As filed with the Securities and Exchange Commission on August 31, 1999
Registration No. 33-
---------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
LEVEL 8 SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 11-2920559
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8000 Regency Parkway, Cary, North Carolina 27511
Address of principal executive offices and zip code)
LEVEL 8 SYSTEMS, INC.
OUTSIDE DIRECTOR STOCK INCENTIVE PLAN
(Full Title of the Plan)
Dennis McKinnie, Esq.
Senior Vice President, Chief Legal and Administrative Officer
Level 8 Systems, Inc.
8000 Regency Parkway
Cary, North Carolina 27511
(Name and address of agent for service)
(919) 380-5000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- ------------- ----------- ----------- -------------- -------------
Common
Stock, $0.001 120,000 $ 9.6875(2) $1,162,500(3) $ 324
par value shares(1)
- ------------- ----------- ----------- -------------- -------------
</TABLE>
(1) Representing shares to be issued and sold by the Registrant under the
Level 8 Systems, Inc. Outside Director and Stock Incentive Plan (the "Plan").
This Registration Statement also covers such indeterminable number of additional
shares as may become issuable to prevent dilution in the event of a stock split,
stock dividend, reclassification or other similar transaction pursuant to the
terms of the Plan.
(2) The average of the high and low prices of the Registrant's Common Stock
as reported by the Nasdaq National Market for August 4, 1999.
(3) The aggregate offering price is calculated solely for the purpose of
determining the registration fee pursuant to Rule 457(h)(1) under the Securities
Act of 1933, as amended.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of the
Instructions to the Registration Statement on Form S-8 will be sent or given to
employees of the Registrant as required by Rule 428(b)(1) promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
<PAGE>
II-3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
<TABLE>
<CAPTION>
<S> <C>
(1) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (File No. 0-26392);
(2) The Registrant's Current Report on Form 8-K/A, filed with the Commission on January 11, 1999 (File No. 0-26392);
(3) The Registrant's Current Report on Form 8-K/A, filed with the Commission on January 15, 1999 (File No. 0-26392);
(4) The Registrant's Current Report on Form 8-K, filed with the Commission on January 15, 1999 (File No. 0-26392).
(5) The Registrant's Current Report on Form 8-K, filed with the Commission on January 21, 1999 (File No. 0-26392);
(6) The Registrant's Current Report on Form 8-K/A, filed with the Commission on March 17, 1999 (File No. 0-26392);
(7) The Registrant's Quarterly Report on Form 10-Q/A for the quarter ended March 31, 1998 and filed with the Commission on
April 22, 1999 (File No. 0-26392);
(8) The Registrant's Quarterly Report on Form 10-Q/A for the quarter ended June 30, 1998 and filed with the Commission on April
22, 1999 (File No. 0-26392);
(9) The Registrant's Quarterly Report on Form 10-Q/A for the quarter ended September 30, 1998 and filed with the Commission on
April 22, 1999 (File No. 0-26392);
(10) The Registrant's Current Report on Form 8-K, filed with the Commission filed with the Commission on April 30, 1999 (File
No. 0-26392);
(11) The Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (File No. 0-26392);
(12) The Registrant's Definitive Proxy Statement for its 1999 Annual Meeting of Shareholders held on May 26, 1999.
(13) The Registrant's Current Report on Form 8-K/A, filed with the Commission on June 29, 1999 (File No. 0-26392);
(14) The Registrant's Current Report on Form 8-K/A, filed with the Commission on July 12, 1999 (File No. 0-26392);
(15) The Registrant's Current Report on Form 8-K, filed with the Commission on July 23, 1999 (File No. 0-26392); and
(16) The description of the Registrant's Common Stock contained in the Registrant's Registration Statement on Form 8-A filed on
</TABLE>
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment that indicates that all securities offered hereby have
been sold or that deregisters all such securities then remaining unsold, shall
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.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation sets forth the extent to
which the Registrant's directors and officers may be indemnified by the
Registrant against the liabilities which they may incur in such capacities. Such
indemnification is authorized by Section 145 of the General Corporation Law of
Delaware, as amended from time to time ("Section 145"). The Registrant shall, to
the extent permitted by Section 145, indemnify each person who was or is a party
or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was or has agreed to become, a director or
officer of the Registrant, or is or was serving, or has agreed to serve, at the
request of the Registrant, as a director, officer or trustee of, or any similar
capacity with, another corporation, partnership, joint venture, trust or other
enterprise (including any employee benefit plans), or by reason of any action
alleged to have been taken or omitted in such capacity, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom. Indemnification may include
payment by the Registrant of expenses in defending any action or proceeding in
advance of the final disposition of such action or proceeding upon receipt of an
undertaking by the person indemnified to repay such payment if it is ultimately
determined that such person is not entitled to the indemnification under the
Registrant's Certificate of Incorporation, which undertaking may be accepted
without reference to the financial ability of such person to make such
repayment. The Registrant shall not indemnify any person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person
unless the initiation thereof was approved by the Board of Directors of the
Registrant. The indemnification rights provided in the Registrant's Certificate
of Incorporation shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under any law, agreement or vote of
stockholder or disinterested directors or otherwise, and shall inure to the
benefit of the heirs, executors and administrators of such persons. The
Registrant may, to the extent authorized from time to time by its Board of
Directors, grant indemnification rights to other persons or agents of the
Registrant or other persons serving the Registrant and such rights may be
equivalent to or greater or less than those set forth in the Registrant's
Certificate of Incorporation.
The Registrant maintains directors and officers liability policies covering
claims made against its directors and officers for certain wrongful acts done in
such capacities and providing reimbursement to the Registrant for its
indemnification of its directors and officers in respect of such claims.
<PAGE>
Item 8. Exhibits.
The following exhibits are filed with or incorporated by reference into
this Registration Statement pursuant to Item 601 of Regulation S-K:
Exhibit
<TABLE>
<CAPTION>
<S> <C>
No. Description
5 Opinion of counsel with respect to the securities being registered.*
10 Level 8 Systems, Inc. Outside Director Stock Incentive Plan*
23(a) Consent of counsel (included in Exhibit 5).*
23(b) Consent of PricewaterhouseCoopers, LLP.*
23(c) Consent of Grant Thornton LLP.*
23(d) Consent of Lurie, Besikof, Lapidus & Co., LLP.*
23 (e) Consent of PricewaterhouseCoopers, LLP, to incorporation by reference Form 10-K of Seer
Technologies, Inc. for the year ended September 30, 1998.*
24 Power of Attorney (see signature pages to this Registration Statement).*
* Filed herewith.
</TABLE>
<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;
(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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective 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
registration statement is on Form S-3, Form S-8 and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in 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.
(h) 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 foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the 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, 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 Cary, State of North Carolina, on this the 31st day
of August, 1999.
LEVEL 8 SYSTEMS, INC.
By:/s/ Dennis McKinnie
Dennis McKinnie
Senior Vice President, Chief Legal and
Administrative Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Steven Dmiszewicki and Dennis McKinnie,
or either of them, as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each of said attorneys-in-fact
and agents, full power and authority to do and perform each and every act and
thing required or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each of said attorneys-in-fact and agents, or their
substitutes, could lawfully do or cause to be done by virtue hereof.
<PAGE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below on August 31, 1999 by the following persons in
the capacities indicated.
/s/ Arie Kilman Chairman of the Board of Directors and
- ----------------- Chief Executive Officer
Arie Kilman (Principal Executive Officer)
/s/ Steven Dmiszewicki President
- ------------------------
Steven Dmiszewicki
/s/ Renee Fulk Vice President - Finance
- ---------------- (Principal Financial and Accounting Officer)
Renee Fulk
/s/ Samuel Somech Director and Chairman Emeritus
- -------------------
Samuel Somech
/s/ Robert M. Brill Director
- ----------------------
Robert M. Brill
/s/ Michel Berty Director
- ------------------
Michel Berty
/s/ Theodore Fine Director
- -------------------
Theodore Fine
/s/ Lenny Recanati Director
- --------------------
Lenny Recanati
/s/ Frank J. Klein Director
- ---------------------
Frank J. Klein
<PAGE>
EXHIBIT INDEX
Exhibit
<TABLE>
<CAPTION>
<S> <C>
No. Description
5 Opinion of counsel with respect to the securities being registered.*
10 Level 8 Systems, Inc. Outside Director Stock Incentive Plan*
23(a) Consent of counsel (included in Exhibit 5).*
23(b) Consent of PricewaterhouseCoopers, LLP.*
23(c) Consent of Grant Thornton LLP.*
23(d) Consent of Lurie, Besikof, Lapidus & Co., LLP.*
23 (e) Consent of PricewaterhouseCoopers, LLP, to incorporation by reference Form 10-K of Seer
Technologies, Inc. for the year ended September 30, 1998.*
24 Power of Attorney (see signature pages to this Registration Statement).*
* Filed herewith.
</TABLE>
<PAGE>
August 31, 1999
Level 8 Systems, Inc.
8000 Regency Parkway
Cary, North Carolina 27511
Re: Registration Statement on Form S-8
Level 8 Systems, Inc.
1997 Stock Option Plan, as Amended and Restated
Ladies and Gentlemen:
We have served as counsel for Level 8 Systems, Inc., a Delaware corporation
(the "Company"), in connection with the registration under the Securities Act of
1933, as amended, pursuant to a Registration Statement on Form S-8 (the
"Registration Statement"), of an additional 1,200,000 shares (the "Shares") of
common stock, $.001 par value, of the Company, to be issued and sold by the
Company pursuant to the Level 8 Systems, Inc. Stock Option Plan, as Amended and
Restated (the "Plan").
We have examined and are familiar with originals or copies (certified,
photostatic or otherwise identified to our satisfaction) of such documents,
corporate records and other instruments relating to the incorporation of the
Company and the authorization of the grants of securities pursuant to the Plan
as we have deemed necessary and advisable. In such examinations, we have
assumed the genuineness of all signatures on all originals and copies of
documents we have examined, the authenticity of all documents submitted to us as
originals and the conformity to original documents of all certified, conformed
or photostatic copies. As to questions of fact material and relevant to our
opinion, we have relied upon certificates or representations of Company
officials and of appropriate governmental officials.
We express no opinion as to matters under or involving the laws of any
jurisdiction other than the corporate law of the State of Delaware.
Based upon and subject to the foregoing and having regard for such legal
considerations as we have deemed relevant, it is our opinion that:
1. The Shares have been duly authorized; and
<PAGE>
2. Upon the issuance and delivery of the Shares and the receipt of
payment therefor as provided in the Plan and as contemplated by the Registration
Statement, such Shares will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ POWELL, GOLDSTEIN, FRAZER & MURPHY LLP
EXHIBIT 10
----------
LEVEL 8 SYSTEMS, INC.
OUTSIDE DIRECTOR STOCK INCENTIVE PLAN
THIS PLAN is made effective as of February 26, 1999 by Level 8 Systems,
Inc., a New York corporation (hereinafter called the "Company").
INTRODUCTION
The Company is adopting the Level 8 Systems, Inc. Outside Director Stock
Incentive Plan (the "Plan") to provide non-employee directors with the
opportunity to purchase the Common Stock of the Company and to provide such
directors with an election to receive Common Stock of the Company in lieu of
directors fees. The Board of Directors of the Company believes this Plan will
promote personal interest in the welfare of the Company by, and provide
incentive to, the individuals who are primarily responsible both for the regular
operations of and for shaping and carrying out the long term plans of the
Company, thus facilitating the continued growth and financial success of the
Company.
<PAGE>
LEVEL 8 SYSTEMS, INC.
OUTSIDE DIRECTOR STOCK INCENTIVE PLAN
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS 3
SECTION 2 ADMINISTRATION 4
SECTION 3 ELIGIBILITY 5
SECTION 4 SHARES SUBJECT TO PLAN 5
SECTION 5 STOCK AWARDS 5
SECTION 6 OPTION GRANTS 5
SECTION 7 TERM OF PLAN 6
SECTION 8 INDEMNIFICATION OF BOARD 6
SECTION 9 AMENDMENT AND TERMINATION OF THE PLAN 7
SECTION 10 ADJUSTMENT IN SHARES OF COMMON STOCK 7
SECTION 11 COMPLIANCE WITH APPLICABLE LAW 7
SECTION 12 RIGHT TO REMOVE DIRECTOR 8
SECTION 12 GOVERNING LAW 8
<PAGE>
SECTION 1 DEFINITIONS
Wherever used herein, the masculine pronoun shall be deemed to include the
feminine, and the singular to include the plural, unless the context clearly
indicates otherwise, and the following words and phrases shall, when used
herein, have the meanings set forth below:
1.1 "Affiliate" means (a) an entity that directly or through one or
---------
more intermediaries is controlled by the Company, and (b) any entity in which
the Company has a significant equity interest, as determined by the Company.
1.2 "Board of Directors" means the Board of Directors of the Company.
--------------------
1.3 "Change in Control" means any one of the following events
-------------------
(a) any person (as defined in Section 3(a)(9) of the Exchange Act and
as used in Sections 13(d) and 14(d) thereof), excluding the Company, any
Subsidiary, any employee benefit plan sponsored or maintained by the Company or
any Subsidiary (including any trustee of such plan acting as trustee) and any
present holder of common stock of the Company (the Company, all Subsidiaries,
such employee benefit plans and trustees acting as trustees and such holders of
common stock being hereafter referred to as the "Company Group"), but including
a "group" as defined in Section 13(d)(3) of the Exchange Act (a "Person"),
becomes the beneficial owner of shares of the Company having at least thirty
percent (30%) of the total number of votes that may be cast for the election of
directors of the Company (the "Voting Shares"); provided that no Change of
Control will occur as a result of an acquisition of stock by the Company Group
which increases, proportionately, the stock representing the voting power of the
Company beneficially owned by such Person above thirty percent (30%) of the
voting power of the Company, and provided further that if such Person acquires
beneficial ownership of stock representing more than thirty percent (30%) of the
voting power of the Company by reason of share purchases by the Company Group,
and after such share purchases by the Company Group acquires any additional
shares representing voting power of the Company, then a Change of Control shall
occur;
(b) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale of the Company's assets or
combination of the foregoing transactions (a "Transaction") other than a
Transaction involving only the Company and one or more of its Subsidiaries, or a
Transaction immediately following which the shareholders of the Company
immediately prior to the Transaction continue to have a majority of the voting
power in the resulting entity excluding for this purpose any shareholder owning
directly or indirectly more than thirty percent (30%) of the shares of the other
company involved in the merger;
(c) within any 24-month period, the persons who were directors of
the Company immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at least
a majority of the Board of Directors or the board of directors of any successor
to the Company, provided that any director who was not a director as of the
effective date of this Plan shall be deemed to be an Incumbent Director if such
director was elected to the Board of Directors by, or on the recommendation of
or with the approval of, at least two-thirds of the directors who then qualified
as Incumbent Directors either actually or by prior operation of this clause (c);
and provided further that any director elected to the Board of Directors to
avoid or settle a threatened or actual proxy contest shall in no event be deemed
to be an Incumbent Director; or
(d) the dissolution or liquidation of the Company.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
----
1.5 "Common Stock" means the common stock of the Company, $.01 par
-------------
value.
1.6 "Company" means Level 8 Systems, Inc.
-------
1.7 "Director" means a member of the Board of Directors.
--------
1.8 "Eligible Director" means a Director who is not an Employee.
------------------
1.9 "Employee" means any person who is employed by the Company or an
--------
Affiliate for purposes of the Federal Insurance Contributions Act and any
consultant retained to provide services (other than in the capacity of a
director) to the Company or an Affiliate.
1.10 "Fair Market Value" means, with respect to a share of Common
-------------------
Stock,
(a) if the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the NASDAQ Stock
Market, the average of the high and low price of the shares on the date in
question, as such price is reported by the National Association of Securities
Dealers through the NASDAQ Stock Market or any successor system. If there is no
reported sale for the Common Stock on the date in question, then the average of
the high and low price of the shares on the last preceding date for which such
quotation exists shall be determinative of Fair Market Value.
(b) if the Common Stock is at the time listed or admitted to
trading on any national securities exchange, the average of the high and low
price per share on the date in question on the securities exchange determined by
the Board of Directors to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such exchange on the
date in question, the Fair Market Value shall be the average of the high and low
price per share on the exchange on the last preceding date for which such
quotation exists.
(c) if the Common Stock is not publicly traded, the fair market
value as determined by the Board of Directors.
1.11 "Option" means a non-qualified stock option granted under the
------
Plan to buy shares of Common Stock as set forth in Plan Section 6.
1.12 "Option Exercise Price" means the per share purchase price for
-----------------------
Common Stock subject to each Option granted under Section 6 which shall be
one-hundred percent (100%) of the Fair Market Value of the Common Stock as of
the date the Option is granted.
1.13 "Plan" means the Level 8 Systems, Inc. Outside Director Stock
----
Incentive Plan.
1.14 "Stock Option Agreement" means an agreement between the Company
------------------------
and an Eligible Director or other documentation evidencing an Option.
SECTION 2 ADMINISTRATION
The Board of Directors shall have the authority in its sole discretion to
interpret the Plan, to make all other determina-tions and to take all other
actions it deems necessary or advisable for the implementation and
administration of the Plan. All actions of the Board of Directors shall be
final, conclusive, and binding. No member of the Board of Directors shall be
liable for any action taken or decision made in good faith relating to the Plan.
SECTION 3 ELIGIBILITY
Only Eligible Directors shall be eligible to receive Common Stock pursuant
to Section 5 of the Plan and an Option pursuant to Section 6 of the Plan on the
terms and subject to the restrictions hereinafter set forth.
SECTION 4 SHARES SUBJECT TO PLAN
Subject to adjustment in accordance with Section 10, 120,000 shares of
Common Stock (the Maximum Plan Shares") are hereby reserved exclusively for
issuance pursuant to an election by an Eligible Director to receive Common Stock
pursuant to Section 5 and Options granted pursuant to Section 6. If an Option
expires or terminates for any reason without being exercised in full, the
unpurchased shares subject to such Option shall again be available for purposes
of the Plan.
SECTION 5 STOCK AWARDS
5.1 Each Eligible Director may elect annually, in writing and in such
form and at such time as the Board of Directors may direct, to receive any
retainer, meeting and committee fees to be earned by such Director from the
Company in the succeeding year in the form of Common Stock.
5.2 Any election to receive Common Stock in lieu of fees shall be
effective only if approved by the Board of Directors.
5.3 An Eligible Director electing to receive Common Stock in lieu of
fees will receive a number of shares of Common Stock equal to the result,
rounded up to the nearest whole number, obtained by dividing the amount of the
meeting, retainer and committee fees to which such Director would otherwise be
entitled by 100% of the Fair Market Value of a share of Common Stock as of the
date any such fees would otherwise have been paid. The Common Stock will be
issued to any electing Eligible Director at such time as any retainer, committee
or meeting fees would be payable to such Director had the Director not made an
election to receive Common Stock in lieu of fees. Once made, any election by an
Eligible Director to receive shares of Common Stock in lieu of fees is
irrevocable.
SECTION 6 OPTION GRANTS
6.1 Each individual who is an Eligible Director as of the effective
date of the Plan shall be awarded an Option to purchase 12,000 shares of Common
Stock as of that date and each individual who becomes an Eligible Director after
the effective date of the Plan shall be awarded an Option to purchase 12,000
shares of Common Stock on the date of such Eligible Director's appointment or
election to the Board of Directors (the "Initial Option").
6.2 Subsequent to the grant of the Initial Option, each Eligible
Director shall be granted an Option to purchase shares of Common Stock at such
time as determined by the Board of Directors, in its sole discretion.
6.3 All Options may be exercised to the extent vested; however, such
Option shall not be exercisable after the expiration of ten (10) years from the
date of the grant of the Option. Each Option awarded under the Plan shall
become vested with respect to thirty-three and one-third percent (33-1/3%) of
the shares of Common Stock at each anniversary of the Option grant date,
beginning with the first anniversary thereof; provided, however, such Option
will vest only if the Eligible Director continues to serve as a member of the
Board of Directors. Notwithstanding the foregoing (but subject to the express
provisions of any Stock Option Agreement), in the event of a Change in Control,
any outstanding Options shall fully vest and become exercisable as of the date
of such Change in Control.
6.4 All Options may be exercised only by written notice to the Company
which notice shall specify the number of shares of Common Stock to be purchased
and shall be accompanied by payment of the Option Exercise Price for such shares
in such manner as the Board of Directors may approve; provided, however, an
Option may only be exercised with respect to whole shares of Common Stock. No
shares shall be issued or delivered upon exercise of an Option until full
payment has been made by the Eligible Director. The holder of the Option, as
such, shall have none of the rights of a stockholder.
6.5 Each Option contemplated by this Section 6 shall be evidenced by a
Stock Option Agreement which shall incorporate the applicable terms of the Plan.
The terms of each Stock Option Agreement shall provide: (a) that the per share
purchase price for each share of Common Stock subject to the Option shall be the
Option Exercise Price; (b) that any nonvested Options shall terminate
immediately on the date upon which an Eligible Director ceases to be Director;
and (c) that any vested Options shall be exercisable no later than the earliest
to occur of (i) three months after the date an Eligible Director ceases to be a
Director for any reason; (ii) twelve (12) months after the date an Eligible
Director ceases to be a Director if such cessation is by reason of his becoming
disabled (within the meaning of Section 22(e)(3) of the Code) or his death; or
(iii) the tenth anniversary of the Option grant date.
6.6 An Option shall not be transferable or assignable except by will,
under the laws of descent and distribution, or, in its discretion, the Board of
Directors may authorize all or a portion of the Options to be granted to an
Eligible Director to be on terms which permit transfer by such Eligible Director
to (a) the spouse, children or grandchildren or parents of the Eligible Director
("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of such Immediate Family Members, or (iii) a partnership or limited liability
company in which such Immediate Family Members are the only partners or members,
provided that there is no consideration paid for any such transfer and
subsequent transfers shall be prohibited except in accordance with the laws of
descent and distribution, or by will. Following transfer, any such options
shall continue to be subject to the same terms and conditions as were applicable
immediately prior to the transfer, including, but not limited to, the vesting
provisions in Section 6.3 and the termination provisions in Section 6.5.
SECTION 7 TERM OF PLAN
The Plan shall be effective on the date hereof and shall continue to be
effective until ten (10) years following the earlier of the effective date of
the Plan, unless sooner terminated by the Board of Directors pursuant to Section
9 hereof.
SECTION 8 INDEMNIFICATION OF BOARD
In addition to such other rights of indemnification that the members of the
Board of Directors may have, each member of the Board of Directors shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees, actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
it may be a party by reason of any action taken or failure to act under or in
connection with the Plan, and against all amounts paid by it in settlement
thereof (provided the settlement has received the prior approval of the Company)
or paid by it in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
the action, suit or proceeding that the Board member is liable for negligence or
misconduct in the performance of his or her duties; provided that promptly after
institution of the action, suit or proceeding the Board member shall in writing
offer the Company the opportunity, at its own expense, to handle and defend such
matter. Upon the delivery to the Board member of written notice of assumption
by the Company of the defense of such matter, the Company will not be
responsible to the Board member for any further fees and disbursements relating
to the defense of such matter, including fees and disbursements of counsel.
SECTION 9 AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors at any time may amend or terminate the Plan without
shareholder approval; provided, however, that the Board of Directors may
condition any amendment on the approval of the shareholders of the Company if
such approval is necessary or advisable with respect to tax, securities or other
applicable laws to which the Company, this Plan, or Directors are subject. No
amendment or termination of the Plan shall adversely affect the rights of a
Director without his consent with respect to Common Stock previously acquired
under the Plan.
SECTION 10 ADJUSTMENT IN SHARES OF COMMON STOCK
10.1 If (a) the number of shares of Common Stock shall be increased or
reduced by a change in par value, split-up, stock split, reverse stock split,
reclassification, merger, consolidation, distribution of stock dividends or
similar capital adjustments, or (b) the Company engages in a transaction for
which the Board of Directors determines an adjustment is appropriate, then the
Board of Directors may make an adjustment in the number and kind of shares of
Common Stock available under the Plan, the number (including any maximum number
of shares) and kind of shares for which grants are to be subsequently made to
each Eligible Director and the number and kind of shares of Common Stock
issuable pursuant to the provisions of the Plan, consistent with the effect of
the change on existing shareholders of the Company.
10.2 If any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the Company with another
corporation, or the sale of substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, each holder of an Option shall thereafter have
the rights to receive upon the basis and upon the terms and conditions specified
therein and in lieu of the shares of Common Stock of the Company immediately
theretofore receivable upon the exercise of such Option, such shares of stock,
securities or assets (including cash) as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore receivable had
such reorganization, reclassification, consolidation, merger or sale not taken
place.
SECTION 11 COMPLIANCE WITH APPLICABLE LAW
Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue any shares of Common Stock if such issuance would violate
any applicable law or any applicable regulation or requirement of any securities
or exchange or similar entity. Prior to the issuance of any shares of Common
Stock under the Plan, the Company may require a written statement that the
recipient is acquiring the shares for investment and not for the purpose or with
the intention of distributing the shares and will not dispose of them in
violation of the registration requirements of the Securities Exchange Act of
1933. If at any time the Company, in its sole discretion, determines that the
listing, registration or qualification (or any updating of any such document) of
any type of award, or the shares of Common Stock issuable pursuant thereto, is
necessary on any securities exchange or under any federal or state securities or
blue sky law, or that the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with, any
award or the issuance of shares of Common Stock pursuant to any award, such
award shall not be made and the shares of Common Stock shall not be issued, as
the case may be, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Company.
SECTION 12 RIGHT TO REMOVE DIRECTOR
Nothing in the Plan or in any Stock Option Agreement shall confer upon any
Eligible Director the right to continue as a Member of the Board of Directors or
affect the right of the Company or any Affiliate to terminate an Eligible
Director's directorship at any time.
SECTION 13 GOVERNING LAWSECTION 12 GOVERNING LAW
The laws of the State of New York shall govern this Plan.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed as of
the day and year first above written.
LEVEL 8 SYSTEMS, INC.
By: /s/ Steven Dmiszewicki
-----------------------------
Steven Dmiszewicki
Title: President
ATTEST:
By: /s/ Dennis McKinnie
- --------------------------
Dennis McKinnie
Title: Senior Vice President, Chief Legal
and Administrative Officer
[CORPORATE SEAL]
EXHIBIT 23(B)
--------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 for the Level 8 Systems, Inc. 1997 Stock Option Plan, as
Amended and Restated, of our report dated March 31, 1999, relating to the
financial statements, which appears in the Annual Report on Form 10-K of Level 8
Systems, Inc. for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
Washington, D.C.
August 31, 1999
EXHIBIT 23(C)
-------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 23, 1998 (except for Note 2, as to
which the date is February 27, 1998 and Note 3, as to which the date is April 6,
1998) accompanying the consolidated financial statements of Level 8 Systems,
Inc. and subsidiaries included in the Annual Report on Form 10-K for the year
ended December 31, 1998 which is incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of aforementioned report.
/s/ Grant Thornton LLP
New York, New York
August 31, 1999
EXHIBIT 23(D)
-------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
of Level 8 Systems, Inc. on Form S-8 of our report dated January 31, 1997,
except for Note 3, as to which the date is April 6, 1998, relating to the
financial statements included in the Annual Report on Form 10-K of Level 8
Systems, Inc. for the year ended December 31, 1998.
/s/ Lurie, Besikof, Lapidus & Co., LLP
Minneapolis, Minnesota
August 31, 1999
EXHIBIT 23(E)
-------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 for the Level 8 Systems, Inc. 1997 Stock Option Plan, as
Amended and Restated, of our report dated December 31, 1998, relating to the
financial statements, which appears in the Annual Report on Form 10-K of Seer
Technologies, Inc. for the year ended September 30, 1998.
/s/ PricewaterhouseCoopers LLP
Washington, D.C.
August 31, 1999
