As filed with the Securities and Exchange Commission on December 31, 1996
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
-------------------------
SYNETIC, INC.
(Exact name of Registrant as specified in its charter)
Delaware 22-2975182
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
669 River Drive
Elmwood Park, New Jersey 07407-1361
(Address of Principal Executive Offices)
AVICENNA SYSTEMS CORP. 1995 STOCK PLAN
(Full title of the plan)
-------------------------
CHARLES E. MELE, ESQ.
Vice President - General Counsel
Synetic, Inc.
669 River Drive
Elmwood Park, New Jersey 07407-1361
(Name and address of agent for service)
(201) 703-3400
(Telephone number, including area code, of agent for service)
-------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to be to be Offering Price Per Aggregate Registration
Registered Registered Share (*) Offering Price Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 161,015 $ 1.25 $ 201,268.75 $ 60.99
par value $.01 per share
===========================================================================================================================
</TABLE>
(*) Pursuant to Rule 457(h), such price is the exercise price of the options.
<PAGE>
2
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
- --------------------
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with
Rule 428 under the Securities Act of 1933, as amended (hereinafter, the
"Securities Act"), and the "Note" to Part I of Form S-8.
<PAGE>
3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated as of their respective dates in
this Registration Statement by reference:
(i) the annual report on Form 10-K for Synetic, Inc., a
Delaware corporation (the "Registrant"), for the fiscal year ending
June 30, 1996;
(ii) the Registrant's quarterly report on Form 10-Q for
the period ended September 30, 1996; and
(iii) the description of the common stock, par value $0.01
per share, contained in the Registrant's Registration Statement on Form
S-1 (File No. 33-43577) filed with the commission on November 1, 1991
for registration of common stock under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of 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, are incorporated by reference
in this Registration Statement and are a part hereof from the date of filing
such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations such as the Registrant are entitled, under certain circumstances,
to be indemnified against all expenses and liabilities (including attorneys'
fees) incurred by them as a result of suits brought against them in their
capacity as a director or officer if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal action or proceeding, if they had
no reasonable cause to believe their conduct was unlawful; provided that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the 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, they are fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper. Any such indemnification may be made by the company only as authorized
in each specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct. Article Eleven of the Registrant's Certificate
of Incorporation and Section 6.5 of the Registrant's By-Laws entitles officers,
directors and controlling persons of the Registrant to indemnification to the
full extent permitted by Section 145 of the DGCL, as the same may be
supplemented or amended from time to time.
<PAGE>
4
Article Thirteen of the Registrant's Certificate of Incorporation
provides that no director shall have any personal liability to the Registrant or
its stockholders for any monetary damages for breach of fiduciary duty as a
director, provided that such provision does not limit or eliminate the liability
of any director (i) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the DGCL (involving certain unlawful dividends or stock repurchase) or (iv) for
any transaction from which such director derived an improper personal benefit.
Amendment to such article does not affect the liability of any director for any
act or omission occurring prior to the effective time of such amendment.
Reference is made to Section 7 of the form of Standby Agreement to be
included as Exhibit 1.1 hereto, which provides certain indemnification rights to
the directors and officers of the Registrant with respect to information by or
on behalf of the Purchasers for use in this Registration Statement.
Reference is made to the Form of Indemnification Agreement between the
Registrant and its directors and officers filed as Exhibit 10.6 to this
Registration Statement pursuant to which the registrant has agreed to indemnify
such directors and officers to the fullest extent permitted by Delaware law, as
the same may be amended from time to time.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8 Exhibits
The following exhibits are filed as part of this Registration
Statement:
Exhibit No. Description of Document
4.1 Avicenna Systems Corp. 1995 Stock Plan.
4.2 Amendment Agreement to the Avicenna Systems Corp. 1995 Stock
Plan and Related Option Agreements.
5 Opinion of Shearman & Sterling, counsel to the Registrant as
to the legality of the common stock registered hereby.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Emens, Kegler, Brown, Hill & Ritter, Co., L.P.A.
23.3 Consent of Shearman & Sterling (included in
Exhibit 5).
24 Powers of Attorney
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
<PAGE>
5
(1) To file, during any period in which offers or sales are
being made of securities registered hereby, a post-effective amendment
to this Registration Statement 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;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby further undertakes that,
for purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to Section 13(a) or 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.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question 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.
<PAGE>
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Elmwood Park, in the State of New Jersey, on the 31 day of
December, 1996.
SYNETIC, INC.
By: /s/ Victor L. Marrero
--------------------------------------
Name: Victor L. Marrero
Title: Vice President- Finance
Chief Financial Officer
<PAGE>
7
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the indicated capacities on December 31, 1996.
Signature Title
* Chairman of the Board
- --------------------------------
(Martin J. Wygod)
/s/ James V. Manning President and Chief Executive Officer
- --------------------------------
(James V. Manning)
Vice President - Finance and
/s/ Victor L. Marrero Chief Financial Officer
- --------------------------------
(Victor L. Marrero)
* Director
- --------------------------------
(Thomas R. Ferguson)
* Director
- --------------------------------
(Mervyn L. Goldstein)
* Director
- --------------------------------
(Ray E. Hannah)
* Director
- --------------------------------
(Roger H. Licht)
* Director
- --------------------------------
(Per G.H. Lofberg)
* Director
- --------------------------------
(Charles A. Mele)
* Director
- --------------------------------
(Herman Sarkowsky)
* Director
- --------------------------------
(Paul C. Suthern)
* Director
- --------------------------------
(Albert M. Weis)
*By /s/ James V. Manning Attorney-in-Fact
-----------------------------
James V. Manning
<PAGE>
8
Exhibit Index
Exhibit No. Description of Document
4.1 Avicenna Systems Corp. 1995 Stock Plan.
4.2 Amendment Agreement to the Avicenna Systems
Corp. 1995 Stock Plan and Related Option Agreements.
5 Opinion of Shearman & Sterling, counsel to the
Registrant as to the legality of the securities
registered hereby.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Emens, Kegler, Brown, Hill & Ritter, Co., L.P.A.
23.3 Consent of Shearman & Sterling (included in
Exhibit 5).
24 Powers of Attorney.
AVICENNA SYSTEMS CORP.
1995 STOCK PLAN
1. Purpose. This 1995 Stock Plan (the "Plan") is intended to
provide incentives: (a) to the officers and other employees of AVICENNA SYSTEMS
CORP. (the "Company"), its parent (if any) and any present or future
subsidiaries of the Company (collectively, "Related Corporations") by providing
them with opportunities to purchase stock in the Company pursuant to options
granted hereunder which qualify as "incentive stock options" under Section
422(b) of the Internal Revenue Code of 1986, as amended (the "Code") ("ISO" or
"ISOs"); (b) to directors, officers, employees and consultants of the Company
and Related Corporations by providing them with opportunities to purchase stock
in the Company pursuant to options granted hereunder which do not qualify as
ISOs ("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with awards of stock in the Company ("Awards"); and (d) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to make direct purchases of
stock in the Company ("Purchases"). Both ISOs and Non-Qualified Options are
referred to hereafter individually as an "Option" and collectively as "Options".
Options, Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 425 of the Code.
2. Administration of the Plan.
A. The Plan shall be administered by the Board of Directors of
the Company (the "Board"). Members of the Board who are either (i) eligible for
Stock Rights pursuant to the Plan or (ii) have been granted Stock Rights may
vote on any matters affecting the administration of the Plan or the grant of any
Stock Rights pursuant to the Plan, except that no such member shall act upon the
granting to himself of Stock Rights, but any such member may be counted in
determining the existence of a quorum at any meeting of the Board during which
action is taken with respect to the granting to him of Stock Rights. All
references in this Plan to the Committee shall mean the Board if no Committee
has been appointed pursuant to subparagraphs B or C of this Section 2 below.
B. The Board may delegate its powers with respect to the
administration of the Plan to a stock plan committee (the "Committee") appointed
by the Board, provided that such Committee shall be composed pursuant to
subparagraph C below if the Company registers any class of any equity security
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Committee may select one of its members as its chairman,
and shall hold meetings at such time and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be the valid acts of the
Committee. From time to time the
<PAGE>
2
Board may increase or decrease the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies however caused, or remove all members
of the Committee and thereafter directly administer the Plan.
C. Notwithstanding the foregoing, if the Company registers any
class of any equity security pursuant to Section 12 of the Exchange Act, then
from and after that time: (I) the Plan shall be administered by the Committee
(unless and until its members are not qualified to serve on the Committee
pursuant to the provisions of the Plan) which shall be composed of not fewer
than two (2) members of the Board who shall be appointed from time to time by
the Board, and (II) no member of such Committee may exercise discretion with
respect to, or participate in, the administration of the Plan if, at any time,
while a member of the Committee or during the twelve (12)-month period prior to
such exercise or participation, he has been granted or awarded Stock Rights or
any other derivative security of the Company or any of its affiliate under this
Plan or any similar plan of the Company, except that:
(a) participation in a "Formula Plan" shall not disqualify a
director from being a disinterested person. A Formula Plan is a plan which:
(i) permits officers and/or directors to receive awards and
either (A) states the amount and price of securities to be
awarded to designated officers and directors or categories of
officers and directors, though not necessarily to others who
may participate in the plan, and specifies the timing of
awards to officers and directors or (B) sets forth a formula
that determines the amount, price and timing of awards, using
objective criteria such as earnings of the Company, value of
the securities, years of service, job classification, and
compensation levels; and
(ii) provides that these plan provisions shall not be amended
more than once every six (6) months, other than to comport
with changes in the Code, the Employee Retirement Income
Security Act ("ERISA"), or the rules thereunder;
(b) participation in an ongoing securities acquisition plan
which meets the following conditions shall not disqualify a director from being
a disinterested person:
(i) the plan provides for broad-based employee participation
and the terms of the plan do not discriminate in favor of
highly compensated employees;
(ii) officer or director participants making withdrawals must
cease further purchases in the plan for six (6) months, or the
series so distributed must be held by the participant six (6)
months prior to disposition; provided, however, that
extraordinary distributions of all of the Company's securities
held by the plan and distributions in connection with death,
retirement, disability, termination of
<PAGE>
3
employment, or a qualified domestic relations order as defined
by the Code or Title I of ERISA, or the rules thereunder, are
not subject to this requirement;
(iii) officer or director participants who cease participation
in the plan may not participate again for at least six (6)
months; and
(iv) for stock purchase plans under Section 423 of the
Internal Revenue Code or similar plans, where the purchase
price of the stock is not fixed and the participant is not
obligated to purchase the stock until exercise of a right, in
addition to the foregoing conditions, the stock acquired is
held for six (6) months from the date the stock purchase price
is fixed.
(c) an election to receive an annual retainer fee in either
cash or an equivalent amount of securities, or partly in cash and partly in
securities, shall not disqualify a director from being a disinterested person;
and
(d) participation in a plan shall not disqualify a director
from being a disinterested person for the purpose of administering another plan
that does not permit participation by directors.
Members of the Committee shall be subject to any additional
restrictions necessary to satisfy the requirements for disinterested
administration of the Plan as set forth in Rule 16b-3 under the Exchange Act as
it may be amended from time to time, and if at any time while the Company has
registered any class of equity securities under Section 12 of the Exchange Act
any member of the Committee does not satisfy such disinterested administration
requirements, no stock options shall be granted under the Plan to any director
or officer until such time as all members of the Committee satisfy such
requirements.
D. Subject to ratification of the grant or authorization of
each Stock Right by the Board (if so required by applicable state law), and
subject to the terms of the Plan, the Committee, if so appointed, shall have the
authority to (i) determine the employees of the Company and Related Corporations
(from among the class of employees eligible under paragraph 3 to receive ISOs)
to whom ISOs may be granted, and to determine (from among the class of
individuals and entities eligible under paragraph 3 to receive Non-Qualified
Options and Awards and to make Purchases) to whom Non-Qualified Options, Awards
and authorizations to make Purchases may be granted; (ii) determine the time or
times at which Options or Awards may be granted or Purchases made; (iii)
determine the option price of shares subject to each Option, which price shall
not be less than the minimum price (if any) specified in paragraph 6, and the
purchase price of shares subject to each Purchase; (iv) determine whether each
Option granted shall be an ISO or a Non-Qualified Option; (v) determine (subject
to paragraph 7) the time or times when each Option shall become exercisable and
the duration of the exercise period; (vi) determine whether restrictions such as
repurchase options are to be imposed on
<PAGE>
4
shares subject to Options, Awards and Purchases and the nature of such
restrictions, if any; and (vii) interpret the Plan and prescribe and rescind
rules and regulations relating to it. If the Committee determines to issue a
Non-Qualified Option, it shall take whatever actions it deems necessary, under
Section 422 of the Code and the regulations promulgated thereunder, to ensure
that such Option is not treated as an ISO. The interpretation and construction
by the Committee of any provisions of the Plan or of any Stock Right granted
under it shall be final unless otherwise determined by the Board. The Committee
may from time to time adopt such rules and regulations for carrying out the Plan
as it may deem best. No member of the Board or the Committee shall be liable for
any action or determination made in good faith with respect to the Plan or any
Stock Right granted under it.
3. Eligible Employees and Others. ISOs may be granted to any
employee of the Company or any Related Corporation. Those officers and directors
of the Company who are not employees may not be granted ISOs under the Plan.
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted to any director (whether or not an employee), officer, employee or
consultant of the Company or any Related Corporation. The granting of any Stock
Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of Stock
Rights.
4. Stock. The stock subject to Options, Awards and Purchases
shall be authorized but unissued shares of Common Stock of the Company, no par
value (the "Common Stock"), or shares of Common Stock reacquired by the Company
in any manner. The aggregate number of shares which may be issued pursuant to
the Plan is FIVE HUNDRED SIXTEEN THOUSAND EIGHT HUNDRED (516,800) subject to
adjustment as provided in paragraph 13. Any such shares may be issued as ISOs,
Non-Qualified Options or Awards, or to persons or entities making Purchases, so
long as the number of shares so issued does not exceed such number, as adjusted.
If any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, or if the Company shall reacquire any vested
shares issued pursuant to Awards or Purchases, the unpurchased shares subject to
such Options and any unvested shares so reacquired by the Company shall again be
available for grants of Stock Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be granted under
the Plan at any time after December 20, 1995 and prior to December 20, 2005.
The date of grant of a Stock Right under the Plan will be the date specified by
the Committee at the time it grants the Stock Right; provided, however, that
such date shall not be prior to the date on which the Committee acts to approve
the grant. The Committee shall have the right, with the consent of the optionee,
to convert any ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16.
<PAGE>
5
6. Minimum Option Price; ISO Limitations.
A. The price per share specified in the agreement relating to
each ISO granted under the Plan shall not be less than the fair market value per
share of Common Stock on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the agreement relating to
such ISO shall not be less than one hundred ten percent (110%) of the fair
market value per share of Common Stock on the date of grant.
B. In no event shall the aggregate fair market value
(determined at the time an ISO is granted) of Common Stock for which ISOs
granted to any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plans of the Company and any
Related Corporation) exceed $100,000; provided that this paragraph 6(B) shall
have no force or effect if its inclusion in the Plan is not necessary for
Options issued as ISOs to qualify as ISOs pursuant to Section 422(d) of the
Code.
C. If, at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Option is granted and
shall mean (i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on which the Common
Stock is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the Common
Stock on the NASDAQ National Market List, if the Common Stock is not then traded
on a national securities exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on the NASDAQ
National Market List. However, if the Common Stock is not publicly traded at the
time an Option is granted under the Plan, "fair market value" shall be deemed to
be the fair value of the Common Stock as determined by the Committee after
taking into consideration all factors which it deems appropriate, including,
without limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. Option Duration. Subject to earlier termination as provided
in paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten (10) years and one day from the date of
grant in the case of Non-Qualified Options, (ii) ten (10) years from the date of
grant in the case of ISOs generally, and (iii) five (5) years from the date of
grant in the case of ISOs granted to an employee owning stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Related Corporation. Subject to earlier termination
as provided in paragraphs 9 and 10, the term of each ISO shall be the term set
forth in the original
<PAGE>
6
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.
8. Exercise of Option. Subject to the provisions of paragraphs
9 through 12, each Option granted under the Plan shall be exercisable as
follows:
A. The Option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B. Once an installment becomes exercisable it shall remain
exercisable until expiration or termination of the Option, unless otherwise
specified by the Committee.
C. Each Option or installment may be exercised at any time or
from time to time, in whole or in part for up to the total number of shares with
respect to which it is then exercisable.
D. The Committee shall have the right to accelerate the date
of exercise of any installment of any Option; provided that the Committee shall
not accelerate the exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to paragraph 16) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in paragraph
6(C).
9. Termination of Employment. If an ISO optionee ceases to be
employed by the Company and all Related Corporations other than by reason of
death or disability as defined in paragraph 10, no further installments of his
ISOs shall become exercisable, and his ISOs shall terminate after the passage of
sixty (60) days, from the date of termination of his employment, but in no event
later than on their specified expiration dates, except to the extent that such
ISOs (or unexercised instruments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed ninety (90) days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute. A
bona fide leave of absence with the written approval of the Committee shall not
be considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
<PAGE>
7
10. Death; Disability.
A. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his death, any ISO of his may be
exercised, to the extent of the number of shares with respect to which he could
have exercised it on his death, by his estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, at any time prior to the earlier of the ISO's specified expiration
date or 180 days from the date of the optionee's death.
B. If an ISO optionee ceases to be reemployed by the Company
and all Related Corporations by reason of his disability, he shall have the
right to exercise any ISO held by him on the date of termination of employment,
to the extent of the number of shares with respect to which he could have
exercised it on that date, at any time prior to the earlier of the ISO's
specified expiration date or 180 days from the date of the termination of the
optionee's employment. For the purposes of the Plan, the term "disability" shall
mean "permanent and total disability" as defined in Section 22(e)(3) of the Code
or successor statute.
11. Assignability. No Stock Right shall be assignable or
transferable by the grantee except by will or by the laws of descent and
distribution, and during the lifetime of the grantee each Stock Right shall be
exercisable only by him.
12. Terms and Conditions of Options. Options shall be
evidenced by instruments (which need not be identical) in such forms as the
Committee may from time to time approve. Such instruments shall conform to the
terms and conditions set forth in paragraphs 6 through 11 hereof and may contain
such other provisions as the Committee deems advisable which are not
inconsistent with the Plan, including restrictions applicable to shares of
Common Stock issuable upon exercise of Options. In granting any Non-Qualified
Option, the Committee may specify that such Non-Qualified Option shall be
subject to the restrictions set forth herein with respect to ISOs, or to such
other termination and cancellation provisions as the Committee may determine.
The Committee may from time to time confer authority and responsibility on one
or more of its own members and/or one or more officers of the Company to execute
and deliver such instruments. The proper officers of the Company are authorized
and directed to take any and all action necessary or advisable from time to time
to carry out the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following
events, an optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. If the shares of Common Stock shall be subdivided or
combined into a greater or smaller number of shares or if the Company shall
issue any shares of Common Stock
<PAGE>
8
as a stock dividend on its outstanding Common Stock, the number of shares of
Common Stock deliverable upon the exercise of Options shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be
made in the purchase price per share to reflect such subdivision, combination or
stock dividend.
B. In the event of (i) a sale of more than 50% of the then
outstanding voting stock of the Company, (ii) a sale of all or substantially all
the assets of the Company, (iii) a merger or consolidation between the Company
and another entity, provided that after such merger or consolidation, the
holders of the outstanding capital stock of the Company immediately prior to the
consolidation or merger shall hold less than 50% of the combined voting power of
the resulting or surviving entity; or (iv) a liquidation of the Company pursuant
to a plan of liquidation adopted by the Company's Board of Directors (each an
"Acceleration Event" and together the "Acceleration Events"), any shares of
outstanding Options held by an optionee which are not vested shall be subject to
accelerated vesting, and thus become vested shares immediately prior to the
consummation of any Acceleration Event. Such accelerated vesting shall apply to
seventy-five percent (75%) of any shares of outstanding Options held by an
optionee that are not vested shares; provided, however, such accelerated vesting
shall not apply in the event of an Acceleration Event if the holders of Series A
Convertible Preferred Stock of the Company have not obtained a weighted average
return on their invested capital of at least twenty-five percent (25%)
(calculated using a standard accounting methodology agreed to by a
representative selected by the holders of the Series A Convertible Preferred
Stock and reasonably acceptable to a representative selected by the holders of
Common Stock).
C. In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subparagraph B above) pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon exercising
an Option shall be entitled to receive for the purchase price paid upon such
exercise the securities he would have received if he had exercised his Option
prior to such recapitalization or reorganization.
D. Notwithstanding the foregoing, any adjustments made
pursuant to subparagraphs A, B or C with respect to ISOs shall be made only the
Committee, after consulting with counsel for the Company, determines whether
such adjustments would constitute a "modification" of such ISOs (as that term is
defined in Section 425 of the Code) or would cause any adverse tax consequences
for the holders of such ISOs. If the Committee determines that such adjustments
made with respect to ISOs would constitute a modification of such ISOs, it may
refrain from making such adjustments.
E. In the event of the proposed dissolution or liquidation of
the Company, each Option will terminate immediately prior to the consummation of
such proposed action or at such other time and subject to such other conditions
as shall be determined by the Committee.
<PAGE>
9
F. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares subject to Options. No
adjustments shall be made for dividends paid in cash or in property other than
securities of the Company.
G. No fractional shares shall be issued under the Plan and the
optionee shall receive from the Company cash in lieu of such fractional shares.
H. Upon the happening of any of the foregoing events described
in subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee, the board of directors or the Successor Board shall determine the
specific adjustments to be made under this paragraph 13 and, subject to
paragraph 2, its determination shall be conclusive.
If any person or entity owning restricted Common Stock
obtained by exercise of a Stock Right made hereunder receives shares or
securities or cash in connection with a corporate transaction described in
subparagraphs A, B or C above as a result of owning such restricted Common
Stock, such shares or securities or cash shall be subject to all of the
conditions and regulations applicable to the restricted Common Stock with
respect to which such shares or securities or cash were issued, unless otherwise
determined by the Committee or the Successor Board.
14. Means of Exercising Stock Rights. A Stock Right (or any
part or installment thereof) shall be exercised by giving written notice to the
Company at its principal office address. Such notice shall identify the Stock
Right being exercised and specify the number of shares as to which such Stock
Right is being exercised, accompanied by full payment of the purchase price
therefor either (a) in United States dollars in cash or by check, or (b) at the
discretion of the Committee, through delivery of shares of Common Stock having a
fair market value equal as of the date of the exercise to the cash exercise
price of the Stock Right, or (c) at the discretion of the Committee, by delivery
of the grantee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, or (d) at the discretion of the Committee, by
any combination of (a), (b) and (c) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (b), (c), or (d) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant of the ISO in
question. The holder of a Stock Right shall not have the rights of a stockholder
with respect to the shares covered by his Option until the date of issuance of a
stock certificate to him for such shares. Except as expressly provided above in
paragraph 13 with respect to changes in capitalization and stock dividends, no
adjustment shall
<PAGE>
10
be made for dividends or similar rights for which the record date is before the
date such stock certificate is issued.
15. Terms and Amendment of Plan. This Plan was adopted by the
Board on December 20, 1995, subject to approval of the Plan by the holders of a
majority of the outstanding shares of Common Stock of the Company present, or
represented, and entitled to vote at a stockholders' meeting held within twelve
(12) months thereafter. Any Stock Rights granted prior to such stockholder
approval shall become null and void if such stockholder approval is not
obtained. The Plan shall expire on December 15, 2005; provided, however, that
the Plan and all Stock Rights granted under the Plan prior to such date shall
remain in effect and subject to adjustment and amendment as herein provided
until they have been satisfied or terminated in accordance with the terms of the
respective grants or awards and the related option instruments. The Board may
terminate or amend the Plan in any respect at any time without the authorization
of stockholders to the extent allowed by law, including without limitation any
rules issued by the Securities and Exchange Commission under Section 16 of the
Exchange Act, except that, unless approved by the stockholders, it may not: (a)
increase the total number of shares that may be issued under the Plan (except by
adjustment pursuant to paragraph 13); (b) modify the provisions of paragraph 3
regarding eligibility for grants of ISOs; (c) modify the provisions of paragraph
6(B) regarding the exercise price at which shares may be offered pursuant to
ISOs (except by adjustment pursuant to paragraph 13); and (d) extend the
expiration date of the Plan. In no event may action of the Board or stockholders
alter or impair the rights of a grantee, without his consent, under any Stock
Right previously granted to him.
16. Conversion of ISOs into Non-Qualified Options; Termination
of ISOs. The Committee, at the written request of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
for any installment or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but are not limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such Options.
At the time of such conversion, the Committee (with the consent of the Optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
17. Application of Funds. The proceeds received by the Company
from the sale of shares pursuant to Options granted and Purchases authorized
under the Plan shall be used for general corporate purposes.
<PAGE>
11
18. Governmental Regulation. The Company's obligation to sell
and deliver shares of the Common Stock under this Plan is subject to the
approval of any governmental authority required in connection with the
authorization, issuance or sale of such shares.
19. Withholding of Additional Income Taxes. Upon the exercise
of a Non-Qualified Option, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of a Stock Right hereunder, the Company, in
accordance with Section 3402(a) of the Code, may require the optionee, Award
recipient or purchaser to pay additional withholding taxes in respect of the
amount that is considered compensation includible in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the grant of an Award, (iii) the making of a Purchase of Common Stock for
less than its fair market value, or (iv) the vesting of restricted Common Stock
acquired by exercising a Stock Right on the grantee's payment of such additional
withholding taxes.
20. Notice to Company of Disqualified Disposition. Each
employee who receives an ISO must agree to notify the Company in writing
immediately after the employee makes a Disqualifying Disposition of any Common
Stock acquired pursuant to the exercise of an ISO. A Disqualifying Disposition
is any disposition (including any sale) of such Common Stock before the later of
(a) two (2) years after the date the employee was granted the ISO or (b) one (1)
year after the date the employee acquired Common Stock by exercising the ISO. If
the employee has died before such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.
21. Governing Law; Construction. The validity and construction
of the Plan and the instruments evidencing Stock Rights shall be governed by the
laws of The Commonwealth of Massachusetts. In construing this Plan, the singular
shall include the plural and the masculine gender shall include the feminine and
neuter, unless the context otherwise requires.
AMENDMENT AGREEMENT TO THE
AVICENNA SYSTEMS CORP. 1995 STOCK PLAN
AND RELATED OPTION AGREEMENTS
WHEREAS, Avicenna Systems Corp., a Massachusetts corporation
("Avicenna"), has adopted the Avicenna Systems Corp. 1995 Stock Plan (the
"Plan"; all terms used herein without definition shall have the meanings
ascribed thereto in the Plan) and has granted options ("Options") to purchase
shares of the common stock of Avicenna, par value $.01 per share ("Avicenna
Common Stock"), thereunder to the employees and consultants listed on the
signature page hereof (the "Optionees") pursuant to the Incentive Stock Option
Agreements ("ISO Agreements") between Avicenna and such employees or the
Non-Qualified Stock Option Agreements between Avicenna and such consultants
("NSO Agreements", and collectively, with the ISO Agreements being,
collectively, the "Option Agreements");
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as
of December 23, 1996 (the "Merger Agreement"), among Synetic, Inc., a Delaware
corporation ("Synetic"), Synternet Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of Synetic, Avicenna and certain shareholders of
Avicenna, the Parent will purchase (the "Purchase") all of the issued and
outstanding capital stock of Avicenna and the Convertible Notes (as such term is
defined in the Merger Agreement); and
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement and as an inducement to the Optionees to remain in the employ
of Avicenna or to continue to perform consulting services for Avicenna, as the
case may be, following the Closing Date, Synetic, Avicenna and the Optionees
desire to amend the terms of the Plan and the Option Agreements as set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. References to Company; Common Stock. On and after the Closing
Date (as defined in the Merger Agreement), all references in the Plan and any
Option Agreement to the "Company" shall be deemed to be references to Synetic,
provided that any references to the employment or status as a consultant of an
Optionee shall be deemed to be a reference to the employment or status as a
consultant of such Optionee with Synetic and its subsidiaries. On and after the
Closing Date, all references in the Plan and any Option Agreement to "Common
Stock" shall be deemed to be references to Synetic common stock, $.01 par value
("Synetic Common Stock").
2. Conversion of Options. Effective as of the Closing Date, each
Option shall be deemed to represent an Option to acquire that number of shares
of Synetic Common Stock equal to the number of shares of Avicenna Common Stock
that would have been issued
<PAGE>
2
upon exercise of such Option multiplied by the Exchange Ratio (as defined in the
Merger Agreement), rounded to the nearest whole number of shares of Synetic
Common Stock, at a price per share of Synetic Common Stock equal to the
per-share exercise price specified in the Option divided by the Exchange Ratio
(rounded to the nearest whole cent).
3. Vesting. (a) Notwithstanding anything to the contrary
contained in the Plan, any Option Agreement or any other agreement between an
Optionee and Avicenna and subject to Section 3(b) below, 50% of the Options
granted to each Optionee shall be deemed to have vested as of the Closing Date,
and the remaining 50% of such Options shall vest on the second anniversary of
the Closing Date.
(b) In the event that the employment or status as a consultant of
an Optionee is terminated by Synetic or any of its subsidiaries without Cause
(as defined below), or as a result of a Permanent Disability (as defined below)
of such Optionee or such Optionee's death, any Options that have not vested as
of the date of termination shall remain outstanding and continue to vest, and
shall otherwise be treated for purposes of the terms and conditions thereof, as
if such Optionee remained in the employ of or as a consultant to Avicenna
through the earlier of (i) the second anniversary of the Closing Date or (ii)
the occurrence of any circumstance or event that would constitute Cause;
provided, however, that the Committee in its sole discretion may accelerate the
vesting of any such Option. Upon any other termination of employment or status
as a consultant (including, without limitation, by reason of the Optionee's
resignation), any Options that have not vested as of the date of termination
shall be forfeited.
(c) For purposes hereof, "Cause" shall have the meaning specified
in an employment agreement or consulting agreement applicable to the Optionee,
or in the case of an Optionee who does not have an employment agreement or
consulting agreement that defines "Cause", shall mean any of the following, each
as communicated to the Optionee by notice from Avicenna setting forth in
reasonable detail the nature of such Cause:
1. A failure of Optionee to perform his employment or
consulting-related duties in any material respect (other than any
such failure resulting from a Permanent Disability of Optionee);
2. Any willful misconduct by Optionee relating, directly or
indirectly, to Synetic, Avicenna or any of their respective
subsidiaries or affiliates, or any breach by Optionee of any
material policy of Synetic, Avicenna or any of their respective
subsidiaries or affiliates, as reasonably determined by the Board
of Directors of Synetic (the "Synetic Board");
3. Any breach by Optionee of any of the covenants set forth
in Section 10 hereof or any substantially similar provisions in
any other agreements with Synetic,
<PAGE>
3
Avicenna or any of their respective subsidiaries or affiliates,
as reasonably determined by the Synetic Board; or
4. Any willful violation by Optionee of any federal or state
law or regulation applicable to the business of Synetic, Avicenna
or any of their respective subsidiaries or affiliates, or
Optionee's commission of a common law fraud or conviction of a
felony or crime involving moral turpitude.
Notwithstanding anything to the contrary contained in the Plan or
any Option Agreement, an Optionee shall be deemed to be
"Permanently Disabled" if (i) such Optionee shall become ill,
mentally or physically disabled, or otherwise incapacitated so as
to be unable regularly to perform the duties of his position for
a period in excess of 90 consecutive days or more than 120 days
in any consecutive 12 month period, or (ii) a duly licensed
physician selected by Synetic or Avicenna with the reasonable
approval of Optionee determines that Optionee is mentally or
physically disabled so as to be unable to perform regularly the
duties of his position and such condition is expected to be of a
permanent duration.
4. Registration Restrictions. An Option shall not be exercisable
unless and until (i) a registration statement under the Securities Act of 1933,
as amended (the "Securities Act") has been duly filed and declared effective
pertaining to the Synetic Common Stock subject to such Option and such Synetic
Common Stock shall have been qualified under applicable state "blue sky" laws,
or (ii) the Committee in its sole discretion determines that such registration
and qualification is not required as a result of the availability of an
exemption from such registration and qualification under such laws. Synetic
shall file such a registration statement at the time and in the manner described
in Section 4.03 of the Merger Agreement. Synetic shall have no obligation to
issue any Synetic Common Stock pursuant to the exercise of an Option if Synetic
reasonably determines at the time of such exercise that the issuance of Synetic
Common Stock at such time would violate applicable law with respect to insider
trading or otherwise, or then existing policies of Synetic applicable to
employees or consultants of Synetic or its subsidiaries holding options to
purchase Synetic Common Stock.
5. Price Protection. (a) If on any Determination Date (as defined
below) the Determination Date Market Price (as defined below) is less than the
Guaranteed Price (as defined in the Merger Agreement), then Synetic will deliver
to an Optionee, as promptly as practicable following the date on which such
Optionee has exercised a Related Option (as defined below), an amount in cash
equal to (i) the number of Related Options held by such Optionee that have been
exercised on such date multiplied by (ii) the number obtained by subtracting (x)
the Determination Date Market Price from (y) the Guaranteed Price.
(b) "Determination Date" means, (i) with respect to any Options
that vest as of the Closing Date, the date on which such Options are first
covered by an effective
<PAGE>
4
registration statement filed with the Securities and Exchange Commission under
the Securities Act in accordance with the provisions of Section 4.03 of the
Merger Agreement and (ii) with respect to any Options that vest as of the second
anniversary of the Closing Date, such second anniversary or, if the Committee
exercises its discretion under Section 3(b) above to accelerate the vesting date
applicable to any Option, the date on which such Option shall vest.
(c) "Determination Date Market Price" means, on any Determination
Date, the last reported sale price of Synetic Common Stock on the NASDAQ
National Market on the trading day immediately preceding such Determination
Date.
(d) "Related Option" means, with respect to any Determination
Date, any Option that is attributed to such Determination Date under Section
5(b) above.
6. No Acceleration Event. The parties hereto hereby acknowledge
and agree that the transactions contemplated by the Merger Agreement shall not
constitute an "Acceleration Event" for purposes of the Plan. Section 13(A) of
the Plan is hereby deleted in its entirety and the subsections that follow such
section are renumbered accordingly.
7. No Adjustment for ISOs. The parties hereto hereby acknowledge
and agree that on and after the Closing Date, no Option shall be treated as an
"incentive stock option" within the meaning of Section 422 of the Code. Section
13(D) of the Plan is hereby deleted in its entirety and the subsections that
follow such section are renumbered accordingly.
8. No Further Grants. No Stock Rights may be granted under the
Plan following the Closing Date.
9. Administration. The Plan shall be administered by the Synetic
Board or the Stock Option Committee of Synetic. All contrary limitations on the
membership of the committee that administers the Plan, including, without
limitation, Section 2(C) thereof, is hereby deleted and the subsections that
follow are renumbered accordingly.
10. Restrictive Covenants. (a) Confidentiality. Each Optionee
understands and acknowledges that in the course of his employment or consulting
relationship, he will have access to and will learn information proprietary to
Synetic, Avicenna and their respective subsidiaries and affiliates
(collectively, the "Company") that concerns the operation and methodology of the
Company, including, without limitation, business plans, financial information,
protocols, proposals, manuals, clinical procedures and guidelines, scientific
data, computer source codes, programs, software, knowhow and specifications,
copyrights, trade secrets, market information, Developments (as hereinafter
defined), data and customer information (collectively, "Proprietary
Information"). Each Optionee agrees
<PAGE>
5
that, at all times (including following termination of his employment or status
as a consultant with the Company), he will keep confidential and will not
disclose directly or indirectly any such Proprietary Information to any third
party, except as required to fulfill his duties to the Company, and will not
misuse, misappropriate or exploit such Proprietary Information in any way. The
restrictions contained herein shall not apply to any information which such
Optionee can demonstrate (a) was already available to the public at the time of
disclosure, or subsequently became available to the public, otherwise than by
breach of this Section 10, or (b) was the subject of a court order to disclose.
Upon any termination of his employment or status as a consultant with the
Company, each Optionee shall immediately return to the Company all copies of any
Proprietary Information in his possession.
(b) Restrictions on Solicitation. During the period (the
"Restricted Period") beginning on the Closing Date and ending on the second
anniversary of the date of cessation of the employment or status as a consultant
of an Optionee with the Company for any reason whatsoever, such Optionee shall
not, directly or indirectly, solicit or contact any customer of the Company for
any commercial pursuit that could be reasonably construed to be in competition
with the Company, or that is contemplated from time to time by Avicenna's
business plan, or take away or interfere or attempt to interfere with any
custom, trade, business or patronage of the Company, or induce, or attempt to
induce, any employees, agents or consultants of or to the Company to do anything
from which such Optionee is restricted by reason of this Section 10 nor shall
such Optionee, directly or indirectly, offer or aid others to offer employment
to or interfere or attempt to interfere with any employees, agents or
consultants of the Company.
(c) Extension of Restricted Period. The Restricted Period with
respect to any Optionee shall be extended by the length of any period during
which such Optionee is in breach of the terms of this Section 10.
(d) Assignment of Developments. All Developments that are at any
time made, conceived or suggested by any Optionee, whether acting alone or in
conjunction with others, during or as a result of such Optionee's employment or
consulting relationship or any prior employment or consulting relationship with
the Company, shall be the sole and absolute property of the Company, free of any
reserved or other rights of any kind on such Optionee's part. During such
Optionee's employment or consulting relationship and, if such Developments were
made, conceived or suggested by such Optionee during or as a result of such
Optionee's employment or consulting relationship or any prior employment or
consulting relationship with the Company, thereafter, such Optionee shall
promptly make full disclosure of any such Developments to the Company and, at
the Company's cost and expense, do all acts and things (including, among others,
the execution and delivery under oath of patent and copyright applications and
instruments of assignment) deemed by the Company to be necessary or desirable at
any time in order to effect the full assignment to the Company of such
Optionee's right and title, if any, to such Developments. For purposes of
<PAGE>
6
this Agreement, the term "Developments" shall mean all data, discoveries,
findings, reports, designs, inventions, improvements, methods, practices,
techniques, developments, programs, concepts, and ideas, whether or not
patentable, relating to the present or planned activities, or future activities
of the Company of which such Optionee is aware, or the products and services of
the Company.
(e) Remedies. Each Optionee acknowledges and agrees that damages
for a breach or threatened breach of any of the covenants set forth in this
Section 10 will be difficult to determine and will not afford a full and
adequate remedy, and therefore agrees that the Company, in addition to seeking
actual damages in connection therewith, may seek specific enforcement of any
such covenant in any court of competent jurisdiction, including, without
limitation, by the issuance of a temporary or permanent injunction, without the
necessity of a bond. Without limiting the generality of the foregoing, in the
event of a material breach by an Optionee of any of the restrictive covenants
set forth in this Section 10, the Committee, in its sole discretion, may require
that any or all of such Optionee's Options (whether or not vested) shall
terminate and be cancelled without any consideration being paid therefor.
(f) Severability. The parties have carefully reviewed the
provisions of this Amendment Agreement and agree that they are fair and
equitable. However, in light of the possibility of differing interpretations of
law and changes in circumstances, the parties agree that if any one or more of
the provisions of this Amendment Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the provisions of this Amendment Agreement shall, to the extent permitted by
law, remain in full force and effect and shall in no way be affected, impaired
or invalidated. Moreover, if any of the provisions contained in this Amendment
Agreement is determined by a court of competent jurisdiction to be excessively
broad as to duration, activity, geographic application or subject, it shall be
construed, by limiting or reducing it to the extent legally permitted, so as to
be enforceable to the extent compatible with then applicable law.
(g) Survival. The provisions of this Section 10 shall survive the
exercise, termination or expiration of any of the Options or the termination or
expiration of the Plan.
11. Payment of Option Price. Notwithstanding anything to the
contrary contained in the Plan or any Option Agreement, the payment of the
exercise price for any Option shall be in cash or certified or official bank
check unless otherwise determined by the Committee in its sole discretion.
12. Rights of First Refusal. The rights of refusal contained in
Section 16 of each of the NSO Agreements and Section 17 of each of the ISO
Agreements are hereby deleted in their entirety.
<PAGE>
7
13. Counterparts; Option Agreements. This Amendment Agreement may
be executed in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be a
separate agreement between the Optionee, Synetic and Avicenna, but all of which
taken together shall constitute one and the same agreement. Each Optionee
represents that he has attached to the counterpart of the signature page to this
Amendment Agreement executed by him a complete and accurate copy of each Option
Agreement (and each amendment and supplement thereto) to which he is a party. In
the event that any Optionee fails to execute this Amendment Agreement, the
provisions hereof shall remain in full force and effect as to any Optionees who
have executed this Amendment Agreement and shall in no way be affected, impaired
or invalidated.
14. Effective Date; 280G Approval. This Amendment Agreement shall
be effective as of the Closing Date. In the event that the Merger is not
consummated, this Amendment Agreement shall be null and void. The Optionees
hereby agree that any payment or right that results from the Merger Agreement
and the transactions contemplated thereby (including, without limitation, any
acceleration of vesting of an Option or any payment under Section 5 above) that
would otherwise constitute "a parachute payment" (within the meaning of Section
280G of the Code) shall be subject to the approval of the stockholders of
Avicenna in a vote satisfying the requirements of Section 280G(b)(5) of the
Code.
15. Governing Law. This Amendment Agreement and, notwithstanding
any provision in the Plan or any Option Agreement to the contrary, the Plan and
the Option Agreements, shall be governed by, and construed in accordance with,
the laws of the State of New Jersey without reference to the choice of law
provisions of New Jersey law.
16. References to Plan and Option Agreements. On and after the
Closing Date, all references contained in the Plan and any Option Agreement to
either the Plan or an Option Agreement shall be deemed to be a reference to the
Plan or Option Agreement as amended by this Amendment Agreement. The second
sentence of Section 1 of each Option Agreement is hereby deleted in its
entirety.
<PAGE>
8
IN WITNESS WHEREOF, Synetic, Avicenna and the Optionees have each
duly executed this Amendment Agreement, or have caused this Amendment Agreement
to be duly executed by their respective officers, as of the Closing Date.
SYNETIC, INC.
By:_________________
Name:
Title:
AVICENNA SYSTEMS CORP.
By:_________________
Name:
Title:
OPTIONEES
(Shearman & Sterling Letterhead)
December 31, 1996
Synetic, Inc.
669 River Drive
Elmwood Park, New Jersey 07407-1361
Ladies and Gentlemen:
We have acted as counsel for Synetic, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") of the Company filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to 161,015 shares (the "Shares") of common
stock, par value $.01 per share, of the Company (the "Common Stock"), to be
issued from time to time pursuant to the Avicenna Systems Corp. 1995 Stock Plan,
as amended (the "Plan").
In so acting, we have examined the Registration Statement and we
have also examined and relied as to factual matters upon the representations and
warranties contained in originals, or copies certified or otherwise identified
to our satisfaction, of such documents, records, certificates and other
instruments as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents, certificates
and instruments submitted to us as originals and the conformity with originals
of all documents submitted to us as copies.
The opinion expressed below is limited to the law of the State of
New York, the General Corporation Law of Delaware and the federal law of the
United States, and we do not express any opinion herein concerning any other
law.
Based upon the foregoing and having regard for such legal
considerations as we have deemed relevant, we are of the opinion that the Shares
have been duly authorized by the Company and, when (a) issued and delivered by
the Company in accordance with the terms of the Plan and (b) paid for in full in
accordance with the terms of the Plan, the Shares will be validly issued, fully
paid and non-assessable.
<PAGE>
2
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Shearman & Sterling
DJB:bk:sa
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
September 27, 1996 included in Synetic, Inc.'s Form 10-K for the year ended
June 30, 1996 and to all references to our Firm included in this registration
statement.
/s/Arthur Andersen LLP
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Arthur Andersen LLP
New York, New York
December 20, 1996
[Emens, Kegler, Brown, Hill & Ritter Letterhead]
December 31, 1996
Synetic, Inc.
669 River Drive
Elmwood Park, NJ 07407-1361
Ladies and Gentlemen:
We hereby consent to the incorporation by reference into the
Synetic, Inc. Registration Statement on Form S-8 (File No. 333- )filed with the
Securities and Exchange Commission, of the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1996. We also consent to all reference to our
firm included in such Registration Statement.
Columbus, Ohio Very truly yours,
EMENS, KEGLER, BROWN, HILL
& RITTER CO., L.P.A.
By: /s/Jack A. Bjerke
----------------------------------
Jack A. Bjerke, Vice President
cc: Robert D. Marotta, Esq.
SYNETIC, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does
hereby constitute and appoint James V. Manning, with full power to act as his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign Registration Statements on Form S-8 (the "Registration
Statements") relating to the Common Stock of Synetic, Inc. and to sign any and
all amendments to the Registration Statements, and to file the same, with all
exhibits thereto, and all 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
requisite and necessary to be done as full to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 17th day of December 1996.
/s/ Herman Sarkowsky
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Signature
Herman Sarkowsky
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Print Name
<PAGE>
/s/ Paul C. Suthern
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Signature
Paul C. Suthern
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Print Name
/s/ Per G.H. Lofberg
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Signature
Per G.H. Lofberg
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Print Name
/s/ Ray E. Hannah
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Signature
Ray E. Hannah
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Print Name
/s/ Charles A. Mele
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Signature
Charles A. Mele
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Print Name
/s/ James V. Manning
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Signature
James V. Manning
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Print Name
/s/ Albert Weis
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Signature
Albert Weis
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Print Name
/s/ Mervyn L. Goldstein, MD
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Signature
Mervyn L. Goldstein, MD
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Print Name
<PAGE>
/s/ Roger Licht
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Signature
Roger Licht
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Print Name
/s/ Thomas R. Ferguson
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Signature
Thomas R. Ferguson
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Print Name
/s/ Martin J. Wygod
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Signature
Martin J. Wygod
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Print Name
