As filed with the Securities and Exchange Commission on February 4, 2000
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
Socrates Technologies Corporation
(Exact name of registrant as specified in its charter)
Delaware 54-1707718
- -------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8500 Leesburg Pike, Suite 406
Vienna, Virginia 22182
(Address, including zip code, of
Registrant's principal executive offices)
Socrates Technologies Corporation's
1998 NON-QUALIFIED STOCK OPTION PLAN
(Full Title of the Plan)
Paul W. Richter
General Counsel, Vice President and Secretary
Socrates Technologies Corporation
8500 Leesburg Pike, Suite 406
Vienna, Virginia 22182
e-mail: [email protected]
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------------
<TABLE>
<CAPTION>
=======================================================================================
CALCULATION OF REGISTRATION FEE
=======================================================================================
Proposed
Maximum Proposed Maximum
Title of Amount Offering Aggregate Amount of
Securities to To Be Price Offering Price Registration
Be Registered Registered Per Share (1) Fee
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
(par value $0.01 per share)
- To be issued upon
exercise of options
granted under the
Socrates Technologies
Corporation 1998
Non-Qualified Stock
Option Plan 1,000,000 $3.00 $2,960,000 $2,960
=======================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee on the basis of the exercise price of outstanding options as
permitted under paragraph (h) of Rule 457 (weighted average exercise price of
$2.96 per share).
================================================================================
<PAGE>
PART I: INFORMATION REQUIRED IN PROSPECTUS
Item 1. Plan Information.
The Non-Qualified Stock Option Plan (Plan) of Socrates Technologies
Corporation was adopted and approved by the Registrant's Board of Directors on
November 10, 1998. Only employees and agents who are not officers or directors
of the Registrant are eligible to receive grants of options under the Plan. A
copy of the Plan has been delivered to all eligible participants of the Plan.
The Plan was adopted to provide full-time employees and consultants of the
Registrant and its subsidiaries with the opportunity to participate in any
success of the Registrant through the purchase of shares of the Registrant's
Common Stock, $0.01 par value, underlying options granted under the Plan.
Officers and directors of the Registrant and its subsidiaries are not eligible
to participate in the Plan. The Plan is not subject to the Employee Retirement
Income Security Act of 1974. The Plan is administered by the Compensation
Committee of the Registrant's Board of Directors, as trustee of the Plan and
which committee members are non-employee directors. Options are granted by the
Compensation Committee of the Registrant's Board of Directors in its sole
discretion. The Registrant's Board of Directors has authorized 1,000,000 shares
of the Registrant's Common Stock, $0.01 par value, for issuance under the Plan.
Item 2. Availability of the Plan.
A copy of the Plan is available at no charge to participants in the
Plan from the Registrant's executive offices at 8500 Leesburg Pike, Suite 406,
Vienna, Virginia 22182, Telephone: (703) 288-6500, Facsimile: (703) 288-6530.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference into this Registration Statement
the following documents and information heretofore filed with the Securities and
Exchange Commission (the "Commission"):
1. The description of the Registrant's Common Stock contained in the
Registrant's Form SB-2 Registration Statement (Commission File Number 33-89194)
filed under Section 5 of the Securities Act of 1933, as amended (the "Act"),
including any amendment, post-effective amendment or report filed for the
purpose of updating such descriptions.
<PAGE>
2. The Registrant's Interim Annual Report on Form 10-K for the three month
period ended December 31, 1998, and Annual Report on Form 10-K for the year
ended September 30, 1998, both filed pursuant to Section 13(a) of the Exchange
Act.
3. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999 and September 30, 1999, filed pursuant to Section 13 of
the Exchange Act.
4. The Registrant's Reports on Form 8-K, dated October 12, 1999, and December
13, 1999.
5. All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, after the date of this Registration Statement and
prior to the filing of a post-effective amendment indicating that all securities
offered have been sold or deregistering all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be part hereof from the date of filing of such documents.
Item 4. Description of Securities.
The Registrant's Common Stock, $0.01 par value, is registered under Section
12(g) of the Securities Exchange Act of 1934, as amended.
Item 5. Interests of Named Experts and Counsel.
Paul W. Richter serves as General Counsel, Vice President, Secretary and
Director of Human Resources of the Registrant. He is also an officer and
director of all of the Company's subsidiaries, except he is only an officer of
Technet Computer Services, Inc. The Registrant has issued Mr. Richter stock
options to purchase an aggregate of 150,000 shares of Registrant's Common Stock,
$0.01 par value, at exercise prices ranging from $0.53 per share to $4.13 per
share. Other than vested shares the options, Mr. Richter does not beneficially
own any shares of the Registrant's Common Stock, $0.01 par value.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Further, in accordance with the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation eliminates the liability of a director
of the Registrant to the Registrant and its stockholders for monetary damages
for breaches of such director's fiduciary duty of care in certain instances.
Article VII of the Bylaws of the Registrant provides for indemnification of
certain agents to the maximum extent permitted by the Delaware General
Corporation Law. Persons covered by this indemnification provision include any
current or former directors, officers, employees and other agents of the
Registrant, as well as persons who serve at the request of the Registrant as
directors, officers, employees or agents of another enterprise.
<PAGE>
In addition, the Registrant may enter into contractual agreements with certain
directors and officers of the Registrant designated by the Board to indemnify
such individuals to the full extent permitted by law. These agreements may
resolve certain procedural and substantive matters that are not covered, or are
covered in less detail, in the Bylaws or by the Delaware General Corporation
Law.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Number Document
4.1 1998 Non-Statutory Stock Option Plan, as amended, together with
Stock Option Agreement and Exercise Notice.
5.1 Opinion of Paul Richter, General Counsel, as to the legality of the
securities being registered.
23.1 Consent of Independent Auditors, Grant Thornton, L.L.P., (see page
I-7).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-6).
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 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.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 6 hereof, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. 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.
<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 Vienna, Virginia on February 3, 2000.
Socrates Technologies Corporation,
/s/ Andreas A. Keller
-----------------------------------
Andreas A. Keller,
Chairman of the Board, President,
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Paul W. Richter and Stephen J. Fogarty, jointly
and severally, his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorney-in-fact, or his substitute or substitutes, may 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 below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
/s/ Andreas A. Keller Chairman of the Board February __, 2000
- --------------------- (Principal Executive Officer)
Andreas A. Keller
/s/ Steve Fogarty Chief Financial Officer and Vice February __, 2000
- --------------------- President (Principal Financial
Steve Fogarty Officer and Principal
Accounting Officer)
/s/ Timothy Keenan President February__, 2000
- ---------------------
Timothy Keenan
/s/ Richard Prins Director February__, 2000
- ---------------------
Richard Prins
/s/ Mariellen Lowry Director February___, 2000
- ---------------------
Mariellen Lowry
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
4.1 Socrates Technologies Corporation 1998 Non-Qualified Stock Option
Plan, together with Stock Option Agreement and Exercise Notice.
5.1 Opinion of Paul Richter, General Counsel, as to the legality of
the securities being registered.
23.1 Consent of Independent Auditors (Grant Thornton, LLP) (see page
II-7).
23.3 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-6).
EXHIBIT 4.1
Socrates Technologies Corporation
1998 NON-QUALIFIED STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Non-Statutory Stock Option Plan
is to promote the success of the Company's business by providing for the grant
of options to employees and agents of the Company and its subsidiaries who are
not officers and directors, and by such grants to provide such participants in
the Plan the opportunity to participate in the ownership and success of the
Company.
The Option granted under the Plan will be a Non-Qualified Stock Option.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Compensation Committee of the Board of
Directors as shall be administering the Plan in accordance with Section 4 of the
Plan.
(b) "Applicable Laws" means the requirements relating to the administration
of stock option plans under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any jurisdiction
where an Option is granted under the Plan.
<PAGE>
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Company's Board of
Directors as appointed by the Board in accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Socrates Technologies Corporation, a Delaware
corporation formerly known as "MVSI, Inc.".
(h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary as an independent contractor to render
services to such entity.
(i) "Director" means a member of the Board of Directors of the Company or a
Subsidiary.
(j) "Disability" means total and permanent disability as defined in Section
22(e)(3) of the Code.
(k) "Employee" means any person employed by the Company or any Parent or
Subsidiary. An Employee shall not cease to be an employee for purposes of the
Plan if the Employee is transferred between locations of the Company or between
the Company, its Parent, any Subsidiary, or any successor.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or
<PAGE>
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the Administrator.
(n) "Notice of Grant" means a written or electronic noticeevidencing certain
terms and conditions of an individual Option grant. TheNotice of Grant is part
of the Option Agreement.
(o) "Officer" means a person who is an officer of the Company or any
Subsidiary within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder.
(p) "Option" means a nonstatutory stock option granted pursuant to the Plan,
that is not intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the regulations promulgated thereunder.
(q) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(r) "Option Exchange Program" means a program whereby an outstanding option
is surrendered in exchange for an option with a lower exercise price.
(s) "Optioned Stock" means the Common Stock subject to an Option.
(t) "Optionee" means the holder of an outstanding Option granted under the
Plan.
(u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) "Plan" means this 1998 Non-Qualified Stock Option Plan.
(w) "Service Provider" means an Employee including a Consultant.
(x) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.
(y) "Subsidiary" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 1,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares, which were subject thereto, shall become available for
future grant or sale under the Plan (unless the Plan has terminated).
4. Administration of the Plan.
(a) The Plan shall be administered by the Compensation Committee of the
Board, which committee shall be constituted to satisfy Applicable Laws. If the
Compensation Committee of the Board is unable to administer the Plan for any
reason whatsoever, the Plan shall be administered by the Board.
<PAGE>
(b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock;
(ii) to determine whether and to what extent Options are granted
hereunder;
(iii) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vi) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option shall have declined since the date the Option was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to modify or amend each Option (subject to Section 14(b) of the
Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
(x) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or previously granted by
the Administrator;
(xi) to determine the terms and restrictions applicable to Options;
(xii) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
<PAGE>
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. Eligibility. Options may be granted to Service Providers.
6. Limitation. Neither the Plan nor any Option shall confer upon an Optionee any
right with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.
7. Term of Plan. The Plan shall become effective upon its adoption by the Board.
It shall continue in effect for ten (10) years, unless sooner terminated under
Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions which must be satisfied before the Option may be
exercised.
(c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) consideration received by the Company under a cashless exercise
program implemented by the Company or its authorized agent in connection with
the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or
(viii) any combination of the foregoing methods of payment.
<PAGE>
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. An Option may not be exercised for a fraction of a
Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee ceases
to be a Service Provider, other than upon the Optionee's death or Disability,
the Optionee may exercise his Option, but only within such period of time as is
specified in the Option Agreement, and only to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). If, on the date
of termination, the Optionee is not vested as to his entire Option, the Shares
covered by the unvested portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, the Optionee may exercise his Option
within such period of time as is specified in the Option Agreement, to the
extent the Option is vested on the date of termination (but in no vent later
than the expiration of the term of such Option as set forth in the Option
Agreement). If, on the date of termination, the Optionee is not vested as to his
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
<PAGE>
(d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Option is vested on the date of death. If, at the
time of death, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall immediately revert to
the Plan. The Option may be exercised by the executor or administrator of the
Optionee's estate or, if none, by the person(s) entitled to exercise the Option
under the Optionee's will or the laws of descent or distribution. If the Option
is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares, an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Transferability of Options. Unless determined otherwise by the Administrator
to the contrary, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. The Administrator may, in the manner established
by the Administrator, provide for the transfer, without payment of
consideration, of an Option by the Optionee to any member of the Optionee's
immediate family or to a trust or a partnership whose beneficiaries are members
of the Optionee's immediate family. In such case, the Option shall be
exercisable only by such transferee. Following such transfer, any such Option
shall continue to be subject to the same terms and conditions as were applicable
immediately prior to the transfer. For purposes of this section, an Optionee's
"immediate family" shall mean the Optionee's spouse, children and grandchildren.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset Sale
or Change of Control.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated. To the extent it has not been previously exercised, an Option will
terminate immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. Subject to the provisions of paragraph (d) hereof,
in the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each outstanding Option
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option,
the Optionee shall fully vest in and have the right to exercise the Option as to
all of the Optioned Stock, including Shares as to which it would not otherwise
be vested or exercisable. If an Option becomes fully vested and exercisable in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Administrator shall notify the Optionee in writing or electronically that
the Option shall be fully vested and exercisable for a period of fifteen (15)
days from the date of such notice, and the Option shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall
be considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned
Stock, immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
(d) Change in Control. In the event of a "Change in Control" of theCompany,
the term and conditions of Optionee's employment agreement, if any,shall govern
the acceleration of vesting of Optionee's outstanding Options, ifany. A "Change
in Control" shall be deemed to have occurred if: (i) the Company sells or
otherwise disposes of all or substantially all of its assets; (ii) there is a
merger, consolidation or any other corporate reorganization of the Company with
any other corporation or corporations or any other entity or person (or a
related series of such transactions), provided that the stockholders of the
Company, as a group, do not hold, immediately after such event, at least 50% of
the voting power of the surviving or successor corporation; or (iii) any person
or entity, including any "person" as such term is used in Section 13(d)(3) of
the Exchange Act, becomes the "beneficial owner" (as defined in the Exchange
Act) of Common Stock of the Company representing 40% or more of the combined
voting power of the voting securities of the Company.
<PAGE>
13. Date of Grant. The date of grant of an Option shall be, for all purposes,
the date on which the Administrator makes the determination granting such
Option, or such other later date as is determined by the Administrator. Notice
of the determination shall be provided to each Optionee within a reasonable time
after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment, alteration, suspension
or termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to options granted under the
Plan prior to the date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of
an Option unless the exercise of such Option and the issuance and delivery of
such Shares shall comply with Applicable Laws and shall be further subject to
the approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Option
the Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
17. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
<PAGE>
Exhibit A of Exhibit 4.1
1998 NON-QUALIFIED STOCK OPTION PLAN
EXERCISE NOTICE
Socrates Technologies Corporation
8500 Leesburg Pike, Suite 406
Vienna, Virginia 22182
Attention: Paul W. Richter, General Counsel
Exercise of Option. Effective as of today,_______________,______, theundersigned
("Purchaser") hereby elects to purchase ________ shares (the"Shares") of the
Common Stock of Socrates Technologies Corporation (the "Company") under and
pursuant to the 1998 Non-Qualified Stock Option Plan (the "Plan") and the Stock
Option Agreement dated _____________________ (the "Option Agreement") .
The purchase price for the shares shall be $_________, as required by the Option
Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the full
purchase price for the shares.
3. Representation of Purchaser. Purchaser acknowledges that Purchaser has
received, read and understood the Plan and the Option Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the Shares, no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section 12 of the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser consulted with any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the international substantive laws, but not the choice of law rules,
of Delaware`.
Submitted by:
PURCHASER: ___________________________
By: _____________________________________________
Optionee
ACCPTED BY: _______________________________
Signature: ________________________________
_____________________________
Date Received
Address: 8500 Leesburg Pike, Suite 406, Vienna, Virginia 22182
EXHIBIT 5.1
February 1, 2000
Board of Directors
Socrates Technologies Corporation
8133 Leesburg Pike, Suite 760
Vienna, Virginia 22182
RE: Socrates Technologies Corporation Non-Qualified
Stock Option Plan
Lady and Gentlemen:
I have examined the Registration Statement on Form S-8 to be filed by Socrates
Technologies Corporation (the "Company") with the Securities and Exchange
Commission on or about January 14, 2000, in connection with the registration
under the Securities Act of 1933, as amended, of 1,000,000 shares of the
Company's Common Stock (the "Shares") reserved for issuance under the Socrates
Technologies Corporation 1998 Non-Qualified Stock Option Plan (the "Plan"). I
have examined the proceedings taken and are familiar with the proceedings
proposed to be taken by the Company in connection with the sale and issuance of
the Shares.
It is our opinion that, the Shares, when issued and sold in the manner referred
to in the Plan and the agreements that accompany the Plan, and in accordance
with the Company's Certificate of Incorporation, will be legally and validly
issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration Statement
and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendments thereto.
Please call me at (703) 725-7299 with any questions.
Sincerely,
/s/ Paul W. Richter
- ----------------------
Paul W. Richter
General Counsel
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We have issued our reports, dated April 12, 1999 and December 15, 1998,
accompanying the consolidated financial statements of Socrates Technologies
Corporation and subsidiaries included in the Interim Annual Report on Form 10-K,
for the three-month period ended December 31, 1998 and the Annual Report on Form
10-K for the year ended September 30, 1998, which are incorporated by reference
in this Registration Statement on Form S-8. We consent to the incorporation by
reference in the Registration Statement of the aforementioned reports.
/S/ Grant Thornton, LLP
-----------------------
Grant Thornton, LLP
McLean, Virginia
February 3, 2000
