<PAGE> 1
Filed: March 24, 2000 Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMPUTER CONCEPTS CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2895590
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
80 ORVILLE DRIVE, BOHEMIA, NEW YORK 11716
(Address of principal executive offices) (Zip Code)
1998 STOCK/STOCK OPTION PLAN
(Full Title of the Plan)
ANTHONY COPPOLA, PRESIDENT
COMPUTER CONCEPTS CORP.
80 ORVILLE DRIVE
BOHEMIA, NEW YORK 11716
(Name and address of agent for service)
(631) 244-1500
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed Proposed
Class of Maximum Maximum Amount of
Securities Amount to be Offering Price Per Aggregate Registration
to be Registered Registered Security (1) Offering Price(1) Fee
<S> <C> <C> <C> <C>
Common Stock, 4,657,300 (2)(3) $1.97 $9,174,881 $ 2,550.62
par value
$.0001
per share
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee, based
upon the average of high and low prices of our common stock on the NASDAQ on
March 22, 2000.
(2) The Registration Statement also covers an indeterminate number of additional
shares of common stock which may become issuable pursuant to anti-dilution and
adjustment provisions of the plans.
(3) Includes shares issued and issuable upon exercise of options under the
plans.
<PAGE> 2
PROSPECTUS
This Prospectus relates to an aggregate 4,657,300 shares, including
384,800 shares issued under the 1998 Stock/Stock Option Plan and 2,047,500
shares authorized and issuable pursuant to the 1998 plan and 2,225,000 shares
issuable upon exercise of options for the common stock $.0001 par value of
Computer Concepts Corp. and is to be used in connection with the reoffer and
resale of such shares of our common stock and/or shares issuable upon exercise
of options which have been issued or are issuable to our directors, officers,
employees and consultants, some of whom are our affiliates, pursuant to our
1998 Incentive Stock Option Plan and grants of our common stock or options in
1999 and 2000 to our directors, officers, employees and consultants pursuant to
written compensation agreements. The amount of our common stock to be reoffered
or resold hereby by each selling stockholder who is an affiliate, and any other
person with whom he or she is acting in concert for the purpose of selling our
common stock, may not exceed, during any three month period, the amount
specified in Rule 144 (e) of the Securities Act of 1933, as amended (the
"Securities Act"). See "Selling Stockholders" and "Plan of Distribution." Our
common stock may be offered by the selling stockholders from time to time in
transactions on the National Association of Securities Dealers, Inc., Automated
Quotation System ("NASDAQ") in negotiated transactions, through the writing of
options on the common stock, or a combination of such methods of sale, at fixed
prices that may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. The
selling stockholders may effect such transactions by the sale of the common
stock to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of the common stock for whom such
broker-dealers may act as agent or to whom they may sell as principal, or both
(which compensation to a particular broker-dealer might be in excess of
customary commissions). The selling stockholders and any broker-dealer who acts
in connection with the sale of common stock hereunder may be deemed to be
"underwriters" as that term is defined in the Securities Act. The selling
stockholders may also sell the common stock pursuant to all of the terms and
conditions of Rule 144 promulgated under the Securities Act or any other
exemption from the registration requirements of the Act which may be
applicable. See "Selling Stockholders" and "Plan of Distribution." We will not
receive any of the proceeds from the sale of the common stock by the selling
stockholders, however, to the extent options are exercised, we will receive the
applicable option exercise premiums.
Our common stock is listed on the NASDAQ Small Cap Market under the
Symbol "CCEE." On March 22, 2000, the last reported sale price of our common
stock as reported by NASDAQ was $1.97 per share.
We will bear all expenses (other than underwriting discounts and
selling commissions, and fees and expenses of counsel or other advisors to the
selling stockholders) in connection with the registration of our common stock
being offered hereby, which expenses are estimated to be approximately $20,000.
An investment in the securities offered hereby involves a high degree of risk.
See Risk Factors beginning on page 3.
Neither the SEC nor any state securities commission has approved these
securities or determined that this Prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
You should rely only on information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
information that is different. This Prospectus does not consummate an offer to
sell or the solicitation of an offer to buy the securities offered hereby in any
state to any person to whom it is unlawful to make such offer or solicitation.
Except where otherwise indicated, this Prospectus speaks as of its date and
neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create an implication that there has been no change in our
affairs since the date hereof.
-------------------------
THE DATE OF THIS PROSPECTUS IS MARCH 24, 2000
<PAGE> 3
INTRODUCTION
Computer Concepts Corp. is a Delaware corporation originally organized
on August 27, 1987 under the corporate name Unique Ventures, Inc. As of April
22, 1989, we were restructured and we initiated our first business activities in
regard to research and development of computer software and hardware technology
as a development stage company in the data-base information retrieval area, and
effective September 20, 1989, we changed our name to Computer Concepts Corp.
Effective October 31, 1990, we acquired Ramp Associates, Inc. as a subsidiary
which provided software consulting services. Effective September 1, 1993, we
acquired Softworks, Inc. as a subsidiary which developed, marketed and sold
mainframe computer systems management software. We eliminated the Ramp
Associates, Inc. line of consulting services effective December 1993. In June of
1994, we acquired the Superbase software technology, and effective December 31,
1994, we acquired MapLinx Corp. as a subsidiary, which provided PC based
software that allows for geographical presentation of database information.
During December 1994, we also acquired DBopen, Inc., which provided PC database
administration tools employing client/server technology, and in 1998 acquired
the ComputerCop technology and related assets. Subsequent thereto, we sold
MapLinx Corp., the Superbase technology and discontinued the DBopen products. In
1998 and 1999, we sold or transferred shares of our Softworks, Inc. subsidiary
in conjunction with its Initial Public Offering and a secondary offering in
August, 1998 and June, 1999, respectively, and the raising of capital through
the sale of Softworks' shares, and the acquisition of certain assets and in
fulfillment of corporate obligations. In January and February, 2000, we sold our
interests in Softworks and the ComputerCop related assets. We now own and
operate computer software development, marketing and sales, and provide internet
based telecommunications related services in New York. Our executive offices are
located at 80 Orville Drive, Bohemia, New York 11716 and our telephone number at
that address is (631) 244-1500.
AVAILABLE INFORMATION
We are subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith file reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by us can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street, N.
W., Judiciary Plaza, Washington, D. C. 20549 and at the Commission's regional
offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and at 7 World Trade Center, New York, New York 10048.
We have filed with the Commission a Registration Statement on Form S-8
under the Securities Act, with respect to the shares of common stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to us and the shares of common stock offered hereby,
reference is hereby made to the Registration Statement, exhibits and schedules.
RECENT DEVELOPMENTS
In January 2000, we completed the sale of our investment in Softworks,
Inc. for approximately $61 million in cash. In February 2000, we also completed
the sale of our ComputerCOP assets (which included software technology and
$20,500,000 in cash) to NetWolves Corporation in exchange for 1,775,000 shares
of NetWolves' common stock valued at $35 million. On March 14, 2000, we
announced that Daniel DelGiorno (Sr.) was retiring from his Chairman and
officer positions. Our remaining Board elected James Cannavino to complete Mr.
DelGiorno's term and to act as Chairman of the Board until the next annual
shareholder's meeting. In conjunction with Mr. Cannavino's election as
Chairman, and having completed these recent transactions, our President and
CEO, Daniel DelGiorno (Jr.), informed the Board that he was electing to retire
from his positions as a director and officer concurrent with his father's
retirement in order to spend more time with his family in retirement. Anthony
Coppola, Executive Vice-President in charge our d.b.Express internet
telecommunications business, was named as acting President pending further
actions by the Board. On March 17, 2000, we announced the decision of Messrs.
Pellicano, Beige and Medina to voluntarily resign from their positions as
members of our Board of Directors. Additionally, the Board elected Dr. Dennis
Murray, President of Marist College, to serve as director for the balance of
Mr. Pellicano's term. We also announced the election of Mr. Charles Feld of
Delta Airlines, to serve the balance of Mr. DelGiorno's (Jr.) term as a
director.
Our new Board members are considering a number of alternatives for our future
direction, which may include modifying our overhead, facilities usage,
personnel, compensation structure, marketing, sales and growth strategies which
could result in significant changes to our present structure and could therefore
result in possible, significant one-time charges. We cannot be assured that any
of those changes, or others, will result in our success.
Background information for each of our three new Board members is as follows:
<PAGE> 4
- - James Cannavino, the new Chairman of the Board, has extensive experience in
the computer industry including serving as a board member for several
computer industry companies, and as the CEO and Chairman of Cybersafe
Corporation. Prior to joining Cybersafe, Mr. Cannavino served as President
of Perot Systems Corporation, which grew from $300 million to more than
$800,000 million under his leadership, and prior to Perot, he was a senior
executive at IBM, holding numerous executive management positions. As a 32
year veteran at IBM Corporation, Mr. Cannavino retired from IBM in March,
1995 as Senior Vice President for Strategy and Development. He was a member
of the IBM Corporate Executive Committee and Worldwide Management Council,
and served on the Board of IISM's Integrated Services and Solutions
Company. He was also a Board member of three IBM joint-venture companies,
including Prodigy Services, Inc., Digital Domain, Inc. and New Leaf
Entertainment. He was responsible for driving IBM's thrust into
network-centered computing, and is also widely recognized as the force
behind IBM's investments in object technologies and new services offerings.
Mr. Cannavino brings us a wealth of knowledge and experience in developing
and implementing successful long-term strategic plans.
- - Dennis Murray has been President of Marist College since 1979. Under Dr.
Murray's leadership, Marist has become one of the most technologically
advanced liberal arts colleges in the country, having recently completed a
five-year, $16 million joint study with the IBM Corporation that included
an integrated voice and data network that connects virtually every room on
campus, and the integration of information technology across the
curriculum. Dr. Murray serves on several boards, including Bank of New
York/Dutchess Division, the Franklin and Eleanor Roosevelt Institute, the
McCann Foundation and Vassar Brothers Hospital Foundation. He is also the
editor of three books in the field of government and public affairs and is
co-author of a guide to corporate-sponsored university research in
biotechnology.
- - Charles Feld has acted in the capacity of Chief Information Officer for
Delta Airlines since December, 1997, and is highly respected and
acknowledged as a leader in the computer industry. From June, 1992 until
August, 1997, Mr. Feld served as Chief Information Officer for Burlington
Northern Santa Fe Corp. Mr. Feld also has been President of the Feld Group,
Inc., a provider of temporary chief information officer consulting services
for more than five years.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We hereby incorporate by reference into this Prospectus the following:
(a) Report on Form 10-K for the year ended December 31, 1999, and
including specifically the Consolidated Financial Statements
for the years ended December 31, 1999, 1998 and 1997, as
reported on by Hays & Company, Certified Public Accountants;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the Registrant document referred to in
(a) above.
All documents filed by us pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act subsequent to the date hereof and prior to the filing
of a post-effective amendment to the Registration Statement which indicates that
all shares of common stock offered hereby have been sold or which deregisters
all shares of common stock then remaining unsold, shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that such statement is
modified or superseded by a statement contained herein or in a subsequently
filed document which also is or is deemed to be incorporated by reference
herein. Any such statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
We will provide, without charge, to each person (including any
beneficial owner) to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (not including exhibits to such
information unless such exhibits are specifically incorporated by reference into
such information). Such requests should be directed to Office of the President,
at our executive offices at 80 Orville Drive, Bohemia, New York 11716, telephone
number (631) 244-1500.
<PAGE> 5
RISK FACTORS
The securities offered hereby are speculative and involve a high degree of risk.
Only those persons able to lose their entire investment should purchase these
securities. Prospective investors, prior to making an investment decision,
should carefully read this prospectus and consider, along with other matters
referred to herein, the following risk factors:
1. LACK OF PROFITABLE OPERATIONS AND CASH FLOW FROM OPERATIONS; FUTURE
PROFITABILITY UNCERTAIN. We first acquired operating assets in April of 1989. We
have incurred net losses of approximately $12,385,000 and $5,572,000 for the
years ended December 31, 1997 and 1999, respectively, and although we reported a
net profit of $9,547,000 for the year ended December 31, 1998, we had cumulative
losses of $77,766,000 through December 31, 1999, and may incur additional losses
in the course of building our business. Our profitability under our current
business plan is substantially dependent upon the successful exploitation of our
d.b.Express technology. There can be no assurances that we will be able to
successfully exploit the d.b.Express technology.
2. LIMITED REVENUES; CONTRACTION OF OPERATIONS. We started our business
in 1989. Effective October 1990, we acquired Ramp Associates, Inc. and effective
September 1993, we acquired Softworks, Inc., both of which operated as private
self-sufficient companies prior to their acquisition by us. We eliminated the
Ramp Associates, Inc. line of consulting services effective December 1993. We
purchased the "Superbase" database software technology in June 1994 and acquired
DBopen Inc., and MapLinx, Inc. in December 1994. Subsequent to these
acquisitions, as a result of limited sales, changing market conditions and our
decision to focus our activities on exploitation of d.b.Express and Softworks,
we determined to sell the "Superbase" technology assets (sold in the second
quarter of 1996), discontinue the DBopen related products and sold the net
assets of MapLinx in 1997. In June, 1998, we acquired asset rights related to
the software product now known as ComputerCOP, and in August, 1998, sold shares
of our Softworks, Inc. subsidiary in an Initial Public Offering. In 1998 and
1999 additional interests in Softworks were sold with the balance of our
interest being sold pursuant to a tender offer by EMC Corporation in January,
2000. In February 2000, the ComputerCop assets were sold. Our primary source of
revenue is currently generated from d.b.Express. Although we have taken the
steps we believe are necessary to exploit d.b.Express, there can be no assurance
that our efforts will be successful in this regard. Although revenues from our
d.b.Express related operations have been increasing, to date, revenues generated
therefrom have not been sufficient to pay our operating costs.
3. POTENTIAL ADVERSE IMPACT ON MARKET PRICE OF SHARES ELIGIBLE FOR
FUTURE SALE. We have approximately 22,135,600 shares of common stock outstanding
as of March 22, 2000, including the shares issuable under the plans and being
registered herein, of which approximately 17,000,000 are currently without
restriction on resale, and virtually all of the restricted shares not included
in this registration have been outstanding in excess of one year and may qualify
for sale pursuant to various securities laws and regulations. The influx of all
of this common stock on the market together with the 4,657,300 (if all options
are earned and exercised) shares registered herein, could have a significant
adverse effect on the market for, as well as the price of, the common stock. If
all outstanding options and warrants, including options registered herein and/or
subject to various performance requirements (approximately 4,665,000), were
exercised, the outstanding shares would total approximately 26,800,500 shares. A
decline in the market price also may make the terms of future financings which
involve our common stock or the use of convertible debt more burdensome.
Although the exercise of options would result in significant proceeds to us
(approximately $9,504,000 if all outstanding warrants and options are earned and
are exercised for cash), the impact of any significant number of such shares
entering the market would likely have a negative impact on the market price for
our common stock. We have authorized capital of 150,000,000 shares of common
stock, par value $.0001 per share.
4. COMPETITION. Our products and services are marketed in a highly
competitive environment characterized by rapid change, frequent product
introductions and declining prices. Further, our personal computer products have
been designed specifically for use on the Intel x86 family of computers,
utilizing other well known database products. A decline in the use of this type
of personal computer or the emergence of competitive platforms could materially
adversely affect the market for ours products. We consider certain end-user data
access tool and executive information system software companies to be
competitors of our d.b.Express product, including Trinzic Corporation,
<PAGE> 6
Cognos, Inc., Comshare Corp., and Pilot Software, Inc. While we believe that
d.b.Express can compete effectively against such companies' product offerings
based on ease of use, lack of programming, data access, speed and price, no
assurance can be given in this regard, and we have focused our activities in the
area of certain telecommunications industry related services which also have
numerous competitive companies. Many of our existing and potential competitors
possess substantially greater financial, marketing and technology resources than
we do.
5. CURRENT LITIGATION. We, and certain of our officers and directors,
are parties to several lawsuits, including a class action complaint and a
derivative action complaint, among others. While we are vigorously defending
these actions, any substantial judgment against us would have a material adverse
effect on our financial condition and could threaten our viability.
6. DEPENDENCE ON KEY PERSONNEL AND RECENT CHANGES IN MANAGEMENT. We
have been highly dependent on our executive officers and management personnel,
the loss of any of whom could have an adverse affect upon our operations. Our
senior officers and founding directors recently retired and new directors were
elected by remaining Board members to serve out the balance of the retiring
Board members' terms or until the next shareholder meeting. Should any of the
members of our remaining senior management be unable or unwilling to continue in
their present roles or should such person determine to enter into competition
with us, our prospects could be adversely affected. Our new Board members are
considering a number of alternatives for our future direction, which may include
modifying our overhead, facilities usage, personnel, compensation structure,
marketing, sales and growth strategies which could result in significant changes
to our present structure. We cannot be assured that any of those changes, or
others, will result in our success. Our success is also dependent upon our
ability to attract, retain and motivate highly-trained technical, marketing,
sales and management personnel. The inability to attract, retain and motivate
personnel required for development, maintenance and expansion of our activities
could adversely affect our business and prospects.
7. SUBSTANTIAL NUMBER OF OUTSTANDING SHARES OF COMMON STOCK AND
VOLATILITY IN TRADING PRICE. We have approximately 22,135,600 shares of common
stock outstanding as of March 22, 2000, of which approximately 17,000,000 are
currently without restriction on resale. The price of our common stock is
subject to fluctuation and has increased and decreased substantially from $1.00
to $7.00 during 1998 and 1999. The trading activity in our common stock also
varies from time to time so that, at any given time, the sale of a large block
could adversely affect the market price of our common stock.
8. NO CREDIT FACILITY. We have no bank or other credit facility
arrangements and have no other significant assets other than cash and/or our
investment interest in NetWolves Corporation common stock which is subject to
various restrictions on sale. Accordingly, our business could be adversely
affected in the event that we have a need for funds in amounts greater than ours
cash on hand. If additional funds are needed, we could obtain the funds through
debt or equity financing, or if necessary, we could sell a portion of our
investment in NetWolves Corporation.
9. NO REGULAR DIVIDENDS. We have not declared or paid, and do not
anticipate declaring or paying in the foreseeable future, a regular periodic
cash dividend on our common stock. However, we have declared two dividends of
$6,000,000 and approximately $2,000,000. Our ability to pay dividends is
dependent upon, among other things, future earnings, our operating and financial
condition, our capital requirements, general business conditions and other
pertinent factors, and is subject to the discretion of the Board of Directors.
Accordingly, there is no assurance that any additional dividends will be paid on
our common stock.
10. IMPORTANCE OF AND RISKS RELATING TO INTELLECTUAL PROPERTY RIGHTS.
The computer software industry is characterized by extensive use of intellectual
property protected by copyright, patent and trademark laws. While we believe
that we do not infringe on the intellectual property rights of any third parties
in the conduct of our business, allegations of any such infringement, or
disputes or litigations relating thereto, could have a material adverse affect
on our business and financial condition. Also, if third parties were permitted
to use our proprietary technology without our consent or without our being
compensated therefor, we believe that one of our competitive advantages could be
eroded. No assurance can be given that our patents and copyrights will
effectively protect us from any copying or emulation of our products in the
future.
<PAGE> 7
11. LACK OF MANAGING UNDERWRITER. The sale of common stock by the
selling stockholders will not be coordinated or controlled by a managing
underwriter. Certain selling stockholders may be deemed to be underwriters, as
such term is defined by the Securities Act. Selling stockholders will, during
the distribution period, also be subject to the restrictions on their purchases
and sales of common stock as set forth in Rules 10b-6 and 10b-7 under the
Exchange Act. See "Selling Security holders" and "Plan of Distribution."
12. POTENTIAL IMPACT IF RULE 15G BECOMES APPLICABLE TO OUR SECURITIES.
Rule 15G of the Securities Act of 1934 provides certain requirements for the
sale of securities which are classified as "penny stocks." As our stock exceeds
the stock price, asset and revenue parameters for classification as a penny
stock (more than $5.00, less than $2 million of tangible assets or $6 million of
revenues for companies in business more than three years) and trades on the
NASDAQ exchange (Small Cap Market) those rules are not currently applicable to
us. However, in the event, we were to be so classified in the future, the
compliance requirements for the sale of securities under Rule 15G could have a
negative effect on the marketability of our securities.
13. POTENTIAL LOSS OF ENTIRE INVESTMENT IN OUR SECURITIES. An
investment in our securities involves a high degree of risk, including the
potential total loss of your investment.
SELLING STOCKHOLDERS
Certain of the selling stockholders whose shares of common stock are
registered by the Registration Statement and covered by this Prospectus are
"affiliates" of us as that term is defined in Rule 405 of the Securities Act.
Such shares of common stock are issuable to the selling stockholders under the
plans. Additional shares of common stock which are registered by the
Registration Statement and which become issued pursuant to options issued to the
selling stockholders may be added to this Prospectus by supplements hereto.
The amount of common stock to be reoffered or resold by each selling
stockholder hereby who is an affiliate, and any other person with whom each
selling stockholders is acting in concert for the purpose of selling our common
stock, is limited by Rule 144(e) of the Securities Act, which as currently in
effect would prohibit such reoffers or resales from exceeding, during any three
month period, the greater of (i) one percent of the common stock outstanding as
shown by the most recent report or statement published by us, or (ii) the
average weekly reported volume of trading in the common stock reported by NASDAQ
during the four calendar weeks preceding the date of receipt of the order to
execute the transaction by the broker or the date of execution of the
transaction directly with a market maker.
Included in the 4,657,300 shares we are registering are 384,800 shares
authorized and issued, but which we had not previously included in a
registration. The names of those selling stockholders and certain information
with respect to them are listed below. Except as otherwise noted, none of such
persons has had any material relationship with the Company during the past three
years.
<TABLE>
<CAPTION>
Amount of Percentage of
Amount of Common Outstanding
Common Amount of Stock to be Common Stock
Stock Common Owned if to be Owned if
Name of Beneficially Stock to be all Shares all Shares
Selling Owned Prior Offered Offered Hereby Offered Hereby
Stockholder to Offering* Hereby are Sold are Sold **
- ----------- ------------ ----------- -------------- --------------
<S> <C> <C> <C> <C>
Amico, Claudia 800 800 ***
Athans, Leigh 22,050 6,000 16,050 ***
Balan, Sajay 22,110 6,000 16,110 ***
Beach, Brian 36,500 6,000 30,500 ***
Beige, Jack S.+ 186,250 25,000 161,250 ***
Brander, Roni 10,560 2,000 8,560 ***
Bronson, Scott 6,500 4,000 2,500 ***
Castoro, Michael 58,350 12,500 46,350 ***
Chamberlain, Orland 31,750 6,000 25,750 ***
Coppola, Anthony ++ 228,875 22,500 206,375 ***
Dageyev, Igor 19,350 6,000 13,350 ***
Desmet, Clark 10,000 2,000 8,000 ***
Dengler, Chris 8,500 2,000 6,500 ***
DiMare, Salvatore 31,000 6,000 25,000 ***
Dietl, Jaclyn 5,500 2,000 3,500 ***
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C> <C> <C>
Eisenberg, Michael 195,000 10,000 185,000 ***
Gordon, Sindy 1,000 1,000 ***
Hallock, Gail 2,000 1,000 1,000 ***
Heuzey, Doug 67,950 10,000 57,950 ***
Hoffman, Warren 25,000 25,000 ***
Johnston, Tim 17,750 2,000 15,750 ***
Kaemmlein, Hans 247,500 50,000 197,500 ***
Kale, Udayan 22,100 6,000 16,100 ***
Koenig, Michael 71,150 10,000 61,150 ***
Kogan, Ian 11,000 2,000 9,000
Kolenik, Michelle 4,750 2,000 2,750 ***
Kopelson, Edward 3,000 3,000 ***
Leap, Arnold 92,950 10,000 82,950 ***
Leuly, Mark 70,650 20,000 50,650 ***
Mata, Corina 20,760 4,000 16,760 ***
Neely, Linda 100,000 50,000 50,000 ***
Pellicano, Russell+ 230,000 25,000 205,000 ***
Rybalko, Oleg 19,750 4,000 15,750 ***
Sages, Allan 2,750 2,000 750 ***
Sassano, Louis 17,500 4,000 13,500 ***
Singh, Jasmeet Paul 3,000 3,000 ***
Sosias, Margie 1,500 1,000 500 ***
Vadul, Anand 4,000 4,000 ***
Wang, Xiaoli 18,250 7,000 11,250 ***
West, James 4,000 4,000 ***
White, Tim 51,000 8,000 42,000 ***
Whitney, Allison 4,750 4,000 750 ***
Zvonik, Linda 4,000 4,000 ***
--------- --------- ---------
1,991,655 384,800 1,606,855
</TABLE>
* Includes shares issuable upon exercise of options
** Based on approximately 26,780,500 shares deemed outstanding if all
outstanding options are exercised.
*** Less than one percent
+ Director until March 17, 2000
++ Officer effective March 14, 2000
PLAN OF DISTRIBUTION
The common stock may be offered by the selling stockholders from time
to time in transactions on NASDAQ, in negotiated transactions, through the
writing of options on the common stock, or a combination of such methods of
sale, at fixed prices that may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at
negotiated prices. The selling stockholders may effect such transactions by the
sale of the common stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the selling stockholders and/or the purchasers of the common stock for whom
such broker-dealers may act as agent or to whom they may sell as principal, or
both (which compensation to a particular broker-dealer might be in excess of
customary commissions). The selling stockholders and any broker-dealer who acts
in connection with the sale of common stock hereunder may be deemed to be
"underwriters" as that term is defined in the Securities Act, and any commission
received by them and any profit on any resale of the common stock as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act. The selling stockholders also may sell the common stock pursuant
to all the terms and conditions of Rule 144 promulgated under the Securities
Act.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered hereby; however, we would receive the exercise price for options
exercised by selling stockholders.
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
us by Daniel B. Kinsey, P. C. Mr. Kinsey beneficially owns 428,000 shares and
options to purchase 150,000 shares of our common stock.
EXPERTS
An opinion is included herein and in the registration statement in
reliance upon the authority of the firm of Daniel B. Kinsey, P.C., as experts
regarding the legality of the securities offered hereby.
<PAGE> 9
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. ANY INFORMATION OR
REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN OR MADE, MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY US. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES
OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SECURITIES BY ANY PERSON IN ANY JURISDICTION
WHERE SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING SUCH OFFER IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS
SHALL NOT, UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Introduction.............................. 2
Available Information..................... 2
Recent Developments....................... 2
Incorporation of Certain Documents
by Reference......................... 3
Risk Factors.............................. 4
Selling Stockholders...................... 6
Plan of Distribution...................... 7
Use of Proceeds........................... 7
Legal Matters............................. 7
Experts................................... 7
</TABLE>
4,657,300 SHARES OF
COMMON STOCK
COMPUTER CONCEPTS CORP.
PROSPECTUS
MARCH 24, 2000
<PAGE> 10
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference into this
Registration Statement the documents listed in (a) through (c)
below:
(a) The Registrant's latest annual report filed pursuant
to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, or either (I) the latest prospectus
filed pursuant to Rule 424(b) under the Securities
Act of 1933 that contains audited financial
statements for the Registrant's latest fiscal year
for which such statements have been filed or (II) the
Registrant's effective registration statement on Form
10 filed under the Securities Exchange Act of 1934
containing audited financial statements for the
Registrant's latest fiscal year;
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 since
the end of the fiscal year covered by the Registrant
document referred to in (a) above;
(c) The description of the class of securities to be
offered which is contained in a registration
statement filed under Section 12 of the Securities
Exchange Act of 1934, including any amendment or
report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which indicates that all securities offered
have been sold or which deregisters all such securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The legality of the securities offered hereby will be
passed upon for the Company by Daniel B. Kinsey, P.C. Mr. Kinsey beneficially
owns 428,000 shares and options to purchase 150,000 shares of our common stock.
An opinion is included in the registration statement in reliance upon the
authority of the firm of Daniel B. Kinsey, P.C., as experts regarding the
legality of the securities offered hereby.
Item 6. Indemnification of Directors and Officers.
Under the provisions of the Certificate of Incorporation and
By-Laws of Registrant, each person who is or was a director or officer of
Registrant shall be indemnified by Registrant as of right to the full extent
permitted or authorized by the General Corporation Law of Delaware.
Under such law, to the extent that such person is successful
on the merits of defense of a suit or proceeding brought against him by reason
of the fact that he is a director or officer of Registrant, he shall be
indemnified against expenses (including attorneys' fees) reasonably incurred in
connection with such action.
If unsuccessful in defense of a third-party civil suit or a
criminal suit is settled, such a person shall be indemnified under such law
against both (1) expenses (including attorneys' fees) and (2) judgments, fines
and amounts paid in settlement if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of
Registrant, and with respect to any criminal action, had no reasonable cause to
believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the
right of Registrant, or if such suit is settled, such a person shall be
indemnified under such law only against expenses (including attorneys' fees)
incurred in the defense or settlement of such 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 Registrant except that if such a person is adjudicated to be liable
in such suit for negligence or misconduct in the performance of his duty to
Registrant, he cannot be made whole even for expenses unless the court
determines that he is fairly and reasonably entitled to be indemnified for such
expenses.
<PAGE> 11
The officers and directors of the Company are covered by
officers' and directors' liability insurance. The policy coverage is $5,000,000,
which includes reimbursement for costs and fees. There is a maximum aggregate
deductible for each loss under the policy of $250,000, for officers and
directors as a group of $50,000 and for each officer or director of $5,000.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 1998 Stock / Stock Option Plan
5 Opinion and consent of Daniel B. Kinsey, P. C.
23.1 Consent of Daniel B. Kinsey, P. C. - included in the
opinion filed as Exhibit 5
23.2 Consent of Hays & Company, Independent Certified
Public Accountants
24 Powers of Attorney.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement; provided, however, that
paragraphs (a)(l)(i) and (a)(l)(ii) do not apply if
the information required to be included in a
post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under
the Securities Act of 1933, 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
of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has
been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question
<PAGE> 12
whether such indemnification by it is against policy as
expressed in the Act and will be governed by final
adjudication of such issue.
***
<PAGE> 13
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
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 Bohemia, New York on the 22nd day of March, 2000.
COMPUTER CONCEPTS CORP.
By: /s/ James Cannavino.
James Cannavino., Chairman
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on March 22, 2000, by the following
persons in the capacities indicated. Each person whose signature appears below
constitutes and appoints James Cannavino and George Aronson, and each of them
acting individually, with full power of substitution, our true and lawful
attorneys-in-fact and agents to do any and all acts and things in our name and
on our behalf in our capacities indicated below which they or either of them may
deem necessary or advisable to enable Computer Concepts Corp. 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 not limited to, power and authority to
sign for us or any of us in our names in the capacities stated below, any and
all amendments (including post-effective amendments) thereto, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in such connection, as
fully to all intents and purposes as we might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ James Cannavino. Chairman, Director
- ------------------------------
James Cannavino
/s/ Dennis Murray Director
- ------------------------------
Dennis Murray
/s/Anthony Coppola President
- ------------------------------
Anthony Coppola
/s/ George Aronson Chief Financial Officer
- ------------------------------
George Aronson
</TABLE>
<PAGE> 14
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
COMPUTER CONCEPTS CORP.
Form S-8 Registration Statement
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page No. in Sequential
Exhibit Numbering of all Pages,
Number Exhibit Description including Exhibit Pages
- ------ ------------------- -----------------------
<S> <C> <C>
4.1 1998 Stock / Stock Option Plan ...........
5 Opinion and Consent of Counsel ...........
23.1 Consent of Counsel ....................... See Exhibit 5
23.2 Consent of Hays & Company ................
24 Powers of Attorney ....................... See signature page
</TABLE>
<PAGE> 1
COMPUTER CONCEPTS CORP.
1998 STOCK / STOCK OPTION PLAN
1. Purpose; Effectiveness of the Plan.
A. The purpose of this Plan is to advance the interests of the
Company and its stockholders by helping the Company obtain and retain the
services of employees and consultants, upon whose judgment, initiative and
efforts the Company is substantially dependent, and to enable the Company to
provide compensation in the form of securities when deemed appropriate, and to
provide those persons with further incentives to advance the interests of the
Company.
B. This Plan will become effective on the date of its adoption by
the Board. This Plan will remain in effect until it is terminated by the Board
or the Committee (as defined hereafter) under section 9 hereof. This Plan will
be governed by, and construed in accordance with, the laws of the State of
Delaware.
2. Certain Definitions.
Unless the context otherwise requires, the following
defined terms (together with other capitalized terms defined elsewhere in this
Plan) will govern the construction of this Plan, and of any stock option
agreements entered into pursuant to this Plan:
A. "10% Stockholder" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set forth in
Section 424(d) of the Code at the time he or she is granted an Option, stock
possessing more than ten percent (10%) of the total combined voting power or
value of all classes of stock of the Company and/or of its subsidiaries;
B. "1933 Act" means the federal Securities Act of 1933, as
amended;
C. "Board" means the Board of Directors of the Company;
D. "called for under an Option," or words to similar effect, means
issuable pursuant to the exercise of an Option;
E. "Code" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to Sections of
the Code as enacted at the time of this Plan's adoption by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Code resulting from recodification, renumbering or otherwise);
F. "Committee" means a committee of two or more Disinterested
Directors, appointed by the Board, to administer and interpret this Plan;
provided that the term "Committee" will refer to the Board during such times as
no Committee is appointed or qualified by the Board; the Board may always act in
lieu of the Committee;
G. "Company" means Computer Concepts Corp., a Delaware
corporation;
H. "Disability" has the same meaning as "permanent and total
disability," as defined in Section 22(e)(3) of the Code;
I. "Disinterested Director" means a member of the Board who is not
during the period of one year prior to his or her service as an administrator of
the Plan, or during the period of such service, granted or awarded Stock,
options to acquire Stock, or similar equity securities of the Company under this
Plan or any similar plan of the Company;
J. "Eligible Participants" means persons who, at a particular
time, are employees or consultants of the Company or its subsidiaries;
K. "Fair Market Value" means, with respect to the Stock, the
market price per share of such Stock determined by the Committee, consistent
with the requirements of Section 422 of the Code and to the extent consistent
therewith, as follows:
i. If the Stock was traded on a stock exchange on the
date in question, then the Fair Market Value will be equal to the
closing price reported by the applicable composite-transactions
report for such date;
<PAGE> 2
ii. If the Stock was traded over-the-counter on the
date in question and was classified as a national market issue,
then the Fair Market Value will be equal to the last-transaction
price quoted by the NASDAQ system for such date;
iii. If the Stock was traded over-the-counter on the
date in question but was not classified as a national market
issue, then the Fair Market Value will be equal to the average of
the last reported representative bid and asked prices quoted by
the NASDAQ system for such date; and
iv. If none of the foregoing provisions is
applicable, then the Fair Market Value will be determined by the
Committee in good faith on such basis as it deems appropriate.
L. "ISO" has the same meaning as "incentive stock option," as
defined in Section 422 of the Code;
M. "Just Cause Termination" means a termination by the Company of
an Optionee's employment by and/or service to the Company (or if the Optionee is
a director, removal of the Optionee from the Board by action of the stockholders
or, if permitted by applicable law and the by-laws of the Company, the other
directors), in connection with the good faith determination of the Company's
board of directors (or of the Company's stockholders if the Optionee is a
director and the removal of the Optionee from the Board is by action of the
stockholders, but in either case excluding the vote of the Optionee if he or she
is a director or a stockholder) that the Optionee has engaged in any acts
involving dishonesty or moral turpitude or in any acts that materially and
adversely affect the business, affairs or reputation of the Company or its
subsidiaries, or as defined in any applicable employment agreement;
N. "NSO" means any option granted under this Plan whether
designated by the Committee as a "non-qualified stock option," a "non-statutory
stock option" or otherwise;
O. "Option" means an option granted pursuant to this Plan
entitling the option holder to acquire shares of Stock issued by the Company
pursuant to the valid exercise of the option;
P. "Option Agreement" means an agreement between the Company and
an Optionee, in form and substance satisfactory to the Committee in its sole
discretion, which may consist solely of an option certificate, consistent with
this Plan;
Q. "Option Price" with respect to any particular Option means the
exercise price at which the Optionee may acquire each share of the Option Stock
called for under such Option;
R. "Option Stock" means Stock issued or issuable by the Company
pursuant to the valid exercise of an Option;
S. "Optionee" or "Grantee" means an Eligible Participant to whom
Stock and/or Options are granted hereunder, and any transferee thereof pursuant
to a Transfer authorized under this Plan;
T. "Plan" means this 1998 Stock Option Plan of the Company;
U. "QDRO" has the same meaning as "qualified domestic relations
order" as defined in Section 414(p) of the Code;
V. "Stock" means shares of the Company's Common Stock, $.0001 par
value;
W. "Stock Award" means any and all awards or grants of Stock
henceforth made by the Company, unless otherwise specified, to employees or
consultants by the Board or Committee in regard to services rendered to the
Company;
X. "Transfer," with respect to Option Stock, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer, conveyance,
pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy of
such Option Stock, including without limitation an assignment for the benefit of
creditors of the Optionee, a transfer by operation of law, such as a transfer by
will or under the laws of descent and distribution, an execution of judgment
against the Option Stock or the acquisition of record or beneficial ownership
thereof by a lender or creditor, a transfer pursuant to a QDRO, or to any decree
of divorce, dissolution or separate maintenance, any property settlement, any
separation agreement or any other agreement with a spouse (except for estate
planning purposes) under which a part or all of the shares of Option Stock are
transferred or awarded to the spouse of the Optionee or are required to be sold;
or a transfer resulting from the filing by the Optionee of a petition for
relief, or the filing of an involuntary petition against such Optionee, under
the bankruptcy laws of the United States or of any other nation.
<PAGE> 3
3. Eligibility.
The Company may grant Stock and/or Options under this Plan only to
persons who are Eligible Participants as of the time of such grant. Subject to
the provisions of sections 4(d), 5 and 6 hereof, there is no limitation on the
number or amount of Options or Stock that may be granted to an Eligible
Participant.
4. Administration.
A. Committee. The Committee, if appointed by the Board, will
administer this Plan. If the Board, in its discretion, does not appoint such a
Committee, or chooses to act in lieu of the Committee, the Board itself will
administer this Plan and take such other actions as the Committee is authorized
to take hereunder; provided that the Board may take such actions hereunder in
the same manner as the Board may take other actions under the Company's articles
of incorporation and by-laws generally.
B. Authority and Discretion of Committee. The Committee will have
full and final authority in its discretion, at any time and from time to time,
subject only to the express terms, conditions and other provisions of the
Company's articles of incorporation, by-laws and this Plan, and the specific
limitations on such discretion set forth herein:
(i) to select and approve the persons who will be
granted Stock or Options under this Plan from among the Eligible
Participants, and to grant to any person so selected one or more
shares of stock or Options to purchase such number of shares of
Option Stock on such terms as the Committee may determine;
ii. to determine the period or periods of time during
which Options may be exercised, the Option Price, vesting
provisions in regard to Stock or Options in the discretion of the
Committee and the duration of such Options, and other matters to
be determined by the Committee in connection with specific grants
and Option Agreements as specified under this Plan;
iii. to interpret this Plan, to prescribe, amend and
rescind rules and regulations relating to this Plan, and to make
all other determinations necessary or advisable for the operation
and administration of this Plan; and
iv. to delegate all or a portion of its authority
under subsections (i) and (ii) of this section 4(b) to one or more
directors of the Company who are executive officers of the
Company, but only in connection with Options granted to Eligible
Participants who are not subject to the reporting and liability
provisions of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, and subject
to such restrictions and limitations (such as the aggregate number
of shares of Option Stock called for by such Options that may be
granted) as the Committee may decide to impose on such delegate
directors.
C. Limitation on Authority. Notwithstanding the foregoing, or any
other provision of this Plan, the Committee will have no authority to grant
Stock or Options under this Plan to any of its members, however, the Board may
so act, with any subject Board member abstaining from action in regard to
himself.
D. Option Agreements. Options will be deemed granted hereunder on
the date the grant of Options is approved by the Committee or Board, as the case
may be.
E. Designation of Options. Except as otherwise provided herein,
the Committee will designate any Option granted hereunder as an NSO, it being
the Company's intent to adopt a separate plan in regard to the granting of ISOs.
5. Shares Reserved.
A. Pool. The aggregate number of shares of Option Stock that may
be issued pursuant to the exercise of Options granted under this Plan and all
other compensation plans adopted by the Company, i) in regard to Option Stock
issued with an exercise price less than Fair Market Value on the date of
granting the Option Stock, the aggregate number granted will not exceed five
percent (5%) (to be measured for all plans on a calendar year basis, but
separate and in addition to the Option Stock issued pursuant to item "ii,"
below) of the outstanding common stock of the Company on the date of granting
the Option Stock; and ii) in regard to Option Stock issued with an exercise
price equal to or greater than Fair Market Value on the date of granting the
Option Stock, the aggregate number granted will not exceed fifteen percent (15%)
(to be measured for all plans on a calendar year basis) of the outstanding
common stock of the Company on the date of granting the Option Stock (separately
or collectively referred to as the "Option Pool," as the case may be), provided
that such number will be increased from time to time by the number of shares of
Option Stock available to be issued in any prior
<PAGE> 4
calendar year which are not granted during that year and/or that the Company
subsequently may reacquire through repurchase or otherwise. These terms shall
not act to limit the number of shares of Stock which may be awarded from time to
time independent of Option grants. Shares of Option Stock that would have been
issuable pursuant to Options, but that are no longer issuable because all or
part of those Options have terminated or expired, will be deemed not to have
been issued for purposes of computing the number of shares of Option Stock
remaining in the Option Pool and available for issuance. In addition, stock
awards shall not exceed 2,432,300.
B. Adjustments Upon Changes in Stock. In the event of any change
in the outstanding Stock of the Company as a result of a stock split, reverse
stock split, stock dividend, recapitalization, combination or reclassification,
appropriate proportionate adjustments will be made in: (i) the aggregate number
of shares of Option Stock in the Option Pool that may be issued pursuant to the
exercise of Options granted hereunder; (ii) the Option Price and the number of
shares of Option Stock called for in each outstanding Option granted hereunder;
and (iii) other rights and matters determined on a per share basis under this
Plan or any Option Agreement hereunder. Any such adjustments will be made only
by the Board, and when so made will be effective, conclusive and binding for all
purposes with respect to this Plan and all Options then outstanding. No such
adjustments will be required by reason of the issuance or sale by the Company
for cash or other consideration of additional shares of its Stock or securities
convertible into or exchangeable for shares of its Stock.
6. Terms of Stock Option Agreements.
Each Option granted pursuant to this Plan will be
evidenced by an agreement (an "Option Agreement") between the Company and the
person to whom such Option is granted, in form and substance satisfactory to the
Committee in its sole discretion, consistent with this Plan. Without limiting
the foregoing, each Option Agreement (unless otherwise stated therein) will be
deemed to include the following terms and conditions:
A. Covenants of Optionee. At the discretion of the Committee, the
person to whom an Option is granted hereunder, as a condition to the granting of
the Option, may be deemed to accept and agree to all conditions and terms which
the Options may be made subject to. Upon request, such Optionee shall deliver to
the Company a confidential information agreement approved by the Committee, an
investor representations and subscriptions letter and a questionnaire, in form
acceptable to the Committee. Nothing contained in this Plan, any Option
Agreement or in any other agreement executed in connection with the granting of
an Option under this Plan will confer upon any Optionee any right with respect
to the continuation of his or her status as an employee of, consultant or
independent contractor to, or director of, the Company or its subsidiaries.
B. Vesting Periods. Except as otherwise provided herein, each
Stock Award or Option Agreement may specify the period or periods of time within
which each Option or portion thereof will first become vested or exercisable
(the "Vesting Period") with respect to the total number of shares of Option
Stock called for thereunder (the "Total Award Option Stock"). Such Vesting
Periods will be fixed by the Committee in its discretion in regard to each
Option Agreement, and may be accelerated or shortened by the Committee in its
discretion.
C. Exercise of the Option.
i. Mechanics and Notice. An Option may be exercised
to the extent exercisable (1) by giving written notice of exercise
to the Company, specifying the number of full shares of Option
Stock to be purchased and accompanied by full payment of the
Option Price thereof and the amount of withholding taxes pursuant
to subsection 6(c)(ii) below; and (2) by giving assurances
satisfactory to the Company that the shares of Option Stock to be
purchased upon such exercise are being purchased for investment
and not with a view to resale in connection with any distribution
of such shares in violation of the 1933 Act; provided, however,
that in the event the Option Stock called for under the Option is
registered under the 1933 Act, or in the event resale of such
Option Stock without such registration would otherwise be
permissible, this second condition will be inoperative if, in the
opinion of counsel for the Company, such condition is not required
under the 1933 Act, or any other applicable law, regulation or
rule of any governmental agency.
ii. Withholding Taxes. As a condition to the issuance
of the shares of Option Stock upon full or partial exercise of an
NSO granted under this Plan, upon request the Optionee will pay to
the Company in cash, or in such other form as the Committee may
determine in its discretion, the amount of the Company's tax
withholding liability required in connection with such exercise.
For purposes of this subsection 6(c)(ii), "tax withholding
liability" will mean all federal and state income taxes, social
security tax, and any other taxes applicable to the compensation
income arising from the transaction required by applicable law to
be withheld by the Company.
D. Payment of Option Price. Each Option Agreement will specify the
Option Price with respect to the exercise
<PAGE> 5
of Option Stock thereunder, to be fixed by the Committee in its discretion. The
Option Price will be payable to the Company in United States dollars in cash or
by check or, such other legal consideration or methods of payment as may be
approved by the Committee, in its discretion, including, but not limited to the
following:
i. The Committee, in its discretion, may permit a
particular Optionee to pay all or a portion of the Option Price,
and/or the tax withholding liability set forth in subsection
6(c)(ii) above, with respect to the exercise of an Option either
by surrendering shares of Stock already owned by such Optionee or
by withholding shares of Option Stock, provided that the Committee
determines that the fair market value of such surrendered Stock or
withheld Option Stock is equal to the corresponding portion of
such Option Price and/or tax withholding liability, as the case
may be, to be paid for therewith. ]
ii. If the Committee permits an Optionee to pay any
portion of the Option Price and/or tax withholding liability with
shares of Stock with respect to the exercise of an Option (the
"Underlying Option") as provided in subsection 6(d)(i) above, then
the Committee, may, but is not obligated to, in its discretion,
grant to such Optionee (but only if Optionee remains an Eligible
Participant at that time) additional NSOs, the number of shares of
Option Stock called for thereunder to be equal to all or a portion
of the Stock so surrendered or withheld (a "Replacement Option").
Each Replacement Option will be evidenced by an Option Agreement.
Unless otherwise set forth therein, each Replacement Option will
be immediately exercisable upon such grant (without any Vesting
Period) and will be coterminous with the Underlying Option. The
Committee, in its sole discretion, may establish such other terms
and conditions for Replacement Options as it deems appropriate.
E. Termination of the Option. Except as otherwise provided herein,
each Option Agreement will specify the period of time, to be fixed by the
Committee in its discretion, during which the Option granted therein will be
exercisable (the "Option Period"). To the extent not previously exercised, each
Option will terminate upon the expiration of the Option Period specified in the
Option Agreement; provided, however, that each such Option will terminate, if
earlier: (i) ninety days after the date that the Optionee ceases to be an
Eligible Participant for any reason, other than by reason of death or disability
or a Just Cause Termination; (ii) twelve months after the date that the Optionee
ceases to be an Eligible Participant by reason of such person's death or
disability; or (iii) immediately as of the date that the Optionee ceases to be
an Eligible Participant by reason of a Just Cause Termination. In the event of a
sale or all or substantially all of the assets of the Company, or a merger or
consolidation or other reorganization in which the Company is not the surviving
corporation, or in which the Company becomes a subsidiary of another corporation
(any of the foregoing events, a "Corporate Transaction"), then notwithstanding
anything else herein, the successor corporation must agree to assume the
outstanding Options or substitute therefor comparable options of such successor
corporation or a parent or subsidiary of such successor corporation, or the
right to exercise all then outstanding Options will vest immediately prior to
such Corporate Transaction.
F. Options Nontransferable. Unless otherwise expressly provided,
no Option will be transferable by the Optionee otherwise than by will or the
laws of descent and distribution, or pursuant to a QDRO. During the lifetime of
the Optionee, the Option will be exercisable only by him or her, or the
transferee of an NSO if it was transferred pursuant to a QDRO.
G. Qualification of Stock. The right to exercise an Option will be
further subject to the requirement that if at any time the Board determines, in
its discretion, that the listing, registration or qualification of the shares of
Option Stock called for thereunder upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of or in connection with the
granting of such Option or the purchase of shares of Option Stock thereunder,
the Option may not be exercised, in whole or in part, unless and until such
listing, registration, qualification, consent or approval is effected or
obtained free of any conditions not acceptable to the Board, in its discretion.
H. Additional Restrictions on Transfer. By accepting Stock,
Options and/or Option Stock under this Plan, the Optionee will be deemed to
represent, warrant and agree as follows:
i. Securities Act of 1933. The Optionee understands
that the shares of Option Stock have not been registered under the
1933 Act, and that such shares are not freely tradeable and must
be held indefinitely unless such shares are either registered
under the 1933 Act or an exemption from such registration is
available. The Optionee understands that the Company is under no
obligation to register the shares of Option Stock.
ii. Other Applicable Laws. The Optionee further
understands that Transfer of the Option Stock requires full
compliance with the provisions of all applicable laws.
iii. Investment Intent. Unless a registration
statement is in effect with respect to the sale of Stock or Option
Stock obtained through exercise of Options granted hereunder: (1)
The Stock grantee acquires, or
<PAGE> 6
upon exercise of any Option, the Optionee will purchase the Option
Stock for his or her own account and not with a view to
distribution within the meaning of the 1933 Act, other than as may
be effected in compliance with the 1933 Act and the rules and
regulations promulgated thereunder; (2) no one else will have any
beneficial interest in the Stock or Option Stock; and (3) he or
she has no present intention of disposing of the Stock or Option
Stock at any particular time.
I. Compliance with Law. Notwithstanding any other provision of
this Plan, Stock or Options may be granted pursuant to this Plan, and Option
Stock may be issued pursuant to the exercise thereof by an Optionee, only after
there has been compliance with all applicable federal and state securities laws
which may require providing of representations and questionnaires by Optionee,
and all of the same will be subject to this overriding condition. The Company
will not be required to register or qualify Option Stock with the Securities and
Exchange Commission or any State agency, except that the Company will register
with, or as required by local law, file for and secure an exemption from such
registration requirements from, the applicable securities administrator and
other officials of each jurisdiction in which an Eligible Participant would be
granted an Option hereunder prior to such grant.
J. Stock Certificates. Unless registered, certificates
representing the Stock or Option Stock issued pursuant to the exercise of
Options will bear all legends required by law and necessary to effectuate this
Plan's provisions. The Company may place a "stop transfer" order against shares
of the Option Stock until all restrictions and conditions set forth in this Plan
and in the legends referred to in this section 6(j) have been complied with.
K. Notices. Any notice to be given to the Company under the terms
of an Option Agreement will be addressed to the Company at its principal
executive office, Attention: Corporate Secretary, or at such other address as
the Company may designate in writing. Any notice to be given to an Optionee will
be addressed to the Optionee at the address provided to the Company by the
Optionee. Any such notice will be deemed to have been duly given if and when
enclosed in a properly sealed envelope, addressed as aforesaid, registered and
deposited, postage and registry fee prepaid, in a post office or branch post
office regularly maintained by the United States Government.
L. Other Provisions. The Option Agreement may contain such other
terms, provisions and conditions, including such special forfeiture conditions,
rights of repurchase, rights of first refusal and other restrictions on Transfer
of Option Stock issued upon exercise of any Options granted hereunder, not
inconsistent with this Plan, as may be determined by the Committee in its sole
discretion.
7. Proceeds from Sale of Stock.
Cash proceeds from the sale of shares of Option Stock
issued from time to time upon the exercise of Options granted pursuant to this
Plan will be added to the general funds of the Company and as such will be used
from time to time for general corporate purposes.
8. Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the
limitations of this Plan, the Committee may modify, extend or renew outstanding
Options granted under this Plan, or accept the surrender of outstanding Options
(to the extent not theretofore exercised) and authorize the granting of Stock or
new Options in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, however, no modification of any Option will,
without the consent of the holder of the Option, negatively alter or impair any
rights or obligations under any Option theretofore granted under this Plan.
9. Amendment and Discontinuance.
The Board may amend, suspend or discontinue this Plan
at any time or from time to time; provided further that no such action may
negatively alter or impair any Option previously granted under this Plan without
the consent of the holder of such Option.
10. Plan Compliance with Rule 16b-3.
With respect to persons subject to Section 16 of the
Securities Exchange Act of 1934, this plan has not been approved by the
shareholders of the Company which is one of the requirements for qualification
for exemption from liability under Section 16. By acceptance of Options,
Optionees acknowledge and agree with the following provisions:
A. Rule 16b-3 Compliance. If the Optionee is subject
to Rule 16b-3 compliance, the Optionee
<PAGE> 7
will not sell Option Stock until at least six months after issuance of the
Option Stock to the Optionee.
B. No Section 16 Exemption. As certain requirements
for qualification for exemption from Section 16 liability have not been met,
until such time as being advised in writing by the Company that the Plan
qualifies for the exemption, Optionees are subject to Section 16 liability on
exercise of the Options and should carefully review the timing of transactions
involving the Option Stock to avoid liability under Section 16 (the
"short-swing profit" rules; profits from any transaction within a six month
period are deemed to be based on insider information and all profits must be
paid to the Company). The exercise of the Option may be deemed a purchase,
thereby requiring a six month wait prior to a transfer or sale of the Option
Stock after the exercise of the Option. Although the exercise of options is
normally a taxable event, if the shares received may not be sold without
incurring Rule 16b liability, the taxable event is deemed not to occur until the
six month period has expired; therefore, the timing of an exercise should be
carefully considered well in advance of the time the Optionee may desire to sell
Option Stock.
11. Copies of Plan.
A copy of this Plan will be delivered to each
Optionee at or before the time he or she executes an Option Agreement.
* * *
(Date Plan Adopted by Board of Directors: February 19, 1998)
<PAGE> 1
March 22, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Computer Concepts Corp.
Registration Statement on Form S-8
Gentlemen:
Reference is made to the filing by Computer Concepts Corp. (the "Corporation")
of a Registration Statement on Form S-8 with the Securities and Exchange
Commission pursuant to the provisions of the Securities Act of 1933, as amended,
covering the registration of 4,657,300 shares of the Corporation's Common Stock,
$.0001 par value per share, in connection with the Corporation's stock incentive
plans (the "Plans").
As counsel for the Corporation, I have examined its corporate records, including
its Certificate of Incorporation, as amended, its By-Laws, its corporate
minutes, the form of its Common Stock certificate, the Plans, related documents
under the Plans and such other documents as deemed necessary or relevant under
the circumstances.
Based upon this examination, I am of the opinion that:
1. The Corporation is duly organized and validly existing under the laws of
the State of Delaware.
2. The 2,432,300 shares and the 2,225,000 shares of the Corporation's Common
Stock issuable upon exercise of options, when issued pursuant to the Plans
and in accordance with the agreements related thereto, will be validly
authorized, legally issued, fully paid and non-assessable.
I hereby consent to be named in the Registration Statement and in the Prospectus
which constitutes a part thereof as counsel of the Corporation, and I hereby
consent to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
DANIEL B. KINSEY, P.C.
Daniel B. Kinsey
<PAGE> 1
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Computer Concepts Corp. on Form S-8 (being filed herewith) of our report dated
February 18, 2000, appearing in the Annual Report on Form 10-K of Computer
Concepts Corp. for the year ended December 31, 1999.
s/ Hays & Company
March 22, 2000
New York, New York
