<PAGE>
As filed with the Securities and Exchange Commission on August 16, 1996
Registration No. 333-______________
================================================================================
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
7TH LEVEL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2480669
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1110 EAST COLLINS BOULEVARD, SUITE 122
RICHARDSON, TEXAS 75081
(Address, including ZIP code, of registrant's
principal executive offices)
7TH LEVEL, INC. AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN
(Full title of the plan)
GEORGE D. GRAYSON
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
7TH LEVEL, INC.
1110 EAST COLLINS BOULEVARD, SUITE 122
RICHARDSON, TEXAS 75081
(Name and address of agent for service)
214-498-8100
(Telephone number, including area code, of agent for service)
Copies to:
DEREK R. MCCLAIN
JAMES A. KRAUSE
VINSON & ELKINS L.L.P.
3700 TRAMMELL CROW CENTER
2001 ROSS AVENUE
DALLAS, TEXAS 75201
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount to be offering price aggregate Amount of
to be registered registered per share (1) offering price (1) registration fee
===========================================================================================
<S> <C> <C> <C> <C>
Common Stock 1,200,000 Shares $7 7/58 $9,150,000 $3,155.18
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h), using the average of the high and low prices
on August 14, 1996, as reported on the Nasdaq National Market.
================================================================================
<PAGE>
The contents of the registration statement on Form S-8, File No. 33-85848,
of 7th Level, Inc., a Delaware corporation (the "Company"), filed with the
Securities and Exchange Commission on November 1, 1994, are hereby incorporated
by reference.
ITEM 8. EXHIBITS
5 Opinion of Vinson & Elkins L.L.P.
10.1 7th Level, Inc. Amended and Restated Incentive Stock Option Plan.
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Vinson & Elkins L.L.P. (included in Exhibit 5).
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richardson, State of Texas, on August 15, 1996.
7TH LEVEL, INC.
By: /s/ George D. Grayson
----------------------------------------
George D. Grayson
Chief Executive Officer and
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ George D. Grayson Chief Executive Officer August 15, 1996
- --------------------------------- and Chairman of the Board
GEORGE D. GRAYSON (Principal xecutive Officer)
/s/ Robert Alan Ezrin President and Director August 15, 1996
- ---------------------------------
ROBERT ALAN EZRIN
/s/ W. Scott Page Executive Vice President of August 15, 1996
- --------------------------------- Production and Director
W. SCOTT PAGE
/s/ David R. Henkel Chief Operating Officer August 15, 1996
- --------------------------------- and Director
DAVID R. HENKEL
/s/ David W. Craig Chief Financial Officer August 15, 1996
- --------------------------------- (Principal Financial
DAVID W. CRAIG Officer and Principal
Accounting Officer)
/s/ Merv Adelson Director August 15, 1996
- ---------------------------------
MERV ADELSON
/s/ Steven Fink Director August 15, 1996
- ---------------------------------
STEVEN FINK
/s/ Lewis C. Solmon Director August 5, 1996
- ---------------------------------
LEWIS C. SOLMON
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION OF EXHIBITS PAGE
------- ----------------------- ------------
<S> <C> <C>
5 -- Opinion of Vinson & Elkins L.L.P.
10.1 -- 7th Level, Inc. Amended and Restated Incentive Stock Option Plan.
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Vinson & Elkins L.L.P. (included in Exhibit 5)
</TABLE>
4
<PAGE>
Exhibit 5
[LETTERHEAD OF VINSON & ELKINS APPEARS HERE]
August 15, 1996
7th Level, Inc.
1110 East Collins Blvd., Suite 122
Richardson, Texas 75081
Dear Sirs:
We have acted as counsel to 7th Level, Inc., a Delaware corporation (the
"Company"), in connection with the registration under the Securities Act of 1933
(the "Securities Act") of the offer and sale of an aggregate of 1,200,000 shares
(the "Shares") of common stock ("Common Stock"), par value $.01 per share, of
the Company, as that number may be adjusted from time to time pursuant to the
provisions of the 7th Level, Inc. Amended and Restated Incentive Stock Option
Plan (as amended, and including any agreement evidencing an award thereunder,
the "Plan"), that may be issued pursuant to the Plan. Unless otherwise defined
herein, terms having their initial letters capitalized have the meanings
ascribed to them in the Plan.
In reaching the opinion set forth herein, we have reviewed such agreement,
certificates of public officials and officers of the Company, records, documents
and matters of law that we deemed relevant.
Based upon and subject to the foregoing, and subject further to the
assumptions, exceptions, and qualifications hereinafter stated, we express the
opinion that each Share, when issued in accordance with the terms of the Plan,
will be legally issued, fully paid and non-assessable.
The opinion expressed above is subject to the following assumptions,
exceptions and qualifications:
(a) We have assumed that (i) all information contained in all
documents reviewed by us is true and correct, (ii) all signatures on all
documents reviewed by us are genuine, (iii) all documents submitted to us as
originals are true and complete, (iv) all documents submitted to us as copies
are true and complete copies of the originals thereof, and (v) each natural
person signing any document reviewed by us had the legal capacity to do so.
<PAGE>
7th Level, Inc.
August 15, 1996
Page 2
(b) We have also assumed that the Company will receive the full amount
and type of consideration (as specified in the Plan) for each of the Shares upon
issuance, that such consideration will be in cash, personal property, or
services already performed, that such consideration will equal or exceed the par
value per share of Common Stock, that appropriate certificates evidencing the
Shares will be properly executed upon such issuance, and that each grant of an
award pursuant to the Plan will be duly authorized.
The opinion expressed above is limited to the laws of the State of Texas,
the Delaware General Corporation Law, and the federal laws of the United States
of America.
This opinion may be filed as an exhibit to a registration statement filed
under the Securities Act. In giving this consent, we do not thereby admit that
we come into the category of persons whose consent is required under Section 7
of the Securities Act or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
---------------------------
Vinson & Elkins L.L.P.
<PAGE>
Exhibit 10.1
AMENDED AND RESTATED INCENTIVE STOCK OPTION PLAN OF
7TH LEVEL, INC.
A DELAWARE CORPORATION
I. Purpose of Plan
The purpose of this Amended and Restated Incentive Stock Option Plan (this
"Plan") is to strengthen 7th Level, Inc. a Delaware corporation (the
"Corporation"), and its subsidiaries, if any, by providing stock options as a
means to attract, retain and motivate corporate personnel.
II. Administration
This Plan shall be administered by a committee (the "Committee") composed
of members selected by, and serving at the pleasure of, the Board of Directors
of the Corporation (the "Board"). The Committee shall be constituted so as to
permit the Plan to comply with Rule 16b-3, as currently in effect or as
hereinafter modified or amended ("Rule 16b-3"), promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The Committee shall have the
sole authority to select the employees entitled to receive Options (as defined
below) from among those eligible hereunder (the "Optionees") and to establish
the number of shares that may be issued under each Option to such employees;
provided, however, that, notwithstanding any provision in this Plan to the
contrary, the maximum number of shares of common stock, $.01 par value per share
of the Corporation (the "Common Stock") that may be subject to Options granted
under the Plan to an individual Optionee during any calendar year may not exceed
250,000 (subject to adjustment in the same manner as provided in Article IX
hereof to prevent dilution.) The limitation set forth in the preceding sentence
shall be applied in a manner which will permit compensation generated under the
Plan to constitute "performance-based" compensation for purposes of section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), including,
without limitation, counting against such maximum number of shares, to the
extent required under section 162(m) of the Code and applicable interpretive
authority thereunder, any shares subject to Options that are canceled or
repriced. The Committee shall have the power to make all determinations
necessary for the administration of the Plan, subject to the restrictions on
committee power set forth in Delaware law.
III. Grant of Options
The Corporation is authorized to grant incentive stock options ("Incentive
Stock Options") as defined in section 422 of the Code and options that are not
intended to be Incentive Stock Options (hereafter "Non-Qualified Stock Options"
and, together with Incentive Stock Options, the "Options"). Any Option granted
under this Plan shall be granted within 10 years from the date this Plan is
adopted, or the date this Plan is approved by the stockholders pursuant to
Article X, whichever is earlier. No Option granted under this Plan shall be
exercisable by its terms after the expiration of 10 years from the grant of the
Option. Options may be granted only to individuals who are employees (including
officers and directors who are also employees) of the Corporation or any parent
or subsidiary corporation (as defined in section 424 of the Code) of the
Corporation at the time the Option is granted. Options may be granted to the
same individual on more than one occasion.
Incentive Stock Options may not be granted to employees who own stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Corporation, or of its parent or subsidiary, if any,
within the meaning of section 422(b)(6) of the Code, unless (i) at the time such
Option is granted the option price is at least 110% of the fair market value of
the Common Stock subject to such Option and (ii) such Option by its terms is not
exercisable after the expiration of five years from the date of the grant.
To the extent that the aggregate fair market value of Common Stock (as
determined in good faith by the Committee at the time the Incentive Stock Option
is granted), with respect to which Incentive Stock Options are exercisable for
the first time by an individual during any calendar year (under all incentive
stock option plans of the Corporation and any parent or subsidiary corporation)
exceeds $100,000, such excess Incentive Stock Options shall be
<PAGE>
treated as Non-Qualified Stock Options. The Committee shall determine, in
accordance with applicable provisions of the Code, Treasury Regulations and
other administrative pronouncements which of an Optionee's Incentive Stock
Options will not constitute Incentive Stock Options because of such limitation
and shall notify the Optionee of such determination as soon as practicable after
such determination.
IV. Stock Subject to Plan
The aggregate number of shares of Common Stock that may be issued pursuant
to Options granted under this Plan shall not exceed 3,200,000 shares of Common
Stock (subject to adjustment as provided in Article VIII). Such shares may
consist of authorized but unissued shares of Common Stock or previously issued
shares of Common Stock reacquired by the Corporation. Any of such shares which
remain unissued and which are not subject to outstanding Options at the
termination of this Plan shall cease to be subject to this Plan, but, until
termination of this Plan, the Corporation shall at all times make available a
sufficient number of shares to meet the requirements of this Plan. Should any
Option hereunder expire or terminate prior to its exercise in full, the shares
of Common Stock theretofore subject to such Option may again be subject to an
Option granted under this Plan to the extent permitted under Rule 16b-3. The
aggregate number of shares which may be issued under this Plan shall be subject
to adjustment as provided in Article VIII hereof. Exercise of an Option in any
manner shall result in a decrease in the number of shares of Common Stock which
may thereafter be available, both for purposes of the Plan and for sale to any
one individual, by the number of shares as to which the Option is exercised.
Separate stock certificates shall be issued by the Corporation for those shares
acquired pursuant to the exercise of an Incentive Stock Option and for those
shares acquired pursuant to the exercise of any Non-Qualified Stock Options.
V. Option Agreements
Each Option shall be evidenced by a written agreement between the
Corporation and the Optionee ("Option Agreement") which shall contain such terms
and conditions as the Committee deems necessary, including, without limitation,
terms and conditions relating to the termination of Options. The terms and
conditions of the respective Option Agreements need not be identical. Moreover,
an Option Agreement may provide for the payment of the option price, in whole or
in part, by the delivery of a number of shares of Common Stock (plus cash if
necessary) having a fair market value equal to such option price.
VI. Option Price
The purchase price for a share of Common Stock subject to an Incentive
Stock Option granted pursuant to this Plan shall not be less than the fair
market value of the Common Stock subject to such Incentive Stock Option at the
time such Option is granted. The purchase price for a share of the Common Stock
subject to a Non-Qualified Stock Option granted pursuant to this Plan shall be
not less than 70% of the fair market value of the Common Stock subject to such
Non-Qualified Stock Option on the date such Option is granted.
For all purposes under the Plan, the fair market value of a share of Common
Stock on a particular date shall be equal to the mean of the high and low sales
prices of the Common Stock (i) reported by the Nasdaq National Market System on
that date or (ii) if the Common Stock is listed on a national stock exchange,
reported on the stock exchange composite tape on that date; or, in either case,
if no prices are reported on that date, on the last preceding date on which such
prices of the Common Stock are so reported. If the Common Stock is traded over
the counter at the time a determination of its fair market value is required to
be made hereunder, its fair market value shall be deemed to be equal to the
average between the reported high and low or closing bid and ask prices of the
Common stock on the most recent date on which the Common Stock was publicly
traded. In the event the Common Stock is not publicly traded at the time
<PAGE>
a determination of its value is required to be made hereunder, the determination
of its fair market value shall be made by the Committee in such manner as it
deems appropriate.
VII. Options Nontransferable
Each Option and all rights granted thereunder shall not be transferable
other than by will or the laws of descent and distribution, and shall be
exercisable during the Optionee's lifetime only by the Optionee or the
Optionee's guardian or legal representative; provided, however, that on and
after the date the Corporation elects to have this Plan governed under the
amendments to Rule 16b-3 effective on or after May 1, 1991, this Plan shall be
deemed to be amended to limit the transferability of Options, including any
exceptions thereto, to the same extent provided by Rule 16b-3 as so amended.
VIII. Recapitalization or Reorganization
In the event of a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, an appropriate and
proportionate adjustment shall be made in the number of shares of Common Stock
for which Options may be granted pursuant to Article IV hereof. A corresponding
change shall be made to the number and kind of shares, and the exercise price
per share, of unexercised Options.
IX. Merger, Consolidation or Dissolution of Corporation
Following the merger of one or more corporations into the Corporation, or
any consolidation of the Corporation and one or more corporations in which the
Corporation is the surviving corporation, the exercise of Options under this
Plan shall apply to the shares of the surviving corporation.
Notwithstanding any other provision of this Plan, all Options under this
Plan shall terminate on the dissolution or liquidation of the Corporation, or on
any merger or consolidation in which the Corporation is not the surviving
corporation.
X. Effective Date of Plan
This Plan shall be effective on approval by the outstanding shares or
unanimous written consent of the stockholders of the Corporation in the manner
required by Rule 16b-3.
XI. Amendment and Termination of Plan
The Board in its discretion may terminate this Plan at any time with
respect to any shares of Common Stock for which Options have not theretofore
been granted. The Board shall have the right to alter or amend this Plan or any
part hereof from time to time; provided, that no change in any Option heretofore
granted may be made which would impair the rights of the Optionee without the
consent of such Optionee; and provided, further, that (i) the Board may not make
any alteration or amendment which would decrease any authority granted to the
Committee hereunder in contravention of Rule 16b-3 and (ii) the Board may not
make any alteration or amendment which would materially increase the benefits
accruing to participants under the Plan, increase the aggregate number of shares
which may be issued pursuant to the provisions of the Plan, change the class of
individuals eligible to receive Options under the Plan or extend the term of the
Plan, without the approval of the stockholders of the Corporation.
<PAGE>
XII. Compliance with Section 16
With respect to persons subject to Section 16 of the 1934 Act, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Committee.
7TH LEVEL, INC.
By: /s/ DAVID R. HENKEL
-------------------------------
David R. Henkel
Chief Operating Officer
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
7th Level, Inc.:
We consent to incorporation by reference herein of our reports relating to
the financial statements of (a) 7th Level, Inc. as of December 31, 1995 and 1994
and for each of the years in the two-year period ended December 31, 1995 and the
period from April 28, 1993 (inception) through December 31, 1993 and (b) 7th
Level Sole Proprietorship (a development stage enterprise) as of December 31,
1993 and for the period from January 1, 1993 (inception) through December 31,
1993, which reports appear in the December 31, 1995 annual report on Form 10-K
of 7th Level, Inc.
KPMG Peat Marwick LLP
Dallas, Texas
August 15, 1996
