<PAGE>
As filed with the Securities and Exchange Commission on May 5, 1999.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
4FRONT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-0675510
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
6300 SOUTH SYRACUSE WAY, SUITE 293
ENGLEWOOD, COLORADO 80111
(303) 721 7341
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
4FRONT TECHNOLOGIES, INC.
1996 EQUITY INCENTIVE PLAN
------------------
CRAIG KLEINMAN
6300 SOUTH SYRACUSE WAY, SUITE 293
ENGLEWOOD, COLORADO 80111
(303) 721 7341
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------ -------------- ---------------------------- ---------------------------- ----------------
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED (1) OFFERING PRICE PER SHARE (2) AGGREGATE OFFERING PRICE (2) REGISTRATION FEE
- ------------------------------ -------------- ---------------------------- ---------------------------- ----------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.001 PAR VALUE. 700,000 SHARES $9.39 $6,573,000 $1,827.29
============================== ============== ============================ ============================ ================
</TABLE>
(1) THIS REGISTRATION STATEMENT RELATES TO AN ADDITIONAL 700,000 SHARES,
SUBJECT TO STOCK OPTIONS, GRANTED OR TO BE GRANTED UNDER THE 4FRONT
TECHNOLOGIES INC. 1996 EQUITY INCENTIVE PLAN, AS AMENDED. THIS REGISTRATION
STATEMENT SHALL ALSO COVER ANY ADDITIONAL INDETERMINABLE NUMBER OF SHARES
AS MAY BE REQUIRED PURSUANT TO THE 4FRONT TECHNOLOGIES INC. 1996 EQUITY
INCENTIVE PLAN IN THE EVENT OF A STOCK DIVIDEND, STOCK SPLIT,
RECAPITALIZATION OR OTHER SIMILAR CHANGE IN THE COMMON STOCK.
(2) THE PRICE IS ESTIMATED IN ACCORDANCE WITH RULE 457(H)(1) UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, SOLELY FOR THE PURPOSE OF CALCULATING
THE REGISTRATION FEE AND IS THE PRODUCT RESULTING FROM MULTIPLYING 700,000,
THE NUMBER OF SHARES OF ADDITIONAL COMMON STOCK REGISTERED BY THE
REGISTRATION STATEMENT AS TO WHICH OPTIONS MAY BE GRANTED UNDER THE 4FRONT
TECHNOLOGIES INC. 1996 EQUITY INCENTIVE PLAN, BY $9.39, THE AVERAGE OF THE
HIGH AND LOW PRICES OF THE COMMON STOCK AS REPORTED ON THE NASDAQ NATIONAL
MARKET ON MAY 4, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The contents of the Registration Statement on Form S-8 (Registration No.
333- 27905) of 4Front Technologies, Inc. as filed with the Securities and
Exchange Commission on May 28, 1997, are incorporated herein by reference.
EXPERTS
The financial statements and schedule incorporated by reference in this
Registration Statement have been audited by KPMG independent chartered
accountants, to the extent and for the periods set forth in their reports
incorporated herein by reference, and are incorporated herein in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.
<PAGE>
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 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 New York, State of New York on this 4th day of May,
1999.
4FRONT TECHNOLOGIES, INC.
/s/ Anil J. Doshi
-------------------------------------
By: Anil J. Doshi
Title: Chairman of the Board, Chief
Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Anil J. Doshi Chairman of the Board, Chief Executive May 4, 1999
- ----------------------- Officer and Director
Anil J. Doshi (principal executive officer)
* Vice Chairman of the Board, May 4, 1999
- ----------------------- President and Director
Mark Ellis
/s/ Terrence W. Burt Vice President, Chief May 4, 1999
- ----------------------- Operating Officer and Director
Terence W. Burt
* Vice President for Corporation May 4, 1999
- ----------------------- Affairs and Director
Kenneth J. Newel
/s/ Stephen McDonnell Chief Financial Officer (principal May 4, 1999
- ----------------------- financial and accounting officer)
Stephen McDonnell
<PAGE>
* Secretary and Director May 4, 1999
- -----------------------
Craig Kleinman
* Director May 4, 1999
- -----------------------
Brian V. Murray
* Director May 4, 1999
- -----------------------
Arthur Keith Ross
* /s/ Anil J. Doshi
----------------------------------
By Anil J. Doshi, Attorney In Fact
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
- ------- -----------
4 4Front Technologies, Inc. 1996 Equity Incentive Plan, as amended
5 Opinion of Fulbright & Jaworski L.L.P.
23.1 Consent of KPMG
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5)
<PAGE>
Exhibit 4
4FRONT TECHNOLOGIES, INC.
1996 EQUITY INCENTIVE PLAN
1. PURPOSE
The purpose of the Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company and its Subsidiaries and Affiliates, by
offering them an opportunity to participate in the Company's future performance
through awards of Options.
Capitalized terms not defined in the text are defined in Section 20.
2. SHARES SUBJECT TO THE PLAN
2.1. NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and 14, the total
number of Shares reserved and available for grant and issuance pursuant to the
Plan shall be 1,100,000 Shares, provided, however, that the maximum number of
Shares that may be issued under the Plan to members of the Board of Directors of
the Company who are not employees of the Company is up to 200,000 Shares.
Subject to Sections 2.2 and 14, Shares reserved for issuance pursuant to Options
granted under this Plan shall again be available for grant and issuance, in
connection with future Options under the Plan, that: (a) are subject to issuance
upon exercise of an Option, but cease to be subject to such Option for any
reason other than exercise of such Option, or (b) are subject to an Option that
otherwise terminates without such Shares being issued and for which the
participant did not receive any benefits of ownership.
2.2. ADJUSTMENT OF SHARES. In the event that the number of outstanding
shares of the Company's Common Stock is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then: (a) the number of Shares reserved for issuance
under the Plan, and (b) the Exercise Prices of and number of Shares subject to
outstanding Options, shall be proportionately adjusted, subject to any required
action by the Board or the stockholders of the Company and compliance with
applicable securities laws; provided, however, that fractions of a Share shall
not be issued, but shall either be paid in cash at Fair Market Value or shall be
rounded up to the nearest Share, as determined by the Committee; and provided,
further, that the Exercise Price of any Option may not be decreased to below the
par value of the Shares.
3. ELIGIBILITY
ISOs (as defined in Section 5.1 below) may be granted only to employees
(including
<PAGE>
officers and directors who are also employees) of the Company or of a Subsidiary
of the Company. NQSOs (as defined in Section 5 below) may be granted to
employees, directors (subject to Section 5.1 hereof), officers, consultants,
independent contractors and advisers of the Company or any Subsidiary or
Affiliate of the Company; provided, however, that such consultants, contractors
and advisers render bona fide services not in connection with the offer and sale
of securities in a capital- raising transaction. A person may be granted both
ISOs and NQSOs under the Plan.
4. ADMINISTRATION
4.1. COMMITTEE AUTHORITY. The Plan shall be administered by the Committee
or the Board acting as the Committee. Subject to the purposes, terms and
conditions of the Plan, and to the direction of the Board, the Committee shall
have full power to implement and carry out the Plan, provided, however, that all
grants of Options to Directors shall be effected strictly in accordance with the
terms of Section 5.1 hereof. Except as otherwise provided pursuant to Section 5
hereof, the Committee shall have the authority to:
(a) construe and interpret the Plan, any Option Agreement and any
other agreement or document executed pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations relating to the
Plan:
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other consideration subject to
Options;
(f) determine whether Options will be granted singly, in combination
or in tandem with, in replacement of, or as alternatives to, other Options
under the Plan or any other incentive or compensation plan of the Company
or any Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting, exercisability and payment of Options and
to accelerate the vesting and/or exercisability of Options, as provided
herein;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Option or any Option Agreement;
(j) determine whether an Option has been earned; and
2
<PAGE>
(k) make all other determinations necessary or advisable for the
administration of the Plan.
4.2. COMMITTEE DISCRETION. Any determination permitted to be made by the
Committee under the Plan with respect to any Option shall be made in its sole
discretion at the time of grant of the Option or, unless in contravention of any
express term of the Plan or Option, at any later time, and such determination
shall be final and binding on the Company and all persons having an interest in
any Option under the Plan.
4.3. EXCHANGE ACT REQUIREMENTS. If two or more members of the Board are
Outside Directors and Disinterested Persons, the Committee shall be comprised of
at least two members of the Board, all of whom are Outside Directors and
Disinterested Persons. It is the intent of the Company that the Plan and Options
hereunder satisfy and be interpreted in a manner that, in the case of
Participants who are or may be Insiders, satisfies the applicable requirements
of Rule 16b-3 (or its successor) of the Exchange Act. If any provision of the
Plan or of any Option would otherwise conflict with the intent expressed in this
Section 4.3, that provision, to the extent possible, shall be interpreted and
deemed amended so as to avoid such conflict.
5. GRANT AND EXERCISE OF OPTIONS
5.1. GRANT OF OPTIONS. Except as otherwise limited herein, the Committee
may grant Options to eligible persons pursuant to this Section 5 and shall
determine whether such Options shall be Incentive Stock Options within the
meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"). Directors
who are not employees of the Company may be granted Options for an aggregate of
up to 200,000 shares upon approval of the Plan by the Board of Directors;
provided, however, that Directors who are not employees of the Company may only
be granted NQSOs. The Committee shall determine the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the Option
may be exercised, and all other terms and conditions of the Option, subject to
the following:
5.1.1. FORM OF OPTION GRANT. Each Option granted shall be evidenced by an
Option Agreement, which shall expressly identify the Option as an ISO or NQSO,
and be in such form and contain such provisions (which need not be the same for
each Participant receiving an Option) as the Committee shall from time to time
approve, and which shall comply with and be subject to the terms and conditions
of the Plan. The Committee may in its discretion include in any NQSO granted
under the Plan a condition that the Participant shall agree to remain in the
employ of, and to render services to, the Company or any of its Subsidiaries for
a period of time (specified in the agreement) following the date the NQSO is
granted.
5.1.2. DATE OF GRANT. The date of grant of an Option shall be the date on
which the Committee makes the determination to grant such Option. The Option
Agreement and a copy of the Plan will be delivered to the Participant within a
reasonable time after the granting of
3
<PAGE>
such Option.
5.1.3. EXERCISE PERIOD. Options shall be exercisable within the times or
upon the events determined by the Committee as set forth in the Option
Agreement; provided, however:
(a) no Option shall be exercisable after the expiration of ten (10)
years from the date the Option is granted;
(b) subject to Sections 4.1(h) and 5.2, no Option shall be exercisable
less than six (6) months after the date of grant or prior to stockholder
approval of the Plan;
(c) Each Option granted under the Plan shall be exercisable only with
respect to one-third of the total number of Shares subject to such Option
upon the expiration of six (6) months after the date of grant, with the
balance being exercisable, one-half upon the expiration of eighteen (18)
months from the date of such grant, and one-half upon the expiration of
thirty (30) months from the date of such grant; and
(d) no ISO granted to a person who directly or by attribution owns
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Subsidiary of the Company ("Ten
Percent Stockholder") shall be exercisable after the expiration of five (5)
years from the date the Option is granted.
5.1.4. EXERCISE PRICE. The Exercise Price shall be determined by the
Committee when an Option is granted, provided, however, that:
(i) the Exercise Price of an ISO or an NQSO shall be not less
than 100% of the Fair Market Value of the Shares on the date of grant,
and
(ii) the Exercise Price of any ISO granted to a Ten Percent
Stockholder shall not be less than 110% of the Fair Market Value of
the Shares on the date of grant.
Payment for the Shares purchased may be made in accordance with Section 6 of the
Plan.
5.1.5. METHOD OF EXERCISE. Options may be exercised only by delivery to the
Company of a written stock option exercise form stating the number of Shares
being purchased, the restrictions imposed on the Shares, if any, and containing
such representations and agreements regarding the Participant's investment
intent, access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased. As a further condition to exercise, the Participant must pay or make
arrangements satisfactory to the Company
4
<PAGE>
for payment of any applicable withholding taxes.
5.1.6. TERMINATION. Notwithstanding the exercise periods set forth in the
Option Agreement, exercise of an Option shall always be subject to the
following:
(a) If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant's Options,
only to the extent that such Options would have been exercisable upon the
Termination Date, no later than thirty (30) days after the Termination
Date, but in any event, no later than the expiration date of the Options.
(b) If the Participant is Terminated because of death or Disability,
then the Participant's Options which are ISOs may be exercised, only to the
extent that such Options would have been exercisable by the Participant on
the Termination Date, and must be exercised by the Participant (or the
Participant's legal representative or authorized assignee) no later than
one hundred eighty (180) days after the Termination Date, but in any event
no later than the expiration date of the Options.
5.1.7. LIMITATIONS ON EXERCISE. The Committee may specify a reasonable
minimum of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent a Participant from exercising the
Option for the full number of Shares for which it is then exercisable.
5.1.8. LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISOs are exercisable for
the first time by a Participant during any calendar year (under the Plan or
under any other incentive stock option plan of the Company or any Affiliate or
Subsidiary of the Company) shall not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISOs are exercisable for
the first time by a Participant during any calendar year exceeds $100,000, the
Options for the first $100,000 worth of Shares to become exercisable in such
calendar year shall be ISOs and the Options for the amount in excess of $100,000
that become exercisable in that calendar year shall be NQSOs. In the event that
the Code or the regulations promulgated thereunder are amended after the
Effective Date of the Plan to provide for a different limit on the Fair Market
Value of Shares permitted to be subject to ISOs, such different limit shall be
automatically incorporated herein and shall apply to any Options granted after
the effective date of such amendment.
5.1.9. MODIFICATION, EXTENSION OR RENEWAL. The Committee may modify, extend
or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. The Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants affected, by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.1.4 of
the Plan for Options granted on the
5
<PAGE>
date the action is taken to reduce the Exercise Price; provided, further, that
the Exercise Price shall not be reduced below the par value of the Shares.
5.2. ACCELERATED VESTING.
5.2.1. Notwithstanding Section 5.1.3(b), the Committee shall have the
authority to accelerate the exercisability of Options granted pursuant to the
terms of this Plan, provided however, that the acceleration of exercisability
shall be conditioned upon inclusion in the Option Agreements with Participants
of such provisions and restrictions as are necessary to permit stock issued upon
exercise of such Options to continue to qualify for the exception from Section
16(b) of the Securities Act as is provided under Rule 16b-3(a), (b) and (c).
5.2.2. Notwithstanding anything herein to the contrary, if a Change in
Control of the Company occurs or if the Committee determines in its sole
discretion that an Acceleration Event has occurred, then all Options shall
become fully exercisable as of the date such Change in Control occurred or the
Committee determines that an Acceleration Event has occurred, provided however,
that the acceleration of exercisability shall be subject to the imposition of
such restrictions on transferability of shares of Common Stock subject to such
Options, as are necessary to permit stock issued upon exercise of such Options
to continue to qualify for the exception from Section 16(b) of the Securities
Act as is provided under Rule 16b-3(a), (b) and (c).
6. PAYMENT FOR SHARE PURCHASES
6.1. PAYMENT. Payment for Shares purchased pursuant to the Plan may be made
in cash (by check) or, where expressly approved by the Committee and permitted
by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares of the Company's Common Stock that (1)
either have been owned by the Participant for more than six (6) months and
have been paid for within the meaning of Rule 144 of the Securities Act or
were obtained by the Participant in the public market; and, (2) are clear
of all liens, claims, encumbrances or security interests;
(c) by waiver of compensation due or accrued to the Participant for
services rendered:
(d) provided that a public market for the Company's stock exists and
subject to the ability of the Participant to sell Shares in compliance with
applicable securities laws;
(i) through a "same day sale" commitment from the Participant and
a broker-dealer that is a member of the National Association of
Securities
6
<PAGE>
Dealers (an "NASD Dealer") whereby the Participant irrevocably elects
to exercise the Option and to sell a portion of the Shares so
purchased in order to pay the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(ii) through a "margin" commitment from the Participant and an
NASD Dealer whereby Participant irrevocably elects to exercise the
Option and to pledge the Shares so purchased to the NASD Dealer in a
margin account as security for a loan from the NASD Dealer in the
amount of the Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or
(e) by any combination of the foregoing.
Notwithstanding the foregoing, the Exercise Price of an Option held by a
Director who is not an employee shall be paid either (i) in cash; or (ii)
pursuant to subsection (a) of this Section 6.1, or (iii) by any combination of
the foregoing (i) and (ii).
7. PRIVILEGES OF STOCK OWNERSHIP
(a) VOTING AND DIVIDENDS. No Participant shall have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to
the Participant. After Shares are issued to the Participant, the
Participant shall be a stockholder and have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares.
(b) FINANCIAL STATEMENTS. The Company shall provide financial
statements to each Participant annually during the period such Participant
has Options outstanding, provided, however, that the Company shall not be
required to provide such financial statements to Participants whose
services in connection with the Company assure them access to equivalent
information.
8. TRANSFERABILITY
Options granted under the Plan, and any interest therein, shall not be
transferable or assignable by a Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as consistent with the specific Plan and Option
Agreement provisions relating thereto. During the lifetime of the Participant,
an Option shall be exercisable only by the Participant, and any elections with
respect to an Option may
7
<PAGE>
be made only by the Participant.
9. CERTIFICATES
All certificates for Shares or other securities delivered under the Plan
shall be subject to such stock transfer orders, legends and other restrictions
as the Committee may deem necessary or advisable, including restrictions under
any applicable federal, state or foreign securities law, or any rules,
regulations and other requirements of the Securities and Exchange Commission
(the "SEC") or any stock exchange or automated quotation system upon which the
Shares may be listed.
10. EXCHANGE AND BUYOUT OF OPTIONS
The Committee may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Options in
exchange for the surrender and cancellation of any or all outstanding Options.
The Committee may at any time buy from a Participant an Option previously
granted with payment in cash, Shares or other consideration, based on such terms
and conditions as the Committee and the Participant shall agree. Notwithstanding
anything to the contrary contained herein, no new Options shall be granted to
any Participant solely to replace previously canceled Options which were granted
with a higher exercise price.
11. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE
An Option shall not be effective unless such Option is in compliance with
all applicable federal and state securities laws, rules and regulations of any
governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed, as they are in effect
on the date of grant of the Option and also on the date of exercise or other
issuance. Notwithstanding any other provision in the Plan, the Company shall
have no obligation to issue or deliver certificates for Shares under the Plan
prior to: (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (b) completion of any
registration or other qualification of such Shares under any state or federal
law or ruling of any governmental body that the Company determines to be
necessary or advisable. The Company shall be under no obligation to register the
Shares with the SEC or to effect compliance with the registration, qualification
or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company shall have no liability for any
inability or failure to do so.
12. NO OBLIGATION TO EMPLOY
Nothing in the Plan or any Option granted under the Plan shall confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company, or any Subsidiary or
Affiliate of the Company or limit in any way the right of the Company or any
Subsidiary or Affiliate of the Company to terminate Participant's employment
8
<PAGE>
or other relationship at any time, with or without cause.
13. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way the right
or power of the Company or its stockholders to make or authorize all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any other corporate act or
proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of its Common Stock outstanding, without
receiving compensation therefor in money, services or property, then (i) the
number, class and per share price of Shares subject to outstanding Options
hereunder shall be appropriately adjusted in such a manner as to entitle a
Participant to receive upon exercise thereof (and, if relevant, for the same
aggregate cash consideration), the same total number and class of shares as such
Participant would have received had such Participant exercised such Option in
full immediately prior to such event; and (ii) the number and class of shares
with respect to which Options may be granted under the Plan shall be adjusted by
substituting for the total number of shares of Common Stock then reserved that
number and class of shares of stock that would have been received by the owner
of an equal number of outstanding shares of Common Stock as the result of the
event requiring the adjustment.
After a merger of one or more corporations into the Company, or after a
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each holder of an outstanding Option shall,
at no additional cost, be entitled to receive upon exercise of such Option
(subject to any required action by stockholders of the Company) in lieu of the
number of Shares as to which such Option shall then be so exercisable, the
number and class of shares of stock or other securities to which such holder
would have been entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or consolidation, such holder
had been the holder of record of a number of shares of Common Stock equal to the
number of shares as to which such Option shall be so exercised.
If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company is liquidated, or sells or otherwise disposes of substantially all
its assets to another corporation while unexercised Options remain outstanding
under the Plan, (i) subject to the provisions of clause (ii) below, after the
effective date of such merger, consolidation or sale, as the case may be, each
holder of an outstanding Option shall be entitled to receive upon exercise of
such Option in lieu of shares of Common Stock, shares of such stock or other
securities, cash or property as the holders of shares of Common Stock received
pursuant to the terms of the merger, consolidation or sale; or (ii) all
9
<PAGE>
outstanding Options may be canceled by the Board as of the effective date of any
such merger, consolidation, liquidation or sale provided that: (x) notice of
such cancellation shall be given to each holder of an Option, and (y) each
holder of an Option shall have the right to exercise such Option to the extent
that the same is then exercisable or, if the Board shall have accelerated the
time for exercise of all unexercised and unexpired Options, in full during the
30-day period preceding the effective date of such merger, consolidation,
liquidation or sale.
Except as expressly provided above, the issue by the Company of shares of
stock of any class, securities convertible into shares of stock of any class,
for cash, property or services, either upon direct sale or upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of Shares then subject to outstanding Options.
14. ADOPTION AND STOCKHOLDER APPROVAL
The Plan shall become effective on the date that it is adopted by the Board
(the "Effective Date"). The Company shall submit the Plan for approval by the
stockholders of the Company at the next annual meeting of stockholders of the
Company to obtain the advantages under NASD, Internal Revenue Code, SEC and
other regulations that approval of stockholders may bestow, provided however,
that Options granted under the Plan shall be conditioned upon stockholder
approval of the Plan within one year of adoption by the Board.
15. TERM OF PLAN
The Plan will terminate ten (10) years from the Effective Date.
16. AMENDMENT OR TERMINATION OF PLAN
The Board may at any time terminate or amend the Plan in any respect,
including without limitation amendment of any form of Option Agreement or
instrument to be executed pursuant to the Plan; provided, however, that the
Board shall not, without the approval of the stockholders of the Company, amend
the Plan in any manner that requires such stockholder approval pursuant to the
Code or the regulations promulgated thereunder as such provisions apply to ISO
plans or pursuant to the Exchange Act or Rule 16b-3 (or its successor), as
amended, thereunder.
17. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board, the submission of the Plan
to the stockholders of the Company for approval, nor any provision of the Plan
shall be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock options
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and bonuses otherwise than under the Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.
18. GOVERNING LAW
The Plan and all agreements, documents and instruments entered into
pursuant to the Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware, excluding that body of law pertaining to
conflict of laws.
19. DEFINITIONS
As used in the Plan, the following terms shall have the following meanings:
"ACCELERATION EVENT" means but is not limited to, any Change of Control of
the Company or other event determined in the discretion of the Committee.
"AFFILIATE" means any corporation that directly, or indirectly through one
or more intermediaries, controls or is under common control with, another
corporation, where "control" (including the terms "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
cause the direction of the management and policies of the corporation, whether
through the ownership of voting securities, by contract or otherwise.
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CONTROL" means the occurrence of any of the following events:
(A) when the Company acquires actual knowledge that any person (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner (as defined in Rule 13d-3 of the Exchange Act) directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then-outstanding securities;
(B) upon the first purchase of Common Stock pursuant to a tender or
exchange offer (other than a tender or exchange offer made by the Company);
(C) upon the approval by the Company's shareholders of: (i) a merger or
consolidation of the Company with or into another corporation, which does not
result in any capital reorganization or reclassification or other change in the
Company's then-outstanding shares of Common Stock, (ii) a sale or disposition of
all or substantially all of the Company's assets, or (iii) a plan of liquidation
or dissolution of the Company;
(D) if during any period of two consecutive years, the individuals who at
the
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beginning of such period constitute the Board of Directors of the Company cease
for any reason to constitute at least a majority thereof, unless the election,
or the nomination for election by the Company's shareholders, of each new
director is approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; or
(E) if the Board of Directors or any designated committee determines, in
its sole discretion, that any person (such as that term is used in Sections
13(d) and 14(d) of the Exchange Act) directly or indirectly exercises a
controlling influence over the management or policies of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee appointed by the Board to administer the
Plan, or if no committee is appointed, the Board.
"COMPANY" means 4Front Technologies, Inc., a corporation organized under
the laws of the State of Delaware, or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent, partial or
total, within the meaning of Section 22(e)(3) of the Code, as determined by the
Committee.
"DISINTERESTED PERSON" means a Director who has not, during the period that
person is a member of the Committee and for one year prior to service as a
member of the Committee, been granted Options pursuant to the Plan or any other
plan of the Company, any Subsidiary or Affiliate of the Company, except in
accordance with the requirements set forth in Rule 16b-3(c)(2)(i) (and any
successor regulation thereto) as promulgated by the SEC under Section 16(b) of
the Exchange Act, as such rule is amended from time to time and as interpreted
by the SEC.
"EFFECTIVE DATE" means the date the Plan is adopted by the Board.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market
System, its last reported sale price on the Nasdaq National Market or, if
no such reported sale takes place on such date, the average of the closing
bid and asked prices;
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(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, the last reported sale price or, if no such
reported sale takes place on such date, the average of the closing bid and
asked prices on the principal national securities exchange on which the
Common Stock is listed or admitted to trading;
(c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on
such date, as reported by the Wall Street Journal, for the over-the-counter
market; or
(d) if none of the foregoing is applicable, by the Board of Directors
of the Company in good faith.
"INSIDER" means an officer or director of the Company or other person whose
transactions in the Company's Common Stock are subject to Section 16 of the
Exchange Act.
"OPTION" means an option to purchase Shares of Common Stock of the Company
pursuant to Section 5.
"OPTION AGREEMENT" means, with respect to each Option, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Option.
"OUTSIDE DIRECTOR" means any outside director as defined in Section 162(m)
of the Code and the regulations issued thereunder.
"PARTICIPANT" means a person who receives an Option under the Plan.
"PLAN" means this 4Front Technologies, Inc. 1996 Equity Incentive Plan, as
amended from time to time.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock, $.001 par value per
share, reserved for issuance under the Plan, as adjusted pursuant to Sections 2
and 14, and any security issued in respect thereto or in replacement therefor.
"SUBSIDIARY" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of granting of
the Option, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in
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such chain.
"TERMINATION" or "TERMINATED" means, for purposes of the Plan with respect
to a Participant, that the Participant has ceased to provide services as an
employee, director, consultant, independent contractor or adviser to the Company
or a Subsidiary or Affiliate of the Company, except in the case of sick leave,
military leave, or any other leave of absence approved by the Committee,
provided that such leave is for a period of not more than ninety (90) days, or
reinstatement upon the expiration of such leave is guaranteed by contract or
statute. The Committee shall have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the "Termination Date").
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EXHIBIT 5
April 30, 1999
4Front Technologies, Inc.
6300 South Syracuse Way, Suite 293
Englewood, Colorado 80111
Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by 4Front Technologies, Inc. (the "Company") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to 700,000 additional shares of Common Stock of the
Company, par value $.001 per share (the "Shares"), which may be issued upon the
exercise of options granted or to be granted pursuant to the 4Front
Technologies, Inc. 1996 Equity Incentive Plan, as amended (the "Plan").
As counsel for the Company, we have examined such corporate records,
documents and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that, in our opinion, all necessary corporate
proceedings by the Company have been duly taken to authorize the issuance of the
Shares upon the exercise of options granted or to be granted pursuant to the
Plan, and that the Shares being registered pursuant to the Registration
Statement, when issued upon the exercise of and payment for options granted or
to be granted under the Plan in accordance with the terms of the options and the
Plan, will be duly authorized, legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Act.
Sincerely yours,
Fulbright & Jaworski L.L.P.
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EXHIBIT 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
4Front Technologies, Inc.
We consent to incorporation by reference in this registration statement on Form
S-8 of 4Front Technologies, Inc. ("4Front") of our report dated April 29, 1999,
relating to the consolidated balance sheets of 4Front and subsidiaries as of
January 31, 1999, and 1998, and the related consolidated statements of earnings,
retained earnings, comprehensive income (loss), and cash flows for each of the
years in the three-year period ended January 31, 1999, and all related
schedules, which report appears in the January 31, 1999 annual report on Form
10-K of 4Front.
KPMG
London, England
May 5, 1999
