<PAGE> 1
Securities and Exchange Commission
Washington D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MIGRATEC, INC.
(Exact name of issuer as specified in its charter)
FLORIDA 65-0125664
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12801 NORTH STEMMONS FREEWAY, SUITE 710
FARMERS BRANCH, TEXAS 75234
(Address, including zip code, of principal executive offices)
MIGRATEC, INC., 1999 STOCK OPTION PLAN
AND
WORK FOR HIRE AGREEMENT
(Full title of the plans)
W. CURTIS OVERSTREET, PRESIDENT
12801 NORTH STEMMONS FREEWAY, SUITE 710
FARMERS BRANCH, TEXAS 75234
(972) 969-0300
(Name, address and telephone number, including area code, of agent for service)
Copy to:
James Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(954) 763-1200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Shares Amount To Be Offering Price Aggregate Offering Amount of
To Be Registered Registered Per Share (1) Price (1) (2) Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock, no par value (1) 2,000,000 (1) $ 0.33 (1) $ 660,000 (1) $ 183.48 (1)
Common Stock, no par value (2) 200,000 (2) $ 0.12 (2) $ 24,000 (2) $ 6.68 (2)
---------- --------- ---------
Total 2,200,000 $ 684,000 $ 190.16
========= ========= =========
</TABLE>
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities Act
based upon the average of the bid and ask price ($0.33) for the Common
Stock, no par value, per share (the "Common Stock"), as reported by NASD
Over the Counter Bulletin Board on March 9, 1999.
(2) Calculated pursuant to Rule 457(h)(1) based on the price at which the
options are exercisable.
<PAGE> 2
MIGRATEC, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
Form S-8 Item Number and Caption Caption in Prospectus
-------------------------------- --------------------------------
<S> <C>
1. Forepart of Registration Facing Page of
Statement and Outside Registration Statement
Front Cover Page of and Cover Page of
Prospectus Prospectus
2. Inside Front and Outside Inside Cover Page of
Back Cover Pages of Prospectus and Outside
Prospectus Cover Page of Prospectus
3. Summary Information, Risk Not Applicable
Factors and Ratio of
Earnings to Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Not Applicable
Price
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities Description of Securities;
to be Registered MigraTEC, Inc., 1997
Stock Option Plan
10. Interests of Named Experts Legal Matters
and Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
13. Disclosure of Commission Indemnification
Position on
Indemnification for
Securities Act Liabilities
</TABLE>
<PAGE> 3
PROSPECTUS
MIGRATEC, INC.
2,200,000 SHARES OF COMMON STOCK, NO PAR VALUE
Issued Pursuant to
the MigraTEC, Inc., 1999 Stock Option Plan
and
Work For High Agreement
This Prospectus is part of a Registration Statement which registers an aggregate
of 2,200,000 shares of Common Stock, no par value (such shares being
collectively referred to as the "Shares") of MigraTEC, Inc. (the "Company"). An
aggregate of (i) 200,000 of the Shares may be issued, as set froth herein, to
consultants of the Company upon the exercise of options at an exercise price of
$0.12 per share; and (ii) up to 2,000,000 of the Shares may be issued, as set
forth herein, to officers, directors, employees and consultants of the Company
pursuant to the exercise of non-qualified or incentive stock options to purchase
shares of Common Stock under and in accordance with the MigraTEC, Inc., 1999
Stock Option Plan (the "Plan") (the Plan covers the issuance of up to 2,000,000
shares of Common Stock), and separate stock option agreements with employees,
officers, directors and consultants (the "Option Agreements") (such options
being collectively referred to as "Options"). All of the Options or Shares have
been, or will be, granted or issued to such officers, directors, employees and
consultants pursuant to individual written option agreements. Individuals or
entities that are granted Options or issued Shares may sometimes hereafter be
collectively referred to as the "Selling Security Holders." The Selling Security
Holders may sell all or a portion of the Shares from time to time in the
over-the-counter market, in negotiated transactions, directly or through brokers
or otherwise, and at market prices prevailing at the time of such sales or at
negotiated prices. The Company will not receive any proceeds from such sales
except upon exercise of the Options.
No person has been authorized by the Company to give any information or to make
any representation other than as contained in this Prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the Shares issuable upon exercise of the Options or under the
terms of the Agreements shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus does not constitute an offer to sell securities in any state to
any person to whom it is unlawful to make such offer in such state.
The date of this Prospectus is March 12, 1999.
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street N.W.,
Washington D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street N.W., Washington D.C. 20549. The Commission
also maintains a website on the internet that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. The Company's Common
Stock is traded on the NASD Over-the-Counter Bulletin Board under the symbol
"MIGR."
The Company has filed with the Commission a Registration Statement on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), with respect to the Shares. This Prospectus, which is Part I of the
Registration Statement, omits certain information contained in the Registration
Statement. For further information with respect to the Company and the Shares
offered by this Prospectus, reference is made to the Registration Statement,
including the exhibits thereto. Statements in this Prospectus as to any document
are not necessarily complete, and where any such document is an exhibit to the
Registration Statement or is incorporated by reference herein, each such
statement is qualified in all respects by the provisions of such exhibit or
other document, to which reference is hereby made, for a full statement of the
provisions thereof. A copy of the Registration Statement, with exhibits, may be
obtained from the Commission's office in Washington D.C. (at the above address)
upon payment of the fees prescribed by the rules and regulations of the
Commission, or examined there without charge or at the Commission's website at
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and Exchange
Commission are incorporated herein by reference and made a part hereof:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997, filed on April 15, 1998.
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998, filed May 20, 1998.
(c) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1998, filed, August 19, 1998.
(d) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998, filed November 23, 1998.
All reports and documents filed by the Company pursuant to Section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such
<PAGE> 5
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document, which
also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written request of any such person, a copy of any or all of
the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, MigraTEC,
Inc., 12801 North Stemmons Freeway, Suite 710, Farmers Branch, Texas 75234.
<PAGE> 6
THE COMPANY
MigraTEC, Inc. (the "Company" or "MigraTEC") is a provider of software products
and services which address both the Year 2000 ("Y2K") challenge and the need for
companies to migrate existing software applications to new and more efficient
hardware and software platforms.
Migration is the process of making all changes necessary to move an
organization's current software applications from an existing operating system
to a new target operating system in order to utilize advancing technology and
meet changing business requirements. Migration allows companies to retain the
functionality and business processes which have been developed in their existing
software applications while gaining the efficiencies which result from moving
the software applications to more advanced technology platforms. Migration
avoids the business interruption, retraining and re-engineering problems created
when a software application is totally replaced. Thus, migration not only
extends the productive life of existing software applications, which have
already been developed at significant cost, but also preserves the business
logic and consistency of the existing software application, ensuring continued
ease of ongoing maintenance of the software.
MigraTEC's software technology has been utilized in over 400 migration projects,
facilitated either directly by the Company or through a license of previous
technology of the Company to IBM. Successful migration projects performed by the
Company include Caterpillar Inc., Ameritech Inc., USAA Insurance, Duke Energy,
Bell Sygma, The Sabre Group Inc., Payless ShoeSource Inc., Group I Software
Europe Ltd. and AutoTester Inc., including follow-up projects at Duke Energy,
Bell Sygma, Ameritech Inc. and The Sabre Group Inc.
In order to facilitate the Company's transition from its prior dependency on the
revenues generated from the IBM software license, a new management team was
brought into the Company in 1997 to implement a turnaround plan based on further
developing MigraTEC's proprietary core software technology and establishing the
Company as a technology partner of large strategically positioned companies.
Currently, MigraTEC is focused on further developing its proprietary technology
to serve as the foundation for an advanced universal migration software tool
designed to facilitate the transition between numerous computer languages and
operating platforms. The Company intends to utilize the enhanced technology to
facilitate its provision of migration services and to generate additional
revenues through the licensing of the technology to large computer products and
services organizations.
With rapid technological changes occurring in today's marketplace, such as the
move to the Internet, Windows and WindowsNT, the development of 64 bit
processors, Y2K compliance issues, and the advent of the introduction of the
European Monetary Unit, management believes that MigraTEC's proprietary software
technology represents an attractive resource for companies seeking access to
technology that will allow them to respond to these challenges and market
opportunities. MigraTEC's proprietary technology is designed to automate a
significant amount of the migration process by identifying critical code
elements in the software to be migrated thereby automating a high percentage of
the changes required. In June of 1998, the Company submitted a patent
application covering certain processes relating to the "core" portion of its
proprietary software technology.
The Company is designing its software products so they can be used:
o by MigraTEC to provide a variety of services for its business
customers,
<PAGE> 7
o by individual businesses to correct or migrate their own client/server
software applications, or
o by other services and/or systems integrators in order to facilitate
their delivery of solutions and/or hardware to their customers.
The first product to which the Company has applied its enhanced technology is
MigraTEC2000, a Y2K software tool to remediate Y2K problems for client/server
applications. The Company's MigraTEC2000 software product utilizes a parsing
technology to perform the following: (1) an inventory of the current source code
to ensure that all lines of code in the application are present for analysis and
remediation, (2) an analysis of the code to ensure that all lines of code
containing Y2K date related fields have been identified, and (3) an automated
remediation of the code pursuant to parameters and instructions determined by
the client. The patent application filed by the Company was related to the
parsing technology incorporated into its MigraTEC2000 software product. Parsing
technology, which management believes is superior to scanning technologies, is a
technology that analyzes the structural relationships contained within computer
program code. The superiority that parsing technology achieves is in the
identification of not only the obvious names of program elements but also the
numerous and subtle ways in which those elements interact with each other to
produce secondary effects.
MigraTEC, Inc., was organized under the State of Florida in February 1989, under
the name New York Acquisitions, Inc. On February 29, 1996, the Company acquired
all of the capital stock of One Up Corporation in a reverse acquisition and
changed its name to One Up Corporation. Thereafter, on February 16, 1998, the
Company changed its name to MigraTEC, Inc. The address and telephone number of
the Company's executive offices are: 12801 North Stemmons Freeway, Suite 710,
Farmers Branch, Texas 75234, telephone number (972) 969-0300, facsimile number
(972) 969-0315.
<PAGE> 8
MIGRATEC, INC., 1999 STOCK OPTION PLAN
INTRODUCTION
The following descriptions summarize certain provisions of the Plan and the form
of agreements to be entered into by recipients of options thereunder. Such
summaries do not purport to be complete and are qualified by reference to the
full text of the Plan and form of agreement. A copy of the Plan is on file as an
exhibit to the Registration Statement of which this Prospectus is a part. Each
person receiving an option under the Plan should read the Plan and related
option agreement in its entirety.
The Company's 1999 Stock Option Plan was adopted by its Board of Directors on
March 1, 1999, effective as of that date. Under the Plan, the Company had
reserved an aggregate of 2,000,000 shares of Common Stock for issuance pursuant
to options granted under the Plan ("Plan Options").
The purpose of the Plan is to encourage stock ownership by officers, directors,
employees and consultants of the Company, and to give such persons a greater
personal interest in the success of the Company's business and an added
incentive to continue to advance and contribute to the Company. The Board of
Directors of the Company, or a committee designated thereunder, which currently
oversees compensation matters, will administer the Plan including, without
limitation, the selection of the persons who will be granted Plan Options under
the Plan, the type of Plan Options to be granted, the number of shares subject
to each Plan Option and the Plan Option price.
Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of Common Stock owned
by the eligible person and receive a new Plan Option to purchase shares of
Common Stock equal in number to the tendered shares. As discussed hereafter, any
Incentive Option granted under the Plan must provide for an exercise price of
not less than 100% of the fair market value of the underlying shares on the date
of such grant, but the exercise price of any Incentive Option granted to an
eligible employee owning more than 10% of the outstanding Common Stock of the
Company must not be less than 110% of such fair market value as determined on
the date of the grant. The term of each Plan Option and the manner in which it
may be exercised is determined by the Board of Directors or the Committee,
provided that no Plan Option may be exercisable more than ten (10) years after
the date of its grant and, in the case of an Incentive Option granted to an
eligible employee owning more than 10% of the Common Stock, no more than five
(5) years after the date of the grant.
ELIGIBILITY
Officers, directors, employees and consultants of the Company and its
subsidiaries are eligible to receive Non-Qualified Options under the Plan. Only
officers and employees of the Company who are employed by the Company or by any
subsidiary thereof are eligible to receive Incentive Options.
<PAGE> 9
ADMINISTRATION
The Plan will be administered by the Company's Board of Directors or an
underlying committee (the "Committee"). The Board of Directors or the Committee
determines from time to time those officers, directors, employees and
consultants of the Company or any of its subsidiaries to whom Plan Options are
to be granted, the terms and provisions of the respective option agreements, the
time or times at which such Plan Options shall be granted, the type of Plan
Options to be granted, the dates such Plan Options become exercisable, the
number of shares subject to each Plan Option, the purchase price of such shares
and the form of payment of such purchase price. All other questions relating to
the administration of the Plan, and the interpretation of the provisions thereof
and of the related option agreements, are resolved by the Board of Directors or
the Committee.
SHARES SUBJECT TO AWARDS
The Company has reserved 2,000,000 of its authorized but unissued shares of
Common Stock or shares maintained in the treasury of the Company for issuance
under the Plan, and a maximum of 2,000,000 shares may be issued thereunder
unless the Plan is subsequently amended. In connection with the adoption and
approval of the Plan, the Company's Board of Directors resolved that the
aggregate number of total shares of the Company's Common Stock issuable under
the Plan may not exceed 2,000,000 shares (subject to adjustment in the event of
certain changes in the Company's capitalization) without further action by the
Company's Board of Directors and shareholders, as required. Except for such
limitation on the aggregate number of shares issuable under the Plan, there is
no maximum or minimum number of shares of Common Stock as to which a Plan Option
may be granted to any person. Shares used for Plan Options may be authorized and
unissued shares or shares reacquired by the Company, including shares purchased
in the open market. Shares covered by Plan Options which terminate unexercised
will again become available for additional Plan Options, without decreasing the
maximum number of shares issuable under the Plan, although such shares may also
be used by the Company for other purposes.
The Plan provides that, if the Company's outstanding shares are increased,
decreased, exchanged or otherwise adjusted due to a share dividend, forward or
reverse share split, recapitalization, reorganization, merger, consolidation,
combination or exchange of shares, an appropriate and proportionate adjustment
shall be made in the number or kind of shares subject to the Plan or subject to
unexercised Plan Options and in the purchase price per share under such Plan
Options. Any adjustment, however, does not change the total purchase price
payable for the shares subject to outstanding Plan Options. In the event of the
proposed dissolution or liquidation of the Company, a proposed sale of all or
substantially all of the assets of the Company, a merger or tender offer for the
Company's shares of Common Stock, the Board of Directors may declare that each
Option granted under this Plan shall terminate as of a date to be fixed by the
Board of Directors; provided that not less than thirty (30) days written notice
of the date so fixed shall be given to each Eligible Person holding an Option,
and each such Eligible Person shall have the right, during the period of thirty
(30) days proceeding such termination, to exercise his Option as to all or any
part of the Shares, including shares of stock as to which such Option would not
otherwise be exercisable.
<PAGE> 10
TERMS OF EXERCISE
The Plan provides that the Plan Options granted thereunder shall be exercisable
from time to time in whole or in part, unless otherwise specified in the
agreement representing the Plan Options or by the Committee or by the Board of
Directors. Each Plan Option may be exercised in whole or in part at any time
during the period from the date of the grant until the end of the period covered
by the Plan Option period.
The Plan provides that, with respect to Incentive Stock Options, the aggregate
fair market value (determined as of the time the option is granted) of the
shares of Common Stock, with respect to which Incentive Stock Options are first
exercisable by any option holder during any calendar year (including all
incentive stock option plans of the Company, any parent or any subsidiaries
which are qualified under Section 422 of the Internal Revenue Code of 1986)
shall not exceed $100,000.
EXERCISE PRICE
The purchase price for shares subject to Incentive Stock Options must be at
least 100% of the fair market value of the Company's Common Stock on the date
the option is granted, except that the purchase price must be at least 110% of
the fair market value in the case of an Incentive Stock Option granted to a
person who is a "10% stockholder." A "10% stockholder" is a person who owns
(within the meaning of Section 422(b)(6) of the Internal Revenue Code of 1986)
at the time the Incentive Stock Option is granted, shares possessing more than
10% of the total combined voting power of all classes of the outstanding shares
of the Company, any parent or any subsidiaries. The Plan provides that fair
market value shall be determined by the Board or the Committee in accordance
with procedures which it may from time to time establish. If the purchase price
is paid with consideration other than cash, the Board or the Committee shall
determine the fair value of such consideration to the Company in monetary terms.
The exercise price of Non-Qualified Options shall be determined by the Board of
Directors or the Committee but not less than 55% of the fair market value (but
in no event less than the par value) of one share of the Company's Common Stock
on the date the Option is granted.
The per share purchase price of shares subject to Plan Options granted under the
Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
MANNER OF EXERCISE
Plan Options are exercisable under the Plan by delivery of written notice to the
Company stating the number of shares with respect to which the Plan Option is
being exercised, together with full payment of the purchase price therefor.
Payment shall be in cash, checks, certified or bank cashier's checks, promissory
notes secured by the Shares issued through exercise of the related Options,
shares of Common Stock or in such other form or combination of forms which shall
be acceptable to the Board of Directors or the Committee, provided that any loan
or guarantee by the Company of the purchase price may only be made upon
resolution of the Board or Committee that such loan or guarantee is reasonably
expected to benefit the Company.
<PAGE> 11
OPTION PERIOD
All Incentive Stock Options shall expire on or before the tenth (10th)
anniversary of the date the option is granted except as limited above.
Non-Qualified Options shall expire ten (10) years and one (1) day from the date
of grant unless otherwise provided under the terms of the option grant.
TERMINATION
All Plan Options are nonassignable and nontransferable, except by will or by the
laws of descent and distribution, and during the lifetime of the optionee, may
be exercised only by such optionee. If an optionee shall die (i) while an
employee of the Corporation or a Subsidiary or (ii) within three months after
termination of his employment with the Corporation or a Subsidiary because of
his disability, or retirement or otherwise, his or her Options may be exercised,
to the extent that the optionee shall have been entitled to do so on the date of
his death or such termination of employment, by the person or persons to whom
the optionee's right under the Option pass by will or applicable law, or if no
such person has such right, by his executors or administrators, at any time, or
from time to time.
In the event of termination of employment because of his death while an employee
or because of disability, his Options may be exercised not later than the
expiration date specified in the Plan or one year after the optionee's death,
whichever date is earlier, or in the event of termination of employment because
of retirement or otherwise, not later than the expiration date specified in the
Plan or one year after the optionee's death, whichever date is earlier.
If an optionee's employment by the Corporation or a Subsidiary shall terminate
because of his disability and such optionee has not died within the following
three months, he may exercise his Options, to the extent that he shall have been
entitled to do so at the date of the termination of his employment, at any time,
or from time to time, but not later than the expiration date specified in the
Option Agreement (or Grant Letter) or one year after termination of employment,
whichever date is earlier.
If an optionee's employment shall terminate by reason of his retirement in
accordance with the terms of the Corporation's tax-qualified retirement plans,
if any, or with the consent of the Board or the Stock Option Committee or
involuntarily other than by termination for cause, and such optionee has not
died within the following three months, he may exercise his Option to the extent
he shall have been entitled to do so at the date of the termination of his
employment, at any time and from to time, but not later than the expiration date
specified in the Plan or thirty (30) days after termination of employment,
whichever date is earlier. Termination for cause is defined by the Plan to mean;
(i) termination of employment for cause as defined in the optionee's Employment
Agreement or (ii) in the absence of an Employment Agreement for the optionee,
termination of employment by reason of the optionee's commission of a felony,
fraud or willful misconduct which has resulted, or is likely to result, in
substantial and material damage to the Corporation or a Subsidiary, all as the
Board of Directors or the Committee in its sole discretion may determine.
If an optionee's employment shall terminate for any reason other than death,
disability, retirement or otherwise, all right to exercise his Option shall
terminate at the date of such termination of employment absent specific
provisions in the optionee's Option Agreement.
<PAGE> 12
MODIFICATION AND TERMINATION OF PLANS
The Board of Directors or Committee may amend, suspend or terminate the Plan at
any time. However, no such action may prejudice the rights of any optionee who
has prior thereto been granted options under this Plan. Further, no amendment to
this Plan which has the effect of (a) increasing the aggregate number of Shares
subject to this Plan (except for adjustments due to changes in the Company's
capitalization), or (b) changing the definition of "Eligible Person" under this
Plan, may be effective unless and until approved by the Shareholders of the
Company in the same manner as approval of this Plan is required. Any such
termination of the Plan shall not affect the validity of any Plan Options
previously granted thereunder. Unless the Plan shall thereto fore have been
suspended or terminated by the Board of Directors, the Plan shall terminate on
March 1, 2009.
FEDERAL INCOME TAX EFFECTS
The following discussion applies to the Plan and is based on federal income tax
laws and regulations in effect on March 1, 1999. It does not purport to be a
complete description of the federal income tax consequences of the Plan, nor
does it describe the consequences of state, local or foreign tax laws which may
be applicable. Accordingly, any person receiving a grant under the Plan should
consult with his own tax adviser.
The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974 and is not qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
An employee granted an Incentive Stock Option does not recognize taxable income
either at the date of grant or at the date of its timely exercise. However, the
excess of the fair market value of Common Stock received upon exercise of the
Incentive Stock Option over the Option exercise price is an item of tax
preference under Section 57(a)(3) of the Code and may be subject to the
alternative minimum tax imposed by Section 55 of the Code. Upon disposition of
stock acquired on exercise of an Incentive Stock Option, long-term capital gain
or loss is recognized in an amount equal to the difference between the sales
price and the Incentive Stock Option exercise price, provided that the option
holder has not disposed of the stock within two years from the date of grant and
within one year from the date of exercise. If the Incentive Stock Option holder
disposes of the acquired stock (including the transfer of acquired stock in
payment of the exercise price of an Incentive Stock Option) without complying
with both of these holding period requirements ("Disqualifying Disposition"),
the option holder will recognize ordinary income at the time of such
Disqualifying Disposition to the extent of the difference between the exercise
price and the lesser of the fair market value of the stock on the date the
Incentive Stock Option is exercised (the value six months after the date of
exercise may govern in the case of an employee whose sale of stock at a profit
could subject him to suit under Section 16(b) of the Securities Exchange Act of
1934) or the amount realized on such Disqualifying Disposition. Any remaining
gain or loss is treated as a short-term or long-term capital gain or loss,
depending on how long the shares are held. In the event of a Disqualifying
Disposition, the Incentive Stock Option tax preference described above may not
apply (although, where the Disqualifying Disposition occurs subsequent to the
year the Incentive Stock Option is exercised, it may be necessary for the
employee to amend his return to eliminate the tax preference item previously
reported). The Company and its subsidiaries are not entitled to a tax deduction
upon either exercise of an Incentive Stock Option or disposition of stock
acquired pursuant to such an exercise, except to the extent that the Option
holder recognized ordinary income in a Disqualifying Disposition.
<PAGE> 13
If the holder of an Incentive Stock Option pays the exercise price, in full or
in part, with shares of previously acquired Common Stock, the exchange should
not affect the Incentive Stock Option tax treatment of the exercise. No gain or
loss should be recognized on the exchange, and the shares received by the
employee, equal in number to the previously acquired shares exchanged therefor,
will have the same basis and holding period for long-term capital gain purposes
as the previously acquired shares. The employee will not, however, be able to
utilize the old holding period for the purpose of satisfying the Incentive Stock
Option statutory holding period requirements. Shares received in excess of the
number of previously acquired shares will have a basis of zero and a holding
period which commences as of the date the Common Stock is issued to the employee
upon exercise of the Incentive Stock Option. If an exercise is effected using
shares previously acquired through the exercise of an Incentive Stock Option,
the exchange of the previously acquired shares will be considered a disposition
of such shares for the purpose of determining whether a Disqualifying
Disposition has occurred.
In respect to the holder of Non-Qualified Options, the option holder does not
recognize taxable income on the date of the grant of the Non-Qualified Option,
but recognizes ordinary income generally at the date of exercise in the amount
of the difference between the option exercise price and the fair market value of
the Common Stock on the date of exercise. However, if the holder of
Non-Qualified Options is subject to the restrictions on resale of Common Stock
under Section 16 of the Securities Exchange Act of 1944, such person generally
recognizes ordinary income at the end of the six-month period following the date
of exercise in the amount of the difference between the option exercise price
and the fair market value of the Common Stock at the end of the six-month
period. Nevertheless, such holder may elect within 30 days after the date of
exercise to recognize ordinary income as of the date of exercise. The amount of
ordinary income recognized by the option holder is deductible by the Company in
the year that income is recognized.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of the Shares must be made in compliance with federal and state
securities laws. Officers, directors and 10% or greater shareholders of the
Company, as well as certain other persons or parties who may be deemed to be
"affiliates" of the Company under the Federal Securities Laws, should be aware
that resales by affiliates can only be made pursuant to an effective
Registration Statement, Rule 144 or any other applicable exemption. Officers,
directors and 10% and greater stockholders may also be subject to the "short
swing" profit rule of Section 16(b) of the Securities Exchange Act of 1934.
WORK FOR HIGH AGREEMENT
On October 5, 1998, the Company entered into a Work For High Agreement with two
individual consultants. In exchange for the consultants developing certain
computer source codes for the Company, the Company granted the two consultants
options to purchase an aggregate of 200,000 shares of Common Stock exercisable
for a period of two (2) years beginning on the date the Company received the
computer source code from the consultants at an exercise price of $0.12 per
share.
<PAGE> 14
DESCRIPTION OF SECURITIES
The Company is authorized to issue 200,000,000 shares of Common Stock, no par
value per share (the "Common Stock"), and 1,000,000 shares of Redeemable
Convertible 12% Preferred Stock, $1,000 par value per share (the "Preferred
Stock"). As of March 8, 1999, there were 45,148,501 shares of Common Stock
issued and outstanding and no shares of Preferred Stock outstanding.
COMMON STOCK
The Company is authorized to issue up to 200,000,000 shares ("Shares") of Common
Stock, no par value per share. The holders of shares of Common Stock are
entitled to share, on a ratable basis, such dividends as may be declared by the
Board of Directors out of funds legally available therefor. Upon liquidation,
dissolution or winding up of the Company, after payment to creditors and holders
of any outstanding shares of Preferred Stock, the assets of the Company will be
divided pro rata on a per Share basis among the holders of the Common Stock.
Each share of Common Stock entitles the holders thereof, to one vote. Holders of
Common Stock do not have cumulative voting rights, which means that the holders
of more than 50% of shares voting for the election of Directors can elect all of
the Directors if they choose to do so, and in such event, the holders of the
remaining shares will not be able to elect any Directors. The ByLaws of the
Company require that only a majority of the issued and outstanding shares of
Common Stock of the Company need be represented to constitute a quorum and to
transact business at a shareholders' meeting. The Common Stock has no
preemptive, subscription or conversion rights and is not redeemable by the
Company.
PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of the Preferred Stock, none
of which are issued or outstanding.
NASD OTC BULLETIN BOARD
The Company's Common Stock is traded on the NASD Over the Counter Bulletin Board
under the symbol "MIGR." As such, the Company's Common Stock is covered by a
Securities and Exchange Commission rule that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally institutions with
assets in excess of $5,000,000 or individuals with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
spouse). For transactions covered by the rule, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Consequently, the rule
may affect the ability of broker-dealers to sell the Company's securities and
also may affect the ability of purchasers in this offering to sell their shares
in the secondary market.
TRANSFER AGENT
The Transfer Agent for the shares of Common Stock is Interwest Transfer Company,
P.O. Box 17136, Salt Lake City, Utah 84117.
<PAGE> 15
LEGAL MATTERS
Certain legal matters in connection with the securities being offered hereby
will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson, P.A.,
200 East Las Olas Boulevard, Suite 1900, Fort Lauderdale, Florida 33301.
EXPERTS
The consolidated financial statements of the Company appearing in the Company's
Annual Report on Form 10-KSB, for the fiscal year ended December 31, 1997, filed
on April 15, 1998, have been audited by King Griffin & Adamson P.C., Independent
Certified Public Accountants, as set forth in their report thereon included
therein and incorporated herein by reference. Such financial statements are, and
audited financial statements to be included in subsequently filed documents will
be, incorporated herein in reliance upon the reports of King Griffin & Adamson
P.C. pertaining to such financial statements (to the extent covered by consents
filed with the Securities and Exchange Commission) given upon the authority of
such firm as experts in accounting and auditing.
INDEMNIFICATION
The Florida Business Corporation Act (the "Corporation Act") permits the
indemnification of directors, employees, officers and agents of Florida
corporations. The Company's Articles of Incorporation (the "Articles") and
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by the Corporation Act. Insofar as indemnification
for liabilities arising under the Corporation Act may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as express in the act and is therefore unenforceable.
The Articles of Incorporation and Bylaws of the Company require the Company to
indemnify its Directors and officers to the fullest extent permitted by the
Business Corporation Act of the State of Florida.
The above indemnification provisions notwithstanding, the Company is aware that
insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as express in the act and is therefore unenforceable.
<PAGE> 16
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (d) below are incorporated by reference in
the Registration Statement. All reports and documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents. Any statement incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute part of this Prospectus.
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1997, filed on April 15, 1998.
(b) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998, filed May 20, 1998.
(c) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1998, filed, August 19, 1998.
(d) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998, filed November 23, 1998.
ITEM 4. DESCRIPTION OF SECURITIES
The class of securities to be offered hereby is registered under Section 15(d)
of the Securities Exchange Act of 1934, as amended. A description of the
Registrant's securities is set forth in the Prospectus incorporated as a part of
this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Corporation Act (the "Corporation Act") permits the
indemnification of directors, employees, officers and agents of Florida
corporations. The Company's Articles of Incorporation (the "Articles") and
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by the Corporation Act. Insofar as indemnification
for liabilities arising under the Act may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing
<PAGE> 17
provisions, the Company has been informed that, in the opinion of the
Commission, such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as express in the act and is therefore unenforceable.
The Articles of Incorporation and Bylaws of the Company require the Company to
indemnify its Directors and officers to the fullest extent permitted by the
Business Corporation Act of the State of Florida.
The above indemnification provisions notwithstanding, the Company is aware that
insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as express in the act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inasmuch as the employees, executives, directors and consultants who received
the Shares of the Company will be either knowledgeable, sophisticated or have
access to comprehensive information relevant to the Company, such transaction
was undertaken in reliance on the exemption from registration provided by
Section 4(2) of the Act. Alternatively, the Company will rely upon the
exemptions afforded by Regulation D under the Act. As a condition precedent to
such grant, such security holders were, or will be, required to express an
investment intent and consent to the imprinting of a restrictive legend on each
stock certificate to be received from the Registrant.
ITEM 8. EXHIBITS
EXHIBIT DESCRIPTION
(4) MigraTEC, Inc., 1999 Stock Option Plan.
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A., relating to the
issuance of shares of Common Stock pursuant to the MigraTEC, Inc.,
1999 Stock Option Plan and the Work For Hire Agreement.
(10) Work For Hire Agreement between the Company, Jeff Clignett and Duane
A. Barnes dated October 5, 1998.
(24.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A., included in the
opinion filed as exhibit (5) hereto.
(24.2) Consent of King Griffin & Adamson P.C.
<PAGE> 18
ITEM 9. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are being made,
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;
(b) That, for the purposes of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof; and
(c) 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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
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.
(3) Insofar as indemnification for liabilities arising under the 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 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 of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE> 19
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 the City of Farmers Branch and the State of Texas, on the 12th
day of March, 1999.
MIGRATEC, INC.
By: /s/ W. CURTIS OVERSTREET
-------------------------------------------
W. Curtis Overstreet
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Principal Executive Officer, President
/s/ W. CURTIS OVERSTREET and Director March 12, 1999
- ----------------------------------------
W. Curtis Overstreet
/s/ BENJAMIN SWIRSKY Chairman of the Board and Director March 12, 1999
- ----------------------------------------
Benjamin Swirsky
/s/ MARK C. MYERS Principal Financial Officer and March 12, 1999
- ---------------------------------------- Secretary
Mark C. Myers
/s/ DEANE WATSON, JR. Director March 12, 1999
- ----------------------------------------
Deane Watson, Jr.
/s/ CYNTHIA K. ALDERMAN Principal Accounting Officer March 12, 1999
- ----------------------------------------
Cynthia K. Alderman
/s/ MARCUS A. ROWAN Vice-Chairman of the Board and March 12, 1999
- ---------------------------------------- Director
Marcus A. Rowan
/s/ RICHARD A. GRAY, JR. Director March 12, 1999
- ----------------------------------------
Richard A. Gray, Jr.
</TABLE>
<PAGE> 20
EXHIBIT INDEX
MIGRATEC, INC.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
(4) MigraTEC, Inc., 1999 Stock Option
Plan
(5) Opinion of Atlas, Pearlman, Trop &
Borkson, P.A., relating to the
issuance of shares of Common Stock
pursuant to the 1999 Stock Option
Plan and Work for Hire Agreement
(10) Work for Hire Agreement between the
Company, Jeff Clignett and Duane A.
Barnes dated October 5, 1998
(24.1) Consent of Atlas, Pearlman, Trop &
Borkson, P.A., included in the
opinion filed as exhibit (5) hereto
(24.2) Consent of King Griffin & Adamson P.C.
</TABLE>
<PAGE> 1
EXHIBIT (4)
MigraTEC, Inc., 1999 Stock Option Plan
<PAGE> 2
EXHIBIT (4)
MIGRATEC, INC.
1999 STOCK OPTION PLAN
1. Grant of Options; Generally. In accordance with the provisions
hereinafter set forth in this stock option plan, the name of which is the
MIGRATEC, INC., 1999 STOCK OPTION PLAN (the "Plan"), the Board of Directors (the
"Board") or, the Compensation Committee (the "Stock Option Committee") of
MigraTEC, Inc. (the "Corporation"), is hereby authorized to issue from time to
time on the Corporation's behalf to any one or more Eligible Persons, as
hereinafter defined, options to acquire shares of the Corporation's no par value
common stock (the "Stock").
2. Type of Options. The Board or the Stock Option Committee is authorized
to issue Incentive Stock Options ("ISOs") which meet the requirements of Section
ss.422 of the Internal Revenue Code of 1986, as amended (the "Code"), which
options are hereinafter referred to collectively as ISOs, or singularly as an
ISO. The Board or the Stock Option Committee is also, at its discretion,
authorized to issue options which are not ISOs, which options are hereinafter
referred to collectively as Non Statutory Options ("NSOs"), or singularly as an
NSO. The Board or the Stock Option Committee is also authorized to issue "Reload
Options" in accordance with Paragraph 8 herein, which options are hereinafter
referred to collectively as Reload Options, or singularly as a Reload Option.
Except where the context indicates to the contrary, the term "Option" or
"Options" means ISOs, NSOs and Reload Options.
3. Amount of Stock. The aggregate number of shares of Stock which may be
purchased pursuant to the exercise of Options shall be 2,000,000 ("2 million")
shares. Of this amount, the Board or the Stock Option Committee shall have the
power and authority to designate whether any Options so issued shall be ISOs or
NSOs, subject to the restrictions on ISOs contained elsewhere herein. If an
Option ceases to be exercisable, in whole or in part, the shares of Stock
underlying such Option shall continue to be available under this Plan. Further,
if shares of Stock are delivered to the Corporation as payment for shares of
Stock purchased by the exercise of an Option granted under this Plan, such
shares of Stock shall also be available under this Plan. If there is any change
in the number of shares of Stock due to the declaration of stock dividends,
recapitalization resulting in stock split-ups, or combinations or exchanges of
shares of Stock, or otherwise, the number of shares of Stock available for
purchase upon the exercise of Options, the shares of Stock subject to any Option
and the exercise price of any outstanding Option shall be appropriately adjusted
by the Board or the Stock Option Committee. The Board or the Stock Option
Committee shall give notice of any adjustments to each Eligible Person granted
an Option under this Plan, and such adjustments shall be effective and binding
on all Eligible Persons. If because of one or more recapitalizations,
reorganizations or other corporate events, the holders of outstanding Stock
receive something other than shares of Stock then, upon exercise of an Option,
the Eligible Person will receive what the holder would have owned if the holder
had exercised the Option immediately before the first such corporate event and
not disposed of anything the holder received as a result of the corporate event.
<PAGE> 3
4. Eligible Persons.
(a) With respect to ISOs, an Eligible Person means any individual who has
been employed by the Corporation or by any subsidiary of the Corporation, for a
continuous period of at least ninety (90) days.
(b) With respect to NSOs, an Eligible Person means (i) any individual who
has been employed by the Corporation or by any subsidiary of the Corporation,
for a continuous period of at least ninety (90) days, (ii) any director of the
Corporation or any subsidiary of the Corporation or (iii) any consultant of the
Corporation or any subsidiary of the Corporation.
5. Grant of Options. The Board or the Stock Option Committee has the right
to issue the Options established by this Plan to Eligible Persons. The Board or
the Stock Option Committee shall follow the procedures prescribed for it
elsewhere in this Plan. A grant of Options shall be set forth in a writing
signed on behalf of the Corporation or by a majority of the members of the Stock
Option Committee. The writing shall identify whether the Option being granted is
an ISO or an NSO and shall set forth the terms which govern the Option. The
terms shall be determined by the Board or the Stock Option Committee, and may
include, among other terms, the number of shares of Stock that may be acquired
pursuant to the exercise of the Options, when the Options may be exercised, the
period for which the Option is granted and including the expiration date, the
effect on the Options if the Eligible Person terminates employment and whether
the Eligible Person may deliver shares of Stock to pay for the shares of Stock
to be purchased by the exercise of the Option. However, no term shall be set
forth in the writing which is inconsistent with any of the terms of this Plan.
The terms of an Option granted to an Eligible Person may differ from the terms
of an Option granted to another Eligible Person, and may differ from the terms
of an earlier Option granted to the same Eligible Person.
6. Option Price. The option price per share shall be determined by the
Board or the Stock Option Committee at the time any Option is granted, and shall
be not less than (i) in the case of an ISO, the fair market value, (ii) in the
case of an ISO granted to a ten percent or greater stockholder, 110 percent of
the fair market value, or (iii) in the case of an NSO, not less than 55% of the
fair market value (but in no event less than the par value) of one share of
Stock on the date the Option is granted, as determined by the Board or the Stock
Option Committee. Fair market value as used herein shall be:
(a) If shares of Stock shall be traded on an exchange or over-the-counter
market, the mean between the high and low sales prices of Stock on such exchange
or over-the-counter market on which such shares shall be traded on that date, or
if such exchange or over-the-counter market is closed or if no shares shall have
traded on such date, on the last preceding date on which such shares shall have
traded.
(b) If shares of Stock shall not be traded on an exchange or
over-the-counter market, the value as determined by a recognized appraiser as
selected by the Board or the Stock Option Committee.
<PAGE> 4
7. Purchase of Shares. An Option shall be exercised by the tender to the
Corporation of the full purchase price of the Stock with respect to which the
Option is exercised and written notice of the exercise. The purchase price of
the Stock shall be in United States dollars, payable in cash, check, Promissory
Note secured by the Shares issued through exercise of the related Options, or in
property or Corporation stock, if so permitted by the Board or the Stock Option
Committee in accordance with the discretion granted in Paragraph 5 hereof,
having a value equal to such purchase price. The Corporation shall not be
required to issue or deliver any certificates for shares of Stock purchased upon
the exercise of an Option prior to (i) if requested by the Corporation, the
filing with the Corporation by the Eligible Person of a representation in
writing that it is the Eligible Person's then present intention to acquire the
Stock being purchased for investment and not for resale, and/or (ii) the
completion of any registration or other qualification of such shares under any
government regulatory body, which the Corporation shall determine to be
necessary or advisable.
8. Grant of Reload Options. In granting an Option under this Plan, the
Board or the Stock Option Committee may include a Reload Option provision
therein, subject to the provisions set forth in Paragraphs 20 and 21 herein. A
Reload Option provision provides that if the Eligible Person pays the exercise
price of shares of Stock to be purchased by the exercise of an ISO, NSO or
another Reload Option (the "Original Option") by delivering to the Corporation
shares of Stock already owned by the Eligible Person (the "Tendered Shares"),
the Eligible Person shall receive a Reload Option which shall be a new Option to
purchase shares of Stock equal in number to the tendered shares. The terms of
any Reload Option shall be determined by the Board or the Stock Option Committee
consistent with the provisions of this Plan.
9. Stock Option Committee. The Stock Option Committee may be appointed from
time to time by the Corporation's Board of Directors. The Board may from time to
time remove members from or add members to the Stock Option Committee. The Stock
Option Committee shall be constituted so as to permit the Plan to comply in all
respects with the provisions set forth in Paragraph 20 herein. The members of
the Stock Option Committee may elect one of its members as its chairman. The
Stock Option Committee shall hold its meetings at such times and places as its
chairman shall determine. A majority of the Stock Option Committee's members
present in person shall constitute a quorum for the transaction of business. All
determinations of the Stock Option Committee will be made by the majority vote
of the members constituting the quorum. The members may participate in a meeting
of the Stock Option Committee by conference telephone or similar communications
equipment by means of which all members participating in the meeting can hear
each other. Participation in a meeting in that manner will constitute presence
in person at the meeting. Any decision or determination reduced to writing and
signed by all members of the Stock Option Committee will be effective as if it
had been made by a majority vote of all members of the Stock Option Committee at
a meeting which is duly called and held.
10. Administration of Plan. In addition to granting Options and to
exercising the authority granted to it elsewhere in this Plan, the Board or the
Stock Option Committee is granted the full right and authority to interpret and
construe the provisions of this Plan, promulgate, amend and
<PAGE> 5
rescind rules and procedures relating to the implementation of the Plan and to
make all other determinations necessary or advisable for the administration of
the Plan, consistent, however, with the intent of the Corporation that Options
granted or awarded pursuant to the Plan comply with the provisions of Paragraph
20 and 21 herein. All determinations made by the Board or the Stock Option
Committee shall be final, binding and conclusive on all persons including the
Eligible Person, the Corporation and its stockholders, employees, officers and
directors and consultants. No member of the Board or the Stock Option Committee
will be liable for any act or omission in connection with the administration of
this Plan unless it is attributable to that member's willful misconduct.
11. Provisions Applicable to ISOs. The following provisions shall apply to
all ISOs granted by the Board or the Stock Option Committee and are incorporated
by reference into any writing granting an ISO:
(a) An ISO may only be granted within ten (10) years from December 16,
1997, the date that this Plan was originally adopted by the Corporation's Board
of Directors.
(b) An ISO may not be exercised after the expiration of ten (10) years from
the date the ISO is granted.
(c) The option price may not be less than the fair market value of the
Stock at the time the ISO is granted.
(d) An ISO is not transferable by the Eligible Person to whom it is granted
except by will, or the laws of descent and distribution, and is exercisable
during his or her lifetime only by the Eligible Person.
(e) If the Eligible Person receiving the ISO owns at the time of the grant
stock possessing more than ten (10%) percent of the total combined voting power
of all classes of stock of the employer corporation or of its parent or
subsidiary corporation (as those terms are defined in the Code), then the option
price shall be at least 110% of the fair market value of the Stock, and the ISO
shall not be exercisable after the expiration of five (5) years from the date
the ISO is granted.
(f) The aggregate fair market value (determined at the time the ISO is
granted) of the Stock with respect to which the ISO is first exercisable by the
Eligible Person during any calendar year (under this Plan and any other
incentive stock option plan of the Corporation) shall not exceed $100,000.
(g) Even if the shares of Stock which are issued upon exercise of an ISO
are sold within one year following the exercise of such ISO so that the sale
constitutes a disqualifying disposition for ISO treatment under the Code, no
provision of this Plan shall be construed as prohibiting such a sale.
<PAGE> 6
(h) This Plan was adopted by the Corporation on March 1, 1999, by virtue of
its approval by the Corporation's Board of Directors. Approval by the
stockholders of the Corporation is to occur prior to March 1, 2000.
12. Determination of Fair Market Value. In granting ISOs under this Plan,
the Board or the Stock Option Committee shall make a good faith determination as
to the fair market value of the Stock at the time of granting the ISO.
13. Restrictions on Issuance of Stock. The Corporation shall not be
obligated to sell or issue any shares of Stock pursuant to the exercise of an
Option unless the Stock with respect to which the Option is being exercised is
at that time effectively registered or exempt from registration under the
Securities Act of 1933, as amended, and any other applicable laws, rules and
regulations. The Corporation may condition the exercise of an Option granted in
accordance herewith upon receipt from the Eligible Person, or any other
purchaser thereof, of a written representation that at the time of such exercise
it is his or her then present intention to acquire the shares of Stock for
investment and not with a view to, or for sale in connection with, any
distribution thereof; except that, in the case of a legal representative of an
Eligible Person, "distribution" shall be defined to exclude distribution by will
or under the laws of descent and distribution. Prior to issuing any shares of
Stock pursuant to the exercise of an Option, the Corporation shall take such
steps as it deems necessary to satisfy any withholding tax obligations imposed
upon it by any level of government.
14. Exercise in the Event of Death of Termination or Employment.
(a) If an optionee shall die (i) while an employee of the Corporation or a
Subsidiary or (ii) within three months after termination of his employment with
the Corporation or a Subsidiary because of his disability, or retirement or
otherwise, his Options may be exercised, to the extent that the optionee shall
have been entitled to do so on the date of his death or such termination of
employment, by the person or persons to whom the optionee's right under the
Option pass by will or applicable law, or if no such person has such right, by
his executors or administrators, at any time, or from time to time. In the event
of termination of employment because of his death while an employee or because
of disability, his Options may be exercised not later than the expiration date
specified in Paragraph 5 or one year after the optionee's death, whichever date
is earlier, or in the event of termination of employment because of retirement
or otherwise, not later than the expiration date specified in Paragraph 5 hereof
or one year after the optionee's death, whichever date is earlier.
(b) If an optionee's employment by the Corporation or a Subsidiary shall
terminate because of his disability and such optionee has not died within the
following three months, he may exercise his Options, to the extent that he shall
have been entitled to do so at the date of the termination of his employment, at
any time, or from time to time, but not later than the expiration date specified
in Paragraph 5 hereof or one year after termination of employment, whichever
date is earlier.
<PAGE> 7
(c) If an optionee's employment shall terminate by reason of his retirement
in accordance with the terms of the Corporation's tax-qualified retirement plans
if any, or with the consent of the Board or the Stock Option Committee or
involuntarily other than by termination for cause, and such optionee has not
died within the following three months, he may exercise his Option to the extent
he shall have been entitled to do so at the date of the termination of his
employment, at any time and from to time, but not later than the expiration date
specified in Paragraph 5 hereof or thirty (30) days after termination of
employment, whichever date is earlier. For purposes of this Paragraph 14,
termination for cause shall mean; (i) termination of employment for cause as
defined in the optionee's Employment Agreement or (ii) in the absence of an
Employment Agreement for the optionee, termination of employment by reason of
the optionee's commission of a felony, fraud or willful misconduct which has
resulted, or is likely to result, in substantial and material damage to the
Corporation or a Subsidiary, all as the Board or the Stock Option Committee in
its sole discretion may determine.
(d) If an optionee's employment shall terminate for any reason other than
death, disability, retirement or otherwise, all right to exercise his Option
shall terminate at the date of such termination of employment absent specific
provisions in the optionee's Option Agreement.
15. Corporate Events. In the event of the proposed dissolution or
liquidation of the Corporation, a proposed sale of all or substantially all of
the assets of the Corporation, a merger or tender for the Corporation's shares
of Common Stock the Board of Directors may declare that each Option granted
under this Plan shall terminate as of a date to be fixed by the Board of
Directors; provided that not less than thirty (30) days written notice of the
date so fixed shall be given to each Eligible Person holding an Option, and each
such Eligible Person shall have the right, during the period of thirty (30) days
preceding such termination, to exercise his Option as to all or any part of the
shares of Stock covered thereby, including shares of Stock as to which such
Option would not otherwise be exercisable. Nothing set forth herein shall extend
the term set for purchasing the shares of Stock set forth in the Option.
16. No Guarantee of Employment. Nothing in this Plan or in any writing
granting an Option will confer upon any Eligible Person the right to continue in
the employ of the Eligible Person's employer, or will interfere with or restrict
in any way the right of the Eligible Person's employer to discharge such
Eligible Person at any time for any reason whatsoever, with or without cause.
17. Nontransferability. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the optionee, an Option shall be exercisable only by him.
18. No Rights as Stockholder. No optionee shall have any rights as a
stockholder with respect to any shares subject to his Option prior to the date
of issuance to him of a certificate or certificates for such shares.
19. Amendment and Discontinuance of Plan. The Corporation's Board of
Directors may amend, suspend or discontinue this Plan at any time. However, no
such action may prejudice the
<PAGE> 8
rights of any Eligible Person who has prior thereto been granted Options under
this Plan. Further, no amendment to this Plan which has the effect of (i)
increasing the aggregate number of shares of Stock subject to this Plan (except
for adjustments pursuant to Paragraph 3 herein), or (ii) changing the definition
of Eligible Person under this Plan, may be effective unless and until approval
of the stockholders of the Corporation is obtained in the same manner as
approval of this Plan is required. The Corporation's Board of Directors is
authorized to seek the approval of the Corporation's stockholders for any other
changes it proposes to make to this Plan which require such approval, however,
the Board of Directors may modify the Plan, as necessary, to effectuate the
intent of the Plan as a result of any changes in the tax, accounting or
securities laws treatment of Eligible Persons and the Plan, subject to the
provisions set forth in this Paragraph 19, and Paragraphs 20 and 21.
20. Compliance with Rule 16b-3. This Plan is intended to comply in all
respects with Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), with respect to participants who are subject to Section 16 of
the Exchange Act, and any provision(s) herein that is/are contrary to Rule 16b-3
shall be deemed null and void to the extent appropriate by either the Stock
Option Committee or the Corporation's Board of Directors.
21. Compliance with Code. The aspects of this Plan on ISOs is intended to
comply in every respect with Section 422 of the Code and the regulations
promulgated thereunder. In the event any future statute or regulation shall
modify the existing statute, the aspects of this Plan on ISOs shall be deemed to
incorporate by reference such modification. Any stock option agreement relating
to any Option granted pursuant to this Plan outstanding and unexercised at the
time any modifying statute or regulation becomes effective shall also be deemed
to incorporate by reference such modification and no notice of such modification
need be given to optionee.
If any provision of the aspects of this Plan on ISOs is determined to
disqualify the shares purchasable pursuant to the Options granted under this
Plan from the special tax treatment provided by Code Section 422, such provision
shall be deemed null and void and to incorporate by reference the modification
required to qualify the shares for said tax treatment.
22. Compliance With Other Laws and Regulations. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Corporation to sell
and deliver Stock under such options, shall be subject to all applicable federal
and state laws, rules, and regulations and to such approvals by any government
or regulatory agency as may be required. The Corporation shall not be required
to issue or deliver any certificates for shares of Stock prior to (a) the
listing of such shares on any stock exchange or over-the-counter market on which
the Stock may then be listed and (b) the completion of any registration or
qualification of such shares under any federal or state law, or any ruling or
regulation of any government body which the Corporation shall, in its sole
discretion, determine to be necessary or advisable. Moreover, no Option may be
exercised if its exercise or the receipt of Stock pursuant thereto would be
contrary to applicable laws.
<PAGE> 9
23. Disposition of Shares. In the event any share of Stock acquired by an
exercise of an Option granted under the Plan shall be transferable other than by
will or by the laws of descent and distribution within two years of the date
such Option was granted or within one year after the transfer of such Stock
pursuant to such exercise, the optionee shall give prompt written notice thereof
to the Corporation or the Stock Option Committee.
24. Name. The Plan shall be known as the "MigraTEC, Inc., 1999 Stock Option
Plan."
25. Notices. Any notice hereunder shall be in writing and sent by certified
mail, return receipt requested or by facsimile transmission (with electronic or
written confirmation of receipt) and when addressed to the Corporation shall be
sent to it at its office, 12801 Stemmons Freeway # 710, Farmers Branch, Texas
75234, and when addressed to the Committee shall be sent to it at 12801 Stemmons
Freeway # 710, Farmers Branch, Texas 75234, subject to the right of either party
to designate at any time hereafter in writing some other address, facsimile
number or person to whose attention such notice shall be sent.
26. Headings. The headings preceding the text of Sections and subparagraphs
hereof are inserted solely for convenience of reference, and shall not
constitute a part of this Plan nor shall they affect its meaning, construction
or effect.
27. Effective Date. This Plan, the MigraTEC, Inc., 1999 Stock Option Plan,
was adopted by the Board of Directors of the Corporation on March 1, 1999. The
effective date of the Plan shall be the same date.
Dated as of March 8, 1999.
MIGRATEC, INC.
By: /s/ W. CURTIS OVERSTREET
------------------------------
Name: W. Curtis Overstreet
Its: President
<PAGE> 1
EXHIBIT (5)
Opinion of Atlas, Pearlman, Trop & Borkson, P.A.,
relating to the issuance of shares of Common Stock pursuant to the
MigraTEC, Inc., 1999 Stock Option Plan
and
Work for Hire Agreement
<PAGE> 2
EXHIBIT (5)
March 12, 1999
MigraTEC, Inc.
12801 North Stemmons Freeway, Suite 710
Farmers Branch, Texas 75234
RE: REGISTRATION STATEMENT ON FORM S-8; MIGRATEC, INC.,
1999 STOCK OPTION PLAN AND WORK FOR HIRE AGREEMENT
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the Securities and
Exchange Commission with respect to the registration by MigraTEC, Inc. (the
"Company"), and the resale of an aggregate of 2,200,000 shares of Common Stock,
no par value per share, of the Company (the "Shares"). Of the Shares, 2,000,000
may be sold pursuant to the above Registration Statement and the Company's 1999
Stock Option Plan (the "Plan"). The remaining 200,000 Shares are issuable to
consultants of the Company upon the exercise of options granted to the
consultants in consideration for services performed by the consultants to the
Company pursuant to a Work For Hire Agreement dated October 5, 1998, between the
Company and Jeff Clignett and Duane A. Barnes (the "Agreement").
In our capacity as counsel to the Company, we have examined the original,
certified, conformed, photostat or other copies of the Company's Articles of
Incorporation, By-Laws, the Plan, the Agreement and various other agreements and
corporate minutes provided to us by the Company and such other documents and
instruments as we deemed necessary. In all such examinations, we have assumed
the genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain corporate records and
documents of the Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the Company, and we
express no opinion thereon.
Based upon and in reliance of the foregoing, we are of the opinion that the
Shares to be issued upon exercise of the options granted pursuant to the Plan
and the options granted pursuant to the Agreement, when issued in accordance
with the terms thereof, will be validly issued, fully paid and nonassessable.
We hereby consent to the use of this opinion in the Registration Statement on
Form S-8 to be filed with the Securities and Exchange Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
/s/ ATLAS, PEARLMAN, TROP & BORKSON, P.A.
- --------------------------------------------
JMS/sf
<PAGE> 1
EXHIBIT (10)
Work for Hire Agreement
between the Company, Jeff Clignett and Duane A. Barnes
dated October 5, 1998
<PAGE> 2
EXHIBIT (10)
WORK FOR HIRE AGREEMENT
This Agreement is made effective as of October 5, 1998, between MigraTEC, Inc.,
located at 12801 Stemmons Freeway, Suite 710, Dallas, Texas 75234 (hereinafter
"MigraTEC") and Jeff Clignett located at 8650 Diceman Drive, Dallas, Texas 75218
and Duane A. Barnes located at 9125 Sante Fe Trail, Celina, Texas 75009
(hereinafter collectively referred to as "Contractors").
1. GENERAL. Subject to this Agreement, MigraTEC hereby hires Contractors, and
Contractors hereby agrees, to provide the services to MigraTEC as described in
the Statement of Work attached hereto as Exhibit A and referred to under Section
4 (hereinafter collectively referred to as the "Services").
2. INDEPENDENT CONTRACTOR. Contractors will perform the Services as an
independent contractor of MigraTEC and this Agreement will not be construed to
create a partnership, joint venture or employment relationship between
Contractors and MigraTEC. Contractors will not represent itself to be an
employee or agent of MigraTEC and will not enter into any agreement on behalf of
MigraTEC.
3. TERM. This Agreement will become effective, as of the date set forth above,
upon its execution by Contractors and MigraTEC and will continue until the
Services are completed unless earlier terminated pursuant to Section 9
hereinafter.
4. SERVICES. Contractors will use their reasonable commercial efforts to perform
all Services in a professional and workmanlike manner satisfactory to MigraTEC,
as a work made for hire, and in accordance with the applicable Statement of Work
attached as Exhibit A. Unless otherwise agreed by Contractors, MigraTEC will
provide all equipment, work space, supplies and other items necessary or
appropriate to perform the Services. Contractors may perform the Services at
MigraTEC's premises or such other premises that MigraTEC and Contractors may
deem appropriate. MigraTEC will permit Contractors to have reasonable access to
MigraTEC's premises, personnel, computer and telephone equipment while
performing any of the Services at MigraTEC's premises.
5. PAYMENT FOR SERVICES. MigraTEC will pay Contractors fees for Services
rendered hereunder in accordance with Exhibit B.
6. REIMBURSABLE EXPENSES. MigraTEC will reimburse Contractors for the necessary
and reasonable out-of-pocket expenses that Contractors may incur in performing
the Services ("Reimbursable Expenses") provided such Reimbursable Expenses have
been approved in advance by MigraTEC. Contractors will furnish MigraTEC with the
appropriate receipts for all Reimbursable Expenses together with invoices for
Services submitted to MigraTEC and such Reimbursable Expenses will be paid by
MigraTEC within thirty (30) days of receipt.
<PAGE> 3
7. OWNERSHIP RIGHTS. a. Deliverables. Contractors agree that upon completion of
the Services, all data, information and other material acquired or compiled by
Contractors in respect to the Services, including source code, object code and
technical documentation, hereinafter collectively referred to as the "Work
Product", shall be delivered to MigraTEC. Contractors shall not retain any
copies of any items included in Work Product and shall not be entitled to
prepare derivative works utilizing any items included in Work Product.
b. Ownership. Full and exclusive rights and ownership in all Work
Product and in any and all related patent rights, trademarks, copyrights, trade
secrets, and any other proprietary rights which Contractors possess or may be
entitled to shall vest in and is hereby assigned to MigraTEC as a work made for
hire. Contractors shall retain no right, ownership or title in the Work Product
or in any related patent rights, trademarks, copyrights, trade secrets, or any
other proprietary rights. The parties hereto agree that all Work Product and
rights thereto are being sold in their entirety to MigraTEC for whatever use it
desires, and nothing contained herein shall be deemed to construe a mere license
to MigraTEC.
c. Cooperation by Contractors. Should MigraTEC or any of its agents or
representatives seek to obtain letters patent, trademarks or copyrights in any
country of the world on all or part of the Work Product, Contractors agree to
cooperate fully without compensation in providing information, completing forms,
performing actions and obtaining the necessary signatures or assignments
required to obtain such letters patent, trademarks or copyrights. In the event
MigraTEC shall be unable for any reason to obtain Contractors' signatures on any
document necessary for any purpose set forth in the foregoing sentence,
Contractors hereby irrevocably designate and appoint each of MigraTEC and its
duly authorized officers and agents as Contractors' agent and Contractors'
attorney-in-fact to act for and in Contractors' behalf and stead to execute and
file any such document and to do all other lawfully permitted acts to further
any such purpose with the same force and effect as if executed and delivered by
Contractors.
8. WARRANTY. Contractors represents and warrants that Contractors will perform
the Services in a good workmanlike and professional manner in accordance with
the description set forth in the Statement of Work attached as Exhibit A. ALL
OTHER WARRANTIES OR CONDITIONS, WHETHER EXPRESS OR IMPLIED (INCLUDING, BUT NOT
LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSE), ARE HEREBY DISCLAIMED.
9. EXTENSION AND TERMINATION. a. Extension. The parties may extend the term of
this Agreement by mutual written agreement. MigraTEC shall use best efforts to
give Contractors at least 30 days notice if extension is contemplated by
MigraTEC.
b. Termination for Cause. Either party may terminate this Agreement
immediately upon notice to the other party, and without prejudice to any other
remedies, if (i) the other party breaches any of its obligations hereunder and
fails to remedy such breach to the notifying party's satisfaction within fifteen
(15) days after it demands such cure or (ii) the other party becomes insolvent
or bankrupt, assigns all or a substantial part of its business or assets for the
benefit of
<PAGE> 4
creditors, permits the appointment of a receiver for its business or assets,
becomes subject to any legal proceeding relating to insolvency, reorganization
or the protection of creditors' rights or otherwise ceases to conduct business
in the normal course.
10. CONSEQUENCES OF EXPIRATION OR TERMINATION. Upon the expiration or
termination of this Agreement for any reason, MigraTEC will promptly pay
Contractors all fees and Reimbursable Expenses that may be due and outstanding
related to the Services that Contractors has performed, and Contractors will
deliver to MigraTEC all notebooks, documentation and all other items belonging
to MigraTEC or containing the work product owned by MigraTEC resulting from
Contractors' work under this Agreement.
11. NON-SOLICITATION. Neither party shall solicit or employ, directly or
indirectly, as an employee or independent contractor, the personnel of the other
party for a period of 12 months after termination.
12. NO CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE
TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR
INCIDENTAL DAMAGES, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF THE
OTHER PARTY (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF DATA, GOODWILL,
PROFITS, USE OF MONEY, INTERRUPTION IN USE OR AVAILABILITY OF DATA, STOPPAGE OF
OTHER WORK OR IMPLEMENTATION OF OTHER ASSETS), ARISING OUT OF BREACH OR FAILURE
OF EXPRESS OR IMPLIED WARRANTY OR CONDITION, BREACH OF CONTRACT,
MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE.
13. NOTICES. Any notice or approval required or permitted under this Agreement
will be given in writing and sent by certified mail, return receipt requested,
postage prepaid, to the address specified below or to any other address that may
be later designated in writing by prior notice. Any notice sent pursuant hereto
will be deemed to have been received 3 days after the date of its posting.
If to MigraTEC: If to Contractors:
MigraTEC, Inc. Jeff Clignett
12801 Stemmons Freeway 8650 Diceman Drive
Suite 710 Dallas, Texas 75218 and
Dallas, Texas 75234 Duane A. Barnes
Attn: Mark C. Myers 9125 Sante Fe Trail
Celina, Texas 75009
14. ASSIGNMENT. Contractors may not assign or otherwise transfer this Agreement
or any if its rights or obligations hereunder without MigraTEC's prior approval.
MigraTEC may not assign this Agreement unless pursuant to notice and in
connection with a sale, consolidation or other reorganization of MigraTEC's
business.
<PAGE> 5
15. WAIVERS. No delay or failure by any party hereto in exercising or enforcing
any of its rights or remedies hereunder and no course of dealing or performance
with respect thereto will constitute a waiver thereof. All rights and remedies
will be cumulative and not exclusive of any other rights or remedies.
16. AMENDMENTS. No amendment of modification of this Agreement will be effective
unless made in writing and signed by both parties hereto.
17. SEVERABILITY. This Agreement is governed by the laws of the state of Texas.
If any provision of this Agreement is held invalid, illegal or unenforceable in
any jurisdiction, for any reason, then, to the full extent permitted by law (a)
all other provisions hereof will remain in full force and effect in such
jurisdiction and will be liberally construed in order to carry out the intent of
the parties hereto as nearly as may be possible and (b) any court having
jurisdiction thereover will have the power to reform such provision to the
extent necessary for such provision to be enforceable under applicable law.
18. ENTIRE AGREEMENT. This Agreement and its Exhibits constitute the complete
and entire agreement between Contractors and MigraTEC with respect to the
subject matter hereof and all prior or contemporaneous oral or written
communications, understandings or agreements between Contractors and MigraTEC
with respect to such subject matter are hereby superseded in their entireties.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first set forth above.
MIGRATEC, INC. CONTRACTORS
By: /s/ MARK C. MYERS Signature: /s/ JEFF CLIGNETT
----------------------------- -----------------------------
Name: Mark C. Myers Name: Jeff Clignett
----------------------------- -----------------------------
Title: C.F.O. Signature: /s/ DUANE A. BARNES
----------------------------- -----------------------------
Name: Duane A. Barnes
-----------------------------
<PAGE> 6
EXHIBIT A
STATEMENT OF WORK
I. DESCRIPTION OF SERVICES/WORK PRODUCT: Development and delivery of
computer source code, in the form of a Microsoft Visual C++ 5.x
Project, which can be compiled and built into a running application
program herein referred to as "MTIDev". This program will implement a
functional Microsoft Visual C++ Integrated Development
Environment-style User Interface framework which contains, or
interfaces to, MigraTEC 2000 components, as specified in VI, below. The
source code will be written in the C++ language, will utilize Microsoft
Foundation Class Library object classes where possible, and will be
designed and implemented to adhere to the "object-oriented" programming
model.
It is understood that certain third-party components of MTIDev, which
are integral to the proper functioning of MTIDev, and are specified as
"Stingray Components" in VI below, will not be developed under this
agreement but will, nevertheless, interface to MTIDev in order to
provide proper functionality. MigraTEC is responsible for obtaining the
rights to these third-party components.
II. ESTIMATED START DATE: OCTOBER 5, 1998
III. ESTIMATED LENGTH OF PROJECT: FIVE WEEKS
IV. ADDITIONAL SPECIFICATIONS:
MTIDev will interface to the current versions of the following MigraTEC
2000 components:
[a] Inventory "backend" component;
[b] Parser component;
[c] Branch bank component;
[d] Remediator component;
[e] Databases which support [a] through [d].
MTIDev will utilize the following third-party "Stingray components":
[a] file editor component implemented by Objective Edit product;
[b] tree view, tabbed window, "file open" dialog box, and listbox
components implemented by Object Toolkit Basic product.
<PAGE> 7
MTIDev source code will be organized into the following files:
[a] stdafx.cpp
[b] childfrm.cpp
[c] mainfrm.cpp
[d] MTIDev.cpp
[e] MTIDevDoc.cpp
[f] MTIDevView.cpp
[g] fileview.cpp
[h] hnodecomponent.cpp
[i] hnodefile.cpp
[j] hnodeheader.cpp
[k] hnodeproject.cpp
[l] newprojectdlg.cpp
[m] configurationdlg.cpp
[n] outbar.cpp
[o] prjbar.cpp
[p] propertiesdlg.cpp
[q] splash.cpp
[r] header files required by the above;
[s] resource files required by the above;
[t] other project files required by the above;
[u] database recordeset interface files designated xxxRS.cpp.
<PAGE> 8
EXHIBIT B
PAYMENT FOR SERVICES
Each of Contractors will be granted a two (2) year option to purchase 100,000
shares of common stock of MigraTEC at a price of $0.12 per share (i.e., a
100,000 share option granted to Jeff Clignett and a 100,000 share option to
Duane A. Barnes). Such options shall be exercisable for a two (2) year period at
any time after the date of acceptance of the Services by MigraTEC as being
complete and delivery of all items pursuant to the Work for Hire Agreement. Such
acceptance and delivery shall be evidenced by a certificate of acceptance
prepared by MigraTEC and delivered to Contractors.
<PAGE> 9
CERTIFICATE OF ACCEPTANCE
Date: November 19, 1998
This document certifies that MigraTEC, Inc., has received the Services and/or
Work Product described in Exhibit A to the Work for Hire Agreement, dated
October 5, 1998, by and between MigraTEC, Inc., Jeff Clignett and Duane A.
Barnes, a copy of such Exhibit A being attached hereto. This document certifies
the acceptance by MigraTEC, Inc., of the Services and/or Work Product as being
complete and in compliance with the requirements of such Exhibit A.
By: /s/ RICK JOHNSON
-----------------------------
Rick Johnson
Date: November 19, 1998
--------------------------
Title: Chief Operating Officer
--------------------------
<PAGE> 1
EXHIBIT (24.1)
Consent of Atlas, Pearlman, Trop & Borkson, P.A.,
included in the opinion filed as exhibit (5) hereto
<PAGE> 1
EXHIBIT (24.2)
Consent of King Griffin & Adamson P.C.
<PAGE> 2
EXHIBIT (24.2)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
MigraTEC, Inc., on Form S-8 of our report dated April 1, 1998, on our audits of
the consolidated financial statements of MigraTEC, Inc., and Subsidiary as of
December 31, 1997 and 1996, and for the years ended December 31, 1997 and 1996,
which is incorporated by reference in MigraTEC, Inc.'s, Annual Report on Form
10-KSB for the year ended December 31, 1997.
KING GRIFFIN & ADAMSON P.C.
Dallas, Texas
March 12, 1999
