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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COMPUTER INTEGRATION CORP.
(Exact name of Registrant as specified in its charter)
DELAWARE 65-0506623
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
7900 GLADES ROAD, SUITE 440, BOCA RATON, FLORIDA 33434
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(Address of Principal Executive Offices) (Zip Code)
COMPUTER INTEGRATION CORP. 1994 STOCK OPTION PLAN, AS AMENDED, AND
- -------------------------------------------------------------------------------
1994 EMPLOYEE INCENTIVE PLAN
(Full title of the plan)
RONALD G. FARRELL
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
COMPUTER INTEGRATION CORP.
7900 GLADES ROAD, SUITE 440
BOCA RATON, FLORIDA
(407) 482-6678
- -------------------------------------------------------------------------------
(Name, address and telephone number, including
area code, of agent for service)
COPY TO:
DONN A. BELOFF, ESQ.
HOLLAND & KNIGHT
ONE EAST BROWARD BOULEVARD, SUITE 1300
FORT LAUDERDALE, FLORIDA 33302
305-525-1000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of regis-
to be registered registered (1) offering price per unit aggregate offering price (2) tration fee (2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 1,055,000 shares $1.80 $1,899,000 $654.83
value $.001
============================================================================================================================
</TABLE>
(1) Represents the maximum number of shares that may be acquired pursuant
to this Registration Statement pursuant to the Computer Integration
Corp. 1994 Stock Option Plan and the 1994 Employee Incentive Plan.
Pursuant to Rule 416 promulgated under the Securities Act of 1933, this
Registration Statement also registers such additional shares of
Common Stock as may be offered or issued to prevent dilution resulting
from stock splits, stock dividends or similar transactions.
(2) Computed pursuant to Rule 457(h) promulgated under the Securities Act
of 1933, as amended, based on the book value of the Registrant's
Common Stock as of March 31, 1996, with respect to shares not yet
subject to outstanding options, shares issued pursuant to the 1994
Stock Option Plan and shares issued and issuable pursuant to the
1994 Employee Incentive Plan.
The exhibit index is located on Form S-8 Page 6.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission by Computer Integration Corp., a Delaware corporation (the
"Corporation" or the "Registrant"), are incorporated herein by reference:
(1) The Corporation's Annual Report filed on Form
10-K for the fiscal year ended June 30, 1995.
(2) The Corporation's Quarterly Reports on Form
10-Q filed for the periods ending September 30, 1995,
December 31, 1995 and March 31, 1996, and on Form 10-Q/A
for the period ending March 31, 1996.
(3) The Corporation's report on Form 8-K filed
with the Commission on July 11, 1995 and amended on September
11, 1995.
(4) All documents subsequently filed by the
Corporation pursuant to Sections 13(a), 13(c), 14, and 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"),
prior to the filing of a post-effective amendment which
indicated that all remaining securities offered have been sold
or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this
Registration Statement and to be part thereof from the date of
filing such documents.
(5) The description of the Corporation's Common
Stock, par value $.001 per share, contained in the Company's
Registration Statement filed on Form 8-A pursuant to Section
12(g) of the Securities Exchange Act of 1934.
Any statement in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the General Corporation Law of the State of Delaware
(the "Delaware Law") grants each corporation organized thereunder the power to
indemnify any person who is or was a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with 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 being
or having been in any such capacity, if he acted in good faith in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
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proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 102(b)(7) of the Delaware Law enables a corporation in its certificate
of incorporation, or an amendment thereto validly approved by its stockholders,
to limit or eliminate the personal liability of the members of its board of
directors for violation of the director's fiduciary duty or care.
Article 10 of the Registrant's Certificate of Incorporation
contains the following provision with respect to the liability of the
Registrant's directors to the Registrant:
A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director except for liability (i) for any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived any improper personal
benefit.
The Registrant has obtained directors and officers liability
insurance. In addition to covering directors and officers of the Registrant,
the insurance also insures the Registrant against amounts paid by it to
indemnify directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
Exhibit Numbers Description
4.1(a) Certificate of Designation of Series A, 9%
Cumulative Convertible Redeemable Preferred Stock
4.1(b) Certificate of Designation of Series B Convertible
Preferred Stock
4.1(c) Certificate of Designation of Series C, 9%
Cumulative Convertible Redeemable Preferred Stock
4.1(d) 1994 Employee Incentive Plan
4.1(e) 1994 Stock Option Plan; Amendment No. 1
to 1994 Stock Option Plan
5.1 Opinion of Holland and Knight
23.1 Consent of Ernst & Young LLP
23.2 Consent of McGladrey & Pullen, LLP
23.3 Consent of Holland and Knight is included in their
opinion filed as Exhibit 5.1 to this Registration
Statement.
24.1 Power of Attorney (included on signature page)
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement;
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) (Section 230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement. [Amended in Release
No. 33-7168 (Paragraph 85,420), effective June 7, 1995,
60 FR 26604.]
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(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on
Form S-3, Form S-8 or Form F-3, and the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at the time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boca Raton, State of Florida, on May 16, 1996.
Computer Integration Corp.
By: s/ Ronald G. Farrell
---------------------------------
Ronald G. Farrell
President and Chairman of the
Board of Directors
GENERAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, each officer and director
whose signature appears below, hereby authorizes, constitutes and appoints
RONALD G. FARRELL his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign this Registration Statement for the
registration under the Securities Act of 1933, as amended, of shares of Common
Stock of Computer Integration Corp. and any and all post-effective amendments
to this Registration Statement, together with any and all exhibits hereto and
thereto and other documents required to be filed with respect hereto and
thereto and to file the same with the Securities and Exchange Commission and
any other regulatory or other authority, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every act and
thing requisite or necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof
and incorporate such changes as the said attorney-in-fact deems appropriate.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons
in the capacities and on the date indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ronald G. Farrell Chairman of the Board, Chief May 16, 1996
-------------------------------------- Executive Officer, and
Ronald G. Farrell Director (Principal Executive
Officer)
/s/ John F. Chiste Chief Financial Officer, May 16, 1996
--------------------------------------- Treasurer, (Principal
John F. Chiste Financial and Accounting
Officer)
Director May __, 1996
-------------------------------------
Samuel C. McElhaney
Director May __, 1996
--------------------------------------
Araldo Cossutta
/s/ Frank J. Zappala Director May 16, 1996
---------------------------------------
Frank Zappala
/s/ Ronald G. Assaf Director May 16, 1996
-------------------------------------
Ronald G. Assaf
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ----
<S> <C> <C>
4.1(a) Certificate of Designation of Series A, 9% Cumulative Convertible Redeemable Preferred Stock . . . . 7
4.1(b) Certificate of Designation of Series B Convertible Preferred Stock . . . . . . . . . . . . . . . . . 22
4.1(c) Certificate of Designation of Series C, 9% Cumulative Convertible Redeemable Preferred Stock . . . . 32
4.1(d) 1994 Employee Incentive Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.1(e) 1994 Stock Option Plan; Amendment No. 1 to 1994 Stock Option Plan . . . . . . . . . . . . . . . . . 69
5.1 Opinion of Holland & Knight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
23.1 Consent of Ernst & Young LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
23.2 Consent of McGladrey & Pullen, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
23.3 Consent of Holland & Knight is included in its opinion filed as Exhibit 5.1
to this Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24.1 Power of Attorney (included on signature page) . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
6
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EXHIBIT 4.1(a)
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COMPUTER INTEGRATION CORP.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS, AND LIMITATIONS OF SERIES A, 9% CUMULATIVE
CONVERTIBLE REDEEMABLE PREFERRED STOCK
Computer Integration Corp., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), does
hereby certify:
That, pursuant to authority conferred upon the Board of
Directors of the Corporation ("Board of Directors") by the Certificate of
Incorporation of the Corporation (the "Certificate"), and pursuant to the
provisions of the Delaware General Corporation Law, said Board of Directors, on
July 12, 1994, duly adopted resolutions providing for the issuance of one
series, aggregating Forty Thousand (40,000) shares, of Series A, 9% Cumulative
Convertible Redeemable Preferred Stock, stated value $100 and par value $.001
per share, which resolutions are as follows:
WHEREAS, the Certificate of Incorporation of the Corporation
authorizes for issuance a class of shares of capital stock known as
Preferred Stock, par value $.001 per share (the "Preferred Stock"),
issuable by the Board of Directors from time to time;
WHEREAS, the Certificate of Incorporation of the Corporation
authorizes the Board of Directors to determine the rights,
preferences, privileges and restrictions granted to or imposed upon
any wholly unissued Preferred Stock, to fix the number of shares
constituting any such class and to determine the designation thereof
or any of them; and
WHEREAS, the Corporation has not issued any shares of such
Preferred Stock and the Board of Directors of the Corporation desires,
pursuant to its authority as aforesaid, to determine and fix the
rights, preferences, privileges and restrictions relating to a class
of said Preferred Stock to be designated "Series A, 9% Cumulative
Convertible Redeemable Preferred Stock" (the "Series A Preferred
Stock").
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
hereby fixes and determines the designation of the number of shares
constituting, and the rights, preferences, privileges and restrictions
relating to, the Series A Preferred Stock as follows:
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1. Designation. The designation of the series
of stock created by this resolution shall be "Series A, 9% Cumulative
Convertible Redeemable Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A Preferred
shall be forty thousand (40,000). Each share of the Series A
Preferred Stock shall have a stated value equal to $100.
2. Dividends. The holders of the Series A
Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of the funds of the Corporation legally
available therefore, cumulative dividends at the annual rate of $9 per
share, payable $4.50 per share on each January 31st and July 31st,
commencing January 31, 1995. Such dividends shall be payable in cash
or in kind. In the year in which shares of Series A Preferred Stock
are issued, in the event that the payment date for the purchase of
shares of Series A Preferred Stock shall be other than January 31st or
July 31st, the initial dividend shall accumulate and be payable pro
rata only from the date of payment to the Corporation for the
respective shares of Series A Preferred Stock. If the dividend on the
Series A Preferred Stock for any dividend period shall not have been
paid or set apart in full for the Series A Preferred Stock, the
aggregate deficiency shall be cumulative and shall be fully paid or
set apart for payment before any dividends shall be paid upon or set
apart for payment for any class of common stock of the Corporation or
any other class of preferred stock of the Corporation ranking junior
thereto. Accumulations of dividends on the Series A Preferred Stock
shall not bear interest.
3. Liquidation Preference. In the event of any
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or otherwise, after payment or
provision for payment of the debts and other liabilities of the
Corporation, the holders of the Series A Preferred Stock shall be
entitled to receive, before the holders of any of the common stock or
other classes of preferred stock of the Corporation ranking junior
thereto, out of the remaining net assets of the Corporation, the
amount of $100 in cash or in kind for each share of Series A Preferred
Stock, plus an amount equal to all dividends accrued but unpaid, if
any, with respect
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to each such share up to the date fixed for distribution. After such
payment shall have been made in full to the holders of the outstanding
Series A Preferred Stock, or funds or assets necessary for such
payment shall have been set aside in trust for the account of the
holders of the outstanding Series A Preferred Stock, so as to be and
continue to be available therefor, the holders of the outstanding
Series A Preferred Stock shall be entitled to no further participation
in such distribution of the assets of the Corporation.
In the event, after payment or provision for payment
of the debts and other liabilities of the corporation, the remaining
net assets of the Corporation are not sufficient to pay the
liquidation preference of the holders of the Series A Preferred Stock,
no such distribution shall be made on account of any shares of any
other class or series of capital stock of the Corporation ranking on a
parity with the shares of the Series A Preferred Stock upon such
liquidation unless proportionate distributive amounts shall be paid on
account of each share of the Series A Preferred Stock, ratably, in
proportion to the full distributable amounts for which holders of all
such parity shares, including other shares of Series A Preferred
Stock, are respectively entitled upon such liquidation.
4. Conversion of Preferred Stock into Common
Stock. Each share of the Series A Preferred Stock shall be under
paragraph 4(a) below convertible at the option of the holder thereof
and under paragraph 4(b) below automatically and mandatorily converted
upon the occurrence of the event described therein; in either event,
any such shares of Series A Preferred Stock shall be converted into
fully paid and nonassessable shares of the Corporation's common stock,
par value $.001 per share (the "Common Stock").
(a) Elective Conversion. Subject to any
other provision of this paragraph 4, each holder of record of any
share(s) of Series A Preferred Stock shall have the right to convert
such holder's share(s) of Series A Preferred Stock, in whole or in
part, including all accrued but unpaid dividends, if any, in
accordance with the Conversion Ratio (defined below), subject to the
adjustments set forth below, at his or her option, at any time and
from time to time after the later of (i) the date that the Corporation
increases the number of
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authorized shares of Common Stock to at least ten million (10,000,000)
shares of Common Stock or (ii) the date on which a Registration
Statement (defined below) that includes the shares of the Common Stock
issuable upon conversion of the Series A Preferred Stock is declared
effective by the U.S. Securities and Exchange Commission ("SEC"), or
any other Federal agency at the time administering the Securities Act
of 1933, as amended, or any similar Federal statute, and the rules and
regulations of the SEC issued under such Act, as they each may, from
time to time, be in effect.
In case any shares of Series A Preferred
Stock shall have been called for redemption pursuant to paragraph 5
hereof, any election to convert under this paragraph 4(a) with respect
to the shares so called for redemption shall cease and terminate at
the close of business on the tenth day prior to the date fixed for the
redemption of such shares, unless default shall be made in the payment
of the redemption price.
Any holder of a share or shares of Series A
Preferred Stock electing to convert his or her Series A Preferred
Stock into Common Stock shall surrender the certificate(s)
representing all of the share(s) of Series A Preferred Stock so to be
converted, duly endorsed to the Corporation or in blank, at the
principal office of the Corporation (or such other place as may be
designated by the Corporation), and shall give written notice to the
Corporation at said office that he or she elects to convert the same
and therein set forth the name or names (with the address or
addresses) in which the shares of Common Stock are to be issued.
If the last day of the exercise period of the
conversion right in the city where the principal place of business of
the Corporation (or in the city of the principal office of such other
entity as the Corporation shall have designated as the place so to
surrender Series A Preferred Stock for conversion, as aforesaid) shall
be a legal holiday or a day on which banking institutions are
authorized by law to close, then such conversion right may be
exercised in such city on the next succeeding day not in such city a
legal holiday or a day on which banking institutions are authorized by
law to close.
For purposes of this paragraph 4(a),
the term "Registration Statement" shall mean a registration statement
filed by the Corporation with the SEC for a public offering and sale
of securities of the
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Corporation (other than a registration statement on Form S-4 or Form
S-8, or their successors, or any other form for a limited purpose, or
any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation).
(b) Mandatory Conversion. Each share of
the Series A Preferred Stock, and all accrued but unpaid dividends, if
any, shall automatically and mandatorily convert, without the option
of any holder of any share(s) of Series A Preferred Stock or any
action of the Corporation, to shares of Common Stock in accordance
with the Conversion Ratio (defined below) as of the close of business
of the date (the "Automatic Conversion Date") which ends a
five-consecutive trading-day period on which a quote is available
(such trade dates need not occur an consecutive business days if no
quote is available for a given business day) during which the average
of the bid and ask price of the Common Stock on the OTC Bulletin Board
("OTCBB") (or any successor thereto) or on the NASDAQ Small-Cap
Market(R), if then admitted for trading thereon (or the average of the
last reported sale price on the Nasdaq National Market(R) System
("Nasdaq-NMS") or other national stock exchange on which the Common
Stock is principally traded, if the Common Stock is then listed or
admitted for trading on the Nasdaq-NMS or such other exchange), equals
or exceeds $4.00 per share. The term "principally traded" as used in
the preceding sentence shall refer to that national securities
exchange or Nasdaq-NMS, if any, on which the greatest number of shares
of Common Stock have been traded during such five-day period.
As soon as practicable after the Automatic
Conversion Date, the Corporation shall provide each holder of record
of Series A Preferred Stock with notice of the automatic conversion
and the Automatic Conversion Date and call upon the holders to
surrender to the Corporation, in the manner and at the place
designated, the certificate(s) representing shares of the Series A
Preferred Stock. Such notice shall be by mail to each holder of the
Series A Preferred Stock at the address last shown on the records of
the Corporation for such holder or given by such holder to the
Corporation for the holder for the purpose of notice or, if no such
address appears or is given, at the place where the principal
executive office of the Corporation is located. Notwithstanding any
failure by a holder to deliver the certificates representing his or
her shares of Series A
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Preferred Stock, after the Automatic Conversion Date all such
certificates of the Series A Preferred Stock shall be deemed to
represent the appropriate number of shares of Common Stock.
Notwithstanding any provision contained in this paragraph 4(b), no
share of the Series A Preferred Stock called for redemption pursuant
to paragraph 5 hereof shall automatically and mandatorily convert at
any time after the Corporation has provided notice of its intent to
redeem such shares pursuant to paragraph 5 hereof, unless the
Corporation shall provide notice to the holder on or before the date
specified for redemption of such shares of Series A Preferred Stock
that it elects to have the mandatory conversion provisions of this
paragraph 4(b) apply and override the Corporation's notice of
redemption (the "Notice of Cancellation"). Unless such Notice of
Cancellation is provided, the automatic and mandatory conversion under
this paragraph 4(b) shall cease and terminate with respect to all
shares of Series A Preferred Stock so called for redemption at the
close of business on the date that the Corporation provides notice of
such redemption pursuant to Paragraph 5 hereof. The Corporation's
redemption, including any related notice to redeem, of certain shares
of the Series A Preferred Stock shall have no effect on the automatic
and mandatory conversion under paragraph 4(b) of those other shares of
Series A Preferred Stock with respect to which notice of redemption
was not provided.
(c) Additional Provisions Applicable to
All Conversions. Any conversion of Series A Preferred Stock into
Common Stock pursuant to this paragraph 3 shall be subject to the
following additional terms and provisions:
(1) All shares of the Series A
Preferred Stock and all accrued but unpaid dividends, if any, shall be
convertible (or, as the case may be, automatically converted) into
Common Stock at the rate of two and 50/100 dollars ($2.50) per share
of Common Stock (initially equivalent to a rate of forty (40) shares
of Common Stock for each share of Series A Preferred Stock based on
the stated value of $100 of the Series A Preferred Stock) (the
"Conversion Ratio"), subject to the adjustments set forth in this
paragraph 4(c) below.
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(2) Subject to compliance with all
applicable securities laws, as soon as practicable after the surrender
for conversion of any certificate(s) representing Series A Preferred
Stock (in the case of an elective conversion) or after the Automatic
Conversion Date (in the case of an automatic conversion), the
Corporation shall deliver or cause to be delivered at the principal
office of the Corporation (or such other place as may be designated by
the Corporation), to each holder of Series A Preferred Stock,
certificates representing the shares of Common Stock issuable upon
such conversion, issued in such name or names as such holder may
direct. Except as otherwise provided herein, shares of the Series A
Preferred Stock shall be deemed to have been converted, in the case of
an elective conversion pursuant to paragraph 4(a), as of the close of
business on the date of the surrender for conversion of the
certificates representing Series A Preferred Stock, or in the case of
an automatic conversion pursuant to paragraph 4(b), as of the close of
business on the Automatic Conversion Date, and in either case the
rights of such holders of the Series A Preferred Stock shall cease,
and the person(s) in whose name(s) the certificates for such shares
are to be issued shall be treated for all purposes as having become
the record holder(s) of such Common Stock, at such time, or if such
day shall not constitute a business day, then the close of business on
the next succeeding business day.
(3) The Corporation shall not be
required to issue any fractions of shares of Common Stock upon
conversions of any shares of Series A Preferred Stock. If more than
one share of Series A Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares
of Common Stock which shall be issuable upon conversion of such Series
A Preferred Stock shall be computed on the basis of the aggregate
number of shares of the Series A Preferred Stock so surrendered. If
any interest in a fractional share of Common Stock would otherwise be
deliverable upon the conversion of any shares of Series A Preferred
Stock, the Corporation shall make adjustment for such fractional share
interest by payment of an amount in cash equal to the same fraction of
the value of a full share of Common Stock of the Corporation as
determined by the Corporation, which determination shall be
conclusive.
14
<PAGE> 9
(4) In the event that the
Corporation shall at any time subdivide or combine in a greater or
lesser number of shares the outstanding shares of Common Stock, the
number of shares of Common Stock issuable upon conversion of any
shares of Series A Preferred Stock prior to the occurrence of such
event shall be proportionately increased in the case of subdivision or
decreased in the case of a combination, effective in either case at
the close of business on the date when such subdivision or combination
shall become effective.
(5) In the event that the
Corporation shall be consolidated with or merged into any other
corporation, provision shall be made as part of the terms of such
consolidation or merger so that any holder of Series A Preferred Stock
may thereafter receive in lieu of Common Stock otherwise issuable to
him upon conversion of his or her Series A Preferred Stock, but only
in accordance with the conversion ratio stated in this paragraph 4,
the same kind and amount of securities as may be distributable upon
such consolidation or merger with respect to the Common Stock.
(6) In the event that the
Corporation shall at any time pay to the holders of Common Stock a
dividend in Common Stock, the number of shares of Common Stock of the
Corporation issuable upon any conversion of the Series A Preferred
Stock shall be proportionately increased, effective following the
close of business on the record date for determination of the holders
of Common Stock entitled to such dividend.
(7) Such adjustments shall be made
successively if more than one event listed in paragraphs 4(c)(4), (5)
or (6) shall occur; provided, however, that no adjustment need be made
by the Corporation until such adjustments cumulatively aggregate at
least five percent (5%) of the then current Conversion Ratio.
(8) No adjustment of the Conversion
Ratio shall be made by any event or occurrence other than those
enumerated in this paragraph 4(c).
15
<PAGE> 10
(9) The issuance of certificates for
shares of Common Stock upon conversion of any shares of the Series A
Preferred Stock shall be made without charge for any tax in respect of
such issuance. However, if any certificate is to be issued in a name
other than that of the holder of record as the Series A Preferred
Stock so converted, the person or persons requesting the issuance
thereof shall pay to the Corporation the amount of any tax which may
be payable in respect of any transfer involved in such issuance, or
shall establish to the satisfaction of the Corporation that such tax
has been paid or is not due and payable.
5. Redemption of Preferred Stock. The Series A
Preferred Stock of any holder shall be redeemable, in whole or in
part, at the option of the Corporation by resolution of its Board of
Directors, from time to time and at anytime, commencing one year after
the date that the Series A Preferred Stock certificate was issued to
the original holder of such shares of Series A Preferred Stock. The
redemption price shall equal $110, plus all dividends accrued and
unpaid on the Series A Preferred Stock so redeemed up to the date
fixed for redemption. The Corporation shall give notice of redemption
as hereinafter provided.
In the event that less than the entire amount of the
Series A Preferred Stock outstanding is redeemed at any one time, the
shares to be redeemed shall be selected by lot in a manner to be
determined by the Board of Directors of the Corporation.
The Corporation shall give notice of redemption not
less than thirty (30) nor more than sixty (60) days prior to the date
fixed for redemption of the Series A Preferred Stock or any part
thereof. Such notice shall specify the time and place thereof and
shall be given by mail to each holder of record of shares of Series A
Preferred Stock chosen for redemption at the address last shown on the
records of the Corporation for such holder or given by such holder to
the Corporation for the purpose of notice or, if no such address
appears or is given, at the place where the principal executive office
of the Corporation is located. Any notice which was mailed in the
manner herein provided shall be conclusively presumed to have been
duly given whether or not the holder received the notice.
16
<PAGE> 11
Upon such redemption date, or upon such earlier date
as the Board of Directors shall designate for payment of the
redemption price (unless the Corporation shall default in the payment
of the redemption price as set forth in such notice), the holders of
shares of Series A Preferred Stock selected for redemption to whom
notice has been duly given shall cease to be stockholders with respect
to such shares and shall have no interest in or claim against the
Corporation by virtue thereof and shall have no other rights with
respect to such shares except the right to convert such shares within
the time hereinafter set forth and except the right to receive the
moneys payable upon such redemption from, the Corporation or
otherwise, without interest thereon, upon surrender (and endorsement,
if required by the Corporation) of the certificates, and the shares
represented thereby shall no longer be deemed to be outstanding.
Upon redemption or conversion of any share of Series
A Preferred Stock in the manner set out herein, or upon purchase of
any share of Series A Preferred Stock by the Corporation, the shares
so acquired by the Corporation shall be cancelled.
After giving any notice of redemption and prior to
the close of business on the tenth day prior to the redemption date,
as hereinafter provided, the holders of the Series A Preferred Stock
so called for redemption may convert such stock into Common Stock of
the Corporation in accordance with the conversion privileges set forth
in paragraph 4(a) hereof.
In the event that the Corporation shall at any time
subdivide or combine in a greater or lesser number of shares the
outstanding shares of Series A Preferred Stock or issue shares of
Common Stock as the form of a dividend paid with respect to its Common
Stock, the consideration payable upon redemption of the Series A
Preferred Stock shall be proportionately decreased in the case of
subdivision or increased in the case of a combination or the payment
of such a stock dividend, effective in either case at the close of
business on the date when such subdivision or combination shall become
effective.
6. Voting Rights.
17
<PAGE> 12
(a) Except as otherwise required by law
or as otherwise specifically provided herein, the holders of the
Series A Preferred Stock shall not be entitled to vote at any meeting
of the stockholders for the election of directors or for any other
purpose or otherwise to participate in any action taken by the
Corporation or the stockholders thereof, or to receive notice of any
meeting of stockholders.
(b) If at any time, and from time to
time, the Corporation shall default in paying two consecutive
dividends for a period of more than 30 days as to each dividend
payment date (an "Event of Default"), then the holders of the Series A
Preferred Stock shall have the exclusive right, voting separately as a
class, to elect one additional director to the Board of Directors of
the Corporation in the manner provided in paragraph 6(d) below, and
the holders of shares entitled to vote thereon other than the Series A
Preferred Stock shall be entitled to elect the remaining members of
the Board of Directors. Such voting rights shall remain vested until
all defaults respecting dividends shall have been cured, whereupon (i)
the holders of the Series A Preferred Stock shall be divested of such
voting right (subject, however, to such voting right at any time or
from time to time similarly arising and being divested); (ii) the term
of any director then in office elected by the holders of the Series A
Preferred Stock shall terminate; and (iii) the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by the same number by which it was increased at the time the
voting rights of the holders of the Series A Preferred Stock arose.
Notwithstanding anything to the contrary in this paragraph 6(b), any
dividend payment date which forms the basis of an Event of Default
subsequently cured in the manner described in the preceding sentence,
may not be counted for purposes of determining a subsequent Event of
Default. In each instance in which the holders of the Series A
Preferred Stock shall be entitled to vote for directors as provided
herein, each such holder shall be entitled to one vote for each share
of the Series A Preferred Stock held.
(c) Directors elected by the holders of
the Series A Preferred Stock shall serve for a term ending on the
earlier to occur of (i) the first annual meeting of stockholders of
the Corporation following an Event of Default or (ii) until all
defaults respecting dividends shall have been cured. At each annual
meeting
18
<PAGE> 13
of the Corporation's stockholders following an Event of Default, until
such default shall have been cured, the holders of Series A Preferred
Stock shall be entitled to elect one director to the Board of
Directors of the Corporation.
(d) At any time when the holders of the
Series A Preferred Stock shall have thus become entitled to elect
directors, any provision of the by-laws of the Corporation to the
contrary notwithstanding, a special meeting of the holders of Series A
Preferred Stock may be called by the holders of 51% of the Series A
Preferred Stock for the purpose of electing directors, by notice being
mailed, first class postage prepaid, not less than 10 days prior to
the proposed date of such meeting, to each holder of record of Series
A Preferred Stock at his address as the same appears on the
Corporation's record of holders of the Series A Preferred Stock.
At any such special meeting at which the holders of
the Series A Preferred Stock shall be entitled to elect directors, the
holders of a majority of the then outstanding Series A Preferred Stock
present in person or by proxy shall be sufficient to constitute a
quorum for the election of such director. The person elected by the
holders of the Series A Preferred Stock at any meeting held in
accordance with the terms of the preceding sentence shall become a
director as of the date of such election and, together with the
directors remaining in office or such persons, if any, as may be
elected by the holders of voting shares other than Series A Cumulative
Preferred Stock, shall constitute the Board of Directors of the
Corporation. Any director so elected by the holders of the Series A
Preferred Stock may be removed by, and shall not be removed except by,
the vote of the holders of record of a majority of the shares of the
Series A Preferred Stock, voting as a single class at a meeting of the
stockholders, or of the holders of the Series A Preferred Stock called
for that purpose. Any vacancy, whether as a result of removal or
otherwise, in the office of a director elected by the holders of the
Series A Preferred Stock may be filled by, and shall only be filled
by, the majority vote of the holders of the Series A Preferred Stock,
voting as a separate class. A meeting for the removal of a director
elected by the
19
<PAGE> 14
holders of the Series A Preferred Stock and the filling of the vacancy
created thereby or otherwise shall be called, noticed and held in the
same manner as provided for in the initial election of such board
members.
(e) Notwithstanding the provisions of
paragraph 6(d), the election or removal of such directors may be
evidenced by one or more written consents executed by the holders of a
majority of the then outstanding Series A Preferred Stock without the
necessity of a meeting, prior notice, and a formal vote. Within ten
(10) days after any such meeting or written consent, the holders of
the Series A Preferred Stock shall provide written notice to the
Corporation of the election, or removal, as the case may be, of such
directors.
(f) Notwithstanding anything herein to
the contrary, within thirty (30) days of the end of the calendar
quarter in which the holders of the Series A Preferred Stock shall
have thus become entitled to elect directors, holders of 51% of the
Series A Preferred Stock may, by written consent to the Corporation,
irrevocably terminate said voting rights. After such written
termination, the holders of the Series A Preferred Stock shall not be
entitled to vote at any meeting of the stockholders for the election
of directors or for any other purpose or otherwise to participate in
any action taken by the Corporation or the stockholders thereof, or to
receive notice of any meeting of stockholders.
7. Ranking. As long as any shares of the
Series A Preferred Stock remain outstanding, the Corporation shall
not, without obtaining the prior written consent of the holders of at
least a majority in number of the shares of the Series A Preferred
Stock then outstanding, create, authorize or issue any other class or
series of capital stock of the Corporation, the terms of which provide
that such class or series shall rank prior to the Series A Preferred
Stock in respect to dividend rights or rights upon dissolution,
liquidation or winding up of the Corporation; provided, however, the
Corporation may at any time create, authorize or issue, without the
consent of any of the holders of the Series A Preferred Stock, other
classes or series of capital stock which rank junior to, or on parity
with, the Series A Preferred Stock in respect to dividend rights and
upon dissolution, liquidation or winding up of the Corporation.
20
<PAGE> 15
IN WITNESS WHEREOF, Computer Integration Corp., a Delaware
corporation, has caused its corporate seal to be affixed hereto and this
Certificate of Designation to be signed by its President and Secretary this
12th day of July 1994.
COMPUTER INTEGRATION CORP.
By: /s/ RONALD G. FARRELL
----------------------------
Ronald G. Farrell, President
By: /s/ JOHN F. CHISTE
----------------------------
John F. Chiste, Secretary
21
<PAGE> 16
Exhibit 4.1(b)
22
<PAGE> 17
COMPUTER INTEGRATION CORP.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS, AND LIMITATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK
Computer Integration Corp., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), does
hereby certify:
That, pursuant to authority conferred upon the Board of
Directors of the Corporation ("Board of Directors") by the Certificate of
Incorporation of the Corporation (the "Certificate"), and pursuant to the
provisions of the Delaware General Corporation Law, said Board of Directors, on
July 12, 1994, duly adopted resolutions providing for the issuance of one
series, aggregating Two Hundred Fifty (250) shares, of Series B Convertible
Preferred Stock, stated value $4,000 and par value $.001 per share, which
resolutions are as follows:
WHEREAS, the Certificate of Incorporation of the Corporation
authorizes for issuance a class of shares of capital stock known as
Preferred Stock, par value $.001 per share (the "Preferred Stock"),
issuable by the Board of Directors from time to time;
WHEREAS, the Certificate of Incorporation of the Corporation
authorizes the Board of Directors to determine the rights,
preferences, privileges and restrictions granted to or imposed upon
any wholly unissued Preferred Stock, to fix the number of shares
constituting any such class and to determine the designation thereof
or any of them; and
WHEREAS, the Corporation has not issued any shares of such
Preferred Stock and the Board of Directors of the Corporation desires,
pursuant to its authority as aforesaid, to determine and fix the
rights, preferences, privileges and restrictions relating to a class
of said Preferred Stock to be designated "Series B Convertible
Preferred Stock" (the "Series B Preferred Stock").
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
hereby fixes and determines the designation of the number of shares
constituting, and the rights, preferences, privileges and restrictions
relating to, the Series B Preferred Stock as follows:
23
<PAGE> 18
1. Designation. The designation of the
series of stock created by this resolution shall be "Series B
Convertible Preferred Stock" (the "Series B Preferred Stock")
and the number of shares constituting the Series B Preferred
shall be Two Hundred Fifty (250). Each share of the Series B
Preferred Stock shall have a stated value equal to $4,000.00.
2. Dividends. No dividends shall be
payable with respect to the Series B Preferred Stock.
3. Liquidation Preference. In the
event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or otherwise,
after payment or provision for payment of the debts and other
liabilities of the Corporation, the holders of the Series B
Preferred Stock shall be entitled to receive, before the
holders of any of the common stock or other classes of
preferred stock of the Corporation ranking junior thereto, out
of the remaining net assets of the Corporation, the amount of
$4,000.00 in cash or in kind for each share of Series B
Preferred Stock. After such payment shall have been made in
full to the holders of the outstanding Series B Preferred
Stock, or funds or assets necessary for such payment shall
have been set aside in trust for the account of the holders of
the outstanding Series B Preferred Stock, so as to be and
continue to be available therefor, the holders of the
outstanding Series B Preferred Stock shall be entitled to no
further participation in such distribution of the assets of
the Corporation.
In the event that, after payment or provision
for payment of the debts and other liabilities of the
Corporation and preferences or other rights granted to the
holders of Series B Preferred Stock, the remaining net assets
of the Corporation are not sufficient to pay the liquidation
preference of the holders of the Series B Preferred Stock,
then no such distribution shall be made on account of any
shares of any other class or series of capital stock of the
Corporation ranking on a parity with the shares of the Series
24
<PAGE> 19
B Preferred Stock upon such liquidation unless proportionate
distributive amounts shall be paid on account of each share of
the Series B Preferred Stock, ratably, in proportion to the
full distributable amounts for which holders of all such
parity shares, including other shares of Series B Preferred
Stock, are respectively entitled upon such liquidation.
4. Mandatory Conversion of Preferred
Stock. The Series B Preferred Stock of any holder shall be
mandatorily convertible, in whole, at the option of the
Corporation by resolution of its Board of Directors, at any
time, into shares of the Corporation's common stock, par value
$.001 per share (the "Common Stock"), at a conversion ratio of
Four Thousand (4,000) shares of Common Stock (the "Conversion
Ratio") for each share of the Series B Preferred Stock. The
Corporation shall give notice of any mandatory conversion as
hereinafter provided.
The Corporation shall give notice of any
mandatory conversion not less than ten (10) nor more than
sixty (60) days prior to the date fixed for mandatory
conversion of the Series B Preferred Stock. Such notice shall
specify the time and place thereof and shall be given by mail
to each holder of record of shares of Series B Preferred Stock
chosen for mandatory conversion at the address last shown on
the records of the Corporation for such holder or given by
such holder to the Corporation for the purpose of notice or,
if no such address appears or is given, at the place where the
principal executive office of the Corporation is located. Any
notice which was mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not
the holder received the notice.
Upon such mandatory conversion date the
holders of shares of Series B Preferred Stock selected for
mandatory conversion to whom notice has been duly given shall
cease to be stockholders with respect to such shares and shall
have no interest in or claim against the Corporation by virtue
thereof and shall be deemed shareholders with respect to
shares of the Common Stock issuable in connection with such
mandatory conversion.
25
<PAGE> 20
Upon conversion of any share of Series B
Preferred Stock in the manner set out herein, the shares of
Series B Preferred Stock so acquired by the Corporation shall
be cancelled.
5. Elective Conversion of Preferred
Stock into Common Stock. Each holder of record of any
share(s) of Series B Preferred Stock shall have the right to
convert all, but not less than all, of such holder's share(s)
of Series B Preferred Stock, into shares of the Corporation's
Common Stock at the same Conversion Ratio as is set forth in
Paragraph 4 hereof; PROVIDED, HOWEVER, that no such conversion
shall be permitted at any time prior to December 31, 1994.
Any holder of a share or shares of Series B
Preferred Stock electing to convert his or her Series B
Preferred Stock into Common Stock shall surrender the
certificate(s) representing all of the share(s) of Series B
Preferred Stock, duly endorsed to the Corporation or in blank,
at the principal office of the Corporation (or such other
place as may be designated by the Corporation), and shall give
written notice to the Corporation at said office that he or
she elects to convert the same and therein set forth the name
or names (with the address or addresses) in which the shares
of Common Stock are to be issued.
Subject to compliance with all applicable
securities laws, as soon as practicable after the surrender
for elective conversion of any certificate(s) representing
Series B Preferred Stock, the Corporation shall deliver or
cause to be delivered at the principal office of the
Corporation (or such other place as may be designated by the
Corporation), to each holder of Series B Preferred Stock,
certificates representing the shares of Common Stock issuable
upon such elective conversion, issued in such name or names as
such holder may direct. Except as otherwise provided herein,
shares of the Series B Preferred Stock shall be deemed to have
been converted as of the close of business on the date of the
surrender for conversion of the certificates representing
Series B Preferred Stock, and the rights of such holders of
the Series B Preferred Stock shall cease, and the person(s) in
whose name(s) the certificates for such shares are to be
issued shall be treated for all purposes as having become the
record holder(s)
26
<PAGE> 21
of such Common Stock, at such time, or if such day shall not
constitute a business day, then the close of business on the
next succeeding business day.
6. Additional Provisions Applicable to
All Conversions. Any conversion of Series B Preferred Stock
into Common Stock pursuant to Paragraphs 4 or 5 shall be
subject to the following additional terms and provisions:
(a) The Corporation shall not be
required to issue any fractions of shares of Common Stock upon
conversions of any shares of Series B Preferred Stock. If any
interest in a fractional share of Common Stock would otherwise
be deliverable upon the conversion of any shares of Series B
Preferred Stock, the Corporation shall make adjustment for
such fractional share interest by payment of an amount in cash
equal to the same fraction of the value of a full share of
Common Stock of the Corporation as determined by the
Corporation, which determination shall be conclusive.
(b) In the event that the
Corporation shall at any time subdivide or combine in a
greater or lesser number of shares the outstanding shares of
Common Stock, the Conversion Ratio prior to the occurrence of
such event shall be proportionately increased in the case of
subdivision or decreased in the case of a combination,
effective in either case at the close of business on the date
when such subdivision or combination shall become effective.
(c) In the event that the
Corporation shall be consolidated with or merged into any
other corporation, provision shall be made as part of the
terms of such consolidation or merger so that any holder of
Series B Preferred Stock may thereafter receive in lieu of
Common Stock otherwise issuable to him upon conversion of his
or her Series B Preferred Stock, but only in accordance with
the conversion ratio stated herein, the same kind and amount
of securities as may be distributable upon such consolidation
or merger with respect to the Common Stock.
27
<PAGE> 22
(d) In the event that the
Corporation shall at any time pay to the holders of Common
Stock a dividend in Common Stock, the Conversion Ratio shall
be proportionately increased, effective following the close of
business on the record date for determination of the holders
of Common Stock entitled to such dividend.
(e) Such adjustments shall be made
successively if more than one event listed in paragraphs 6(b),
(c) or (d) shall occur; provided, however, that no adjustment
need be made by the Corporation until such adjustments
cumulatively aggregate at least five percent (5%) of the then
current Conversion Ratio.
(f) No adjustment of the Conversion
Ratio shall be made by any event or occurrence other than
those enumerated in this paragraph 6.
(g) The issuance of certificates
for shares of Common Stock upon conversion of any shares of
the Series B Preferred Stock shall be made without charge for
any tax in respect of such issuance. However, if any
certificate is to be issued in a name other than that of the
holder of record as the Series B Preferred Stock so converted,
the person or persons requesting the issuance thereof shall
pay to the Corporation the amount of any tax which may be
payable in respect of any transfer involved in such issuance,
or shall establish to the satisfaction of the Corporation that
such tax has been paid or is not due and payable.
7. Voting Rights. Except as otherwise
required by law or as otherwise specifically provided herein,
the holders of the Series B Preferred Stock shall not be
entitled to vote at any meeting of the stockholders for the
election of directors or for any other purpose or otherwise to
participate in any action taken by the Corporation or the
stockholders thereof.
28
<PAGE> 23
8. Ranking. As long as any
shares of the Series B Preferred Stock remain outstanding, the
Corporation shall not, without obtaining the prior written
consent of the holders of at least a majority in number of the
shares of the Series B Preferred Stock then outstanding,
create, authorize or issue any other class or series of
capital stock of the Corporation, the terms of which provide
that such class or series shall rank prior to the Series B
Preferred Stock in respect to dividend rights or rights upon
dissolution, liquidation or winding up of the Corporation;
provided, however, the Corporation may at any time create,
authorize or issue, without the consent of any of the holders
of the Series B Preferred Stock, other classes or series of
capital stock which rank junior to, or on parity with, the
Series B Preferred Stock in respect to dividend rights and
upon dissolution, liquidation or winding up of the
Corporation. Without limiting the generality of the
foregoing, the Series B Preferred Stock shall rank on parity
with the Corporation's Series A 9% Cumulative Convertible
Redeemable Preferred Stock with respect to the dissolution,
liquidation or winding up of the affairs of the Corporation,
whether voluntary or otherwise.
29
<PAGE> 24
IN WITNESS WHEREOF, Computer Integration Corp., a Delaware
corporation, has caused its corporate seal to be affixed hereto and this
Certificate of Designation to be signed by its President and Secretary this
12th day of July 1994.
COMPUTER INTEGRATION CORP.
By: /s/ RONALD G. FARRELL
----------------------------
Ronald G. Farrell, President
By: /s/ JOHN F. CHISTE
----------------------------
John F. Chiste, Secretary
30
<PAGE> 25
Exhibit 4.1(c)
31
<PAGE> 26
COMPUTER INTEGRATION CORP.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS, AND LIMITATIONS OF SERIES C, 9% CUMULATIVE
CONVERTIBLE REDEEMABLE PREFERRED STOCK
Computer Integration Corp., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), does
hereby certify:
That, pursuant to authority conferred upon the Board of
Directors of the Corporation ("Board of Directors") by the Certificate of
Incorporation of the Corporation (the "Certificate"), and pursuant to the
provisions of the Delaware General Corporation Law, said Board of Directors, on
July 12, 1994, duly adopted resolutions providing for the issuance of one
series, aggregating Two Hundred Fifty (250) shares, of Series C, 9% Cumulative
Convertible Redeemable Preferred Stock (the "Series C Preferred Stock"), stated
value $4,000 and par value $.001 per share, which resolutions are as follows:
WHEREAS, the Certificate of Incorporation of the Corporation
authorizes for issuance a class of shares of capital stock known as
Preferred Stock, par value $.001 per share (the "Preferred Stock"),
issuable by the Board of Directors from time to time;
WHEREAS, the Certificate of Incorporation of the Corporation
authorizes the Board of Directors to determine the rights,
preferences, privileges and restrictions granted to or imposed upon
any wholly unissued Preferred Stock, to fix the number of shares
constituting any such class and to determine the designation thereof
or any of them; and
WHEREAS, the Corporation has not issued any shares of such
Preferred Stock and the Board of Directors of the Corporation desires,
pursuant to its authority as aforesaid, to determine and fix the
rights, preferences, privileges and restrictions relating to a class
of said Preferred Stock to be designated "Series C, 9% Cumulative
Convertible Redeemable Preferred Stock" (the "Series C Preferred
Stock").
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors
hereby fixes and determines the designation of the number of shares
constituting, and the rights, preferences, privileges and restrictions
relating to, the Series C Preferred Stock as follows:
32
<PAGE> 27
1. Designation. The designation of the series
of stock created by this resolution shall be "Series C, 9% Cumulative
Convertible Redeemable Preferred Stock" (the "Series C Preferred
Stock") and the number of shares constituting the Series C Preferred
shall be two hundred fifty (250). Each share of the Series C
Preferred Stock shall have a stated value equal to $4,000.
2. Dividends. The holders of the Series C
Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of the funds of the Corporation legally
available therefore, cumulative dividends at the annual rate of $360
per share, payable $180 per share on each January 31st and July 31st,
commencing January 31, 1995. Such dividends shall be payable in cash
or in kind. In the year in which shares of Series C Preferred Stock
are issued, in the event that the payment date for the purchase of
shares of Series C Preferred Stock shall be other than January 31st or
July 31st, the initial dividend shall accumulate and be payable pro
rata only from the date of payment to the Corporation for the
respective shares of Series C Preferred Stock. If the dividend on the
Series C Preferred Stock for any dividend period shall not have been
paid or set apart in full for the Series C Preferred Stock, the
aggregate deficiency shall be cumulative and shall be fully paid or
set apart for payment before any dividends shall be paid upon or set
apart for payment for any class of common stock of the Corporation or
any other class of preferred stock of the Corporation ranking junior
thereto. Accumulations of dividends on the Series C Preferred Stock
shall not bear interest.
3. Liquidation Preference. In the event of any
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or otherwise, after payment or
provision for payment of the debts and other liabilities of the
Corporation, the holders of the Series C Preferred Stock shall be
entitled to receive, before the holders of any of the common stock or
other classes of preferred stock of the Corporation ranking junior
thereto, out of the remaining net assets of the Corporation, the
amount of $4,000 in cash or in kind for each share of Series C
Preferred Stock, plus an amount equal to all dividends accrued but
unpaid, if any, with
33
<PAGE> 28
respect to each such share up to the date fixed for distribution.
After such payment shall have been made in full to the holders of the
outstanding Series C Preferred Stock, or funds or assets necessary for
such payment shall have been set aside in trust for the account of the
holders of the outstanding Series C Preferred Stock, so as to be and
continue to be available therefor, the holders of the outstanding
Series C Preferred Stock shall be entitled to no further participation
in such distribution of the assets of the Corporation.
In the event, after payment or provision for payment
of the debts and other liabilities of the corporation, the remaining
net assets of the Corporation are not sufficient to pay the
liquidation preference of the holders of the Series C Preferred Stock,
no such distribution shall be made on account of any shares of any
other class or series of capital stock of the Corporation ranking on a
parity with the shares of the Series C Preferred Stock upon such
liquidation unless proportionate distributive amounts shall be paid on
account of each share of the Series C Preferred Stock, ratably, in
proportion to the full distributable amounts for which holders of all
such parity shares, including other shares of Series C Preferred
Stock, are respectively entitled upon such liquidation.
4. Conversion of Preferred Stock into Common
Stock. Each share of the Series C Preferred Stock shall be under
paragraph 4(a) below convertible at the option of the holder thereof
and under paragraph 4(b) below automatically and mandatorily converted
upon the occurrence of the event described therein; in either event,
any such shares of Series C Preferred Stock shall be converted into
fully paid and nonassessable shares of the Corporation's common stock,
par value $.001 per share (the "Common Stock").
(a) Elective Conversion. Subject to any
other provision of this paragraph 4, each holder of record of any
share(s) of Series C Preferred Stock shall have the right to convert
such holder's share(s) of Series C Preferred Stock, in whole or in
part, including all accrued but unpaid dividends, if any, in
accordance with the Conversion Ratio (defined below), subject to the
adjustments set forth below, at his or her option, at any time and
from time to time after the date that the Corporation increases the
number of authorized shares of
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<PAGE> 29
Common Stock to at least ten million (10,000,000) shares of Common
Stock (whether by amendment of its Articles of Incorporation, merger
into another corporation with such amount of authorized shares of
common stock, or otherwise).
In case any shares of Series C Preferred
Stock shall have been called for redemption pursuant to paragraph 5
hereof, any election to convert under this paragraph 4(a) with respect
to the shares so called for redemption shall cease and terminate at
the close of business on the tenth day prior to the date fixed for the
redemption of such shares, unless default shall be made in the payment
of the redemption price.
Any holder of a share or shares of Series C
Preferred Stock electing to convert his or her Series C Preferred
Stock into Common Stock shall surrender the certificate(s)
representing all of the share(s) of Series C Preferred Stock so to be
converted, duly endorsed to the Corporation or in blank, at the
principal office of the Corporation (or such other place as may be
designated by the Corporation), and shall give written notice to the
Corporation at said office that he or she elects to convert the same
and therein set forth the name or names (with the address or
addresses) in which the shares of Common Stock are to be issued.
If the last day of the exercise period of the
conversion right in the city where the principal place of business of
the Corporation (or in the city of the principal office of such other
entity as the Corporation shall have designated as the place so to
surrender Series C Preferred Stock for conversion, as aforesaid) shall
be a legal holiday or a day on which banking institutions are
authorized by law to close, then such conversion right may be
exercised in such city on the next succeeding day not in such city a
legal holiday or a day on which banking institutions are authorized by
law to close.
(b) Mandatory Conversion. Each share of
the Series C Preferred Stock, and all accrued but unpaid dividends, if
any, shall automatically and mandatorily convert, without the option
of any holder of any share(s) of Series C Preferred Stock or any
action of the Corporation, to shares of Common Stock in accordance
with the Conversion Ratio (defined below) as of the close of business
of the date (the "Automatic Conversion Date") which ends a
five-consecutive trading-day period on which a quote is available
(such trade
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<PAGE> 30
dates need not occur on consecutive business days if no quote is
available for a given business day) during which the average of the
bid and ask price of the Common Stock on the OTC Bulletin Board
("OTCBB") (or any successor thereto) or on the NASDAQ Small-Cap
Market(R), if then admitted for trading thereon (or the average of the
last reported sale price on the Nasdaq National Market(R) System
("Nasdaq-NMS") or other national stock exchange on which the Common
Stock is principally traded, if the Common Stock is then listed or
admitted for trading on the Nasdaq-NMS or such other exchange), equals
or exceeds $4.00 per share. The term "principally traded" as used in
the preceding sentence shall refer to that national securities
exchange or Nasdaq-NMS, if any, on which the greatest number of shares
of Common Stock have been traded during such five-day period.
As soon as practicable after the Automatic
Conversion Date, the Corporation shall provide each holder of record
of Series C Preferred Stock with notice of the automatic conversion
and the Automatic Conversion Date and call upon the holders to
surrender to the Corporation, in the manner and at the place
designated, the certificate(s) representing shares of the Series C
Preferred Stock. Such notice shall be by mail to each holder of the
Series C Preferred Stock at the address last shown on the records of
the Corporation for such holder or given by such holder to the
Corporation for the holder for the purpose of notice or, if no such
address appears or is given, at the place where the principal
executive office of the Corporation is located. Notwithstanding any
failure by a holder to deliver the certificates representing his or
her shares of Series C Preferred Stock, after the Automatic Conversion
Date all such certificates of the Series C Preferred Stock shall be
deemed to represent the appropriate number of shares of Common Stock.
Notwithstanding any provision contained in this paragraph 4(b), no
share of the Series C Preferred Stock called for redemption pursuant
to paragraph 5 hereof shall automatically and mandatorily convert at
any time after the Corporation has provided notice of its intent to
redeem such shares pursuant to paragraph 5 hereof, unless the
Corporation shall provide notice to the holder on or before the date
specified for redemption of such shares of Series C Preferred Stock
that it elects to have the mandatory conversion provisions of this
paragraph 4(b) apply and override the Corporation's notice of
redemption (the "Notice of Cancellation"). Unless such Notice of
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<PAGE> 31
Cancellation is provided, the automatic and mandatory conversion under
this paragraph 4(b) shall cease and terminate with respect to all
shares of Series C Preferred Stock so called for redemption at the
close of business on the date that the Corporation provides notice of
such redemption pursuant to Paragraph 5 hereof. The Corporation's
redemption, including any related notice to redeem, of certain shares
of the Series C Preferred Stock shall have no effect on the automatic
and mandatory conversion under paragraph 4(b) of those other shares of
Series C Preferred Stock with respect to which notice of redemption
was not provided.
(c) Additional Provisions Applicable to
All Conversions. Any conversion of Series C Preferred Stock into
Common Stock pursuant to this paragraph 3 shall be subject to the
following additional terms and provisions:
(1) All shares of the Series C
Preferred Stock and all accrued but unpaid dividends, if any, shall be
convertible (or, as the case may be, automatically converted) into
Common Stock at the rate of one and 00/100 dollar ($1.00) per share of
Common Stock (initially equivalent to a rate of four thousand (4,000)
shares of Common Stock for each share of Series C Preferred Stock
based on the stated value of $4,000 of the Series C Preferred Stock)
(the "Conversion Ratio"), subject to the adjustments set forth in this
paragraph 4(c) below.
(2) Subject to compliance with all
applicable securities laws, as soon as practicable after the surrender
for conversion of any certificate(s) representing Series C Preferred
Stock (in the case of an elective conversion) or after the Automatic
Conversion Date (in the case of an automatic conversion), the
Corporation shall deliver or cause to be delivered at the principal
office of the Corporation (or such other place as may be designated by
the Corporation), to each holder of Series C Preferred Stock,
certificates representing the shares of Common Stock issuable upon
such conversion, issued in such name or names as such holder may
direct. Except as otherwise provided herein, shares of the Series C
Preferred Stock shall be deemed to have been converted, in the case of
an elective conversion pursuant to paragraph 4(a), as of the close of
business on the date of the surrender for conversion of the
certificates representing Series C Preferred Stock, or
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<PAGE> 32
in the case of an automatic conversion pursuant to paragraph 4(b), as
of the close of business on the Automatic Conversion Date, and in
either case the rights of such holders of the Series C Preferred Stock
shall cease, and the person(s) in whose name(s) the certificates for
such shares are to be issued shall be treated for all purposes as
having become the record holder(s) of such Common Stock, at such time,
or if such day shall not constitute a business day, then the close of
business on the next succeeding business day.
(3) The Corporation shall not be
required to issue any fractions of shares of Common Stock upon
conversions of any shares of Series C Preferred Stock. If more than
one share of Series C Preferred Stock shall be surrendered for
conversion at one time by the same holder, the number of full shares
of Common Stock which shall be issuable upon conversion of such Series
C Preferred Stock shall be computed on the basis of the aggregate
number of shares of the Series C Preferred Stock so surrendered. If
any interest in a fractional share of Common Stock would otherwise be
deliverable upon the conversion of any shares of Series C Preferred
Stock, the Corporation shall make adjustment for such fractional share
interest by payment of an amount in cash equal to the same fraction of
the value of a full share of Common Stock of the Corporation as
determined by the Corporation, which determination shall be
conclusive.
(4) In the event that the
Corporation shall at any time subdivide or combine in a greater or
lesser number of shares the outstanding shares of Common Stock, the
number of shares of Common Stock issuable upon conversion of any
shares of Series C Preferred Stock prior to the occurrence of such
event shall be proportionately increased in the case of subdivision or
decreased in the case of a combination, effective in either case at
the close of business on the date when such subdivision or combination
shall become effective.
(5) In the event that the
Corporation shall be consolidated with or merged into any other
corporation, provision shall be made as part of the terms of such
consolidation or merger so that any holder of Series C Preferred Stock
may thereafter receive in lieu of Common Stock otherwise issuable to
him upon conversion of his or her Series C Preferred Stock, but only
in accordance with the conversion ratio stated
38
<PAGE> 33
in this paragraph 4, the same kind and amount of securities as may be
distributable upon such consolidation or merger with respect to the
Common Stock.
(6) In the event that the
Corporation shall at any time pay to the holders of Common Stock a
dividend in Common Stock, the number of shares of Common Stock of the
Corporation issuable upon any conversion of the Series C Preferred
Stock shall be proportionately increased, effective following the
close of business on the record date for determination of the holders
of Common Stock entitled to such dividend.
(7) Such adjustments shall be made
successively if more than one event listed in paragraphs 4(c)(4), (5)
or (6) shall occur; provided, however, that no adjustment need be made
by the Corporation until such adjustments cumulatively aggregate at
least five percent (5%) of the then current Conversion Ratio.
(8) No adjustment of the Conversion
Ratio shall be made by any event or occurrence other than those
enumerated in this paragraph 4(c).
(9) The issuance of certificates for
shares of Common Stock upon conversion of any shares of the Series C
Preferred Stock shall be made without charge for any tax in respect of
such issuance. However, if any certificate is to be issued in a name
other than that of the holder of record as the Series C Preferred
Stock so converted, the person or persons requesting the issuance
thereof shall pay to the Corporation the amount of any tax which may
be payable in respect of any transfer involved in such issuance, or
shall establish to the satisfaction of the Corporation that such tax
has been paid or is not due and payable.
5. Redemption of Preferred Stock. The Series C
Preferred Stock of any holder shall be redeemable, in whole or in
part, at the option of the Corporation by resolution of its Board of
Directors, from time to time and at anytime, commencing one year after
the date that the Series C Preferred Stock certificate was
39
<PAGE> 34
issued to the original holder of such shares of Series C Preferred
Stock. The redemption price shall equal $4,400, plus all dividends
accrued and unpaid on the Series C Preferred Stock so redeemed up to
the date fixed for redemption. The Corporation shall give notice of
redemption as hereinafter provided.
In the event that less than the entire amount of the
Series C Preferred Stock outstanding is redeemed at any one time, the
shares to be redeemed shall be selected by lot in a manner to be
determined by the Board of Directors of the Corporation.
The Corporation shall give notice of redemption not
less than thirty (30) nor more than sixty (60) days prior to the date
fixed for redemption of the Series C Preferred Stock or any part
thereof. Such notice shall specify the time and place thereof and
shall be given by mail to each holder of record of shares of Series C
Preferred Stock chosen for redemption at the address last shown on the
records of the Corporation for such holder or given by such holder to
the Corporation for the purpose of notice or, if no such address
appears or is given, at the place where the principal executive office
of the Corporation is located. Any notice which was mailed in the
manner herein provided shall be conclusively presumed to have been
duly given whether or not the holder received the notice.
Upon such redemption date, or upon such earlier date
as the Board of Directors shall designate for payment of the
redemption price (unless the Corporation shall default in the payment
of the redemption price as set forth in such notice), the holders of
shares of Series C Preferred Stock selected for redemption to whom
notice has been duly given shall cease to be stockholders with respect
to such shares and shall have no interest in or claim against the
Corporation by virtue thereof and shall have no other rights with
respect to such shares except the right to convert such shares within
the time hereinafter set forth and except the right to receive the
moneys payable upon such redemption from, the Corporation or
otherwise, without interest thereon, upon surrender (and endorsement,
if required by the Corporation) of the certificates, and the shares
represented thereby shall no longer be deemed to be outstanding.
40
<PAGE> 35
Upon redemption or conversion of any share of Series
C Preferred Stock in the manner set out herein, or upon purchase of
any share of Series C Preferred Stock by the Corporation, the shares
so acquired by the Corporation shall be cancelled.
After giving any notice of redemption and prior to
the close of business on the tenth day prior to the redemption date,
as hereinafter provided, the holders of the Series C Preferred Stock
so called for redemption may convert such stock into Common Stock of
the Corporation in accordance with the conversion privileges set forth
in paragraph 4(a) hereof.
In the event that the Corporation shall at any time
subdivide or combine in a greater or lesser number of shares the
outstanding shares of Series C Preferred Stock or issue shares of
Common Stock as the form of a dividend paid with respect to its Common
Stock, the consideration payable upon redemption of the Series C
Preferred Stock shall be proportionately decreased in the case of
subdivision or increased in the case of a combination or the payment
of such a stock dividend, effective in either case at the close of
business on the date when such subdivision or combination shall become
effective.
6. Voting Rights.
(a) Except as otherwise required by law
or as otherwise specifically provided herein, the holders of the
Series C Preferred Stock shall not be entitled to vote at any meeting
of the stockholders for the election of directors or for any other
purpose or otherwise to participate in any action taken by the
Corporation or the stockholders thereof, or to receive notice of any
meeting of stockholders.
(b) If at any time, and from time to
time, the Corporation shall default in paying two consecutive
dividends for a period of more than 30 days as to each dividend
payment date (an "Event of Default"), then the holders of the Series C
Preferred Stock shall have the exclusive right, voting separately as a
class, to elect one additional director to the Board of Directors of
the Corporation in the manner provided in paragraph 6(d) below, and
the holders of shares entitled to vote thereon other than the Series C
Preferred Stock
41
<PAGE> 36
shall be entitled to elect the remaining members of the Board of
Directors. Such voting rights shall remain vested until all defaults
respecting dividends shall have been cured, whereupon (i) the holders
of the Series C Preferred Stock shall be divested of such voting right
(subject, however, to such voting right at any time or from time to
time similarly arising and being divested); (ii) the term of any
director then in office elected by the holders of the Series C
Preferred Stock shall terminate; and (iii) the number of directors
constituting the Board of Directors of the Corporation shall be
reduced by the same number by which it was increased at the time the
voting rights of the holders of the Series C Preferred Stock arose.
Notwithstanding anything to the contrary in this paragraph 6(b), any
dividend payment date which forms the basis of an Event of Default
subsequently cured in the manner described in the preceding sentence,
may not be counted for purposes of determining a subsequent Event of
Default. In each instance in which the holders of the Series C
Preferred Stock shall be entitled to vote for directors as provided
herein, each such holder shall be entitled to one vote for each share
of the Series C Preferred Stock held.
(c) Directors elected by the holders of
the Series C Preferred Stock shall serve for a term ending on the
earlier to occur of (i) the first annual meeting of stockholders of
the Corporation following an Event of Default or (ii) until all
defaults respecting dividends shall have been cured. At each annual
meeting of the Corporation's stockholders following an Event of
Default, until such default shall have been cured, the holders of
Series C Preferred Stock shall be entitled to elect one director to
the Board of Directors of the Corporation.
(d) At any time when the holders of the
Series C Preferred Stock shall have thus become entitled to elect
directors, any provision of the by-laws of the Corporation to the
contrary notwithstanding, a special meeting of the holders of Series C
Preferred Stock may be called by the holders of 51% of the Series C
Preferred Stock for the purpose of electing directors, by notice being
mailed, first class postage prepaid, not less than 10 days prior to
the proposed date of such meeting, to each holder of record of
42
<PAGE> 37
Series C Preferred Stock at his address as the same appears on the
Corporation's record of holders of the Series C Preferred Stock.
At any such special meeting at which the holders of
the Series C Preferred Stock shall be entitled to elect directors, the
holders of a majority of the then outstanding Series C Preferred Stock
present in person or by proxy shall be sufficient to constitute a
quorum for the election of such director. The person elected by the
holders of the Series C Preferred Stock at any meeting held in
accordance with the terms of the preceding sentence shall become a
director as of the date of such election and, together with the
directors remaining in office or such persons, if any, as may be
elected by the holders of voting shares other than Series C Cumulative
Preferred Stock, shall constitute the Board of Directors of the
Corporation. Any director so elected by the holders of the Series C
Preferred Stock may be removed by, and shall not be removed except by,
the vote of the holders of record of a majority of the shares of the
Series C Preferred Stock, voting as a single class at a meeting of the
stockholders, or of the holders of the Series C Preferred Stock called
for that purpose. Any vacancy, whether as a result of removal or
otherwise, in the office of a director elected by the holders of the
Series C Preferred Stock may be filled by, and shall only be filled
by, the majority vote of the holders of the Series C Preferred Stock,
voting as a separate class. A meeting for the removal of a director
elected by the holders of the Series C Preferred Stock and the filling
of the vacancy created thereby or otherwise shall be called, noticed
and held in the same manner as provided for in the initial election of
such board members.
(e) Notwithstanding the provisions of
paragraph 6(d), the election or removal of such directors may be
evidenced by one or more written consents executed by the holders of a
majority of the then outstanding Series C Preferred Stock without the
necessity of a meeting, prior notice, and a formal vote. Within ten
(10) days after any such meeting or written consent, the holders of
the Series C Preferred Stock shall provide written notice to the
Corporation of the election, or removal, as the case may be, of such
directors.
(f) Notwithstanding anything herein to
the contrary, within thirty (30) days of the end of the calendar
quarter in which the holders of the Series C Preferred Stock shall
have thus become entitled
43
<PAGE> 38
to elect directors, holders of 51% of the Series C Preferred Stock
may, by written consent to the Corporation, irrevocably terminate said
voting rights. After such written termination, the holders of the
Series C Preferred Stock shall not be entitled to vote at any meeting
of the stockholders for the election of directors or for any other
purpose or otherwise to participate in any action taken by the
Corporation or the stockholders thereof, or to receive notice of any
meeting of stockholders.
7. Ranking. As long as any shares of the
Series C Preferred Stock remain outstanding, the Corporation shall
not, without obtaining the prior written consent of the holders of at
least a majority in number of the shares of the Series C Preferred
Stock then outstanding, create, authorize or issue any other class or
series of capital stock of the Corporation, the terms of which provide
that such class or series shall rank prior to the Series C Preferred
Stock in respect to dividend rights or rights upon dissolution,
liquidation or winding up of the Corporation; provided, however, the
Corporation may at any time create, authorize or issue, without the
consent of any of the holders of the Series C Preferred Stock, other
classes or series of capital stock which rank junior to, or on parity
with, the Series C Preferred Stock in respect to dividend rights and
upon dissolution, liquidation or winding up of the Corporation.
Without limiting the generality of the foregoing, the Series C
Preferred Stock shall rank on parity with: (i) the Corporation's
Series A 9% Cumulative Convertible Redeemable Preferred Stock with
respect to dividends and the dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or otherwise and
(ii) the Corporation's Series B Convertible Preferred Stock with
respect to the dissolution, liquidation or winding up of the affairs
of the Corporation, whether voluntary or otherwise.
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IN WITNESS WHEREOF, Computer Integration Corp., a Delaware
corporation, has caused its corporate seal to be affixed hereto and this
Certificate of Designation to be signed by its President and Secretary this
12th day of July 1994.
COMPUTER INTEGRATION CORP.
By: /s/ RONALD G. FARRELL
----------------------------
Ronald G. Farrell, President
By: /s/ JOHN F. CHISTE
----------------------------
John F. Chiste, Secretary
45
<PAGE> 40
Exhibit 4.1(d)
46
<PAGE> 41
COMPUTER INTEGRATION CORP.
- --------------------------------------------------------------------------------
1994 EMPLOYEE INCENTIVE PLAN
- --------------------------------------------------------------------------------
47
<PAGE> 42
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE III Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV Share Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VI Stock Appreciation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE VII Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VIII Performance Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IX Performance Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE X Other Stock Based Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE XI Non-Transferability and Termination Provisions . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE XII Change in Control Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE XIII Termination or Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XIV Unfunded Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XV General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XVI Effective Date of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVII Term of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVIII Name of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
48
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COMPUTER INTEGRATION CORP.
--------------------------
1994 EMPLOYEE INCENTIVE PLAN
--------------------------
ARTICLE I
Purpose
The purpose of this 1994 Stock Bonus Plan (the "Plan") is to enable
Computer Integration Corp. (the "Company") to offer key employees of the
Company and Designated Subsidiaries (defined below) performance-based stock
incentives and other equity interests in the Company and other incentive awards
thereby creating a means to raise the level of stock ownership by key
employees, which is low in comparison to companies that are similarly situated
to the Company, in order to attract, retain and reward such key employees, and
strengthen the mutuality of interests between key employees and the Company's
shareholders.
ARTICLE II
Definitions
For purposes of this Plan, the following terms shall have the
following meanings:
2.1 "AWARD" shall mean any award under this Plan of any Stock
Appreciation Right, Restricted Stock, Performance Shares, Performance Units or
Other Stock-Based Award. All Awards shall be confirmed by, and subject to the
terms of, a written agreement executed by the Company and the Participant.
2.2 "BOARD" shall mean the Board of Directors of the Company.
2.3 "CAUSE" shall mean, with respect to a Participant's
Termination of Employment, (1) in the case where there is no employment
agreement between the Company and the Participant, termination due to a
Participant's dishonesty, fraud, insubordination or refusal to perform services
for any reason other than illness or incapacity or materially unsatisfactory
performance of his or her duties for the Company or Designated Subsidiary; or
(2) in the case where there is an employment agreement between the Company and
the Participant, termination that is or would be deemed to be for cause under
such employment agreement.
2.4 "CHANGE IN CONTROL" shall have the meaning set forth in
Article XII.
2.5 "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
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2.6 "COMMON STOCK" means the Common Stock, $.001 par value per
share, of the Company.
2.7 "DESIGNATED SUBSIDIARY" shall mean a subsidiary, as defined in
Section 424(f) of the Code, of the Company which has been designated from time
to time by the Board to participate in the Plan.
2.8 "DISABILITY" shall mean total and permanent disability, as
defined in Section 22(e)(3) of the Code.
2.9 "ELIGIBLE EMPLOYEES" shall mean the employees of the Company
and the Designated Subsidiaries who are eligible pursuant to Section 5.1 to be
granted Awards under this Plan.
2.10 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934.
2.11 "FAIR MARKET VALUE" for purposes of this Plan, unless
otherwise required by any applicable provision of the Code or any regulations
issued thereunder, shall mean, as of any date, the last sales prices reported
for the Common Stock on the applicable date, (i) as reported by the principal
national securities exchange in the United States on which it is then traded,
or (ii) if not traded on any such national securities exchange, as quoted on an
automated quotation system sponsored by the National Association of Securities
Dealers, or if the Common Stock shall not have been reported or quoted on such
date, on the first day prior thereto on which the Common Stock was reported or
quoted. If the Common Stock is not readily tradeable on a national securities
exchange or any system sponsored by the National Association of Securities
Dealers, its Fair Market Value shall be set by the Committee on the advice of a
registered investment adviser (as defined under Investment Advisers Act of
1940) in good faith or some other expert in valuation selected by the Board.
2.12 "GOOD REASON" shall mean, with respect to a Participant's
Termination of Employment, termination due to "good reason," as may be, and if
specifically provided in, any employment agreement between the Company and the
Participant, or such other voluntary termination as the Committee, in its sole
discretion, decides to treat as a Good Reason termination.
2.13 "OTHER STOCK-BASED AWARD" shall mean an Award under this Plan
that is valued in whole or in part by reference to, or is payable in or
otherwise based on, Common Stock.
2.14 "PARTICIPANT" shall mean the following persons to whom an
Award has been made pursuant to this Plan: Eligible Employees of the Company
and Designated Subsidiaries.
2.15 "PERFORMANCE CYCLE" shall have the meaning set forth in
Section 10.1.
2.16 "PERFORMANCE PERIOD" shall have the meaning set forth in
Section 9.1.
2.17 "PERFORMANCE SHARE" shall mean an Award made pursuant to
Article VIII of this Plan of the right to receive Common Stock or cash of an
equivalent value at the end of a specified Performance Period.
2.18 "PERFORMANCE UNIT" shall mean an Award made pursuant to
Article IX of this Plan of the right to receive a fixed dollar amount, payable
in cash or Common Stock or a combination of both.
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2.19 "RESTRICTED STOCK" shall mean an Award of shares of Common
Stock under this Plan that is subject to restrictions under Article VII.
2.20 "RESTRICTION PERIOD" shall have the meaning set forth in
Subsection 8.3(a).
2.21 "RETIREMENT" shall mean Termination of Employment without
Cause from the Company and/or a Designated Subsidiary by a Participant who is
at least age sixty-five (65) or such earlier date after age fifty-five (55) as
approved by the Committee with regard to such Participant.
2.22 "STOCK APPRECIATION RIGHT" shall mean the right pursuant to an
Award granted under Article VI. A Non-Tandem Stock Appreciation Right shall
mean the right to receive an amount in cash or stock equal to the difference
between (x) the Fair Market Value of a share of Common Stock as of the date
such Right is exercised, and (y) the aggregate exercise price of such Right.
The aggregate exercise price of a Non-Tandem Stock Appreciation Right shall be
based on a percentage (designated by the Committee, in its sole discretion) of
Fair Market Value of a share of Common Stock as of the date such Right is
awarded, or, any other date that Committee may, in its sole discretion, choose.
2.23 "TEN PERCENT STOCKHOLDER" shall mean a person owning Common
Stock of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company as defined in
Section 422 of the Code.
2.24 "TERMINATION OF EMPLOYMENT" shall mean (1) a termination of
service for reasons other than a military or personal leave of absence granted
by the Company or a transfer of a Participant from or among the Company and its
subsidiaries, as defined under Section 424(f) of the Code; or (2) when a
subsidiary, with respect to which is employing a Participant, ceases to be a
subsidiary, as defined under Section 424(f) of the Code.
2.25 "TRANSFER" shall mean anticipate, alienate, attach, sell,
assign, pledge, encumber, charge or otherwise transfer.
2.26 "WITHHOLDING ELECTION" shall have the meaning set forth in
Section 15.4.
ARTICLE III
Administration
3.1 THE COMMITTEE. The Plan shall be administered and interpreted
by the Committee.
3.2 AWARDS. The Committee shall have full authority to grant,
pursuant to the terms of this Plan, to Eligible Employees: (i) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Performance Shares, (v)
Performance Units, and (vi) Other Stock-Based Awards. In particular, the
Committee shall have the authority:
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(a) to select the Eligible Employees to whom Stock Appreciation
Rights, Restricted Stock, Performance Shares, Performance
Units and Other Stock-Based Awards may from time to time be
granted hereunder;
(b) to determine whether and to what extent Stock Appreciation
Rights, Restricted Stock, Performance Shares, Performance
Units and Other Stock-Based Awards, or any combination
thereof, are to be granted hereunder to one or more Eligible
Employees;
(c) to determine the number of shares of Common Stock to be
covered by each such Award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with
the terms of this Plan, of any Award granted hereunder
(including, but not limited to, the share price, any
restriction or limitation, any vesting schedule or
acceleration thereof, or any forfeiture restrictions or waiver
thereof, regarding any Award and the shares of Common Stock
relating thereto, based on such factors, if any, as the
Committee shall determine, in its sole discretion);
(e) to determine whether, to what extent and under what
circumstances grants of Awards under this Plan are to operate
on a tandem basis and/or in conjunction with or apart from
other awards made by the Company outside of this Plan;
(f) to determine whether, to what extent and under what
circumstances to provide loans (which shall be on a recourse
basis and shall bear a reasonable rate of interest) to
Participants in order to purchase shares of Common Stock under
the Plan; and
(g) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with
respect to an Award under this Plan shall be deferred either
automatically or at the election of the Participant.
3.3 GUIDELINES. Subject to Article XV hereof, the Committee shall
have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing this Plan and perform all acts, including
the delegation of its administrative responsibilities, as it shall, from time
to time, deem advisable; to construe and interpret the terms and provisions of
this Plan and any Award issued under this Plan (and any agreements relating
thereto); and to otherwise supervise the administration of this Plan. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in this Plan or in any agreement relating thereto in the manner
and to the extent it shall deem necessary to carry this Plan into effect.
3.4 DECISIONS FINAL. Any decision, interpretation or other action
made or taken in good faith by or at the direction of the Company, the Board,
or the Committee (or any of its members) arising out of or in connection with
the Plan shall be within the absolute discretion of all and each of them, as
the case may be, and shall be final, binding and conclusive on the Company and
all employees and Participants and their respective heirs, executors,
administrators, successors and assigns.
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3.5 RELIANCE ON COUNSEL. The Company, the Board or the Committee
may consult with legal counsel, who may be counsel for the Company or other
counsel, with respect to its obligations or duties hereunder, or with respect
to any action or proceeding or any question of law, and shall not be liable
with respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
3.6 PROCEDURES. If the Committee is appointed, the Board of
Directors shall designate one of the members of the Committee as chairman and
the Committee shall hold meetings at such times and places as it shall deem
advisable. A majority of the Committee members shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its members.
Any decision or determination reduced to writing and signed by all the
Committee members shall be fully as effective as if it had been made by a vote
at a meeting duly called and held. The Committee shall keep minutes of its
meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.
ARTICLE IV
Share Limitation
4.1 SHARES. The aggregate number of shares of Common Stock which
may be issued under this Plan or with respect to which other Awards may be
granted shall not exceed 5,000 shares (subject to any increase or decrease
pursuant to Section 4.2) which may be either authorized and unissued Common
Stock or Common Stock held in or acquired for the treasury of the Company.
4.2 CHANGES.
(a) In the event of any change in the capital stock of the Company
by reason of any stock dividend or distribution, stock split
or reverse stock split, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of
shares, distribution with respect to its outstanding Common
Stock of capital stock other than Common Stock,
reclassification of its capital stock, issuance of warrants or
options to purchase any Common Stock or securities convertible
into Common Stock, or any similar change affecting the capital
stock of the Company; then the aggregate number and kind of
shares which thereafter may be issued under this Plan and the
number and kind of shares subject to other outstanding Awards
(including but not limited to Awards of Restricted Stock,
Performance Shares and Other Stock-Based Awards) granted under
this Plan, shall be appropriately adjusted consistent with
such change in such manner as the Committee may deem equitable
to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants under this Plan,
and any such adjustment determined by the Committee in good
faith shall be binding and conclusive on the Company and all
Participants and employees and their respective heirs,
executors, administrators, successors and assigns.
(b) Fractional shares of Common Stock resulting from any
adjustment in Awards pursuant to Section 4.2(a) shall be
aggregated until, and eliminated at, the time of exercise by
rounding-down for fractions less than one-half (1/2) and
rounding-up for fractions equal to or greater than one-half
(1/2). No cash settlements shall be made with respect to
fractional Shares eliminated by
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rounding. Notice of any adjustment shall be given by the
Committee to each Participant whose Award has been adjusted
and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of the Plan.
(c) Subject to Section 4.2(d), if the Company merges or
consolidates with one or more corporations, then, from and
after the effective date of such merger or consolidation, upon
exercise of Awards theretofore granted, the Participant shall
be entitled to acquire under such Awards in lieu of the number
of shares of Common Stock as to which such Awards shall then
be exercisable but on the same terms and conditions of
exercise thereof, the number and class of shares of Common
Stock and/or other securities or property (including cash) to
which the Participant would have been entitled pursuant to the
terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, the
Participant had been the holder of record of the total number
of shares of Common Stock receivable upon exercise of such
Awards (whether or not then exercisable) had such merger or
consolidation not occurred.
(d) In the event of a merger or consolidation in which the Company
is not the surviving entity or in the event of any transaction
that results in the acquisition of substantially all of the
Company's outstanding Common Stock by a single person or
entity or by a group of persons and/or entities acting in
concert, or in the event of the sale or transfer of all of the
Company's assets (all of the foregoing being referred to as
"Acquisition Events"), then the Committee may, in its sole
discretion, terminate all outstanding Awards, effective as of
the date of the Acquisition Event, by delivering notice of
termination to each Participant, providing that, during at
least the twenty (20) days prior to the Acquisition Event,
each Participant shall have the right to exercise in full all
of his or her Awards that are then outstanding (without regard
to any limitations on exercisability otherwise contained in
the Award Agreements) but contingent on occurrence of the
Acquisition Event, and, provided that, if the Acquisition
Event does not take place within a specified period after
giving such notice for any reason whatsoever, the notice and
exercise shall be null and void. If an Acquisition Event
occurs and the Committee does not terminate the outstanding
Awards pursuant to the preceding sentence, then the provisions
of Section 4.2(c) shall apply.
4.3 PURCHASE PRICE. Notwithstanding any provision of this Plan to
the contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than par value. Notwithstanding the foregoing limitation, such
consideration may consist of services actually rendered to the Company or its
Designated Subsidiaries.
ARTICLE V
Eligibility
5.1 Key employees of the Company and its Designated Subsidiaries
who are not subject to the provisions of Section 16 of the Exchange Act by
virtue of their relationship to the Company or their beneficial ownership of
shares of the Company's capital stock are eligible to be granted Awards under
this Plan. Eligibility under this Plan shall be determined by the Committee.
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ARTICLE VI
Stock Appreciation Rights
6.1 NON-TANDEM STOCK APPRECIATION RIGHTS. Non-Tandem Stock
Appreciation Rights may be granted without reference to any stock options
granted by the Company.
6.2 TERMS AND CONDITIONS OF NON-TANDEM STOCK APPRECIATION RIGHTS.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article XI and the
following:
(a) TERM. The term of each Non-Tandem Stock Appreciation Right
shall be fixed by the Committee, but shall not be greater than
ten (10) years after the date the Right is granted.
(b) EXERCISABILITY. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee at
grant; provided, however, that any Right shall not be
exercisable prior to the first anniversary date of its term,
except that this special limitation shall not apply to an
exercise for shares of Common Stock in the event of death or
Disability of the Participant prior to expiration of this one
(1) year period. If the Committee provides, in its
discretion, that any such Right is exercisable subject to
certain limitations (including, without limitation, that it is
exercisable only in installments or within certain time
periods), the Committee may waive such limitation on the
exercisability at any time at or after grant in whole or in
part (including, without limitation, that the Committee may
waive the installment exercise provisions or accelerate the
time at which Rights may be exercised), based on such factors,
if any, as the Committee shall determine, in its sole
discretion.
(c) METHOD OF EXERCISE. Subject to whatever installment exercise
and waiting period provisions apply under subsection (b)
above, Non-Tandem Stock Appreciation Rights may be exercised
in whole or in part at any time during the option term, by
giving written notice of exercise to the Company specifying
the number of Rights to be exercised.
(d) PAYMENT. Upon the exercise of a Non-Tandem Stock Appreciation
Right a Participant shall be entitled to receive, for each
Right exercised, up to, but no more than, an amount in cash
and/or shares of Common Stock (as chosen by the Committee in
its sole discretion) equal in value to the excess of the Fair
Market Value of one share of Common Stock on the date the
Right is exercised over the Fair Market Value of one (1) share
of Common Stock on the date the Right was awarded to the
Participant.
6.3 LIMITED STOCK APPRECIATION RIGHTS. The Committee may, in its
sole discretion, grant Non-Tandem Stock Appreciation Rights either as a general
Stock Appreciation Right or as a limited Stock Appreciation Right. Limited
Stock Appreciation Rights may be exercised only upon the occurrence of a Change
in Control or such other event as the Committee may, in its sole discretion,
designate at the time of grant or thereafter. Upon the exercise of limited
Stock Appreciation Rights, except as otherwise provided in
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an Award agreement, the Participant shall receive in cash an amount equal to
the amount (1) set forth in Section 6.2(d) with respect to Tandem Stock
Appreciation Rights or (2) set forth in Section 6.4(d) with respect to
Non-Tandem Stock Appreciation Rights.
ARTICLE VII
Restricted Stock
7.1 AWARDS OF RESTRICTED STOCK. Shares of Restricted Stock may be
issued either alone or in addition to other Awards granted under the Plan. The
Committee shall determine the eligible persons to whom, and the time or times
at which, grants of Restricted Stock will be made, the number of shares to be
awarded, the price (if any) to be paid by the recipient (subject to Section
7.2), the time or times within which such Awards may be subject to forfeiture,
the vesting schedule and rights to acceleration thereof, and all other terms
and conditions of the Awards.
The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the
Committee may determine, in its sole discretion. Notwithstanding any provision
contained herein to the contrary, Awards of Restricted Stock granted under the
Plan shall be limited to two percent (2%) of the outstanding shares of Common
Stock of the Company at any time but not less than the amount issued as of such
date, except that such limitation on Awards of Restricted Stock shall not apply
to any of the following Awards and none of the following Awards shall count
toward the restriction:
(1) Awards of Restricted Shares granted in lieu of cash
bonuses;
(2) Awards of Restricted Shares that are used to settle
Non-Tandem Stock Appreciation Rights;
(3) Awards of Restricted Stock that vest pursuant to
performance-based standards; and
(4) Awards of Restricted Stock where the Participant is
required to purchase shares of Restricted Stock at a
price per share that is more than 75% of the Fair
Market Value of the Common Stock at the time of
grant.
7.2 AWARDS AND CERTIFICATES. The prospective Participant selected
to receive a Restricted Stock Award shall not have any rights with respect to
such Award, unless and until such Participant has delivered a fully executed
copy of the agreement evidencing the Award to the Company and has otherwise
complied with the applicable terms and conditions of such Award. Further, such
Award shall be subject to Article XII and the following conditions:
(a) PURCHASE PRICE. Subject to Section 4.3, the purchase price
for shares of Restricted Stock may be less than their par
value and may be zero, to the extent permitted by applicable
law.
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(b) ACCEPTANCE. Awards of Restricted Stock must be accepted
within a period of sixty (60) days (or such shorter period as
the Committee may specify at grant) after the Award date, by
executing a Restricted Stock Award agreement and by paying
whatever price (if any) the Committee has designated
thereunder.
(c) LEGEND. Each Participant receiving a Restricted Stock Award
shall be issued a stock certificate in respect of such shares
of Restricted Stock. Such certificate shall be registered in
the name of such Participant, and shall bear an appropriate
legend referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:
"The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Computer Integration
Corp. (the "Company") 1994 Employee Incentive Plan and an
Agreement entered into between the registered owner and the
Company dated _____________. Copies of such Plan and
Agreement are on file at the principal office of the Company."
(d) CUSTODY. The Committee shall require that the stock
certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed, and
that, as a condition of any Restricted Stock Award, the
Participant shall have delivered a duly signed stock power,
endorsed in blank, relating to the Common Stock covered by
such Award.
7.3 RESTRICTIONS AND CONDITIONS. The shares of Restricted Stock
awarded pursuant to this Plan shall be subject to Article XI and the following
restrictions and conditions:
(a) RESTRICTION PERIOD; VESTING AND ACCELERATION OF VESTING.
Subject to the provisions of this Plan and the Award
agreement, during a period set by the Committee commencing
with the date of such Award (the "Restriction Period"), the
Participant shall not be permitted to Transfer shares of
Restricted Stock awarded under this Plan; provided, however,
that, except as provided in Article III and Sections 4.2(d)
and 11.7, the Restriction Period for shares of Restricted
Stock (other than shares described in Section 7.1(1) through
(4)) shall require that such shares shall not vest until the
expiration of at least three (3) years after the date of the
grant of Restricted Stock. Notwithstanding the foregoing, the
special three (3) year vesting limitation shall not apply in
the event of death or Disability prior to the expiration of
the three (3) year vesting period. Within these limits, based
on service, performance and/or such other factors or criteria
as the Committee may determine in its sole discretion, the
Committee may provide for the lapse of such restrictions in
installments in whole or in part, or may accelerate the
vesting of all or any part of any Restricted Stock Award
and/or waive the deferral limitations for all or any part of
such Award.
(b) RIGHTS AS SHAREHOLDER. Except as provided in this subsection
(b) and subsection (a) above, the Participant shall have, with
respect to the shares of Restricted Stock, all of the rights
of a holder of shares of Common Stock of the Company including
the right to receive any dividends. The
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Committee, in its sole discretion, as determined at the time
of Award, may permit or require the payment of dividends to be
deferred.
(c) LAPSE OF RESTRICTIONS. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock
subject to such Restriction Period, the certificates for such
shares shall be delivered to the Participant. All legends
shall be removed from said certificates at the time of
delivery to the Participant.
ARTICLE VIII
Performance Shares
8.1 AWARD OF PERFORMANCE SHARES. Performance Shares may be
awarded either alone or in addition to other Awards granted under this Plan.
The Committee shall determine the eligible persons to whom and the time or
times at which Performance Shares shall be awarded, the number of Performance
Shares to be awarded to any person, the duration of the period (the
"Performance Period") during which, and the conditions under which, receipt of
the Shares will be deferred or postponed, and the other terms and conditions of
the Award in addition to those set forth in Section 8.2. Notwithstanding any
provision herein to the contrary, in no event shall a Performance Period be
less than three (3) years from date Performance Shares are granted.
The Committee may condition the grant or vesting of Performance Shares
upon the attainment of specified performance goals or such other factors or
criteria as the Committee shall determine, in its sole discretion.
8.2 TERMS AND CONDITIONS. Performance Shares awarded pursuant to
this Article VIII shall be subject to Article XI and the following terms and
conditions:
(a) VESTING. At the expiration of the Performance Period or the
achievement of certain specified performance goals, the
Committee shall determine the extent to which the performance
goals have been achieved and the percentage of the Performance
Shares of each Participant that have vested.
(b) DIVIDENDS. Unless otherwise determined by the Committee at
the time of Award, amounts equal to any dividends declared
during the Performance Period with respect to the number of
shares of Common Stock covered by a Performance Share Award
will not be paid to the Participant.
(c) PAYMENT. Subject to the provisions of the Award agreement and
this Plan, at the expiration of the Performance Period, share
certificates (including, without limitation, Restricted Stock)
and/or cash of an equivalent value (as the Committee may
determine in its sole discretion with respect to the payment
form or value) shall be delivered to the Participant, or his
legal representative, in a number equal to the vested shares
covered by the Performance Share Award.
(d) ACCELERATED VESTING. Based on service, performance and/or
such other factors or criteria, if any, as the Committee may
determine, the Committee may, at or after grant, accelerate
the
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vesting of all or any part of any Performance Share Award
and/or waive the deferral limitations for all or any part of
such Award.
ARTICLE IX
Performance Units
9.1 AWARD OF PERFORMANCE UNITS. Performance Units may be awarded
either alone or in addition to other Awards granted under this Plan. The
Committee shall determine the eligible persons to whom and the time or times at
which Performance Units shall be awarded, the number of Performance Units to be
awarded to any person, the duration of the period (the "Performance Cycle")
during which, and the conditions under which, a Participant's right to
Performance Units will be vested, the ability of Participants to defer the
receipt of payment of such Units, and the other terms and conditions of the
Award in addition to those set forth in Section 9.2. Notwithstanding any
provision herein to the contrary, in no event shall a Performance Cycle be less
than three (3) years from the date Performance Units are granted.
A Performance Unit shall have a fixed dollar value.
The Committee may condition the grant or vesting of Performance Units
upon the attainment of specified performance goals or such other factors or
criteria as the Committee shall determine, in its sole discretion.
9.2 TERMS AND CONDITIONS. The Performance Units awarded pursuant
to this Article IX shall be subject to Article XI and the following terms and
conditions:
(a) VESTING. At the expiration of the Performance Cycle or the
achievement of certain specified performance goals, the
Committee shall determine the extent to which the performance
goals have been achieved, and the percentage of the
Performance Units of each Participant that have vested.
(b) PAYMENT. Subject to the applicable provisions of the Award
agreement and this Plan, at the expiration of the Performance
Cycle, cash and/or share certificates (including, without
limitation, Restricted Stock) of an equivalent value (as the
Committee may determine in its sole discretion with respect to
the payment form or value) shall be delivered to the
Participant, or his legal representative, in payment of the
vested Performance Units covered by the Performance Unit
Award.
(c) ACCELERATED VESTING. Based on service, performance and/or
such other factors or criteria, if any, as the Committee may
determine, the Committee may, at or after grant, accelerate
the vesting of all or any part of any Performance Unit Award
and/or waive the deferral limitations for all or any part of
such Award.
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ARTICLE X
Other Stock Based Awards
10.1 OTHER AWARDS. Other Awards of Common Stock and other Awards
that are valued in whole or in part by reference to, or are payable in or
otherwise based on, Common Stock ("Other Stock-Based Awards"), including,
without limitation, Awards valued by reference to subsidiary performance, may
be granted either alone or in addition to or in tandem with Stock Appreciation
Rights, Restricted Stock, Performance Shares or Performance Units.
Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which such
Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such Awards, and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified performance period.
10.2 TERMS AND CONDITIONS. Other Stock-Based Awards made pursuant
to this Article X shall be subject to Article XI and the following terms and
conditions:
(a) DIVIDENDS. Unless otherwise determined by the Committee at
the time of Award, subject to the provisions of the Award
agreement and this Plan, the recipient of an Award under this
Article X shall be entitled to receive, currently or on a
deferred basis, dividends or dividend equivalents with respect
to the number of shares of Common Stock covered by the Award,
as determined at the time of the Award by the Committee, in
its sole discretion.
(b) VESTING. Any Award under this Article X and any Common Stock
covered by any such Award shall vest or be forfeited to the
extent so provided in the Award agreement, as determined by
the Committee, in its sole discretion.
(c) WAIVER OF LIMITATION. In the event of the Participant's
Retirement, Disability or death, or in cases of special
circumstances, the Committee may, in its sole discretion,
waive in whole or in part any or all of the limitations
imposed hereunder (if any) with respect to any or all of an
Award under this Article.
(d) PRICE. Common Stock issued on a bonus basis under this
Article X may be issued for no cash consideration; Common
Stock purchased pursuant to a purchase right awarded under
this Article X shall be priced as determined by the Committee.
ARTICLE XI
Non-Transferability and Termination Provisions
The terms and conditions of this Article XI shall apply to
Awards under this Plan as follows:
11.1 NON-TRANSFERABILITY. No Stock Appreciation Right shall be
Transferable by the Participant otherwise than by will or by the laws of
descent and distribution. All Rights shall be exercisable, during the
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Participant's lifetime, only by the Participant. Subject to applicable
provisions of the Award agreement and this Plan, Performance Share Awards may
not be Transferred during the Performance Period, Performance Unit Awards may
not be Transferred at any time and shares of Common Stock subject to Awards
under Article X may not be Transferred prior to the date on which shares are
issued, or, if later, the date on which any applicable restriction, performance
or deferral period lapses.
11.2 TERMINATION BY DEATH. If a Participant's Termination of
Employment is by reason of death, any Stock Appreciation Right held by such
Participant, unless otherwise determined by the Committee at grant or
thereafter, may be exercised, to the extent exercisable at the Participant's
death, by the legal representative of the estate, at any time within a period
of one (1) year from the date of such death or until the expiration of the
stated term of such Stock Right, whichever period is the shorter.
11.3 TERMINATION BY REASON OF DISABILITY. If a Participant's
Termination of Employment is by reason of Disability, any Stock Appreciation
Right held by such Participant, unless otherwise determined by the Committee at
grant or thereafter, may be exercised, to the extent exercisable at the
Participant's termination, by the Participant (or the legal representative of
the Participant's estate if the Participant dies after termination) at any time
within a period of one (1) year from the date of such termination or until the
expiration of the stated term of such Right, whichever period is the shorter.
11.4 TERMINATION BY REASON OF RETIREMENT OR GOOD REASON. If a
Participant's Termination of Employment is by reason of Retirement or Good
Reason, any Stock Appreciation Right held by such Participant, unless otherwise
determined by the Committee at grant, shall be fully vested and may thereafter
be exercised by the Participant at any time within a period of two (2) years
(or such other period as the Committee may specify at grant or if longer
thereafter) from the date of such termination or until the expiration of the
stated term of such Right, whichever period is the shorter; provided, however,
that, if the Participant dies within such two (2) year period, any unexercised
Non-Tandem Stock Appreciation Right held by such Participant shall thereafter
be exercisable, to the extent to which it was exercisable at the time of death,
for a period of twelve (12) months (or such other period as the Committee may
specify at grant or if longer thereafter) from the date of such death or until
the expiration of the stated term of such Right, whichever period is the
shorter.
11.5 INVOLUNTARY TERMINATION WITHOUT CAUSE. If a Participant's
Termination of Employment is by involuntary termination without Cause, any
Stock Appreciation Right held by such Participant, unless otherwise determined
by the Committee at grant or thereafter, may be exercised, to the extent
exercisable at termination, by the Participant at any time within a period of
thirty (30) days (or such other period as the Committee may specify at grant or
if longer thereafter) from the date of such termination or until the expiration
of the stated term of such Right, whichever period is shorter.
11.6 OTHER TERMINATION. Unless otherwise determined by the
Committee at grant or thereafter, if a Participant's Termination of Employment
is for any reason other than death, Disability, Retirement, Good Reason, or
involuntary termination without Cause, the Stock Appreciation Right shall
thereupon terminate and expire as of the date of termination.
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11.7 TERMINATION OF EMPLOYMENT FOR RESTRICTED SHARES. Subject to
the applicable provisions of the Award agreement and this Plan, upon a
Participant's Termination of Employment for any reason during the Restriction
Period, all Restricted Shares still subject to restriction will vest or be
forfeited in accordance with the terms and conditions established by the
Committee at grant or thereafter.
11.8 TERMINATION OF EMPLOYMENT FOR PERFORMANCE SHARES AND
PERFORMANCE UNITS. Subject to the applicable provisions of the Award agreement
and this Plan, upon a Participant's Termination of Employment for any reason
during the Performance Period or the Performance Cycle as may be applicable for
a given Award, the Performance Shares or Performance Units in question will
vest or be forfeited in accordance with the terms and conditions established by
the Committee at grant or thereafter.
ARTICLE XII
Change in Control Provisions
12.1 BENEFITS. In the event of a Change in Control of the Company
(as defined below), and except as otherwise provided by the Committee upon the
grant of an Award, the Participant shall be entitled to the following benefits:
(a) All outstanding Non-Tandem Stock Appreciation Rights of such
Participant granted prior to the Change in Control shall be
fully vested and immediately exercisable in their entirety.
For purposes of this Section 12.1, Change in Control price
shall mean the higher of (i) the highest price per share of
Common Stock paid in any transaction related to a Change in
Control of the Company, or (ii) the highest Fair Market Value
per share of Common Stock at any time during the sixty (60)
day period preceding a Change in Control.
(b) All Performance Share Awards and Performance Unit Awards of
such Participant granted prior to the Change in Control shall
vest, at a minimum, as if the applicable Performance Period or
Performance Cycle had ended upon such Change in Control and
the determination of the extent to which any specified
performance goals or targets had been achieved had been made
at such time.
(c) The restrictions to which any shares of Restricted Stock of
such Participant granted prior to the Change in Control are
subject shall lapse as if the applicable Restriction Period
had ended upon such Change in Control.
Any determination by the Committee made pursuant to paragraph (a) of
this Section 12.1 may be made as to all outstanding Awards or only as to
certain outstanding Awards specified by the Committee and any such
determination may be made prior to or after a Change in Control.
12.2 CHANGE IN CONTROL. A "Change in Control" shall be deemed to
have occurred upon:
(a) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person") of beneficial ownership (within the meaning of Rule
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13d-3 promulgated under the Exchange Act) of twenty percent
(20%) or more of either (1) the then outstanding shares of
Common Stock or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding
Company Voting Securities"); excluding, however, the
following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted
was itself acquired directly from the Company, (2) any
acquisition by the Company, (3) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any acquisition by any corporation pursuant to a
reorganization, merger, consolidation or similar corporate
transaction (in each case, a "Corporate Transaction"), if,
pursuant to such Corporate Transaction, the conditions
described in clauses (1), (2) and (3) of paragraph (c) of this
Section 12.2 are satisfied; or
(b) A change in the composition of the Board such that the
individuals who, as of the date hereof, constitute the Board
(the Board as of the date hereof shall be hereinafter referred
to as the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, for purposes of this subsection that any individual
who becomes a member of the Board subsequent to the date
hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and
who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; but,
provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board
shall not be so considered as a member of the Incumbent Board;
or
(c) The approval by the stockholders of the Company of a Corporate
Transaction or, if consummation of such Corporate Transaction
is subject, at the time of such approval by stockholders, to
the consent of any government or governmental agency, the
obtaining of such consent (either explicitly or implicitly
consummation); excluding, however, such a Corporate
Transaction pursuant to which (1) all or substantially all of
the individuals and entities who are the beneficial owners,
respectively, of the outstanding shares of Common Stock and
Outstanding Company Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or
indirectly, more than sixty percent (60%) of, respectively,
the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction and the combined
voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of
directors, in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of
the outstanding shares of Common Stock and outstanding Company
Voting Securities, as the case may be, (2) no Person (other
than the Company, any employee benefit plan (or related trust)
of the Company or the corporation resulting from such
Corporate Transaction and any Person beneficially owning,
immediately prior to such Corporate Transaction, directly or
indirectly, twenty percent (20%) or more of the outstanding
shares of Common Stock or Outstanding Company Voting
Securities, as the case may be) will beneficially
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own, directly or indirectly, twenty percent (20%) or more of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the then outstanding securities of
such corporation entitled to vote generally in the election of
directors and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the
members of board of directors of the corporation resulting
from such Corporate Transaction; or
(d) The approval of the stockholders of the Company of (1) a
complete liquidation or dissolution of the Company or (2) the
sale or other disposition of all or substantially all of the
assets of the Company; excluding, however, such a sale or
other disposition to a corporation, with respect to which
following such sale or other disposition, (A) more than sixty
percent (60%) of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors will
be then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the outstanding shares of
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
outstanding shares of Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (other
than the Company and any employee benefit plan (or related
trust) of the Company or such corporation and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, twenty percent (20%) or
more of the outstanding shares of Common Stock or Outstanding
Company Voting Securities, as the case may be) will
beneficially own, directly or indirectly, twenty percent (20%)
or more of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power
of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and
(C) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of such corporation.
ARTICLE XIII
Termination or Amendment of the Plan
13.1 TERMINATION OR AMENDMENT. Notwithstanding any other Provision
of this Plan, the Board may at any time, and from time to time, amend, in whole
or in part, any or all of the provisions of the Plan (including any amendment
deemed necessary to ensure that the Company may comply with any regulatory
requirement referred to in Article XV), or suspend or terminate it entirely,
retroactively or otherwise; provided, however, that, unless otherwise required
by law or specifically provided herein, the rights of a Participant with
respect to Awards granted prior to such amendment, suspension or termination,
may not be impaired without the consent of such Participant and, provided
further, without the approval of the stockholders of the Company entitled to
vote, no amendment may be made which would materially increase the aggregate
number of shares of Common Stock that may be issued under this Plan (except by
operation of Section 4.2);
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The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action by
the Committee shall impair the rights of any holder without the holder's
consent.
ARTICLE XIV
Unfunded Plan
14.1 UNFUNDED STATUS OF PLAN. This Plan is intended to constitute
an "unfunded" plan for incentive and deferred compensation. With respect to
any payments as to which a Participant has a fixed and vested interest but
which are not yet made to a Participant by the Company, nothing contained
herein shall give any such Participant any rights that are greater than those
of a general creditor of the Company.
ARTICLE XV
General Provisions
15.1 LEGEND. The Committee may require each person receiving
shares pursuant to an Award under the Plan to represent to and agree with the
Company in writing that the Participant is acquiring the shares without a view
to distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed or any national securities association system
upon whose system the Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
15.2 OTHER PLANS. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
15.3 NO RIGHT TO EMPLOYMENT. Neither this Plan nor the grant of
any Award hereunder shall give any Participant or other employee any right with
respect to continuance of employment by the Company or any subsidiary, nor
shall they be a limitation in any way on the right of the Company or any
subsidiary by which an employee is employed to terminate his employment at any
time.
15.4 WITHHOLDING OF TAXES. The Company shall have the right to
deduct from any payment to be made pursuant to this Plan, or to otherwise
require, prior to the issuance or delivery of any shares of Common Stock or the
payment of any cash hereunder, payment by the Participant of, any Federal,
state or local taxes required by law to be withheld. The Committee may permit
any such withholding obligation to be satisfied by reducing the number of
shares of Common Stock otherwise deliverable.
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15.5 NO ASSIGNMENT OF BENEFITS. No Award or other benefit payable
under this Plan shall, except as otherwise specifically provided by law, be
Transferable in any manner, and any attempt to Transfer any such benefit shall
be void, and any such benefit shall not in any manner be liable for or subject
to the debts, contracts, liabilities, engagements or torts of any person who
shall be entitled to such benefit, nor shall it be subject to attachment or
legal process for or against such person.
15.6 LISTING AND OTHER CONDITIONS.
(a) As long as the Common Stock is listed on a national securities
exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant
to an Award shall be conditioned upon such shares being listed
on such exchange or system. The Company shall have no
obligation to issue such shares unless and until such shares
are so listed, and the right to exercise any Award with
respect to such shares shall be suspended until such listing
has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant
to an Award is or may in the circumstances be unlawful or
result in the imposition of excise taxes under the statutes,
rules or regulations of any applicable jurisdiction, the
Company shall have no obligation to make such sale or
delivery, or to make any application or to effect or to
maintain any qualification or registration under the
Securities Act of 1933, as amended, or otherwise with respect
to shares of Common Stock or Awards, and the right to exercise
any Award shall be suspended until, in the opinion of said
counsel, such sale or delivery shall be lawful or will not
result in the imposition of excise taxes.
(c) Upon termination of any period of suspension under this
Section 16.6, any Award affected by such suspension which
shall not then have expired or terminated shall be reinstated
as to all shares available before such suspension and as to
shares which would otherwise have become available during the
period of such suspension.
15.7 GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).
15.8 CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they
were also used in the plural form in all cases where they would so apply.
15.9 DESIGNATION OF CONSULTANTS/LIABILITY.
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the
administration of the Plan and may grant authority to
employees to execute agreements or other documents on behalf
of the Committee.
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(b) The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the
Plan and may rely upon any opinion received from any such
counsel or consultant and any computation received from any
such consultant or agent. The Committee, its members and any
person designated pursuant to paragraph (a) above shall not be
liable for any action or determination made in good faith with
respect to the Plan. To the maximum extent permitted by
applicable law and the Company Certificate of Incorporation
and By-Laws and to the extent not covered by the Company's
insurance, the Committee (or former Committee), its members
(or former members) and any person at any time designated
pursuant to paragraph (a) above, shall be indemnified and held
harmless by the Company against any cost or expense (including
counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Company)
arising out of any act or omission to act in connection with
the Plan unless arising out of such person's own fraud or bad
faith. Such indemnification shall be in addition to any
rights of indemnification the person may have as a director,
officer or employee or under the Certificate of Incorporation
of the Company or the By-Laws of the Company. Expenses
incurred by the Committee or Board in the engagement of any
such counsel, consultant or agent shall be paid by the
Company.
15.10 OTHER BENEFITS. No Award payment under this Plan shall be
deemed compensation for purposes of computing benefits under any retirement
plan of the Company or its subsidiaries nor affect any benefits under any other
benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation.
15.11 COSTS. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock pursuant to
any Awards hereunder.
15.12 NO RIGHT TO SAME BENEFITS. The provisions of Awards need not
be the same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
15.13 DEATH. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an option. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of the Plan.
15.14 SEVERABILITY OF PROVISIONS. If any provision of the Plan
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof, and the Plan shall be construed
and enforced as if such provisions had not been included.
15.15 HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of
the Plan, and shall not be employed in the construction of the Plan.
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ARTICLE XVI
Effective Date of Plan
The Plan shall become effective upon the date specified by the Board
in its resolution adopting the Plan. Any grants of Awards hereunder prior to
such approval shall be effective when made (unless otherwise specified by the
Committee at the time of grant).
ARTICLE XVII
Term of Plan
No Stock Appreciation Right, Restricted Stock, Performance Shares,
Performance Unit or Other Stock Based Award shall be granted pursuant to the
Plan on or after the tenth anniversary of the earlier of the date the Plan (as
amended) is adopted or the date of shareholder approval but Awards granted
prior to such tenth anniversary may extend beyond that date.
ARTICLE XVIII
Name of Plan
This Plan shall be known as "The Computer Integration Corp. 1994
Employee Incentive Plan."
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EXHIBIT 4.1(e)
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COMPUTER INTEGRATION CORP.
1994 STOCK OPTION PLAN
SECTION 1. PURPOSE.
This 1994 Stock Option Plan is intended to provide incentives: (a) to the
officers and other employees of Computer Integration Corp. or any of its
present or future subsidiaries by providing such employees with opportunities
to purchase stock in Computer Integration Corp. pursuant to options granted
hereunder that qualify as "incentive stock options" under Section 422(b) of the
Internal Revenue Code of 1986, as amended; and (b) to directors, officers,
employees, advisors and consultants of Computer Integration Corp. or any of its
present or future subsidiaries by providing such persons with opportunities to
purchase stock in Computer Integration Corp. pursuant to options granted
hereunder which do not qualify as "incentive stock options."
SECTION 2. DEFINITIONS.
(a) "Agreement" shall have the meaning ascribed to the term as set
forth in Section 6 hereof.
(b) "Board of Directors" means the Board of Directors of the
Company or any Subsidiary.
(c) "Common Stock" means the common stock, $.001 par value per
share, of the Company.
(d) "Company" means Computer Integration Corp., a Delaware
corporation.
(e) "Employee" means every individual performing services for the
Company or any Subsidiary if the relationship between him and the person for
whom he performs such services is the legal relationship of employer and
employee as determined in accordance with Section 3401(c) of Internal Revenue
Code and Treasury Regulations promulgated thereunder. A member of the Board of
Directors in his sole capacity as such is not an Employee.
(f) "Incentive Stock Option" means a right granted pursuant to
this Plan to purchase Common Stock that satisfies the requirements of Section
422 of the Internal Revenue Code.
(g) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
(h) "Merger Effective Date" means the Effective Date of the Merger
Agreement between the Company and NEG, Inc., a Delaware corporation.
(i) "Non-Employee Director" means every member of the Board of
Directors who is not also an Employee of the Company or any Subsidiary.
(j) "Nonqualified Stock Option" means a right granted pursuant to
this Plan to purchase Common Stock that does not satisfy the requirements of
Section 422 of the Internal Revenue Code.
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(k) "Option" means a right granted pursuant to this Plan to
purchase Common Stock which may be either an Incentive Stock Option or a
Nonqualified Stock Option as determined by the Board of Directors.
(l) "Optionee" means an individual who has received an Option
under the Plan.
(m) "Plan" means this stock option plan authorizing the granting
of stock Options.
(n) "Plan Administrators" shall have the meaning ascribed to the
term as set forth in Section 5 hereof.
(o) "Reserved Shares" shall have the meaning ascribed to the term
as set forth in Section 3 hereof.
(p) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time the
Option is granted, each of the corporations other than the last corporation in
the unbroken chain owns 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
SECTION 3. SHARES SUBJECT TO THE PLAN.
Subject to adjustments pursuant to Section 9 of the Plan, no more than
Five Hundred Thousand (500,000) shares in the aggregate of the Company's Common
Stock (the "Reserved Shares") may be issued pursuant to the Plan to eligible
participants. The number of the Reserved Shares shall be reduced by the number
of Options granted under the Plan. The Reserved Shares may be made available
from authorized but unissued Common Stock of the Company, from Common Stock of
the Company held as treasury stock, from any shares which may become available
due to the expiration, cancellation or other termination of any Option
previously granted by the Company, or from any combination of the foregoing.
SECTION 4. ELIGIBILITY.
The individuals eligible to receive Options under this Plan shall be
such valued Employees, Non-Employee Directors, advisors or consultants of the
Company or any Subsidiary, as the Board of Directors may from time to time
determine and select. Non-Employee Directors, advisors and consultants shall
only be eligible to receive Nonqualified Stock Options. Employees shall be
eligible to receive both Incentive Stock Options and Nonqualified Stock
Options. An Optionee may hold more than one Option. No Employee of the
Company or any Subsidiary is eligible to receive any Incentive Stock Options if
such Employee, at the time the option is granted, owns, beneficially or of
record, in excess of 10% of the outstanding voting stock of the Company or a
Subsidiary; provided, however, that such Employee will be eligible to receive
an Incentive Stock Option if at the time such Option is granted the Option
price is at least 110% of the fair market value (determined with regard to
Section 422(c)(7) of the Internal Revenue Code) of the stock subject to the
Option and such Option by its terms is not exercisable after the expiration of
five (5) years from the date such Option is granted. Pursuant to Section
422(d) of the Internal Revenue Code, no Option granted pursuant to this Plan
shall be treated as an Incentive Stock Option to the extent that the aggregate
fair market value (determined at the time the Option was granted) of Common
Stock with respect to which Options (that otherwise qualify as Incentive Stock
Options) are exercisable for the first time by an Employee during any calendar
year (under all plans of the Company and its Subsidiaries) exceeds $100,000.
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SECTION 5. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by those members of the Board
of Directors, or by a committee appointed by the Board of Directors, (in either
event, the "Plan Administrators") who are disinterested persons within the
meaning of Rule 16b-3(c)(2)(i) of the Securities Exchange Act of 1934, as
amended ("Disinterested Persons").
(b) The Plan Administrators shall have the power, subject to, and
within the limits of, the express provisions of the Plan:
(i) To determine from time to time which eligible persons
shall be granted Options under the Plan, and the time
when any Option shall be granted to them;
(ii) To determine the number of Options to be granted to
any person;
(iii) To grant Incentive Stock Options, Nonqualified Stock
Options, or both, under the Plan to such persons;
(iv) To determine the duration and purposes of leaves of
absence which may be granted to Optionees without
constituting a termination of their employment for
purposes of the Plan;
(v) To prescribe the terms and provisions of each Option
granted under the Plan (which need not be identical);
(vi) To determine the maximum period during which Options
may be exercised;
(vii) To construe and interpret the Plan and Options
granted under it, and to establish, amend, and
revoke rules and regulations for its administration;
and
(viii) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to
promote the best interests of the Company with
respect to the Plan.
(c) Notwithstanding the foregoing, neither the Board of Directors,
any committee thereof nor any person designated pursuant to paragraph (d) below
may take any action which would cause any Plan Administrator to cease to be a
Disinterested Person with regard to this Plan or any other stock option or
other equity plan of the Company. In particular, neither the Board of
Directors, the Plan Administrators, nor any committee thereof shall have any
discretion as to:
(i) the selection of Non-Employee Directors who are
eligible to receive the grant of Nonqualified Stock
Options pursuant to Section 7 below; or
(ii) the number of Options granted to any Non-Employee
Director pursuant to Section 7 below.
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(d) The Plan Administrators, in the exercise of these powers, may
correct any defect or supply any omission, or reconcile any inconsistency in
the Plan, or in any Option, in the manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective. All determinations of
the Plan Administrators shall be made by majority vote. Subject to any
applicable provisions of the Company's By-laws, all decisions made by the Plan
Administrators pursuant to the provisions of the Plan and related orders or
resolutions of the Plan Administrators shall be final, conclusive and binding
on all persons, including the Company, stockholders of the Company, Employees
and Optionees.
(e) The Plan Administrators may designate the Secretary of the
Company, or other employees of the Company or competent professional advisors,
to assist in the administration of this Plan and may grant authority to such
persons to execute agreements or other documents on behalf of the Plan
Administrators.
(f) The Plan Administrators may employ such legal counsel,
consultants and agents as they may deem desirable for the administration of
this Plan and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or agent. No
present or former Plan Administrator shall be liable for any action or
determination made in good faith with respect to this Plan or any Option
granted hereunder. To the maximum extent permitted by applicable law and the
Company's Certificate of Incorporation and By-laws, each present or former Plan
Administrator shall be indemnified and held harmless by the Company against any
cost or expenses (including counsel fees) or liability (including any sum paid
in settlement of a claim with the approval of the Company) arising out of any
act or omission to act in connection with this Plan unless arising out of such
person's own fraud or bad faith. Such indemnification shall be in addition to
any rights of indemnification the person may have as a director, officer or
employee or under the Certificate of Incorporation of the Company, the By-laws
of the Company or otherwise. Expenses incurred by the Plan Administrators in
the engagement of such counsel, consultant or agent shall be paid by the
Company.
SECTION 6. OPTION TERMS AND CONDITIONS.
The Options granted under the Plan shall be evidenced by written
Option Agreements (the "Agreements") consistent with the terms of the Plan
which shall be executed by the Company and the Optionee. The Agreements, in
such form as the Plan Administrators shall from time to time approve, shall,
incorporate the following terms and conditions:
(a) Time of Exercise. Options shall be exercisable in accordance
with the terms of the Agreements as approved by the Plan Administrators from
time to time. Incentive Stock Options may be exercised only if, at all times
during the period that begins on the date of the granting of the Incentive
Stock Option and that ends on the day three (3) months before the date of such
exercise, the Optionee was an Employee of the Company or any Subsidiary;
provided, however, that if the Optionee is "disabled" within the meaning of
Section 22(e) of the Internal Revenue Code, then the end of the preceding
post-employment exercise period shall be extended to one (1) year.
(b) Purchase Price. Except as otherwise provided in Section 4
hereof, the purchase price per share of Common Stock deliverable upon the
exercise of an Incentive Stock Option shall not be less than the fair market
value of the Common Stock on the date the Option is granted. The purchase
price per share of
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Common Stock deliverable upon the exercise of a Nonqualified Stock Option shall
be determined by the Plan Administrators in their sole discretion.
(c) Method of Exercise. In order to exercise an Option in whole
or in part, the Optionee shall give written notice to the Company at its
principal place of business of such exercise, stating the number of shares with
respect to which the Option is being exercised. Such notice shall be
accompanied by full payment of the purchase price thereof either (i) in cash,
or (ii) at the discretion of the Plan Administrators, in whole shares of Common
Stock having a fair market value equal as of the date of the exercise to the
cash exercise price of the Option, or (iii) at the discretion of the Plan
Administrators, by delivery of the Optionee's personal recourse note bearing
interest payable not less than annually at no less than 100% of the lowest
applicable Federal rate, as defined in Section 1274(d) of the Internal Revenue
Code, or (iv) any combination of (i), (ii) and (iii) above. If the Plan
Administrators exercise their discretion to permit payment of the exercise
price of any Option by means of the methods set forth in clauses (ii), (iii) or
(iv) of the preceding sentence, such discretion shall be exercised in writing
at the time of the grant of the Option in question. The exercise date of the
Option shall be the date the Company receives such notice with any necessary
accompaniments in satisfactory order.
(d) Transferability. An Option shall not be transferable by the
Optionee other than at death and an Option granted to such Optionee is
exercisable, during his lifetime, only by such Optionee.
The Agreements may also contain such other terms, provisions, and
conditions consistent with the Plan and applicable provisions of the Internal
Revenue Code as the Plan Administrators may determine are necessary or proper.
SECTION 7. STOCK OPTION GRANT FOR NON-EMPLOYEE DIRECTORS.
(a) Grant of Options. Each existing director of the
Company as of the Merger Effective Date, or any other person as of the date he
or she first becomes a director, in each case who is not an Employee, is hereby
automatically granted a Nonqualified Stock Option to purchase 5,000 shares of
Common Stock. The Options granted to existing directors as of the Merger
Effective Date, shall be at an exercise price of $.10 per share. A
Nonqualified Stock Option to purchase an additional 5,000 shares of Common
Stock shall be granted to each such Non-Employee Director on each election to
the Board or one year anniversary of his or her last election thereafter
(without further action by the Board or Plan Administrators).
(b) Option Price. Notwithstanding anything to the contrary
contained in this Plan, any Nonqualified Stock Option granted pursuant to this
Section 7 shall provide an exercise price per share equal to 100% of the fair
market value per share of the Common Stock on the date of such grant.
(c) Option Term. Any Nonqualified Stock Option granted
pursuant to this Section 7 shall expire on the earlier of (i) the date which is
six years from the date of its grant or (ii) the date which is 30 days after
the date that such Optionee shall no longer serve as a member of the Board.
Nonqualified Stock Options issued to a Non-Employee Director shall not be
exercisable until the first anniversary of the date of grant.
(d) All grants of Nonqualified Stock Options to members of the
Board pursuant to this Section 7 shall in all other respects be made in
accordance with the provisions of this Plan applicable to other eligible
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persons. The provisions of this Section 7 shall not be amended more than once
in any six month period, other than to comply with changes in the Internal
Revenue Code, the Employee Retirement Income Security Act of 1974, as amended,
or other applicable federal or state law.
SECTION 8. RIGHTS OF STOCKHOLDERS AND OPTIONEE.
An Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such Option,
unless and until: (a) the Option shall have been exercised pursuant to the
terms thereof; (b) the Company shall have issued and delivered the shares to
the Optionee; and (c) the Optionee's name shall have been entered as a
stockholder of record on the books of the Company. Thereupon, the Optionee
shall have full voting and other ownership rights with respect to such shares.
SECTION 9. ADJUSTMENTS IN THE EVENT OF CHANGES IN THE
CAPITAL STRUCTURE, REORGANIZATION ANTI-DILUTION OR
ACCOUNTING CHANGES.
(a) Changes in Capital Structure. In the event of a change in the
corporate structure or shares of the Company, the Plan Administrators (subject
to any required action by the stockholders) shall make such equitable
adjustments designed to protect against dilution as they may deem appropriate
in the number and kind of shares authorized by the Plan and, with respect to
outstanding Options in the number and kind of shares covered thereby and in the
exercise price of such Options on the dates granted. For the purpose of this
Section, a change in the corporate structure or shares of the Company shall
include, but is not limited to, changes resulting from a recapitalization,
stock split, consolidation, rights offering, stock dividend, reorganization, or
liquidation.
(b) Reorganization-Continuation of the Plan. Upon the effective
date of the dissolution or liquidation of the Company, or a reorganization,
merger or consolidation of the Company with one or more corporations in which
the Company is not the surviving corporation, or of a transfer of substantially
all of the Company's property or more than 80% of the then outstanding shares
of the Company to another corporation not controlled by the Company's
stockholders, the Plan and any Option previously granted under the Plan shall
terminate unless provision be made in writing in connection with such
transaction for the continuation of the Plan and for the assumption of the
Options previously granted, or for the substitution of new Options covering the
shares of a successor employer corporation, or a parent or subsidiary thereof,
with appropriate adjustments (in accordance with the applicable provisions of
the Internal Revenue Code) as to the number and kind of shares and price per
share, in which event the Plan and the Options previously granted or new
Options substituted therefor shall continue in the manner and under the terms
as provided.
(c) Reorganization-Termination of the Plan. In the event of a
dissolution, liquidation, reorganization, merger, consolidation, transfer of
assets or transfer of shares, as provided in Section 9(b) above, and if
provision is not made in such transaction for the continuance of the Plan and
for the assumption of Options previously granted or the substitution of new
Options covering the shares of a successor employer corporation or a parent or
subsidiary thereof, then an Optionee under the Plan shall be entitled to
written notice prior to the effective date of any such transactions stating
that rights under his Option must be exercised within thirty (30) days of the
date of such notice or they will be terminated.
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SECTION 10. GENERAL RESTRICTIONS.
Each Option shall be subject to the requirement that, if at any time
the Plan Administrators shall determine, in their discretion, that the listing
or qualification of the shares or other securities subject to such Option upon
any securities exchange, or under any state or federal law or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with the granting thereof or the issue or
purchase of shares or payments of any amount thereunder, such Option may not be
exercised in whole or in part and no amounts may be received thereunder unless
such listing, qualification, consent or approval shall have been effected or
obtained free of any conditions unacceptable to the Plan Administrators.
SECTION 11. EMPLOYMENT.
Nothing in this Plan shall be deemed to grant any right of continued
employment to a participating employee or to limit or waive any rights of the
Company or its Subsidiary to terminate such employment at any time, with or
without cause.
SECTION 12. AMENDMENT.
Subject to the provisions of Sections 5(c) and 7(d) hereof, the Board
of Directors of the Company shall have the power to amend or revise the terms
of this Plan or any part thereof without further action of the stockholders;
provided, however, that no such amendment shall impair any Option or deprive
any Optionee of shares that may have been granted to him under the Plan without
his consent; and provided, further, that no such amendment shall, without
stockholder approval:
(a) increase the aggregate number of the Reserved Shares for the
purpose of the Plan;
(b) change the class of individuals eligible to receive Options
under the Plan;
(c) extend the maximum period during which any Option may be
granted or exercised;
(d) reduce the Option price per share under any Option
below fair market value; or
(e) extend the term of the Plan.
SECTION 13. EFFECTIVE DATE AND TERMINATION OF PLAN.
(a) The effective date of the Plan shall be the Merger Effective
Date; provided, however, in the event that the Plan is not approved by the
voting stockholders of the Company on or before December 31, 1994, the Plan and
all Options granted and to be granted hereunder shall be null and void and the
Company shall have no obligation of any nature whatsoever to any employee or
other person arising out of the Plan or any options granted or to be granted
hereunder.
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(b) The Board of Directors of the Company may terminate the Plan
at any time with respect to any shares that are not subject to Options. Unless
terminated earlier by the Board of Directors, the Plan shall terminate on June
21, 2004, and no Options shall be granted under this Plan after it has been
terminated. Termination of this Plan shall not affect the right and obligation
of any Optionee with respect to Options granted prior to termination.
SECTION 14. WITHHOLDING TAXES.
Whenever under the Plan shares are to be issued in satisfaction of
Options granted hereunder, the Company shall have the right to require the
recipient to make arrangements to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any, prior to
or following the delivery of any certificate or certificates for such shares.
SECTION 15. QUALIFICATION.
This Plan is adopted pursuant to, and is intended to comply with, the
applicable provisions of the Internal Revenue Code and the regulations
thereunder. Incentive Stock Options granted pursuant to this Plan are intended
to be "incentive stock options" as that term is defined in Section 422 of the
Internal Revenue Code and the regulations thereunder. In the event this Plan
or any Incentive Stock Option granted pursuant to this Plan is in any way
inconsistent with the applicable legal requirements of the Internal Revenue
Code or any regulation thereunder, this Plan and any Incentive Stock Option
granted pursuant to this Plan shall be deemed automatically amended as of the
date hereof to conform to such legal requirements, if such conformity can be
achieved by amendment.
SECTION 16. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Employee who receives an Incentive Stock Option must agree to
notify the Company in writing immediately after the Employee makes a
disqualifying disposition of any Common Stock acquired pursuant to the exercise
of an Incentive Stock Option. For purposes of this Plan, a "disqualifying
disposition" is any disposition (including any sale) of such Common Stock
before the later of (i) two years after the date the Employee was granted the
Incentive Stock Option, or (ii) one year after the date the Employee acquired
Common Stock by exercising the Incentive Stock Option.
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EXHIBIT 5.1
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May 17, 1996
Computer Integration Corp.
7900 Glades Road, Suite 440
Boca Raton, Florida 33434
Dear Sirs:
We are acting as counsel to Computer Integration Corp., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8, with exhibits thereto (the "Registration Statement"), filed by the
Company under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, relating to the registration of 1,055,000 shares (the
"Shares") of Common Stock, par value $.001 per share, of the Company. The
Shares are to be issued by the Company upon the exercise of certain stock
options (the "Options") granted and to be granted to certain employees or
directors of the Company pursuant to the Company's 1994 Stock Option Plan
(the "ISOP") or pursuant to performance-based stock incentives under the
Company's 1994 Employee Incentive Plan (the "Incentive Plan" and, together
with the ISOP, the "Plans").
As such counsel, we have participated in the preparation of the
Registration Statement, and have reviewed the corporate proceedings in
connection with the adoption of the Plans and have also examined and relied
upon originals or copies, certified or otherwise authenticated to our
satisfaction, of all such corporate records, documents, agreements, and
instruments relating to the Company, and certificates of public officials and
of representatives of the Company, and have made such investigations of law,
and have discussed with representatives of the Company and such other persons
such questions of fact, as we have deemed proper and necessary as a basis for
rendering this opinion.
Based on and subject to the foregoing, we are of the opinion that
the Shares are duly authorized and, upon issuance in connection with the
exercise of the Options in accordance with the terms of the ISOP against
payment of the exercise price therefor (as applicable), or issuance pursuant
to the terms of the Incentive Plan, will be, assuming no change in the
applicable law or pertinent facts, validly issued, fully paid, and
non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving the foregoing consent, we do not admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ HOLLAND & KNIGHT
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EXHIBIT 23.1
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EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement of Computer Integration Corp. (CIC) on Form S-8 pertaining to the
Computer Integration Corp. 1994 Stock Option Plan, as amended, and 1994
Employee Incentive Plan of our report dated August 4, 1995, with respect to the
consolidated financial statements and financial statement schedule of CIC as of
and for the years ended June 30, 1995 and 1994, and the period from inception
(July 29, 1992) through June 30, 1993, and of our report dated August 9, 1993,
with respect to the statements of income and retained earnings, cash flows and
related financial statement schedule for the period from July 1, 1992 through
March 30, 1993 of Copley Systems Corporation, included in CIC's Annual Report
on Form 10-K for the year ended June 30, 1995 filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
West Palm Beach, Florida
May 20, 1996
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EXHIBIT 23.2
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We hereby consent to the incorporation by reference in the
May 20, 1996 Registration Statement on Form S-8 of Computer Integration
Corp. of our report dated August 23, 1995, the financial statements of Cedar
Computer Center, Inc. as of June 30, 1995 and October 31, 1994 and for the eight
months ended June 30, 1995, the twelve months ended October 31, 1994, the
fifteen months ended October 31, 1993, and the twelve months ended July 31,
1992 which appears in the Form 8-K/A-1 of Computer Integration Corp. dated
September 8, 1995.
/s/ McGLADREY & PULLEN, LLP
Des Moines, Iowa
May 20, 1996
84
