As filed with the Securities and Exchange Commission on June 18, 1998
Registration No. 333-______
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AVERT, INC.
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(Exact name of registrant as specified in its charter)
Colorado 84-1028716
-------------------------------- ---------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
301 Remington, Fort Collins, Colorado 80524
------------------------------------------------
(Address of Principal Executive Offices)(Zip Code)
AVERT, INC. AMENDED AND RESTATED 1994 STOCK INCENTIVE PLAN
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(Full title of the plan)
Dean A. Suposs
301 Remington
Fort Collins, Colorado 80524
Telephone: (970) 484-7722
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(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copy to:
Thomas H. Maxfield, Esq.
Baker & Hostetler, LLP
303 East 17th Avenue, Suite 1100
Denver, Colorado 80203
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Title of securities Amount to be Proposed maximum offering Proposed maximum aggregate Amount of
To be registered Registered price per share(1) offering price(1) Registration fee(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 525,000 $6.05 $3,176,250 $962.50
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Calculated pursuant to Rule 457(h), based on an assumed exercise price of
$6.05 per share, which represents the average of the high and low prices of
such securities reported in the consolidated reporting system on June 15,
1998.
(2) Registration fee is calculated on the basis of 1/33 of 1% of the proposed
maximum aggregate offering price of $3,176,250.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933 (the "Securities Act") and the Note to Part
I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
are incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-KSB, as amended, for the
year ended December 31, 1997;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since December 31, 1997; and
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated June 22, 1994, pursuant to
Section 12(b) of the Exchange Act, including any amendments or reports filed for
the purpose of updating such description.
All reports and other documents subsequently filed by the Registrant
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
then offered hereby have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein 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 incorporated or deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
II-2
<PAGE>
Item 6. Indemnification of Directors and Officers.
The following subparagraphs briefly describe indemnification provisions for
directors, officers and controlling persons of the Company against liability,
including liability under the Securities Act:
1. Under provisions of the Bylaws of the Company and the Securities Act,
each person who is or was a director or officer of the Company will be
indemnified by the Company as a matter of right to the extent permitted or
authorized by law. The effects of the Bylaws and the Securities Act may be
summarized as follows:
(a) Under Colorado law, a person who is wholly successful on the
merits in defense of a suit or proceeding brought against him by reason of
the fact that he is a director or officer of the Company shall be
indemnified against reasonable expenses (including attorneys' fees)
incurred in connection with such suit or proceeding;
(b) Except as provided in subparagraph (c) below, a director may be
indemnified under such law against both (1) reasonable expenses (including
attorneys' fees), and (2) judgments, penalties, fines and amounts paid in
settlement, if he acted in good faith and reasonably believed, in the case
of conduct in his official capacity as a director, that his conduct was in
the Company's best interests, or in all other cases that his conduct was
not opposed to the best interests of the Company, and with respect to any
criminal action, he had no reasonable cause to believe his conduct was
unlawful, but the Company may not indemnify the director if the director is
found liable to the Company or is found liable on the basis that personal
benefit was improperly received by the director in connection with any suit
or proceeding charging improper personal benefit to the director;
(c) In connection with a suit or proceeding by or in the right of the
Company, indemnification is limited to reasonable expenses incurred in
connection with the suit or proceeding, but the Company may not indemnify
the director if the director was found liable to the Company; and
(d) Officers of the Company will be indemnified to the same extent as
directors as described in (a), (b) and (c) above, and officers who are not
directors may be indemnified to such further extent, consistent with law,
as provided by the Articles of Incorporation, bylaws, resolution of the
shareholders or the Board of Directors, or in a contract.
2. The underwriters of the Company's initial public offering agreed,
pursuant to an Underwriting Agreement to indemnify directors, officers and
controlling persons of the Company against certain liabilities, including
liabilities under the Securities Act.
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 foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-3
<PAGE>
Item 8. Exhibits.
Reference is made to the Exhibit Index that immediately precedes the
exhibits filed with this Registration Statement.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above do not apply if the Registration Statement is on Form
S-3 or Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to section 13 or section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act, each filing
of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Exchange Act (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as the indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore, unenforceable.
II-4
<PAGE>
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question 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.
II-5
<PAGE>
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Collins, State of Colorado, on the 28th day of
May, 1998.
AVERT, INC.
By: /s/ Dean A. Suposs
--------------------------
Dean A. Suposs, President
Each person whose signature appears below appoints Dean A. Suposs to act as
his true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him and in his stead, in any capacities to sign any and
all amendments, including post-effective amendments to this Registration
Statement, and to file the same, with all exhibits thereto and all other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dean A. Suposs Chairman of the Board; President May 28, 1998
- ----------------------------------------------
Dean A. Suposs
(Principal Executive Officer)
/s/ Jamie Burgat Vice President of Operations; May 28, 1998
- ---------------------------------------------- Treasurer; Secretary
Jamie Burgat
(Principal Financial & Accounting Officer)
/s/ D. Michael Vaughan Director May 28, 1998
- ----------------------------------------------
D. Michael Vaughan
/s/ Stephen C. Fienhold Director May 28, 1998
- ----------------------------------------------
Stephen C. Fienhold
/s/ Stephen D. Joyce Director May 28, 1998
- ----------------------------------------------
Stephen D. Joyce
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Description Numbered Page
- ------- ----------- -------------
4.1 Avert, Inc. Amended and Restated 1994 Stock Incentive Plan.
4.2 Excerpt from Articles of Incorporation of Avert, Inc.
Regarding Common Stock and Preferred Stock(1) N/A
5.1 Opinion of Baker & Hostetler, LLP.
23.1 Consent of Hein + Associates, LLP
23.2 Consent of Baker & Hostetler, LLP--included in Exhibit 5.1. N/A
24.1 Powers of Attorney -- included in Part II of Registration
Statement. N/A
- --------
(1) Filed as an Exhibit to Amendment No. 1 to the Registration Statement
(File No. 33-76726-D) filed with the Securities and Exchange
Commission on April 26, 1994.
II-7
EXHIBIT 4.1
AMENDED AND RESTATED
AVERT, INC.
1994 STOCK INCENTIVE PLAN
1. General. This Amended and Restated Stock Incentive Plan (the "Plan")
provides eligible employees of Avert, Inc., (the "Company") with the opportunity
to acquire or expand their equity interest in the Company by making available
for award or purchase Common Shares, without par value, of the Company ("Common
Shares"), through the granting of nontransferable options to purchase Common
Shares ("Stock Options") and the granting of Common Shares subject to temporal
restrictions on transfer and substantial risks of forfeiture ("Restricted
Stock"). Stock Options and Restricted Stock shall be collectively referred to
herein as "Grants"; an individual grant of Stock Options or Restricted Stock
shall be individually referred to herein as a "Grant." It is intended that key
employees may be granted, simultaneously or from time to time, Stock Options
that qualify as incentive stock options ("Incentive Stock Options") under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
Stock Options that do not so qualify ("Non-qualified Stock Options"). No
provision of the Plan is intended or shall be construed to grant employees
alternative rights in any Incentive Stock Option granted under the Plan so as to
prevent such Option from qualifying under Section 422 of the Code.
2. Purpose of the Plan. The purpose of the Plan is to provide continuing
incentives to key employees of the Company and of any subsidiary corporation of
the Company, by encouraging such key employees to acquire new or additional
share ownership in the Company, thereby increasing their proprietary interest in
the Company's business and enhancing their personal interest in the Company's
success.
For purposes of the Plan, a "subsidiary corporation" consists of any
corporation at least fifty percent (50%) of the stock of which is directly or
indirectly owned or controlled by the Company.
3. Effective Date of the Plan. The Plan shall become effective upon March
19, 1994, subject to approval by holders of a majority of the outstanding shares
of voting capital stock of the Company. If the Plan is not so approved within
twelve (12) months after the date the Plan is adopted by the Board of Directors,
the Plan and any Grants made hereunder shall be null and void. However, if the
Plan is so approved, no further shareholder approval shall be required with
respect to the making of Grants pursuant to the Plan, except as provided in
Section 11 hereof.
4. Administration of the Plan. The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company, or by any other
committee selected by such Board of Directors by majority vote and composed of
no fewer than two (2) members of such Board of Directors (the "Committee"). No
person shall be appointed to the Committee who, during the one-year period
immediately preceding such person's appointment to the Committee, has received
any Grants under the Plan or any similar stock option or stock incentive plan,
other than a formula-based plan, maintained by the Company or any subsidiary
corporation. A member of the Committee (i) must be a "disinterested person"
within the meaning of Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934 or any successor definition
adopted by the Securities and Exchange Commission and (ii) shall not be eligible
to participate in this Plan while serving on the Committee.
<PAGE>
A majority of the Committee shall constitute a quorum. The acts of a
majority of the members present at any meeting at which a quorum is present (or
acts unanimously approved in writing by the members of the Committee) shall
constitute binding acts of the Committee.
Subject to the terms and conditions of the Plan, the Committee shall be
authorized and empowered:
(a) To select the key employees to whom Grants may be made;
(b) To determine the number of Common Shares to be covered by any Grant;
(c) To prescribe the terms and conditions of any Grants made under the
Plan, and the form(s) and agreement(s) used in connection with such
Grants, which shall include agreements governing the granting of
Restricted Stock and/or Stock Options;
(d) To determine the time or times when Stock Options will be granted and
when they will terminate in whole or in part;
(e) To determine the time or times when Stock Options that are granted may
be exercised;
(f) To determine, at the time a Stock Option is granted under the Plan,
whether such Option is an Incentive Stock Option entitled to the
benefits of Section 422 of the Code; and
(g) To establish any other Stock Option agreement provisions not
inconsistent with the terms and conditions of the Plan or, where the
Stock Option is an Incentive Stock Option, with the terms and
conditions of Section 422 of the Code.
5. Employees Eligible for Grants. Grants may be made from time to time to
those key employees of the Company or a subsidiary corporation, who are
designated by the Committee in its sole and exclusive discretion. Key employees
may include, but shall not necessarily be limited to, management (employee)
members of the Board of Directors (excluding members of the Committee), and
officers, of the Company and any subsidiary corporation; however, Stock Options
intended to qualify as Incentive Stock Options shall only be granted to key
employees while actually employed by the Company or a subsidiary corporation.
The Committee may grant more than one Stock Option to the same key employee. No
Stock Option shall be granted to any key employee during any period of time when
such key employee is on a leave of absence.
6. Shares Subject to the Plan. The shares to be issued pursuant to any
Grant made under the Plan shall be Common Shares. Either Common Shares held as
treasury stock, or authorized and unissued Common Shares, or both, may be so
issued, in such amount or amounts within the maximum limits of the Plan as the
Board of Directors shall from time to time determine.
Subject to the provisions of the next succeeding paragraph of this Section
6 and the provisions of Section 7(h), the aggregate number of Common Shares that
can be actually issued under the Plan (exclusive of Restricted Stock forfeited
under the Plan before the holder thereof received any benefits of ownership,
such as dividends) shall be Five Hundred Twenty-Five Thousand (525,000) Common
Shares.
<PAGE>
If, at any time subsequent to March 19, 1994, the effective date of the
Plan, the number of Common Shares is increased or decreased, or changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation (whether as a result of a stock split,
stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or otherwise): (i) there shall automatically be
substituted for each Common Share subject to an unexercised Stock Option (in
whole or in part) granted under the Plan, the number and kind of shares of stock
or other securities into which each outstanding Common Share shall be changed or
for which each such Common Share shall be exchanged; (ii) the option price per
Common Share or unit of securities shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to a Stock Option shall remain the same as immediately prior to such event; and
(iii) any outstanding Restricted Stock that is converted, exchanged or otherwise
changed into a different number or kind of stock or security, shall continue to
be subject to any and all terms, conditions and restrictions originally
applicable to such Restricted Stock. In addition to the foregoing, the Committee
shall be entitled in the event of any such increase, decrease or exchange of
Common Shares to make other adjustments to the securities subject to a Stock
Option, the provisions of the Plan, and to any related Stock Option agreements
(including adjustments which may provide for the elimination of fractional
shares), where necessary to preserve the terms and conditions of any Grants
hereunder.
7. Stock Option Provisions.
(a) General. The Committee may grant to key employees (also referred to as
"optionees") nontransferable Stock Options that either qualify as Incentive
Stock Options under Section 422 of the Code or do not so qualify. However, any
Stock Option which is an Incentive Stock Option shall only be granted within 10
years from the earlier of (i) the date this Plan is adopted by the Board of
Directors of the Company; or (ii) the date this Plan is approved by the
shareholders of the Company.
(b) Stock Option Price. The option price per Common Share which may be
purchased under a Stock Option under the Plan shall be determined by the
Committee at the time of Grant, but shall not be less than one hundred percent
(100%) of the fair market value of a Common Share, determined as of the date
such Option is granted; however, if a key employee to whom an Incentive Stock
Option is granted is, at the time of the grant of such Option, an "owner," as
defined in Section 422(b)(6) of the Code (modified as provided in Section 424(d)
of the Code) of more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any subsidiary corporation (a
"Substantial Shareholder"), the price per Common Share of such Option, as
determined by the Committee, shall not be less than one hundred ten percent
(110%) of the fair market value of a Common Share on the date such Option is
granted. Except as specifically provided above, the fair market value of a
Common Share shall be determined in accordance with procedures to be established
by the Committee. The day on which the Committee approves the granting of a
Stock Option shall be considered the date on which such Option is granted,
unless the grant is expressly made subject to the occurrence of an event
specified by the Committee at the time of the approval, in which case, the date
on which such event occurs shall be considered the date on which the Option is
granted.
(c) Period of Stock Option. The Committee shall determine when each Stock
Option is to expire. However, no Stock Option shall be exercisable for a period
of more than ten (10) years from the date upon which such Option is granted.
Further, no Incentive Stock Option granted to an employee who is a Substantial
Shareholder at the time of the grant of such Option shall be exercisable after
the expiration of (5) years from the date of grant of such Option.
<PAGE>
(d) Limitation on Exercise and Transfer of Stock Options. Only the key
employee to whom a Stock Option is granted may exercise such Option, except
where a guardian or other legal representative has been duly appointed for such
employee, and except as otherwise provided in the case of such employee's death.
No Stock Option granted hereunder shall be transferable by an optionee other
than by will or the laws of descent and distribution. No Stock Option granted
hereunder may be pledged or hypothecated, nor shall any such Option be subject
to execution, attachment or similar process.
(e) Employment, Holding Period Requirements For Certain Options. The
Committee may condition any Stock Option granted hereunder upon the continued
employment of the optionee by the Company or by a subsidiary corporation, and
may make any such Stock Option immediately exercisable. However, the Committee
will require that, from and after the date of grant of any Incentive Stock
Option granted hereunder until the day three (3) months prior to the date such
Option is exercised, such optionee must be an employee of the Company or of a
subsidiary corporation, but always subject to the right of the Company or any
such subsidiary corporation to terminate such optionee's employment during such
period. Each Stock Option shall be subject to such additional restrictions as to
the time and method of exercise and sale of the Common Shares acquired upon
exercise as shall be prescribed by the Committee. Upon completion of such
requirements, if any, a Stock Option or the appropriate portion thereof may be
exercised in whole or in part from time to time during the option period;
however, such exercise right(s) shall be limited to whole shares.
(f) Payment for Stock Option Price. A Stock Option shall be exercised by an
optionee giving written notice to the Company of his intention to exercise the
same, accompanied by full payment of the purchase price in cash or by check, or,
with the consent of the Committee, in whole or in part with a promissory note or
with a surrender of Common Shares having a fair market value on the date of
exercise equal to that portion of the purchase price for which payment in cash
or check is not made. The Committee may, in its sole discretion, approve other
methods of exercise for a Stock Option or payment of the option price, provided
that no such method shall cause any option granted under the Plan as an
Incentive Stock Option to not qualify under Section 422 of the Code, or cause
any Common Share issued in connection with the exercise of an option not to be a
fully paid and non-assessable Common Share.
(g) Certain Reissuances of Stock Options. To the extent Common Shares are
surrendered by an optionee in connection with the exercise of a Stock Option in
accordance with Section 7(f), the Committee in its sole discretion grant new
Stock Options to such optionee (to the extent Common Shares remain available for
Grants), subject to the following terms and conditions:
i) The number of Common Shares shall be equal to the number of Common
Shares being surrendered by the optionee;
ii) The option price per Common Share shall be equal to the fair market
value of Common Shares, determined on the date of exercise of the
Stock Options whose exercise caused such Grant; and
iii) The terms and conditions of such Stock Options shall in all other
respects replicate such terms and conditions of the Stock Options
whose exercise caused such Grant, except to the extent such terms and
conditions are determined to not be wholly consistent with the general
provisions of this Section 7, or in conflict with the remaining
provisions of this Plan.
<PAGE>
(h) Cancellation and Replacement of Stock Options and Related Rights. The
Committee may at any time or from time to time permit the voluntary surrender by
an optionee who is the holder of any outstanding Stock Options under the Plan,
where such surrender is conditioned upon the granting to such optionee of new
Stock Options for such number of shares as the Committee shall determine, or may
require such a voluntary surrender as a condition precedent to the grant of new
Stock Options. The Committee shall determine the terms and conditions of new
Stock Options, including the prices at and periods during which they may be
exercised, in accordance with the provisions of this Plan, all or any of which
may differ from the terms and conditions of the Stock Options surrendered. Any
such new Stock Options shall be subject to all the relevant provisions of this
Plan. The Common Shares subject to any Stock Option so surrendered, shall no
longer be charged against the limitation provided in Section 6 of this Plan and
may again become shares subject to the Plan. The granting of new Stock Options
in connection with the surrender of outstanding Stock Options under this Plan
shall be considered for the purposes of the Plan as the granting of new Stock
Options and not an alteration, amendment or modification of the Plan or of the
Stock Options being surrendered.
(i) Limitation on Exercisable Incentive Stock Options. The aggregate fair
market value of the Common Shares first becoming subject to exercise as
Incentive Stock Options by a key employee during any given calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). Such aggregate
fair market value shall be determined as of the date such Option is granted,
taking into account, in the order in which granted, any other incentive stock
options granted by the Company, or by a parent or subsidiary thereof.
8. Restricted Stock.
(a) Grant. The Committee shall determine the key employees to whom, and the
time or times at which, Grants of Restricted Stock will be made, the number of
shares of Restricted Stock to be granted, the price (if any) to be paid by such
key employees (subject to Section 8(b)), the time or times within which such
Restricted Stock grants may be subject to forfeiture, and the other terms and
conditions of the grants in addition to those set forth in Section 8(b). The
Committee may condition the grant of Restricted Stock upon the attainment of
specified vesting schedules, employment requirements or performance goals or
such other factors as the Committee may determine in its sole discretion.
(b) Terms and Conditions. Restricted Stock granted under the Plan shall
contain any terms and conditions, not inconsistent with the provisions of the
Plan, which are deemed desirable by the Committee. A key employee who receives a
grant of Restricted Stock shall not have any rights with respect to such Grant,
unless and until such key employee has executed an agreement evidencing such
Grant in the form approved from time to time by the Committee, has delivered a
fully executed copy thereof to the Company, and has otherwise complied with the
applicable terms and conditions of such Grant. In addition, Restricted Stock
granted under the Plan shall be subject to the following terms and conditions:
i) The purchase price for Common Shares consisting of Restricted Stock,
if any, will be specified by the Committee.
ii) Grants of Restricted Stock shall only be accepted by executing a
Restricted Stock agreement and paying, in cash or by check, whatever
price (if any) is required under Section 8(b)(i).
iii) Each key employee granted Restricted Stock shall be issued a stock
certificate in respect of such shares of Restricted Stock. Such
certificate shall be registered in the name of such key employee, and
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Grant.
<PAGE>
iv) Any stock certificates evidencing Common Shares consisting of
Restricted Stock shall either (A) be held in custody by the Company
until the employment and other restrictions thereon shall all have
lapsed; or (B) be affixed with a legend, identifying such Shares as
Restricted Stock and expressly prohibiting the sale, transfer, tender,
pledge, assignment or encumbrance of such Shares, as the Committee
shall determine. With respect to any Restricted Stock held in custody
by the Company, the key employee granted such Restricted Stock shall
deliver to the Company a stock power, endorsed in blank, relating to
the Common Shares represented by such Stock. With respect to any
Restricted Stock held by a key employee under legend, the key employee
granted such Restricted Stock shall deliver to the Company an
acknowledgement that such Stock remains subject to a substantial risk
of forfeiture in the event of termination of employment under certain
circumstances, and that the certificates representing ownership of
such Stock will be surrendered to the Company immediately upon any
such termination of employment.
v) Subject to the provisions of the Plan and the Restricted Stock
agreement, during a temporal period set by the Committee and
commencing with the date of such Grant (the "Restriction Period"), a
key employee shall not be permitted to sell, transfer, tender, pledge,
assign or otherwise encumber any Restricted Stock granted under the
Plan. However, the Committee, in its sole discretion, may provide for
the lapse of such transfer or other restrictions in installments, or
accelerate or waive such restrictions in whole or in part, based on
service, performance or other factors and criteria selected by the
Committee.
vi) Except as provided in this Section 8(b)(vi) and Section 8(b)(v), a key
employee shall have, with respect to shares of Restricted Stock
granted to him, all of the rights of a shareholder of the Company,
including the right to vote such Stock and the right to receive any
dividends thereon. The Committee, in its sole discretion and as
determined at the time of a Grant of Restricted Stock, may permit or
require cash dividends otherwise due and payable to be deferred and,
if the Committee so determines, reinvested either in additional
Restricted Stock (to the extent Common Shares are available), or
otherwise. Stock dividends issued with respect to Restricted Stock
shall be treated as additional shares of Restricted Stock. As
Restricted Stock, such additional Common Shares will be subject to the
same restrictions, terms and conditions applicable to the Restricted
Stock with respect to which such additional Common Shares were issued.
vii) No Restricted Stock shall be transferable by a key employee other than
by will or by the laws of descent and distribution.
viii)In the event Restricted Stock is forfeited by a key employee, the
Company will refund to such key employee any payment(s) made by such
key employee to purchase such Stock, promptly upon such forfeiture
(and any corresponding surrender of stock certificates).
(c) Minimum Value Provisions. To ensure that Grants of Restricted Stock
actually reflect the performance of the Company and service of the key employee,
the Committee may provide, in its sole discretion, for a tandem
performance-based award, or other grant, designed to guarantee a minimum value,
payable in cash or Common Shares, to the recipient of a Restricted Stock Grant,
subject to such performance, future service, deferral and other terms and
conditions as may be specified by the Committee.
<PAGE>
9. Termination of Employment. If a key employee ceases to be an employee of
the Company and every subsidiary corporation, for a reason other than death,
retirement, or permanent and total disability, his Grants shall, unless extended
by the Committee on or before his date of termination of employment, terminate
on the effective date of such termination of employment. Neither the key
employee nor any other person shall have any right after such date to exercise
all or any part of his Stock Options, and all Restricted Stock which is not
vested or otherwise subject to restriction shall thereupon be forfeited, and/or
declared void and without value.
If termination of employment is due to death or permanent and total
disability, then outstanding Stock Options may be exercised within the one (1)
year period ending on the anniversary of such death or permanent and total
disability. In the case of death, such outstanding Stock Options shall be
exercised by such key employee's estate, or the person designated by such key
employee by will, or as otherwise designated by the laws of descent and
distribution. Notwithstanding the foregoing, in no event shall any Stock Option
be exercisable after the expiration of the option period, and in the case of
exercises made after a key employee's death, not to any greater extent than the
key employee would have been entitled to exercise such Option at the time of his
death. Restricted Stock held by a key employee whose employment by the Company
or any subsidiary corporation terminates by reason of death shall thereupon vest
and all restrictions and risks of forfeiture thereon shall thereupon lapse.
Subject to the discretion of the Committee, in the event a key employee
terminates employment with the Company and all subsidiary corporations because
of normal or early retirement, or, in the case of Restricted Stock, permanent
and total disability, (a) any then-outstanding Stock Options held by such key
employee shall lapse at the earlier of the end of the term of such Stock Option
or three (3) months after such retirement or permanent and total disability; and
(b) any Restricted Stock held by such key employee shall thereafter vest and any
applicable restrictions shall lapse, to the extent such Restricted Stock would
have become vested or no longer subject to restriction within one year from the
time of termination had the key employee continued to fulfill all of the
conditions of the Restricted Stock during such period (or on such accelerated
basis as the Committee may determine at or after date of Grant).
In the event an employee of the Company or one of its subsidiary
corporations is granted a leave of absence by the Company or such subsidiary
corporation to enter military service or because of sickness, his employment
with the Company or such subsidiary corporation shall not be considered
terminated, and he shall be deemed an employee of the Company or such subsidiary
corporation during such leave of absence or any extension thereof granted by the
Company or such subsidiary corporation.
10. Change of Control. Upon the occurrence of a Change of Control (as
defined below), notwithstanding any other provisions hereof or of any agreement
to the contrary, all Stock Options granted under this Plan shall become
immediately exercisable in full and remain exercisable under the terms of the
applicable Option Agreement(s) and all Restricted Stock grants shall become
immediately vested and any applicable restrictions shall lapse.
For purposes of this Plan, a Change of Control shall be deemed to have
occurred if: (i) a tender offer shall be made and consummated for the ownership
of 50% or more of the outstanding voting securities of the Company; (ii) the
Company shall be merged or consolidated with another corporation and, as a
result of such merger or consolidation, less than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be owned in the
aggregate by the former shareholders of the Company as the same shall have
<PAGE>
existed immediately prior to such merger or consolidation; or (iii) the Company
shall sell substantially all of its assets to another corporation which is not a
wholly owned subsidiary; or (iv) a person, within the meaning of Section 3(a)(9)
or of Section 13(d)(3) (as in effect on the date hereof) of the Exchange Act,
shall acquire, other than by reason of inheritance, fifty percent (50%) or more
of the outstanding voting securities of the Company (whether directly,
indirectly, beneficially or of record). In making any such determination,
transfers made by a person to an affiliate of such person (as determined by the
Board of Directors of the Company), whether by gift, devise or otherwise, shall
not be taken into account. For purposes of this Plan, ownership of voting
securities shall take into account and shall include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(i) as in effect on the date hereof
pursuant to the Exchange Act.
Notwithstanding the provisions of subparagraph (iv) of this Section 10,
"person" is used in that subparagraph shall not include any holder who was the
beneficial owner of more than ten percent (10%) of the voting securities of the
company on the date the Plan was adopted by the Board of Directors.
11. Amendments to Plan. The Committee is authorized to interpret this Plan
and from time to time adopt any rules and regulations for carrying out this Plan
that it may deem advisable. Subject to the approval of the Board of Directors of
the Company, the Committee may at any time amend, modify, suspend or terminate
this Plan. In no event, however, without the approval of shareholders, shall any
action of the Committee or the Board of Directors result in:
(a) Materially amending, modifying or altering the eligibility
requirements provided in Section 5 hereof;
(b) Materially increasing, except as provided in Section 6 hereof, the
maximum number of shares subject to Grants; or
(c) Materially increasing the benefits accruing to participants under this
Plan;
except to conform this Plan and any agreements made hereunder to changes in the
Code or governing law.
12. Investment Representation, Approvals and Listing. The Committee may, if
it deems appropriate, condition its grant of any Stock Option hereunder upon
receipt of the following investment representation from the optionee:
"I agree that any Common Shares of Avert, Inc., which I may acquire by
virtue of this Stock Option shall be acquired for investment purposes
only and not with a view to distribution or resale, and may not be
transferred, sold, assigned, pledged, hypothecated or otherwise
disposed of by me unless (i) a registration statement or post-effective
amendment to a registration statement under the Securities Act of 1933,
as amended, with respect to said Common Shares has become effective so
as to permit the sale or other disposition of said shares by me; or
(ii) there is presented to Avert, Inc., an opinion of counsel
satisfactory to Avert, Inc., to the effect that the sale or other
proposed disposition of said Common Shares by me may lawfully be made
otherwise than pursuant to an effective registration statement or
post-effective amendment to a registration statement relating to the
said shares under the Securities Act of 1933, as amended."
<PAGE>
The Company shall not be required to issue any certificate or certificates
for Common Shares upon the exercise of any Stock Option granted under this Plan
prior to (i) the obtaining of any approval from any governmental agency which
the Committee shall, in its sole discretion, determine to be necessary or
advisable; (ii) the admission of such shares to listing on any national
securities exchange on which the Common Shares may be listed; (iii) the
completion of any registration or other qualifications of the Common Shares
under any state or federal law or ruling or regulations of any governmental body
which the Committee shall, in its sole discretion, determine to be necessary or
advisable or the determination by the Committee, in its sole discretion, that
any registration or other qualification of the Common Shares is not necessary or
advisable; and (iv) the obtaining of an investment representation from the
optionee in the form stated above or in such other form as the Committee, in its
sole discretion, shall determine to be adequate.
13. General Provisions. The form and substance of Stock Option agreements
and Restricted Stock agreements made hereunder, whether granted at the same or
different times, need not be identical. Nothing in this Plan or in any agreement
shall confer upon any employee any right to continue in the employ of the
Company or any of its subsidiary corporations, to be entitled to any
remuneration or benefits not set forth in this Plan or such Grant, or to
interfere with or limit the right of the Company or any subsidiary corporation
to terminate his employment at any time, with or without cause. Nothing
contained in this Plan or in any Stock Option agreement shall be construed as
entitling any optionee to any rights of a shareholder as a result of the grant
of a Stock Option, until such time as Common Shares are actually issued to such
optionee pursuant to the exercise of such Option. This Plan may be assumed by
the successors and assigns of the Company. The liability of the Company under
this Plan and any sale made hereunder is limited to the obligations set forth
herein with respect to such sale and no term or provision of this Plan shall be
construed to impose any liability on the Company in favor of any employee with
respect to any loss, cost or expense which the employee may incur in connection
with or arising out of any transaction in connection with this Plan. The cash
proceeds received by the Company from the issuance of Common Shares pursuant to
this Plan will be used for general corporate purposes. The expense of
administering this Plan shall be borne by the Company. The captions and section
numbers appearing in this Plan are inserted only as a matter of convenience.
They do not define, limit, construe or describe the scope or intent of the
provisions of this Plan.
14. Termination of This Plan. This Plan shall terminate on March 17, 2004,
and thereafter no Stock Options or Restricted Stock shall be granted hereunder.
All Stock Options and Restricted Stock outstanding at the time of termination of
this Plan shall continue in full force and effect according to their terms and
the terms and conditions of this Plan.
EXHIBIT 5.1
June 11, 1998
Avert, Inc.
301 Remington Street
Fort Collins, CO 80524
Gentlemen:
We have acted as counsel for Avert, Inc. (the "Company") in connection with
the registration under the Securities Act of 1933 (the "Act") on Form S-8 of
525,000 of the Company's Common Stock, no par value (the "Shares") covered by
the Avert, Inc. Amended and Restated 1994 Stock Incentive Plan (the "Plan"). The
Registration Statement on Form S-8 and exhibits thereto filed with the
Securities and Exchange Commission under the Act are referred to herein as the
"Registration Statement."
We have examined the Articles of Incorporation, as amended, the Bylaws and
the Minutes of the Board of Directors of the Company, the applicable laws of the
State of Colorado and a copy of the Registration Statement.
Based on the foregoing, and having regard for such legal considerations as
we deem relevant, we are of the opinion that the Company is authorized to issue
and to sell the Shares; and the Shares, when issued pursuant to the terms of the
Plan will be fully paid and nonassessable.
We hereby consent to the use of this opinion as a part of the Registration
Statement.
Very truly yours,
/s/ Baker & Hostetler LLP
BAKER & HOSTETLER LLP
EXHIBIT 23.1
Avert, Inc.
301 Remington Street
Fort Collins, CO 80524
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference of our report dated February
24, 1998 accompanying the financial statements of Avert, Inc to the Form S-8
Registration Statement of Avert, Inc. and to the use of our name and the
statements with respect to us, as appearing under the heading "Experts" in the
Registration Statement.
/s/ Hein + Associates LLP
HEIN + ASSOCIATES LLP
Denver, Colorado
June 5, 1998
