-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TgU5iDKYyojPKeNEFMFYNMKvSPNztb1tw53Uzoq8tNuFj1i3TARzowJodt/QDTVo +0xTnVOvddCIFD1Tlz2rtQ== 0001005150-97-000474.txt : 19970630 0001005150-97-000474.hdr.sgml : 19970630 ACCESSION NUMBER: 0001005150-97-000474 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970627 EFFECTIVENESS DATE: 19970627 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORENSIC TECHNOLOGIES INTERNATIONAL CORP CENTRAL INDEX KEY: 0000887936 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] IRS NUMBER: 521261113 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-30173 FILM NUMBER: 97631374 BUSINESS ADDRESS: STREET 1: 2021 RESEARCH DR CITY: ANNAPOLIS STATE: MD ZIP: 21401 BUSINESS PHONE: 4102248770 S-8 1 FORM S-8 As Filed with the Securities and Exchange Commission on June 26, 1997 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933 FORENSIC TECHNOLOGIES INTERNATIONAL CORPORATION (Exact name of issuer as specified in its charter) Maryland 52-1261113 (State of Incorporation) (IRS Employer Identification Number) 2021 Research Drive, Annapolis, Maryland 21401 (Address of Principal Executive Offices) (410) 224-8770 (Registrant's telephone number, including area code) FORENSIC TECHNOLOGIES INTERNATIONAL CORPORATION Employee Stock Purchase Plan (Full title of the Plan) ---------------------------- Jack B. Dunn, IV Chief Executive Officer and President Forensic Technologies International Corporation 2021 Research Drive Annapolis, Maryland 21401 (410) 224-8770 (Name, address and telephone number of agent for service) ---------------------------- Copy to: John B. Watkins, Esquire Wilmer, Cutler & Pickering 100 Light Street Baltimore, Maryland 21202 (410) 986-2800 ----------------------------
CALCULATION OF REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------- Proposed Proposed Title of Maximum Maximum Securities Amount Offering Aggregate Amount of to be to be Price Offering Registration Registered Registered(1) Per Share Price Fee (2) - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Options 400,000 shares ___ ___ ___ - ---------------------------------------------------------------------------------------------------------------- Common Stock, 400,000 shares $ 7.25 $ 2,900,000 $ 878.78 par value $.01 per share, - ----------------------------------------------------------------------------------------------------------------
-1- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Also registered hereunder are such additional number of shares of Common Stock, presently indeterminable, as may be necessary to satisfy the antidilution provisions of the Plan to which this Registration Statement relates. (2) The registration fee has been calculated in accordance with Rule 457(h) with respect to the 400,000 shares of Common Stock registered hereby on the basis of the average of the high and low sale prices reported on The Nasdaq National Market ("Nasdaq") on June 24, 1997. -2- PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Note: The document(s) containing the information required by Item 1 of Form S-8 and the statement of availability of registrant information and any other information required by Item 2 of Form S-8 will be sent or given to participants as specified by Rule 428 under the Securities Act of 1933, as amended (the "Securities Act"). In accordance with Rule 428 and the requirements of Part I of Form S-8, such documents are not being filed with the Securities and Exchange Commission (the "Commission") either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act. Forensic Technologies International Corporation (the "Registrant" or the "Company") shall maintain a file of such documents in accordance with the provisions of Rule 428. Upon request, the Registrant shall furnish the Commission or its staff a copy or copies of all of the documents included in such file. -3- PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference The Company hereby incorporates by reference the documents listed in (a) through (c) below. In addition, all documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (prior to filing of a Post-Effective Amendment which indicates that all securities offered have been sold or which deregisters all 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. (a) The Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1996. (b) All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act, including the Company's quarterly financial statements on Form 10-Q for the quarter ended March 31, 1997 filed on May 15, 1997 pursuant Section 13(a) of the Exchange Act (c) The description of the Company's Common Stock which is incorporated by reference in the Registration Statement on Form 8-A filed by the Company under the Exchange Act on April 30, 1996, including any amendment or report filed for the purpose of updating such description. Item 4. Description of Securities Inapplicable. Item 5. Interests of Named Experts and Counsel The validity of the authorization and issuance of the Common Stock offered hereby will be passed upon for the Company by Wilmer, Cutler & Pickering, Baltimore, Maryland. George P. Stamas, a member of the Board of Directors and a stockholder of the Company, is a partner in Wilmer, Cutler & Pickering. As of June 1, 1997, Mr. Stamas was the beneficial owner of 5,838 shares of Common Stock and stock options to purchase 9,800 shares of Common Stock of the Company. -4- Item 6. Indemnification of Directors and Officers 1. Statutory Provisions of the Maryland General Corporation Law. Section 2-418. Indemnification of directors, officers, employees and agents. (a) Definitions. - In this section the following words have the meanings indicated. (1) "Director" means any person who is or was a director of a corporation and any person who, while a director of a corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan. (2) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger, consolidation, or other transaction in which the predecessor's existence ceased upon consummation of the transaction. (3) "Expenses" include attorney's fees. (4) "Official capacity" means the following: (i) When used with respect to a director, the office of director in the corporation; and (ii) When used with respect to a person other than a director as contemplated in subsection (j), the elective or appointive office in the corporation held by the officer, or the employment or agency relationship undertaken by the employee or agent in behalf of the corporation. (iii) "Official capacity" does not include service of any other foreign or domestic corporation or any partnership, joint venture, trust, other enterprise, or employee benefit plan. (5) "Party" includes a person who was, is, or is threatened to be made a named defendant or respondent in a proceeding. (6) "Proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative. -5- (b) Permitted indemnification of director. - (1) A corporation may indemnify any director made a party to any proceeding by reason of service in that capacity unless it is established that: (i) The act or omission of the director was material to the matter giving rise to the proceeding; and 1. Was committed in bad faith; or 2. Was the result of active and deliberate dishonesty; or (ii) The director actually received an improper personal benefit in money, property, or services; or (iii) In the case of any criminal proceeding, the director had reasonable cause to believe that the act or omission was unlawful. (2)(i) Indemnification may be against judgments, penalties, fines, settlements, and reasonable expenses actually incurred by the director in connection with the proceeding. (ii) However, if the proceeding was one by or in the right of the corporation, indemnification may not be made in respect of any proceeding in which the director shall have been adjudged to be liable to the corporation. (3)(i) The termination of any proceeding by judgment, order, or settlement does not create a presumption that the director did not meet the requisite standard of conduct set forth in this subsection. (ii) The termination of any proceeding by conviction, or a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates a rebuttable presumption that the director did not meet that standard of conduct. (c) No indemnification of director liable for improper personal benefit. - A director may not be indemnified under subsection (b) of this section in respect of any proceeding charging improper personal benefit to the director, whether or not involving action in the director's official capacity, in which the director was adjudged to be liable on the basis that personal benefit was improperly received. -6- (d) Required indemnification against expenses incurred in successful defense. - Unless limited by the charter: (1) A director who has been successful, on the merits or otherwise, in the defense of any proceeding referred to in subsection (b) of this section shall be indemnified against reasonable expenses incurred by the director in connection with the proceeding. (2) A court of appropriate jurisdiction, upon application of a director and such notice as the court shall require, may order indemnification in the following circumstances: (i) If it determines a director is entitled to reimbursement under paragraph (1) of this subsection, the court shall order indemnification, in which case the director shall be entitled to recover the expenses of securing such reimbursement; or (ii) If it determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director has met the standards of conduct set forth in subsection (b) of this section or has been adjudged liable under the circumstances described in subsection (c) of this section, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any proceeding by or in the right of the corporation or in which liability shall have been adjudged in the circumstances described in subsection (c) shall be limited to expenses. (3) A court of appropriate jurisdiction may be the same court in which the proceeding involving the director's liability took place. (e) Determination that indemnification is proper. - (1) Indemnification under subsection (b) of this section may not be made by the corporation unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in subsection (b) of this section. -7- (2) Such determination shall be made: (i) By the board of directors by a majority vote of a quorum consisting of directors not, at the time, parties to the proceeding, or, if such a quorum cannot be obtained, then by a majority vote of a committee of the board consisting solely of two or more directors not, at the time, parties to such proceeding and who were duly designated to act in the matter by a majority vote of the full board in which the designated directors who are parties may participate: (ii) By special legal counsel selected by the board of directors or a committee of the board by vote as set forth in subparagraph (i) of this paragraph, or, if the requisite quorum of the full board cannot be obtained therefor and the committee cannot be established, by a majority vote of the full board in which directors who are parties may participate; or (iii) By the stockholders. (3) Authorization of indemnification and determination as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible. However, if the determination that indemnification is permissible is made by special legal counsel, authorization of indemnification and determination as to reasonableness of expenses shall be made in the manner specified in subparagraph (ii) of paragraph (2) of this subsection for selection of such counsel. (4) Shares held by directors who are parties to the proceeding may not be voted on the subject matter under this subsection. (f) Payment of expenses in advance of final disposition of action. - (1) Reasonable expenses incurred by a director who is a party to a proceeding may be paid or reimbursed by the corporation in advance of the final disposition of the proceeding upon receipt by the corporation of: (i) A written affirmation by the director of the director's good faith belief that the standard of conduct necessary for indemnification by the corporation as authorized in this section has been met; and (ii) A written undertaking by or on behalf of the director to repay the amount if it shall ultimately be determined that the standard of conduct has not been met. -8- (2) The undertaking required by subparagraph (ii) of paragraph (1) of this subsection shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make the repayment. (3) Payments under this subsection shall be made as provided by the charter, bylaws, or contract or as specified in subsection (e) of this section. (g) Validity of indemnification provision. - The indemnification and advancement of expenses provided or authorized by this section may not be deemed exclusive of any other rights, by indemnification or otherwise, to which a director may be entitled under the charter, the bylaws, a resolution of stockholders or directors, an agreement or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office. (h) Reimbursement of director's expenses incurred while appearing as witness. - This section does not limit the corporation's power to pay or reimburse expenses incurred by a director in connection with an appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent in the proceeding. (i) Director's service to employee benefit plan. - For purposes of this section: (1) The corporation shall be deemed to have requested a director to serve an employee benefit plan where the performance of the director's duties to the corporation also imposes duties on, or otherwise involves services by, the director to the plan or participants or beneficiaries of the plan; (2) Excise taxes assessed on a director with respect to an employee benefit plan pursuant to applicable law shall be deemed fines; and (3) Action taken or omitted by the director with respect to an employee benefit plan in the performance of the director's duties for a purpose reasonably believed by the director to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation. -9- (j) Officer, employee or agent. - Unless limited by the charter: (1) An officer of the corporation shall be indemnified as and to the extent provided in subsection (d) of this section for a director and shall be entitled, to the same extent as a director, to seek indemnification pursuant to the provisions of subsection (d); (2) A corporation may indemnify and advance expenses to an officer, employee, or agent of the corporation to the same extent that it may indemnify directors under this section; and (3) A corporation, in addition, may indemnify and advance expenses to an officer, employee, or agent who is not a director to such further extent, consistent with law, as may be provided by its charter, bylaws, general or specific action of its board of directors, or contract. (k) Insurance or similar protection. - (1) A corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan against any liability asserted against and incurred by such person in any such capacity or arising out of such person's position, whether or not the corporation would have the power to indemnify against liability under the provisions of this section. (2) A corporation may provide similar protection, including a trust fund, letter of credit, or surety bond, not inconsistent with this section. (3) The insurance or similar protection may be provided by a subsidiary or an affiliate of the corporation. (l) Report of indemnification to stockholders. - Any indemnification of, or advance of expenses to, a director in accordance with this section, if arising out of a proceeding by or in the right of the corporation, shall be reported in writing to the stockholders with the notice of the next stockholders' meeting or prior to the meeting. -10- 2. Charter Provisions. The Company has provided for indemnification by the following provision of ARTICLE EIGHTH of its Charter. The Corporation shall indemnify (a) its directors and officers, whether serving the Corporation or at its request any other entity, to the full extent required or permitted by the General Laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures and to the full extent permitted by law, and (b) its other employees and agents to such extent as shall be authorized by the Board of Directors or in the Corporation's By-laws and be permitted by law. The foregoing shall not be exclusive of any other rights to which those seeking indemnification may be entitled. The Board of Directors may take such actions as are necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve, and amend from time to time such By-Laws, resolutions and contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of the charter of the Corporation shall limit or eliminate the right to indemnification provided hereunder with respect to acts or omissions occurring prior to such amendment or appeal. 3. By-laws Provisions. The Company has provided for indemnification by the following provisions of ARTICLE XI of its By-laws: SECTION 1. Definitions. As used in this Article XI, any word or words that are defined in Section 2-418 of the Corporations and Associations Article of the Annotated Code of Maryland (the "Indemnification Section"), as amended from time to time, shall have the same meaning as provided in the Indemnification Section. SECTION 2. Indemnification of Directors and Officers. The Corporation shall indemnify and advance expenses to a director or officer of the Corporation in connection with a proceeding to the fullest extent permitted by and in accordance with the Indemnification Section. SECTION 3. Indemnification of Other Agents and Employees. With respect to an employee or agent, other than a director or officer of the Corporation, the Corporation may, as determined by and in the discretion of the Board of Directors of the Corporation, indemnify and advance expenses to such employees or agents in connection with a proceeding to the extent permitted by and in accordance with the Indemnification Section. Item 7. Exemption from Registration Claimed -11- Not Applicable. Item 8. Exhibits Number Description 4.1* Amended and Restated Articles of Incorporation of the Registrant. 4.2* Restated By-Laws of the Registrant. 4.3 Employee Stock Purchase Plan 4.4* Specimen certificate representing the Common Stock of Registrant. 5.1 Opinion of Wilmer, Cutler & Pickering. 23.1 Consent of Independent Public Accountants. 23.2 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5.1). ------------ * Incorporated herein by reference from the Registrant's Registration Statement on Form SB-2 (File No. 333-2002). -12- Item 9. Undertakings The undersigned Registrant hereby undertakes the following: (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 1993; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. -13- (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of any 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 reflating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned registrant hereby undertakes, that, 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 of 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. -14- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Annapolis, Maryland on June 27, 1997. FORENSIC TECHNOLOGIES INTERNATIONAL CORPORATION /S/ Jack B. Dunn IV ------------------------------------- Jack B. Dunn, IV Chief Executive Officer and President KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Jack B. Dunn, IV his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or in his name, place and stead, in any and all capacities to sign any and all amendments or 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 said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite 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 said attorney-in-fact and agent or his substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date - --------- ----- ---- /S/ Jack B. Dunn, IV - -------------------------- Jack B. Dunn, IV Director, Chief Executive Officer June 27, 1997 and President (principal executive officer) /S/ Gary Sindler - -------------------------- Gary Sindler Executive Vice President and June 27, 1997 Chief Financial Officer, Secretary and Treasurer (principal financial and accounting officer) /S/ Daniel W Luczak - -------------------------- Daniel W. Luczak Chairman of the Board June 27, 1997 -15- /S/ Joseph R. Reynolds Jr. - -------------------------- Joseph R. Reynolds, Jr. Vice Chairman of the Board June 27, 1997 /S/ James A Flick - -------------------------- James A. Flick Director June 27, 1997 /S/Peter F. O'Malley - -------------------------- Peter F. O'Malley Director June 27, 1997 /S/ Dennis J. Shaughnessy - -------------------------- Dennis J. Shaughnessy Director June 27, 1997 /S/ George P. Stamas - -------------------------- George P. Stamas Director June 27, 1997
-16- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 EXHIBITS to FORM S-8 REGISTRATION STATEMENT under THE SECURITIES ACT OF 1933, AS AMENDED FORENSIC TECHNOLOGIES INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) -17- Exhibits Number Description 4.1* Amended and Restated Articles of Incorporation of the Registrant. 4.2* Restated By-Laws of the Registrant. 4.3 Employee Stock Purchase Plan 4.4* Specimen certificate representing the Common Stock of Registrant. 5.1 Opinion of Wilmer, Cutler & Pickering. 23.1 Consent of Independent Public Accountants. 23.2 Consent of Wilmer, Cutler & Pickering (included in Exhibit 5.1). ------------------ * Incorporated herein by reference from the Registrant's Registration Statement on Form SB-2 (File No. 333-2002). -18- EX-4.3 2 EXHIBIT 4.3 FORENSIC TECHNOLOGIES INTERNATIONAL CORPORATION EMPLOYEE STOCK PURCHASE PLAN PURPOSE The Forensic Technologies International Corporation Employee Stock Purchase Plan (the "ESPP" or the "Plan") provides employees of Forensic Technologies International Corporation (the "Company") and selected Company Subsidiaries with an opportunity to become owners of the Company through the purchase of shares of the Company's common stock (the "Common Stock"). The Company intends this Plan to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"), and its terms should be construed accordingly. ELIGIBILITY An Employee whom the Company or a Eligible Subsidiary has employed continuously for one year as of the first day of an Offering Period is eligible to participate in the ESPP for that Offering Period; provided, however, that an Employee may not make a purchase under the ESPP if such purchase would result in the Employee's owning Common Stock possessing 5% or more of the total combined voting power or value of the Company's outstanding stock. For purposes of determining an individual's amount of stock ownership, any options to acquire shares of Company Common Stock are counted as shares of stock, and the attribution rules of Section 424(d) of the Code apply. Employee means any person employed as a common law employee of the Company or an Eligible Subsidiary. Employee excludes anyone not treated initially on the payroll records as a common law employee. ADMINISTRATOR The Compensation Committee of the Board of Directors of the Company, or such other committee as the Board designates (the "Committee"), will administer the ESPP. The Committee is vested with full authority and discretion to make, administer, and interpret such rules and regulations as it deems necessary to administer the ESPP (including rules and regulations deemed necessary in order to comply with the requirements of Section 423 of the Code). Any determination or action of the Committee in connection with the administration or interpretation FTI Employee Stock Purchase Plan Page 1 of 11 of the ESPP shall be final and binding upon each Employee, Participant and all persons claiming under or through any Employee or Participant. OFFERING Offering Periods are successive six month periods beginning on PERIOD PERIOD January 1 and July 1, and the first such period will begin on July 1, 1997. PARTICIPATION An eligible Employee may become a "Participant" for an Offering Period by completing an authorization notice and delivering it to the Committee through the Company's Human Resources Department within a reasonable period of time before the first day of such Offering Period. The Committee will send to each new Employee who satisfies the rules in ELIGIBILITY above a notice advising the Employee of his right to participate in the ESPP for the following Offering Period. All Participants receiving options under the ESPP will have the same rights and privileges. METHOD A Participant may contribute to the ESPP through payroll OF PAYMENT deductions, as follows: The Participant must elect on an authorization notice to have deductions made from his Compensation for each payroll period during the Offering Period at a rate of at least 1% but not more than 15% of his Compensation. Compensation under the Plan means an Employee's regular compensation, including overtime, bonuses, and commissions, from the Company or an Eligible Subsidiary paid during an Offering Period. All payroll deductions will be credited to the Participant's account under the ESPP. No interest or earnings will accrue on any payroll deductions credited to such accounts. Payroll deductions will begin on the first payday coinciding with or following the first day of each Offering Period and will end with the last payday preceding or coinciding with the end of that Offering Period, unless the Participant sooner withdraws as authorized under WITHDRAWALS below. A Participant may not alter the rate of payroll deductions during the Offering Period. FTI Employee Stock Purchase Plan Page 2 of 11 The Company may use the consideration it receives for general corporate purposes. GRANTING OF On the first day of each Offering Period, a Participant will OPTIONS receive options to purchase a number of shares of Common Stock with funds withheld from his Compensation. Such number of shares will be determined at the end of the Offering Period according to the following procedure: Step 1 -- Determine the amount the Company withheld from Compensation since the beginning of the Offering Period; Step 2 -- Determine the amount that represents 85% of the lower of Fair Market Value of a share of Common Stock on the (I) first day of the Offering Period, or (II) the last day of the Offering Period; and Step 3 -- Divide the amount determined in Step 1 by the amount determined in Step 2 and round down the quotient to the nearest whole number. FAIR MARKET The Fair Market Value of a share of Common Stock for purposes VALUE of the Plan as of each date described in Step 2 will be determined as follows: if the Common Stock is traded on a national securities exchange, the closing sale price on that date; if the Common Stock is not traded on any such exchange, the closing sale price as reported by the National Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq") for such date; if no such closing sale price information is available, the average of the closing bid and asked prices as reported by Nasdaq for such date; or if there are no such closing bid and asked prices, the average of the closing bid and asked prices as reported by any other commercial service for such date. FTI Employee Stock Purchase Plan Page 3 of 11 For January 1 and any other date described in Step 2 that is not a trading day, the Fair Market Value of a share of Common Stock for such date shall be determined by using the closing sale price or the average of the closing bid and asked prices, as appropriate, for the immediately preceding trading day. No Participant shall receive options: if, immediately after the grant, that Participant would own shares, or hold outstanding options to purchase shares, or both, possessing 5% or more of the total combined voting power or value of all classes of shares of the Company or any Subsidiaries; or that permit the Participant to purchase shares under all employee stock purchase plans of the Company and any Subsidiary with a Fair Market Value (determined at the time the options are granted) that exceeds $25,000 in any calendar year. EXERCISE Unless a Participant effects a timely withdrawal pursuant to OF OPTION the WITHDRAWAL paragraph below, his option for the purchase of shares of Common Stock during an Offering Period will be automatically exercised as of the last day of the Offering Period for the purchase of the maximum number of full shares that the sum of the payroll deductions credited to the Participant's account during such Offering Period can purchase pursuant to the formula specified in GRANTING OF OPTIONS. Any payroll deductions credited to a Participant's account during the Offering Period that are not used for the purchase of shares will be treated as follows: If the Participant has elected to withdraw from the ESPP as of the end of the Offering Period, the Company will deliver the amount of the payroll deductions to the Participant. The amount of any other excess payroll deductions will be applied to the purchase of shares in the immediately succeeding Offering Period. DELIVERY OF As soon as administratively feasible after the options are COMMON used to purchase Common Stock, the Company will deliver to STOCK each Participant or, in the alternative, to a custodian that the Committee designates, the shares of Common Stock the Participant purchased upon the exercise of FTI Employee Stock Purchase Plan Page 4 of 11 the option. If shares are delivered to a custodian, the Participant may elect at any time thereafter to take possession of the shares or to have the Committee deliver the shares to any brokerage firm. The Committee may, in its discretion, establish a program for cashless sales of Common Stock received under the ESPP. SUBSEQUENT A Participant will be deemed to have elected to participate in OFFERINGS each subsequent Offering Period following his initial election to participate in the ESPP, unless the Participant files a written withdrawal notice with the Human Resources Department at least ten days before the beginning of the Offering Period as of which the Participant desires to withdraw from the ESPP. WITHDRAWAL A Participant may withdraw all, but not less than all, payroll FROM THE deductions credited to his account for an Offering Period PLAN before the end of such Offering Period by delivering a written notice to the Human Resources Department on behalf of the Committee at least thirty days before the end of such Offering Period. A Participant who for any reason, including retirement, termination of employment, or death, ceases to be an Employee before the last day of any Offering Period will be deemed to have withdrawn from the ESPP as of the date of such cessation. Upon the withdrawal of a Participant from the ESPP under the terms of the preceding paragraph, his outstanding options under the ESPP will immediately terminate. If a Participant withdraws from the ESPP for any reason, the Company will pay to the Participant all payroll deductions credited to his account or, in the event of death, to the persons designated as provided in DESIGNATION OF BENEFICIARY, as soon as administratively feasible after the date of such withdrawal and no further deductions will be made from the Participant's Compensation. A Participant who has elected to withdraw from the ESPP may resume participation in the same manner and pursuant to the same rules as any Employee making an initial election to participate in the ESPP, i.e., he may elect to participate in the next following Offering Period so long as he files the authorization form by the deadline for that Offering Period. Any Participant who is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and who withdraws from the ESPP for any reason will only be permitted to resume participation FTI Employee Stock Purchase Plan Page 5 of 11 in a manner that will permit transactions under the ESPP to continue to be exempt within the meaning of Rule 16b-3, as issued under the Exchange Act. STOCK SUBJECT The shares of Common Stock that the Company will sell to TO PLAN Participants under the ESPP will be shares of authorized but unissued Common Stock. The maximum number of shares made available for sale under the ESPP will be 400,000 (subject to the provisions in ADJUSTMENTS UPON CHANGES IN CAPITAL STOCK). If the total number of shares for which options are to be exercised in an Offering Period exceeds the number of shares then available under the ESPP, the Company will make, so far as is practicable, a pro rata allocation of the shares available. A Participant will have no interest in shares covered by his option until the Participant exercises the option. Shares that a Participant purchases under the ESPP will be registered in the name of the Participant. The Company will not issue fractional shares pursuant to the ESPP, but the Administrator may, in its discretion, direct the Company to make a cash payment in lieu of fractional shares. ADJUSTMENTS Subject to any required action by the Company (which it shall UPON CHANGES promptly take) or its stockholders, and subject to the IN CAPITAL STOCK provisions of applicable corporate law, if, during an Offering Period, the outstanding shares of Common Stock increase or decrease or change into or are exchanged for a different number or kind of security by reason of any recapitalization, reclassification, stock split, reverse stock split, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or some other increase or decrease in such Common Stock occurs without the Company's receiving consideration, the Administrator will make a proportionate and appropriate adjustment in the number of shares of Common Stock underlying the options, so that the proportionate interest of the Participant immediately following such event will, to the extent practicable, be the same as immediately FTI Employee Stock Purchase Plan Page 6 of 11 before such event. Any such adjustment to the options will not change the total price with respect to shares of Common Stock underlying the Participant's election but will include a corresponding proportionate adjustment in the price of the Common Stock, to the extent consistent with Section 424 of the Code. The Administrator will make a commensurate change to the maximum number and kind of shares provided in the STOCK SUBJECT TO PLAN section. Any issue by the Company of any class of preferred stock, or securities convertible into shares of common or preferred stock of any class, will not affect, and no adjustment by reason thereof will be made with respect to, the number of shares of Common Stock subject to any options or the price to be paid for stock except as this ADJUSTMENTS section specifically provides. The grant of an option under the Plan will not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or to consolidate, or to dissolve, liquidate, sell, or transfer all or any part of its business or assets. Substantial Upon a Substantial Corporate Change, the Plan and the offering Corporate will terminate unless provision is made in writing in Change connection with such transaction for the assumption or continuation of outstanding elections, or the substitution for such options or grants of any options or grants covering the stock or securities of a successor employer corporation, or a parent or subsidiary of such successor, with appropriate adjustments as to the number and kind of shares of stock and prices, in which event the options will continue in the manner and under the terms so provided. If an option would otherwise terminate pursuant to the preceding sentence, the optionee will have the right, at such time before the consummation of the transaction causing such termination as the Board reasonably designates, to exercise any unexercised portions of the option. However, the Board may determine that allowing such exercise before the end of the Offering Period will not occur if the election would render unavailable "pooling of interest" accounting for any reorganization, merger, or consolidation of the Company. FTI Employee Stock Purchase Plan Page 7 of 11 A Substantial Corporate Change means the dissolution or liquidation of the Company, merger, consolidation, or reorganization of the Company with one or more corporations in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company to another corporation, or any transaction (including a merger or reorganization in which the Company survives) approved by the Board that results in any person or entity (other than any affiliate of the Company as defined in Rule 144(a)(1) under the Securities Act) owning 100% of the combined voting power of all classes of stock of the Company. DESIGNATION OF A Participant may file with the Committee a written BENEFICIARY designation of a beneficiary who is to receive any payroll deductions credited to the Participant's account under the ESPP or any shares of Common Stock owed to the Participant under the ESPP if the Participant's dies. A Participant may change a beneficiary at any time by filing a notice in writing with the Human Resources Department on behalf of the Committee. Upon the death of a Participant and upon receipt by the Committee of proof of the identity and existence of the Participant's designated beneficiary, the Company shall deliver such cash or shares, or both, to the beneficiary. If a Participant dies and is not survived by a beneficiary that the Participant designated in accordance with the immediate preceding paragraph, the Company will deliver such cash or shares, or both, to the personal representative of the estate of the deceased Participant. If, to the knowledge of the Committee, no personal representative has been appointed within 90 days following the date of the Participant's death, the Committee, in its discretion, may direct the Company to deliver such cash or shares, or both, to the surviving spouse of the deceased Participant, or to any one or more dependents or relatives of the deceased Participant, or if no spouse, dependent or relative is known to the Committee, then to such other person as the Committee may designate. FTI Employee Stock Purchase Plan Page 8 of 11 No designated beneficiary may acquire any interest in such cash or shares before the death of the Participant. SUBSIDIARY Employees of Company Subsidiaries will be entitled to EMPLOYEES participate in the ESPP, except as otherwise designated by the Board of Directors or the Committee. Eligible Subsidiary means each of the Company's Subsidiaries, except as the Board otherwise specifies. Subsidiary means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time an option is granted to a Participant under the ESPP, each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. TRANSFERS, A Participant may not assign, pledge, or otherwise dispose ASSIGNMENTS, of payroll deductions credited to the Participant's AND PLEDGES account or any rights to exercise an option or to receive shares of Common Stock under the ESPP other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order, as defined in the Employee Retirement Income Security Act. Any other attempted assignment, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw under the WITHDRAWAL section. AMENDMENT OR The Board of Directors of the Company may at any time TERMINATION terminate or amend the ESPP. Any amendment of the ESPP OF PLANC that (i) materially increases the benefits to Participants, (ii) materially increases the number of securities that may be issued under the ESPP, or (iii) materially modifies the eligibility requirements for participation in the ESPP must be approved by the shareholders of the Company to take effect. The Company shall refund to each Participant the amount of payroll deductions credited to his account as of the date of termination as soon as administratively feasible following the effective date of the termination. NOTICES All notices or other communications by a Participant to the Committee or the Company shall be deemed to have been duly given when the Human Resources Department or the Secretary of the Company receives them or when any other person the Company designates receives the notice or other communication in the form the Company specifies. FTI Employee Stock Purchase Plan Page 9 of 11 GENERAL ASSETS Any amounts the Company invests or otherwise sets aside or segregates to satisfy its obligations under this ESPP will be solely the Company's property (except as otherwise required by Federal or state wage laws), and the optionee's claim against the Company under the ESPP, if any, will be only as a general creditor. The optionee will have no right, title, or interest whatever in or to any investments that the Company may make to aid it in meeting its obligations under the ESPP. Nothing contained in the ESPP, and no action taken pursuant to its provisions, will create or be construed to create an implied or constructive trust of any kind or a fiduciary relationship between the Company and any Employee, Participant, former Employee, former Participant, or any beneficiary. PRIVILEGES OF No Participant and no beneficiary or other person claiming STOCK OWNERSHIP under or OWNERSHIP through such Participant will have any right, title, or interest in or to any shares of Common Stock allocated or reserved under the Plan except as to such shares of Common Stock, if any, that have been issued to such Participant. LIMITATIONS ON Notwithstanding any other provisions of the ESPP, no LIABILITY individual acting as a director, employee, or agent of the Company shall be liable to any Employee, Participant, former Employee, former Participant, or any spouse or beneficiary for any claim, loss, liability, or expense incurred in connection with the ESPP, nor shall such individual be personally liable because of any contract or other instrument he executes in such other capacity. The Company will indemnify and hold harmless each director, employee, or agent of the Company to whom any duty or power relating to the administration or interpretation of the ESPP has been or will be delegated, against any cost or expense (including attorneys' fees) or liability (including any sum paid in settlement of a claim with the FTI Board's approval) arising out of any act or omission to act concerning this ESPP unless arising out of such person's own fraud or bad faith. NO EMPLOYMENT Nothing contained in this Plan constitutes an employment CONTRACT contract between the Company or an Eligible Subsidiary and any Employee. The ESPP does not give an Employee any right to be retained in the Company's employ, nor does it enlarge or diminish the Company's right to terminate the Employee's employment. DURATION OF ESPP Unless the FTI Board extends the Plan's term, no Offering Period will begin after December 31, 2006. FTI Employee Stock Purchase Plan Page 10 of 11 APPLICABLE LAW The laws of the State of Maryland (other than its choice of law provisions) govern the ESPP and its interpretation. APPROVAL OF The ESPP must be submitted to the shareholders of the SHAREHOLDERS Company for their approval within 12 months after the Board of Directors of the Company adopts the ESPP. The adoption of the ESPP is conditioned upon the approval of the shareholders of the Company, and failure to receive their approval will render the ESPP and any outstanding options thereunder void and of no effect. FTI Employee Stock Purchase Plan Page 11 of 11 EX-5.1 3 EXHIBIT 5.1 WILMER, CUTLER & PICKERING 100 LIGHT STREET BALTIMORE, MD 21202 --- TELEPHONE (410) 986-2800 FACSIMILE (410) 986-2828 June 24, 1997 Forensic Technologies International Corporation 2021 Research Drive Annapolis, Maryland 21401 Re: Forensic Technologies International Corporation Employee Stock Purchase Plan -------------------------------------------------------------- Ladies and Gentlemen: We have acted as counsel to Forensic Technologies International Corporation, a Maryland corporation (the "Company"), in connection with the preparation by the Company of a Registration Statement on Form S-8 in the form to be filed with the Securities and Exchange Commission on June 26, 1997 (the "Registration Statement") under the Securities Act of 1933, as amended, for the registration of options (the "Options") covering 400,000 shares of Common Stock, $.01 par value per share (the "Shares"), of the Company and 400,000 Shares issuable upon the exercise of the Options pursuant to the Employee Stock Purchase Plan of the Company (the "Plan"). For purposes of this opinion letter, we have examined copies of the following documents: 1. An executed copy of the Registration Statement; 2. A copy of the document disclosing material information to Plan participants prepared in connection with the Registration Statement; 3. A copy of the Plan, as certified on June 24, 1997 by the Secretary of the Company as then being complete, accurate and in effect; 4. A copy of the Amended and Restated Articles of Incorporation of the Company, as certified on June 24, 1997 by the Maryland State Department of Assessments and Taxation. ("SDAT"); Forensic Technologies International Corporation June 24, 1997 Page 2 5. A copy of the By-Laws of the Company, as certified on June 24, 1997 by the Secretary of the Company as then being complete, accurate and in effect; 6. Resolutions of the Board of Directors of the Company adopted at a special meeting held May 21, 1997, as certified by the Secretary of the Company on June 24, 1997 as then being complete, accurate and in effect; 7. Minutes of the Annual Meeting of Stockholders of the Company held May 21, 1997, as certified by the Secretary of the Company on June 24, 1997 as then being complete, accurate and in effect; 8. A Certificate of Good Standing of the Company in the State of Maryland as certified on June 24, 1997 by SDAT; and 9. A certificate of the Secretary of the Company as to factual matters dated June 24, 1997. In our examination of the aforesaid documents, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, and the conformity with the original documents of all documents submitted to us as certified, telecopied, photostatic or reproduced copies. We have assumed the accuracy of the foregoing certifications, on which we are relying, and have made no independent investigation or verification thereof. We have assumed that there will be no amendments, modifications, additions, deletions or changes to the form of Registration Statement as filed on June 26, 1997 from the form of Registration Statement reviewed for this opinion letter. We are members of the Bar of the State of Maryland and do not hold ourselves out as being experts in the law of any other state. This opinion letter is limited to the laws of the United States and the Maryland General Corporation Law. Our opinions in this letter are rendered only with respect to the laws and the rules, regulations and orders thereunder that are currently in effect. Based upon, subject to, and limited by the foregoing, we are of the opinion that: 1. The issuance of the Options in accordance with the terms of the Plan has been lawfully and duly authorized by the Board of Directors and Stockholders of the Company. Forensic Technologies International Corporation June 24, 1997 Page 3 2. The issuance of the Shares upon the exercise of Options granted, when issued and exercised in accordance with the terms of the Plan, has been lawfully and duly authorized by the Board of Directors and Stockholders of the Company. 3. When the Options have been exercised, the exercise price has been paid in full and the Shares have been issued and delivered in accordance with the terms of the Plan, the Shares will be validly issued, fully paid and nonassessable under the Maryland General Corporation Law. We assume no obligation to advise you of any changes in the foregoing subsequent to the delivery of this opinion letter. This opinion letter has been prepared solely for your use in connection with the filing of the Registration Statement, and should not be quoted in whole or in part or otherwise be referred to, nor otherwise be filed with or furnished to any governmental agency or other person or entity, without our prior written consent. We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement. Nothing herein shall be construed to cause us to be considered "experts" within the meaning of Section 11 of the Securities Act of 1933, as amended. Very truly yours, WILMER, CUTLER & PICKERING By: /s/John B. Watkins ----------------------------------- John B. Watkins, a partner EX-23.1 4 EXHIBIT 23.1 Consent of Ernst & Young, LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statements (Form S-8 No. 333-_____ ) pertaining to the Employee Stock Purchase Plan of our report dated January 31, 1997, with respect to the consolidated financial statements of Forensic Technologies International Corporation included in its Annual Report (Form 10-KSB) for the year ended December 31, 1996, filed with the Securities and Exchange Commission. /s/ Ernst & Young, LLP Baltimore, Maryland June 25, 1997 -----END PRIVACY-ENHANCED MESSAGE-----