AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL __, 2000
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-------------
INFINITE GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 52-1490422
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Identification
Organization) Number)
2364 Post Road
Warwick, Rhode Island 02886
(401) 738-5777
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Executive Offices)
-----------------------------
Infinite Group, Inc. 1993, 1994, 1995, 1996, 1997,
1998 and 1999 Stock Option Plans
(Full Title of Plans)
Clifford G. Brockmyre
Chief Executive Officer
Infinite Group, Inc.
2364 Post Road
Warwick, Rhode Island 02886
(401) 738-5777
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Please send copies of all correspondence to:
Kenneth S. Rose, Esq.
Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10022-5030
Telephone No. (212) 838-4312
Fax No. (212) 838-9190
--------------------
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed Maximum
Proposed Maximum Aggregate Amount of
Title of Securities Amount to be Offering Price Offering Registration
To be Registered Registered (1) per Share Price Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (par value $.001
per share) issuable pursuant to
options granted or to be granted
under the 1993, 1994, 1995, 1996,
1997, 1998 and 1999 Stock Option
Plans (the "Plans")
- -------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon exercise of
options granted under the Plans (2) 536,614 $2.347 $1,259,433 $333.75
- -------------------------------------------------------------------------------------------------------------------
Common Stock issuable pursuant to options
that may be granted under the Plans (3) 1,803,386 $2.773 $5,000,789 $1,325.09
- -------------------------------------------------------------------------------------------------------------------
Total 2,340,000 $6,260,222 $1,658.84
===================================================================================================================
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended,
this Registration Statement also covers an indeterminate number of additional
shares or rights which by reason of certain events specified in the Plans become
subject to the Plans.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee on the basis of the weighted average exercise
price of $2.347 per share for outstanding options to purchase a total of 536,614
shares of Common Stock.
(3) Calculated in accordance with Rule 457(c) and Rule 457(h), the
proposed maximum offering price per share, proposed maximum aggregate offering
price and the amount of the registration fee are based upon the average of the
high and low sales prices reported on the Nasdaq SmallCap Market on April 26,
2000, with respect to shares available for grant under the Plans.
===============================================================================
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INFINITE GROUP, INC.
REGISTRATION STATEMENT ON FORM S-8
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in this Part I (plan
information and registrant information) will be sent or given to employees as
specified by Rule 428(b)(1) of the Securities Act of 1933, as amended (the
"Securities Act"). Such documents need not be filed with the Securities and
Exchange Commission either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424 of the Securities
Act. These documents and the documents incorporated by reference in this
registration statement pursuant to Item 3 of Part II of this form, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by the Company with the Commission pursuant
to the Securities Exchange Act of 1934 (the "Exchange Act") are incorporated in
this Prospectus by reference:
(1) Annual Report on Form 10-KSB for the fiscal year ended December 31,
1999; and
(2) The description of the Company's Common Stock, contained in the
Company's Registration Statement on Form 8-A registering such shares
pursuant to Section 12 of the Exchange Act, including any amendment
or report updating such information.
Each document filed subsequent to the date of this registration statement
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
registration statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this registration statement is delivered,
upon the written or oral request of any such person, a copy of any document
incorporated by reference in this registration statement (other than exhibits
unless such exhibits are specifically incorporated by reference in such
documents). Requests should be directed to Infinite Group, Inc., 2364 Post Road,
Warwick, Rhode Island 02886, (401) 738-5777, Attention: Bruce J. Garreau, Chief
Financial Officer.
Item 4. Description of Securities
Not applicable.
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Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Sections 145 of the Delaware General Corporation Law grants to the Company
the power to indemnify the officers and directors of the Company, under certain
circumstances and subject to certain conditions and limitations as stated
therein, against all expenses and liabilities incurred by or imposed upon them
as a result of suits brought against them as such officers and directors if they
act in good faith and in a manner they reasonably believe to be in or not
opposed to the best interests of the Company and, with respect to any criminal
action or proceeding, have no reasonable cause to believe their conduct was
unlawful.
The Company's certificate of incorporation provides as follows:
"EIGHTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
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 law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit."
Pursuant to Section 102(b)(7) of the Delaware General Corporation Laws,
Article EIGHTH of the Registrant's Restated Certificate of Incorporation
eliminates a director's personal liability for monetary damages to the
Registrant and its stockholders for breaches of fiduciary duty as a director,
except in circumstances involving a breach of a director's duty of loyalty to
the Registrant or its stockholders, acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of the law, self-dealing, or
the unlawful payment of dividends or repurchase of stock.
The Registrant maintains an insurance policy on behalf of itself and
certain of its subsidiaries, and on behalf of the directors and officers
thereof, covering certain liabilities which may arise as a result of the actions
of the directors and officers.
Item 7. Exemption From Registration Claimed
Not Applicable
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Item 8. Exhibits
The Exhibits listed below are filed as part of this report.
Exhibit No. Description
- ---------- -----------
3.1 Restated Certificate of Incorporation of the Company. (1)
3.2 Certificate of Amendment of Certificate of Incorporation dated
January 7, 1998. (2)
3.3 Certificate of Amendment of Certificate of Incorporation dated
February 16, 1999. (3)
3.4 By-Laws of the Company. (1)
4.1 Specimen Stock Certificate. (1)
4.2 Form of Stock Option Plan. *
4.3 Form of Stock Option Agreement. (1)
5.1 Opinion of Morse, Zelnick, Rose & Lander, LLP as to legality of the
securities being registered*
23.1 Consent of Freed Maxick, Sachs & Murphy, P. C. (independent public
accountants)*
23.2 Consent of Morse, Zelnick, Rose & Lander, LLP (included in
Exhibit 5.1)
24 Power of Attorney (included in signature page)
- -------------------------
* Filed herewith.
(1) Previously filed as on Exhibit to the Company's Registration Statement on
Form S-1 (File #33-61856). This Exhibit is incorporated herein by
reference.
(2) Incorporated by reference to Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997.
(3) Incorporated by reference to Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1998.
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Item 9. Undertakings
The undersigned hereby undertakes:
(a) To file, during any period in which it 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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraph (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) That, for the purpose of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions described in Item 6 of this Registration Statement,
or otherwise, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Warwick, State of Rhode Island on this 26th day of
April, 2000.
INFINITE GROUP, INC.
By:/s/ Clifford G. Brockmyre II
----------------------------
Clifford G. Brockmyre II,
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Clifford G. Brockmyre II and Kenneth S. Rose, or either
one of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all pre-or post-effective amendments to
this Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might not could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities indicated.
/s/ Clifford G. Brockmyre II Director, President and
- ---------------------------- Chief Executive Officer April 26, 2000
Clifford G. Brockmyre II
/s/ Bruce J. Garreau Chief Financial and April 26, 2000
- ------------------------ Accounting Officer
Bruce J. Garreau
/s/ Daniel T. Landi Corporate Controller and April 26, 2000
- ------------------------ Secretary
Daniel T. Landi
/s/ Michael S. Smith Director April 26, 2000
- ------------------------
Michael S. Smith
/s/ William G. Lyons III Director April 26, 2000
- ---------------------------
William G. Lyons III
/s/ J. Terence Feeley Director April 26, 2000
- ------------------------
J. Terence Feeley
<PAGE>
INFINITE GROUP INC.
INDEX OF EXHIBITS
3.1 Restated Certificate of Incorporation of the Company. (1)
3.2 Certificate of Amendment of Certificate of Incorporation dated January 7,
1998. (2)
3.3 Certificate of Amendment of Certificate of Incorporation dated
February 16, 1999. (3)
3.4 By-Laws of the Company. (1)
4.1 Specimen Stock Certificate. (1)
4.2 Form of Stock Option Plan. *
4.3 Form of Stock Option Agreement. (1)
5.1 Opinion of Morse, Zelnick, Rose & Lander, LLP as to legality of the
securities being registered*
23.1 Consent of Freed Maxick, Sachs & Murphy, P. C. (independent public
accountants)*
23.2 Consent of Morse, Zelnick, Rose & Lander, LLP (included in Exhibit 5.1)
24 Power of Attorney (included in signature page)
- -------------------------
* Filed herewith.
(1) Previously filed as on Exhibit to the Company's Registration Statement on
Form S-1 (File #33-61856). This Exhibit is incorporated herein by
reference.
(2) Incorporated by reference to Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997.
(3) Incorporated by reference to Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1998.
EXHIBIT 4.2
INFINITE GROUP, INC.
1999 STOCK OPTION PLAN
1. Purpose; Types of Awards; Construction.
The purpose of the Infinite Group, Inc. 1999 Stock Option Plan (the
"Plan") is to align the interests of officers, other key employees, consultants
and non-employee directors of Infinite Group, Inc. (the "Company") and its
subsidiaries with those of the stockholders of the Company, to afford an
incentive to such officers, employees, consultants and directors to continue as
such, to increase their efforts on behalf of the Company and to promote the
success of the Company's business. To further such purposes, the Committee may
grant options to purchase shares of the Company's common stock. The provisions
of the Plan are intended to satisfy the requirements of Section 16(b) of the
Securities Exchange Act of 1934 and of Section 162(m) of the Internal Revenue
Code of 1986, as amended, and shall be interpreted in a manner consistent with
the requirements thereof, as now or hereafter construed, interpreted and applied
by regulations, rulings and cases.
2. Definitions.
As used in this Plan, the following words and phrases shall have the
meanings indicated below:
(a) "Agreement" shall mean a written agreement entered into
between the Company and an Optionee in connection with an award under the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause" when used in connection with the termination of an
Optionee's employment by the Company or the cessation of an Optionee's service
as a consultant or a member of the Board, shall mean (i) the conviction of the
Optionee for the commission of a felony, (ii) the willful and continued failure
by the Optionee substantially to perform his duties and obligations to the
Company or a Subsidiary (other than any such failure resulting from his
incapacity due to physical or mental illness), or (iii) the willful engaging by
the Optionee in misconduct that is demonstrably injurious to the Company or a
Subsidiary. For purposes of this Section 2(c), no act, or failure to act, on an
Optionee's part shall be considered "willful" unless done, or omitted to be
done, by the Optionee in bad faith and
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without reasonable belief that his action or omission was in the best interest
of the Company. The Committee shall determine whether a termination of
employment is for Cause for purposes of the Plan.
(d) "Change in Control" shall mean the occurrence of the event set
forth in any of the following paragraphs:
(i) any Person (as defined below) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its subsidiaries)
representing 50% or more of the combined voting power of the Company's
then outstanding securities; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving: individuals
who, on the date hereof, constitute the Board and any new director (other
than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a
vote of at least two-thirds (2/3) of the directors then still in office
who either were directors on the date hereof or whose appointment,
election or nomination for election was previously so approved or
recommended; or
(iii) there is consummated a merger or consolidation of the
Company or a direct or indirect subsidiary thereof with any other
corporation, other than (A) a merger or consolidation which would result
in the voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its subsidiaries)
representing 50% or more of the combined voting power of the Company's
then outstanding securities; or
(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is consummated
an agree-
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ment for the sale or disposition by the Company of all or substantially all
of the Company's assets, other than a sale or disposition by the Company of all
or substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by Persons in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.
For purposes of this Section 2(d), "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (i) the Company
or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(f) "Committee" shall mean a committee established by the
Board to administer the Plan.
(g) "Common Stock" shall mean shares of common stock, par
value $0.01 per share, of the Company.
(h) "Company" shall mean Infinite Group, Inc., a corporation
organized under the laws of the State of Delaware, or any successor corporation.
(i) "Disability" shall mean an Optionee's inability to perform
his duties with the Company or on the Board by reason of any medically
determinable physical or mental impairment, as determined by a physician
selected by the Optionee and acceptable to the Company.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, and as now or hereafter construed,
interpreted and applied by regulations, rulings and cases.
(k) "Fair Market Value" per share as of a particular date
shall mean (i) if the shares of Common Stock are then listed on a national
securities exchange, the
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closing sales price per share of Common Stock on the national securities
exchange on which the Common Stock is principally traded for the last preceding
date on which there was a sale of such Common Stock on such exchange, or (ii) if
the shares of Common Stock are then traded in an over-the-counter market, the
closing bid price for the shares of Common Stock in such over-the-counter market
for the last preceding date on which there was a sale of such Common Stock in
such market, or (iii) if the shares of Common Stock are not then listed on a
national securities exchange or traded in an over-the-counter market, such value
as the Committee, in its sole discretion, shall determine.
(l) "Incentive Stock Option" shall mean any option intended to
be and designated as an incentive stock option within the meaning of Section 422
of the Code.
(m) "Non-employee Director" shall mean a member of the Board
who is not an employee of the Company.
(n) "Nonqualified Option" shall mean an Option that is not an
Incentive Stock Option.
(o) "Option" shall mean the right, granted hereunder, to
purchase shares of Common Stock. Options granted by the Committee pursuant to
the Plan may constitute either Incentive Stock Options or Nonqualified Stock
Options.
(p) "Optionee" shall mean a person who receives a grant of an
Option.
(q) "Option Price" shall mean the exercise price of the shares
of Common Stock covered by an Option.
(r) "Parent" shall mean any company (other than the Company)
in an unbroken chain of companies ending with the Company if, at the time of
granting an Option, each of the companies other than the Company owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other companies in such chain.
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(s) "Plan" shall mean this Infinite Group, Inc. 1999 Stock
Option Plan.
(t) "Retirement" shall mean the retirement of an Optionee in
accordance with the terms of any tax-qualified retirement plan maintained by the
Company or a Subsidiary in which the Optionee participates. If the Optionee is
not a participant in such a plan, such term shall mean the termination of the
Optionee's employment or cessation of the Optionee's service as a member of the
Board, other than by reason of death, Disability or Cause on or after attainment
of the age of 65.
(u) "Rule 16b-3" shall mean Rule 16b-3, as from time to time
in effect, promulgated by the Securities and Exchange Commission under Section
16 of the Exchange Act, including any successor to such Rule.
(v) "Subsidiary" shall mean any company (other than the
Company) in an unbroken chain of companies beginning with the Company if, at the
time of granting an Option, each of the companies other than the last company in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
companies in such chain.
(w) "Ten Percent Stockholder" shall mean an Optionee who, at
the time an Incentive Stock Option is granted, owns (or is deemed to own
pursuant to the attribution rules of Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary.
3. Administration.
The Plan shall be administered by the Committee, the members of
which shall, except as may otherwise be determined by the Board, be
"non-employee directors" under Rule 16b-3 and "outside directors" under Section
162(m) of the Code.
The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Options; to
determine which Options shall constitute Incentive Stock Options and which
Options shall constitute Nonqualified Stock Options; to determine the purchase
price of the shares of Common Stock covered by each Option; to determine the
persons to whom, and the
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time or times at which awards shall be granted; to determine the number of
shares to be covered by each award; to interpret the Plan; to prescribe, amend
and rescind rules and regulations relating to the Plan; to determine the terms
and provisions of the Agreements (which need not be identical) and to cancel or
suspend awards, as necessary; and to make all other determinations deemed
necessary or advisable for the administration of the Plan.
The Committee may delegate to one or more of its members or to one
or more agents such administrative duties as it may deem advisable, including
delegating to one or more of the Company's management employees the authority to
grant Options to employees who are not "insiders" for purposes of Section 16 of
the Exchange Act and who are not "covered employees" for purposes of Section
162(m) of the Code, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect
to any responsibility the Committee or such person may have under the Plan. The
Board shall have sole authority, unless expressly delegated to the Committee, to
grant Options to Non-employee Directors. All decisions, determination and
interpretations of the Committee shall be final and binding on all Optionees of
any awards under this Plan.
The Board shall have the authority to fill all vacancies, however
caused, in the Committee. The Board may from time to time appoint additional
members to the Committee, and may at any time remove one or more Committee
members. One member of the Committee shall be selected by the Board as chairman.
The Committee shall hold its meetings at such times and places as it shall deem
advisable. All determinations of the Committee shall be made by a majority of
its members either present in person or participating by conference telephone at
a meeting or by written consent. The Committee may appoint a secretary and make
such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any award
granted hereunder.
4. Eligibility.
Awards may be granted to officers and other key employees of and
consultants to the Company, and its Subsidiaries, including officers and
directors who are employees, and to Non-employee Directors. In determining the
persons to whom awards shall be granted and the number of shares to be covered
by each award, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to the success of
the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.
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5. Stock.
The maximum number of shares of Common Stock reserved for the grant
of awards under the Plan shall be 110,000, subject to adjustment as provided in
Section 9 hereof. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be required by the
Company.
If any outstanding award under the Plan should for any reason
expire, be canceled or be forfeited without having been exercised in full, the
shares of Common Stock allocable to the unexercised, canceled or terminated
portion of such award shall (unless the Plan shall have been terminated) become
available for subsequent grants of awards under the Plan.
6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be evidenced by an
Agreement, in such form and containing such terms and conditions as the
Committee shall from time to time approve, which Agreement shall comply with and
be subject to the following terms and conditions, unless otherwise specifically
provided in such Option Agreement:
(a) Number of Shares. Each Option Agreement shall state the
number of shares of Common Stock to which the Option relates.
(b) Type of Option. Each Option Agreement shall specifically
state that the Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option.
(c) Option Price. Each Option Agreement shall state the Option
Price, which shall not be less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock covered by the Option on the date of
grant unless, with respect to Nonqualified Stock Options, otherwise determined
by the Committee. The Option Price shall be subject to adjustment as provided in
Section 9 hereof. The date as of which the Committee adopts a resolution
expressly granting an Option shall be considered the day on which such Option is
granted, unless such resolution specifies a different date.
(d) Medium and Time of Payment. The Option Price shall be paid
in full, at the time of exercise, in cash or in shares of Common Stock then
owned by the Optionee having a Fair Market Value equal to such Option Price or
in a combination of cash
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and Common Stock or, unless the Committee shall determine otherwise, by a
cashless exercise procedure through a broker-dealer.
(e) Exercise Schedule and Period of Options. Each Option
Agreement shall provide the exercise schedule for the Option as determined by
the Committee; provided, however, that, the Committee shall have the authority
to accelerate the exercisability of any outstanding Option at such time and
under such circumstances as it, in its sole discretion, deems appropriate. The
exercise period shall be ten (10) years from the date of the grant of the Option
unless otherwise determined by the Committee; provided, however, that, in the
case of an Incentive Stock Option, such exercise period shall not exceed ten
(10) years from the date of grant of such Option. The exercise period shall be
subject to earlier termination as provided in Sections 6(f) and 6(g) hereof. An
Option may be exercised, as to any or all full shares of Common Stock as to
which the Option has become exercisable, by written notice delivered in person
or by mail to the Secretary of the Company, specifying the number of shares of
Common Stock with respect to which the Option is being exercised.
Notwithstanding any other provision of this Plan, no Option granted hereunder
may be exercised prior to the consummation of an underwritten public offering of
the Company's securities where the gross proceeds from such offering are in
excess of $25 million.
(f) Termination. Except as provided in this Section 6(f) and
in Section 6(g) hereof, an Option may not be exercised unless (i) with respect
to an Optionee who is an employee of the Company, the Optionee is then in the
employ of the Company or a Subsidiary (or a company or a Parent or Subsidiary
company of such company issuing or assuming the Option in a transaction to which
Section 424(a) of the Code applies), and unless the Optionee has remained
continuously so employed since the date of grant of the Option and (ii) with
respect to an Optionee who is a Non-employee Director, the Optionee is then
serving as a member of the Board or as a member of a board of directors of a
company or a Parent or Subsidiary company of such company issuing or assuming
the Option. In the event that the employment of an Optionee shall terminate or
the service of an Optionee as a member of the Board shall cease (other than by
reason of death, Disability, Retirement or Cause), all Options of such Optionee
that are exercisable at the time of such termination may, unless earlier
terminated in accordance with their terms, be exercised within ninety (90) days
after the date of such termination or service (or such different period as the
Committee shall prescribe).
(g) Death, Disability or Retirement of Optionee. If an
Optionee shall die while employed by the Company or a Subsidiary or serving as a
member of the Board, or within ninety (90) days after the date of termination of
such Optionee's employment or cessation of such Optionee's service (or within
such different period as the Committee may have provided pursuant to Section
6(f) hereof), or if the Optionee's employment shall terminate or service shall
cease by reason of Disability or Retirement, all Options theretofore granted to
such Optionee (to the extent otherwise exercisable) may, unless earlier
terminated in
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accordance with their terms, be exercised by the Optionee or by his beneficiary,
at any time within one year after the death, Disability or Retirement of the
Optionee (or such different period as the Committee shall prescribe). In the
event that an Option granted hereunder shall be exercised by the legal
representatives of a deceased or former Optionee, written notice of such
exercise shall be accompanied by a certified copy of letters testamentary or
equivalent proof of the right of such legal representative to exercise such
Option. Unless otherwise determined by the Committee, Options not otherwise
exercisable on the date of termination of employment shall be forfeited as of
such date.
(h) Other Provisions. The Option Agreements evidencing awards
under the Plan shall contain such other terms and conditions not inconsistent
with the Plan as the Committee may determine, including penalties for the
commission of competitive acts and a provision providing that no option may be
exercised prior to the consummation of an underwritten initial public offering
of the Company's securities pursuant to a registration statement filed pursuant
to the Securities Act of 1933, as amended.
7. Non Discretionary Grants.
Each director of the Company, other than a director who is an
officer, employee or beneficial owner of 10% or more of the Company's Common
Stock (or an officer, director, employee or affiliate thereof), upon first
taking office shall be granted options for ______ shares of Common Stock.
Options covering ______ shares shall be exercisable immediately and Options
covering ______ shares shall be exercisable at the end of each subsequent year
of service on the Board. In addition, each such director will be granted Options
for an additional ______ shares of Common Stock on the date of the Company's
annual stockholders' meeting. Options covering ______ shares shall be
exercisable immediately and Options covering _____ shares shall be exercisable
on each of the first and second anniversary of the date of grant. The exercise
price of all Options granted pursuant to this Section 7 shall be the fair market
value of a share of Common Stock on the date of grant.
8. Nonqualified Stock Options.
Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to the general
terms and conditions specified in Section 6 hereof.
9. Incentive Stock Options.
Options granted pursuant to this Section 9 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in Section 6 hereof. An Incentive Stock Option may not be granted to a
Non-employee Director or a consultant to the Company.
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(a) Value of Shares. The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the shares
of Common Stock with respect to which Incentive Stock Options granted under this
Plan and all other option plans of any subsidiary become exercisable for the
first time by each Optionee during any calendar year shall not exceed $100,000.
(b) Ten Percent Stockholder. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the shares
of Common Stock on the date of grant of such Incentive Stock Option, and (ii)
the exercise period shall not exceed five (5) years from the date of grant of
such Incentive Stock Option.
10. Effect of Certain Changes.
(a) In the event of any extraordinary dividend, stock
dividend, recapitalization, merger, consolidation, stock split, warrant or
rights issuance, or combination or exchange of such shares, or other similar
transactions, each of the number of shares of Common Stock available for awards,
the number of such shares covered by outstanding awards, and the price per share
of Options, as appropriate, shall be equitably adjusted by the Committee to
reflect such event and preserve the value of such awards; provided, however,
that any fractional shares resulting from such adjustment shall be eliminated.
(b) Upon the occurrence of a Change in Control, each Option
granted under the Plan and then outstanding but not yet exercisable shall
thereupon become fully exercisable.
11. Surrender and Exchange of Awards.
The Committee may permit the voluntary surrender of all or a portion
of any Option granted under the Plan or any option granted under any other plan,
program or arrangement of the Company or any Subsidiary ("Surrendered Option"),
to be conditioned upon the granting to the Optionee of a new Option for the same
number of shares of Common Stock as the Surrendered Option, or may require such
voluntary surrender as a condition precedent to a grant of a new Option to such
Optionee. Subject to the provisions of the Plan, such new Option may be an
Incentive Stock Option or a Nonqualified Stock Option, and shall be exercisable
at the price, during such period and on such other terms and conditions as are
specified by the Committee at the time the new Option is granted.
12. Period During Which Awards May Be Granted.
Awards may be granted pursuant to the Plan from time to time within
a period of ten (10) years from the date the Plan is adopted by the Board, or
the date the Plan is approved by the shareholders of the Company, whichever is
earlier, unless the Board shall terminate the Plan at an earlier date.
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13. Nontransferability of Awards.
Except as otherwise determined by the Committee, awards granted
under the Plan shall not be transferable otherwise than by will or by the laws
of descent and distribution, and awards may be exercised or otherwise realized,
during the lifetime of the Optionee, only by the Optionee or by his guardian or
legal representative.
14. Approval of Shareholders.
The Plan shall take effect upon its adoption by the Board and shall
terminate on the tenth anniversary of such date, but the Plan (and any grants of
awards made prior to the shareholder approval mentioned herein) shall be subject
to the approval of Company's shareholders, which approval must occur within
twelve months of the date the Plan is adopted by the Board.
15. Agreement by Optionee Regarding Withholding Taxes.
If the Committee shall so require, as a condition of exercise of a
Nonqualified Stock Option (a "Tax Event"), each Optionee who is not a
Non-employee Director shall agree that no later than the date of the Tax Event,
such Optionee will pay to the Company or make arrangements satisfactory to the
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the Tax Event. Alternatively, the Committee
may provide that such an Optionee may elect, to the extent permitted or required
by law, to have the Company deduct federal, state and local taxes of any kind
required by law to be withheld upon the Tax Event from any payment of any kind
due the Optionee. The withholding obligation may be satisfied by the withholding
or delivery of Common Stock. Any decision made by the Committee under this
Section 15 shall be made in its sole discretion.
16. Amendment and Termination of the Plan.
The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan; provided, however, that, unless otherwise determined
by the Board, an amendment that requires stockholder approval in order for the
Plan to continue to comply with Rule 16b-3, Section 162(m) of the Code or any
other law, regulation or stock exchange requirement shall not be effective
unless approved by the requisite vote of stockholders. Except as provided in
Section 10 (a) hereof, no suspension, termination, modification or amendment of
the Plan may adversely affect any award previously granted, unless the written
consent of the Optionee is obtained.
17. Rights as a Shareholder.
An Optionee or a transferee of an award shall have no rights as a
shareholder with respect to any shares covered by the award until the date of
the issuance of a stock
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certificate to him for such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distribution of other rights for which the record date is prior to the date such
stock certificate is issued, except as provided in Section 10(a) hereof.
18. No Rights to Employment or Service as a Director.
Nothing in the Plan or in any award granted or Agreement entered
into pursuant hereto shall confer upon any Optionee the right to continue in the
employ of the Company or any Subsidiary or as a member of the Board or to be
entitled to any remuneration or benefits not set forth in the Plan or such
Agreement or to interfere with or limit in any way the right of the Company or
any such Subsidiary to terminate such Optionee's employment or service. Awards
granted under the Plan shall not be affected by any change in duties or position
of an employee Optionee as long as such Optionee continues to be employed by the
Company or any Subsidiary.
19. Beneficiary.
An Optionee may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Optionee, the executor or administrator of the Optionee's estate
shall be deemed to be the Optionee's beneficiary.
20. Governing Law.
The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware.
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EXHIBIT 5.1
MORSE, ZELNICK, ROSE & LANDER
A LIMITED LIABILITY PARTNERSHIP
450 PARK AVENUE
NEW YORK, NEW YORK 10022-2605
212 838 1177
FAX 212 838 9190
April 26, 2000
Infinite Group, Inc.
2364 Post Road
Warwick, Rhode Island 02886
Re: Registration Statement on Form S-8
Dear Sirs:
We have acted as counsel to Infinite Group, Inc., a Delaware corporation
(the "Company"), in connection with the preparation of a registration statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Act"), to register the offering by the Company of shares of Common Stock,
par value $0.001 per share (the "Shares"), issuable upon exercise of options
granted or to be granted under the Company's 1993, 1994, 1995, 1996, 1997, 1998
and 1999 Stock Option Plan, as amended (the "Plans").
In this regard, we have reviewed the Certificate of Incorporation of the
Company, as amended, resolutions adopted by the Company's Board of Directors,
the Plans, the form of Option Agreement, and such other records, documents,
statutes and decisions as we have deemed relevant in rendering this opinion.
Based upon the foregoing, we are of the opinion that the Shares issuable
upon exercise of the options granted and to be granted under the Plans have been
duly and validly authorized for issuance and when issued and delivered as
contemplated by the Plans and the form of Option Agreement will be legally
issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement. In giving this opinion, we do not hereby admit that we
are acting within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the SEC thereunder.
Very truly yours,
/s/ Morse, Zelnick, Rose & Lander, LLP
--------------------------------
Morse, Zelnick, Rose & Lander, LLP
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1993, 1994, 1995, 1996, 1997, 1998 and 1999 Stock Option
Plans, of Infinite Group, Inc. of our report, dated February 25, 2000, with
respect to the consolidated financial statements of Infinite Group, Inc.
included in its Annual Report on Form 10-KSB for the year ended December 31,
1999, filed with the Securities and Exchange Commission.
/s/ Freed Maxick, Sachs & Murphy, P. C.
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Buffalo, New York
April 27, 2000
