As Filed with the Securities and Exchange Commission on October 4, 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 Employees Stock Purchase 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
CALCULATION OF REGISTRATION FEE
<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(2) Per Unit(1) Offering Price(1) Fee
=============================================================================================
Common Stock, $.001 1,500,000 shares $1 7/8 $2,812,500 $782
par value per share
=============================================================================================
<FN>
(1) Pursuant to Rule 457(b), 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 on October 1, 1999 as reported on the
Nasdaq National Market.
(2) 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 Employees Stock
Purchase Plan.
=============================================================================================
</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 Current Report on Form 8-K/A dated June 8,
1998 (filed on March 11, 1999);
(5) The Registrant's Current Report on Form 8-K dated May 25,
1999 (filed on June 2, 1999);
(6) 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);
(7) The Registrant's Current Report on Form 8-K dated September
14, 1999 (filed on September 14, 1999); and
(8) 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
II-1
<PAGE>
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.
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.
II-2
<PAGE>
Item 8. Exhibits.
Exhibit No. Description
4.1 Applied Digital Solutions, Inc. 1999 Employees Stock
Purchase Plan, as amended through September 23, 1999.
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.
(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
II-3
<PAGE>
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 October 4, 1999.
APPLIED DIGITAL SOLUTIONS, INC.
By: /S/ David A. Loppert
-------------------------------------
David A. Loppert, Vice President,
Treasurer and 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,
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) October 4, 1999
(Richard J. Sullivan)
/S/ Garrett A. Sullivan President and Director (Principal
- ------------------------------- Operating Officer) October 4, 1999
(Garrett A. Sullivan)
Vice President, Treasurer and
/S/ David A. Loppert Chief Financial Officer
- ------------------------------- (Principal Accounting Officer) October 4, 1999
(David A. Loppert)
/S/ Angela M. Sullivan Director October 4, 1999
- -------------------------------
(Angela M. Sullivan)
/S/ Daniel E. Penni Director October 4, 1999
- -------------------------------
(Daniel E. Penni)
/S/ Arthur F. Noterman Director October 4, 1999
- -------------------------------
(Arthur F. Noterman)
Director _______________
- -------------------------------
(Constance K. Weaver)
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 Applied Digital Solutions, Inc. 1999 Employees Stock
Purchase Plan, as amended through September 23, 1999.
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.
23.2 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 EMPLOYEES STOCK PURCHASE PLAN
(As amended through September 23, 1999)
<PAGE>
APPLIED DIGITAL SOLUTIONS, INC.
1999 EMPLOYEES STOCK PURCHASE PLAN
(As amended through September 23, 1999)
Table of Contents
Page
1. NAME AND PURPOSE............................................................1
1.1. Name.............................................................1
1.2. Purpose and Construction.........................................1
2. DEFINITION OF TERMS.........................................................1
2.1. General Definitions..............................................1
2.1.1. Board.................................................1
2.1.2. Code..................................................1
2.1.3. Company...............................................1
2.1.4. Committee.............................................1
2.1.5. Common Stock..........................................1
2.1.6. Compensation..........................................2
2.1.7. Effective Date........................................2
2.1.8. Employee..............................................2
2.1.9. Eligible Employee.....................................2
2.1.10. Employer.............................................2
2.1.11. Entry Date...........................................2
2.1.12. Exercise Date........................................2
2.1.13. Fair Market Value....................................3
2.1.14. Offering.............................................3
2.1.15. Offering Date........................................3
2.1.16. Offering Period......................................3
2.1.17. Option...............................................3
2.1.18. Parent...............................................3
2.1.19. Participant..........................................3
2.1.20. Plan.................................................3
2.1.21. Share................................................3
2.1.22. Subsidiary...........................................4
2.1.23. Termination Date.....................................4
2.1.24. Participation Agreement..............................4
2.2. Other Definitions................................................4
3. SHARES TO BE OFFERED........................................................4
3.1. Number of Shares.................................................4
3.2. Reusage..........................................................4
3.3. Adjustments......................................................4
i
<PAGE>
4. ADMINISTRATION..............................................................5
4.1. Committee........................................................5
4.2. Authority........................................................5
4.3. Determination....................................................5
4.4. Delegation.......................................................5
5. AMENDMENT AND TERMINATION...................................................5
5.1. Power of Board...................................................5
5.2. Limitation.......................................................6
5.3. Term.............................................................6
5.4. Termination......................................................6
5.5. Effect...........................................................6
6. OFFERINGS. 6
6.1. Offerings........................................................6
6.2. Terms of Offering................................................6
7. GRANTS, PARTICIPATION AND WITHDRAWAL........................................7
7.1. Grant of Options.................................................7
7.2. Options Not Transferable.........................................8
7.3. Election to Participate..........................................8
7.4. Method of Payment and Stock Purchase Accounts....................8
7.5. Withdrawal from the Plan.........................................8
8. PURCHASE OF STOCK...........................................................8
8.1. Exercise of Option...............................................8
8.2. Allotment of Shares..............................................9
8.3. Rights on Retirement, Death or Termination of Employment.........9
8.4. Delivery of Stock................................................9
9. MISCELLANEOUS PROVISIONS....................................................9
9.1. Underscored References...........................................9
9.2. Number and Gender...............................................10
9.3. Governing Law...................................................10
9.4. Purchase for Investment.........................................10
9.5. Restricted Shares...............................................10
9.6. No Employment Contract..........................................10
9.7. Offset..........................................................10
9.8. No Effect on Other Benefits.....................................10
9.9. Notice to Company...............................................10
ii
<PAGE>
APPLIED DIGITAL SOLUTIONS, INC.
1999 EMPLOYEES STOCK PURCHASE PLAN
(As amended through September 23, 1999)
1. NAME AND PURPOSE.
1.1. Name.
The name of this Plan is the "Applied Digital Solutions, Inc. 1999
Employees Stock Purchase Plan".
1.2. Purpose and Construction.
The Company has established this Plan to encourage and facilitate the
purchase of its Common Stock by Eligible Employees. This Plan is intended to
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Code.
Consequently, the provisions of this Plan shall be construed in a manner
consistent with the requirements of Section 423 of the Code. Any term or
provision of this Plan which is inconsistent with the requirements of Section
423 of the Code shall be inapplicable.
2. DEFINITION OF TERMS.
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. Board.
The Board of Directors of the Company.
2.1.2. Code.
The internal Revenue Code of 1986, as amended. Any reference
to the Code includes the regulations promulgated pursuant to the Code.
2.1.3. Company.
Applied Digital Solutions, Inc.
2.1.4. Committee.
The Committee described in Section 4.1.
2.1.5. Common Stock.
The Company's $.001 par value common stock.
1
<PAGE>
2.1.6. Compensation.
The gross salary and wages earned by an Employee for
services rendered to an Employer plus any other remuneration so earned as
the Committee shall determine.
2.1.7. Effective Date.
The date the Plan is approved by the shareholders of the
Company which must occur within one year before or after approval by the
Board. Any Offerings made prior to the approval by the shareholders of the
Company and Options granted under such Offerings shall be void if such
approval is not obtained.
2.1.8. Employee.
A person employed by the Employer.
2.1.9. Eligible Employee.
With respect to each Offering, an Employee who is eligible
to be granted an Option under the terms of such Offering. Notwithstanding
the foregoing, with respect to any Offering, all Employees must be Eligible
Employees except Employees who may be excluded under Section 423(b)(4) of
the Code. Unless otherwise determined by the Committee, eligibility for an
Offering shall be determined as of the Offering Date. For purposes of
determining an Employee's eligibility under the Plan, the Committee shall
have the right to determine that employment for an entity which is acquired
by an Employer or whose assets are acquired by an Employer is employment by
the Employer.
2.1.10. Employer.
With respect to each Offering, the Company and all of its
Parents and Subsidiaries whose Employees are eligible to be granted Options
to purchase Common Stock in such Offering.
2.1.11. Entry Date.
The Offering Date and any other dates selected by the
Committee as of which an Eligible Employee may become a Participant.
2.1.12. Exercise Date.
Each date on which an Option is exercised.
2
<PAGE>
2.1.13. Fair Market Value.
The closing price of Shares on the NASDAQ on a given date or
in the absence of sales on a given date, the closing price on the NASDAQ on
the last day on which a sale occurred prior to such date.
2.1.14. Offering.
An offering consisting of grants of Options to purchase
Shares under the Plan.
2.1.15. Offering Date.
Each date selected by the Committee for the initial granting
of Options to purchase Shares in an Offering.
2.1.16. Offering Period.
With respect to each Offering, the period beginning on the
Offering Date and ending on the Termination Date.
2.1.17. Option.
An option granted under the Plan to purchase Shares.
2.1.18. 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, 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.
2.1.19. Participant.
An Eligible Employee who has elected to participate in the
Plan.
2.1.20. Plan.
The Applied Digital Solutions, Inc. 1999 Employee Stock
Purchase Plan and all amendments and supplements to it.
2.1.21. Share.
A share of Common Stock.
3
<PAGE>
2.1.22. 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, 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.
2.1.23. Termination Date.
The date on which an Offering expires.
2.1.24. Participation Agreement.
The written agreement pursuant to which an Eligible Employee
becomes a Participant and elects such matters provided for in the Plan and
as the Committee shall determine from time to time.
2.2. Other Definitions.
In addition to the above definitions, certain words and phrases used
in the Plan and in any Offering may be defined in other portions of the Plan or
in such Offering.
3. SHARES TO BE OFFERED.
3.1. Number of Shares.
The number of Shares for which Options may be granted under the Plan
shall be 1,500,000, 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 3,000,000 Shares in the aggregate. Such Shares may be authorized but
unissued Shares, Shares held in the treasury, or both.
3.2. Reusage.
If an Option expires or is terminated, surrendered or canceled
without having been fully exercised, the Shares covered by such Option which
were not purchased shall again be available for use under the Plan.
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 class of stock and number of shares of such class available for Options, the
class of stock and maximum number of shares of such class that may be purchased
in the current Offering Period, and the price per share, as applicable, shall be
appropriately adjusted by the Committee.
4
<PAGE>
4. ADMINISTRATION.
4.1. 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.
4.2. Authority.
Subject to the terms of the Plan, the Committee shall have complete
authority to:
(a) determine the terms and conditions of, and the Employers and the
Eligible Employees under, each Offering, as described in Section 6;
(b) interpret and construe the Plan;
(c) prescribe, amend and rescind rules and regulations relating to
the Plan;
(d) maintain accounts, records and ledgers relating to Options;
(e) maintain records concerning its decisions and proceedings;
(f) determine all questions relating to Options under the Plan;
(g) employ agents, attorneys, accountants or other persons for such
purposes as the Committee considers necessary or desirable; and
(h) 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.
4.3. Determination.
All determinations of the Committee shall be final.
4.4. Delegation.
The Committee may delegate all or any part of its authority under the
Plan to any Employee, Employees or committee.
5. AMENDMENT AND TERMINATION.
5.1. 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.
5
<PAGE>
5.2. Limitation. The Board may not amend the Plan, without approval
of the shareholders of the Company:
(a) in a manner which would cause the Plan to fail to meet the
requirements of Section 423 of the Code; or
(b) in a manner which would violate applicable law or
administrative regulation or rule.
5.3. 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, shall continue in full force and effect until terminated.
5.4. Termination.
The Plan may be terminated at any time by the Board. The Plan shall
automatically terminate when all of the Shares available for purchase under the
Plan have been sold. Upon termination of the Plan, and the exercise or lapse of
all outstanding Options, any balances remaining in each Participant's stock
purchase account shall be refunded to him.
5.5. Effect.
The amendment or termination of the Plan shall not adversely affect
any Options granted prior to such amendment or termination.
6. OFFERINGS.
6.1. Offerings.
There may be one or more Offerings under the Plan, which shall occur
at such time or times, if any, as the Committee shall determine. Offerings may
run concurrently and/or consecutively. Except as otherwise provided in an
Offering, all capitalized terms used in the Offering shall have the same meaning
as in the Plan, and the Offering shall be subject to all of the terms and
conditions of the Plan.
6.2. Terms of Offering.
At the time each Offering is made, the Committee will determine all
of the terms and conditions of the Offering, which terms and conditions shall
include, but not be limited to, the following:
A. The number of Shares to be offered, which in no event shall
exceed the maximum number of Shares then available under the provisions of
Section 3.
B. The Offering Period, which in no event shall exceed the maximum
period permitted under Section 423 of the Code.
C. The price per Share for which Common Stock will be sold to
Participants who exercise Options, which price shall not be less than the
lower of the following:
6
<PAGE>
1. 85% of the Fair Market Value on the date upon which the Option
was granted; or
2. 85% of the Fair Market Value on the Exercise Date upon which
the Option is exercised.
Notwithstanding the foregoing, in no event shall the price per Share be
less than the par value.
D. The Employers and Eligible Employees with respect to the
Offering. However, no Employee shall be granted an Option:
1. if, immediately after the grant, such Employee would own
(within the meaning of Section 423(b)(3) of the Code) stock
possessing 5% or more of the total combined voting power or value of
all classes of stock of the Company or of any Parent or Subsidiary;
or
2. which permits his rights to purchase stock under all employees
stock purchase plans (as defined in Section 423(b) of the Code) of
the Company and its Parents and Subsidiaries to accrue at a rate
which exceeds $25,000 of fair market value of such stock, determined
as of the time such Option is granted, for each calendar year in
which such Option is outstanding at anytime.
E. The number of Entry Dates and the date of each Entry Date.
F. The number of Exercise Dates and the date of each Exercise Date.
G. The maximum number of Shares, if any, that may be purchased in
the Offering Period by a Participant.
H. The maximum number of Shares, if any, which may be purchased in
an Offering Period by a Participant as a percentage of his Compensation.
I. Whether or not interest will be paid on balances in Participant's
stock purchase accounts, and, if interest is to be paid, the rate of
interest or method of determining the rate of interest, and whether
interest is to be used to purchase Shares or paid to the Participant.
J. If, when, and the extent to which a Participant may change or
cease payroll deductions during an Offering Period.
7. GRANTS, PARTICIPATION AND WITHDRAWAL.
7.1. Grant of Options.
On each Offering Date, each Eligible Employee shall be granted an
Option to purchase Shares in accordance with the provisions of the Plan, and, if
so permitted by the terms of the Offering, on each subsequent Entry Date within
an Offering Period, if any, each Eligible Employee, who was not an Eligible
Employee on the Offering Date, shall be granted an Option to purchase Shares in
accordance with the provisions of the Plan. An Eligible Employee becomes a
Participant for the Offering Period or the remainder of the Offering Period, as
the case may be, by executing and delivering to the Company a Participation
Agreement.
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7.2. Options Not Transferable.
Each option shall not be transferable by the grantee other than by
will or under the laws of descent and distribution and shall be exercisable,
during his lifetime, only by him.
7.3. Election to Participate.
An Eligible Employee who wishes to participate in the Plan as of an
Entry Date must deliver his executed Participation Agreement to the Company no
later than required by the Committee.
7.4. Method of Payment and Stock Purchase Accounts.
Payment for Shares shall be made through payroll deductions from the
Participant's Compensation, such deductions to be authorized by a Participant in
the Participation Agreement, by separate cash payments which may be made by a
Participant from time to time, if permitted by the Committee, and if permitted,
in accordance with rules and limitations set by the Committee, and, with the
consent of the Committee, and upon such terms as it shall require, in Shares
which shall be valued at Fair Market Value on the Exercise Date. A stock
purchase account shall be set up on the books of the Company in the name of each
Participant. The amount of all payroll deductions, separate cash payments, and
tender of Shares shall be credited to the respective stock purchase accounts of
the Participants on the Company's books. The funds deducted and withheld by the
Company through payroll deductions, the funds received by the Company from
separate cash payments, and the tendered Shares may be used by the Company for
any corporate purposes as the Board shall determine, and the Company shall not
be obligated to segregate said funds or Shares in any way.
7.5. Withdrawal from the Plan.
A Participant may not withdraw from the Plan unless permitted by the
Committee and, if so permitted, only at such times and upon such conditions as
the Committee shall determine.
8. PURCHASE OF STOCK.
8.1. Exercise of Option.
Unless a Participant shall have withdrawn from the Plan as provided
in Section 7.5, his Option to purchase Shares will be automatically exercised
for him on each Exercise Date for the number of full Shares or, in the event a
custodial account described in Section 8.4 is established and such account may
hold fractional shares, for the number of full and fractional Shares which the
accumulated payroll deductions, separate cash payments (plus, if so permitted by
the Committee pursuant to paragraph (i) of Section 6.2, interest on such cash
deductions and payments) and tendered Shares as of the Exercise Date will
purchase at the applicable Option price, subject to the limitations set forth in
the Plan and the Offering and subject to allotment in accordance with Section
8.2. Any balance remaining in a Participant's stock purchase account after the
exercise of an Option will remain in such account unless the Offering is over
and there is no Offering which begins immediately after the Termination Date of
the Offering or the Participant is not a Participant in such subsequent
Offering.
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8.2. Allotment of Shares.
In the event that, on any Exercise Date, the aggregate funds and
Shares available for the purchase of Shares, pursuant to the provisions of
Section 8.1, would purchase a greater number of Shares than the number of Shares
then available for purchase under the Plan on such Exercise Date, the Company
shall issue to each Participant, on a pro rata basis, such number of Shares as,
when taken together with the Shares issued to all other Participants, will
result in the issuance of Shares totaling no more than the number of Shares then
remaining available for issuance under the Plan on such Exercise Date.
8.3. Rights on Retirement, Death or Termination of Employment.
In the event of a Participant's retirement, death or termination of
employment, no payroll deduction shall be taken from any Compensation due and
owing to him at such time, and the amount in the Participant's stock purchase
account shall be applied as of the next Exercise Date in the manner set forth in
Section 8.1, as if the retirement, death or termination of employment had not
occurred, unless the former Employee or, in the event of his death, the person
or persons to whom his rights pass by will or the laws of the descent and
distribution (including his estate during the period of administration) requests
in writing prior to the Exercise Date that such amount be refunded; provided,
however, if the retirement, death or termination of employment occurs more than
three months prior to the next Exercise Date, such amount shall automatically be
refunded. An Employee of a Subsidiary or a Parent which ceases to be a
Subsidiary or a Parent shall be deemed to have terminated his employment for
purposes of this Section 8.3 as of the date such corporation ceases to be a
Subsidiary or a Parent, as the case may be, unless, as of such date, the
Employee shall become an Employee of the Company or any Subsidiary or Parent.
8.4. Delivery of Stock.
Unless the Committee establishes a account custodian, as described
below, certificates for Shares purchased will be issued and delivered as soon as
practicable. None of the rights or privileges of a shareholder of the Company
shall exist with respect to Shares purchased under the Plan until the
certificates representing such Shares are issued. Notwithstanding the foregoing,
if so determined by the Committee, Shares acquired on the Exercise Date shall be
credited to an account maintained for the benefit of the Participant by the
custodian selected by the Committee. If such an arrangement is established, it
will be governed by and subject to the terms and conditions of the agreement
between the Company or the Committee and the custodian, and each Participant, by
enrolling in the Plan, shall be deemed to have consented to such terms and
conditions.
9. MISCELLANEOUS PROVISIONS.
9.1. 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.
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9.2. 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.
9.3. Governing Law.
This Plan shall be construed and administered in accordance with the
laws of the State of Missouri.
9.4. Purchase for Investment.
The Committee may require each person purchasing Shares pursuant to
an Option 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.
9.5. Restricted Shares.
Shares purchased under the Plan may be subject to restrictive
agreements between an Employer and a Participant. In such case, the Employer
shall have the right to include a legend reflecting any such restriction on any
certificate for such Shares.
9.6. No Employment Contract.
The adoption of the Plan shall not confer upon any Employee any right
to continued employment nor shall it interfere in any way with the right of the
Company, a Parent or Subsidiary to terminate the employment of any of its
employees at any time.
9.7. Offset.
In the event that any Participant wrongfully appropriates funds or
other property of an Employer and thereby becomes indebted to such Employer, any
funds or Shares in his stock purchase account may be applied against and used to
satisfy such indebtedness.
9.8. No Effect on Other Benefits. The grant of Options 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.
9.9. Notice to Company.
Each Participant shall promptly give the Company prior written notice
of any disposition of Shares purchased under the Plan which occurs within 2
years of the date of grant of the Option pursuant to which such Shares were
purchased.
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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
direct dial number
(314) 259-2455
October 1, 1999
Board of Directors
Applied Digital Solutions, Inc.
400 Royal Palm Way, Suite 410
Palm Beach, Florida 33480
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 1,500,000 shares of the Company's common
stock, $.001 par value per share, issuable under the Applied Digital Solutions,
Inc. 1999 Employees Stock Purchase 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 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
1,500,000 shares of common stock of the Company covered by the Registration
Statement, when issued on exercise of options 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,
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
- --------------------------------
St. Louis, Missouri
October 1, 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
year ended December 31, 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
October 1, 1999
