Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
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BILLSERV, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 98-0190072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MARSHALL N. MILLARD TERRI A. HUNTER
SECRETARY, SENIOR VICE PRESIDENT AND GENERAL COUNSEL TREASURER, EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
211 NORTH LOOP 1604 EAST, SUITE 100, SAN ANTONIO, TEXAS 78232
(Address of principal executive office)
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BILLSERV, INC.
1999 EMPLOYEE COMPREHENSIVE STOCK PLAN
(Full title of the Plan)
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TIMOTHY N. TUGGEY
ROBERT M. BARNETT
LOEFFLER, JONAS & TUGGEY LLP
700 N. ST. MARY'S ST. #800
SAN ANTONIO, TEXAS 78205
210/354-4300
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
=========================== ============================ ===================== ================== =======================
TITLE OF SECURITIES TO BE AMOUNT TO BE REGISTERED PROPOSED MAXIMUM MAXIMUM AMOUNT OF REGISTRATION
REGISTERED OFFERING PRICE PER AGGREGATE FEE
SHARE (2) OFFERING PRICE
(2)
--------------------------- ---------------------------- --------------------- ------------------ -----------------------
Common Stock, Par Value
$.001 3,000,000 shares (1) $1.00 $3,000,000.00 $276.00
=========================== ============================ ===================== ================== =======================
(1) Pursuant to Rule 416 under the Securities Act, additional shares of the
common stock of the Company issued or which become issuable in order to
prevent dilution resulting from any future stock split, stock dividend or
similar transaction that are being registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c) and (h) under the Securities Act based upon the
average of the high and low sales prices of the Registrant's Common Stock
on the NASDAQ STOCK MARKET'S NATIONAL MARKET on February 6, 2002.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents and reports filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are incorporated herein by
reference:
(a) Annual Report of the Registrant on Form 10-K for the year
ended December 31, 2000, Commission File No. 000-30152.
(b) Quarterly Reports of the Registrant on Form 10-Q for the
quarters ended March 31, 2001, June 30, 2001 and September 30,
2001, Commission File No. 000-30152
(b) The description of the Registrant's Common Stock
contained in the Registration Statement (Commission File
No. 001-15093) filed under Section 12 of the Securities
Exchange Act of 1934, including any amendment or report filed
for the purpose of updating such description.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Nevada law generally sets forth the powers of the Company to indemnify
officers, directors, employees and agents. The Articles of Incorporation for the
Company provide as follows:
No director or officer shall have any personal liability to
the corporation or its stockholders for the damages for breach
of fiduciary duty as a director or officer, except that this
Article shall not eliminate or limit the liability of a
director or officer for (i) acts or omissions that involve
intentional misconduct, fraud or a knowing violation of the
law, or (ii) the payment of dividends in violation of Nevada
Revised Statutes.
Except to the extent herein above set forth, there is no charter
provision, bylaw, contract, arrangement or statute pursuant to which any
director or officer of the Company is indemnified in any manner against any
liability which he may incur in his capacity as such. The Company also maintains
a standard director and officer liability policy to fund the Company's
obligations as stated herein above.
ITEM 8. EXHIBITS
Except as noted below, the following Exhibits are filed herewith and
made a part hereof:
EXHIBIT DESCRIPTION OF DOCUMENT
4.3 1999 Employee Comprehensive Stock Plan.
5.1 Opinion of Loeffler, Jonas & Tuggey LLP (filed herewith).
23.1 Consent of Loeffler, Jonas & Tuggey LLP (included in
Exhibit 5.1).
23.2 Consent of Independent Accountants (filed herewith).
24.1 Power of Attorney
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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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar 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 reflect 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 20 percent 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 or Form F-3, and 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 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) For the purpose 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 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to 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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 Act and will
be governed by the final adjudication of such issue.
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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 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 San Antonio, State of Texas, on this 7th day of
February, 2002.
BILLSERV, INC.
By: /s/ Terri A. Hunter
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Terri A. Hunter
Treasurer, Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated as of the dates indicated.
Signatures Titles Date
/s/ Michael R. Long Chairman of the Board, Chief
-------------------- Executive Officer and Director February 7, 2002
Michael R. Long *
/s/ Louis A. Hoch Director, President and Chief
------------------ Operating Officer February 7, 2002
Louis A. Hoch *
/s/ Terri A. Hunter Director, Treasurer, Executive Vice
-------------------- President and Chief Financial Officer February 7, 2002
Terri A. Hunter *
/s/ Marshall N. Millard Secretary, Senior Vice President
------------------------ and General Counsel February 7, 2002
Marshall N. Millard
/s/ E. Scott Crist Director
-------------------
E. Scott Crist * February 7, 2002
/s/ Roger R. Hemminghaus Director
-------------------------
Roger R. Hemminghaus * February 7, 2002
/s/ Peter G. Kirby Director
-------------------
Peter G. Kirby, Ph.D.* February 7, 2002
/s/ Richard B. Bergman Director
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Richard B. Bergman* February 7, 2002
Marshall N. Millard, the undersigned attorney-in-fact, by signing his name
below, does hereby sign this Registration Statement on behalf of the directors
and officers of Billserv.com, Inc. indicated above by asterisk (constituting a
majority of the directors) pursuant to a power of attorney executed by such
persons and filed with the Securities and Exchange Commission contemporaneously
herewith.
By: /s/ Marshall N. Millard
----------------------------------------
Marshall N. Millard, as attorney-in-fact
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EXHIBIT INDEX
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Exhibit Number Exhibit
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4.1 1999 Employee Comprehensive Stock Plan.
5.1 Opinion of Counsel regarding legality of securities
being registered.
23.1 Consent of Counsel (included in Exhibit 5.1)
23.2 Consent of Independent Accountants.
24.1 Power of Attorney.
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EXHIBIT 4.1
1999 EMPLOYEE COMPREHENSIVE STOCK PLAN
1. PURPOSE. The purpose of this 1999 Employee Comprehensive Stock
Plan (the "Plan") is to further the success of Billserv, Inc., a Nevada
corporation (the "Company"), and certain of its affiliates by making available
Common Stock of the Company to certain officers and employees of the Company and
its affiliates, and thus to provide an additional incentive to such individuals
to continue in the service of the Company or its affiliates and to give them a
greater interest as stockholders in the success of the Company. Subject to
compliance with the provisions of the Plan and the Code, Incentive Stock Options
as authorized by Section 422 of the Code and stock options that do not qualify
under Section 422 of the Code are authorized and may be granted under the Plan.
Further, the Company may grant Restricted Stock, as defined below.
2. DEFINITIONS. As used in this Plan the following terms shall
have the meanings indicated:
(a) "Award" means an award of stock options (including
Incentive Stock Options) or Restricted Stock, on a stand-alone, combination or
tandem basis, as described in or granted under this Plan.
(b) "Award Agreement" means a written agreement setting
forth the terms of an Award, in the form prescribed by the Committee.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" shall mean, in the context of the termination
of a Participant, as determined by the Board, in the reasonable exercise of its
business judgment the occurrence of one of the following events: (i) conviction
of or a plea of nolo contendere to a charge of a felony (which, through lapse of
time or otherwise, is not subject to appeal); (ii) willful refusal without
proper legal cause to perform, or gross negligence in performing, Participant's
duties and responsibilities; (iii) material breach of fiduciary duty to the
Company through the misappropriation of Company funds or property or otherwise;
or (iv) the unauthorized absence of Participant from work (other than for sick
leave or disability) for a period of thirty working days or more during any
period of forty-five working days; provided, further, within one year following
a Change of Control, "Cause" shall be limited to the conviction of or a plea of
nolo contendere to the charge of a felony (which, through lapse of time or
otherwise, is not subject to an appeal), or a material breach of fiduciary duty
to the Company through the misappropriation of Company funds or property or
otherwise.
(e) "Change of Control" shall be deemed to have occurred if
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 40% of the combined voting power of the Company's then
outstanding voting securities, or (ii) at any time during the 24-month period
after a tender offer, merger, consolidation, sale of assets or contested
election, or any combination of such transactions, at least a majority of the
Board shall cease to consist of "continuing directors" (meaning directors of the
Company who either were directors prior to such transaction or who subsequently
became directors and whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two thirds of the directors
then still in office who were directors prior to such transaction), or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 40% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement of sale or disposition by the Company of all or
substantially all of the Company's assets.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
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(g) "Committee" means the Committee administering the Plan
described in Section 3 hereof.
(h) "Common Stock" means the Company's common stock, par
value $.001 per share.
(i) "Continuous Status as an Employee" means that the
employment relationship with any one or more of (i) the Company, (ii) any
Parent, (iii) any Subsidiary has not been terminated or interrupted.
(j) "Date of Grant" means the date on which an Award is
granted under an Award Agreement executed by the Company and a Participant
pursuant to the Plan.
(k) "Disinterested Person" means a "disinterested person"
as such term is defined in Rule 16b-3 promulgated under the Exchange Act or any
successor provision.
(1) "Effective Date" means the effective date of this Plan
specified in Section 14 hereof.
(m) "Exchange Act" means the Securities Exchange Act of
1934, as it may be amended from time to time.
(n) "Good Reason" shall mean the occurrence of any of the
following events: (a) removal from the principal office held by the Participant
on the date of the most recent Award, or a material reduction in the
Participant's authority or responsibility, including, without limitation,
involuntary removal from the Board, but not including termination of the
Participant for Cause; or (b) the Company otherwise commits a material breach of
this Plan, or the Participant's employment agreement, if applicable; provided,
however, that within one year following a Change of Control, "Good Reason" shall
mean (i) removal from the principal office held by the Participant on the date
of the most recent Award, (ii) a material reduction in the Participant's
authority or responsibility, including, without limitation, involuntary removal
from the Board, but not including termination of the Participant for cause;
(iii) relocation of the Company's headquarters from the San Antonio, Texas
metropolitan area, (iv) a material reduction of participant's compensation, or
(v) the Company otherwise commits a material breach of this plan, or the
Participant's employment agreement, if applicable.
(o) "Incentive Stock Option" means an option qualifying
under Section 422 of the Code.
(p) "Parent" means a parent corporation of the Company as
defined in Section 424(e) of the Code.
(q) "Participants" means the employees and officers of the
Company, its Subsidiaries and its Parent (including those directors of the
Company who are also employees of the Company, its Parent or one or more of its
Subsidiaries).
(r) "Restricted Period" shall mean the period designated by
the Committee during which Restricted Stock may not be sold, assigned,
transferred, pledged, or otherwise encumbered, which period shall not be less
than one year nor more than two years from the Date of Grant.
(s) "Restricted Stock" shall mean those shares of Common
Stock issued pursuant to an Award that remain subject to the Restricted Period.
(t) "Retained Distributions" shall mean any securities or
other property (other than cash dividends) distributed by the Company or
otherwise received by the holder in respect of Restricted Stock during any
Restricted Period.
(u) "Retirement" shall mean retirement of a Participant
from the employ of the Company, its Parent, or its Subsidiaries, as the case may
be, in accordance with the then existing employment policies of any such
employer.
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(v) "Subsidiary" means a subsidiary corporation of the
Company as defined in Section 424(f) of the Code.
3. ADMINISTRATION OF THE PLAN. The Board shall appoint a committee
(the "Committee") comprised of two or more directors to administer the Plan.
Only directors who are Disinterested Persons shall be eligible to serve as
members of the Committee. The Committee shall report all action taken by it to
the Board, which shall review and ratify or approve those actions that are by
law required to be so reviewed and ratified or approved by the Board. The
Committee shall have full and final authority in its discretion, subject to the
provisions of the Plan, to make determinations with respect to the participation
of Participants in this Plan, to prescribe the form of Award Agreements
embodying Awards made under the Plan, and, except as otherwise required by law
or this Plan, to set the size and terms of Awards (which need not be identical
or consistent with respect to each Participant) including vesting schedules,
price, whether stock options granted hereunder shall constitute an Incentive
Stock Option, restriction or option period, post-retirement and termination
rights, payment alternatives such as cash, stock or other means of payment
consistent with the purposes of this Plan, and such other terms and conditions
as the Committee deems appropriate. Except as otherwise required by this Plan,
the Committee shall have authority to interpret and construe the provisions of
this Plan and the Award Agreements, to correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any Award Agreement in the
manner the Committee deems advisable for the administration of the Plan and make
determinations pursuant to any Plan provision or Award Agreement, which shall be
final and binding on all persons. The Committee may authorize any one or more of
their number or any officer of the Company to execute and deliver documents on
behalf of the Committee.
4. COMMON STOCK SUBJECT TO PROVISIONS OF THIS PLAN. Upon approval
of this Plan by the directors and shareholders of the Company, the total number
of shares to be subject to options under this Plan shall be Five Million
(5,000,000) of the authorized and unissued common shares of the Company.
Thereafter, an amount of additional shares to be subject to options shall
automatically be available for award under this Plan, such that at no time shall
the total number of shares subject to options under this Plan be less than five
percent (5%) of the then issued and outstanding common shares of the Company. In
all events, the total number of shares shall be subject to appropriate increase
or decrease in the event of a stock dividend, split or reclassification of
shares subject to this Plan.
5. ELIGIBILITY. Except as hereinafter provided, Awards may be
granted to any Participant as the Committee shall determine from time to time.
In determining the Participants to whom Awards shall be granted and the number
of shares to be covered by each such Award, the Committee may take into account
the nature of the services rendered by the respective Participants, their
present and potential contributions to the Company's success and such other
factors as the Committee in its sole discretion shall deem relevant. A
Participant who has been granted an Award under the Plan may be granted an
additional Award or Awards under the Plan, in the Committee's sole discretion.
6. AWARDS UNDER THIS PLAN. The Committee, in its sole discretion,
may make Awards of stock options (including Incentive Stock Options and stock
options that do not qualify as Incentive Stock Options) as described in Sections
7 and 8 hereof, and of Restrictive Stock, as described in Section 10 hereof.
7. OPTIONS AUTHORIZED. The options subject to Award under this
Plan may be Incentive Stock Options or stock options that do not qualify as
Incentive Stock Options (sometimes referred to herein as "nonqualified options"
or "nonqualified stock options"). The Committee shall have the full power and
authority to (i) determine which options shall be nonqualified stock options and
which shall be Incentive Stock Options, (ii) grant only Incentive Stock Options
or, alternatively, only nonqualified stock options, and (iii) in its sole
discretion, grant to the holder of an outstanding option, in exchange for the
surrender and cancellation of such option, a new option having a purchase price
lower than that provided in the option so surrendered and canceled and/or
containing such other terms and conditions as the Committee may prescribe in
accordance with the provisions of the Plan. Under no circumstances may
nonqualified stock options be granted where the exercise of such nonqualified
stock options may affect the exercise of Incentive Stock Options granted
pursuant to the Plan. In addition to any other limitations set forth herein, (1)
no Participant shall receive any grant of options, whether Incentive Stock
Options or nonqualified stock options, exercisable for more than three hundred
fifty thousand (350,000) shares of Common Stock during any
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one fiscal year of the Company and (2) the aggregate fair market value
(determined in accordance with Paragraph 8(a) of the Plan as of the time the
option is granted) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a Participant in any calendar year
(under all plans of the Company and of any Parent or Subsidiary) shall not
exceed one hundred thousand dollars ($100,000.00).
8. TERMS AND CONDITIONS OF OPTIONS. The grant of an option under
the Plan shall be evidenced by an Award Agreement executed by the Company and
the applicable Participant and shall contain such terms and be in such form as
the Committee may from time to time approve, subject to the following
limitations and conditions:
(A) OPTION PRICE. The option exercise price per share with
respect to each option shall be determined by the Committee, but shall in no
instance be less than the par value of the shares subject to the option. In
addition, the option exercise price per share with respect to Incentive Stock
Options granted hereunder shall in no instance be less than the fair market
value of the shares subject to the option as determined by the Committee. For
the purposes of this Paragraph 8(a), fair market value shall be, where
applicable, the closing price of the Common Stock on the Date of Grant of such
option as reported on any national securities exchange on which the Common Stock
may be listed. If the Common Stock is not listed on a national securities
exchange but is publicly traded on the Nasdaq Stock Market's National Market or
on another automated quotation system, the fair market value shall be the
closing price of the Common Stock on the Date of Grant, or if traded on the
Nasdaq Small Cap or Nasdaq Over-The-Counter market, the fair market value shall
be the mean between the closing bid and ask prices on any such system or market.
If the Common Stock was not traded on the Date of Grant of such option, the
nearest preceding date on which there was a trade shall be substituted.
Notwithstanding the foregoing, however, fair market value shall be determined
consistent with Code Section 422(b)(4) or any successor provisions. The
Committee may permit the option exercise price to be payable by transfer to the
Company of Common Stock owned by the option holder with a fair market value at
the time of the exercise equal to the option exercise price.
(B) PERIOD OF OPTION. The expiration date of each option
shall be fixed by the Committee, but notwithstanding any provision of the Plan
to the contrary, such expiration date shall not be more than ten (10) years from
the Date of Grant of the option.
(C) VESTING OF STOCKHOLDER RIGHTS. Neither the optionee nor
his successor in interest shall have any of the rights of a stockholder of the
Company until the shares relating to the option hereunder are issued by the
Company and are properly delivered to such optionee, or successor.
(D) EXERCISE OF OPTION. Each option shall be exercisable
from time to time (but not less than six (6) months after the Date of Grant)
over such period and upon such terms and conditions as the Committee shall
determine, but not at any time as to less than one hundred (100) shares unless
the remaining shares that have become so purchasable are less than twenty five
(25) shares. After the death of the optionee, an option may be exercised as
provided in Section 9(c) hereof.
(E) DISQUALIFYING DISPOSITION. The Award Agreement
evidencing any Incentive Stock Options granted under this Plan shall provide
that if the optionee makes a disposition, within the meaning of Section 424(c)
of the Code and regulations promulgated thereunder, of any share or shares of
Common Stock issued to him pursuant to exercise of the option within the
two-year period commencing on the day after the Date of Grant of such option or
within the one-year period commencing on the day after the date of issuance of
the share or shares to him pursuant to the exercise of such option, he shall,
within ten (10) days of such disposition date, notify the Company of the sales
price or other value ascribed to or used to measure the disposition of the share
or shares thereof and immediately deliver to the Company any amount of federal
income tax withholding required by law.
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(F) LIMITATION ON GRANTS TO CERTAIN STOCKHOLDERS. An
Incentive Stock Option may be granted to a Participant only if such Participant,
at the time the option is granted, does not own, after application of the
attribution rules of Code Section 424, stock possessing more than ten percent
(10%) of the total combined voting power of all classes of Common Stock of the
Company or of its Parent or Subsidiary. The preceding restrictions shall not
apply if at the time the option is granted the option price is at least one
hundred ten percent (110%) of the fair market value (as defined in Section 8(a)
above) of the Common Stock subject to the option and such option by its terms is
not exercisable after the expiration of five (5) years from the Date of Grant.
(G) RESTRICTION ON ISSUING SHARES. The exercise of each
option shall be subject to the condition that if at any time the Company shall
determine in its discretion that the satisfaction of withholding tax or other
withholding liabilities, or that the listing, registration, or qualification of
any shares otherwise deliverable upon such exercise upon any securities exchange
or under any state or federal law, or that the consent or approval of any
regulatory body, is necessary or desirable as a condition of, or in connection
with, such exercise or the delivery or purchase of shares pursuant thereto, then
in any such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.
(H) CONSISTENCY WITH CODE. Notwithstanding any other
provision in this Plan to the contrary, the provisions of all Award Agreements
relating to Incentive Stock Options pursuant to the Plan shall not violate the
requirements of the Code applicable to the Incentive Stock Options authorized
hereunder.
9. EXERCISE OF OPTION.
(a) 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 Committee and set forth in the Award Agreement. An option
shall be deemed exercised when (i) the Company has received written notice of
such exercise in accordance with the terms of the Award Agreement, (ii) full
payment of the aggregate option exercise price of the shares as to which the
option is exercised has been made and (iii) arrangements that are satisfactory
to the Committee in its sole discretion have been made for the Participant's
payment to the Company of the amount, if any, that the Committee determines to
be necessary for the Company to withhold in accordance with applicable federal
or state income tax withholding requirements.
(b) Upon Retirement or other termination of the
Participant's Continuous Status as an Employee, other than (a) a termination
that is either (i) for Cause or (ii) voluntary on the part of a Participant and
without the written consent of the Company, a Parent, or any Subsidiary (b) a
termination by reason of death, the Participant may (unless otherwise provided
in his Award Agreement) exercise his option at any time within three (3) months
after such termination of the Participant's Continuous Status as an Employee (or
within one (1) year after termination of the Participant's Continuous Status as
an Employee due to permanent and total disability within the meaning of Code
Section 22(e)(3)), or within such other time as the Committee shall authorize,
but in no event may the Participant exercise his Option after ten (10) years
from the Date of Grant thereof (or such lesser period as may be specified in the
Award Agreement), and only to the extent of the number of shares for which his
options were exercisable by him at the date of the termination of the
Participant's Continuous Status as an Employee. In the event of the termination
of the Continuous Status as an Employee of a Participant to whom an option has
been granted under the Plan that is either (i) for Cause or (ii) voluntary on
the part of the Participant and without written consent, any option held by him
under the Plan, to the extent not previously exercised, shall forthwith
terminate on the date of such termination of the Participant's Continuous Status
as an Employee. Options granted under the Plan shall not be affected by any
change of employment so long as the holder continues to be an employee of the
Company, a Subsidiary or a Parent. The Award Agreement may contain such
provisions as the Committee shall approve with respect to the effect of approved
leaves of absence.
(c) In the event a Participant to whom an option has been
granted under the Plan dies during, or within three (3) months after the
Retirement or other termination of, the Participant's Continuous Status as an
Employee, such option (unless it shall have been previously terminated pursuant
to the provisions of the Plan or unless otherwise provided in his Award
Agreement) may be exercised (to the extent of the entire number of shares
covered by the option whether or not purchasable by the Participant at the date
of his death) by the executor or
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administrator of the optionee's estate or by the person or persons to whom the
optionee shall have transferred such option by will or by the laws of descent
and distribution, at any time within a period of one (1) year after his death,
but not after the exercise termination date set forth in the relevant Award
Agreement.
(d) If as of the date of termination of the Participant's
Continuous Status as an Employee (other than as a result of the Participant's
death) the Participant is not entitled to exercise his or her entire options,
the shares of Common Stock covered by the unexercisable portion of the option
shall revert to the Plan. If the Participant (or his or her designee or estate
as provided in Section 9(c) above) does not exercise his or her options within
the time specified in the Plan and the Award Agreement, the unexercised options
shall terminate and the shares of Common Stock covered by such options shall
revert to the Plan.
10. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
(A) GENERAL. The Committee, in its sole discretion, may
make Awards of Restricted Stock to selected Participants, which Awards shall be
evidenced by an Award Agreement that contains such terms and conditions,
including vesting, as the Committee may determine. As a condition to any Award
of Restricted Stock hereunder, the Committee may require a Participant to pay to
the Company the amount (such as the par value of such shares) required to be
received by the Company in order to assure compliance with applicable state law.
Any Award of Restricted Stock for which such requirement is established shall
automatically expire if not purchased in accordance with the Committee's
requirements within sixty (60) days after the Date of Grant.
Subject to the terms and conditions of the respective Award Agreement,
the Participant, as the owner of the Common Stock issued as Restricted Stock and
any Retained Distributions with respect thereto, shall have the rights of a
stockholder, including, but not limited to, voting rights as to such Common
Stock and the right to receive cash dividends or distributions thereon when, as
and if paid.
Within the limits set forth in the Plan, an Award of Restricted Stock
may be subject to such vesting requirements as may be fixed by the Committee.
Vesting may be accelerated by a Change of Control. Vesting may also be
accelerated upon death, permanent disability or Retirement.
Unless otherwise provided in the Award Agreement, in the event that an
Award of Restricted Stock is made to a Participant whose employment or service
is subsequently terminated by reason of death, permanent disability or
Retirement or for such other reason as the Committee may provide, such
Participant (or his estate or beneficiary) will be entitled to receive such
additional portion of his Restricted Stock and any Retained Distributions with
respect thereto that the Participant would have received had the Participant
remained in the employment of the Company, Parent, or Subsidiary, as applicable,
through the date on which the next portion of the shares of non-vested
Restricted Stock subject to the Award of Restricted Shares would have vested.
Unless otherwise provided in the Award Agreement, in the event an Award
of Restricted Stock is made to a Participant whose employment with the Company,
Parent, or Subsidiary, as applicable, is subsequently terminated by the
Participant for Good Reason or by the company, Parent or Subsidiary as
applicable, other than for Cause, then in any such event, the Participant will
be entitled to receive such additional portion of his or her shares of
Restricted Stock and any Retained Distributions with respect thereto that the
Participant would have received had the Participant remained in the employment
of the Company, Parent, or Subsidiary, as applicable, through the date on which
the next portion of the shares of unvested Restricted Stock subject to the Award
of Restricted Stock would have vested.
Unless otherwise provided in the Award Agreement, in the event that an
Award of Restricted Stock is made to a Participant who subsequently voluntarily
resigns or whose employment is terminated for Cause, then all such Restricted
Stock and any Retained Distributions with respect thereto as to which the
Restricted Period still applies shall be forfeited by such Participant and shall
again become available for grant under the Plan.
(B) TRANSFERABILITY. Restricted Stock and any Retained
Distributions with respect thereto may not be sold, assigned, transferred,
pledged, or otherwise encumbered during the Restricted Period, which shall be
determined by the Committee and shall not be less than one year nor more than
two years from the date such
11
Restricted Stock was awarded. The Committee may, at any time, reduce the
Restricted Period with respect to any outstanding shares of Restricted Stock and
any Retained Distributions with respect thereto awarded under the Plan.
Shares of Restricted Stock, when issued, will be represented by a stock
certificate or certificates registered in the name of the Participant to whom
such Restricted Stock shall have been granted and shall bear a restrictive
legend to the effect that ownership of such Restricted Stock (and any related
Retained Distributions) and the enjoyment of all rights appurtenant thereto are
subject to the restrictions, terms and conditions provided in the Plan and the
applicable Award Agreement. Each certificate shall be deposited by the
Participant with the Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to the Company of
all or any portion of the Restricted Stock and any securities constituting
Retained Distributions that shall be forfeited or that shall not become vested
in accordance with the respective Award Agreement. The certificate or
certificates issued for the Restricted Stock may bear such legend or legends as
the Committee may, from time to time, deem appropriate to reflect the
restrictions under the Plan for such Restricted Stock.
(C) STOCK CERTIFICATES; ADDITIONAL RESTRICTIONS. Shares of
Restricted Stock shall constitute issued and outstanding shares of Common Stock
for all corporate purposes. Each Participant will have the right to vote the
Restricted Stock held by such Participant, to receive and retain all cash
dividends and distributions thereon and exercise all other rights, powers and
privileges of a holder of Common Stock with respect to such Restricted Stock,
with the exception that:
(i) the Participant will not be entitled to
delivery of the stock certificate or certificates representing such
Restricted Stock until the Restricted Period applicable to such shares
or portion thereof shall have expired and unless all other vesting
requirements with respect thereto shall have been fulfilled;
(ii) other than cash dividends and distributions
and rights to purchase stock which might be distributed to stockholders
of the Company, the Company will retain custody of all Retained
Distributions made, paid, declared or otherwise received by the holder
thereof with respect to Restricted Stock (and such Retained
Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock with respect to
which they were made, paid or declared) until such time, if ever, as
the Restricted Period applicable to the shares with respect to which
such Retained Distributions shall have been made, paid, declared or
received shall have expired, and such Retained Distributions shall not
bear interest or be segregated in separate accounts; and
(iii) upon the breach of any restrictions, terms or
conditions provided in the Plan or the respective Award Agreement or
otherwise established by the Committee with respect to any Restricted
Stock or Retained Distributions, such Restricted Stock and any related
Retained Distributions shall thereupon be automatically forfeited.
(D) MERGERS AND OTHER CORPORATE CHANGES. Unless otherwise
provided in the Award Agreement, upon the occurrence of a Change of Control, all
restrictions imposed on the Participant's Restricted Stock and any Retained
Distributions shall automatically terminate and lapse and the Restricted Period
shall automatically terminate; provided, however, that if the Change of Control
occurs within six months of the Date of Grant the restrictions and Restricted
Period shall terminate on the six month anniversary of the Date of Grant.
11. ADJUSTMENTS. The Committee, in its discretion, may make such
adjustments in the option price, the number or kind of shares and other
appropriate provisions covered by outstanding Awards that are required to
prevent any dilution or enlargement of the rights of the holders of such options
that would otherwise result from any reorganization, recapitalization, stock
split, stock dividend, combination of shares, merger, consolidation, issuance of
rights or any other change in the capital structure of the Company. The
Committee, in its discretion, may also make such adjustments in the aggregate
number and class of shares that may be the subject of Awards which are
appropriate to reflect any transaction or event described in the preceding
sentence.
12. AMENDMENT, SUSPENSION AND TERMINATION OF THE PLAN. The Board
may at any time suspend or terminate the Plan or may amend it from time to time
in such respects as the Board may deem advisable in order that
12
the Awards granted thereunder may conform to any changes in the law or in any
other respect that the Board may deem to be in the best interests of the
Company; provided, however, that without approval by the stockholders of the
Company voting the proper percentage of its voting power, no such amendment
shall make any change in the Plan for which stockholder approval is required in
order to comply with (i) Rule 16b-3, as amended, promulgated under the Exchange
Act, (ii) the Code or regulatory provisions dealing with Incentive Stock
Options, (iii) any rules for listed companies promulgated by any national stock
exchange on which the Company's Common Stock is traded or (iv) any other
applicable rule or law. Unless sooner terminated hereunder, the Plan shall
terminate ten (10) years after the Effective Date. No amendment, suspension, or
termination of the Plan shall, without a Participant's consent, impair or negate
any of the rights or obligations under any Award theretofore granted to such
Participant under the Plan.
13. TAX WITHHOLDING. The Company shall have the right to withhold
from any payments made under this Plan, or to collect as a condition of payment,
any taxes required by law to be withheld. At any time when a Participant is
required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with a distribution of shares of Common
Stock pursuant to this Plan, the Participant may satisfy this obligation in
whole or in part by electing to have the Company withhold from such distribution
shares of Common Stock having a value equal to the amount required to be
withheld. The value of the shares of Common Stock to be withheld shall be based
on the fair market value, as determined pursuant to Section 8(a) hereof, of the
Common Stock on the date that the amount of tax to be withheld shall be
determined (the "Tax Date"). Any such election is subject to the following
restrictions: (i) the election must be made on or prior to the Tax Date; (ii)
the election must be irrevocable; and (iii) the election must be subject to the
disapproval of the Committee. To the extent required to comply with rules
promulgated under Section 16 of the Exchange Act, elections by Participants who
are subject to Section 16 of the Exchange Act are subject to the following
additional restrictions: (i) no election shall be effective for a Tax Date which
occurs within six (6) months of the grant of the Award; and (ii) the election
must be made either (a) six (6) months or more prior to the Tax Date or (b)
during the period beginning on the third business day following the date of
release for publication for the Company's quarterly or annual summary statements
of sales and earnings and ending on the twelfth business day following such
date.
14. EFFECTIVE DATE OF THE PLAN. This Plan shall become effective on
the date (the "Effective Date") of the last to occur of (i) the adoption of the
Plan by the Board and (ii) the approval, within twelve (12) months of such
adoption, by a majority (or such other proportion as may be required by state
law) of the outstanding voting shares of the Company, voted either in person or
by proxy, at a duly held stockholders meeting or by written stockholder consent
but in any event not before the effectiveness of the Company's Form 10
Registration Statement filed under the Exchange Act.
15. SPECIAL PROVISIONS REGARDING CHANGE OF CONTROL. The Board or
the Committee may, from time to time, make special provisions for one or more
Participants respecting a possible Change of Control of the Company, a
Subsidiary, or Parent, and, to the extent that any such special provisions made
with the consent of the affected employee may have the effect of accelerating
vesting of stock options granted under the Plan or removal of restrictions on
Restricted Stock allotted under the Plan or the effect of preventing a
termination or dilution of benefits, such special provisions shall be
controlling over and shall be deemed to be an amendment of any inconsistent
terms of the applicable Award Agreement.
16. MISCELLANEOUS PROVISIONS.
(a) If approved by the Board, the Company or any Parent or
Subsidiary may lend money or guarantee loans by third parties to an individual
to finance the exercise of any option granted under the Plan to continue to hold
Common Stock thereby acquired. No such loans to finance the exercise of an
Incentive Stock Option shall have an interest rate or other terms that would
cause any part of the principal amount to be characterized as interest for
purposes of the Code.
(b) This Plan is intended and has been drafted to comply in
all respects with Rule 16b-3, as amended, under the Exchange Act ("Rule 16b-3").
If any provision of this Plan does not comply with Rule 16b-3, this Plan shall
be automatically amended to comply with Rule 16b-3.
13
(c) No person shall have any claim or right to be granted
an Award, and the grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company, a Parent, or
a Subsidiary. Nothing in this Plan shall interfere with or limit in any way the
right of the Company, a Parent, any Subsidiary to terminate any Participant's
employment at any time, nor confer upon any Participant any right to continue in
the employ of the Company, a Parent, or any Subsidiary.
(d) To the extent that federal laws do not otherwise
control, this Plan shall be construed in accordance with and governed by the
laws of the State of Nevada or the property laws of any particular state.
(e) In case any one or more of the provisions of this Plan
shall be held invalid, illegal or unenforceable in any respect under applicable
law and regulation (including Rule 16b-3), the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provisions shall be
deemed null and void; however, to the extent permissible by law, any provision
which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this Plan to be construed in compliance with all
applicable laws (including Rule 16b-3) so as to foster the intent of this Plan.
Notwithstanding anything in this Plan to the contrary, the Committee, in its
sole and absolute discretion, may bifurcate this Plan so as to restrict, limit
or condition the use of any provision of this Plan to Participants who are
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning this Plan with respect to other Participants.
(f) None of a Participant's rights or interests under the
Plan may be assigned or transferred in whole or in part, either directly or by
operation of law or otherwise (except pursuant to a qualified domestic relations
order or, in the event of a Participant's death, by will or the laws of descent
and distribution), including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner, and no such
right or interest of any Participant in the Plan shall be subject to any
obligation or liability of such individual.
(g) No Restricted Stock or any Retained Distributions shall
be issued hereunder unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, or other
securities laws.
(h) The expenses of the Plan shall be borne by the Company.
(i) By accepting any Award under the Plan, each Participant
or beneficiary claiming under or through him shall be conclusively deemed to
have indicated his acceptance ratification of, and consent to, any action taken
under the Plan by the Company, the Committee or the Board.
(j) Awards granted under the Plan shall be binding upon the
Company, its successors and assigns.
(k) The appropriate officers of the Company shall cause to
be filed any reports, returns, or other information regarding Awards hereunder
or any Common Stock issued pursuant hereto as may be required by Section 13 or
15(d) of the Exchange Act, or any other applicable statute, rule or regulation.
(1) Nothing contained in this Plan shall prevent the Board
of Directors from adopting other or additional compensation arrangements,
subject to stockholder approval if such approval is required.
14
LOEFFLER, JONAS & TUGGEY, LLP
ATTORNEYS AT LAW
San Antonio
755 East Mulberry Avenue, Suite 200 Washington, D.C.
Austin
San Antonio, Texas 78212 San Antonio
Washington, D.C.
TELEPHONE 210.354.4300 Austin
FACSIMILE 210.354.4034
EXHIBIT 5.1
February 7, 2002
Billserv, Inc.
211 North Loop 1604 East, Suite 100
San Antonio, Texas 78232
RE: 1999 Employee Comprehensive Stock Plan (the "Plan")
Form S-8 Registration Statement No. (the "Registration Statement")
Ladies and Gentlemen:
We have been advised that on or about February 8, 2002, Billserv, Inc.,
a Nevada corporation (the "Company"), expects to file under the Securities Act
of 1933, as amended (the "Act") with the Securities and Exchange Commission (the
"Commission"), a Registration Statement on Form S-8 (the "Registration
Statement"). Such Registration Statement relates to the Offering ("Offering"),
from time to time of 5,000,000 shares of common stock, par value $.001 each, of
the Company, which may be issued pursuant to the Plan. Such Offering represents
an increase of 3,000,000 shares from the amount originally included in the Plan.
This firm has acted as counsel to you in connection with the preparation and
filing of the Registration Statement and you have requested our opinion with
respect to certain legal aspects of the Offering of the Offered Securities.
In rendering our opinion, we have participated in the preparation of
the Registration Statement and have examined and relied upon the original or
copies, certified to our satisfaction, of such documents and instruments of the
Company as we have deemed necessary and have made such other investigations as
we have deemed appropriate in order to express the opinions set forth herein. In
our examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals, and the conformity
to original documents of all documents submitted to us as certified or
reproduction copies. In addition, we have assumed and have not verified the
accuracy of factual matters of each document we have reviewed.
As to certain questions of fact material to this opinion, we have
relied, to the extent we deem reasonably appropriate, upon the representations
or certificates of officers or directors of the Company.
Based upon the following examination and subject to the comment and
assumptions as noted below, we are of the opinion that shares of common stock,
par value $.001 each, of the Company which may be issued pursuant to the Plan
will be, when so issued or transferred and delivered in accordance with the
Plan, duly authorized, validly issued, fully paid and non-assessable.
15
Billserv, Inc.
February 7, 2002
Page Two
Insofar as the foregoing opinions relate to the legality, validity,
binding effect or enforceability of any agreement or obligations of the company,
(i) we have assumed that each party to such agreement or obligation has
satisfied those legal requirements that are applicable to it to the extent
necessary to make such agreement or obligation enforceable against it; (ii) such
opinions are subject to applicable bankruptcy, insolvency, reorganization,
liquidation, receivership, fraudulent conveyance or similar laws, now or
hereafter in effect, relating to creditors' rights generally, and (iii) such
opinions are subject to the general principals of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding at law or in equity).
This opinion is limited in all respect to the laws of the State of
Nevada. We do not purport to be admitted to practice in the State of Nevada, and
for the purposes of rendering the opinions set in this letter we have assumed
that the applicable laws of the State of Nevada are the same as the laws of the
State of Texas.
We bring to your attention the fact that this legal opinion is an
expression of professional judgment and not a guaranty of results. This opinion
is given as of the date hereof, and we assume no obligation to update or
supplement such opinion to reflect any facts or circumstances that may hereafter
come to our attention or any changes in laws or judicial decisions that may
hereafter occur.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we have
come within the category of persons whose consent is required by the Section 7
of the Act or the rules and regulations of the Commission thereunder.
Respectfully submitted,
/s/ Loeffler, Jonas & Tuggey, llp
---------------------------------
LOEFFLER, JONAS & TUGGEY, LLP
16
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. ____________) pertaining to the 1999 Employee Comprehensive Stock
Plan of Billserv, Inc. of our report dated February 5, 2001, except Note 16, as
to which the date is March 21, 2001, with respect to the consolidated financial
statements of Billserv, Inc. included in the Annual Report (Form 10-K) for the
year ended December 31, 2000, filed with the Securities and Exchange Commission
on March 30, 2001.
/s/ Ernst & Young LLP
Ernst & Young LLP
San Antonio, Texas
February 8, 2002
17
EXHIBIT 24
BILLSERV, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That each person whose signature
appears below has made, constituted and appointed, and by this instrument does
make, constitute and appoint Marshall N. Millard, Timothy N. Tuggey or Robert M.
Barnett, his or her true and lawful attorney, with full power of substitution
and resubstitution, to affix for him or her and in his or her name, place and
stead, as attorney-in-fact, his or her signature as director (including as a
member of any committee of the board of directors) or officer, or both, of
Billserv, Inc., a Nevada corporation (the "Company"), to a Form S-8 Registration
Statement ("Registration Statement") and any other form that may be used from
time to time, with respect to the issuance and sale of its Common Stock and
other securities pursuant to Billserv, Inc.'s 1999 Employee Comprehensive Stock
Option Plan (the "Plan") and to any and all amendments, post-effective
amendments and exhibits to such Registration Statement, and to any and all
applications and other documents pertaining thereto, giving and granting to each
such attorney-in-fact full power and authority to do and perform every act and
thing whatsoever necessary to be done in the premises, as fully as they might or
could do if personally present, and hereby ratifying and confirming all that
each of such attorney-in-fact or any such substitute shall lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed this 7th day
of February, 2002.
/s/ Michael R. Long
-----------------------------
Michael R. Long
/s/ Louis A. Hoch
-----------------------------
Louis A. Hoch
/s/ Terri A. Hunter
-----------------------------
Terri A. Reynolds
/s/ Marshall N. Millard
-----------------------------
Marshall N. Millard
/s/ E. Scott Crist
-----------------------------
E. Scott Crist
/s/ Roger R. Hemminghaus
-----------------------------
Roger R. Hemminghaus
/s/ Peter G. Kirby
-----------------------------
Peter G. Kirby, Ph.D.
18