As Filed with the Securities and Exchange Commission on December 8, 1999
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
APPLIED DIGITAL SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
MISSOURI
(State or other jurisdiction of
incorporation or organization)
43-1641533
(I.R.S. Employer
Identification No.)
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
(561) 366-4800
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Applied Digital Solutions, Inc. 1999 Flexible Stock Plan
(Full title of the Plan)
Garrett A. Sullivan
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
(561) 366-4800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all correspondence to:
Denis P. McCusker, Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, Missouri 63102-2750
(314) 259-2000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================
<S> <C> <C> <C> <C>
Title of Each Class Amount Proposed Maximum Proposed Maximum Amount of
of Securities to be to be Offering Price Aggregate Registration
Registered Registered(1) Per Unit(2) Offering Price(2) Fee
=============================================================================================
Common Stock, $.001 5,000,000 shares $7.4563 $37,281,500 $9,842
par value per share
=============================================================================================
<FN>
(1) This Registration Statement also relates to such indeterminate number of
additional shares as may be issuable pursuant to the anti-dilution
provisions of the Applied Digital Solutions, Inc. 1999 Flexible Stock Plan.
(2) Pursuant to Rule 457(c) and Rule 457(h), the proposed offering price and
registration fee have been calculated on the basis of the average of the
high and low trading prices for the Common Stock for the five day period
ended December 3, 1999, as reported on the Nasdaq National Market.
</FN>
</TABLE>
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Information required by Part I of Form S-8 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, as amended
("Securities Act"), and the Note to Part I of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Information required by Part I of Form S-8 to be contained in the
Section 10(a) prospectus is omitted from this registration statement in
accordance with Rule 428 under 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 heretofore filed by the Registrant with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended ("Exchange Act") are incorporated herein by reference:
(1) the Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 (filed on March 31, 1999);
(2) the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999 (filed on May 17, 1999);
(3) the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999 (filed on August 16, 1999);
(4) the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999 (filed on November 15, 1999);
(5) the Registrant's Current Report on Form 8-K/A dated June 8,
1998 (filed on March 11, 1999);
(6) the Registrant's Current Report on Form 8-K and Form 8-K/A
dated May 25, 1999 (filed on June 2, 1999 and October 5, 1999,
respectively);
(7) the Registrant's Current Report on Form 8-K and Form 8-K/A
dated June 4, 1999 (filed on June 11, 1999 and August 12, 1999,
respectively);
(8) the Registrant's Current Report on Form 8-K dated September
14, 1999 (filed on September 14, 1999); and
II-1
<PAGE>
(9) the Registrant's Registration Statement on Form 8-A filed on
May 5, 1995, registering its common stock under Section 12(g) of the
Exchange Act, including any amendments or reports filed for the
purpose of updating such description.
All documents filed by the Registrant with the Securities and Exchange
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the termination of the offering shall
hereby be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents. Any statement
contained herein, in an amendment hereto, or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document
incorporated or deemed to be incorporated herein by reference, which statement
is also incorporated herein by reference, 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.
The Registrant's common stock is registered under Section 12 of the
Exchange Act.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Sections 351.355(1) and (2) of The General and Business Corporation Law of
the State of Missouri provide that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful, except that, in the case of an action or suit by or in the right
of the corporation, the corporation may not indemnify such persons against
judgments and fines and no person shall be indemnified as to any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation,
unless and only to the extent that the court in which the action or suit was
brought determines upon application that such person is fairly and reasonably
entitled to indemnity for proper expenses. Section 351.355(3) provides that, to
the extent that a director, officer, employee or agent of the corporation has
been successful in the defense of any such action, suit or proceeding or any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred in connection with
such action, suit or proceeding. Section 351.355(7) provides that a corporation
may provide additional indemnification to any person indemnifiable under
subsection (1) or (2), provided such additional indemnification is authorized by
the corporation's articles of incorporation or an amendment thereto or by a
shareholder-approved bylaw or agreement, and provided further that no person
shall thereby be indemnified against conduct which was finally adjudged to have
been knowingly fraudulent, deliberately dishonest or willful misconduct or which
involved an accounting for profits pursuant to Section 16(b) of the Securities
Exchange Act of 1934.
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<PAGE>
The bylaws of the Registrant provide that the Registrant shall indemnify,
to the full extent permitted under Missouri law, any director, officer, employee
or agent of the Registrant who has served as a director, officer, employee or
agent of the Registrant or, at the Registrant's request, has served as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to such provisions, the Registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits.
Exhibit No. Description
4.1 Applied Digital Solutions, Inc. 1999 Flexible Stock
Plan.
5.1 Opinion of Bryan Cave LLP relating to legality of the
Common Stock.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Rubin, Brown, Gornstein & Co. LLP.
23.3 Consent of Bryan Cave LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
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<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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 indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question 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-4
<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 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 Palm Beach, State of Florida, on December 7, 1999.
APPLIED DIGITAL SOLUTIONS, INC.
By: /S/ David A. Loppert
-------------------------------------
David A. Loppert, Vice President,
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Garrett A. Sullivan and David A. Loppert, and each of them (with full power to
each of them to act alone), the true and lawful attorney in fact and agent for
the undersigned, to act on behalf of and in the name of the undersigned in
connection with this Registration Statement, including the authority to sign any
amendments (including post-effective amendments) to this Registration Statement,
or to sign any registration statement which registers additional securities
under the Applied Digital Solutions, Inc. 1999 Flexible Stock Plan pursuant to
Instruction E to Form S-8, and to file the same, with exhibits and any and all
other documents filed with respect thereto, with the Securities and Exchange
Commission (or any other governmental or regulatory authority), and each such
person ratifies and confirms all that said attorneys in fact and agents may
lawfully do or cause to be done by virtue hereof.
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.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Chairman of the Board of
Directors, Chief Executive
/S/ Richard J. Sullivan Officer and Secretary (Principal
- ------------------------------- Executive Officer) December 7, 1999
(Richard J. Sullivan)
/S/ Garrett A. Sullivan President and Director (Principal
- ------------------------------- Operating Officer) December 7, 1999
(Garrett A. Sullivan)
Vice President, Chief Financial
/S/ David A. Loppert Officer (Principal Accounting
- ------------------------------- Officer) December 7, 1999
(David A. Loppert)
Director December _, 1999
- -------------------------------
(Angela M. Sullivan)
/S/ Daniel E. Penni Director December 7, 1999
- -------------------------------
(Daniel E. Penni)
/S/ Arthur F. Noterman Director December 7, 1999
- -------------------------------
(Arthur F. Noterman)
/S/ Constance K. Weaver) Director December 7, 1999
- -------------------------------
(Constance K. Weaver)
/S/ Richard S. Friedland Director December 7, 1999
- -------------------------------
(Richard S. Friedland)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 Applied Digital Solutions, Inc. 1999 Flexible Stock
Plan.
5.1 Opinion of Bryan Cave LLP relating to legality of the
Common Stock.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Rubin, Brown, Gornstein & Co. LLP.
23.3 Consent of Bryan Cave LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
II-6
Exhibit 4.1
APPLIED DIGITAL SOLUTIONS, INC.
1999 FLEXIBLE STOCK PLAN
<PAGE>
APPLIED DIGITAL SOLUTIONS, INC.
1999 FLEXIBLE STOCK PLAN
TABLE OF CONTENTS
Page
1. NAME AND PURPOSE...........................................................1
1.1. Name............................................................1
1.2. Purpose.........................................................1
2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION.............................1
2.1. General Definitions.............................................1
2.1.1. Affiliate...........................................1
2.1.2. Agreement...........................................1
2.1.3. Benefit.............................................1
2.1.4. Board...............................................1
2.1.5. Cash Award..........................................1
2.1.6. Change of Control...................................2
2.1.7. Code................................................2
2.1.8. Company.............................................2
2.1.9. Committee...........................................2
2.1.10. Common Stock........................................2
2.1.11. Effective Date......................................2
2.1.12. Employee............................................3
2.1.13. Employer............................................3
2.1.14. Exchange Act........................................3
2.1.15. Fair Market Value...................................3
2.1.16. Fiscal Year.........................................3
2.1.17. ISO.................................................3
2.1.18. NQSO................................................3
2.1.19. Option..............................................3
2.1.20. Other Stock Based Award.............................3
2.1.21. Parent..............................................3
2.1.22. Participant.........................................4
2.1.23. Performance Based Compensation......................4
2.1.24. Performance Share...................................4
2.1.25. Plan................................................4
2.1.26. Reload Option.......................................4
2.1.27. Restricted Stock....................................4
2.1.28. Rule 16b-3..........................................4
2.1.29. SEC.................................................4
2.1.30. Share...............................................4
2.1.31. SAR.................................................5
2.1.32. Subsidiary..........................................5
2.2. Other Definitions...............................................5
2.3. Conflicts.......................................................5
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<PAGE>
3. COMMON STOCK...............................................................5
3.1. Number of Shares................................................5
3.2. Reusage.........................................................5
3.3. Adjustments.....................................................6
4. ELIGIBILITY................................................................6
4.1. Determined By Committee.........................................6
5. ADMINISTRATION.............................................................6
5.1. Committee.......................................................6
5.2. Authority.......................................................6
5.3. Delegation......................................................7
5.4. Determination...................................................7
6. AMENDMENT..................................................................7
6.1. Power of Board..................................................7
6.2. Limitation......................................................7
7. TERM AND TERMINATION.......................................................8
7.1. Term............................................................8
7.2. Termination.....................................................8
8. MODIFICATION OR TERMINATION OF BENEFITS....................................8
8.1. General.........................................................8
8.2. Committee's Right...............................................8
9. CHANGE OF CONTROL..........................................................8
9.1. Right of Committee..............................................8
10. AGREEMENTS AND CERTAIN BENEFITS...........................................9
10.1. Grant Evidenced by Agreement...................................9
10.2. Provisions of Agreement........................................9
10.3. Transferability................................................9
11. REPLACEMENT AND TANDEM AWARDS.............................................9
11.1. Replacement....................................................9
11.2. Tandem Awards..................................................9
12. PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING.............................10
12.1. Payment.......................................................10
12.2. Dividend Equivalents..........................................10
12.3. Deferral......................................................10
12.4. Withholding...................................................10
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<PAGE>
13. OPTIONS..................................................................11
13.1. Types of Options..............................................11
13.2. Grant of ISOs and Option Price................................11
13.3. Other Requirements for ISOs...................................11
13.4. NQSOs.........................................................11
13.5. Determination by Committee....................................11
14. SARS.....................................................................11
14.1. Grant and Payment.............................................11
14.2. Grant of Tandem Award.........................................11
14.3. ISO Tandem Award..............................................11
14.4. Payment of Award..............................................11
15. ANNUAL LIMITATIONS.......................................................12
15.1. Limitation on Options and SARs................................12
15.2. Computations..................................................12
16. RESTRICTED STOCK AND PERFORMANCE SHARES..................................12
16.1. Restricted Stock..............................................12
16.2. Cost of Restricted Stock......................................12
16.3. Non-Transferability...........................................12
16.4. Performance Shares............................................12
16.5. Grant.........................................................12
17. CASH AWARDS..............................................................13
17.1. Grant.........................................................13
17.2. Rule 16b-3....................................................13
17.3. Restrictions..................................................13
18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS..............................13
18.1. Other Stock Based Awards......................................13
18.2. Other Benefits................................................13
19. MISCELLANEOUS PROVISIONS.................................................13
19.1. Underscored References........................................13
19.2. Number and Gender.............................................13
19.3. Unfunded Status of Plan.......................................13
19.4. Termination of Employment.....................................13
19.5. Designation of Beneficiary....................................14
19.6. Governing Law.................................................14
19.7. Purchase for Investment.......................................14
19.8. No Employment Contract........................................14
19.9. No Effect on Other Benefits...................................14
iii
<PAGE>
APPLIED DIGITAL SOLUTIONS, INC.
1999 FLEXIBLE STOCK PLAN
1. NAME AND PURPOSE
1.1. Name.
The name of this Plan is the "Applied Digital Solutions, Inc. 1999
Flexible Stock Plan."
1.2. Purpose.
The Company has established this Plan to attract, retain, motivate and
reward Employees and other individuals, to encourage ownership of the Company's
Common Stock by Employees and other individuals, and to promote and further the
best interests of the Company by granting cash and other awards.
2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2.1. General Definitions.
The following words and phrases, when used in the Plan, unless
otherwise specifically defined or unless the context clearly otherwise requires,
shall have the following respective meanings:
2.1.1. Affiliate.
A Parent or Subsidiary of the Company.
2.1.2. Agreement.
The document which evidences the grant of any Benefit under
the Plan and which sets forth the Benefit and the terms, conditions and
provisions of, and restrictions relating to, such Benefit.
2.1.3. Benefit.
Any benefit granted to a Participant under the Plan.
2.1.4. Board.
The Board of Directors of the Company.
2.1.5. Cash Award.
A Benefit payable in the form of cash.
1
<PAGE>
2.1.6. Change of Control.
The acquisition, without the approval of the Board, by any
"person" or "group" (as that term is used in Section 13(d) and 14(d)(2) of
the Exchange Act), other than the Company or a Related Entity, of
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of
outstanding voting securities of the Company carrying more than 20% of the
combined voting power in the election of directors through a tender offer,
exchange offer or otherwise; the liquidation or dissolution of the Company
following a sale or other disposition of all or substantially all of its
assets; a merger or consolidation involving the Company as a result of
which persons who were shareholders of the Company immediately prior to the
effective date of the merger or consolidation shall have beneficial
ownership of less than 50% of the combined voting power in the election of
directors of the surviving corporation following the effective date of such
merger or consolidation; or any time during any two-year period in which
individuals who constituted the Board at the start of such period (or whose
election was approved by at least two-thirds of the then members of the
Board who were members at the start of the two-year period) do not
constitute at least 50% of the Board for any reason. A Related Entity is
the Parent, a Subsidiary or any employee benefit plan (including a trust
forming a part of such a plan) maintained by the Parent, the Company or a
Subsidiary.
2.1.7. Code.
The Internal Revenue Code of 1986, as amended. Any reference
to the Code includes the regulations promulgated pursuant to the Code.
2.1.8. Company.
Applied Digital Solutions, Inc.
2.1.9. Committee.
The Committee described in Section 5.1.
2.1.10. Common Stock.
The Company's common stock which presently has a par value
of $.001 per Share.
2.1.11. Effective Date.
The date that the Plan is approved by the shareholders of
the Company which must occur within one year before or after approval by
the Board. Any grants of Benefits prior to the approval by the shareholders
of the Company shall be void if such approval is not obtained.
2
<PAGE>
2.1.12. Employee.
Any person employed by the Employer.
2.1.13. Employer.
The Company and all Affiliates.
2.1.14. Exchange Act.
The Securities Exchange Act of 1934, as amended.
2.1.15. Fair Market Value.
The closing price of Shares on the Nasdaq National Market on
a given date, or, in the absence of sales on a given date, the closing
price on the Nasdaq National Market on the last day on which a sale
occurred prior to such date.
2.1.16. Fiscal Year.
The taxable year of the Company which is the calendar year.
2.1.17. ISO.
An Incentive Stock Option as defined in Section 422 of the
Code.
2.1.18. NQSO.
A non-qualified stock Option, which is an Option that does
not qualify as an ISO.
2.1.19. Option.
An option to purchase Shares granted under the Plan.
2.1.20. Other Stock Based Award.
An award under Section 8 that is valued in whole or in part
by reference to, or is otherwise based on, Common Stock.
2.1.21. Parent.
Any corporation (other than the Company or a Subsidiary) in
an unbroken chain of corporations ending with the Company, if, at the time
of the grant of an Option or other Benefit, each of the corporations (other
than the Company) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
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<PAGE>
2.1.22. Participant.
An individual who is granted a Benefit under the Plan.
Benefits may be granted only to Employees, members of the Board, employees
and owners of entities which are not Affiliates but which have a direct or
indirect ownership interest in an Employer or in which an Employer has a
direct or indirect ownership interest, individuals who, and employees and
owners of entities which, are customers and suppliers of an Employer,
individuals who, and employees and owners of entities which, render
services to an Employer, and individuals who, and employees and owners of
entities, which have ownership or business affiliations with any individual
or entity previously described.
2.1.23. Performance Based Compensation.
Compensation which meets the requirements of Section
162(m)(4)(C) of the Code.
2.1.24. Performance Share.
A Share awarded to a Participant under Section 16 of the
Plan.
2.1.25. Plan.
The Applied Digital Solutions, Inc. 1999 Flexible Stock Plan
and all amendments and supplements to it.
2.1.26. Reload Option.
An Option to purchase the number of Shares used by a
Participant to exercise an Option and to satisfy any withholding
requirement incident to the exercise of such Option.
2.1.27. Restricted Stock.
Shares issued under Section 15 of the Plan.
2.1.28. Rule 16b-3.
Rule 16b-3 promulgated by the SEC, as amended, or any
successor rule in effect from time to time.
2.1.29. SEC.
The Securities and Exchange Commission.
2.1.30. Share.
A share of Common Stock.
4
<PAGE>
2.1.31. SAR.
A stock appreciation right, which is the right to receive an
amount equal to the appreciation, if any, in the Fair Market Value of a
Share from the date of the grant of the right to the date of its payment.
2.1.32. Subsidiary.
Any corporation, other than the Company, in an unbroken
chain of corporations beginning with the Company if, at the time of grant
of an Option or other Benefit, 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 such chain.
2.2. Other Definitions.
In addition to the above definitions, certain words and phrases
used in the Plan and any Agreement may be defined in other portions of the Plan
or in such Agreement.
2.3. Conflicts.
In the case of any conflict in the terms of the Plan relating to
a Benefit, the provisions in the section of the Plan which specifically grants
such Benefit shall control those in a different section. In the case of any
conflict between the terms of the Plan relating to a Benefit and the terms of an
Agreement relating to a Benefit, the terms of the Plan shall control.
3. COMMON STOCK
3.1. Number of Shares.
The number of Shares which may be issued or sold or for which
Options, SARs or Performance Shares may be granted under the Plan shall be
5,000,000 Shares, plus an annual increase, effective as of the first day of each
calendar year, commencing with 2000, equal to 5% of the number of outstanding
Shares as of the first day of such calendar year, but in no event more than
15,000,000 Shares in the aggregate. Such Shares may be authorized but unissued
Shares, Shares held in the treasury, or both. The full number of Shares
available may be used for any type of Option or other Benefit.
3.2. Reusage.
If an Option or SAR expires or is terminated, surrendered, or
canceled without having been fully exercised, if Restricted Shares or
Performance Shares are forfeited, or if any other grant results in any Shares
not being issued, the Shares covered by such Option or SAR, grant of Restricted
Shares, Performance Shares or other grant, as the case may be, shall again be
available for use under the Plan. Any Shares which are used as full or partial
payment to the Company upon exercise of an Option or for any other Benefit that
requires a payment to the Company shall be available for purposes of the Plan.
5
<PAGE>
3.3. Adjustments.
If there is any change in the Common Stock of the Company by
reason of any stock dividend, spin-off, split-up, spin-out, recapitalization,
merger, consolidation, reorganization, combination or exchange of shares, or
otherwise, the number of SARs and number and class of shares available for
Options and grants of Restricted Stock, Performance Shares and Other Stock Based
Awards and the number of Shares subject to outstanding Options, SARs, grants of
Restricted Stock which are not vested, grants of Performance Shares which are
not vested, and Other Stock Based Awards, and the price thereof, as applicable,
shall be appropriately adjusted by the Committee.
4. ELIGIBILITY
4.1. Determined By Committee.
The Participants and the Benefits they receive under the Plan
shall be determined solely by the Committee. In making its determinations, the
Committee shall consider past, present and expected future contributions of
Participants and potential Participants to the Employer, including, without
limitation, the performance of, or the refraining from the performance of,
services. Unless specifically provided otherwise herein, all determinations of
the Committee in connection with the Plan or an Agreement shall be made in its
sole discretion.
5. ADMINISTRATION
5.1. Committee.
The Plan shall be administered by the Committee. The Committee
shall consist of the Board, unless the Board appoints a Committee of two or more
but less than all of the Board. If the Committee does not include the entire
Board, it shall serve at the pleasure of the Board, which may from time to time
appoint members in substitution for members previously appointed and fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its Chairman and shall hold its meetings at such times and places as
it may determine. A majority of its members shall constitute a quorum. All
determinations of the Committee made at a meeting at which a quorum is present
shall be made by a majority of its members present at the meeting. Any decision
or determination reduced to writing and signed by a majority of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held.
5.2. Authority.
Subject to the terms of the Plan, the Committee shall have
discretionary authority to:
(a) determine the individuals to whom Benefits are granted, the
type and amounts of Benefits to be granted and the date of issuance and
duration of all such grants;
(b) determine the terms, conditions and provisions of,
and restrictions relating to, each Benefit granted;
(c) interpret and construe the Plan and all Agreements;
(d) prescribe, amend and rescind rules and regulations relating
to the Plan;
(e) determine the content and form of all Agreements;
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(f) determine all questions relating to Benefits under the Plan;
(g) maintain accounts, records and ledgers relating to Benefits;
(h) maintain records concerning its decisions and proceedings;
(i) employ agents, attorneys, accountants or other persons for
such purposes as the Committee considers necessary or desirable;
(j) take, at any time, any action permitted by Section 9.1
irrespective of whether any Change of Control has occurred or is imminent;
(k) determine, except to the extent otherwise provided in the
Plan, whether and the extent to which Benefits under the Plan will be
structured to conform to the requirements applicable to Performance-Based
Compensation, and to take such action, establish such procedures, and
impose such restrictions at the time such Benefits are granted as the
Committee determines to be necessary or appropriate to conform to such
requirements; and
(l) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and carry out the purposes
of the Plan.
5.3. Delegation.
Except as required by Rule 16b-3 with respect to grants of
Options, Stock Appreciation Awards, Performance Shares, Other Stock Based
Awards, or other Benefits to individuals who are subject to Section 16 of the
Exchange Act or as otherwise required for compliance with Rule 16b-3 or other
applicable law, the Committee may delegate all or any part of its authority
under the Plan to any Employee, Employees or committee.
5.4. Determination.
All determinations of the Committee shall be final.
6. AMENDMENT
6.1. Power of Board.
Except as hereinafter provided, the Board shall have the sole
right and power to amend the Plan at any time and from time to time.
6.2. Limitation.
The Board may not amend the Plan, without approval of the
shareholders of the Company:
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(a) in a manner which would cause Options which are intended to
qualify as ISOs to fail to qualify;
(b) in a manner which would cause the Plan to fail to meet the
requirements of Rule 16b-3; or
(c) in a manner which would violate applicable law.
7. TERM AND TERMINATION
7.1. Term.
The Plan shall commence as of the Effective Date and, subject to
the terms of the Plan, including those requiring approval by the shareholders of
the Company and those limiting the period over which ISOs or any other Benefits
may be granted, shall continue in full force and effect until terminated.
7.2. Termination.
The Plan may be terminated at any time by the Board.
8. MODIFICATION OR TERMINATION OF BENEFITS
8.1. General.
Subject to the provisions of Section 8.2, the amendment or
termination of the Plan shall not adversely affect a Participant's right to any
Benefit granted prior to such amendment or termination.
8.2. Committee's Right.
Any Benefit granted may be converted, modified, forfeited or
canceled, in whole or in part, by the Committee if and to the extent permitted
in the Plan or applicable Agreement or with the consent of the Participant to
whom such Benefit was granted. Except as may be provided in an Agreement, the
Committee may, in its sole discretion, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate the vesting of, any
Benefit.
9. CHANGE OF CONTROL
9.1. Right of Committee.
In order to maintain a Participant's rights in the event of a
Change of Control, the Committee, in its sole discretion, may, in any Agreement
evidencing a Benefit, or at any time prior to, or simultaneously with or after a
Change of Control, provide such protection as it may deem necessary. Without, in
any way, limiting the generality of the foregoing sentence or requiring any
specific protection, the Committee may, without the approval or consent of the
Participant:
(a) provide for the acceleration of any time periods relating to
the exercise or realization of such Benefit so that such Benefit may
be exercised or realized in full on or before a date fixed by the
Committee;
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(b) provide for the purchase of such Benefit, upon the
Participant's request, for an amount of cash equal to the amount which
could have been attained upon the exercise or realization of such
Benefit had such Benefit been currently exercisable or payable;
(c) make such adjustment to the Benefits then outstanding as the
Committee deems appropriate to reflect such transaction or change;
and/or
(d) cause the Benefits then outstanding to be assumed, or new
Benefits substituted therefor, by the surviving corporation in such
change.
10. AGREEMENTS AND CERTAIN BENEFITS
10.1. Grant Evidenced by Agreement.
The grant of any Benefit under the Plan may be evidenced by an
Agreement which shall describe the specific Benefit granted and the terms and
conditions of the Benefit. The granting of any Benefit shall be subject to, and
conditioned upon, the recipient's execution of any Agreement required by the
Committee. Except as otherwise provided in an Agreement, all capitalized terms
used in the Agreement shall have the same meaning as in the Plan, and the
Agreement shall be subject to all of the terms of the Plan.
10.2. Provisions of Agreement.
Each Agreement shall contain such provisions that the Committee
shall determine to be necessary, desirable and appropriate for the Benefit
granted which may include, but not necessarily be limited to, the following with
respect to any Benefit: description of the type of Benefit; the Benefit's
duration; its transferability; if an Option, the exercise price, the exercise
period and the person or persons who may exercise the Option; the effect upon
such Benefit of the Participant's death, disability, changes of duties or
termination of employment; the Benefit's conditions; when, if, and how any
Benefit may be forfeited, converted into another Benefit, modified, exchanged
for another Benefit, or replaced; and the restrictions on any Shares purchased
or granted under the Plan.
10.3. Transferability.
Unless otherwise specified in an Agreement or permitted by the
Committee, each Benefit granted shall be not transferable other than by will or
the laws of descent and distribution and shall be exercisable during a
Participant's lifetime only by him.
11. REPLACEMENT AND TANDEM AWARDS
11.1. Replacement.
The Committee may permit a Participant to elect to surrender a
Benefit in exchange for a new Benefit.
11.2. Tandem Awards.
Awards may be granted by the Committee in tandem. However, no
Benefit may be granted in tandem with an ISO except SARs.
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12. PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
12.1. Payment.
Upon the exercise of an Option or in the case of any other
Benefit that requires a payment by a Participant to the Company, the amount due
the Company is to be paid:
(a) in cash, including by means of a so-called "cashless
exercise" of an Option;
(b) by the surrender of all or part of a Benefit (including the
Benefit being exercised);
(c) by the tender to the Company of Shares owned by the optionee
and registered in his name having a Fair Market Value equal to the
amount due to the Company;
(d) in other property, rights and credits deemed acceptable by
the Committee, including the Participant's promissory note;
(e) by any combination of the payment methods specified in (a),
(b), (c) and (d) above.
Notwithstanding, the foregoing, any method of payment other than
(a) may be used only with the consent of the Committee or if and to the extent
so provided in an Agreement. The proceeds of the sale of Shares purchased
pursuant to an Option and any payment to the Company for other Benefits shall be
added to the general funds of the Company or to the Shares held in treasury, as
the case may be, and used for the corporate purposes of the Company as the Board
shall determine.
12.2. Dividend Equivalents.
Grants of Benefits in Shares or Share equivalents may include
dividend equivalent payments or dividend credit rights.
12.3. Deferral.
The right to receive any Benefit under the Plan may, at the
request of the Participant, be deferred for such period and upon such terms as
the Committee shall determine, which may include crediting of interest on
deferrals of cash and crediting of dividends on deferrals denominated in Shares.
12.4. Withholding.
The Company may, at the time any distribution is made under the
Plan, whether in cash or in Shares, or at the time any Option is exercised,
withhold from such distribution or Shares issuable upon the exercise of an
Option, any amount necessary to satisfy federal, state and local income and/or
other tax withholding requirements with respect to such distribution or exercise
of such Options. The Committee or the Company may require a participant to
tender to the Company cash and/or Shares in the amount necessary to comply with
any such withholding requirements.
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13. OPTIONS
13.1. Types of Options.
It is intended that both ISOs and NQSOs, which may be Reload
Options, may be granted by the Committee under the Plan.
13.2. Grant of ISOs and Option Price.
Each ISO must be granted to an Employee and granted within ten
years from the earlier of the date of adoption by the Board or the Effective
Date. The purchase price for Shares under any ISO shall be no less than the Fair
Market Value of the Shares at the time the Option is granted.
13.3. Other Requirements for ISOs.
The terms of each Option which is intended to qualify as an ISO
shall meet all requirements of Section 422 of the Code.
13.4. NQSOs.
The terms of each NQSO shall provide that such Option will not be
treated as an ISO. The purchase price for Shares under any NQSO shall be no less
than 85% of the Fair Market Value of the Shares at the time the Option is
granted.
13.5. Determination by Committee.
Except as otherwise provided in Section 13.2 through Section
13.4, the terms of all Options shall be determined by the Committee.
14. SARS
14.1. Grant and Payment.
The Committee may grant SARs. Upon electing to receive payment of
a SAR, a Participant shall receive payment in cash, in Shares, or in any
combination of cash and Shares, as the Committee shall determine.
14.2. Grant of Tandem Award.
The Committee may grant SARs in tandem with an Option, in which
case: the exercise of the Option shall cause a correlative reduction in SARs
standing to a Participant's credit which were granted in tandem with the Option;
and the payment of SARs shall cause a correlative reduction of the Shares under
such Option.
14.3. ISO Tandem Award.
When SARs are granted in tandem with an ISO, the SARs shall have
such terms and conditions as shall be required for the ISO to qualify as an ISO.
14.4. Payment of Award.
SARs shall be paid by the Company to a Participant, to the extent
payment is elected by the Participant (and is otherwise due and payable), as
soon as practicable after the date on which such election is made.
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15. ANNUAL LIMITATIONS
15.1. Limitation on Options and SARs.
The number of (a) Shares covered by Options where the purchase
price is no less than the Fair Market Value of the Shares on the date of grant
plus (b) SARs which may be granted to any Participant in any Fiscal Year shall
not exceed 500,000.
15.2. Computations.
For purposes of Section 15.1: Shares covered by an Option that is
canceled shall count against the maximum, and, if the exercise price under an
Option is reduced, the transaction shall be treated as a cancellation of the
Option and a grant of a new Option; and SARs covered by a grant of SARs that is
canceled shall count against the maximum, and, if the Fair Market Value of a
Share on which the appreciation under a grant of SARs will be calculated is
reduced, the transaction will be treated as a cancellation of the SARs and the
grant of a new grant of SARs.
16. RESTRICTED STOCK AND PERFORMANCE SHARES
16.1. Restricted Stock.
The Committee may grant Benefits in Shares available under
Section 3 of the Plan as Restricted Stock. Shares of Restricted Stock shall be
issued and delivered at the time of the grant or as otherwise determined by the
Committee, but shall be subject to forfeiture until provided otherwise in the
applicable Agreement or the Plan. Each certificate representing Shares of
Restricted Stock shall bear a legend referring to the Plan and the risk of
forfeiture of the Shares and stating that such Shares are nontransferable until
all restrictions have been satisfied and the legend has been removed. At the
discretion of the Committee, the grantee may or may not be entitled to full
voting and dividend rights with respect to all shares of Restricted Stock from
the date of grant.
16.2. Cost of Restricted Stock.
Unless otherwise determined by the Committee, grants of Shares of
Restricted Stock shall be made at a per Share cost to the Participant equal to
par value.
16.3. Non-Transferability.
Shares of Restricted Stock shall not be transferable until after
the removal of the legend with respect to such Shares.
16.4. Performance Shares.
Performance Shares are the right of an individual to whom a grant
of such Shares is made to receive Shares or cash equal to the Fair Market Value
of such Shares at a future date in accordance with the terms and conditions of
such grant. The terms and conditions shall be determined by the Committee, in
its sole discretion, but generally are expected to be based substantially upon
the attainment of targeted profit and/or performance objectives.
16.5. Grant.
The Committee may grant an award of Performance Shares. The
number of Performance Shares and the terms and conditions of the grant shall be
set forth in the applicable Agreement.
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17. CASH AWARDS
17.1. Grant.
The Committee may grant Cash Awards at such times and (subject to
Section 17.2) in such amounts as it deems appropriate.
17.2. Rule 16b-3.
The amount of any Cash Award in any Fiscal Year to any
Participant who is subject to Section 16 of the Exchange Act shall not exceed
the greater of $100,000 or 100% of his cash compensation (excluding any Cash
Award under this Section 17) for such Fiscal Year.
17.3. Restrictions.
Cash Awards may be subject or not subject to conditions (such as
an investment requirement), restricted or nonrestricted, vested or subject to
forfeiture and may be payable currently or in the future or both.
18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS
18.1. Other Stock Based Awards.
The Committee shall have the right to grant Other Stock Based
Awards which may include, without limitation, the grant of Shares based on
certain conditions, the payment of cash based on the performance of the Common
Stock, and the grant of securities convertible into Shares.
18.2. Other Benefits.
The Committee shall have the right to provide types of Benefits
under the Plan in addition to those specifically listed, if the Committee
believes that such Benefits would further the purposes for which the Plan was
established.
19. MISCELLANEOUS PROVISIONS
19.1. Underscored References.
The underscored references contained in the Plan are included
only for convenience, and they shall not be construed as a part of the Plan or
in any respect affecting or modifying its provisions.
19.2. Number and Gender.
The masculine and neuter, wherever used in the Plan, shall refer
to either the masculine, neuter or feminine; and, unless the context otherwise
requires, the singular shall include the plural and the plural the singular.
19.3. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments or deliveries
of Shares not yet made to a Participant by the Company, nothing contained herein
shall give any rights that are greater than those of a general creditor of the
Company. The Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Shares or
payments hereunder consistent with the foregoing.
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19.4. Termination of Employment.
If the employment of a Participant by the Company terminates for
any reason, except as otherwise provided in an Agreement, all unexercised,
deferred, and unpaid Benefits may be exercisable or paid only in accordance with
rules established by the Committee. These rules may provide, as the Committee
may deem appropriate, for the expiration, forfeiture, continuation, or
acceleration of the vesting of all or part of the Benefits.
19.5. Designation of Beneficiary.
A Participant may file with the Committee a written designation
of a beneficiary or beneficiaries (subject to such limitations as to the classes
and number of beneficiaries and contingent beneficiaries as the Committee may
from time to time prescribe) to exercise, in the event of the death of the
Participant, an Option, or to receive, in such event, any Benefits. The
Committee reserves the right to review and approve beneficiary designations. A
Participant may from time to time revoke or change any such designation of
beneficiary and any designation of beneficiary under the Plan shall be
controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the right of any such
beneficiary to exercise any Option or to receive any Benefit, the Committee may
determine to recognize only an exercise by the legal representative of the
recipient, in which case the Company, the Committee and the members thereof
shall not be under any further liability to anyone.
19.6. Governing Law.
This Plan shall be construed and administered in accordance with
the laws of the State of Missouri.
19.7. Purchase for Investment.
The Committee may require each person purchasing Shares pursuant
to an Option or other award under the Plan to represent to and agree with the
Company in writing that such person is acquiring the Shares for investment and
without a view to distribution or resale. The certificates for such Shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for Shares delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under all applicable laws, rules and regulations,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate references to such restrictions.
19.8. No Employment Contract.
Neither the adoption of the Plan nor any Benefit granted
hereunder shall confer upon any Employee any right to continued employment nor
shall the Plan or any Benefit interfere in any way with the right of the
Employer to terminate the employment of any of its Employees at any time.
19.9. No Effect on Other Benefits.
The receipt of Benefits under the Plan shall have no effect on
any benefits to which a Participant may be entitled from the Employer, under
another plan or otherwise, or preclude a Participant from receiving any such
benefits.
14
Exhibit 5.1
BRYAN CAVE LLP
ONE METROPOLITAN SQUARE
211 N. BROADWAY, SUITE 3600
ST. LOUIS, MISSOURI 63102-2750
(314) 259-2000
FACSIMILE: (314) 259-2020
DENIS P. MCCUSKER INTERNET ADDRESS
DIRECT DIAL NUMBER [email protected]
(314) 259-2455
December 7, 1999
Board of Directors
Applied Digital Solutions, Inc.
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
Ladies and Gentlemen:
We are acting as counsel for Applied Digital Solutions, Inc., a Missouri
corporation (the "Company"), in connection with the preparation and filing of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Registration Statement relates to 5,000,000 shares of the Company's common
stock, $.001 par value per share, issuable under the Applied Digital Solutions,
Inc. 1999 Flexible Stock Plan (the "Plan).
In connection herewith, we have examined and relied without independent
investigation as to matters of fact upon such certificates of public officials,
such statements and certificates of officers of the Company and originals or
copies certified to our satisfaction of the Registration Statement, the Second
Restated Articles of Incorporation and By-laws of the Company as amended and now
in effect, proceedings of the Board of Directors of the Company and such other
corporate records, documents, certificates and instruments as we have deemed
necessary or appropriate in order to enable us to render this opinion. In
rendering this opinion, we have assumed the genuineness of all signatures on all
documents examined by us, the due authority of the parties signing such
documents, the authenticity of all documents submitted to us as originals and
the conformity to the originals of all documents submitted to us as copies.
Based upon and subject to the foregoing, it is our opinion that the
5,000,000 shares of common stock of the Company covered by the Registration
Statement, when issued on grant of certain benefits, or on exercise of certain
benefits granted, pursuant to the Plan, will be legally issued, fully paid and
non-assessable shares of Common Stock of the Company.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/S/ BRYAN CAVE LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Applied Digital Solutions, Inc. (formerly, Applied
Cellular Technology, Inc.) of our report dated February 19, 1999, relating to
the financial statements of Applied Cellular Technology, Inc. as of and for the
year ended December 31, 1998 included in the Form 10-K for the year ended
December 31, 1998 of Applied Cellular Technology, Inc.
/S/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
St. Louis, Missouri
December 7, 1999
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Applied Digital Solutions, Inc. (formerly Applied
Cellular Technology, Inc.) of our report dated February 24, 1998, relating to
the financial statements of Applied Cellular Technology, Inc. as of and for the
years ended December 31, 1996 and 1997 included in the form 10-K for the year
ended December 31, 1998 of Applied Cellular Technology, Inc.
/S/ Rubin, Brown, Gornstein & Co. LLP
- -------------------------------------
Rubin, Brown, Gornstein & Co. LLP
St. Louis, Missouri
December 7, 1999
