<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CITYSCAPE FINANCIAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
565 TAXTER ROAD
ELMSFORD, NEW YORK 10523-5200
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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DELAWARE 11-2994671
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
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CITYSCAPE FINANCIAL CORP.
1997 STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
------------------------
JONAH L. GOLDSTEIN
GENERAL COUNSEL
565 TAXTER ROAD
ELMSFORD, NEW YORK 10523-5200
(914) 592-6677
(NAME, ADDRESS, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common Stock, $0.01 par
value....................... 1,500,000 shares $10.59 $15,885,000 $4,814
=================================================================================================
</TABLE>
(1) Pursuant to Rule 416, there is also being registered such number of
additional shares of Common Stock which may become available for issuance
pursuant to the foregoing plan in the event of certain changes in
outstanding shares, including reorganizations, recapitalizations, stock
splits, stock dividends and reverse stock splits.
(2) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(h) and based on the average of the high and low prices of the
Common Stock of Cityscape Financial Corp. as reported on September 18, 1997
on the Nasdaq National Market.
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INTRODUCTION
This Registration Statement on Form S-8 is filed by Cityscape Financial
Corp., a Delaware corporation (the "Company"), relating to (a) 1,500,000 shares
of the Company's Common Stock, $0.01 par value per share (the "Common Stock"),
issuable under the Company's 1997 Stock Option Plan (the "Plan"), (b) additional
shares of Common Stock that become available under the Plan in connection with
certain changes in the number of outstanding shares of Common stock because of
such things as reorganizations, recapitalizations, stock splits, stock dividends
and reverse stock splits and (c) any other securities with respect to which the
outstanding shares of Common Stock are converted or exchanged (collectively, the
"Shares").
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
- ---------------
* Information required by Part I of Form S-8 to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended (the "Securities
Act"), and the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which previously have been filed by the Company
with the Securities and Exchange Commission (the "Commission"), are incorporated
herein by reference and made a part hereof:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997 and June 30, 1997;
(c) the Company's Current Reports on Form 8-K filed on April 11, 1997,
April 30, 1997, May 20, 1997, July 23, 1997, August 5, 1997 and September
17, 1997; and
(d) the description of the Common Stock contained in the Company's
effective Registration Statement on Form 8-A dated December 1, 1995,
including any amendment or report filed for the purpose of updating such
description.
All reports and other documents filed by the Company pursuant to Sections
13(a), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to the date of this Registration Statement and prior
to the filing of a post-effective amendment hereto that indicates that all
securities offered hereunder have been sold or that deregisters all securities
then remaining unsold shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing of such documents.
For purposes of this Registration Statement, any statement contained in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated herein by reference modifies or supersedes such statement in
such document. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the Delaware General Corporation Law (the "GCL") provides
that a Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no cause to believe his
or her conduct was unlawful.
Section 145(b) of the GCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if he or she acted under similar standards,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his or her duty to the
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.
Section 145 of GCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsection (a) and (b) or in the defense of any
claim, issue or matter therein, such officer or director shall be indemnified
against expenses actually and reasonably incurred by him or her in connection
therewith; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
such officer or director and incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liabilities under Section
145 of the GCL.
As permitted by Section 102(b)(7) of the GCL, the Company's Certificate of
Incorporation provides that a director shall not be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director.
However, such provision does not eliminate or limit the liability of a director
for acts or omissions not in good faith or for breaching his or her duty of
loyalty, engaging in intentional misconduct or knowingly violating a law, paying
a dividend or approving a stock repurchase which was illegal, or obtaining an
improper personal benefit. A provision of this type has no effect on the
availability of equitable remedies, such as injunction or rescission, for breach
of fiduciary duty.
The Company's Bylaws require the Company to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Company) by reason
of the fact that he is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts
3
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paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
In addition, the Company's Bylaws require the Company to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Company to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, except that no indemnification may
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the Company unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Any indemnification (unless ordered by a court) made by the Company may be
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct as set forth
above. Such determination must be made (i) by the Board by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable,
a quorum of disinterested directors so directs, by independent legal counsel in
a written opinion, or (iii) by the stockholders.
To the extent that a director, officer, employee or agent of the Company
has been successful on the merits or otherwise in defense of any covered action,
suit or proceeding, or in defense of any covered claim, issue or matter therein,
he will be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the Company in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
in the specific case upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the Company as authorized in
this Article. Such expenses incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board deems appropriate.
The Company presently maintains policies of directors' and officers'
liability insurance in the amount of $15.0 million.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
4
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ITEM 8. EXHIBITS.
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4.1 Certificate of Incorporation of the Company, as amended, incorporated by reference to
Exhibit 3.1 of the Company's Registration Statement on Form S-4 (No. 333-30115)
4.2 Bylaws of the Company, as amended, incorporated herein by reference to Exhibit 3.2 of
the Company's Registration Statement on Form S-1 (No. 33-98074)
4.3 The Company's 1997 Stock Option Plan, as amended
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the securities being
registered
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of KPMG
23.3 Consent of BDO Stoy Hayward
23.4 Consent of BDO Stoy Hayward
23.5 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1 hereto)
24.1 Power of Attorney (contained on signature page hereto)
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or 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
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deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by a final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Company 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 Elmsford, State of New York, on September 19, 1997.
CITYSCAPE FINANCIAL CORP.
By: /s/ ROBERT C. PATENT
------------------------------------
Robert C. Patent
Executive Vice President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Robert
C. Patent and Jonah L. Goldstein his true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him and in his name, place and stead, at any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, each acting alone, with full powers and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming that all said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of September 19, 1997.
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/s/ ROBERT GROSSER /s/ ROBERT C. PATENT
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Robert Grosser Robert C. Patent
Director and Director
Chief Executive Officer
(Principal Executive Officer)
/s/ ASHER FENSTERHEIM /s/ JONAH L. GOLDSTEIN
- -------------------------------------------- --------------------------------------------
Asher Fensterheim Jonah L. Goldstein
Director Director
/s/ STEVEN M. MILLER /s/ TIM S. LEDWICK
- -------------------------------------------- --------------------------------------------
Steven M. Miller Tim S. Ledwick
Director Chief Financial Officer
(Principal financial officer and
principal accounting officer)
/s/ HOLLIS W. RADEMACHER /s/ ARTHUR P. GOULD
- -------------------------------------------- --------------------------------------------
Hollis W. Rademacher Arthur P. Gould
Director Director
/s/ DAVID A. STEENE
- --------------------------------------------
David A. Steene
Director
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INDEX TO EXHIBITS
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SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
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4.1 Certificate of Incorporation of the Company, as amended, incorporated by
reference to Exhibit 3.1 of the Company's Registration Statement on Form
S-4 (No. 333-30155).....................................................
4.2 Bylaws of the Company, as amended, incorporated herein by reference to
Exhibit 3.2 of the Company's Registration Statement on Form S-1 (No.
33-98074)...............................................................
4.3 The Company's 1997 Stock Option Plan, as amended........................
5.1 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the
securities being registered.............................................
23.1 Consent of KPMG Peat Marwick LLP........................................
23.2 Consent of KPMG.........................................................
23.3 Consent of BDO Stoy Hayward.............................................
23.4 Consent of BDO Stoy Hayward.............................................
23.5 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1
hereto).................................................................
24.1 Power of Attorney (contained on signature page hereto)..................
</TABLE>
<PAGE> 1
EXHIBIT 4.3
CITYSCAPE FINANCIAL CORP.
1997 STOCK OPTION PLAN
(AS AMENDED)
ARTICLE I
PURPOSE OF PLAN
The Company has adopted this Plan to promote the interests of the Company
and its stockholders by using investment interests in the Company to attract,
retain and motivate its management and other persons, to encourage and reward
their contributions to the performance of the Company and to align their
interests with the interests of the Company's stockholders. Capitalized terms
not otherwise defined herein shall have the meanings ascribed to them in Article
VIII.
ARTICLE II
EFFECTIVE DATE AND TERM OF PLAN
2.1 Term of Plan. This Plan became effective as of the Effective Date and
shall continue in effect until the Expiration Date, at which time this Plan
shall automatically terminate.
2.2 Effect on Stock Options. Stock Options may be granted during the Plan
Term, but no Stock Options may be granted after the Plan Term. Notwithstanding
the foregoing, each Stock Option properly granted under this Plan during the
Plan Term shall remain in effect after termination of this Plan until such Stock
Option has been exercised, terminated or expired in accordance with its terms
and the terms of this Plan.
2.3 Stockholder Approval. This Plan shall be approved by the Company's
stockholders within 12 months after the Effective Date. The effectiveness of any
Stock Options granted prior to such stockholder approval shall be subject to
such stockholder approval.
ARTICLE III
SHARES SUBJECT TO PLAN
3.1 Number of Shares. The maximum number of shares of Common Stock that
may be issued pursuant to Stock Options granted under this Plan shall be
1,500,000, subject to adjustment as set forth in Section 3.4.
3.2 Source of Shares. The Common Stock to be issued under this Plan will
be made available, at the discretion of the Board, either from authorized but
unissued shares of Common Stock or from previously issued shares of Common Stock
reacquired by the Company, including without limitation shares purchased on the
open market.
3.3 Availability of Unused Shares. Shares of Common Stock subject to
unexercised portions of any Stock Option granted under this Plan that expire,
terminate or are canceled, and shares of Common Stock issued pursuant to Stock
Options under this Plan that are reacquired by the Company pursuant to the terms
of the Stock Options under which such shares were issued, will again become
available for the grant of further Stock Options under this Plan.
3.4 Adjustment Provisions.
(a) If (i) the outstanding shares of Common Stock of the Company are
increased, decreased or exchanged for a different number or kind of shares or
other securities, or if additional shares or new or different shares or other
securities are distributed in respect of such shares of Common Stock (or any
stock or securities received with respect to such Common Stock), through merger,
consolidation, sale or exchange of
<PAGE> 2
all or substantially all of the properties of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution with respect to such shares of Common
Stock (or any stock or securities received with respect to such Common Stock),
or (ii) the value of the outstanding shares of Common Stock of the Company is
reduced by reason of an extraordinary cash dividend, an appropriate and
proportionate adjustment may be made in (1) the maximum number and kind of
shares subject to this Plan as provided in Section 3.1, (2) the number and kind
of shares or other securities subject to then outstanding Stock Options and/or
(3) the price for each share or other unit of any other securities subject to
then outstanding Stock Options.
(b) No fractional interests will be issued under this Plan resulting from
any adjustments.
(c) To the extent any adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Administering Body, whose
determination in that respect shall be final, binding and conclusive.
(d) The grant of Stock Options pursuant to this Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.
(e) No adjustment to the terms of an Incentive Stock Option shall be made
unless such adjustment either (i) would not cause such Option to lose its status
as an Incentive Stock Option or (ii) is agreed to in writing by the
Administering Body and the Recipient.
3.5 Reservation of Shares. The Company will at all times reserve and keep
available such number of shares of Common Stock as shall equal at least the
number of shares of Common Stock subject to then outstanding Stock Options
issuable in shares of Common Stock under this Plan.
ARTICLE IV
ADMINISTRATION OF PLAN
4.1 Administering Body.
(a) Subject to the provisions of Section 4.1(b)(ii), this Plan shall be
administered by the Board or by the Stock Option Plan Committee of the Board
appointed pursuant to Section 4.1(b).
(b) (i) The Board in its sole discretion may from time to time appoint a
Stock Option Plan Committee of not less than two Board members to administer
this Plan and, subject to applicable law, to exercise all of the powers,
authority and discretion of the Board under this Plan. The Board may from time
to time increase or decrease (but not below two) the number of members of the
Stock Option Plan Committee, remove from membership on the Stock Option Plan
Committee all or any portion of its members, and/or appoint such person or
persons as it desires to fill any vacancy existing on the Stock Option Plan
Committee, whether caused by removal, resignation or otherwise. The Board may
disband the Stock Option Plan Committee at any time and revest in the Board the
administration of this Plan.
(ii) Notwithstanding the foregoing provisions of this Section 4.1(b) to the
contrary, as long as the Company is an Exchange Act Registered Company, (1) the
Board shall appoint the Stock Option Plan Committee, (2) this Plan shall be
administered by the Stock Option Plan Committee and (3) each member of the Stock
Option Plan Committee shall be a Non-employee Director, and, in addition, if
Stock Options are to be made to persons subject to Section 162(m) of the IRC and
such Stock Options are intended to constitute Performance-Based Compensation,
then each member of the Stock Option Plan Committee shall, in addition to being
a Non-employee Director, be an Outside Director.
(iii) The Stock Option Plan Committee shall report to the Board the names
of Eligible Persons granted Stock Options, the number of shares of Common Stock
covered by each Stock Option and the terms and conditions of each such Stock
Option.
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<PAGE> 3
4.2 Authority of Administering Body.
(a) Subject to the express provisions of this Plan, the Administering Body
shall have the power to interpret and construe this Plan and any Stock Option
Documents or other documents defining the rights and obligations of the Company
and Optionees hereunder and thereunder, to determine all questions arising
hereunder and thereunder, to adopt and amend such rules and regulations for the
administration hereof and thereof as it may deem desirable, and otherwise to
carry out the terms of this Plan and such Stock Option Documents and other
documents. The interpretation and construction by the Administering Body of any
provisions of this Plan or of any Stock Option shall be conclusive and binding.
Any action taken by, or inaction of, the Administering Body relating to this
Plan or any Stock Options shall be within the absolute discretion of the
Administering Body and shall be conclusive and binding upon all persons. Subject
only to compliance with the express provisions hereof, the Administering Body
may act in its absolute discretion in matters related to this Plan and any and
all Stock Options.
(b) Subject to the express provisions of this Plan, the Administering Body
may from time to time in its discretion select the Eligible Persons to whom, and
the time or times at which, Stock Options shall be granted, the nature of each
Stock Option, the number of shares of Common Stock that make up or underlie each
Stock Option, the period for the exercise of each Stock Option, and such other
terms and conditions applicable to each individual Stock Option as the
Administering Body shall determine. The Administering Body may grant at any time
new Stock Options to an Eligible Person who has previously received Stock
Options whether such prior Stock Options are still outstanding, have previously
been exercised as a whole or in part, or are canceled in connection with the
issuance of new Stock Options. The Administering Body may grant Stock Options
singly, in combination or in tandem with other Stock Options, as it determines
in its discretion. Any and all terms and conditions of the Stock Options,
including exercise price, may be established by the Administering Body without
regard to existing Stock Options.
(c) Any action of the Administering Body with respect to the administration
of this Plan shall be taken pursuant to a majority vote of the authorized number
of members of the Administering Body or by the unanimous written consent of its
members; provided, however, that (i) if the Administering Body is the Stock
Option Plan Committee and consists of two members, then actions of the
Administering Body must be unanimous and (ii) if the Administering Body is the
Board, actions taken at a meeting of the Board shall be valid if approved by
directors constituting a majority of the required quorum for such meeting.
4.3 No Liability. No member of the Board or the Stock Option Plan
Committee or any designee thereof will be liable for any action or inaction with
respect to this Plan or any Stock Option or any transaction arising under this
Plan or any Stock Option, except in circumstances constituting bad faith of such
member.
4.4 Amendments.
(a) The Administering Body may, insofar as permitted by applicable law,
rule or regulation, from time to time suspend or discontinue this Plan or revise
or amend it in any respect whatsoever, and this Plan as so revised or amended
will govern all Stock Options hereunder, including those granted before such
revision or amendment; provided, however, that no such revision or amendment
shall alter, impair or diminish any rights or obligations under any Stock Option
previously granted under this Plan, without the written consent of the Optionee.
Without limiting the generality of the foregoing, the Administering Body is
authorized to amend this Plan to comply with or take advantage of amendments to
applicable laws, rules or regulations, including amendments to the Securities
Act, Exchange Act or the IRC or any rules or regulations promulgated thereunder.
No stockholder approval of any amendment or revision shall be required unless
(i) such approval is required by applicable law, rule or regulation or (ii) an
amendment or revision to this Plan would materially increase the number of
shares subject to this Plan (as adjusted under Section 3.4), materially modify
the requirements as to eligibility for participation in this Plan, extend the
final date upon which Stock Options may be granted under this Plan, or otherwise
materially increase the benefits accruing to Recipients in a manner not
specifically contemplated herein, or affect this Plan's compliance with Rule
16b-3 or applicable provisions of or regulations under the IRC, and stockholder
approval of the amendment or revision is required to comply with Rule 16b-3 or
applicable provisions of or rules under the IRC.
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(b) The Administering Body may, with the written consent of an Optionee,
make such modifications in the terms and conditions of a Stock Option as it
deems advisable. Without limiting the generality of the foregoing, the
Administering Body may, in its discretion with the written consent of Optionee,
at any time and from time to time after the grant of any Stock Option accelerate
or extend the vesting or exercise period of any Stock Option as a whole or in
part, and adjust or reduce the exercise price of Stock Options held by such
Optionee by cancellation of such Stock Options and granting of Stock Options at
lower or exercise prices or by modification, extension or renewal of such Stock
Options. In the case of Incentive Stock Options, Recipients acknowledge that
extensions of the exercise period may result in the loss of the favorable tax
treatment afforded incentive stock options under Section 422 of the IRC.
(c) Except as otherwise provided in this Plan or in the applicable Stock
Option Document, no amendment, revision, suspension or termination of this Plan
will, without the written consent of the Optionee, alter, terminate, impair or
adversely affect any right or obligation under any Stock Option previously
granted under this Plan.
4.5 Other Compensation Plans. The adoption of this Plan shall not affect
any other stock option, incentive or other compensation plans in effect for the
Company, and this Plan shall not preclude the Company from establishing any
other forms of incentive or other compensation for employees, directors,
advisors or consultants of the Company, whether or not approved by stockholders.
4.6 Plan Binding on Successors. This Plan shall be binding upon the
successors and assigns of the Company.
4.7 References to Successor Statutes, Regulations and Rules. Any
reference in this Plan to a particular statute, regulation or rule shall also
refer to any successor provision of such statute, regulation or rule.
4.8 Issuances for Compensation Purposes Only. This Plan constitutes an
"employee benefit plan" as defined in Rule 405 promulgated under the Securities
Act. Stock Options to eligible employees or directors shall be granted for any
lawful consideration, including compensation for services rendered, promissory
notes or otherwise. Stock Options to consultants and advisors shall be granted
only in exchange for bona fide services rendered by such consultants or advisors
and such services must not be in connection with the offer and sale of
securities in a capital-raising transaction.
4.9 Invalid Provisions. In the event that any provision of this Plan is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision were not contained herein.
4.10 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the internal laws of the State of New York, without giving
effect to the principles of the conflicts of laws thereof.
ARTICLE V
GENERAL AWARD PROVISIONS
5.1 Participation in the Plan.
(a) A person shall be eligible to receive grants of Stock Options under
this Plan if, at the time of the grant of the Stock Option, such person is an
Eligible Person.
(b) Incentive Stock Options may be granted only to Eligible Persons meeting
the employment requirements of Section 422 of the IRC.
(c) Notwithstanding anything to the contrary herein, the Administering Body
may, in order to fulfill the purposes of this Plan, modify grants of Stock
Options to Recipients who are foreign nationals or employed outside of the
United States to recognize differences in applicable law, tax policy or local
custom.
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5.2 Stock Option Documents.
(a) Each Stock Option granted under this Plan shall be evidenced by an
agreement duly executed on behalf of the Company and by the Recipient or, in the
Stock Option Plan Committee's discretion, a confirming memorandum issued by the
Company to the Recipient, setting forth such terms and conditions applicable to
the Stock Option as the Stock Option Plan Committee may in its discretion
determine. Stock Option Documents may but need not be identical and shall comply
with and be subject to the terms and conditions of this Plan, a copy of which
shall be provided to each Recipient and incorporated by reference into each
Stock Option Document. Any Stock Option Document may contain such other terms,
provisions and conditions not inconsistent with this Plan as may be determined
by the Stock Option Plan Committee.
(b) In case of any conflict between this Plan and any Stock Option
Document, this Plan shall control.
5.3 Exercise of Stock Options. No Stock Option shall be exercisable
except in respect of whole shares, and fractional share interests shall be
disregarded. Not less than 100 shares of Common Stock (or such other amount as
is set forth in the applicable Stock Option Documents) may be purchased at one
time and Stock Options must be exercised in multiples of 100 unless the number
purchased is the total number at the time available for purchase under the terms
of the Stock Option. A Stock Option shall be deemed to be exercised when the
Secretary or other designated official of the Company receives written notice of
such exercise from the Optionee, together with payment of the exercise price
made in accordance with Section 5.4 and any amounts required under Section 5.11.
Notwithstanding any other provision of this Plan, the Administering Body may
impose, by rule and/or in Stock Option Documents, such conditions upon the
exercise of Stock Options (including without limitation conditions limiting the
time of exercise to specified periods) as may be required to satisfy applicable
regulatory requirements, including without limitation Rule 16b-3 and Rule 10b-5
under the Exchange Act, and any amounts required under Section 5.12 or other
applicable section of or regulation under the IRC.
5.4 Payment For Stock Options.
(a) The exercise price or other payment for a Stock Option shall be payable
upon the exercise of a Stock Option pursuant to a Stock Option granted hereunder
by delivery of legal tender of the United States or payment of such other
consideration as the Administering Body may from time to time deem acceptable in
any particular instance.
(b) The Company may assist any person to whom Stock Options are granted
hereunder (including without limitation any officer or director of the Company)
in the payment of the exercise price or other amounts payable in connection with
the receipt or exercise of that Stock Option, by lending such amounts to such
person on such terms and at such rates of interest and upon such security (if
any) as shall be approved by the Administering Body.
(c) In the discretion of the Administering Body, Stock Options may be
exercised by capital stock of the Company delivered in transfer to the Company
by or on behalf of the person exercising the Stock Option and duly endorsed in
blank or accompanied by stock powers duly endorsed in blank, with signatures
guaranteed in accordance with the Exchange Act if required by the Administering
Body, or retained by the Company from the stock otherwise issuable upon exercise
or surrender of vested and/or exercisable Stock Options previously granted to
the Recipient and being exercised (if applicable) (in either case valued at Fair
Market Value as of the exercise date); or such other consideration as the
Administering Body may from time to time in the exercise of its discretion deem
acceptable in any particular instance; provided, however, that the Administering
Body may, in the exercise of its discretion, (i) allow exercise of Stock Options
in a broker-assisted or similar transaction in which the exercise price is not
received by the Company until promptly after exercise, and/or (ii) allow the
Company to loan the exercise price to the Optionee, if the exercise will be
followed by a prompt sale of some or all of the underlying shares and a portion
of the sale proceeds is dedicated to full payment of the exercise price and
amounts required pursuant to Section 5.11.
5.5 No Employment Rights. Nothing contained in this Plan (or in Stock
Option Documents or in any other documents related to this Plan or to Stock
Options granted hereunder) shall confer upon any Eligible Person or Recipient
any right to continue in the employ of the Company or any Affiliated Entity or
constitute any contract or agreement of employment or engagement, or interfere
in any way with the right of the
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Company or any Affiliated Entity to reduce such person's compensation or other
benefits or to terminate the employment or engagement of such Eligible Person or
Recipient, with or without cause. Except as expressly provided in this Plan or
in any statement evidencing the grant of Stock Options pursuant to this Plan,
the Company shall have the right to deal with each Recipient in the same manner
as if this Plan and any such statement evidencing the grant of Stock Options
pursuant to this Plan did not exist, including without limitation with respect
to all matters related to the hiring, discharge, compensation and conditions of
the employment or engagement of the Recipient. Any questions as to whether and
when there has been a termination of a Recipient's employment or engagement, the
reason (if any) for such termination, and/or the consequences thereof under the
terms of this Plan or any statement evidencing the grant of Stock Options
pursuant to this Plan shall be determined by the Administering Body and the
Administering Body's determination thereof shall be final and binding.
5.6 Restrictions Under Applicable Laws and Regulations.
(a) All Stock Options granted under this Plan shall be subject to the
requirement that, if at any time the Company shall determine, in its discretion,
that the listing, registration or qualification of the shares subject to Stock
Options granted under this Plan upon any securities exchange or under any
federal, state or foreign law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such Stock Options or the issuance, if any, or purchase of
shares in connection therewith, such Stock Options may not be exercised as a
whole or in part unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company. During the term of this Plan, the Company will
use its reasonable efforts to seek to obtain from the appropriate regulatory
agencies any requisite qualifications, consents, approvals or authorizations in
order to issue and sell such number of shares of its Common Stock as shall be
sufficient to satisfy the requirements of this Plan. The inability of the
Company to obtain from any such regulatory agency having jurisdiction thereof
the qualifications, consents, approvals or authorizations deemed by the Company
to be necessary for the lawful issuance and sale of any shares of its Common
Stock hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of such stock as to which such requisite authorization shall
not have been obtained.
(b) The Company shall be under no obligation to register or qualify the
issuance of Stock Options or underlying shares under the Securities Act or
applicable state securities laws. Unless the issuance of Stock Options and
underlying shares have been registered under the Securities Act and qualified or
registered under applicable state securities laws, the Company shall be under no
obligation to issue any Stock Options or underlying shares of Common Stock
covered by any Stock Options unless the Stock Options and underlying shares may
be issued pursuant to applicable exemptions from such registration or
qualification requirements. In connection with any such exempt issuance, the
Administering Body may require the Optionee to provide a written representation
and undertaking to the Company, satisfactory in form and scope to the Company
and upon which the Company may reasonably rely, that such Optionee is acquiring
such Stock Options and underlying shares for such Optionee's own account as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares of stock, and that such person will make no
transfer of the same except in compliance with any rules and regulations in
force at the time of such transfer under the Securities Act and other applicable
law, and that if shares of stock are issued without such registration, a legend
to this effect (together with any other legends deemed appropriate by the
Administering Body) may be endorsed upon the securities so issued. The Company
may also order its transfer agent to stop transfers of such shares. The
Administering Body may also require the Optionee to provide the Company such
information and other documents as the Administering Body may request in order
to satisfy the Administering Body as to the investment sophistication and
experience of the Optionee and as to any other conditions for compliance with
any such exemptions from registration or qualification.
5.7 Additional Conditions. Any Stock Option may also be subject to such
other provisions (whether or not applicable to any other Stock Option or
Optionee) as the Administering Body determines appropriate including without
limitation provisions to assist the Optionee in financing the purchase of Common
Stock through the exercise of Stock Options, provisions for the forfeiture of or
restrictions on resale or other disposition of shares of Common Stock acquired
under any form of benefit, provisions giving the Company the
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right to repurchase shares of Common Stock acquired under any form of benefit in
the event the Optionee elects to dispose of such shares, and provisions to
comply with federal and state securities laws and federal and state income tax
withholding requirements.
5.8 No Privileges of Stock Ownership. Except as otherwise set forth
herein, an Optionee shall have no rights as a stockholder with respect to any
shares issuable or issued in connection with the Stock Option until the date of
the receipt by the Company of all amounts payable in connection with exercise of
the Stock Option and performance by the Optionee of all obligations thereunder.
Status as an Eligible Person shall not be construed as a commitment that any
Stock Option will be granted under this Plan to an Eligible Person or to
Eligible Persons generally. No person shall have any right, title or interest in
any fund or in any specific asset (including shares of capital stock) of the
Company by reason of any Stock Option granted hereunder. Neither this Plan (or
any documents related hereto) nor any action taken pursuant hereto shall be
construed to create a trust of any kind or a fiduciary relationship between the
Company and any person. To the extent that any person acquires a right to
receive Stock Options hereunder, such right shall be no greater than the right
of any unsecured general creditor of the Company.
5.9 Nonassignability.
No Stock Option granted under this Plan shall be assignable or transferable
except (a) by will or by the laws of descent and distribution, or (b) subject to
the final sentence of this Section 5.9, upon dissolution of marriage pursuant to
a qualified domestic relations order or, in the discretion of the Administering
Body and under circumstances that would not adversely affect the interests of
the Company, pursuant to a nominal transfer that does not result in a change in
beneficial ownership; provided, however, that the Administering Body may in the
applicable Stock Option Document evidencing Stock Options granted hereunder or
at any time thereafter provide that Stock Options granted hereunder may be
transferred without consideration by the Recipient, subject to such rules as the
Administering Body may adopt to preserve the purposes of the Plan, to one or
more Permitted Transferees; provided further, that the Recipient gives the
Administering Body advance written notice describing the terms and conditions of
the proposed transfer and the Administering Body notifies the Recipient in
writing that such transfer would comply with the requirements of the Plan and
any applicable Stock Option Document. The terms of any Stock Option transferred
to Permitted Transferees in accordance with the immediately preceding sentence
shall apply to the Permitted Transferee, except that (a) Permitted Transferees
shall not be entitled to transfer any Stock Options, other than by will or the
laws of descent and distribution; and (b) Permitted Transferees shall not be
entitled to exercise any transferred Stock Options unless there shall be in
effect a registration statement on an appropriate form covering the shares of
Common Stock to be acquired pursuant to the exercise of such Stock Option if the
Administering Body determines that such a registration statement is necessary or
appropriate. During the lifetime of an Optionee, Stock Options shall be
exercisable only by the Optionee or such person's guardian or legal
representative.
Notwithstanding the foregoing, (a) no Stock Option owned by an Optionee
subject to Section 16 of the Exchange Act may be assigned or transferred in any
manner inconsistent with Rule 16b-3, and (b) Incentive Stock Options (or other
Stock Options subject to transfer restrictions under the IRC) may not be
assigned or transferred in violation of Section 422(b)(5) of the IRC (or any
comparable or successor provision) or the regulations thereunder, and nothing
herein is intended to allow such assignment or transfer.
5.10 Information to Optionees.
(a) The Administering Body in its sole discretion shall determine what, if
any, financial and other information shall be provided to Optionees and when
such financial and other information shall be provided after giving
consideration to applicable federal and state laws, rules and regulations,
including without limitation applicable federal and state securities laws, rules
and regulations.
(b) The furnishing of financial and other information that is confidential
to the Company shall be subject to the Optionee's agreement that the Optionee
shall maintain the confidentiality of such financial and other information,
shall not disclose such information to third parties, and shall not use the
information for any purpose other than evaluating an investment in the Company's
securities under this Plan. The Administering Body may impose other restrictions
on the access to and use of such confidential information and may require
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an Optionee to acknowledge the Optionee's obligations under this Section 5.10(b)
(which acknowledgment shall not be a condition to the Optionee's obligations
under this Section 5.10(b)).
5.11 Withholding Taxes. Whenever the granting, vesting or exercise of any
Stock Option granted under this Plan, or the transfer of any shares issued upon
exercise of any Stock Option, gives rise to tax or tax withholding liabilities
or obligations, the Administering Body shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to issuance of such shares.
The Administering Body may, in the exercise of its discretion, allow
satisfaction of tax withholding requirements by accepting delivery of stock of
the Company or by withholding a portion of the stock otherwise issuable in
connection with Stock Options.
5.12 Legends on Stock Options and Stock Certificates. Each Stock Option
Document and each certificate representing shares acquired upon or exercise of
Stock Options shall be endorsed with all legends, if any, required by applicable
federal and state securities and other laws to be placed on the Stock Option
Document and/or the certificate. The determination of which legends, if any,
shall be placed upon Stock Option Documents or the certificates shall be made by
the Administering Body in its sole discretion and such decision shall be final
and binding.
5.13 Effect of Termination of Employment on Stock Options.
(a) Termination for Just Cause. Subject to Section 5.13(c), and except as
otherwise provided in a written agreement between the Company and the Optionee
which may be entered into at any time before or after termination of employment
of the Recipient, in the event of a Just Cause Dismissal of a Recipient, all of
the Optionee's unexercised Stock Options, whether or not vested, shall expire
and become unexercisable as of the date of such Just Cause Dismissal.
(b) Termination Other than for Just Cause. Subject to Section 5.13(c) and
except as otherwise provided in a written agreement between the Company and the
Optionee, which may be entered into at any time before or after termination of
employment, in the event of a Recipient's termination of employment for:
(i) any reason other than for Just Cause Dismissal, death, Permanent
Disability or normal retirement, the Optionee's Stock Options, whether or
not vested, shall expire and become unexercisable as of the earlier of (A)
the date such Stock Options would expire in accordance with their terms had
the Recipient remained employed and (B) 30 days after the date of
employment termination.
(ii) death, Permanent Disability or normal retirement, the Optionee's
unexercised Stock Options shall, whether or not vested, expire and become
unexercisable as of the earlier of (A) the date such Stock Options would
expire in accordance with their terms had the Recipient remained employed
and (B) six months after the date of employment termination.
(c) Alteration of Vesting and Exercise Periods. Notwithstanding anything
to the contrary in Section 5.13(a) or Section 5.13(b), the Administering Body
may in its discretion designate shorter or longer periods to exercise Stock
Options following a Recipient's termination of employment; provided, however,
that any shorter periods determined by the Administering Body shall be effective
only if provided for in the instrument that evidences the grant to the Optionee
of such Stock Options or if such shorter period is agreed to in writing by the
Optionee. Notwithstanding anything to the contrary herein, Stock Options shall
be exercisable by a an Optionee following such Optionee's termination of
employment only to the extent that installments thereof had become exercisable
on or prior to the date of such termination; and provided, further, that the
Administering Body may, in its discretion, elect to accelerate the vesting of
all or any portion of any Stock Options that had not become exercisable on or
prior to the date of such termination.
(d) Leave of Absence. In the case of any employee on an approved leave of
absence, the Administering Body may make such provision respecting continuance
of Stock Options as the Administering Body in its discretion deems appropriate,
except that in no event shall a Stock Option be exercisable after the date such
Stock Option would expire in accordance with its terms had the Recipient
remained continuously employed.
5.14 Limits on Stock Options to Eligible Persons. Notwithstanding any
other provision of this Plan, in order for the compensation attributable to
Stock Options hereunder to qualify as Performance-Based
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Compensation, no one Eligible Person shall be granted any Stock Options with
respect to more than 500,000 shares of Common Stock in any one calendar year.
The limitation set forth in this Section 5.14 shall be subject to adjustment as
provided in Section 3.4 or under Article VII, but only to the extent such
adjustment would not affect the status of compensation attributable to Stock
Options hereunder as Performance-Based Compensation.
ARTICLE VI
STOCK OPTIONS
6.1 Nature of Stock Options. Stock Options may be Incentive Stock Options
or Non-qualified Stock Options.
6.2 Option Exercise Price. The exercise price for each Stock Option shall
be determined by the Administering Body as of the date such Stock Option is
granted. The exercise price shall be no less than the Fair Market Value of the
Common Stock subject to the Option. The Administering Body may, with the consent
of the Optionee and subject to compliance with statutory or administrative
requirements applicable to Incentive Stock Options, amend the terms of any Stock
Option to provide that the exercise price of the shares remaining subject to the
Stock Option shall be reestablished at a price not less than 100% of the Fair
Market Value of the Common Stock on the effective date of the amendment. No
modification of any other term or provision of any Stock Option that is amended
in accordance with the foregoing shall be required, although the Administering
Body may, in its discretion, make such further modifications of any such Stock
Option as are not inconsistent with this Plan.
6.3 Option Period and Vesting. Stock Options granted hereunder shall vest
and may be exercised as determined by the Administering Body, except that
exercise of such Stock Options after termination of the Recipient's employment
shall be subject to Section 5.13. Each Stock Option granted hereunder and all
rights or obligations thereunder shall expire on such date as shall be
determined by the Administering Body, but not later than 10 years after the date
the Stock Option is granted and shall be subject to earlier termination as
provided herein or in the Stock Option Document. The Administering Body may, in
its discretion at any time and from time to time after the grant of a Stock
Option, accelerate vesting of such Option as a whole or part by increasing the
number of shares then purchasable, provided that the total number of shares
subject to such Stock Option may not be increased. Except as otherwise provided
herein, a Stock Option shall become exercisable, as a whole or in part, on the
date or dates specified by the Administering Body and thereafter shall remain
exercisable until the expiration or earlier termination of the Stock Option.
6.4 Special Provisions Regarding Incentive Stock Options.
(a) Notwithstanding anything in this Article VI to the contrary, the
exercise price and vesting period of any Stock Option intended to qualify as an
Incentive Stock Option shall comply with the provisions of Section 422 of the
IRC and the regulations thereunder. As of the Effective Date, such provisions
require, among other matters, that (i) the exercise price must not be less than
the Fair Market Value of the underlying stock as of the date the Incentive Stock
Option is granted, and not less than 110% of the Fair Market Value as of such
date in the case of a grant to a Significant Stockholder; and (ii) that the
Incentive Stock Option not be exercisable after the expiration of five years
from the date of grant in the case of an Incentive Stock Option granted to a
Significant Stockholder.
(b) The aggregate Fair Market Value (determined as of the respective date
or dates of grant) of the Common Stock for which one or more Options granted to
any Recipient under this Plan (or any other option plan of the Company or any of
its subsidiaries or affiliates) may for the first time become exercisable as
Incentive Stock Options under the federal tax laws during any one calendar year
shall not exceed $100,000.
(c) Any Options granted as Incentive Stock Options pursuant to this Plan
that for any reason fail or cease to qualify as such shall be treated as
Non-qualified Stock Options.
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ARTICLE VII
REORGANIZATIONS
7.1 Corporate Transactions Not Involving a Change in Control. If the
Company shall consummate any Reorganization not involving a Change in Control in
which holders of shares of Common Stock are entitled to receive in respect of
such shares any securities, cash or other consideration (including without
limitation a different number of shares of Common Stock), each Stock Option
outstanding under this Plan shall thereafter be exercisable, in accordance with
this Plan, only for the kind and amount of securities, cash and/or other
consideration receivable upon such Reorganization by a holder of the same number
of shares of Common Stock as are subject to that Stock Option immediately prior
to such Reorganization, and any adjustments will be made to the terms of the
Stock Option in the sole discretion of the Administering Body as it may deem
appropriate to give effect to the Reorganization.
7.2 Corporate Transactions Involving a Change in Control. As of the
effective time and date of any Change in Control, this Plan and any then
outstanding Stock Options (whether or not vested) shall automatically terminate
unless (a) provision is made in writing in connection with such transaction for
the continuance of this Plan and for the assumption of such Stock Options, or
for the substitution for such Stock Options of new awards covering the
securities of a successor entity or an affiliate thereof, with appropriate
adjustments as to the number and kind of securities and exercise prices, in
which event this Plan and such outstanding Stock Options shall continue or be
replaced, as the case may be, in the manner and under the terms so provided; or
(b) the Board otherwise shall provide in writing for such adjustments as it
deems appropriate in the terms and conditions of the then-outstanding Stock
Options (whether or not vested), including without limitation (i) accelerating
the vesting of outstanding Stock Options and/or (ii) providing for the
cancellation of Stock Options and their automatic conversion into the right to
receive the securities, cash or other consideration that a holder of the shares
underlying such Stock Options would have been entitled to receive upon
consummation of such Change in Control had such shares been issued and
outstanding immediately prior to the effective date and time of the Change in
Control (net of the appropriate option exercise prices). If, pursuant to the
foregoing provisions of this Section 7.2, this Plan and the Stock Options shall
terminate by reason of the occurrence of a Change in Control without provision
for any of the actions described in clause (a) or (b) hereof, then any Optionee
holding outstanding Stock Options shall have the right, at such time immediately
prior to the consummation of the Change in Control as the Board shall designate,
to exercise the Optionee's Stock Options to the full extent not theretofore
exercised, including any installments which have not yet become vested.
ARTICLE VIII
DEFINITIONS
Capitalized terms used in this Plan and not otherwise defined shall have
the meanings set forth below:
"Administering Body" shall mean the Board as long as no Stock Option
Plan Committee has been appointed and is in effect and shall mean the Stock
Option Plan Committee as long as the Stock Option Plan Committee is
appointed and in effect.
"Affiliated Entity" means any Parent Corporation or Subsidiary
Corporation.
"Board" means the Board of Directors of the Company.
"Change in Control" means the following and shall be deemed to occur
if any of the following events occur:
(a) Any Person becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%)
or more of either the then outstanding shares of Common Stock or the
combined voting power of the Company's then outstanding securities
entitled to vote generally in the election of directors; or
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(b) Individuals who, as of the effective date hereof, constitute
the Board of Directors of the Company (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of Directors
of the Company, provided that any individual who becomes a director
after the effective date hereof whose election, or nomination for
election by the Company's stockholders, is approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered to be a member of the Incumbent Board unless that
individual was nominated or elected by any Person having the power to
exercise, through beneficial ownership, voting agreement and/or proxy,
twenty percent (20%) or more of either the outstanding shares of Common
Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of
directors, in which case that individual shall not be considered to be a
member of the Incumbent Board unless such individual's election or
nomination for election by the Company's stockholders is approved by a
vote of at least two-thirds of the directors then comprising the
Incumbent Board; or
(c) Consummation by the Company of the sale or other disposition by
the Company of all or substantially all of the Company's assets or a
reorganization or merger or consolidation of the Company with any other
person, entity or corporation, other than
(i) a reorganization or merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto (or, in the case of a reorganization or
merger or consolidation that is preceded or accomplished by an
acquisition or series of related acquisitions by any Person, by
tender or exchange offer or otherwise, of voting securities
representing five percent (5%) or more of the combined voting power
of all securities of the Company, immediately prior to such
acquisition or the first acquisition in such series of acquisitions)
continuing to represent, either by remaining outstanding or by being
converted into voting securities of another entity, more than fifty
percent (50%) of the combined voting power of the voting securities
of the Company or such other entity outstanding immediately after
such reorganization or merger or consolidation (or series of related
transactions involving such a reorganization or merger or
consolidation), or
(ii) a reorganization or merger or consolidation effected to
implement a recapitalization or reincorporation of the Company (or
similar transaction) that does not result in a material change in
beneficial ownership of the voting securities of the Company or its
successor; or
(d) Approval by the stockholders of the Company or any order by a
court of competent jurisdiction of a plan of liquidation of the Company.
Notwithstanding the foregoing, a Change in Control of the type
described in paragraph (b), (c) or (d) shall be deemed to be completed on
the date it occurs, and a Change in Control of the type described in
paragraph (a) shall be deemed to be completed as of the date the entity or
group attaining thirty percent (30%) or greater ownership has elected its
representatives to the Company's Board of Directors and/or caused its
nominees to become officers of the Company with the authority to terminate
or alter the terms of employee's employment.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value $0.01
per share, as constituted on the Effective Date of this Plan, and as
thereafter adjusted as a result of any one or more events requiring
adjustment of outstanding Stock Options under Section 3.4 above.
"Company" means Cityscape Financial Corp., a Delaware corporation.
"Effective Date" means April 17, 1997, which is the date this Plan was
adopted by the Board.
"Eligible Person" shall include directors (other than non-employee
directors of the Company), officers, employees, consultants and advisors of
the Company or of any Affiliated Entity.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Act Registered Company" means that the Company has any class
of any equity security registered pursuant to Section 12 of the Exchange
Act.
"Expiration Date" means the tenth anniversary of the Effective Date.
"Fair Market Value" of a share of the Company's capital stock as of a
particular date shall be: (a) if the stock is listed on an established
stock exchange or exchanges (including for this purpose, the Nasdaq
National Market), the average of the highest and lowest sale prices of the
stock quoted for such date as reported in the Transactions Index of each
such exchange, as published in The Wall Street Journal and determined by
the Administering Body, or, if no sale price was quoted in any such Index
for such date, then as of the next preceding date on which such a sale
price was quoted; or (b) if the stock is not then listed on an exchange or
the Nasdaq National Market, the average of the closing bid and asked prices
per share for the stock in the over-the-counter market as quoted on The
Nasdaq Small Cap Market on such date (in the case of (a) or (b), subject to
adjustment as and if necessary and appropriate to set an exercise price not
less than 100% of the fair market value of the stock on the date an option
is granted); or (c) if the stock is not then listed on an exchange or
quoted in the over-the-counter market, an amount determined in good faith
by the Administering Body; provided, however, that (i) when appropriate,
the Administering Body, in determining Fair Market Value of capital stock
of the Company, may take into account such other factors as it may deem
appropriate under the circumstances and (ii) if the stock is traded on the
Nasdaq Small Cap Market and both sales prices and bid and asked prices are
quoted or available, the Administering Body may elect to determine Fair
Market Value under either clause (i) or (ii) above. Notwithstanding the
foregoing, the Fair Market Value of capital stock for purposes of grants of
Incentive Stock Options shall be determined in compliance with applicable
provisions of the IRC.
"Immediate Family" means the Recipient's spouse, children or
grandchildren (including adopted and stepchildren and grandchildren).
"Incentive Stock Option" means a Stock Option that qualifies as an
incentive stock option under Section 422 of the IRC, or any successor
statute thereto.
"IRC" means the Internal Revenue Code of 1986, as amended.
"Just Cause Dismissal" shall mean a termination of a Recipient's
employment for any of the following reasons: (a) the Recipient violates any
reasonable rule or regulation of the Board, the Company's Chief Executive
Officer or the Recipient's superiors that results in damage to the Company
or which, after written notice to do so, the Recipient fails to correct
within a reasonable time; (b) any willful misconduct or gross negligence by
the Recipient in the responsibilities assigned to the Recipient; (c) any
willful failure to perform the Recipient's job as required to meet Company
objectives; (d) any wrongful conduct of a Recipient which has an adverse
impact on the Company or which constitutes a mis-appropriation of Company
assets; (e) the Recipient's performing services for any other person or
entity which competes with the Company while the Recipient is employed by
the Company, without the written approval of the Chief Executive Officer of
the Company; or (f) any other conduct that the Administering Body
determines constitutes Just Cause for Dismissal; provided, however, that if
a Recipient is party to an employment agreement with the Company providing
for just cause dismissal (or some comparable notion) of Recipient from
Recipient's employment with the Company, "Just Cause Dismissal" for
purposes of this Plan shall have the same meaning as ascribed thereto or to
such comparable notion in such employment agreement.
"Non-employee Director" means any director of the Company who
qualifies as a "non-employee director" within the meaning of Rule 16b-3.
"Non-qualified Stock Option" means a Stock Option that is not an
Incentive Stock Option.
"Optionee" means a Recipient or the Recipient's successor in interest.
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<PAGE> 13
"Outside Director" means an "outside director" as defined in the
regulations adopted under Section 162(m) of the IRC.
"Parent Corporation" means any Parent Corporation as defined in
Section 424(e) of the IRC.
"Performance-Based Compensation" means performance-based compensation
as described in Section 162(m) of the IRC. If the amount of compensation an
Eligible Person will receive under any Stock Option is not based solely on
an increase in the value of Common Stock after the date of grant or award,
the Stock Option Plan Committee, in order to qualify Stock Options as
performance-based compensation under Section 162(m) of the IRC, can
condition the grant, award, vesting, or exercisability of such Stock
Options on the attainment of a preestablished, objective performance goal.
For this purpose, a preestablished, objective performance goal may include
one or more of the following performance criteria: (a) cash flow; (b)
earnings per share (including earning before interest, taxes, and
amortization); (c) return on equity; (d) total stockholder return; (e)
return on capital; (f) return on assets or net assets; (g) income or net
income; (h) operating income or net operating income; (i) operating margin;
(j) return on operating revenue; (k) attainment of stated goals related to
the Company's capitalization, costs, financial condition or results of
operations; and (l) any other similar performance criteria.
"Person" means any person, entity or group, within the meaning of
Section 13(d) or 14(d) of the Exchange Act, but excluding (a) the Company
and its subsidiaries, (b) any employee stock ownership or other employee
benefit plan maintained by the Company that is qualified under ERISA and
(c) an underwriter or underwriting syndicate that has acquired the
Company's securities solely in connection with a public offering thereof.
"Permanent Disability" shall mean that the Recipient becomes
physically or mentally incapacitated or disabled so that the Recipient is
unable to perform substantially the same services as the Recipient
performed prior to incurring such incapacity or disability (the Company, at
its option and expense, being entitled to retain a physician to confirm the
existence of such incapacity or disability, and the determination of such
physician to be binding upon the Company and the Recipient), and such
incapacity or disability continues for a period of three consecutive months
or six months in any 12-month period or such other period(s) as may be
determined by the Stock Option Plan Committee with respect to any Stock
Option, provided that for purposes of determining the period during which
an Incentive Stock Option may be exercised pursuant to Section 5.13(b)(ii)
hereof, Permanent Disability shall mean "permanent and total disability" as
defined in Section 22(e) of the IRC.
"Permitted Transferee" means (a) the Recipient's Immediate Family; (b)
a trust solely for the benefit of the Recipient and/or his or her Immediate
Family; or (c) a partnership or limited liability company the partners or
shareholders of which are limited to the Recipient and his or her Immediate
Family.
"Plan" means this 1997 Stock Option Plan of the Company.
"Plan Term" means the period during which this Plan remains in effect
(commencing on the Effective Date and ending on the Expiration Date).
"Recipient" means a person who has received Stock Options under this
Plan.
"Reorganization" means any merger, consolidation or other
reorganization.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Stockholder" is an individual who, at the time a Stock
Option is granted to such individual under this Plan, owns more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company or of any Parent Corporation or Subsidiary Corporation (after
application of the attribution rules set forth in Section 424(d) of the
IRC).
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<PAGE> 14
"Stock Option" means a right to purchase stock of the Company granted
under Article VI of this Plan to an Eligible Person.
"Stock Option Document" means the agreement or confirming memorandum
setting forth the terms and conditions of Stock Options.
"Stock Option Plan Committee" means the committee appointed by the
Board to administer this Plan pursuant to Section 4.1.
"Subsidiary Corporation" means any Subsidiary Corporation as defined
in Section 425(f) of the IRC.
14
<PAGE> 1
EXHIBIT 5.1
September 19, 1997
(212) 351-4000 C 15566-00005
Cityscape Financial Corp.
565 Taxter Road
Elmsford, New York 10523
Re: Registration Statement on Form S-8 for 1,500,000 Shares of Common
Stock
Ladies and Gentlemen:
We have acted as your counsel in the preparation of a Registration
Statement on Form S-8 (the "Registration Statement") to be filed with the
Securities and Exchange Commission to register 1,500,000 shares of common stock,
$0.01 par value per share (the "Common Stock"), of Cityscape Financial Corp., a
Delaware corporation (the "Company"), issuable pursuant to the Company's 1997
Stock Option Plan (the "Stock Option Plan").
For purposes of rendering this opinion, we have made such legal and factual
examinations as we have deemed necessary under the circumstances and, as part of
such examination, we have examined, among other things, originals and copies,
certified or otherwise, identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate. For the purposes of such examination, we have assumed the
genuineness of all signatures on original documents and the conformity to
original documents of all copies submitted to us.
On the basis of and in reliance upon the foregoing examination and
assumptions, we are of the opinion that, assuming the Registration Statement
shall have become effective pursuant to the provisions of the Securities Act of
1933, as amended, the shares of Common Stock being offered under the 1997 Stock
Option Plan, when issued in accordance with the Registration Statement and the
provisions of the 1997 Stock Option Plan, and upon receipt by the Company of the
consideration as contemplated by such plan, will be validly issued, fully paid
and nonassessable.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement. In giving this consent, we do not admit that we are within the
category of persons whose consent is required under Section 7 of the Securities
Act or the General Rules and Regulations of the Commission.
Very truly yours,
/s/ GIBSON, DUNN & CRUTCHER LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Cityscape Financial Corp.:
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated February 28, 1997, which report makes reference
to the report of other auditors, relating to the consolidated statements of
financial condition of Cityscape Financial Corp. and its subsidiaries as of
December 31, 1996 and 1995, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1996, which report appears in the December
31, 1996 annual report on Form 10-K of Cityscape Financial Corp.
/s/ KPMG PEAT MARWICK LLP
--------------------------------------
KPMG PEAT MARWICK LLP
New York, New York
September 19, 1997
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Cityscape Financial Corp.:
We consent to the incorporation by reference in the registration statement
on Form S-8 of our report dated April 2, 1996, relating to the consolidated
statements of financial condition of Heritable Finance Limited as of December
31, 1995 and 1994, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995, which report appears in the December 31, 1996
annual report on Form 10-K of Cityscape Financial Corp.
/s/ KPMG
--------------------------------------
KPMG
Chartered Accountants
Registered Auditors
London, United Kingdom
September 19, 1997
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Cityscape Financial Corp.:
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of Cityscape Financial Corp. of our report, dated November 30, 1995
for the three years ended September 30, 1995 relating to J&J Securities Limited,
which report appears in the Annual Report on Form-10K for the year ended
December 31, 1996 relating to Cityscape Financial Corp. and its subsidiaries.
/s/ BDO STOY HAYWARD
- ---------------------------------------------------------
BDO STOY HAYWARD
London, England
September 18, 1997
<PAGE> 1
EXHIBIT 23.4
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Cityscape Financial Corp.:
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of our report, dated March 27, 1996, which report appears in the
Annual Report on Form 10-K for the year ended December 31, 1996 relating to
Cityscape Financial Corp. and its subsidiaries.
s/ BDO STOY HAYWARD
- ---------------------------------------------------------
BDO STOY HAYWARD
London, England
September 18, 1997
