<PAGE>
As filed with the Securities and Exchange Commission on February 15, 2000.
Registration No. 333-
- -------------------------------------------------------------------------------
UNITED STATES SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ADVANTAGE MARKETING SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
OKLAHOMA 73-1323256
(State or other jurisdiction (I.R.S Employer Identification
of incorporation or Number)
organization)
2601 NORTHWEST EXPRESSWAY, SUITE 1210W
OKLAHOMA CITY, OKLAHOMA
(Address of principal 73112-7293
executive offices) (Zip Code)
ADVANTAGE MARKETING SYSTEMS, INC. EMPLOYEE STOCK OPTION PLAN
(Full Title of the Plan)
MR. JOHN W. HAIL
CHIEF EXECUTIVE OFFICER
ADVANTAGE MARKETING SYSTEMS, INC.
2601 NORTHWEST EXPRESSWAY, SUITE 1210W
OKLAHOMA CITY, OKLAHOMA 73112-7293
(Name and Address of Agent For Service)
(405) 842-0131
(Telephone Number, Including Area Code, of Agent For Service)
------------------------
COPIES TO:
MR. MICHAEL E. DUNN, ESQ.
DUNN SWAN & CUNNINGHAM
2800 OKLAHOMA TOWER, 210 PARK AVENUE
OKLAHOMA CITY, OKLAHOMA 73102-5604
(405) 235-8318
------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
PROPOSED MAXIMIM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED(1) REGISTERED PER SHARE (2) PRICE (2) FEE(3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 952,625 $6.00 $5,715,750 $1,508.96
===================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of
shares of Common Stock as a result of adjustment in the number of
securities issuable upon exercise of stock options by reason of
anti-dilution provisions of the stock option agreements evidencing the
stock options.
(2) The Offering Price has been estimated and the registration fee has been
computed pursuant to Rule 457(c) on the basis of the closing sale price
of the Common Stock as quoted on the American Stock Exchange on
February 11, 2000, which was $6.00.
(3) Calculated pursuant to rule 457(h)(1) on the basis of the closing sale
price of shares of the Common Stock as quoted on the American Stock
Exchange on February 11, 2000.
<PAGE>
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
PLAN INFORMATION
Advantage Marketing Systems, Inc. (the "Company") established the
Advantage Marketing Systems, Inc. Employee Stock Option Plan (the "Plan")
through the grant of stock options to employees, independent contractors and
consultants during the period commencing October 7, 1994, through October 8,
1998 exercisable for the purchase of 952,625 shares of common stock, par value
$.0001 per share. The Plan is not subject to any of the provisions of the
Employee Retirement Income Security Act of 1974.
The purpose of the Plan is to strengthen the ability of the Company
to attract and retain well-qualified personnel, to furnish additional
incentive to those persons responsible for the success of the Company, and
thereby to enhance shareholder value.
Other than the periods during which the stock options are exercisable
and the number of shares of Common Stock purchasable upon exercise, the stock
option agreements comprising the Plan are substantially identical other than
certain of the stock options are transferable. Stock options exercisable for
the purchase of 537,500 shares of Common Stock were transferred to family
members of two executive officers of the Company. The stock options are
nonincentive stock options and are not entitled to the favorable tax
consequences afforded stock options granted under Section 421 of the Internal
Revenue Code of 1986, as amended. The total number of shares of Common Stock,
$.0001 par value per share, authorized and reserved for issuance under the
Plan is 952,625. As of the date of this Registration Statement, all of the
shares authorized and reserved for issuance under the Plan are subject to
currently outstanding and exercisable stock options.
The exercise prices of the stock options were at the fair value of
the Company's Common Stock on the date of grant. The fair value of a share of
the Common Stock was determined by averaging the closing high bid and low
asked quotations for such shares on the date of grant of the option. Upon the
exercise, the Option exercise price must be paid in full, in cash or in Common
Stock or a combination of cash and Common Stock; however, the shares of Common
Stock must have been held by the option holder for more than six months.
Options granted under the Plan have expiration dates of February 21, 2000
through July 5, 2005.
FEDERAL INCOME TAX CONSEQUENCES
No tax obligation arose for the optionee or the Company upon the
granting of Options under the Plan. Upon exercise of a 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 shares of Common 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 if, only in the case of employees, the Company
deducts and withholds appropriate income taxes. Any additional gain or loss
realized by an optionee on disposition of such Option shares generally will be
capital gain or loss to the optionee and will not result in any additional tax
deduction to the Company.
ADDITIONAL INFORMATION
Additional information regarding the Plan and its administration may
be obtained by calling the Company's office at (405) 842-0131 or by writing to
Advantage Marketing Systems, Inc., 2601 Northwest Expressway, Suite 1210W,
Oklahoma City, Oklahoma 73112-7293, Attention: Roger P. Baresel.
The Company has filed the Registration Statement on Form S-8 (herein,
together with all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "1933 Act"), with the Securities and
Exchange Commission (the "Commission"), Washington, D.C., with respect to the
securities offered by the Company
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<PAGE>
under the Plan. As permitted by the rules and regulations of the Commission,
this Registration Statement incorporates certain documents which constitute
under Rule 428(a)(1) promulgated under the 1933 Act a prospectus that meets
the requirements of Section 10(a) of the 1933 Act. The statements contained in
the Registration Statement as to the contents of any contract or other
document referenced herein are not necessarily complete, and in each instance,
if the contract or document was filed as an exhibit, reference is hereby made
to the copy of the contract or other document filed as an exhibit to the
Registration Statement and each such statement is qualified in all respects by
such reference. Furthermore, the Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act") as a "small business issuer" as defined under Regulation S-B promulgated
under the 1933 Act. In accordance with the 1934 Act, the Company files
reports, proxy and other information statements with the Commission (File No.
001-13343). All such reports, proxy and other information statements will be
provided without charge to the participants in the Plan. The Registration
Statement, such reports, proxy and other information statements can be
inspected and copied at, and copies of such materials can be obtained at
prescribed rates from, the Public Reference Section of the Commission in the
office of the Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549-1004, and at the regional offices of the Commission at 7 World
Trade Center, 13th Floor, New York, New York 10048 and at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of the Registration
Statement and the exhibits and schedules thereto and such reports, proxy and
other information statements may be obtained from the Commission at such
offices, upon payment of prescribed rates. In addition, the Registration
Statements and exhibits and such reports, proxy and other information
statements made with the Commission through its Electronic Data Gathering,
Analysis and Retrieval ("EDGAR") system are publicly available through the
Commission's site on the World Wide Web on the Internet, located at
http://www.sec.gov. The Registration Statement, all exhibits thereto and
amendments thereof and all other documents incorporated by reference have been
filed with the Commission through EDGAR. The Company will provide without
charge to each participant in the Plan, upon written or oral request, a copy
of any information incorporated by reference herein. Such requests should be
directed to Advantage Marketing Systems, Inc., 2601 Northwest Expressway,
Suite 1210W, Oklahoma City, Oklahoma 73112-7293, telephone: (405) 842-0131.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed with the Securities and
Exchange Commission (the "Commission") are incorporated in this Registration
Statement by reference:
(a) the Prospectus, dated September 1, 1999, of the Company filed
with the Commission pursuant to Rule 424(b)(1) and in conjunction with the
Company's Registration Statement on Form SB-2 (No. 333-47801);
(b) the Annual Report on Form 10-KSB for the year ended December 31,
1998, filed with the Commission on March 30, 1999; the Quarterly Report on
Form 10-QSB for the quarter ended March 31, 1999, filed with the Commission on
May 7, 1999; the Quarterly Report on Form 10-QSB for the quarter ended June
30, 1999, filed with the Commission on August 13, 1999; the Quarterly Report
on Form 10-QSB for the quarter ended September 30, 1999, filed with the
Commission on November 15, 1999.
(c) the Company's Amendment to Registration Statement on Form 8-A, as
filed with the Commission on June 9, 1999;
(d) the Company's Certificate of Incorporation filed as Exhibit 3.1
to Registration Statement on Form SB-2 (Registration No. 333-47801) as filed
with the Commission on March 11, 1998; and
(e) the Company's Bylaws filed as Exhibit 3.2 to Registration
Statement on Form SB-2 (Registration No. 333- 47801) as filed with the
Commission on March 11, 1998.
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<PAGE>
Furthermore, all documents and reports subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing of each
such document or report.
ITEM 4. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 1031 of the Oklahoma General Corporation Act permits (and
Registrant's Certificate of Incorporation and Bylaws, which are incorporated
by reference herein, authorize) indemnification of directors and officers of
the Registrant and officers and directors of another corporation, partnership,
joint venture, trust or other enterprise who serve at the request of
Registrant, against expenses, including attorneys fees, judgments, fines and
amount paid in settlement actually and reasonably incurred by such person in
connection with any action, suit or proceeding in which such person is a party
by reason of such person being or having been a director or officer of
Registrant or at the request of Registrant, if he conducted himself in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of Registrant, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Registrant may not indemnify an officer or a director with respect to any
claim, issue or matter as to which such officer or director shall have been
adjudged to be liable to Registrant, unless and only to the extent that the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. To the extent
that an officer or director is successful on the merits or otherwise in
defense of any action, suit or proceeding with respect to which such person is
entitled to indemnification, or in defense of any claim, issue or matter
therein, such person is entitled to be indemnified against expenses, including
attorneys fees, actually and reasonable incurred by him in connection
therewith.
The circumstances under which indemnification is granted with an
action brought on behalf of Registrant are generally the same as those set
forth above; however, expenses incurred by an officer or a director in
defending a civil or criminal action, suit or proceeding may be paid by the
Corporation in advance of final disposition upon receipt of an undertaking by
or on behalf of such officer or director to repay such amount it is ultimately
determined that such officer or director is not entitled to indemnification by
Registrant.
These provisions may be sufficiently broad to indemnify such persons
for liabilities under the Securities Act of 1933, as amended (the "1933 Act"),
in which case such provision is against public policy as expressed in the 1933
Act and is therefore unenforceable.
ITEM 8. EXHIBITS.
4.1 Form of certificate of the common stock is incorporated by
reference to Exhibit 4.1 of Amendment No. 2 to the Company's
Registration Statement on Form SB-2 (No. 33-80629), as filed
with the Commission on November 20, 1996.
4.2 Form of Stock Option (Transferable).
4.3 Form of Stock Option (Non-Transferable).
5.1 Opinion of Dunn Swan & Cunningham, A Professional Corporation,
counsel to the Company.
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Dunn Swan & Cunningham.
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<PAGE>
ITEM 9. UNDERTAKINGS.
(A) RULE 415 OFFERING.
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;
(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 2 (a) (1) (i) and 2 (a) (1) (ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") that
are incorporated by reference herein.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933 (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(B) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE.
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 this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the new offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(E) INCORPORATED ANNUAL AND QUARTERLY REPORTS.
The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or
Rule 14c-3 under the Securities exchange Act of 1934; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incorporated
by reference in the prospectus to provide such interim financial
information.
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<PAGE>
(H) REQUEST FOR ACCELERATION OF EFFECTIVE DATE OF FILING
OF REGISTRATION STATEMENT ON FORM S-8.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director,
officer, or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities 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 Oklahoma City, Oklahoma, on this
11th day of February, 2000.
ADVANTAGE MARKETING SYSTEMS, INC.
(Registrant)
By: /S/JOHN W. HAIL
------------------------------------------
John W. Hail, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Roger P. Baresel and John W.
Hail, and each of them, his true and lawful attorney-in-fact and agent, with
all power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any or all amendments (including
post-effective amendments) to this Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith
with the Securities and Exchange Commission, granting unto same
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, 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 each of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/JOHN W. HAIL
- -------------------------- Chairman of the Board, Chief February 11, 2000
John W. Hail Executive Officer and Director
/S/ROGER P. BARESEL
- -------------------------- President, Chief Financial February 11, 2000
Roger P. Baresel Officer and Director
/S/JIMMY L. DUNGAN
- -------------------------- Director February 11, 2000
Jimmy L. Dungan
/S/R. TERREN DUNLAP
- -------------------------- Director February 11, 2000
R. Terren Dunlap
/S/HARLAND C. STONECIPHER
- -------------------------- Director February 11, 2000
Harland C. Stonecipher
</TABLE>
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<PAGE>
EXHIBIT 4.2
THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD OR TRANSFERRED IN
WHOLE OR IN PART, UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), HAS BEEN DECLARED EFFECTIVE WITH RESPECT TO
SUCH SECURITIES, OR COUNSEL SATISFACTORY TO ADVANTAGE MARKETING SYSTEMS, INC.
HAS RENDERED AN OPINION TO ADVANTAGE MARKETING SYSTEMS, INC. IN FORM AND
SUBSTANCE SATISFACTORY TO ADVANTAGE MARKETING SYSTEMS, INC. THAT THE PROPOSED
TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT OR THE RULES AND
REGULATIONS THEREUNDER.
STOCK OPTION
OPTIONS TO PURCHASE COMMON STOCK
OF
ADVANTAGE MARKETING SYSTEMS, INC.
(RESTATED AS OF OCTOBER 29, 1996, TO REFLECT ONE-FOR-EIGHT
REVERSE STOCK SPLIT.)
DATE:
This is to certify that, for value received, [OPTIONEE NAME] or any
subsequent holder or holders of option rights hereunder by virtue of
assignment or transfer ("Holder") is entitled to purchase, subject to the
provisions of this Stock Option (this "Option"), from ADVANTAGE MARKETING
SYSTEMS, INC., an Oklahoma corporation (the "Company"), up to
[NUMBER OF SHARES] shares of Common Stock, $.0001 par value, of the Company
(the "Stock") at an exercise price of [AMOUNT] DOLLARS per share (the
"Exercise Price"), for an aggregate exercise price of [AGGREGATE AMOUNT]
DOLLARS (the "Aggregate Exercise Price"). With the exception of any
adjustments pursuant to Section 4 of this Option, the Stock issuable upon
exercise of this Option shall be in all respects identical to the Common
Stock issued and outstanding of the Company as of the date hereof. The shares
of Stock or other securities deliverable upon such exercise, as adjusted from
time to time, are hereinafter sometimes referred to as the "Option
Securities." This Option may be exercised by the Holder at any time in whole
or in part. Unless the context otherwise requires, the term "Option" or
"Options" as used herein includes this Option and any other Option or Options
that may be issued pursuant to the provisions of this Option, whether upon
transfer, assignment, partial exercise, divisions, combinations, exchange or
otherwise, and the term "Holder" includes any registered transferee or
transferees or registered assignee or assignees of Holder, who in each case
shall be subject to the provisions of this Option, and when used with
reference to Option Securities, means the holder or holders of such Option
Securities.
SECTION 1. EXERCISE OF OPTION. Subject to the provisions hereof,
this Option may be exercised in whole or in part at any time or from time to
time during the period commencing on the date hereof (the "Commencement
Date") and ending 5:00 P.M., Central Standard Time, on [DATE] (the
"Expiration Date") in accordance with Section 1.1 and/or Section 1.2 hereof.
Upon such exercise, the Company shall issue to the Holder one or more
certificates for the Option Securities, as appropriate. If this Option is
exercised in part only, the Company shall, promptly after presentation of
this Option upon such exercise, execute and deliver a new Option evidencing
the rights of Holder thereof to purchase the balance of the Option Securities
purchasable hereunder upon the same terms and conditions as herein set forth.
SECTION 1.1 CASH EXERCISE. The Holder hereof may effect a cash
exercise of all or any portion of this Option by surrender of this
Option, together with the duly executed Purchase Form annexed hereto,
to the Company at its principal offices at any time prior to the
Expiration Date, accompanied by payment in cash or by certified or
official bank check payable to the order of the Company in the amount
equal to Exercise Price multiplied by the number of Option Securities
specified in the Purchase Form.
SECTION 1.2 RECEIPT OF STOCK IN LIEU OF CASH PAYMENT. The
Holder hereof may effect an exercise of this Option by surrendering
this Option Agreement, together with the duly executed Purchase Form
annexed hereto, to the Company at its principal offices at any time
prior to the Expiration Date, accompanied
<PAGE>
by a certificate or certificates evidencing the number of Mature Shares
(as defined below) held by the Holder, in which no payment of cash will
be required to the extent that the Market Value (as defined below) of
the Mature Shares equals or exceeds the total exercise price of the
number of Option Securities for which this Option is being exercised.
In the event a cash payment shall be required, such cash payment shall
be determined in accordance with Section 1.1 with respect to the number
of Option Securities having a total Exercise Price in excess of the
Market Value of the Mature Shares accompanying the Purchase Form. The
number of Option Securities to be issued to the Holder pursuant to
exercise of this Option in accordance with this Section shall be
determined by multiplying the number of Mature Shares (held by the
Holder) by the Market Value (as defined below) of the Common Stock of
the Company and dividing such amount by the Exercise Price of the
Options Securities being purchased, less the number of Mature Shares
held by the Holder evidenced by the certificate or certificates
accompanying the Purchase Form. For purposes of this calculation the
number of Mature Shares shall be limited to that number which when
multiplied by the Market Value (as defined below) of the Common Stock
of the Company yields a value which is less than or equal to the total
exercise price of the number of Option Securities for which this Option
is being exercised. Thereafter, the Mature Shares delivered to the
Company will not be canceled, but will be redelivered to the Holder, as
well as the number of Option Securities issuable pursuant to exercise
of this Option in accordance with this Section. For purposes hereof,
(i) "Mature Shares" shall mean the number of shares of Common Stock
evidenced by the certificate or certificates accompanying the Purchase
Form that have been held by the Holder for more than six months on the
date of issuance of the Option Securities pursuant to exercise of this
Option and (ii) "Market Value" shall mean, as of the close of the
business day preceding the date of exercise of this Option, (A) if the
Common Stock is listed for trading on a national or regional stock
exchange or is included on the Nasdaq National Market or SmallCap
Market, the closing sale price quoted on such exchange or the Nasdaq
National Market or SmallCap Market which is published in THE WALL
STREET JOURNAL for the trading day immediately preceding the date of
exercise, or if no trade of the Common Stock shall have been reported
on such date, the last sale price so quoted for the next day prior
thereto on which a trade in the Common Stock was so reported or (B) if
the Common Stock is not so listed or admitted to trading or included on
a national or regional stock exchange, the Nasdaq National Market or
Nasdaq SmallCap Market, the average of the closing highest reported bid
and lowest reported ask price as quoted on the National Association of
Securities Dealer's OTC Bulletin Board or in the "pink sheets"
published by the National Daily Quotation Bureau for the business day
immediately preceding the date of exercise on which the Common Stock is
traded or, if no trade of the Common Stock shall have been reported on
such date, the last sale price so quoted for the next day prior thereto
on which a trade in the Common Stock was quoted.
SECTION 2. RESERVATION OF SHARES. The Company shall at all times
after the Commencement Date and until expiration of this Option reserve for
issuance and delivery upon exercise of this Option the number of Option
Securities as shall be required for issuance and delivery upon exercise of
this Option.
SECTION 3. TRANSFER, EXCHANGE, ASSIGNMENT OR LOSS OF OPTION.
3.1 This Option may be assigned or transferred, in whole or in part,
as provided herein so long as such assignment or transfer is in accordance
with and subject to the provisions of the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder (said Act and such rules
and Regulations being hereinafter collectively referred to as the "Securities
Act"). Any purported transfer or assignment made other than in accordance
with this Section 3 shall be null and void and of no force and effect.
3.2 Any assignment permitted hereunder shall be made by surrender of
this Option to the Company at its principal office with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax. In
such event, the Company shall, without charge, execute and deliver a new
Option in the name of the assignee named in such instrument of assignment and
designate the assignee as the registered holder on the Company's records and
this Option shall promptly be canceled. This Option may be divided or
combined with other Options which carry the same rights upon presentation
thereof at the principal office of the Company together with a written notice
signed by Holder hereof, specifying the names and denominations in which new
Options are to be issued.
3.3 Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Option, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification to
the Company
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<PAGE>
or (in the case of mutilation) presentation of this Option for surrender and
cancellation, the Company will execute and deliver a new Option of like tenor
and date and any such lost, stolen, destroyed or mutilated Option shall
thereupon become void. This Option may be exchanged at the option of the
Holder for another Option or Options of different denominations, of like
tenor and evidencing in the aggregate the number of shares of Stock or Option
Securities purchasable pursuant to this Option, upon surrender of this
Option, with the Form of Assignment duly filled in and executed, to the
Company at its principal office, at any time or from time to time after the
close of business on the date hereof and prior to the close of business on
the Expiration Date. The Company shall promptly cancel the surrendered Option
and deliver the new Option or Options pursuant to the provisions of this
Section.
SECTION 4. ADJUSTMENT IN THE NUMBER, KIND AND PRICE OF OPTION
SECURITIES. The number and kind of Option Securities purchasable upon
exercise of this Option shall be subject to adjustment from time to time upon
the occurrence, after the date hereof, of the following events:
4.1 In the event the Company shall (i) pay a dividend in, or make a
distribution of, shares of Stock or of capital stock convertible into Stock
on its outstanding Stock, (ii) subdivide its outstanding shares of Stock into
a greater number of such shares, or (iii) combine its outstanding shares of
Stock into a smaller number of such shares, the total number of shares of
Stock purchasable upon the exercise of this Option immediately prior thereto
shall be adjusted so that the Holder shall be entitled to receive at the same
Aggregate Exercise Price the number of shares of Stock and the number of
shares of capital stock convertible into Stock which such Holder would have
owned or have been entitled to receive immediately following the happening of
such event. Any adjustment made pursuant to this Subsection shall, in the
case of a stock dividend or distribution or a stock issuance, become
effective as of the record date therefor and, in the case of a subdivision or
combination, be made as of the effective date thereof.
4.2 In the event of any adjustment of the total number of shares of
Stock purchasable upon the exercise of this Option pursuant to Subsection
4.1, the Aggregate Exercise Price shall remain unchanged, but the number of
shares of capital stock or Option Securities obtainable on exercise of this
Option, and the per share exercise price shall be adjusted as provided in
Subsection 4.1.
4.3 In the event of a capital reorganization or a reclassification
of the Stock (except as provided in Subsection 4.1 or Subsection 4.4), the
holder of this Option, upon exercise thereof, shall be entitled to receive,
in lieu of the Stock to which he would have become entitled upon exercise
immediately prior to such reorganization or reclassification, the shares (of
any class or classes) or other Option Securities or property of the Company
(or cash) that the Holder would have been entitled to receive at the same
Aggregate Exercise Price upon such reorganization or reclassification if this
Option had been exercised immediately prior thereto; and in any such case,
appropriate provision shall be made for the application of this Section 4
with respect to the rights and interests thereafter of the Holder of this
Option (including, but not limited to, the allocation of the Aggregate
Exercise Price between or among the Option Securities), to the end that this
Section 4 (including the adjustments of the number of shares of Stock or
other Option Securities purchasable) shall thereafter be reflected, as nearly
as reasonably practicable, in all subsequent exercises of this Option for any
shares or other Option Securities or other property (or cash) thereafter
deliverable upon the exercise of this Option.
4.4 In case of any consolidation of the Company with, or merger of
the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger which does not result in any reclassification
or change of the outstanding Stock), or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the corporation formed by such consolidation or
merger or the corporation which shall have acquired such assets, as the case
may be, shall execute and deliver to the Holder a supplement to this Option
or a new option providing that the Holder of this Option shall have the right
thereafter (until the Expiration Date) to receive, upon exercise of this
Option or any new option, at the same Aggregate Exercise Price, solely the
kind and amount of shares of Option Securities and property (or cash)
receivable upon such consolidation, merger, sale or transfer by the Holder of
this Option for the number and kind of Option Securities for which this
Option might have been exercised immediately prior to such consolidation,
merger, sale or transfer. Such supplemental option or new option shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section. The above provision
of this Subsection 4.4 shall similarly apply to successive consolidations,
mergers, sales or transfers.
-3-
<PAGE>
4.5 Whenever the Option Securities purchasable upon exercise of this
Option are modified as provided in Subsection 4.1 or 4.4 (provided that any
such modifications shall not change or extend the expiration date of this
Option), the Company will promptly deliver to the Holder a certificate signed
by the Chairman of the Board, Chief Executive Officer or the President, or a
Vice President of the Company and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary of the Company setting forth the
number and kind of Option Securities purchasable and the other property
(including cash) receivable by the Holder upon exercise of this Option or any
supplemental or new option. Such certificate will state that such adjustments
in the kind of purchasable Option Securities and other property (including
cash) receivable by the Holder upon exercise of this Option conform to the
requirements of this Section 4, and setting forth a brief statement of the
facts accounting for such adjustments. In the event, the Holder of this
Option does not agree with such determination of the Board of Directors of
the Company as set forth in the certificate, the Company shall retain a firm
of independent public accountants acceptable to the Holder to make any
computation required under this Section 4, and a certificate signed by such
firm shall be conclusive evidence of the correctness of any computation made
under this Section 4.
SECTION 5. REDEMPTION AND DIVIDEND CONSENT REQUIREMENTS. This Option
may not be redeemed by the Company. During the period from the date hereof
until exercise of this Option in full or through the Expiration Date, the
Company shall not declare any dividends payable in cash or property (other
than in liquidation, voluntary or involuntary dissolution or winding-up of
the Company) without the prior written consent of the Holder of this Option.
SECTION 6. NOTICE OF CERTAIN CORPORATION ACTION. In case the Company
after the date hereof shall propose to effect any consolidation or merger to
which the Company is a party and for which approval of any shareholders of
the Company is required, or any sale, transfer or other disposition of its
property and assets substantially as an entirety, or the liquidation,
voluntary or involuntary dissolution or winding-up of the Company, then, in
each such case, the Company shall mail (by first-class, postage prepaid mail)
to the Holder of this Option notice of such proposed action, which notice
shall specify the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation,
voluntary or involuntary dissolution or winding-up shall take place or
commence, as the case may be, and which shall also specify any record date
for determination of holders of the capital stock of the Company entitled to
vote thereon or participate therein and shall set forth such facts with
respect thereto as shall be reasonably necessary to indicate any adjustments
in the number or kind of Option Securities purchasable upon exercise of this
Option which will be required as a result of such action, and the Holder may
thereafter exercise this Option. Such notice shall be filed and mailed in the
case of any action covered by this Section 6, at least 20 days prior to the
earlier of (i) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation,
voluntary or involuntary dissolution or winding-up is expected to become
effective, (ii) the date on which it is expected that holders of shares of
the capital stock of record on such date shall be entitled to exchange their
shares for securities or other property deliverable upon such
reclassification, reorganization, consolidation, merger, sale, transfer,
other disposition, liquidation, voluntary or involuntary dissolution or
winding-up, or (iii) the record date for determination of holders of the
capital stock of the Company entitled to vote on such action or participate
in such action. Failure of the Holder to exercise this Option in whole or in
part prior to any corporate action as described in this Section 6 shall not
affect or alter the rights of the Holder as set forth in this Option.
SECTION 7. REGISTRATION OF SECURITIES. The Holder shall have the
right to demand and require to, and the Company shall, immediately prepare
and file under the Securities Act a registration statement to allow the
unrestricted sale of the Option Securities to the public from time to time,
and the Company shall take all actions necessary to cause such registration
statement to be current and effective during the period from the registration
statement initially becoming effective through (i) the Expiration Date or
(ii) at any other time when this Option is exercisable, so as to allow the
unrestricted sale of the Option Securities by the Holder to the public. The
Company will also file such applications and other documents necessary to
permit the sale of the Option Securities to the public in all states which
the Holder may reasonably request. In performing its obligations under this
Section 7, the Company shall pay all expenses incident to such registration,
including, without limitation, all registration, filing and applicable
securities exchange and market system fees, all fees and expenses of
complying with securities or blue sky laws, printing expenses, delivery
expenses, transfer agent fees, fees and disbursements of counsel for the
Company and its independent public accountants. The Holder shall be
responsible for all fees and expenses of their counsel and other professional
advisors.
-4-
<PAGE>
SECTION 8. TAX WITHHOLDINGS. The Company's obligation to deliver the
Option Securities upon the exercise of this Option may be subject to the
satisfaction of all applicable federal, state and local income tax
withholding requirements. Subject to approval by the Board of Directors of
the Company, the Holder may, in his discretion, use cash payment or shares of
Common Stock or other Option Securities in satisfaction of all or part of the
required federal, state and local income tax withholding incurred by the
Holder in connection with the exercise of this Option ("Taxes") by any one or
a combination of the following methods: (i) the Holder may make a cash
payment to the Company, (ii) the Holder may have the Company withhold from
the Option Securities otherwise issuable upon exercise of this Option a
portion of those Option Securities with an aggregate Market Value equal to
the amount of such Taxes (not to exceed 100 percent of such Taxes) as
designated by the Holder, and (iii) the Holder may deliver to the Company, at
the time the Option is exercised, one or more shares of Mature Shares held by
the Holder (other than pursuant to the transaction triggering the Taxes) with
an aggregate Market Value equal to such Taxes (not to exceed 100 percent of
such Taxes). The Mature Shares, if applicable, delivered by the Holder to the
Company in payment of all or any portion of the Taxes shall be canceled by
the Company upon receipt.
SECTION 9. GOVERNING LAW. This Option shall be construed in
accordance with the laws of the State of Oklahoma applicable to contracts
executed and to be performed wholly within such state.
SECTION 8. NOTICE. Notices and other communications to be given to
Holder of this Option shall be delivered by hand or by first-class mail,
postage prepaid, to
[NAME & ADDRESS OF OPTIONEE]
(until another address is filed in writing by the Holder with the Company).
Notices or other communications to the Company shall be deemed to have been
sufficiently given if delivered by hand or by first-class mail, postage
prepaid to the Company at
ADVANTAGE MARKETING SYSTEMS, INC.
2601 Northwest Expressway, Suite 1210W
Oklahoma City, Oklahoma 73112
or such other address as the Company shall have designated by written notice
to such registered owner as herein provided. Notice by mail shall be deemed
given when deposited in the United States mail, postage prepaid, as herein
provided.
SECTION 11. SUCCESSORS. All the covenants and provisions of this
Option by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder, and all covenants and
provisions of this Option by or for the benefit of the Holder of this Option
shall bind and inure to the benefit of the Holder of this Option.
SECTION 12. TERMINATION. This Agreement shall terminate as of the
close of business on the Expiration Date, or such earlier date upon which
this Option shall have been exercised in full. However, with respect to
obligations contained herein regarding the registration of the Option
Securities, such obligations shall continue on and after the Expiration Date
if this Option is fully or partially exercised on or before the Expiration
Date.
SECTION 13. BENEFITS OF THIS AGREEMENT. Nothing in this Option shall
be construed to give to any person or corporation other than the Company, and
its respective successors and assigns hereunder and the registered holder of
this Option any legal or equitable right, remedy or claim under this Option,
but this Option shall be for the sole and exclusive benefit of the Company
and its respective successors and assigns hereunder and the registered holder
of this Option.
-5-
<PAGE>
IN WITNESS WHEREOF, Company has executed this Stock Option on [DATE OF
GRANT].
ADVANTAGE MARKETING SYSTEMS, INC.
By:
-------------------------------
John W. Hail, Chief Executive Officer
-6-
<PAGE>
PURCHASE FORM (CASH EXERCISE)
(TO BE EXECUTED BY THE HOLDER OF THE STOCK OPTION IF EXERCISED
IN WHOLE OR IN PART)
To: ADVANTAGE MARKETING SYSTEMS, INC.
The undersigned
----------------------------------------------------
Please insert name of Holder
hereby irrevocably elects, pursuant to Section 1.1 of the Option, to exercise
the right of purchase represented by the Stock Option (the "Option") to which
this Purchase Form is attached, for, and to purchase thereunder, ______________
_________________ (________) shares of Common Stock provided for therein and
tenders payment herewith to the order of ADVANTAGE MARKETING SYSTEMS, INC.
in the amount of $___________. The undersigned requests that certificates for
such shares of Common Stock be issued as follows:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Deliver to:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------------
and if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable thereunder, that a new Stock Option for the balance
remaining of shares of Common Stock purchasable under the Option be registered
in the name of, and delivered to the undersigned at the address stated below:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Deliver to:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Dated: _________________________,____ Signature
---------------------------
(Signature must conform in
all respects to the name of
Holder as specified on the
face of the Stock Option in
every particular, without
alteration, enlargement or
any change whatever.)
-7-
<PAGE>
PURCHASE FORM (STOCK IN LIEU OF CASH PAYMENT EXERCISE)
(TO BE EXECUTED BY THE HOLDER OF THE STOCK OPTION IF EXERCISED IN WHOLE OR IN
PART)
To: ADVANTAGE MARKETING SYSTEMS, INC.
The undersigned
----------------------------------------------------
Please insert name of Holder
hereby irrevocably elects, pursuant to Section 1.2 of the Option, to exercise
the right of purchase represented by the Stock Option (the "Option") to which
this Purchase Form is attached, for, and to purchase thereunder, ______________
_________________ (________) shares of Common Stock provided for therein and
tenders payment herewith _________ shares of Common Stock of the Company held
by the Holder as evidenced by the certificate or certificates accompanying
this Purchase Form. The undersigned requests that certificates for such
shares of Common Stock be issued as follows:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Deliver to:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------------
and if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable thereunder, that a new Stock Option for the balance
remaining of shares of Common Stock purchasable under the Option be registered
in the name of, and delivered to the undersigned at the address stated below:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Deliver to:
---------------------------------------------------------------------
Address:
---------------------------------------------------------------------------
Dated: ________________________, ____ Signature
---------------------------
(Signature must conform in
all respects to the name of
Holder as specified on the
face of the Stock Option in
every particular, without
alteration, enlargement or
any change whatever.)
-8-
<PAGE>
ASSIGNMENT FORM
(TO BE EXECUTED BY THE HOLDER OF THE STOCK OPTION ONLY
UPON ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________________________
______________________________________________("Assignee") the right to purchase
_______________________________________________ (_______) shares of Common Stock
subject to purchase under the Stock Option (the "Option") to which this
Assignment is attached, and appoints ___________________________________________
________________________________________________________________________________
_____________________ Attorney to transfer said Option or portion thereof on the
books of ADVANTAGE MARKETING SYSTEMS, INC. with the full power of
substitution in the premises. In accordance with Section 3 of the Option,
the undersigned requests that the Company execute, issue and deliver a new
Stock Option evidencing the rights of the Assignee to purchase such assigned
shares of Common Stock to Assignee as follows:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Deliver to:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------------
and if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable under the Option, that the Company execute, issue and
deliver a new Stock Option for the balance remaining of shares of Common Stock
purchasable under the Option to be registered in the name of, and delivered to
the undersigned at the address stated below:
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Deliver to:
---------------------------------------------------------------------
Address:
------------------------------------------------------------------------
Dated:___________________________,____.
In the presence of:
Signature
- ---------------------------------------
Signature Guaranteed:
---------------------------
(Signature must conform in
all respects to the name of
Holder as specified on the
face of the Stock Option in
every particular, without
alteration, enlargement or
any change whatsoever, and
the signature must be
guaranteed in the usual
manner.)
-9-
<PAGE>
EXHIBIT 4.3
STOCK OPTION
OPTIONS TO PURCHASE COMMON STOCK
OF
ADVANTAGE MARKETING SYSTEMS, INC.
(RESTATED AS OF OCTOBER 29, 1996, TO REFLECT ONE-FOR-EIGHT
REVERSE STOCK SPLIT.)
DATE:
This is to certify that, for value received, [NAME OF OPTIOINEE]
("Optionee") is entitled to purchase, subject to the provisions of this Stock
Option (this "Option"), from ADVANTAGE MARKETING SYSTEMS, INC., an Oklahoma
corporation (the "Company"), up to [NUMBER OF SHARES] shares of Common Stock,
$.0001 par value, of the Company (the "Stock") at an exercise price of [AMOUNT
OF EXERCISE PRICE] DOLLARS per share (the "Exercise Price"), for an aggregate
exercise price of [AGGREGATE EXERCISE PRICE] DOLLARS (the "Aggregate Exercise
Price"). With the exception of any adjustments pursuant to Section 4 of this
Option, the Stock issuable upon exercise of this Option shall be in all respects
identical to the Common Stock issued and outstanding of the Company as of the
date hereof. The shares of Stock or other securities deliverable upon such
exercise, as adjusted from time to time, are hereinafter sometimes referred to
as the "Option Securities." This Option may be exercised by the Optionee at any
time in whole or in part. Unless the context otherwise requires, the term
"Option" or "Options" as used herein includes this Option and any other Option
or Options that may be issued pursuant to the provisions of this Option, whether
upon partial exercise, divisions, combinations, exchange or otherwise.
SECTION 9. EXERCISE OF OPTION. Subject to the provisions hereof,
this Option may be exercised in whole or in part at any time or from time to
time during the period commencing on the date hereof (the "Commencement
Date") and ending 5:00 P.M., Central Standard Time, on [DATE] (the
"Expiration Date") in accordance with Section 1.1 and/or Section 1.2 hereof.
Upon such exercise, the Company shall issue to the Optionee one or more
certificates for the Option Securities, as appropriate. If this Option is
exercised in part only, the Company shall, promptly after presentation of
this Option upon such exercise, execute and deliver a new Option evidencing
the rights of Optionee to purchase the balance of the Option Securities
purchasable hereunder upon the same terms and conditions as herein set forth.
SECTION 1.1 CASH EXERCISE. Subject to Section 5, the Optionee may
effect a cash exercise of all or any portion of this Option by surrender of
this Option, together with the duly executed Purchase Form annexed hereto, to
the Company at its principal offices at any time prior to the Expiration
Date, accompanied by payment in cash or by certified or official bank check
payable to the order of the Company in the amount equal to Exercise Price
multiplied by the number of Option Securities specified in the Purchase Form.
SECTION 1.2 RECEIPT OF STOCK IN LIEU OF CASH PAYMENT. Subject to
Section 5, the Optionee may effect an exercise of this Option by surrendering
this Option Agreement, together with the duly executed Purchase Form annexed
hereto, to the Company at its principal offices at any time prior to the
Expiration Date, accompanied by a certificate or certificates evidencing the
number of Mature Shares (as defined below) held by the Optionee, in which no
payment of cash will be required to the extent that the Market Value (as
defined below) of the Mature Shares equals or exceeds the total exercise
price of the number of Option Securities for which this Option is being
exercised. In the event a cash payment shall be required, such cash payment
shall be determined in accordance with Section 1.1 with respect to the number
of Option Securities having a total Exercise Price in excess of the Market
Value of the Mature Shares accompanying the Purchase Form. The number of
Option Securities to be issued to the Optionee pursuant to exercise of this
Option in accordance with this Section shall be determined by multiplying the
number of Mature Shares (held by the Optionee) by the Market Value (as defined
below) of the Common Stock of the Company and dividing such amount by the
Exercise Price of the Option Securities being purchased, less the number of
Mature Shares held by the Optionee evidenced by the certificate or certificates
accompanying the Purchase Form. For purposes of this calculation the number of
Mature Shares shall be limited to that number which when multiplied by the
Market Value (as defined below) of the Common Stock of the Company yields a
value which is less than or equal to the total exercise price of
<PAGE>
the number of Option Securities for which this Option is being exercised.
Thereafter, the Mature Shares delivered to the Company will not be canceled, but
will be redelivered to the Optionee, as well as the number of Option Securities
issuable pursuant to exercise of this Option in accordance with this Section.
For purposes hereof, (i) "Mature Shares" shall mean the number of shares of
Common Stock evidenced by the certificate or certificates accompanying the
Purchase Form that have been held by the Optionee for more than six months on
the date of issuance of the Option Securities pursuant to exercise of this
Option and (ii) "Market Value" shall mean, as of the close of the business day
preceding the date of exercise of this Option, (A) if the Common Stock is listed
for trading on a national or regional stock exchange or is included on the
Nasdaq National Market or SmallCap Market, the closing sale price quoted on such
exchange or the Nasdaq National Market or SmallCap Market which is published in
THE WALL STREET JOURNAL for the trading day immediately preceding the date of
exercise, or if no trade of the Common Stock shall have been reported on such
date, the last sale price so quoted for the next day prior thereto on which a
trade in the Common Stock was so reported or (B) if the Common Stock is not so
listed or admitted to trading or included on a national or regional stock
exchange, the Nasdaq National Market or Nasdaq SmallCap Market, the average of
the closing highest reported bid and lowest reported ask price as quoted on the
National Association of Securities Dealer's OTC Bulletin Board or in the "pink
sheets" published by the National Daily Quotation Bureau for the business day
immediately preceding the date of exercise on which the Common Stock is traded
or, if no trade of the Common Stock shall have been reported on such date, the
last sale price so quoted for the next day prior thereto on which a trade in the
Common Stock was quoted.
SECTION 10. RESERVATION OF SHARES. The Company shall at all times
after the Commencement Date and until expiration of this Option reserve for
issuance and delivery upon exercise of this Option the number of Option
Securities as shall be required for issuance and delivery upon exercise of
this Option.
SECTION 11. NONTRANSFERABILITY OF THIS OPTION. Except as
otherwise herein provided, this Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and this Option may be
exercised, during the lifetime of Optionee, only by him. More particularly
(but without limiting the generality of the foregoing), this Option may not
be assigned, transferred (except as provided above), pledged or hypothecated
in any way, shall not be assignable by operation of law and shall not be
subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of this
Option contrary to the provisions hereof shall be null and void and without
effect.
SECTION 12. ADJUSTMENT IN THE NUMBER, KIND AND PRICE OF OPTION
SECURITIES. The number and kind of Option Securities purchasable upon exercise
of this Option shall be subject to adjustment from time to time upon the
occurrence, after the date hereof, of the following events:
12.1 In the event the Company shall (i) pay a dividend in, or make a
distribution of, shares of Stock or of capital stock convertible into Stock on
its outstanding Stock, (ii) subdivide its outstanding shares of Stock into a
greater number of such shares, or (iii) combine its outstanding shares of Stock
into a smaller number of such shares, the total number of shares of Stock
purchasable upon the exercise of this Option immediately prior thereto shall be
adjusted so that the Optionee shall be entitled to receive at the same Aggregate
Exercise Price the number of shares of Stock and the number of shares of capital
stock convertible into Stock which such Optionee would have owned or have been
entitled to receive immediately following the happening of such event. Any
adjustment made pursuant to this Subsection shall, in the case of a stock
dividend or distribution or a stock issuance, become effective as of the record
date therefor and, in the case of a subdivision or combination, be made as of
the effective date thereof.
12.2 In the event of any adjustment of the total number of shares of
Stock purchasable upon the exercise of this Option pursuant to Subsection 4.1,
the Aggregate Exercise Price shall remain unchanged, but the number of shares of
capital stock or Option Securities obtainable on exercise of this Option, and
the per share exercise price shall be adjusted as provided in Subsection 4.1.
12.3 In the event of a capital reorganization or a reclassification
of the Stock (except as provided in Subsection 4.1 or Subsection 4.4), the
Optionee, upon exercise thereof, shall be entitled to receive, in lieu of the
Stock to which he would have become entitled upon exercise immediately prior to
such reorganization or reclassification, the shares (of any class or classes) or
other Option Securities or property of the Company (or cash) that the Optionee
would have been entitled to receive at the same Aggregate Exercise Price upon
such reorganization or reclassification
-2-
<PAGE>
if this Option had been exercised immediately prior thereto; and in any such
case, appropriate provision shall be made for the application of this Section 4
with respect to the rights and interests thereafter of the Optionee (including,
but not limited to, the allocation of the Aggregate Exercise Price between or
among the Option Securities), to the end that this Section 4 (including the
adjustments of the number of shares of Stock or other Option Securities
purchasable) shall thereafter be reflected, as nearly as reasonably practicable,
in all subsequent exercises of this Option for any shares or other Option
Securities or other property (or cash) thereafter deliverable upon the exercise
of this Option.
12.4 In case of any consolidation of the Company with, or merger of
the Company with, or merger of the Company into, another corporation (other than
a consolidation or merger which does not result in any reclassification or
change of the outstanding Stock), or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the corporation formed by such consolidation or
merger or the corporation which shall have acquired such assets, as the case
may be, shall execute and deliver to the Optionee a supplement to this Option
or a new option providing that the Optionee shall have the right thereafter
(until the Expiration Date) to receive, upon exercise of this Option or any
new option, at the same Aggregate Exercise Price, solely the kind and amount
of shares of Option Securities and property (or cash) receivable upon such
consolidation, merger, sale or transfer by the Optionee for the number and
kind of Option Securities for which this Option might have been exercised
immediately prior to such consolidation, merger, sale or transfer. Such
supplemental option or new option shall provide for adjustments which shall
be as nearly equivalent as may be practicable to the adjustments provided in
this Section. The above provision of this Subsection 4.4 shall similarly
apply to successive consolidations, mergers, sales or transfers.
12.5 Whenever the Option Securities purchasable upon exercise of this
Option are modified as provided in Subsection 4.1 or 4.4 (provided that any such
modifications shall not change or extend the expiration date of this Option),
the Company will promptly deliver to the Optionee a certificate signed by the
Chairman of the Board, Chief Executive Officer or the President, or a Vice
President of the Company and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary of the Company setting forth the number and
kind of Option Securities purchasable and the other property (including cash)
receivable by the Optionee upon exercise of this Option or any supplemental or
new option. Such certificate will state that such adjustments in the kind of
purchasable Option Securities and other property (including cash) receivable by
the Optionee upon exercise of this Option conform to the requirements of this
Section 4, and setting forth a brief statement of the facts accounting for such
adjustments. In the event, the Optionee does not agree with such determination
of the Board of Directors of the Company as set forth in the certificate, the
Company shall retain a firm of independent public accountants acceptable to the
Optionee to make any computation required under this Section 4, and a
certificate signed by such firm shall be conclusive evidence of the correctness
of any computation made under this Section 4.
SECTION 13. SERVICE REQUIREMENT. This Option and the exercise hereof
shall be subject to the requirement that the Optionee continue to provide
services to the Company in a capacity of equal or greater responsibility than
the Optionee was on February 21, 1995 (the "Service Requirement"), as determined
in the sole discretion of the Board of Directors of the Company; provided
however, that 20 percent of this Option shall vest, on a cumulative basis, on
each anniversary date of the grant of this Option and such vested portion of
this Option shall not be subject to the Service Requirement. That portion of
this Option that ceases to be subject to the Service Requirement shall be
exercised by the Optionee during the Exercise Period in accordance with the
provisions hereof. Provided, however, at any time the Company may waive the
Service Requirement, subject to such terms and conditions as determined in the
sole discretion of the Board of Directors of the Company, by providing written
notification to the Optionee of such waiver and setting forth the terms and
conditions of such waiver.
SECTION 14. NOTICE OF CERTAIN CORPORATION ACTION. In case the
Company after the date hereof shall propose to effect any consolidation or
merger to which the Company is a party and for which approval of any
shareholders of the Company is required, or any sale, transfer or other
disposition of its property and assets substantially as an entirety, or the
liquidation, voluntary or involuntary dissolution or winding-up of the Company,
then, in each such case, the Company shall mail (by first-class, postage prepaid
mail) to the Optionee notice of such proposed action, which notice shall
specify the date on which such reclassification, reorganization, consolidation,
merger, sale, transfer, other disposition, liquidation, voluntary or involuntary
dissolution or winding-up shall take place or commence, as the case may be, and
which shall also specify any record date for determination of holders of the
capital stock of the Company entitled to vote thereon or participate therein
and shall set forth such facts with respect
-3-
<PAGE>
thereto as shall be reasonably necessary to indicate any adjustments in the
number or kind of Option Securities purchasable upon exercise of this Option
which will be required as a result of such action, and the Optionee may
thereafter exercise this Option. Such notice shall be filed and mailed in the
case of any action covered by this Section 6, at least 20 days prior to the
earlier of (i) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation, voluntary
or involuntary dissolution or winding-up is expected to become effective, (ii)
the date on which it is expected that holders of shares of the capital stock of
record on such date shall be entitled to exchange their shares for securities or
other property deliverable upon such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition, liquidation, voluntary
or involuntary dissolution or winding-up, or (iii) the record date for
determination of holders of the capital stock of the Company entitled to vote on
such action or participate in such action. Failure of the Optionee to exercise
this Option in whole or in part prior to any corporate action as described in
this Section 6 shall not affect or alter the rights of the Optionee as set forth
in this Option.
SECTION 15. RESTRICTED SECURITIES. All of the Option Securities
subject to this Option are being acquired by the Optionee for his own
investment purpose and not with a view to, or for resale in connection with,
any distribution of the Option Securities or with any intention of further
distribution. The Optionee understands that the Option Securities have not
been registered under the Securities Act of 1933 (the "Act") or the
securities laws of any state (collectively called the "Securities Laws") and
will be issued in reliance upon certain exemptions from the registration
requirements of such Securities Laws for non-public offerings. The Optionee
hereby acknowledges that the Option Securities are "Restricted Securities" as
defined under the Act and Rule 144 promulgated thereunder and may not be
transferred, and that the Company will not be required to approve any such
transfer, unless and until the Company shall have been informed of the
proposed transfer and i) the Optionee has obtained an opinion of counsel, in
form and content satisfactory to the Company and its counsel, that no
violation of the Act or any other applicable law will be involved in such
transfer, and or other such documentation in connection therewith as counsel
for the Company may require as a condition precedent in order to make a
determination that the transfer will involve no such violation; or ii) the
transfer shall be governed by the provisions of Rule 144 or any other rule
promulgated under the Act, in a manner satisfactory to the Company's counsel.
The Optionee agrees that the Company is under no obligation to register the
Option Securities on behalf of the Optionee or to assist him in complying
with any exemption from their registration, except as otherwise provided
herein. The Optionee agrees that the following legend may be placed on any
certificates delivered to him representing the Option Securities in order to
give notice of the transfer restrictions set forth in this agreement and that
the Company may instruct its transfer agent not to transfer any of the Option
Securities until it has received written approval from the Company.
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION UNDER THE ACT TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY. THE SALE, IF ANY, OF THESE SHARES SHALL BE GOVERNED BY THE
PROVISIONS OF RULE 144 OR ANY OTHER APPLICABLE RULE PROMULGATED BY THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED."
SECTION 8. TAX WITHHOLDINGS. The Company's obligation to deliver
the Option Securities upon the exercise of this Option may be subject to the
satisfaction of all applicable federal, state and local income tax
withholding requirements. Subject to approval by the Board of Directors of
the Company, the Optionee may, in his discretion, use cash payment or shares
of Common Stock or other Option Securities in satisfaction of all or part of
the required federal, state and local income tax withholding incurred by the
Optionee in connection with the exercise of this Option ("Taxes") by any one
or a combination of the following methods: (i) the Optionee may make a cash
payment to the Company, (ii) the Optionee may have the Company withhold from
the Option Securities otherwise issuable upon exercise of this Option a
portion of those Option Securities with an aggregate Market Value equal to
the amount of such Taxes (not to exceed 100 percent of such Taxes) as
designated by the Optionee, and (iii) the Optionee may deliver to the
Company, at the time the Option is exercised, one or more shares of Mature
Shares held by the Optionee (other than pursuant to the transaction
triggering the Taxes) with an aggregate Market Value equal to such
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<PAGE>
Taxes (not to exceed 100 percent of such Taxes). The Mature Shares, if
applicable, delivered by the Optionee to the Company in payment of all or any
portion of the Taxes shall be canceled by the Company upon receipt.
SECTION 9. GOVERNING LAW. This Option shall be construed in
accordance with the laws of the State of Oklahoma applicable to contracts
executed and to be performed wholly within such state.
SECTION 10. NOTICE. Notices and other communications to be given
to Optionee shall be delivered by hand or by first-class mail, postage
prepaid, to
[NAME AND ADDRESS OF OPTIOINEE]
(until another address is filed in writing by the Optionee with the Company).
Notices or other communications to the Company shall be deemed to have been
sufficiently given if delivered by hand or by first-class mail, postage prepaid
to the Company at
ADVANTAGE MARKETING SYSTEMS, INC.
2601 Northwest Expressway, Suite 1210W
Oklahoma City, Oklahoma 73112
or such other address as the Company shall have designated by written notice to
Optionee as herein provided. Notice by mail shall be deemed given when deposited
in the United States mail, postage prepaid, as herein provided.
SECTION 11. SUCCESSORS. All the covenants and provisions of this
Option by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder, and all covenants and
provisions of this Option by or for the benefit of the Optionee shall bind
and inure to the benefit of the Optionee.
SECTION 12. TERMINATION. This Agreement shall terminate as of
the close of business on the Expiration Date, or such earlier date upon which
this Option shall have been exercised in full.
SECTION 13. BENEFITS OF THIS AGREEMENT. Nothing in this Option
shall be construed to give to any person or corporation other than the
Company, and its respective successors and assigns hereunder and the Optionee
any legal or equitable right, remedy or claim under this Option, but this
Option shall be for the sole and exclusive benefit of the Company and its
respective successors and assigns hereunder and the Optionee.
IN WITNESS WHEREOF, Company has executed this Stock Option on [DATE OF
GRANT].
ADVANTAGE MARKETING SYSTEMS, INC.
By:
-------------------------------------
John W. Hail, Chief Executive Officer
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<PAGE>
PURCHASE FORM (CASH EXERCISE)
(TO BE EXECUTED BY THE OPTIONEE IF EXERCISED IN WHOLE OR IN PART)
To: ADVANTAGE MARKETING SYSTEMS, INC.
The undersigned _____________________________________________________
Please insert name of Optionee
hereby irrevocably elects, pursuant to Section 1.1 of the Option, to exercise
the right of purchase represented by the Stock Option (the "Option") to which
this Purchase Form is attached, for, and to purchase thereunder, _____________
______________________________________ (___________) shares of Common Stock
provided for therein and tenders payment herewith to the order of ADVANTAGE
MARKETING SYSTEMS, INC. in the amount of $_______________. The undersigned
requests that certificates for such shares of Common Stock be issued as follows:
Name:__________________________________________________________________________
Address:_______________________________________________________________________
Deliver to:____________________________________________________________________
Address:_______________________________________________________________________
and if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable thereunder, that a new Stock Option for the balance
remaining of shares of Common Stock purchasable under the Option be registered
in the name of, and delivered to the undersigned at the address stated below:
Name:__________________________________________________________________________
Address:_______________________________________________________________________
Deliver to:____________________________________________________________________
Address:_______________________________________________________________________
Dated: _______________,____ Signature
---------------------------------------
(Signature must conform in all respects
to the name of Optionee as specified on
the face of the Stock Option in every
particular, without alteration,
enlargement or any change whatever.)
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<PAGE>
PURCHASE FORM (STOCK IN LIEU OF CASH PAYMENT EXERCISE)
(TO BE EXECUTED BY THE OPTIONEE IF EXERCISED IN WHOLE OR IN PART)
To: ADVANTAGE MARKETING SYSTEMS, INC.
The undersigned _____________________________________________________
Please insert name of Optionee
hereby irrevocably elects, pursuant to Section 1.2 of the Option, to exercise
the right of purchase represented by the Stock Option (the "Option") to which
this Purchase Form is attached, for, and to purchase thereunder, ____________
___________________________________ (__________) shares of Common Stock provided
for therein and tenders payment herewith shares of Common Stock of the Company
held by the Optionee as evidenced by the certificate or certificates
accompanying this Purchase Form. The undersigned requests that certificates for
such shares of Common Stock be issued as follows:
Name:__________________________________________________________________________
Address:_______________________________________________________________________
Deliver to:____________________________________________________________________
Address:_______________________________________________________________________
and if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable thereunder, that a new Stock Option for the balance
remaining of shares of Common Stock purchasable under the Option be registered
in the name of, and delivered to the undersigned at the address stated below:
Name:__________________________________________________________________________
Address:_______________________________________________________________________
Deliver to:____________________________________________________________________
Address:_______________________________________________________________________
Dated: _______________,____ Signature
---------------------------------------
(Signature must conform in all respects
to the name of Optionee as specified on
the face of the Stock Option in every
particular, without alteration,
enlargement or any change whatever.)
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<PAGE>
EXHIBIT 5.1
DUNN SWAN & CUNNINGHAM
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELLORS AT LAW
2800 OKLAHOMA TOWER 405.235.8318
210 PARK AVENUE TELECOPY 405.235.9605
OKLAHOMA CITY, OKLAHOMA 73102-5604
February 11, 2000
Board of Directors
of Advantage Marketing Systems, Inc.
2601 Northwest Expressway, Suite 1210W
Oklahoma City, Oklahoma 73112
Gentlemen:
We have acted as counsel to Advantage Marketing Systems, Inc., an
Oklahoma corporation (the "Company"), in conjunction with the offering of an
aggregate of 952,625 shares of common stock, $.0001 par value per share (the
"Common Stock") to be issued pursuant to exercise of stock options granted by
the Company pursuant to various stock option agreements.
The offering of the Common Stock is more fully described in that
certain Registration Statement on Form S-8, filed by the Company with the
United States Securities and Exchange Commission (the "Commission") pursuant
to the Securities Act of 1933, as amended (the "Act").
For purposes of this opinion, we have made such investigations as we
deem necessary or appropriate and have reviewed, considered and received such
certificates, documents and materials as we deemed appropriate. In conducting
our examination we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as certified copies.
The law bearing upon the matters addressed in this opinion letter is
limited to the law of the United States and the law of Oklahoma.
Based upon our examination and consideration of such documents,
certificates, records, matters and things as we have deemed necessary for the
purposes hereof, we are of the opinion as of the date hereof that:
1. The Company will be duly organized and existing under the laws
of the State of Oklahoma;
2. All of the issued and outstanding shares of the Common Stock
of the Company will have been legally issued, will be fully
paid and will not be liable to further call or assessment;
3. The 952,625 shares of Common Stock to be sold by the Company
pursuant to exercise of stock options, will be legally issued,
fully paid and will not be liable for further call or
assessment; and
4. The Board of Directors of the Company has dulyapproved the
terms of the stock option agreements evidencing the stock
options, and has authorized the execution and delivery of the
stock option agreements evidencing the stock option. The
Company has full power, authority and legal right to enter
into the stock purchase agreements evidencing the stock
options and to perform, deliver and consummate the
transactions contemplated thereunder.
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In arriving at the foregoing opinion, we have relied, among other
things, upon the examination of the corporate records of the Company and
certificates of officers and directors of the Company and of public officials.
Very truly yours,
/s/ DUNN SWAN & CUNNINGHAM
2
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EXHIBIT 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in this
Registration Statement on Form S-8 of Advantage Marketing Systems, Inc. of our
report dated March 19, 1999 appearing in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1998.
/S/DELOITTE & TOUCHE LLP
Oklahoma City, Oklahoma,
February 11, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF COUNSEL
Dunn Swan & Cunningham, A Professional Corporation, hereby consents to
the use of its name in the Prospectus constituting part of this Registration
Statement.
/S/DUNN SWAN & CUNNINGHAM
A Professional Corporation
Oklahoma City, Oklahoma
February 11, 2000
