in any event within ninety days, upon the written
request of the Agent, unless a determination shall be made in the manner set
forth in the second sentence of Subsection 5.05 hereof that such Agent acted in
a manner set forth therein so as to justify the Corporation's not indemnifying
or making an advance to the Agent. The right to indemnification or advances as
granted by this Article V shall be enforceable by the Agent in any court of
competent jurisdiction, if the Board of Directors or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such proceeding shall also be indemnified by the Corporation.
Section 5.07. OTHER RIGHTS AND REMEDIES. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article V
shall not be deemed exclusive of any other rights to which an Agent seeking
indemnification or advancement of expenses may be entitled under any Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be an Agent and shall inure
to the benefit of the heirs, executors and administrators of such a person. All
rights to indemnification under this Article V shall be deemed to be provided by
a contract between the Corporation and the Agent who serves in such capacity at
any time while these Bylaws and other relevant provisions of the Delaware
General Corporation Law and other applicable law, if any,
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are in effect. Any repeal or modification thereof shall not affect any rights
or obligations then existing.
Section 5.08. INSURANCE. Upon resolution passed by the Board of
Directors, the Corporation may purchase and maintain insurance on behalf of any
person who is or was an Agent against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Article V.
Section 5.09. CONSTITUENT CORPORATIONS. For the purposes of this Article
V, references to "the Corporation" shall include, in addition to the resulting
corporation, all constituent corporations (including all constituents of
constituents) absorbed in a consolidation or merger as well as the resulting or
surviving corporation, which, if the separate existence of such constituent
corporation had continued, would have had power and authority to indemnify its
Agents, so that any Agent of such constituent corporation shall stand in the
same position under the provisions of the Article V with respect to the
resulting or surviving corporation as that Agent would have with respect to such
constituent corporation if its separate existence had continued.
Section 5.10. OTHER ENTERPRISES, FINES, AND SERVING AT CORPORATION'S
REQUEST. For purposes of this Article V, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
V.
Section 5.11. SAVINGS CLAUSE. If this Article V or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Agent as to expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, and whether internal or external, including a
grand jury proceeding and an action or suit brought by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this
Article V that shall not have been invalidated, or by any other applicable law.
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ARTICLE VI
Stock
Section 6.01. CERTIFICATES. Except as otherwise provided by law, each
stockholder shall be entitled to a certificate or certificates which shall
represent and certify the number and class (and series, if appropriate) of
shares of stock owned by him in the Corporation. Each certificate shall be
signed in the name of the Corporation by the Chairman of the Board or a Vice-
Chairman of the Board or the President or a Vice President, together with the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary.
Any or all of the signatures on any certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if such person were such officer,
transfer agent or registrar at the date of issue.
Section 6.02. TRANSFER OF SHARES. Shares of stock shall be transferable
on the books of the Corporation only by the holder thereof, in person or by his
duly authorized attorney, upon the surrender of the certificate representing the
shares to be transferred, properly endorsed, to the Corporation's transfer
agent, if the Corporation has a transfer agent, or to the Corporation's
registrar, if the Corporation has a registrar, or to the Secretary, if the
Corporation has neither a transfer agent nor a registrar. The Board of
Directors shall have power and authority to make such other rules and
regulations concerning the issue, transfer and registration of certificates of
the Corporation's stock as it may deem expedient.
Section 6.03. TRANSFER AGENTS AND REGISTRARS. The Corporation may have
one or more transfer agents and one or more registrars of its stock whose
respective duties the Board of Directors or the Secretary may, from time to
time, define. No certificate of stock shall be valid until countersigned by a
transfer agent, if the Corporation has a transfer agent, or until registered by
a registrar, if the Corporation has a registrar. The duties of transfer agent
and registrar may be combined.
Section 6.04. STOCK LEDGERS. Original or duplicate stock ledgers,
containing the names and addresses of the stockholders of the Corporation and
the number of shares of each class of stock held by them, shall be kept at the
principal executive office of the Corporation or at the office of its transfer
agent or registrar.
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Section 6.05. RECORD DATES. The Board of Directors may fix, in advance, a
date as the record date for the purpose of determining stockholders entitled to
notice of, or to vote at, any meeting of stockholders or any adjournment
thereof, or stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or in order to make a
determination of stockholders for any other proper purpose. Such date in any
case shall be not more than sixty (60) days, and in case of a meeting of
stockholders, not less than ten (10) days, prior to the date on which the
particular action requiring such determination of stockholders is to be taken.
Only those stockholders of record on the date so fixed shall be entitled to any
of the foregoing rights, notwithstanding the transfer of any such stock on the
books of the Corporation after any such record date fixed by the Board of
Directors.
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I HEREBY CERTIFY that the foregoing is a complete and correct copy of
the Bylaws of INTERNATIONAL META SYSTEMS, INC., a Delaware corporation, as in
effect on the date hereof.
Dated: January 22, 1997
Paul Sefchek
--------------------------------
Paul Sefchek, Secretary
<PAGE>
International Meta Systems, Inc.
1996 STOCK OPTION PLAN
1. PURPOSE. The purpose of the International Meta Systems, Inc. 1996
Stock Option Plan (the "Plan"), is to provide an incentive to officers,
directors, employees, independent contractors, and consultants of International
Meta Systems, Inc., a Delaware corporation and any parent companies and
subsidiaries (collectively referred to as "IMS") to remain in the employ of IMS
or provide services to IMS and contribute to its success.
As used in the Plan, the term "Code" shall mean the Internal Revenue Code
of 1986, as amended, and any successor statute, and the terms "Parent" and
"Subsidiary" shall have the meanings set forth in Code Sections 424(e) and (f).
This Plan was adopted by the Board of Directors as of April 30, 1996 and by
the stockholders of IMS as of July 10, 1996.
2. ADMINISTRATION. The Plan shall be administered by a Plan Committee
which shall be established by the Board of Directors of IMS (the "Board"). The
Plan Committee shall be consist of at least two members who shall be Outside
Directors of IMS, as defined in Treasury Regulation Section 1.162-27(e)(3),
promulgated under Code Section 162(m). Members of the Plan Committee shall be
appointed, both initially and as vacancies occur, by the Board. The Board, at
any time it so desires, may increase or decrease, but not below two, the number
of members of the Plan Committee, may remove from membership on the Plan
Committee all or any portion of its members, and may appoint such person or
persons as it desires to fill any vacancy existing on the Plan Committee,
whether by removal, resignation or otherwise. The provisions of the Plan and
all option and stock appreciation right ("SAR") agreements executed pursuant
thereto, and its decisions shall be conclusive and binding upon all interested
persons. Subject to the provisions of the Plan, the Plan Committee shall have
the sole authority to determine:
(a) The persons (hereinafter, "optionees") to whom options to purchase
shares of Common Stock of IMS ("Stock") and SARs shall be granted;
(b) The number of options and SARs to be granted to each optionee;
(c) The price to be paid for each share of Stock upon the exercise of each
option;
(d) The period within which each option and SAR shall be exercised and,
with the consent of the optionee, any extensions of such period (provided,
however, that the original period and all extensions shall not exceed the
maximum period permissible under the Plan); and
(e) The terms and conditions of each stock option and/or SAR agreement
entered into between IMS and persons to whom IMS has granted an option or SAR
and of any amendments thereto (provided that the optionee consents to each such
amendment).
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The Plan Committee shall meet at such times and places as it determines,
including by means of a telephone conference call. A majority of the members
shall constitute a quorum, and a decision of a majority of those present at any
meeting at which a quorum is present shall constitute the decision of the Plan
Committee. A memorandum signed by all of the members of the Plan Committee
shall constitute the decision of the Plan Committee without the necessity, in
such event, for holding an actual meeting.
3. ELIGIBILITY. Officers, directors and employees of IMS independent
contractors, consultants and other persons providing significant services to IMS
shall be eligible to receive grants of options under the Plan.
4. STOCK SUBJECT TO PLAN. There shall be reserved for issue, upon the
exercise of options granted under the Plan, 4,500,000 shares of Stock or the
number of shares of Stock, which, in accordance with the provisions of Section 9
hereof, shall be substituted therefor. Such shares may be treasury shares. If
an option granted under the Plan shall expire or terminate for any reason
without having been exercised in full, unpurchased shares subject thereto shall
again be available for the purposes of the Plan.
5. TERMS OF OPTIONS AND SARs.
(a) INCENTIVE STOCK OPTIONS. It is intended that options granted
pursuant to this Section 5(a) qualify as incentive stock options as defined in
Section 422 of the Code. Incentive stock options shall be granted only to
employees of IMS. Each stock option agreement evidencing an incentive stock
option shall provide that the option is subject to the following terms and
conditions and to such other terms and conditions not inconsistent therewith as
the Plan Committee may deem appropriate in each case:
(1) OPTION PRICE. The price to be paid for each share of Stock
upon the exercise of each incentive stock option shall be determined by the Plan
Committee at the time the option is granted, but shall in no event be less than
100% of the Fair Market Value (as defined below) of the shares on the date the
option is granted, or not less than 110% of the Fair Market Value (as defined
below) of such shares on the date such option is granted in the case of an
individual then owning (within the meaning of Section 424(d) of the Code) 10% or
more of the total combined voting power of all classes of stock of IMS. As used
in this Plan, the term "date the option is granted" means the date on which the
Plan Committee authorizes the grant of an option hereunder or any later date
specified by the Plan Committee. For the purposes of the Plan, Fair Market
Value of the shares shall be (i) the closing sales price of shares of Stock sold
on the New York Stock Exchange, American Stock Exchange or the NASDAQ National
Market System on the date the option is granted (or if there was no sale on such
date, the highest asked price for the Stock on such date), (ii) if the Stock is
not listed on either of those exchanges or traded on the NASDAQ National Market
System on the date the option is granted, the mean between the "bid" and "asked"
price of the Stock in the National Over-The-Counter Market (or other similar
market quotation system) on the date the option is granted, or (iii) if the
Stock is not traded in any market, the price determined by the Plan Committee to
be the fair market value, based upon such evidence as it may deem necessary or
desirable.
(2) PERIOD OF OPTION AND EXERCISE. The period or periods within
which an option may be exercised shall be determined by the Plan Committee at
the time the option is granted, but in no event shall any option granted
hereunder be exercised more than ten years from the date the option was granted
nor more than five years from the date the option was granted in the case of an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of IMS.
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(3) PAYMENT FOR STOCK. The option exercise price for each share
of Stock purchased under an option shall be paid in full at the time of
purchase. The Plan Committee may provide that the option price be payable, at
the election of the holder of the option and with the consent of the Plan
Committee, in whole or in part either in cash or by delivery of Stock in
transferable form, such Stock to be valued for such purpose at its Fair Market
Value on the date on which the option is exercised. No share of Stock shall be
issued upon exercise until full payment therefor has been made, and no optionee
shall have any rights as an owner of Stock until the date of issuance to him of
the stock certificate evidencing such Stock.
(4) LIMITATION ON AMOUNT BECOMING EXERCISABLE IN ANY ONE
CALENDAR YEAR. Subject to the overall limitations of Section 4 hereof (relating
to the aggregate shares subject to the Plan), the aggregate Fair Market Value
(determined as of the time the option is granted) of Stock with respect to which
incentive stock options first become exercisable by the optionee during any
calendar year (under the Plan and all other incentive stock option plans of IMS)
shall not exceed $100,000.
(b) NONQUALIFIED STOCK OPTIONS. Nonqualified stock options may be granted
not only to employees but also to directors who are not employees of IMS and to
consultants, independent contractors and other persons who provide substantial
services to IMS. Each nonqualified stock option granted under the Plan shall be
evidenced by a stock option agreement between the person to whom such option is
granted and IMS. Such stock option agreement shall provide that the option is
subject to the following terms and conditions and to such other terms and
conditions not inconsistent therewith as the Plan Committee may deem appropriate
in each case:
(1) OPTION PRICE. The price to be paid for each share of Stock
upon the exercise of an option shall be determined by the Plan Committee at the
time the option is granted, but shall in no event be less than 100% of the Fair
Market Value of the shares on the date the option is granted. As used in this
Plan, the term "date the option is granted" means the date on which the Plan
Committee authorized the grant of an option hereunder or any later date
specified by the Plan Committee.
(2) PERIOD OF OPTION AND EXERCISE. The periods, installments or
intervals during which an option may be exercised shall be determined by the
Plan Committee at the time the option is granted, but in no event shall such
period exceed 10 years from the date the option is granted.
(3) PAYMENT FOR STOCK. The option exercise price for each share
of Stock purchased under an option shall be paid in full at the time of
purchase. The Plan Committee may provide that the option exercise price be
payable at the election of the holder of the option, with the consent of the
Plan Committee, in whole or in part either in cash or by delivery of Stock in
transferable form, such Stock to be valued for such purpose at its Fair Market
Value on the date on which the option is exercised. No share of Stock shall be
issued until full payment therefor has been made, and no optionee shall have any
rights as an owner of shares of Stock until the date of issuance to him of the
stock certificate evidencing such Stock.
(4) LIMITATION ON NUMBER OF SHARES. No one optionee who is an
employee of IMS may be granted more than 500,000 nonqualified stock options in
any one fiscal year.
(c) STOCK APPRECIATION RIGHTS. SARs may be granted in writing under the
Plan by the Plan Committee subject to the following terms and conditions and
such other terms and conditions as the Plan Committee may prescribe.
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(1) RIGHT OF OPTIONEE. Each SAR shall entitle the holder
thereof, upon the exercise of the SAR, to receive from IMS in exchange therefor
an amount equal in value to the excess of the Fair Market Value on the date of
exercise of one share of Stock over its Fair Market Value on the date of grant
(or, in the case of an SAR granted in connection with an option, the excess of
the Fair Market Value of one share of Stock at the time of exercise over the
option exercise price per share under the option to which the SAR relates),
multiplied by the number of shares covered by the SAR or the option, or portion
thereof, that is surrendered. No SAR shall be exercisable at a time that the
amount determined under this subparagraph is negative. Payment by IMS upon
exercise of an SAR shall be made in Stock valued at the Fair Market Value of the
Stock on the date of exercise.
(2) EXERCISE. An SAR shall be exercisable only at the time or
times established by the Plan Committee. If an SAR is granted in connection
with an option, the following rules shall apply: (i) the SAR shall be
exercisable only to the extent and on the same conditions that the related
option could be exercised; (ii) upon exercise of the SAR, the option or portion
thereof to which the SAR relates terminates; and (iii) upon exercise of the
option, the related SAR or portion thereof terminates.
(3) RULES. The Plan Committee may withdraw any SAR granted
under the Plan at any time and may impose any conditions upon the exercise of an
SAR or adopt rules and regulations from time to time affecting the rights of
holders of SARs granted prior to adoption or amendment of such rules and
regulations as well as SARs granted thereafter.
(4) FRACTIONAL SHARES. No fractional shares shall be issued
upon exercise of an SAR. In lieu thereof, cash may be paid in an amount equal
to the value of the fraction or, if the Plan Committee shall determine, the
number of shares may be rounded downward to the next whole share.
(5) SHARES SUBJECT TO PLAN. Upon the exercise of an SAR for
shares, the number of shares of Stock reserved for issuance under the Plan shall
be reduced by the number of shares issued.
6. NONTRANSFERABILITY. The options and SARs granted pursuant to the Plan
shall be nontransferable except by will or the laws of descent and distribution
of the state or country of the optionee's domicile at the time of death or for
options other than incentive stock options, pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act and shall be exercisable during the optionee's lifetime only
by him (or, in the case of a transfer pursuant to a qualified domestic relations
order, by the transferee under such qualified domestic relations order) and
after his death, by his personal representative or by the person entitled
thereto under his will or the laws of intestate succession.
7. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. Unless otherwise
specified in the applicable option and/or SAR agreement or SAR, upon termination
of the optionee's employment or other relationship with IMS, his rights to
exercise options and SARs then held by him shall be only as follows (in no case
do the time periods referred to below extend the term specified in any option):
(a) DEATH OR DISABILITY. Upon the death or disability (within the
meaning of Section 22(e)(3) of the Code) of an optionee, any option or SAR which
he holds may be exercised (to the extent exercisable at his death or
disability), unless it otherwise expires, within such period after the date of
his death (not less than six months nor more than twelve months) as the Plan
Committee shall prescribe in his option agreement or SAR, by the optionee or, in
the event of death, by the optionee's representative or by the person entitled
thereto under his will or the laws of intestate succession.
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(b) RETIREMENT. Upon the retirement (either pursuant to an IMS
retirement plan, if any, or pursuant to the approval of the Board) of an
officer, director or employee, an outstanding option or SAR may be exercised (to
the extent exercisable at the date of such retirement) by him within such period
after the date of his retirement (provided that such period is no less than 30
days and no more than three months) as the Plan Committee shall prescribe in his
option agreement or SAR.
(c) OTHER TERMINATION. In the event an officer, director or employee
ceases to serve as an officer or director or leaves the employ of IMS for any
reasons other than as set forth in (a) and (b), above, or a nonemployee ceases
to provide services to IMS, any option or SAR which he holds shall remain
exercisable (to the extent exercisable as of the date of such termination) until
30 days after the date of such termination.
(d) PLAN COMMITTEE DISCRETION. The Plan Committee may in its sole
discretion accelerate or extend the exercisability of any or all options or
SARs.
8. TRANSFER TO RELATED CORPORATION. In the event an employee leaves the
employ of IMS to become an employee of a Parent or a Subsidiary or any employee
leaves the employ of a Parent or a Subsidiary to become an employee of IMS or
another Parent or Subsidiary, such employee shall be deemed to continue as an
employee for purposes of this Plan.
9. ADJUSTMENT OF SHARES; TERMINATION OF OPTIONS AND SARs.
(a) ADJUSTMENT OF SHARES. In the event of changes in the outstanding
Stock by reason of stock dividends, split-ups, consolidations,
recapitalizations, reorganizations or like events (as determined by the Plan
Committee), an appropriate adjustment shall be made by the Plan Committee in the
number of shares reserved under the Plan, in the number of shares set forth in
Section 4 hereof, in the number of shares and the option price per share
specified in any stock option agreement, and in the number of SARs with respect
to any unexercised shares. The determination of the Plan Committee as to what
adjustments shall be made shall be conclusive. Adjustments for any options to
purchase fractional shares shall also be determined by the Plan Committee. The
Plan Committee shall give prompt notice to all optionees of any adjustment
pursuant to this Section.
(b) TERMINATION OF 0PTIONS AND SARS ON MERGER, REORGANIZATION OR
LIQUIDATION OF IMS. Notwithstanding anything to the contrary in this Plan, in
the event of any merger, consolidation or other reorganization of IMS in which
IMS is not the surviving or continuing corporation (as determined by the Plan
Committee) or in the event of the liquidation or dissolution of IMS, all options
and SARs granted hereunder shall terminate on the effective date of the merger,
consolidation, reorganization, liquidation or dissolution unless there is an
agreement with respect thereto which expressly provides for the assumption of
such options and SARs by the continuing or surviving corporation.
10. SECURITIES LAW REQUIREMENTS. IMS's obligation to issue shares of its
Stock upon exercise of an option or SAR is expressly conditioned upon the
completion by IMS of any registration or other qualification of such shares
under any state and/or federal law or rulings and regulations of any government
regulatory body or the making of such investment representations or other
representations and undertakings by the optionee (or his legal representative,
heir or legatee, as the case may be) in order to comply with the requirements of
any exemption from any such registration or other qualification of such shares
which IMS in its sole discretion shall deem necessary or advisable. IMS may
refuse to permit the sale or other disposition of any shares acquired pursuant
to any such representation until it
5
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is satisfied that such sale or other disposition would not be in contravention
of applicable state or federal securities law.
11. TAX WITHHOLDING. As a condition to the exercise of an option or SAR
or otherwise, IMS may require an optionee to pay over to IMS all applicable
federal, state and local taxes which IMS is required to withhold with respect to
the exercise of an option or SAR granted hereunder. At the discretion of the
Plan Committee and upon the request of an optionee, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Stock otherwise issuable to the optionee upon the exercise of an option or SAR.
12. AMENDMENT. The Board may amend the Plan at any time, except that
without shareholder approval:
(a) The number of shares of Stock which may be reserved for issuance
under the Plan shall not be increased except as provided in Section 9(a) hereof;
(b) The option price per share of Stock subject to incentive stock
options may not be fixed at less than 100% of the Fair Market Value of a share
of Stock on the date the option is granted;
(c) The maximum period of ten (10) years during which the options or
SARs may be exercised may not be extended;
(d) The class of persons eligible to receive options or SARs under
the Plan as set forth in Section 3 shall not be changed; and
(e) This Section 12 may not be amended in a manner that limits or
reduces the amendments which require shareholder approval.
13. EFFECTIVE DATE. The Plan shall be effective upon the date of its
adoption by both the Board, and subject to the approval of the stockholders of
IMS within the 12 month period following such adoption date.
14. TERMINATION. The Plan shall terminate automatically as of the close
of business on the day preceding the 10th anniversary date of its effectiveness
or earlier by resolution of the Board, or upon consummation of any merger,
consolidation or other reorganization in which the options granted hereunder
terminate, all as described in Section 9(b) hereof. Unless otherwise provided
herein, the termination of the Plan shall not affect the validity of any option
agreement outstanding at the date of such termination.
15. STOCK OPTION AND SAR AGREEMENT. Each option and SAR granted under the
Plan shall be evidenced by a written agreement executed by IMS and accepted by
the optionee, which (i) shall contain each of the provisions and agreements
herein specifically required to be contained therein, (ii) shall indicate
whether an option is to be an incentive stock option or a nonqualified stock
option, and if it is to be an incentive stock option, the stock option agreement
shall contain terms and conditions permitting such option to qualify for
treatment as an incentive stock option under Section 422 of the Code, (iii) may
contain the agreement of the optionee to remain in the employ of, and/or to
render services to, IMS or any Parent or Subsidiary for a period of time to be
determined by the Plan Committee, and (iv) may contain such other terms and
conditions as the Plan Committee deems desirable and which are not inconsistent
with the Plan.
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16. NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any option or SAR
granted hereunder shall confer upon any optionee any right to continue in the
employ of or to continue to perform services for IMS, or shall interfere with or
restrict in any way the rights of IMS to discharge or terminate any officer,
director, employee, independent contractor or consultant at any time for any
reason whatsoever, with or without good cause.
Executed and dated as of the date first written above at El Segundo,
California.
INTERNATIONAL META SYSTEMS, INC.
By: /s/ George W. Smith
--------------------------------
George W. Smith, President
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[LETTERHEAD]
January 21, 1997
International Meta Systems, Inc.
100 North Sepulveda Boulevard
Sixth Floor
El Segundo, California 90245
Ladies and Gentlemen:
We have acted as counsel for International Meta Systems, Inc., a Delaware
corporation (the "Company"), in connection with its filing with the Securities
and Exchange Commission of a Registration Statement on Form S-8 (the
"Registration Statement") with respect to the registration under the Securities
Act of 1933, as amended of 4,500,000 shares of the Company's common stock,
$.00001 par value per share (collectively, the "Shares"), to be offered upon the
terms and subject to the conditions set forth in the Company's 1996 Stock Option
Plan (the "Plan").
We have examined (i) the Articles of Incorporation and Bylaws of the
Company, each as amended to date, (ii) the Plan, (iii) the Registration
Statement, and (iv) such certificates, statutes and other instruments and
documents as we considered appropriate for purposes of the opinions hereafter
expressed.
In connection with this opinion, we have assumed the authenticity and
completeness of all records, certificates and other instruments submitted to us
as originals, the conformity to original documents of all records, certificates
and other instruments submitted to us as copies, the authenticity and
completeness of the originals of those records, certificates and other
instruments submitted to us as copies and the correctness of all statements of
fact contained in all records, certificates and other instruments that we have
examined.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and, when issued in accordance with the terms
of the Plan, will be validly issued, fully paid and nonassessable.
<PAGE>
International Meta Systems, Inc.
January 21, 1997
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Fulbright & Jaworski L.L.P.
<PAGE>
[LETTERHEAD]
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS CONSENT
We have issued our reports dated February 5, 1996 accompanying the financial
statements of International Meta Systems, Inc. included in the Annual Report on
Form 10-KSB for the year ended December 31, 1995 which are incorporated by
reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned reports.
/s/ Singer Lewak Greenbaum & Goldstein LLP
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
January 21, 1997
