<PAGE> 1
As filed with the Securities and Exchange Commission on February 17, 1999
NO. ________________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------------
SPARTA, INC.
(Exact name of registrant as specified in its charter)
--------------------
DELAWARE 63-0775889
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23041 AVENIDA DE LA CARLOTA, SUITE 325
LAGUNA HILLS, CALIFORNIA 92653
(Address of Principal Executive Office)(Zip Code)
SPARTA, INC. PROFIT SHARING PLAN
(Full title of the plan)
WAYNE R. WINTON
23041 AVENIDA DE LA CARLOTA, SUITE 325
LAGUNA HILLS, CALIFORNIA 92653
(Name and address of agent for service)
(949) 768-8161
(Telephone number, including area code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================
PROPOSED
PROPOSED MAXIMUM
TITLE OF SECURITIES TO AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
BE REGISTERED(1) REGISTERED PRICE PER SHARE(2) PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01
par value 1,500,000 shares $9.71 $14,565,000 $4,049
- ------------------------------------------------------------------------------------------------------------------
Total Fee $4,049
==================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c), this Registration Statement also
covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(h).
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement is being filed for the purpose of
registering additional securities of the same class as other securities for
which a Registration Statement on Form S-8 (Registration No. 33-45915) relating
to the Registrant's Profit Sharing Plan is effective (the "Prior Registration
Statement"). Pursuant to General Instruction E to Form S-8, the Registrant
hereby incorporates herein the contents of the Prior Registration Statement,
with the exception of Item 4 thereof.
Item 4. Description of Securities
General
Holders of shares of Common Stock are entitled to one vote per share on
all matters to be voted on by stockholders and are entitled to cumulate their
votes for the election of directors. Cumulative voting entitles each stockholder
to cast the number of votes that equals the number of shares of Common Stock
held by such stockholder multiplied by the number of directors to be elected.
Under cumulative voting, the stockholder may cast all of such votes for a single
nominee or may distribute them among any two or more nominees as such
stockholder sees fit. Holders of Common Stock are entitled to receive ratably
dividends, out of funds legally available therefor, when and as declared by the
Board of Directors. Holders of Common Stock have no preemptive, redemption,
subscription or conversion rights. All shares of Common Stock presently
outstanding are, and the shares offered hereby upon full payment therefor will
be, fully paid and nonassessable.
Distributions Upon Liquidation, Dissolution or Winding Up
In the event of any liquidation, dissolution or winding up of the
Registrant, prior to the distribution of any amount to the holders of the
Registrant's Common Stock, the holders of the Registrant's Preferred Stock are
entitled to receive an amount per share equal to the weighted average price per
share paid to the Registrant upon the initial issuance of all of the then
outstanding Preferred Stock (the "Liquidation Preference"). After payment to
the holders of the Preferred Stock of the Liquidation Preference, prior to any
further distribution to the holders of the Preferred Stock, the holders of the
Registrant's Common Stock are entitled to receive, out of any remaining funds
legally available therefor, if any, an amount per share equal to the
Liquidation Preference. If, after the distributions referred to in the two
immediately preceding sentences, there are any funds remaining which are
legally available for distribution to the Registrant's stockholders, the same
will be distributed ratably to the holders of the Registrant's Common Stock
and Preferred Stock.
Restrictions on the Common Stock
All shares of the Registrant's Common Stock are subject to certain
restrictions (including restrictions on their transferability and rights of the
Registrant to repurchase the same under certain circumstances) set forth in the
Registrant's Certificate of Incorporation. The following is a summary of those
restrictions.
Right of Repurchase Upon Termination of Association. In the event of an
employee's or director's termination of association with the Registrant (a
"Terminated Stockholder") for any reason whatsoever, including but not limited
to death, disability, voluntary resignation or involuntary termination, with or
without cause, then (i) all shares of the Registrant's stock which are owned,
beneficially or of record by the Terminated Stockholder, including, without
limitation, any shares held of record by any trustee for the benefit or account
of the Terminated Stockholder under any benefit plan adopted and maintained by
the Registrant, (ii) all shares which the Terminated Stockholder has the right
to acquire subsequent to such termination of association under any employee
benefit plan adopted and maintained by the Registrant or pursuant to any stock
option which was outstanding on the date of the termination of association, and
(iii) all shares of the Registrant's stock previously transferred by the
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<PAGE> 3
Terminated Stockholder (collectively, "Stock of the Terminated Stockholder"),
are subject to the rights of the Registrant and the remaining stockholders of
the Registrant to repurchase all of such shares.
The Registrant has the first option to repurchase any shares of the
Stock of the Terminated Stockholder at any time within thirty days following the
date of termination of association. Notwithstanding the foregoing, the
Registrant's right to repurchase any shares of Stock of the Terminated
Stockholder which are acquired by any person subsequent to his or her
termination of association upon the exercise of any stock option held by such
person on the date of the termination of association may be exercised by the
Registrant at any time within thirty days following the exercise of the stock
option.
In the event that the Registrant does not elect to repurchase all of the
shares of Stock of the Terminated Stockholder, the Board of Directors of the
Registrant may, in its discretion, cause the Registrant to so notify each other
holder of record of the Registrant's then outstanding Common Stock (i) who is
then a director of the Registrant or an employee of the Registrant or any
subsidiary of the Registrant, or (ii) whose termination of association with the
Registrant occurred prior to January 19, 1999 (collectively, the "Remaining
Stockholders"). If such notification is given, each Remaining Stockholder
thereupon has the right to purchase (or, if the Remaining Stockholder is a
participant in the Profit Sharing Plan, to direct the Special Trustee of the
Profit Sharing Plan to purchase for the account of such Remaining Stockholder)
all of the shares of Stock of the Terminated Stockholder which the Registrant
has not elected to repurchase. The Remaining Stockholders' right to purchase is
exercisable at any time within sixty days following the date of termination of
association; provided however, that the Remaining Stockholders' right to
repurchase any shares of Common Stock which are acquired by a Terminated
Stockholder subsequent to his or her termination of association upon the
exercise of any stock option may be exercised by the Remaining Stockholders at
any time within sixty days following the exercise of the stock option. The
option to purchase granted to the Remaining Stockholders may be exercised by
them pro rata, based on the ratio which the number of shares of the Registrant's
Common Stock held by each Remaining Stockholder bears to the total number of
shares of the Common Stock held by all Remaining Stockholders electing to
purchase. If any Remaining Stockholder fails to exercise such option, the
Remaining Stockholders who have elected to purchase have the option for a
further period of ten days to purchase, on a pro rata basis, in one or more
successive allocations on the same principle, the shares of the Common Stock not
so purchased by the declining Remaining Stockholder. The Registrant and/or the
Remaining Stockholders may require a Terminated Stockholder to sell his or her
stock to the Registrant and/or the Remaining Stockholders only if the Registrant
and/or the Remaining Stockholders elect to purchase all of the Stock of the
Terminated Stockholder, unless the Terminated Stockholder agrees to the purchase
by the Registrant and/or the Remaining Stockholders of less than all of such
shares.
In the event that the Registrant and/or the Remaining Stockholders elect
to exercise their purchase rights described above, the price per share of Common
Stock is the price per share as of the date of the termination of association
giving rise to such purchase and sale determined using the formula which has
been adopted by the Registrant's Board of Directors for the purpose of valuing
the Registrant's Common Stock (the "Formula Price"). Notwithstanding the
foregoing, however, if the Terminated Stockholder shall have theretofore taken a
leave of absence in excess of ninety days and shall not have completed one full
year of service with the Registrant subsequent to the end of such leave of
absence, the price per share is the lesser of (i) the Formula Price of the
Registrant's Common
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<PAGE> 4
Stock as of the date of the termination of association, or (ii) the Formula
Price of the Registrant's Common Stock as of the date of commencement of such
leave of absence.
The purchase price for shares of Common Stock repurchased by the
Registrant or the Remaining Stockholders from a Terminated Stockholder upon
exercise of the option to do so which is described above is generally paid in
cash and/or cancellation of indebtedness owed to the Registrant by the
Terminated Stockholder, unless the Terminated Stockholder agrees to accept the
Registrant's interest bearing, non-negotiable promissory note in lieu of cash
for all or a portion of the purchase price. However, with respect to shares of
Common Stock (i) of a Terminated Stockholder who was, immediately prior to the
termination of association of the Terminated Stockholder, an officer or director
of the Registrant, or (ii) which were not originally issued by the Registrant
pursuant to the Registrant's 1997 Stock Plan, the Registrant's 1987 Nonqualified
Stock Option Plan or the Registrant's Profit Sharing Plan, if payment for the
same in cash would cause the Registrant to violate any applicable laws governing
the right of the Registrant to purchase its own shares or to violate the
Repurchase Limitation (as defined below), the Registrant may pay cash for those
of such shares which it can purchase for cash without violating such
restrictions, and deliver a non-negotiable promissory note for the remaining
shares (unless the delivery of such note would itself cause the repurchase to
violate applicable law). Subject to the provisions of any agreement establishing
the terms of any such promissory note entered into between the payee thereof and
the Registrant, each such promissory note has such term, not exceeding seven
years, as the Registrant's Board of Directors determines.
Under the Registrant's Certificate of Incorporation, the Registrant may
not repurchase shares of its stock if and to the extent that such repurchases
would exceed a limitation established from time to time by the Registrant's
Board of Directors (the "Repurchase Limitation"), which is intended to ensure
that repurchases by the Registrant of its stock do not have a material adverse
effect on the Registrant's financial condition.
Restrictions on Transferability. No holder of shares of Common Stock may
sell, pledge, or in any way dispose of any such shares, or any interest therein,
whether voluntarily or by operation of law, except (i) transfers to such
holder's account in the Profit Sharing Plan, or (ii) transfers to the
Registrant, or (iii) transfers to Remaining Stockholders (or to the accounts of
the Remaining Stockholders in the Profit Sharing Plan) pursuant to their
repurchase rights described above, or (iv) hypothecation to any lender which has
been specifically designated by the Registrant's Board of Directors, provided
that the loan program to which such hypothecation relates has been specifically
approved by the Registrant's Board of Directors and includes the right of the
Registrant to repurchase such shares in the event of default under the loan to
which the hypothecation relates, or (v) transfers to a trust for the benefit of
the holder and/or the holder's spouse and/or issue. Any shares so transferred in
trust remain subject to all of the provisions and restrictions of the
Certificate of Incorporation, including the restrictions on further transfer and
the rights of the Registrant and/or Remaining Stockholders to purchase such
shares upon the termination of association of the transferring holder. Further,
as a condition to agreeing to such a transfer, the Registrant may require that
the trustee execute and deliver to the Registrant a written agreement
acknowledging those restrictions.
In the event that any stockholder of the Registrant desires to sell or
otherwise transfer all or any portion of the same other than as described in the
immediately preceding paragraph, he or she may do so provided that he or she
first shall have offered such shares (the "Offered Shares") to the
4
<PAGE> 5
Registrant as described below. At least thirty days prior to any proposed sale
or other transfer, the holder of the Offered Shares must give written notice
(the "Notice") of the proposed transfer to the Registrant. The Notice must set
forth the name of the proposed transferee, the number of shares to be
transferred, the price per share, and all other terms and conditions of the
proposed transfer, and must state that the same constitutes a bona fide, good
faith transaction. The Notice constitutes the grant of an option to the
Registrant to purchase the Offered Shares. The Registrant thereupon, for a
period of thirty days following receipt of the Notice, has the right to purchase
all, but not less than all, of the Offered Shares for a price equal to the price
specified in the Notice. The terms of payment are, at the Registrant's election,
(A) cash, or (B) as provided in the Notice (with the Registrant paying the
equivalent value of any non-cash consideration as mutually agreed upon by the
Registrant and the holder of the Offered Shares).
In the event that the Registrant does not elect to purchase all of the
Offered Shares within thirty days after its receipt of the Notice, the holder of
the Offered Shares may transfer the Offered Shares within thirty days to the
person, at the price, and on the terms specified in the Notice. If the Offered
Shares have not been transferred within such thirty day period, the Offered
Shares again become subject to all of the restrictions on transfer and rights of
first refusal described above. Any of the Offered Shares which have been
transferred by an employee of the Registrant or any subsidiary of the Registrant
or by a director of the Registrant shall, in the hands of the transferee and any
successive transferee, be and remain subject to all of the provisions and
restrictions contained in the Registrant's Certificate of Incorporation,
including but not limited to the Registrant's and Remaining Stockholders' rights
to repurchase such shares upon the termination of association of the employee or
director with the Registrant.
Termination of Transfer Restrictions and Repurchase Rights. The
foregoing transfer restrictions and repurchase rights of the Registrant will
automatically terminate upon the earlier to occur of either of the following:
(i) the closing of the first underwritten public offering of any
class of the Registrant's equity securities pursuant to an effective
registration statement under the Securities Act of 1933, as amended; or
(ii) the listing by the Registrant of any class of its equity
securities for trading on the National Association of Securities Dealers
Automated Quotation System or on any securities exchange.
Item 8. Exhibits
Exhibit
Number Description
------- -----------
4.1 Certificate of Incorporation, as amended to date
5
<PAGE> 6
Exhibit
Number Description
------- -----------
5 Opinion of Higham, McConnell & Dunning
23.1 Consent of Higham, McConnell & Dunning
(included in Exhibit 5)
23.2 Consent of Warnick Maestas & Hick
23.3 Consent of PricewaterhouseCoopers LLP
24 Power of attorney (included in the Signature Page)
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Laguna Hills, State of California on February 1,
1999.
SPARTA, INC.
By: /s/ WAYNE R. WINTON
--------------------------------
Wayne R. Winton, Chairman of the
Board and Chief Executive Officer
POWER OF ATTORNEY
The undersigned directors and officers of SPARTA, Inc. do hereby
constitute and appoint Wayne R. Winton and Jerry R. Fabian, and each of them,
our true and lawful attorneys and agents, to do any and all acts and things in
our name and behalf in our capacities as directors and officers and to execute
any and all instruments for us and in our names in the capacities indicated
below, which said attorneys and agents, or either of them, may deem necessary or
advisable to enable said corporation to comply with the Securities Act of 1933,
as amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with this Registration Statement, including
specifically, but without limitation, power and authority to sign for us or any
of us in our names and in the capacities indicated below, any and all amendments
(including post-effective amendments) hereto; and we do hereby ratify and
confirm all that said attorneys and agents, or either of them, shall do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Position Date
---- -------- ----
<S> <C> <C>
/s/ WAYNE R. WINTON Chairman of the Board, Chief February 1, 1999
- -------------------------------- Executive Officer and Director
Wayne R. Winton
/s/ ROBERT C. SEPUCHA Director February 2, 1999
- --------------------------------
Robert C. Sepucha
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
Name Position Date
---- -------- ----
<S> <C> <C>
/s/ R. STEVE MCCARTER Director February 2, 1999
- -------------------------------------
R. Steve McCarter
/s/ CARL T. CASE Director February 2, 1999
- -------------------------------------
Carl T. Case
/s/ JOHN L. ALLEN Director January 30, 1999
- -------------------------------------
John L. Allen
/s/ ROBERT L. JOHNSON Director February 2, 1999
- -------------------------------------
Robert L. Johnson
Director , 1999
- -------------------------------------
Rock N. Hankin
/s/ JOHN L. PIOTROWSKI Director February 2, 1999
- -------------------------------------
John L. Piotrowski
/s/ CLARKE E. REYNOLDS Director February 1, 1999
- -------------------------------------
Clarke E. Reynolds
/s/ ROBERT BUCHANAN Director February 2, 1999
- -------------------------------------
Robert Buchanan
/s/ B. WARREN KNUDSON Chief Financial Officer February 2, 1999
- -------------------------------------- (Principal Accounting Officer)
B. Warren Knudson
</TABLE>
8
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Special Trustee of the SPARTA, Inc. Profit Sharing Plan has duly caused this
Registration Statement to be signed on behalf of the SPARTA, Inc. Profit Sharing
Plan by the undersigned, thereunto duly authorized, in the City of Laguna Hills,
State of California, on the 1ST day of February, 1999.
SPARTA, INC. PROFIT SHARING PLAN
By: /s/ MARY FRANCES WINTON
------------------------------------
Mary Frances Winton, Special Trustee
9
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EXHIBIT INDEX
Exhibit
Number Description
------- -----------
4.1 Certificate of Incorporation, as amended to date
5 Opinion of Higham, McConnell & Dunning
23.1 Consent of Higham, McConnell & Dunning
(included in Exhibit 5)
23.2 Consent of Warnick Maestas & Hick
23.3 Consent of PricewaterhouseCoopers LLP
24 Power of attorney (included in the Signature Page)
<PAGE> 1
EXHIBIT 4.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
SPARTA, INC.,
a Delaware corporation
SPARTA, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware, does hereby certify that:
FIRST: The name of the corporation is SPARTA, Inc. (the "Corporation").
The original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on May 12, 1989. The Corporation's
Certificate of Incorporation was thereafter amended by (a) a Certificate of
Amendment filed with the Secretary of State of the State of Delaware on
September 6, 1991, (b) an Amended and Restated Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on January 26, 1994,
and (c) an Amended and Restated Certificate of Incorporation filed with the
Secretary of State of the State of Delaware on November 18, 1994.
SECOND: This Amended and Restated Certificate of Incorporation restates
and integrates and also further amends the provisions of the Certificate of
Incorporation of the Corporation.
THIRD: The Certificate of Incorporation of the Corporation, as
heretofore amended or supplemented, is hereby restated and further amended to
read in its entirety as follows:
ARTICLE 1 - NAME
The name of this Corporation is SPARTA, Inc.
ARTICLE 2 - REGISTERED OFFICE AND AGENT
The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, Wilmington, County of New Castle, Delaware
19801. The name of the Corporation's registered agent at that address is The
Corporation Trust Company.
ARTICLE 3 - PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware, as amended from time to time.
<PAGE> 2
ARTICLE 4 - AUTHORIZED CAPITAL
(1) Authorized Capital. The Corporation is authorized to issue two
classes of shares designated "Common Stock" and "Preferred Stock", respectively.
The number of shares of Common Stock authorized to be issued is 25,000,000, par
value $.01 per share, and the number of shares of Preferred Stock authorized to
be issued is 2,000,000, par value $.01 per share.
(2) Powers, Preferences and Rights, and Qualifications, Limitations and
Restrictions, of Common Stock and Preferred Stock. Except as expressly stated in
Articles 4(3), 4(4), 4(5) and 5(1)(B) below, the powers, preferences and rights
of the Common Stock and the Preferred Stock, and the qualifications, limitations
and restrictions thereof, shall in all respects be identical. The Corporation
shall not subdivide or combine any shares of Common Stock, or pay any dividend
or, except as provided in Article 4(4), make any other distribution on any share
of Common Stock, or accord any other payment, benefit or preference to any share
of Common Stock, except by extending such subdivision, combination,
distribution, payment, benefit or preference equally to all shares of Common
Stock and all shares of Preferred Stock. If dividends are declared which are
payable in shares of the Corporation's capital stock, such dividends shall be
payable in shares of Common Stock to holders of Common Stock and such dividends
shall be payable in shares of Preferred Stock to holders of Preferred Stock.
(3) Voting Rights of Common Stock. Except as provided in Article 6 below
with respect to the right to cumulate votes in the election of directors, each
share of Common Stock shall entitle the holder thereof to one (1) vote on all
matters which may be the subject of stockholder action. Except as otherwise
provided by law, the holders of Preferred Stock shall not have voting rights to
vote on the election of directors or to vote or act by written consent on any
other matter which may be the subject of stockholder action.
(4) Liquidation Rights of Preferred Stock.
(A) Preference. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
the Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its shareholders,
whether such assets are capital, surplus, or earnings, before any payment or
declaration and setting apart for payment of any amount shall be made in respect
of the Common Stock, an amount per share of Preferred Stock then outstanding
equal to the Liquidation Preference (as hereinafter defined). If upon any
liquidation, dissolution, or winding up of the Corporation, whether voluntary or
involuntary, the assets to be distributed to the holders of the Preferred Stock
shall be insufficient to permit the payment to such shareholders of the full
preferential amount aforesaid, then all of the assets of the Corporation to be
distributed shall be distributed ratably to the holders of the Preferred Stock
on the basis of the number of shares of Preferred Stock held.
(B) Distribution to Common Stock. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
and subject to the
2
<PAGE> 3
payment in full of the liquidation preference with respect to the Preferred
Stock as provided in Article 4(4)(A) above, the holders of the Common Stock then
outstanding shall be entitled to receive, prior and in preference to any further
distribution of any of the assets or surplus funds of the Corporation to the
holders of the Preferred Stock by reason of their ownership thereof, an amount
equal to the Liquidation Preference for each share of Common Stock then held by
them and no more. Subject to the payment in full of the liquidation preference
with respect to the Preferred Stock as provided in Article 4(4)(A), if upon the
liquidation, dissolution or winding up of the Corporation, the assets to be
distributed to the holders of the Common Stock pursuant to this Article 4(4)(B)
shall be insufficient to permit the payment to such holders of the full
preferential amount aforesaid, then the entire remaining assets and funds of the
Corporation legally available for distribution shall be distributed among the
holders of the Common Stock in proportion to the shares of Common Stock then
held by them.
(C) Remaining Assets. After the payment or distribution to the
holders of the Preferred Stock and Common Stock of the amounts set forth in
Articles 4(4)(A) and 4(4)(B), the holders of the Preferred Stock and Common
Stock then outstanding shall be entitled to receive ratably, with all Preferred
Stock treated as if it had been converted into Common Stock pursuant to Article
4(5) hereof, all remaining assets of the Corporation to be distributed.
(D) Valuation of Securities and Other Property. Whenever the
distribution provided for in this Article 4(4) shall be payable in securities or
property other than cash, the value of such distribution shall be the fair
market value of such securities or other property as determined in good faith by
the Corporation's Board of Directors.
(5) Conversion of Preferred Stock. Each outstanding share of
Preferred Stock shall automatically, without any further act or deed on the part
of the Corporation or any other person, be converted into one share of Common
Stock upon the earliest to occur of the following:
(i) the closing of the first underwritten public offering by the
Corporation of any class of its equity securities pursuant to an effective
registration statement under the Securities Act of 1933, as amended; or
(ii) in the event of any merger or consolidation of the Corporation
with or into any other entity in which the Corporation is not the surviving
corporation, or which results in the outstanding Common Stock of the Corporation
being converted into or exchanged for shares of the capital stock or other
securities of another entity or for cash or other property, immediately
preceding the consummation of such merger or consolidation (but subsequent to
any vote of the shareholders of the Corporation with respect thereto).
Each holder of shares of the Preferred Stock converted in accordance
with this Article 4(5) shall tender the certificate(s) representing such shares
to the Corporation promptly for reissuance with the post-conversion share
designation; provided, however, that the conversion described in this
3
<PAGE> 4
Article 4(5) shall occur automatically and be effective whether or not the
certificate representing such shares is so surrendered.
(6) Definition of "Liquidation Preference". For purposes of this Article
4, the "Liquidation Preference" shall mean an amount equal to the weighted
average price per share paid to the Corporation upon the original issuance of
all of the Preferred Stock outstanding as of the date of determination of the
Liquidation Preference (as adjusted to reflect any stock splits, stock dividends
or reverse stock splits of or on the Preferred Stock occurring subsequent to
such original issuance).
(7) Definition of "Stock". As used in this Amended and Restated
Certificate of Incorporation, "Stock" shall mean both Common Stock and Preferred
Stock.
ARTICLE 5 - RESTRICTIONS ON THE STOCK
(1) Right of Repurchase Upon Termination of Association. In the event of
a Termination of Association (as hereinafter defined) of a person who is a
director of the Corporation or an employee of the Corporation or any subsidiary
of the Corporation (a "Terminated Holder") for any reason whatsoever, including
but not limited to death, disability, voluntary resignation or involuntary
termination, with or without cause, all shares of Stock which are owned,
beneficially or of record by the Terminated Holder, including, without
limitation, any such shares held of record by any trustee for the benefit or
account of any Terminated Holder pursuant to any benefit plan adopted and
maintained by the Corporation (including, without limitation, the SPARTA, Inc.
Profit Sharing Plan and the SPARTA, Inc. Stock Compensation Plan), and all
shares of Stock theretofore transferred by the Terminated Holder (other than in
transfers of the type referred to in Article 5(2)(A)(ii) or (iii) below), shall
be subject to the rights of the Corporation and the Remaining Stockholders (as
hereinafter defined) to repurchase all of such shares of Stock, for the price
and upon the terms set forth in this Article 5(1). (For purposes of this Article
5, a director of the Corporation shall not be deemed to be the beneficial holder
of shares of the Stock which are owned of record by another corporation solely
because such director is also a director, officer and/or shareholder of such
other corporation.) Such rights to repurchase upon a Termination of Association
shall be applicable in all respects to all shares of Stock which such Terminated
Holder owns (beneficially or of record) as of the date of the Termination of
Association, all shares of Stock which such Terminated Holder has the right to
acquire subsequent to such Termination of Association pursuant to any employee
benefit plan adopted and maintained by the Corporation (including without
limitation the SPARTA, Inc. Profit Sharing Plan and the SPARTA, Inc. Stock
Compensation Plan) or pursuant to any option, warrant, or other right,
contractual or otherwise, to acquire shares of Stock which was outstanding on
the date of such Termination of Association, and all shares of Stock which such
Terminated Shareholder has theretofore transferred (other than in transfers of
the type referred to in Article 5(2)(A)(ii) or (iii) below) (collectively,
"Stock of the Terminated Holder").
As used herein, the term "Termination of Association" shall mean (i)
for any person who is an employee of the Corporation or any subsidiary of the
Corporation but not also a director of the Corporation, the cessation of such
person's employment with the Corporation or such
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subsidiary, (ii) for any person who is a director of the Corporation but not
also an employee of the Corporation or of any subsidiary of the Corporation, the
cessation of such person's status as a director of the Corporation, and (iii)
for any person who is both a director of the Corporation and an employee of the
Corporation or of any subsidiary of the Corporation, the cessation of both the
employment and status as a director of such person.
(A) Repurchase by Corporation. The Corporation shall have the first
option to repurchase shares of the Stock of a Terminated Holder pursuant to this
Article 5(1). The Corporation's right to repurchase shall be exercisable by the
Corporation at any time within thirty (30) days following the Termination of
Association. Notwithstanding the foregoing, the Corporation's right to
repurchase any shares of Stock which are acquired by a Terminated Holder
subsequent to the Termination of Association of such Terminated Holder upon the
exercise of any option, warrant or other right held by such Terminated Holder on
the date of the Termination of Association, may be exercised by the Corporation
at any time within thirty (30) days following the exercise of such option,
warrant or right by the Terminated Holder, as the case may be.
(B) Repurchase by Remaining Stockholders. In the event that the
Corporation does not elect to repurchase all of the shares of Stock of a
Terminated Holder as provided in Article 5(1)(A) above, the Board of Directors
of the Corporation may, at its discretion, cause the Corporation to so notify
each other holder of record of the Corporation's then outstanding Common Stock
(i) who is then a director of the Corporation or an employee of the Corporation
or any subsidiary of the Corporation, or (ii) whose Termination of Association
with the Corporation occurred prior to the date of the filing of this Amended
and Restated Certificate of Incorporation with the Delaware Secretary of State
(collectively, the "Remaining Stockholders"), and each Remaining Stockholder
shall thereupon have the right to purchase (or, if the Remaining Stockholder is
a participant in the SPARTA, Inc. Profit Sharing Plan, to direct the Special
Trustee of the SPARTA, Inc. Profit Sharing Plan to purchase for the account of
such Remaining Stockholder) all or any portion of the shares of Stock of the
Terminated Holder which the Corporation has not elected to repurchase. The
Remaining Stockholders' right to purchase shall be exercisable at any time
within sixty (60) days following the Termination of Association; provided
however, that the Remaining Stockholders' right to repurchase any shares of
Stock which are acquired by a Terminated Holder subsequent to the Termination of
Association of such Terminated Holder upon the exercise of any option, warrant
or other right held by such Terminated Holder on the date of the Termination of
Association, may be exercised by the Remaining Stockholders at any time within
sixty (60) days following the exercise of such option, warrant or right by the
Terminated Holder, as the case may be. The option to purchase granted to the
Remaining Stockholders hereby may be exercised by them pro rata, based on the
ratio which the number of shares of the Corporation's Common Stock held by each
such Remaining Stockholder bears to the total number of shares of the Common
Stock held by all Remaining Stockholders electing to purchase. Should any of the
Remaining Stockholders fail to exercise such option, the Remaining Stockholders
who have elected to purchase shall have the option for a further period of ten
(10) days to purchase, on a pro rata basis, in one or more successive
allocations on the same principle, the Stock of the Terminated Holder not so
purchased by the declining Remaining Stockholders.
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<PAGE> 6
(C) Repurchase Price.
The price per share of Stock purchased by the Corporation or the
Remaining Stockholders pursuant to Article 5(1)(A) or (B) (including any Stock
acquired by the Terminated Holder after his or her Termination of Association)
shall be the Formula Price (as hereinafter defined) per share of the Stock as of
the date of the Termination of Association giving rise to such purchase and
sale. Notwithstanding the foregoing, however, if the Terminated Holder shall
have theretofore taken a leave of absence in excess of ninety (90) days and
shall not have completed one full year of service with the Corporation
subsequent to the end of such leave of absence, the price per share (including
shares of Stock acquired by the Terminated Holder after his or her Termination
of Association) shall be the lesser of (1) the Formula Price of the Stock as of
the date of the Termination of Association, or (2) the Formula Price of the
Stock as of the date of commencement of such leave of absence.
(D) Procedure; Termination of Shareholder Rights. If the Corporation
or the Remaining Stockholders shall elect to purchase any shares of the Stock of
a Terminated Holder pursuant to this Article 5(1), the Corporation or such
Remaining Stockholders, as the case may be, shall give a written notice to the
Terminated Holder and other holders thereof, if any, of such election to
purchase (the "Purchase Notice"), setting forth the number of shares of Stock
which the Corporation and/or the Remaining Stockholders, as the case may be,
elects to purchase. The Terminated Holder and other holders, if any, of the
Stock of the Terminated Holder to be purchased shall, within fifteen (15) days
following the giving of the Purchase Notice, surrender to the Corporation the
stock certificate or certificates representing the shares so purchased, duly
endorsed for transfer and free and clear of any claims, liens and encumbrances,
against payment of the purchase price thereof. If the Purchase Notice is given,
and if the purchase price shall be paid or set aside for that purpose, then
notwithstanding that the certificate or certificates evidencing the shares of
Stock to be purchased shall not have been surrendered, all rights of the
Terminated Holder and other holders thereof, if any, with respect to such shares
shall forthwith cease and terminate (except for the right to receive the
purchase price thereof as provided in this Article 5(1)). The Corporation and/or
the Remaining Stockholders may purchase the Stock of a Terminated Holder
pursuant to this Article 5(1) only if the Corporation and/or the Remaining
Stockholders elect to purchase all of the Stock of the Terminated Holder which
are eligible to be purchased pursuant hereto, unless the Terminated Holder
agrees to the purchase by the Corporation and/or the Remaining Stockholders of
less than all of such Stock.
The Purchase Price of any shares of Stock repurchased by the Corporation
or the Remaining Stockholders pursuant to this Article 5(1) shall be paid in
cash and/or cancellation of indebtedness owed to the Corporation by the
Terminated Holder; provided, however, that with respect to shares of Stock (i)
of a Terminated Holder who was, immediately prior to the Termination of
Association of such Terminated Holder, an officer or director of the
Corporation, or (ii) which were not originally issued by the Corporation (A)
pursuant to the Corporation's 1997 Stock Plan, (B) pursuant to the Corporation's
1987 Nonqualified Stock Option Plan (the "1987 Plan"), or (C) in exchange for
shares issued under the 1987 Plan by the Corporation's predecessor, SPARTA,
Inc., an
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<PAGE> 7
Alabama corporation, if payment for the same in cash would cause the Corporation
to violate any applicable laws governing the right of the Corporation to
purchase its own shares or to violate the Repurchase Limitation (as hereinafter
defined), the Corporation may pay cash for those of such shares which it can
purchase for cash without violating such restrictions, and deliver a
non-negotiable promissory note for the remaining shares. Subject to the
provisions of any agreement establishing the terms of any such promissory note
entered into between the payee thereof and the Corporation, any such promissory
note shall have such term, not exceeding seven (7) years, as the Corporation's
Board of Directors shall determine, shall bear interest at a rate equal to the
lesser of ten percent (10%) or the discount rate of the Federal Reserve Bank of
San Francisco, as the same may change from time to time, and shall be payable in
equal quarterly installments.
(E) Termination of Repurchase Rights. The repurchase rights provided
for in this Article 5(1) shall automatically terminate upon the earliest to
occur of either of the following:
(i) the closing of the first underwritten public offering of any
class of the Corporation's equity securities pursuant to an effective
registration statement under the Securities Act of 1933, as amended; or
(ii) the listing by the Corporation of any class of its equity
securities for trading on the National Association of Securities Dealers
Automated Quotation System or on any securities exchange.
(F) Formula Price. As used in this Article 5, the term "Formula
Price" shall mean the price determined pursuant to the formula adopted by the
Board of Directors of the Corporation for the purpose of determining the fair
market value of the Stock, as such formula may be modified from time to time by
the Board of Directors. The Formula Price shall at all times be the same for the
Common Stock and the Preferred Stock.
(2) Restriction on Transferability.
(A) General. No holder of shares of Stock shall be able to sell,
transfer, assign, pledge, hypothecate or in any way dispose of or alienate any
such shares, or any right or interest therein, whether voluntarily or by
operation of law, without first complying with Article 5(2)(C) below, except (i)
transfers to such holder's account in the SPARTA, Inc. Profit Sharing Plan, or
(ii) transfers to the Corporation, or (iii) transfers to Remaining Stockholders
(or to the accounts of the Remaining Stockholders in the SPARTA, Inc. Profit
Sharing Plan) pursuant to Article 5(1) above, or (iv) hypothecation to any
lender which has been specifically designated by the Corporation's Board of
Directors, provided that the loan program to which such hypothecation relates
has been specifically approved by the Corporation's Board of Directors and
includes the right of the Corporation to repurchase such shares in the event of
default under the loan to which the hypothecation relates, or (v) transfers to a
trust for the benefit of the holder and/or the holder's spouse and/or issue,
provided that the Stock so transferred in trust shall be and remain subject to
all
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<PAGE> 8
of the provisions and restrictions of this Certificate of Incorporation,
including the restrictions on further transfer and the rights of the Corporation
and/or Remaining Stockholders to purchase such Stock upon the Termination of
Association of the transferring holder, and the trustee has, if requested by the
Corporation, executed and delivered to the Corporation a written agreement in
form and substance acceptable to the Corporation acknowledging the same.
(B) Sale to the Corporation. Notwithstanding the foregoing
restrictions on transfer, any holder of shares of Stock may offer all or any
portion thereof (except shares which have not then "vested" under the terms of
any agreement or plan under which the same may have been issued) for sale to the
Corporation on February 21, May 21, August 21 or November 21 of any year, or at
such other dates as the Board of Directors of the Corporation may designate from
time to time (each a "Stock Repurchase Date"), at a per share price equal to the
Formula Price of the Stock as of such Stock Repurchase Date. If the Corporation
elects to purchase the shares of Stock of any person on any Stock Repurchase
Date or any other date, and the Corporation cannot purchase all of the shares of
the Corporation then being offered due to (i) any legal restrictions on the
right of the Corporation to purchase its own shares, or (ii) the Repurchase
Limitation, or if the Corporation elects for any other reason not to purchase
all such offered shares, the shares offered for sale shall be accepted for
purchase by the Corporation, up to the total number thereof to be purchased on
such date, in such order and priority as the Board of Directors may determine
from time to time. The purchase price for shares acquired by the Corporation
pursuant to this Article 5(2) shall be paid in cash; provided, however, that if
such cash payment would cause the Corporation to violate any applicable law
governing the right of the Corporation to repurchase its own shares, or to
violate the Repurchase Limitation, the Corporation may pay cash for those shares
of Stock which it may then purchase for cash without violating such restrictions
and deliver a promissory note for the remaining shares to be purchased. Subject
to the provisions of any agreement establishing the terms of any such promissory
note entered into between the payee thereof and the Corporation, any such
promissory note shall have such term, shall bear such interest and shall be on
such other terms and conditions as the Board of Directors of the Corporation
shall determine. Notwithstanding any other provision of this Article 5(2)(B),
however, the Corporation shall not purchase pursuant to this Article 5(2)(B) any
shares of Common Stock which have been issued and outstanding for less than six
(6) months prior to their purchase by the Corporation, except for shares of
Stock of a Terminated Holder.
(C) Right of First Refusal.
(i) In the event that any holder of Stock shall desire to sell
or otherwise transfer all or any portion of the same other than pursuant to
subparagraph (A) or (B) of this Article 5(2), he or she may do so provided that
he or she first shall have offered such shares (the "Offered Shares") to the
Corporation as provided in this subparagraph (C). At least thirty (30) days
prior to any proposed sale or other transfer, the holder of the Offered Shares
shall give written notice (the "Notice") of such proposed transfer to the
Corporation. The Notice must set forth the name of the proposed transferee, the
number of shares to be transferred, the price per share, and all other terms and
conditions of the proposed transfer, and must state that the same constitutes a
bona fide, good faith transaction. The Notice shall constitute the grant of an
option to the Corporation to
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purchase the Offered Shares as provided in this subparagraph (C). The
Corporation shall thereupon, for a period of thirty (30) days following the
Corporation's receipt of the Notice, have the right to purchase all, but not
less than all, of the Offered Shares for a price equal to the price specified in
the Notice. The terms of payment shall be, at the Corporation's election, (A)
cash, or (B) as provided in the Notice (with the Corporation paying the
equivalent value of any noncash consideration as mutually agreed upon by the
Corporation and the holder of the Offered Shares).
(ii) In the event that the Corporation does not elect to
purchase all of the Offered Shares within thirty (30) days after its receipt of
the Notice, the holder of the same may transfer the Offered Shares within thirty
(30) days from the expiration date of such thirty (30) day option period to the
person, at the price, and on the terms specified in the Notice. If the Offered
Shares have not been transferred within such thirty (30) day period, the Offered
Shares shall again become subject to all of the provisions of this Article 5(2)
and may not thereafter be transferred except in the manner and on the terms
provided for herein. Any of the Offered Shares which have been transferred shall
remain subject to all of the provisions and restrictions contained in this
Article 5(2) with respect to any subsequent transfer of such Offered Shares by
the transferee and any successive transferee thereof, and any of the Offered
Shares which have been transferred by an employee of the Corporation or any
subsidiary of the Corporation or by a director of the Corporation shall, in the
hands of the transferee and any successive transferee, be and remain subject to
all of the provisions and restrictions contained in Article 5(1), including but
not limited to the Corporation's and Remaining Stockholders' rights to
repurchase such shares upon the Termination of Association of the employee or
director.
(D) Termination of Transfer Restrictions. The transfer restrictions
set forth in this Article 5(2) shall automatically terminate upon the earliest
to occur of either of the following:
(i) closing of the first underwritten public offering of any
class of the Corporation's equity securities pursuant to an effective
registration statement under the Securities Act of 1933, as amended; or
(ii) the listing by the Corporation of any class of its equity
securities for trading on the National Association of Securities Dealers
Automated Quotation System or on any securities exchange.
(E) Repurchase Limitation. As used in this Article 5, the term
"Repurchase Limitation" shall mean the limitation established by the
Corporation's Board of Directors on the number or value of shares of the Stock
which the Corporation may repurchase during any given period of time, as such
limitation may be modified from time to time by the Board of Directors.
(3) Waiver. The Corporation may, by resolution of its Board of
Directors, acting in its sole discretion, waive any or all of the restrictions
upon the Stock set forth in this Article 5 in such circumstances as the Board of
Directors deems appropriate, and such waiver may be effective as to any or all
of the shares of Stock, or as to any or all of the holders thereof.
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ARTICLE 6 - ELECTION OF DIRECTORS
(1) Cumulative Voting. At all elections of directors of the Corporation,
subject to the requirements of the next sentence, each holder of Common Stock
shall be entitled to as many votes as shall equal the number of votes which
(except for this provision as to cumulative voting) such holder would be
entitled to cast for the election of directors with respect to his shares of
stock multiplied by the number of directors to be elected, and such holder may
cast all of such votes for a single director or may distribute them among the
number to be voted for or for any two or more of them as such holder may see
fit. No stockholder shall be entitled to cumulate votes unless the name of the
candidate for whom such votes would be cast has been placed in nomination prior
to the voting, and any stockholder has given notice at the meeting prior to the
voting of such stockholder's intention to cumulate his vote.
(2) No Requirement of Ballot. Elections of directors need not be by
written ballot unless otherwise provided in the Bylaws.
ARTICLE 7 - LIMITATION OF DIRECTORS' LIABILITY
(1) Limitation of Liability. A director of this Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that this provision shall
not eliminate or limit the liability of a director (i) for any breach of his
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of the law, (iii) under Section 174 of the General Corporation Law of
the State of Delaware, or (iv) for any transaction from which the director
derives an improper personal benefit.
(2) Further Amendments. If the General Corporation Law of the State of
Delaware is hereafter amended to authorize corporate action further limiting or
eliminating the personal liability of directors, then the liability of a
director to the Corporation shall be limited or eliminated to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as so amended
from time to time. Any repeal or modification of this Article 7 by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
ARTICLE 8 - AMENDMENT OF BYLAWS
The Board of Directors of the Corporation shall have concurrent power
with the stockholders to make, alter, amend, change, add to or repeal the Bylaws
of the Corporation.
ARTICLE 9 - AMENDMENT OF CERTIFICATE OF INCORPORATION
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation or to adopt new
provisions, in the manner now or hereafter
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prescribed by the General Corporation Law of the State of Delaware, as amended
from time to time, and all rights conferred on stockholders and directors herein
are granted subject to this reserved power.
FOURTH: The foregoing Amended and Restated Certificate of Incorporation
has been duly proposed by the Board of Directors of the Corporation and adopted
by the stockholders of the Corporation in the manner and by the vote prescribed
by Section 242 of the General Corporation Law of the State of Delaware.
FIFTH: The foregoing Amended and Restated Certificate of Incorporation
has been duly adopted in accordance with the provisions of Section 245 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Amended and Restated Certificate of
Incorporation has been signed under the seal of the Corporation by Wayne R.
Winton, its Chief Executive Officer, and attested to by Jerry Fabian, its
Secretary, this 15th day of January 1999.
SPARTA, INC.
By: /s/ WAYNE R. WINTON
--------------------------------------
Wayne R. Winton, Chief Executive
Officer
[SEAL]
ATTEST:
By: /s/ JERRY FABIAN
--------------------------------
Jerry Fabian,
Secretary
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<PAGE> 1
EXHIBIT 5
February 16, 1999
SPARTA, Inc.
23041 Avenida de la Carlota
Laguna Hills, California 92653
Gentlemen:
At your request, we have examined the Registration Statement on Form S-8
(the "Registration Statement") filed by SPARTA, Inc., a Delaware corporation
(the "Company"), with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of 1,500,000
shares of Common Stock, $.01 par value per share, of the Company (the "Shares"),
which have been reserved for issuance under the SPARTA, Inc. Profit Sharing Plan
(the "Plan").
We have examined the proceedings heretofore taken and are familiar with
the additional proceedings proposed to be taken by the Company in connection
with the authorization and issuance of the Shares pursuant to the Plan.
Based upon such examination, and subject to compliance with applicable
state securities and "blue sky" laws, it is our opinion that the Shares, when
issued pursuant to the provisions of the Plan, will constitute legally issued
and outstanding shares of the Company's Common Stock, fully paid and
nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
HIGHAM, McCONNELL & DUNNING LLP
/s/ Higham, McConnell & Dunning LLP
<PAGE> 1
EXHIBIT 23.2
[LETTERHEAD OF WARNICK MAESTAS & HICK]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of the Sparta, Inc. Profit Sharing Plan of our report
dated June 4, 1998 for the Sparta, Inc. Profit sharing Plan for the Plan
year 1997.
/s/ WARNICK, MAESTAS & HICK
---------------------------
WARNICK, MAESTAS & HICK
Costa Mesa, California
February 8, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Sparta, Inc. of our report dated March 21, 1998
appearing on page F-2 of the Annual Report on Form 10-K for the year
ended December 31, 1997.
/s/ PRICEWATERHOUSECOOPERS LLP
- ---------------------------------
PRICEWATERHOUSECOOPERS LLP
Costa Mesa, California
February 16, 1999
