<PAGE>
As filed with the Securities and Exchange Commission on
September 3, 1996
Commission No. 0-24256
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
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ENHANCED SERVICES COMPANY, INC.
(Exact name of registrant as specified in its charter)
Colorado
(State of other jurisdiction of incorporation or
organization)
84-1075908
(I.R.S. Employer Identification Number)
16000 Barkers Point Lane
Houston, Texas 77079
(Address of Principal Executive Offices)
AMENDED AND RESTATED
1992 INCENTIVE STOCK OPTION PLAN
(Full title of the Plan)
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Kenneth Duckman
Enhanced Services Company, Inc.
16000 Barkers Point Lane
Houston, Texas 77079
(Name and address of agent for service)
Telephone number, including area code of agent for service:
(713) 556-5051
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----------
Copy to:
Joseph Greenberger, Esq.
Greenberger & Forman
1370 Avenue of the Americas
New York, New York 10019-4602
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price offering registration
be registered registered per share(1) price(1) fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par
value 241,240 $5.45 $1,314,047 $453.12
</TABLE>
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457 under the Securities
Act of 1933 on the basis of the average exercise prices of
the options previously granted and, with respect to the
remaining shares reserved for option grants under the Plan,
the average of the closing bid/asked price of the Company's
Common Stock on August 27, 1996, as quoted on the
Electronic Bulletin Board operated by the NASD.
<PAGE>
PROSPECTUS
ENHANCED SERVICES COMPANY. INC.
250,000 Shares of Common Stock
($.001 Par Value)
TO BE ISSUED PURSUANT TO THE AMENDED AND RESTATED 1992 INCENTIVE STOCK
OPTION PLAN OF ENHANCED SERVICES COMPANY, INC.
This Prospectus covers the offer and sale of shares of Common
Stock, par value $.001 per share (the "Common Stock"), of Enhanced Services
Company, Inc. (the "Company") to employees, directors and consultants of the
Company who have been or may be granted options pursuant to the Company's
Amended and Restated 1992 Incentive Stock Option Plan (the "Plan"). The offer is
made at the prices and on the terms and conditions contained in the Common Stock
options granted or to be granted pursuant to the Plan.
The shares of Common Stock covered by this Prospectus are traded
over the counter on the Electronic Bulletin Board operated by the National
Association of Securities Dealers, under the symbol ESVS. Employees who are not
"affiliates" of the Company (as that term is defined in Rule 405 of the
Securities Act of 1933, as amended (the "Act")) and who exercise options to
purchase shares under the Plan may resell such shares from time to time.
This Prospectus is not available for resale of the securities
described herein by persons who are "affiliates" of the Company, as that term is
defined in Rule 405 under the Act. Such resales may be made pursuant to Rule 144
under the Act or pursuant to a registration under Rule 415 under the Act by
means of a separate prospectus. See - "Restrictions on Resale"
No other person is authorized to give any information or make any
representation not contained or incorporated by reference in this Prospectus in
connection with the offer contained in this Prospectus, and, if given or made,
such other information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof. This
Prospectus does not constitute an offer to sell or the solicitation of any offer
to buy any security other than the securities covered by this Prospectus, nor
does it constitute an offer or solicitation by anyone in any jurisdiction in
which such offer or solicitation is not authorized, or in which the person
making such offer or solicitation is not qualified to do so, or to any person to
whom it is unlawful to make such offer or solicitation.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
Available Information................................................1
Information Incorporated by Reference................................1
The Company..........................................................2
Enhanced Services Company, Inc., Amended and
Restated 1992 Incentive Stock Option Plan........................2
General Information....................................2
Purpose................................................3
Administration.........................................3
Securities to be Offered; Eligibility..................4
Outstanding Options....................................4
Terms and Conditions of Options........................4
Amendment and Discontinuance of Plan ..................5
Other Information......................................5
Tax Effects............................................6
Restrictions on Resale of Stock......................................7
Legal Matters........................................................8
Experts..............................................................8
Statement on Indemnification.........................................8
<PAGE>
AVAILABLE INFORMATION
Enhanced Services Company, Inc. (the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and, in accordance therewith, files reports and other materials with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other materials filed by the Company can be inspected and copied (at
prescribed rates) at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
reports, proxy statements and other information can also be inspected and copied
at the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement
on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to an aggregate of 241,240 shares of the
Company's Common Stock, which may be issued to certain employees, directors and
consultants of the Company, upon the exercise of stock options issued to said
individuals, pursuant to the Company's Amended and Restated 1992 Incentive Stock
Option Plan. This Prospectus does not contain all of the information set forth
in the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the shares of the Common Stock
offered by this Prospectus, reference is made to the Registration Statement,
including the exhibits thereto. Statements in this Prospectus as to any document
are not necessarily complete, and where any such document is an exhibit to the
Registration Statement or is incorporated by reference herein, each such
statement is qualified in all respects by the provisions of such exhibit or
other document, to which reference is hereby made, for a full statement of the
provisions thereof. A copy of the Registration Statement, with exhibits, may be
obtained from the Commission's office in Washington, D.C. (at the above address)
upon payment of the fees prescribed by the rules and regulations of the
Commission, or examined there without charges.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
1. The Company's latest Annual Report on Form 10-KSB
for its fiscal year ended November 30, 1995 and
the Registrant's effective registration statement
on Form 10-SB;
2. All other reports filed pursuant to Section 13 or
15(d) of the 1934 Act since the end of the fiscal
year covered by the Annual report on Form 10-KSB
referred to in paragraph 1 above; and
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3. The description of the Common Stock contained in
the Company's registration statement on Form
10-SB, filed under section 12 of the 1934 Act
including any amendment or report updating such
description.
Additionally, all reports and other documents subsequently filed by the Company
pursuant to sections 13(a), 13(c), 14 and 15(d) of the 1934 Act prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof form the date of the filing of such reports and
documents.
The Company hereby undertakes to furnish without charge to each
person to whom this Prospectus is delivered, upon written or oral request of
such person, a copy of any or all of the documents described above, other than
exhibits to such documents. Requests should be addressed to Mr. Kenneth Duckman,
President, Enhanced Services Company, Inc., 16000 Barkers Point Lane, Houston,
Texas 77079, telephone number (713) 556-5051.
THE COMPANY
The Company was incorporated under the laws of the State of
Colorado on March 16, 1987 as Crystal Venture Fund, Inc. The Company provides
upgrade, repair and maintenance and asset management services for portable
computers (hardware services) as well as multimedia presentation development,
processing and deployment for sales, marketing, training, industrial and
promotional applications (customized software services) primarily to medium and
large companies. The Company's principal executive offices are located at 16000
Barkers Point Lane, Houston, Texas 77079, and its telephone number is (713)
556-5051.
ENHANCED SERVICES COMPANY, INC.
AMENDED AND RESTATED 1992 INCENTIVE STOCK OPTION PLAN
General Information
In March 1992, the Company's Board and shareholders adopted the
Company's 1992 Incentive Stock Option Plan, under which 70,000 shares of the
Company's Common Stock, $.001 par value, were initially reserved for issuance
under options granted or to be granted to certain employees, officers or
directors of the Company or its subsidiaries. In April 1994, the shareholders
approved an amendment which increased the number of shares reserved under the
Plan to 130,000.
At the Company's Annual Meeting held on June 17, 1996, the
Company's shareholders approved a proposal to amend and restate the plan (as
amended and restated, the "Plan") in order to (i) further increase the number of
shares reserved for issuance under the Plan to 250,000; (ii) add provisions
whereby upon joining the Board and upon subsequent reelection to the Board,
non-employee directors would automatically receive options to purchase up to
2,000 shares
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of the Company's Common Stock; (iii) add provisions to permit the granting of
Non-Qualified Stock Options to consultants, advisors, and representatives of the
Company; (iv) replace the limitation whereby the fair market value of Incentive
Stock Options granted to an individual during any calendar year can not exceed
$100,000, with a provision permitting an individual to exercise Incentive Stock
Options for shares having a fair market value of $100,000 during any calendar
year; and (v) extend the term of the Plan from March 2002 to April 2006.
The Plan is not subject to the Employee Retirement Income Security
Act of 1974.
Summary of the Plan
The following summary of the Plan is not intended to be complete,
and is qualified in its entirety by reference to the Plan itself, a copy of
which may be obtained without charge from the Company by requesting a copy from
Enhanced Services Company, Inc., 16000 Barkers Point Lane, Houston, TX 77079,
telephone (713) 556-5051, facsimile (713) 556-5035. Capitalized terms used
herein shall have the meaning ascribed to them in the Plan.
Purpose
The primary purpose of the Plan is to promote the growth and
profitability of the Company by providing, through the granting of options,
incentives to attract highly talented persons to positions with one or more of
the Participating Companies, to retain such persons and to motivate them to use
their best efforts on behalf of the Participating Company employer. Options
granted to employees under the Plan may be either incentive stock options,
within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code") ("Incentive Stock Options"), or options which do not
constitute Incentive Stock Options ("Non-Qualified Stock Options"). Options
granted to consultants and non-employee directors under the Plan will be
Non-Qualified Options.
Administration
The Plan is administered either by (i) the Board or (ii) a
Committee of no less than two Board members, appointed by the Board. The Board
and the Committee each have full and absolute power and authority in its sole
discretion to (i) determine which Eligible Persons shall receive Options, (ii)
determine the time when Options shall be granted, (iii) determine the terms and
conditions, of any Option granted under the Plan, (iv) determine the number of
Shares which shall be subject to each Option granted under the Plan, and (v)
interpret the provisions of the Plan and of any Option granted under the Plan.
The interpretations and constructions by the Board or Committee of
any provisions of the Plan and of Options granted thereunder, and such
determinations of the Board or Committee as they deem appropriate for the
administration of the Plan and of Options granted thereunder, are final and
conclusive on all persons
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<PAGE>
having any interest thereunder. The Board may from time to time remove members
from, or add members to, the Committee, and vacancies on the Committee shall be
filled by the Board. The Board may abolish the Committee at any time or revest
in the Board the administration of the Plan.
Eligibility and Extent of Participation
Options may be granted only to employees, consultants,
representatives, advisors and directors of the Company and its subsidiaries.
Incentive Stock Options may be granted only to individuals who are employees
(including officers and directors who are also employees) of the Company or any
parent or subsidiary corporation (as defined in Section 424 of the Code) of the
Company at the time the Option is granted. Non-Qualified Stock Options may be
granted to individuals who are consultants, representatives, advisors or
directors of the Company or any such parent or subsidiary corporation. As of
August 25, 1996, approximately 45 individuals were eligible to receive Options,
and Options were held by 22 individual(s) under the Plan. Subject to the terms
of the Plan, the Board and the Committee have full and final authority to
determine the persons who are to be granted Options under the Plan and the
number of Shares subject to each Option.
Existing Option Grants
On April 1, 1996, the Board granted new options to twelve current
employees of the Company, in exchange for the cancellation of options previously
granted to such individuals. In the aggregate, new options to purchase up to
16,700 shares of the Company's Common Stock at an exercise price of $2.50 per
share were granted, in exchange for the cancellation of old options to purchase
up to (i) 5,700 shares at $4.55 per share and (ii) 11,000 shares at $9.15 per
share. As of August 25, 1996, options to purchase 8,760 shares had been
exercised, and options to purchase up to 81,533 shares were outstanding as
follows:
No. of Outstanding No. of
Exercise Price Options Vested Shares
-------------- ------------------ -------------
$2.50 53,033 45,833
$4.55 20,500 20,500
$12.65 8,000 8,000
159,707 shares of the Company's Common Stock are currently available for future
issuance under the Plan.
Purchase Price and Exercise of Options
The purchase price for each Share issuable upon exercise of an
Option are to be determined by the Committee, but in the case of Incentive Stock
Options shall not be less than 100% of the fair market value of such Share on
the date the Option is granted, except that no Incentive Stock Option may be
granted to an individual if, at the time
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the Option is granted, such individual beneficially owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporation, within the meaning of
Section 422(b)(6) of the Code, unless (i) at the time such Option is granted the
option price is at least 110% of the fair market value of the Stock subject to
the Option and (ii) such Option by its terms is not exercisable after the
expiration of five years from the date of the grant. To the extent that the
aggregate fair market value (determined at the time the respective Incentive
Stock Option is granted) of stock with respect to which Incentive Stock Options
are exercisable for the first time by an individual during any calendar year
exceeds $100,000, such excess Incentive Stock Options are to be treated as
Non-Qualified Stock Options.
An Option may be exercised in such amounts and at such times as
may be determined by the Board or the Committee at the time of grant of such
Option. To the extent that an Option is not exercised within the period of
exercisability fixed by the Committee, it will expire as to the then unexercised
part.
Expiration and Transfer of Options
Options are non-transferable, except by will or by the laws of
descent and distribution. During the lifetime of each Option holder, only he or
she may exercise his or her Option.
Adjustment of Shares
If any change is made in the Shares subject to the Plan, or
subject to any Option granted under the Plan, through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination of
Shares, rights offerings, change in the corporate structure of the Company, or
otherwise, such adjustment are to be made as to the maximum number of Shares
subject to the Plan, and the number of Shares and prices per share of stock
subject to outstanding Options as the Committee may deem appropriate.
Amendments to and Termination of the Plan
The Board may amend, suspend, alter, or terminate the Plan at any
time. To the extent necessary or desirable to comply with Rule 16b-3, the I.R.C.
or any other applicable law or regulation, the Company is required to obtain
shareholder approval of any amendment to the Plan only in such a manner and to
such a degree as required.
The Board may amend the terms of any Option previously granted,
prospectively or retroactively; provided, however, that unless required by
applicable law, rule or regulation, no amendment of the Plan or of any Option
Agreement may without the consent of any Optionee holding any such affected
Options, be permitted if such amendment would affect in a material and adverse
manner Options granted prior to the date of any such amendment.
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<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the Federal income tax consequences of
the grant and exercise of Options, and the disposition of Shares purchased
pursuant to the exercise of Options, is intended to reflect the current
provisions of the Code and the regulations thereunder. This summary is not
intended to be a complete statement of applicable law, not does it deal with
state and local tax considerations.
Incentive Stock Options
No taxable income will be recognized by the Option holder at the
time of a grant or exercise of an Option. The excess of the fair market value of
the Common Stock over the option price at the date of exercise of an Option is
an adjustment for purposes of computing the alternative minimum tax under
section 55 of the Code. If the requirements of section 422 of the Code are met
by the Option holder (including the requirement that no disposition of such
Shares is made by the Option holder for more than two years after the grant of
the Option and for more than one year after the exercise of such Option), then
any gain or loss realized by the Option holder upon disposition of such Shares
will be treated as long-term capital gain or loss (assuming such Shares are held
as a capital asset by the Option holder). If the requirements of section 422 of
the Code are met, the Company will not be entitled to any deduction for Federal
income tax purposes as a result of the issuance of such Shares pursuant to the
exercise of the Option. If Shares acquired on exercise of an Option are disposed
of prior to the expiration of either of the required holding periods described
above (a "disqualifying disposition"), the Option holder will recognize ordinary
income in the year in which the disposition of such Shares occurs. The amount of
such ordinary income will be the excess of (a) the lower of the amount realized
on disposition of such Shares or the fair market value of such Shares on the
date of exercise of such Option, over (b) the Option price, so long as the
disposition is by sale or exchange with respect to which a loss, if sustained,
would be recognized. In addition, long-term capital gain may be recognized by
the Option holder (assuming such Shares are held as a capital asset for more
than six months by the Option holder) in an amount equal to the excess of the
amount realized on the disqualifying disposition over the sum of the Option
price and the ordinary income recognized by the Option holder. The Company (or
the employer of the Option holder) will ordinarily be entitled to a deduction
for Federal income tax purposes at the time of the disqualifying disposition in
an amount equal to the ordinary income recognized by the Option holder.
If an Option is exercised by the estate of an Option holder, the
holding periods do not apply, and the estate will not recognize any ordinary
income when it disposes of the Shares acquired upon the exercise of such Option.
The estate, however, may recognize long-term capital gain, and the Company will
not be entitled to any deduction for Federal income tax purposes.
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<PAGE>
Non-Qualified Stock Options
No tax obligation will arise for the optionee or the Company upon
the granting of either Incentive Stock Options or Non-Qualified Stock Options
under the Plan. Upon exercise of a Non-Qualified Stock Option, an optionee will
recognize ordinary income in an amount equal to the excess, if any, of the fair
market value, on the date of exercise, of the stock acquired over the exercise
price of the option. Thereupon, the Company will be entitled to a tax deduction
in an amount equal to the ordinary income recognized by the optionee. Any
additional gain or loss realized by an optionee on disposition of the shares
generally will be capital gain or loss to the optionee and will not result in
any addition tax deduction to the Company. The taxable event arising from
exercise of Non-Qualified Stock Options by officers of the Company subject to
Section 16(b) of the Securities Act of 1934 occurs on the later of the date on
which the option is exercised or the date six months after the date the option
was granted unless the optionee elects, within 30 days of the date of exercise,
to recognize ordinary income as of the date of exercise. The income recognized
at the end of any deferred period will include any appreciation in the value of
the stock during that period and the capital gain holding period will not being
to run until the completion of such period.
RESTRICTIONS ON RESALE OF STOCK
Shares purchased hereunder by a person deemed an "affiliate" of
the Company under the 1933 Act, must be registered for resale by such person
unless such resale complies with the provision of Rule 144 promulgated under the
1933 Act. Rule 405 under the 1933 Act defines an "affiliate" as "a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with," the Company. Generally, under
Rule 144, if certain conditions, including a two year holding period, are met, a
person may sell, within a three month period, a number of shares that does not
exceed the greater of 1% of the number of outstanding shares or the average
weekly trading volume for the four calendar weeks preceding the filing of the
requisite notice. In addition, every officer or director of the Company is
subject to the "short-swing" profits liability provisions of Section 16 of the
1934 Act. Such provisions may restrict resale of shares of Common Stock received
under the Plan. The foregoing is not intended to be a complete statement of
applicable law and participants in the Plan should rely on their own legal
counsel.
TRANSFER AGENT
The Transfer Agent for the shares of common stock is the Corporate
Stock Transfer Co., 370 17th Street, Denver, Colorado 80202.
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<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the securities offered
hereby are being passed upon for the Company by Greenberger & Forman, 1370
Avenue of the Americas, New York, New York 10019-4602, counsel to the Company.
EXPERTS
The audited consolidated financial statements of the Company
incorporated by reference in this Prospectus have been so incorporated in
reliance on the report of Schumacher & Associates, Inc., independent certified
public accountants, given on the authority of said firm as experts in auditing
and accounting.
STATEMENT ON INDEMNIFICATION
Under provisions of the Company's Amended and Restated Articles of
Incorporation, any person made a party to any lawsuit by reason of being a
director or officer of the Company, or any parent or subsidiary thereof, shall
be indemnified by the Company to the full extent authorized by the Colorado
Corporation Code, as amended. Said Code was repealed on July 1, 1994 and was
replaced by articles 101-117 of the Colorado Business Corporation Act.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed in (a) through (c) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) The Registrant's Annual Report on Form 10-KSB for
the fiscal year ended November 30, 1995 and the
Registrant's effective registration statement on
Form 10-SB;
(b) All other reports filed pursuant to Section 13 or
15(d) of the Exchange Act since the end of the
fiscal year covered by the Registrant's Form
10-KSB referred to in (a) above.
(c) The class of securities to be offered hereby is
registered under Section 12 of the Exchange Act. A
description of the Registrant's securities is set
forth in Item 11 of its Form 10-SB which is
incorporated as a part of this Registration
Statement.
Item 6. Indemnification of Directors and Officers.
a. Article VIII of Registrant's Amended and Restated
Articles of Incorporation provides:
"The Corporation may and shall indemnify each director, officer and any employee
or agent of the Corporation, his heirs, executors and administrators, against
any and all expenses or liability reasonably incurred by him in connection with
any action, suit or proceeding to which he may be a party by reason of his being
or having been a director, officer, employee or agent of the Corporation to the
full extent required or permitted by the Colorado Corporation Code, as amended."
Said Code was repealed on July 1, 1994 and was replaced by articles 101-117 of
the Colorado Business Corporation Act.
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b. Article 109 of the Colorado Business Corporation Act
provides that:
7-109-101. Definitions. As used in this article:
(1) "Corporation" includes any domestic or foreign predecessor
entity of the corporation in a merger, consolidation, or other transaction in
which the predecessor's existence ceased upon consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee, fiduciary, or agent of another foreign or domestic corporation or
other person, or of an employee benefit plan. A director shall be considered to
be serving an employee benefit plan at the corporation's request if his duties
to the corporation also impose duties on or otherwise involve services by him to
the plan or to participants in or beneficiaries of the plan. "Director"
includes, unless the context requires otherwise, the estate or personal
representative of a director.
(3) "Expenses" includes counsel fees.
(4) "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine including an excise tax
assessed with respect to an employee benefit plan, or reasonable expenses.
(5) "Official capacity", when used with respect to a director,
means the office of director in a corporation, and, when used with respect to a
person other than a director, as contemplated in Section 7-109-107 means the
office in a corporation held by the officer or the employment or agency
relationship undertaken by the employee fiduciary, or agent on behalf of the
corporation. "Official capacity" does not include service for any other foreign
or domestic corporation or any other person or employee benefit plan.
(6) "Party" includes a person who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
7-109-102. Authority to indemnify directors. (1) Except as
provided in paragraph (4) of this section, a corporation may indemnify
a person made a party to a proceeding because the person is or was a
director if:
(a) the person conducted himself in good faith;
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(b) the person reasonably believed:
(I) In the case of conduct in an official capacity
with the corporation, that his conduct was in the corporation's best interests;
or
(II) In all other cases, that his conduct was at
least not opposed to the corporation's best interests; and
(c) In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan
for a purpose he reasonably believed to be in the interests of the participants
in or beneficiaries of the plan is conduct that satisfies the requirements of
subparagraph (II) of paragraph (b) of subsection (1) of this section. A
director's conduct with respect to an employee benefit plan for a purpose that
he did not reasonably believe to be in the interests of the participants in or
beneficiaries of the plan shall be deemed not to satisfy the requirements of
paragraph (a) of subsection (1) of this section.
(3) The termination of any proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its equivalent,
is not of itself determinative that the director did not meet the standard of
conduct described in this section.
(4) A corporation may not indemnify a director under this
section:
(a) In connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable to the
corporation; or
(b) In connection with any proceeding charging improper
personal benefit to the director, whether or not involving action in his
official capacity, in which he was adjudged liable on the basis that he derived
an improper personal benefit proceeding.
(5) Indemnification permitted under this section in connection
with a proceeding by or in the right of a corporation is limited to reasonable
expenses incurred in connection with the proceeding.
7-109-103. Mandatory indemnification of directors. Unless limited
by its articles of incorporation, a corporation shall indemnify a person who was
wholly successful, on the merits or otherwise, in defense of any proceeding to
which he was a party because the person is or was a director, against reasonable
expenses incurred by him in connection with the proceeding.
7-109-104. Advance of expenses to directors.
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of the final
disposition of the proceeding if:
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(a) The director furnishes the corporation
a written affirmation of his good-faith belief that
he has met the standard of conduct described in
section 7-109-102;
(b) The director furnishes the corporation a
written undertaking, executed personally or on his
behalf, to repay the advance if it is determined
that he did not meet such standard of conduct; and
(c) A determination is made that the facts then
known to those making the determination would not
preclude indemnification under this article.
(2) The undertaking required by paragraph (b) of subsection (1) of
this section shall be an unlimited general obligation of the director, but need
not be secured and may be accepted without reference to financial ability to
make repayment.
(3) Determinations and authorizations of payments under this
section shall be made in the manner specified in section 7-109- 106.
7-109-105. Court-Ordered indemnification of directors. (1) Unless
otherwise provided in the articles of incorporation, a director who is or was a
party to a proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court, after giving any notice the court considers necessary,
may order indemnification in the following manner:
(a) If it determines the director is entitled to mandatory
indemnification under section 7-109-103, the court shall order indemnification
in which case the court shall also order the corporation to pay the director's
reasonable expenses incurred to obtain court-ordered indemnification.
(b) If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances, whether
or not he met the standard of conduct set forth in section 7-109-102(1) or was
adjudged liable in the circumstances described in section 7-109-102(4), the
court may order such indemnification as the court deems proper; except that the
indemnification with respect to any proceeding in which liability shall have
been adjudged in the circumstances described in section 7-109-102(4) is limited
to reasonable expenses incurred in connection with the proceeding and reasonable
expenses incurred to obtain court-ordered indemnification.
7-109-106. Determination and authorization of indemnification of
directors. (1) A corporation may not indemnify a director under section
7-109-102 unless authorized in the specific case after a determination has been
made that indemnification of the director is permissible in the circumstances
because he has met the standard of conduct set forth in section 7-109-102. A
corporation shall not advance expenses to a director under section 7-109-104
unless
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<PAGE>
authorized in the specific case after the written affirmation and undertaking
required by section 7-109-104(1)(a) and (1)(b) are received and the
determination required by Section 7-109-104(1)(c) has been made.
(2) The determinations required to be made by subsection (1) of
this section shall be made:
(a) By the board of directors by a majority vote
of those present at a meeting where a quorum is
present, which quorum shall consist of directors
not parties to the proceeding or;
(b) If a quorum cannot be obtained, by a majority
vote of a committee of the board designated by the
board, which committee shall consist of two or
more directors not parties to the proceeding;
except that directors who are parties to the
proceeding may participate in the designation of
directors for the committee.
(3) If a quorum cannot be obtained and the committee cannot be
established under paragraph (b) of this section, or even if a quorum is obtained
or a committee designated, if a majority of the directors constituting such
quorum or committee so directs, the determination required to be made by
subsection (1) shall be made:
(a) By independent legal counsel selected by a
vote of the board of directors or the committee in
the manner specified in paragraph (a) or (b) of
subsection (2) of this section or, if a quorum of
the full board cannot be obtained and a committee
cannot be established, by independent legal
counsel selected by a majority vote of the full
board; or
(b) By the shareholders.
(4) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible; except that, if the determination that
indemnification is permissible is made by independent legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by the body that selected said counsel.
7-109-107. Indemnification of officers, employees, fiduciaries,
and agents. Unless otherwise provided in the articles of incorporation:
(a) An officer is entitled to mandatory indemnification pursuant
to section 7-109-103 of this section and is entitled to apply for court-ordered
indemnification pursuant to section 7-109-105 in each case to the same extent as
a director;
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(b) A corporation may indemnify or advance expenses to an officer,
employee, fiduciary or agent of the corporation who is not a director to the
same extent as to a director; and
(c) A corporation may also indemnify and advance expenses to an
officer, employee, fiduciary or agent of the corporation who is not a director
to a greater extent if not inconsistent with public policy, and if provided for
by its bylaws, general or specification of its shareholders or directors, or in
a contract.
7-109-108. Insurance. A corporation may purchase and maintain
insurance on behalf of a person who is or was a director, officer, employee,
fiduciary, or agent of the corporation and who, while a director, officer,
employee, fiduciary, or agent of the corporation is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
fiduciary, or agent of any other foreign or domestic corporation or other person
or of an employee benefit plan, against any liability asserted against or
incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against the
same liability under 7-109-102, 7-109-103, or 7-109-107. Any such insurance may
be procured from any insurance company designated by the board of directors,
whether such insurance company is formed under the laws of this state or any
other jurisdiction of the United States or elsewhere, including any insurance
company in which the corporation has an equity or any other interest through
stock ownership or otherwise.
7-109-109. Limitation of indemnification of directors. (1) a
provision treating a corporation's indemnification of, or advance of expenses
to, directors that is contained in its articles of incorporation or bylaws, in a
resolution of its shareholders or board of directors, or in a contract, except
an insurance policy, or otherwise, is valid only to the extent the provision is
not inconsistent with sections 7-109-101 to 7-109-108. If the articles of
incorporation limit indemnification or advance of expenses, indemnification and
advance of expenses are valid only to the extent not inconsistent with the
articles of incorporation.
(2) Sections 7-109-101 to 7-109-108 do not limit a corporation's
power to pay or reimburse expenses incurred by a director in connection with an
appearance as a witness in a proceeding at a time when he or she has not been
made a named defendant or respondent in the proceeding.
7-109-110. Notice to shareholders of indemnification of director.
If a corporation indemnifies or advances expenses to a director under this
article in connection with a proceeding by or in the right of the corporation,
the corporation shall give written notice of the indemnification or advance to
the shareholders with or before the notice of the next shareholders' meeting. If
the next shareholder action is taken without a meeting at the instigation of the
board of directors, such notice shall be given to the shareholders at or before
the time the first shareholder signs a writing consenting to such action.
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<PAGE>
c. Article 108 of the Colorado Business Corporation Act provides
as follows:
7-108-402. Limitation of certain liabilities of directors and
officers (1) If so provided in the articles of incorporation, the corporation
shall eliminate or limit the personal liability of a director to the corporation
or to its shareholders for monetary damages for breach of fiduciary duty as a
director; except that any such provision shall not eliminate or limit the
liability of a director to the corporation or to its shareholders for monetary
damages for any breach of the director's duty of loyalty to the corporation or
to its shareholders, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, acts specified in section
7-108-403, or any transaction from which the director directly or indirectly
derived an improper personal benefit. No such provision shall eliminate or limit
the liability of a director to the corporation or to its shareholders for
monetary damages for any act or omission occurring before the date when such
provision becomes effective.
(2) No director or officer shall be personally liable for any
injury to person or property arising out of a tort committed by an employee
unless such director or officer was personally involved in the situation giving
rise to the litigation or unless such director or officer committed a criminal
offense in connection with such situation. The protection afforded in this
subsection (2) shall not restrict other common-law protections and rights that a
director or officer may have. This subsection (2) shall not restrict the
corporation's right to eliminate or limit the personal liability of a director
to the corporation or to its shareholders for monetary damages for breach of
fiduciary duty as a director as provided in subsection (1) of this section.
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<PAGE>
Item 8. Exhibits.
The following documents are filed as Exhibits to this Registration
Statement:
4(a) -- Enhanced Services Company, Inc.,
Amended and Restated 1992 Incentive
Stock Option Plan
5 -- Opinion of Greenberger & Forman as to
the validity of the shares being
registered
24.1 -- Consent of Greenberger & Forman
24.2 -- Consent of Schumacher & Associates,
Inc., Certified Public Accountants
25 -- Power of Attorney (following signature
page of Registration Statement)
Item 9. Undertakings.
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 (the "Act");
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement;
Provided, however, that paragraphs (i) and (ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 of Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
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<PAGE>
(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.
(4) That, for the purposes of determining any liability under the
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act 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.
(5) Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 6 or otherwise, the
registrant has been advised that in the opinion of the 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>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 30th day of
August, 1996.
ENHANCED SERVICES COMPANY, INC.
(Registrant)
By: /s/ Kenneth Duckman
-------------------------------
KENNETH DUCKMAN, President
and Chief Executive
Officer
By: /s/ Robert Smith
-------------------------------
ROBERT SMITH, Chief Financial
Officer
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Capacity Date
- --------- -------- ----
/s/ Michael Bernard
- -------------------------------
MICHAEL BERNARD Director August 30, 1996
/s/ Kenneth Duckman
- -------------------------------
KENNETH DUCKMAN Director August 30, 1996
/s/ John Meaney
- -------------------------------
JOHN MEANEY Director August 30, 1996
- -------------------------------
BERTRAM PARISER, Ph.D. Director August , 1996
/s/ Ralph LaBarge
- -------------------------------
RALPH LABARGE Director August 30, 1996
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<PAGE>
EXHIBIT 25
POWER OF ATTORNEY
We, the undersigned officers and directors of ENHANCED SERVICES
COMPANY, INC., hereby severally constitute and appoint Bertram Pariser, Ph.D.,
and Kenneth Duckman and each of them (with full power to each of them to act
alone), our true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for us and in our stead, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents relating thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing necessary or
advisable to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, we have executed this instrument on the dates
set forth below.
Date: August 30, 1996 /s/ Michael Bernard
---------------------------------
MICHAEL BERNARD
Date: August 30, 1996 /s/ Kenneth Duckman
---------------------------------
KENNETH DUCKMAN
Date: August 30, 1996 /s/ John Meaney
---------------------------------
JOHN MEANEY
Date: August , 1996
---------------------------------
BERTRAM PARISER, Ph.D.
Date: August 30, 1996 /s/ Ralph LaBarge
---------------------------------
RALPH LABARGE
<PAGE>
EXHIBIT 4(a)
AMENDED AND RESTATED
(As of April 1, 1996)
1992 INCENTIVE STOCK OPTION PLAN
OF
ENHANCED SERVICES COMPANY, INC.
ARTICLE I
PURPOSE OF PLAN
1.1 Purpose. The purpose of this amended and restated Plan is
to promote the growth and profitability of the Company by providing, through the
granting of options, incentives to attract highly talented persons to positions
with one or more of the Participating Companies, to retain such persons and to
motivate them to use their best efforts on behalf of the Participating Company
employer. This Plan is hereby being amended and restated to (i) increase the
number of shares reserved for issuance under the Plan to 250,000; (ii) add
provisions whereby upon joining the Board and upon each subsequent reelection to
the Board, non-employee directors would automatically receive options to
purchase up to 2,000 shares of the Company's Common Stock; (iii) add provisions
to permit the granting of Non-Qualified Stock Options to consultants, advisors,
and representatives of the Company; (iv) replace the limitation whereby the fair
market value of Incentive Stock Options granted to an individual during any
calendar year can not exceed $100,000, with a provision permitting an individual
to exercise Incentive Stock Options for shares having a fair market value of
$100,000 during any calendar year; (v) extend the term of the Plan from March
2002 to April 2006; and (vi) make certain additional changes.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, the following terms shall have
the meanings set forth in this Article II:
2.1 Board. The term "Board" shall mean the Board of Directors
of the Company.
2.2 Committee. The term "Committee" shall mean a committee
appointed by the Board pursuant to Section 3.4 constituting not less than two
members of the Board.
<PAGE>
2.3 Company. The term "Company" shall mean Enhanced Services
Company, Inc., a Colorado corporation, or any successor thereof.
2.4 Director. The term "Director" shall mean a member of the
Board or a member of the Board of Directors of any Participating Company.
2.5 Effective Date. The term "Effective Date" shall mean April
1, 1996.
2.6 Eligible Person.
(a) With respect to the granting of Incentive Stock
Options, the term "Eligible Person" shall mean any employee of any Participating
Company.
(b) With respect to the granting of Nonstatutory
Stock Options, the term "Eligible Person" shall mean any employee, member of the
Board of Directors, consultant, advisor or representative of any Participating
Company.
2.7 Eligible Person Termination Date. As to an Eligible Person
who is an employee or Director, the term "Eligible Person Termination Date"
shall mean the date as of which the employment or directorship, as the case may
be, of such person terminates.
2.8 Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
2.9 Fair Market Value. The term "Fair Market Value", when used
with respect to the determination of the fair market value of the Shares shall
mean: (a) if Shares are exchange-traded or traded on the NASDAQ small-cap market
("Small-Cap"), the closing sales or last sales price per share of the Shares;
(b) if Shares are regularly traded in any over-the-counter market other than
Small-Cap, the average of the bid and asked prices per share of the Shares; and
(c) if Shares are not traded as described in (a) and (b) of this Section 2.9,
the per share fair market value of the Shares as determined in good faith by the
Board or Committee on such basis as the Board or Committee in its sole
discretion shall choose. The date of determination of Fair Market Value with
respect to subparagraphs (a), (b) and (c) shall be the date of the grant of the
Options, or if no trading day, the last day prior to the grant on which there
has been such trading.
2.10 Incentive Stock Option. The term "Incentive Stock Option"
shall mean any Option intended to satisfy the requirements under I.R.C. Section
422(b) as an incentive stock option which qualifies for special federal income
tax treatment under I.R.C. Section 421 et seq.
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<PAGE>
2.11 I.R.C. The term "I.R.C." shall mean the Internal Revenue
Code of 1986, as it may be amended from time to time.
2.12 Income Tax Regulations. The term "Income Tax Regulations"
shall mean the regulations promulgated by the United States Treasury Department
under the I.R.C.
2.13 Nonstatutory Stock Option. The term "Nonstatutory Stock
Option" shall mean any Options granted hereunder which do not qualify and are
not intended to be treated as Incentive Stock Options.
2.14 Option. The term "Option" shall mean an option to acquire
Shares granted under this Plan.
2.15 Option Agreement. The term "Option Agreement" shall refer
to an agreement evidencing an Option granted under this Plan.
2.16 Option Grant Date. The term "Option Grant Date" shall
mean the effective date of the grant of an Option. The effective date of the
grant shall be deemed to be the date on which the Board or Committee authorizes
the grant of the Option, unless a subsequent date is specified in such
authorization.
2.17 Option Termination Date. The term "Option Termination
Date" shall mean the date as of which all installments of an Option shall expire
and terminate as the Board or Committee shall determine, but in no event later
than 8 years after the Option Grant Date.
2.18 Optionee. The term "Optionee" shall mean an Eligible
Person who has been granted one or more Options.
2.19 Parent Corporation. The term "Parent Corporation" shall
mean a corporation as that term is defined in I.R.C. Section 425(e).
2.20 Participating Company. The term "Participating Company"
shall mean the Company and any Parent Corporation or Subsidiary Corporation.
2.21 Plan. The term "Plan" shall refer to the Company's 1992
Incentive Stock Option Plan as amended and restated herein.
2.22 Restricted Shareholder. The term "Restricted Shareholder"
shall mean an Optionee granted an Incentive Stock Option who, at the time an
Option is granted, beneficially owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its Parent
Corporation or Subsidiary Corporation, with stock ownership determined in
accordance with the attribution rules of I.R.C. Section 425(d).
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<PAGE>
2.23 Rule 16b-3. The term "16b-3" shall mean Rule 16b-3
promulgated by the Securities and Exchange Commission under the Exchange Act as
such rule may be amended from time to time.
2.24 Shares. The term "Shares" shall mean shares of the
Company's authorized but unissued Common Stock, $.001 par value, or any such
Shares held in the Company's treasury.
2.25 Subsidiary Corporation. The term "Subsidiary Corporation"
shall mean a corporation as that term is defined in I.R.C. Section 425(f).
2.26 Terminating Transaction. The term "Terminating
Transaction" shall mean any of the following events: (a) the dissolution or
liquidation of the Company; (b) a reorganization, merger or consolidation of the
Company with one or more other corporations (except with respect to a
transaction, the purpose of which is to change the domicile of the Company), as
a result of which the Company goes out of existence or becomes a subsidiary of
another corporation (which shall be deemed to have occurred if another
corporation shall own, directly or indirectly, fifty percent (50%) or more of
the aggregate voting power of all outstanding equity securities of the Company);
or (c) a sale of all or substantially all of the Company's assets.
2.27 Termination Date. The term "Termination Date" shall mean
the day before the 10th anniversary of the Effective Date.
2.28 Total Disability. The term "Total Disability" shall mean
a total and permanent disability as that term is defined in I.R.C. Section
105(d)(4).
2.29 Vested Installment. The term "Vested Installment" shall
mean any vested installment of an Option.
ARTICLE III
ADMINISTRATION OF PLAN
3.1 Administration by Board. The Plan shall be administered by
the Board. The Board shall have full and absolute power and authority in its
sole discretion to (i) determine which Eligible Persons shall receive Options,
(ii) determine the time when Options shall be granted, (iii) determine the terms
and conditions, of any Option granted hereunder, (iv) determine the number of
Shares which shall be subject to each Option granted hereunder, and (v)
interpret the provisions of the Plan and of any Option granted under the Plan.
3.2 Rules and Regulations. The Board may adopt such rules and
regulations as it, in its discretion, may deem necessary
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<PAGE>
or appropriate to carry out the purposes of the Plan, and shall have authority
to take all action necessary or appropriate to administer the Plan.
3.3 Binding Authority. All decisions, determinations,
interpretations, or other actions by the Board shall be final, conclusive, and
binding on all Eligible Persons, Optionees, Participating Companies and any
successors-in-interest to such persons.
3.4 Administration by Committee.
(a) The Board in its sole discretion may from time
to time appoint a Committee of no less than two Board members to administer the
Plan and, subject to applicable law, to exercise all of the powers, authority,
and discretion of the Board under this Plan. The Board may from time to time
remove members from, or add members to, the Committee, and vacancies on the
Committee shall be filled by the Board. The Board may abolish the Committee at
any time or revest in the Board the administration of the Plan.
(b) The Committee shall report to the Board the
names of Eligible Persons granted Options, the number of Shares covered by each
Option, and the terms and conditions of each such Option.
3.5 Compliance with Applicable Regulations and Laws.
Notwithstanding anything in this Article III to the contrary, to the extent
necessary or desirable to comply with Rule 16b-3, the I.R.C., or any other
applicable law or regulation, the Plan shall be administered in accordance with
the requirements imposed by such regulations or laws.
ARTICLE IV
NUMBER OF SHARES AVAILABLE UNDER THE PLAN
4.1 Maximum Number of Shares in the Aggregate. Subject to
Section 8.1, the maximum number of Shares which may be optioned and sold under
the Plan is 250,000 in the aggregate.
4.2 Additional Availability of Shares. If Options granted
under the Plan shall for any reason terminate, lapse, be forfeited or canceled,
or expire without being exercised, the Shares subject to such unexercised
Options shall again be available for the granting of Options under the Plan and
shall be included in the number of Shares which may be optioned and sold under
the Plan. In the event that Shares which were previously issued by the Company
upon the exercise of an Option are reacquired by the Company as part of the
consideration received (in accordance with Section 6.6(b) hereof) upon the
subsequent exercise of an Option, such Shares shall again be available for the
granting of Options
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<PAGE>
under the Plan and shall be included in the number of shares described in
Section 4.1.
4.3 Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of Shares as
shall equal the number of Shares subject to then-outstanding options under this
Plan.
ARTICLE V
TERM OF PLAN
5.1 Term. The Plan shall be effective as of the Effective Date
and Shall terminate on the Termination Date. No option may be granted hereunder
after the Termination Date.
ARTICLE VI
OPTION TERMS
6.1 Form of Option Agreement. Any Option granted under the
Plan shall be evidenced by an Option Agreement in such form as the Board, in its
discretion, may from time to time approve. Any Option Agreement shall contain
such terms and conditions as the Board, in its discretion, may deem necessary or
appropriate and which are not inconsistent with the provisions of this Plan.
6.2 Limitations on Incentive Stock Options.
(a) In the event that the aggregate Fair Market
Value (determined as of the Option Grant Date) of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by an Eligible
Person during any calendar year under the Plan exceeds $100,000, Options with
respect to and to the extent of such excess shall be treated as Nonstatutory
Stock Options. This Section 6.2(a) shall be applied by taking Options which are
intended to be Incentive Stock Options into account in the order in which they
were granted.
(b) No Optionee who is a Restricted Shareholder may
be granted an Incentive Stock Option which is exercisable after the expiration
of five years after the Option Grant Date.
6.3 Option Exercise Price. The option exercise price for
Shares to be issued under this Plan shall be determined by the Board in its sole
discretion, but in no event shall the option exercise price be less than the
Fair Market Value of the Shares on the Option Grant Date. If the Optionee is a
Restricted Shareholder, the option exercise price shall be not less than 110% of
the Fair Market Value of the Shares on the Option Grant Date.
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<PAGE>
6.4 Vesting and Exercisability of Options. Subject to the
limitations set forth herein and/or in any applicable Option Agreement entered
into hereunder, Options granted under the Plan shall vest and be exercisable in
accordance with the rules set forth in this Section 6.4:
(a) General. Subject to the other provisions of
this Section 6.4, Options shall vest and become exercisable at such times and in
such installments as the Board shall provide in each individual Option
Agreement; provided, however, that in no event shall any Option vest at a rate
less than 20% per year. Notwithstanding the foregoing, the Board may in its sole
discretion accelerate the time at which an Option or installment thereof may be
exercised. Unless otherwise provided in this Section 6.4, Section 8.4 or in the
Option Agreement pursuant to which an Option is granted, an Option may be
exercised when Vested Installments vest as provided in such Option Agreement and
at any time thereafter until, and including, the Option Termination Date.
(b) Termination of Options. All installments of an
Option shall expire and terminate on the Option Termination Date.
(c) Termination of Eligible Person Status Other
than by Reason of Death or Disability. In the event that the Eligible Person
status of an Optionee is terminated for any reason other that by reason of death
or Total Disability, any installment under an Option held by such Optionee which
has not vested as of the Eligible Person Termination Date shall expire and
become unexercisable as of such date. Except as set forth in Section 6.4(f), all
Vested Installments of Options granted hereunder to such Optionee which have not
been exercised prior to the Eligible Person Termination Date shall expire and
become unexercisable as of the earlier of:
(i) The date which is three months following
the Eligible Person Termination Date; or
(ii) The Option Termination Date.
(d) Leave of Absence. In the case of any employee
on an approved leave of absence, the Board may make such provision respecting
continuance of the Option as the Board, in its discretion, deems appropriate,
except that in no event shall an Option be exercisable after the Option
Termination Date.
(e) Death or Total Disability of an Eligible
Person. In the event that the Eligible Person status of an Optionee is
terminated by reason of death or Total Disability, any installments under the
Option held by such Optionee which have not vested as of the Eligible Person
Termination Date shall expire and become unexercisable as of such date. Except
as set forth in Section 6.4(f), all Vested Installments of Options granted
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<PAGE>
hereunder to such Optionee which have not been exercised prior to the Eligible
Person Termination Date shall expire and become unexercisable as of the earlier
of:
(i) The applicable Option Termination Date;
or
(ii) The first anniversary of the Eligible
Person Termination Date.
Any Vested Installments of a deceased Optionee may be
exercised prior to their expiration only by the person or persons to whom the
Optionee's Option rights pass by will or the laws of descent and distribution.
(f) Extensions. Notwithstanding the provisions
covering the exercisability of Options following the Eligible Person Termination
Date set forth in Sections 6.4(c) and (e), respectively, the Board may, in its
sole discretion, with the consent of the Optionee extend the period of time
during which Vested Installments shall remain exercisable, provided that in no
event shall such extension go beyond the Option Termination Date. In the case of
Incentive Stock Options, extensions under this Section 6.4(f) may result in loss
of the favorable treatment accorded incentive stock options under the I.R.C.
6.5 Exercise of Options. An Option may be exercised in
accordance with this Section 6.5 as to all or any portion of the Shares covered
by a Vested Installment of the Option from time to time during the applicable
option period, except that an Option shall not be exercisable with respect to
fractions of a Share. Options may be exercised, in whole or in part, by giving
written notice of exercise to the Company, which notice shall specify the number
of Shares to be purchased and shall be accompanied by payment in full of the
purchase price in accordance with Section 6.6. An Option shall be deemed
exercised when such written notice of exercise and full payment for the Shares
covered thereby has been received by the Company. No Shares shall be issued
until full payment of the purchase price thereof has been made and the Optionee
has satisfied such other conditions as may be required hereunder; as may be
required by applicable law, rules, or regulations; or as may be adopted or
imposed by the Board.
6.6 Payment of Option Exercise Price. Except as otherwise
provided in Section 6.6(b), the entire option exercise price shall be paid at
the time the Option is exercised by cashier's check or such other means deemed
acceptable by the Board. The Board may, in its discretion, permit Optionees to
borrow from the Company an amount of money sufficient to cover the option
exercise price, which amount may or may not bear interest and shall be repayable
as the Board shall determine.
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<PAGE>
6.7 Substitution of Options. In the Board's discretion, the
Board may, with an Optionee's consent, substitute Nonstatutory Stock Options for
outstanding Incentive Stock Options, and any such substitution shall not
constitute a new Option grant for the purposes of this Plan, and shall not
require a revaluation of the Option exercise price for the substituted Option.
Any such substitution may be implemented by an amendment to the applicable
Option Agreement or in such other manner as the Board in its discretion may
determine.
6.8 Option Not Transferable. Options granted hereunder may not
be sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, either voluntarily or involuntarily by
operation of law, other than by will or the laws of descent and distribution,
and may be exercised during the lifetime of the Optionee only by such Optionee.
Upon any attempt to transfer Options other than by will or the laws of descent
and distribution, or to assign, pledge, hypothecate or otherwise dispose of
Options, or upon the levy of any execution, attachment or similar process
thereon, such Options shall become null and void and any subsequent attempted
exercise of the Options shall be ineffective against the Company. The terms of
the Options shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
6.9 Restrictions on Issuance of Shares.
(a) No Shares shall be issued or delivered upon
exercise of an Option unless and until there shall have been compliance with all
applicable requirements of the Securities Act of 1933, as amended, (the "1933
Act"), all applicable listing requirements of any market or securities exchange
on which Shares are then listed, and any other requirement of law or of any
regulatory body having jurisdiction over such issuance and delivery. The
inability of the Company to obtain any required permits, authorizations, or
approvals necessary for the lawful issuance and sale of any Shares hereunder on
the terms deemed reasonable by the Board shall relieve the Company, the Board,
and any Committee of any liability in respect of the non-issuance or sale of
such Shares as to which such requisite permits, authorization, or approvals
shall not have been obtained.
(b) As a condition to the granting or exercise of
any Option, the Board may require the person receiving or exercising such Option
to make any representation and/or warranty to the Company as may be required (or
deemed appropriate by the Board, in its discretion) under any applicable law or
regulation, including but not limited to a representation that the option and/or
shares are being acquired only for investment and without any present intention
to sell or distribute such option and/or shares, if such a representation is
required under the 1933 Act or any other applicable law, rule, or regulation.
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<PAGE>
6.10 Option Adjustments.
(a) If the outstanding shares of Common Stock of
the Company are increased, decreased, changed into or exchanged for a different
number or kind of shares of the Company through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse stock
split, upon authorization by the Board an appropriate and proportionate
adjustment shall be made in the number or kind of shares, and the per-share
option price thereof, which may be issued in the aggregate and to any individual
Optionees under this Plan upon exercise of options granted hereunder; provided,
however, that no such adjustment need be made if, upon the advise of counsel,
the Board determines that such adjustment may result in the receipt of federally
taxable income to holders of Options granted under the Plan or the holder of
Common Stock or other classes of the Company's securities.
(b) Upon the occurrence of a Terminating
Transaction, as of the effective date of such Terminating Transaction, the Plan
and any then outstanding Options (whether or not vested) shall terminate unless
(i) provision be made in writing in connection with such transaction for the
continuance of the Plan and for the assumption of such Options, or for the
substitution for such Options of new options covering the securities of a
successor corporation or an affiliate thereof, with appropriate adjustments as
to the number and kind of securities and exercise prices, in which event the
Plan and such outstanding Options shall continue or be replaced, as the case may
be, in the manner and under the terms so provided; or (ii) the Board otherwise
shall provide in writing for such adjustments as it deems appropriate in the
terms and conditions of the then-outstanding Options (whether or not vested),
including without limitation (A) accelerating the vesting of outstanding
Options, and/or (B) providing for the cancellation of the Options and their
automatic conversation into the right to receive the securities or other
properties which a holder of the Shares underlying such Options would have been
entitled to receive upon such Terminating Transaction had such Shares been
issued and outstanding (net of the appropriate option exercise prices). If,
pursuant to the foregoing provisions of this paragraph (b), the Plan and the
Options shall terminate by reason of the occurrence of a Terminating Transaction
without provision for any of the action(s) described in clause (i) or (ii)
hereof, then any Optionee holding outstanding Options shall have the right, at
such time immediately prior to the consummation of the Terminating Transaction
as the Board shall designate, to exercise his or her Options to the full extent
not theretofore exercised, including any installments which have not yet become
Vested Installments (subject, however, to the provisions of Section 6.2(a)
above).
(c) Except to the extent required to retain
qualification of an Option as an Incentive Stock Option under I.R.C. Section
422, to the maximum extent possible any adjustments
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<PAGE>
authorized under this Section 6.10 with respect to any outstanding Options shall
be made by means of appropriate adjustments to the number of Shares (or other
securities) and the option exercise price therefor under the unexercised
portions of such outstanding Options, but without changing the aggregate
exercise price applicable to said unexercised portions. In all cases, the nature
and extent of adjustments under this Section 6.10 shall be determined by the
Board, and any such determination as to what adjustments shall be made, and the
extent thereof, shall be final, binding and conclusive. No fractional shares of
stock shall be issued under the Plan pursuant to any such adjustment.
6.11 Taxes. The Board shall make such provisions and take such
steps as it deems necessary or appropriate for the withholding of any federal,
state, local and other tax required by law to be withheld with respect to the
grant or exercise of an Option under the Plan, including, without limitation,
the deduction of the amount of any such withholding tax from any compensation or
other amounts payable to an Optionee by any of the Participating Companies, or
requiring an Optionee (or the Optionee's beneficiary or legal representative) as
a condition of granting or exercising an Option to pay to any Participating
Companies any amount required to be withheld, or to execute such other documents
as the Board deems necessary or desirable in connection with the satisfaction of
any applicable withholding obligation. In the discretion of the Board, upon
exercise of a Nonstatutory Stock Option, the Optionee may request the Company to
withhold from the Shares to be issued upon such exercise that number of Shares
(based on the Fair Market Value of the Shares as of the day immediately
preceding the day notice of exercise is received by the Company) that would
satisfy any tax withholding requirement; provided, however, that any such
withholding shall conform to any restrictions as to timing or otherwise under
Rule 16b-3.
6.12 Legends on Options and Stock Certificates. Each Option
Agreement and each certificate representing Shares acquired upon exercise of an
Option shall be endorsed with all legends, if any, required by applicable
federal and state securities laws to be placed on the Option Agreement and/or
the certificate. The determination of which legends, if any, shall be placed
upon Option Agreements and/or the Shares shall be made by the Board in its sole
discretion and such decision shall be final and binding.
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
7.1 Board Authority. The Board may amend, suspend, alter, or
terminate the Plan at any time. To the extent necessary or desirable to comply
with Rule 16b-3, the I.R.C. or any other applicable law or regulation, the
Company shall obtain shareholder
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<PAGE>
approval of any amendment to the Plan only in such a manner and to such a
degree as required.
7.2 Limitation on Board Authority. The Board may amend the
terms of any Option previously granted, prospectively or retroactively, and may
amend the Plan in accordance with the provisions of Section 7.1; provided,
however, that unless required by applicable law, rule or regulation, no
amendment of the Plan or of any Option Agreement shall, without the consent of
any Optionee holding any such affected Options, be permitted if such amendment
would affect in an material and adverse manner Options granted prior to the date
of any such amendment.
7.3 Contingent Grants Based on Amendments. Options may be
granted in reliance on and consistent with any amendment adopted by the Board
and which is necessary to enable such Options to be granted under the Plans,
even though such amendment requires future shareholder approval; provided,
however, that any such contingent Option by its terms may not be exercised prior
to shareholder approval of such amendment, and provided further, that in the
event shareholder approval is not obtained within twelve months of the date of
grant of such contingent Option, then such contingent Option shall be deemed
cancelled and no longer outstanding.
ARTICLE VIII
CERTAIN PROVISIONS RELATING TO
EXECUTIVE OFFICERS AND DIRECTORS
8.1 Limitations on Grants to Certain Executive Officers. From
and after the Company's 1996 Annual Meeting of Stockholders, the maximum number
of options that may be granted during any calendar year to the Company's chief
executive officer and its four mostly highly compensated executive officers who
are compensated at an annual rate in excess of $100,000 is 50,000.
8.2 Limitation on Exercisability of Director Options.
Notwithstanding the provisions contained in section 6.4, Options granted to
members of the Board may not be exercised prior to one year after the date such
Option is granted.
8.3 Automatic Award of Options to Non-Employee Directors. Each
Director who is not an employee of any Participating Company shall receive 2,000
Options on joining the Board and 2,000 options on the day of each Annual Meeting
of Stockholders in which such Director is elected or reelected to office. Such
Options shall be awarded at the fair market value on the date of grant. This
provision shall not be amended more than once every six months, other than to
conform with changes in the I.R.C., the Employee Retirement Income Security Act
of 1974, or the rules promulgated thereunder.
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<PAGE>
ARTICLE IX
GENERAL PROVISIONS
9.1 Availability of Plan. A copy of this Plan shall be shown
to any Eligible Person making reasonable inquiry concerning the Plan.
9.2 No Rights in Shares Before Issuance and Delivery. Neither
the Optionee, his or her estate nor his or her transferees by will or the laws
of descent and distribution shall be, or have any rights or privileges of, a
shareholder of the Company with respect to any Shares issuable upon exercise of
the Option unless and until certificates representing such Shares shall have
been issued and delivered notwithstanding exercise of the Option. No adjustment
will be made for a dividend or other rights where the record date is prior to
the date such stock certificates are issued, except as provided in Section
6.10(a).
9.3 Notice. Any notice or other communication required or
permitted to be given pursuant to the Plan or under any Option Agreement must be
in writing and may be given by registered or certified mail, and if given by
registered or certified mail, shall be determined to have been given and
received on the date three days after a registered or certified letter
containing such notice, properly addressed with postage prepaid, is deposited in
the United States mails; and if given otherwise than by registered or certified
mail, it shall be deemed to have been given when delivered to and received by
the party to whom addressed. Notice shall be given to Eligible Persons at their
most recent addresses shown in the Company's records. Notice to the Company
shall be addressed to the Company at the address of the Company's principal
executive offices, to the attention of the Treasurer of the Company.
9.4 Titles and Headings. Titles and headingsf sections of this
Plan document are for convenience of reference only and shall not affect the
construction of any provisions hereof.
9.5 Governing Law. This Plan shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws of the
State of Colorado applicable to agreements made and to be performed wholly
within the State of Colorado.
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<PAGE>
9.6 Information. During the period that Options are
outstanding, the Company will provide Optionees with copies of all reports,
proxy statements and other communications distributed to its shareholders
generally.
IN WITNESS WHEREOF, pursuant to the due authorization and
adoption of this Amended and Restated Plan by the Board on April 1, 1996, the
Company has caused this Amended and Restated Plan to be duly executed by its
duly authorized officers.
ENHANCED SERVICES COMPANY, INC.
By: _______________________________
Kenneth Duckman, President
and Chief Executive Officer
By: _______________________________
Robert Smith, Treasurer and
Chief Financial Officer
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EXHIBIT 5
Greenberger & Forman
1370 Avenue of the Americas
New York, New York 10019
August 30, 1996
Securities and Exchange Commission
450 Fifth Street Northwest
Washington, D.C. 20549
Re: S.E.C. Registration Statement
on Form S-8 of 241,240 Shares
of Common Stock of Enhanced Services Company, Inc.
Commission File No. 0-24256
--------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Enhanced Services Company,
Inc. (the "Company") in connection with a Registration Statement to
be filed with the United States Securities and Exchange Commission,
Washington, D.C., pursuant to the Securities Act of 1933, as
amended, covering the registration of the aggregate of 241,240
shares of the Company's $.001 par value Common Stock (the "Common
Stock") which may be issued to officers, directors, employees,
consultants and advisors of the Company, pursuant to the Company's
Amended and Restated 1992 Incentive Stock Option Plan.
As a basis of our opinion expressed below, we have
examined such records of the Company, such certificates of public
officials, and such other documents as we have deemed relevant and
necessary. We have assumed the conformity to the originals of all
copies and the authenticity of all originals. As to various
questions of fact to our material, we have relied, after due
investigation, upon inquiries made by us of an officer or officers
of the Company.
Based upon the foregoing, we are of the opinion as
follows:
1. The Company has been duly incorporated and organized
under the laws of the State of Colorado and is validly existing as
a corporation in good standing under the laws of that state.
2. The Company's authorized capital consists of Twenty
Million (20,000,000) shares of Capital Stock of the Company, of
which 15,000,000 shares are designated Common Stock having a par
value of $.001 per share and of which 5,000,000 are designated
preferred stock, having a par value of $.001 per share.
3. The 241,240 shares of the Company's Common Stock to
be registered pursuant to the Registration Statement have been duly
authorized and, when sold as described in the Registration
Statement, will be legally issued, fully paid and nonassessable.
Very truly yours,
GREENBERGER & FORMAN
By: /s/ Matthew S. Cohen
----------------------------
Matthew S. Cohen
<PAGE>
EXHIBIT 24.1
Greenberger & Forman
1370 Avenue of the Americas
New York, New York 10019
August 30, 1996
Securities and Exchange Commission
450 Fifth Street Northwest
Washington, D.C. 20549
Re: S.E.C. Registration Statement
on Form S-8 of 241,240 Shares
of Common Stock of Enhanced Services Company, Inc.
Commission File No. 0-24256
--------------------------------------------------
Ladies and Gentlemen:
We hereby consent to the inclusion of our opinion
regarding the legality of the securities being registered by the
Registration Statement to be filed with the United States
Securities and Exchange Commission, Washington, DC, pursuant to the
Securities Act of 1933, as amended, by Enhanced Services Company,
Inc., a Colorado corporation, in connection with its offering of up
to 241,240 shares of its common stock which may be issued pursuant
to options granted under the Company's Amended and Restated 1992
Incentive Stock Option Plan, as more fully described in such
Registration Statement.
We further consent to the reference in such Registration
Statement to our having given such opinion.
Very truly yours,
GREENBERGER & FORMAN
By: /s/ Matthew S. Cohen
-------------------------
Matthew S. Cohen
<PAGE>
EXHIBIT 24.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this registration
statement of Enhanced Services Company, Inc. on Form S-8 of our report appearing
in and incorporated by reference in the Annual Report on Form 10-KSB, as
amended, of Enhanced Services Company, Inc. for the fiscal year ended November
30, 1995. We also consent to the reference to us under the heading "Experts" in
the Prospectus constituting part of this Registration Statement.
/s/ SCHUMACHER & ASSOCIATES
--------------------------------
SCHUMACHER & ASSOCIATES
Denver, Colorado
August 29, 1996
