SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
BILLSERV.COM, 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 MILLARD LORI TURNER
SECRETARY, VICE PRESIDENT TREASURER, VICE PRESIDENT AND
AND GENERAL COUNSEL CHIEF FINANCIAL OFFICER
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14607 SAN PEDRO AVE., SUITE 100, SAN ANTONIO, TEXAS 78232
(Address of principal executive office)
BILLSERV.COM, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan)
TIMOTHY N. TUGGEY
MORRIS E. WHITE III
ARTER & HADDEN 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)
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER SHARE (3) PRICE (3) FEE
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Common Stock, Par 1,000,000 shares
Value $.001 (1)(2) $9.16 $9,160,000 $2,418.24
================================================================================================
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(1) Pursuant to Rule 416(c) under the Securities Act of 1933, this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein.
(2) 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.
(3) 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 NASD OTC Bulletin Board on February 15, 2000.
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) Amendment No. 1 to the Form SB-2 Registration Statement, file No. 333-93799, filed on January 14, 2000 which became effective on January 18, 2000.
(b) Annual Report of the Registrant on Form 10-K for the year ended December 31, 1999, file No. 000-30152.
(c) The description of the Registrant's Common Stock contained in
the Registration Statement (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
4.1 Amended and Restated Certificate of Incorporation of
the Company (incorporated by reference to Exhibit 1 to
the Company's Registration Statement on Form SB-2, SEC
File No. 333-93799).
4.2 Bylaws of the Company (incorporated by reference to
Exhibit 1 to the Company's Registration Statement on
Form SB-2, SEC File No. 333-93799).
4.3 billserv.com, Inc. Employee Stock Purchase Plan.
5.1 Opinion of Arter & Hadden LLP (filed herewith).
23.1 Consent of Arter & Hadden LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, Independent Auditors (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.
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 14th day of February, 2000.
BILLSERV.COM, INC.
By: /s/ LOUIS A. HOCH
Louis A. Hoch
President
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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 Chief Executive Officer
Michael R. Long* and Director February 14, 2000
/s/ LOUIS A. HOCH President, Director and Chief
Louis A. Hoch* Operating Officer February 14, 2000
/s/ DAVID S. JONES Executive Vice President
David S. Jones* and Director February 14, 2000
/s/ LORI TURNER Treasurer, Vice President
Lori Turner* and Chief Financial Officer February 14, 2000
/s/ MARSHALL MILLARD Secretary, Vice President
Marshall Millard and General Counsel February 14, 2000
/s/ E. SCOTT CRIST Director
E. Scott Crist* February 14, 2000
/s/ ROGER R. HEMMINGHAUS
Roger R. Hemminghaus* Director February 14, 2000
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Marshall N. Millard, the undersigned attorney-in-fact, by signing his/her 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, as attorney-in-fact
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Pursuant to the requirements of the Securities Act of 1933, the administrators of the Plan have 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 February 14, 2000.
billserv.com, Inc. EMPLOYEE STOCK
PURCHASE PLAN
By: The Employee Stock Purchase Plan
Committee of billserve.com, Inc.
By: ________________________________
E. Scott Crist, Committee member
By: ________________________________
Roger Hemminhaus, Committee member
EXHIBIT INDEX
Exhibit Number Exhibit
4.1 Amended and Restated Certificate of Incorporation of the
Company (incorporated by reference to Exhibit 1 to the
Company's Registration Statement on Form SB-2, SEC File
No. 333-93799.
4.2 Bylaws of the Company (incorporated by reference to Exhibit 1
to the Company's Registration Statement on Form SB-2, SEC File
No. 333-93799.
4.3 billserv.com, Inc. Employee Stock Purchase Plan.
5.1 Opinion of Arter & Hadden LLP.
23.1 Consent of Arter & Hadden LLP (included in exhibit 5.1).
23.2 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Powers of Attorney.
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EXHIBIT 4.3
BILLSERV.COM INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The billserv.com Inc. Employee Stock Purchase Plan (the "plan") is designed to encourage employees of billserv.com Inc. ("billserv.com") and its participating Subsidiaries (collectively, the "Company"), where permitted by applicable laws and regulations, to acquire an equity interest in billserv.com through the purchase of shares of the common stock, par value $0.001 per share, of billserv.com ("Common Stock"). These purchases are intended to establish a closer identification of employee, Company and stockholder interests and to provide employees with a direct means of participating in the Company's growth and earnings. It is anticipated that Plan participation will motivate employees to remain in the employ of the Company and give greater efforts on behalf of the Company. This Plan is intended to constitute an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS
The following words or terms, when used herein, shall have the following respective meanings:
"Closing Market Price" refers to the reported closing sales price for shares of the Common Stock as so reported in The Wall Street Journal for that day.
"Committee" shall refer to the committee appointed by the billserv.com Board of Directors to administer this Plan.
"Designated Broker" refers to the securities brokerage company that will assist billserv.com in administering the Plan and which may be designated from time to time by the Committee.
"Effective Date" means July 1, 1999, the first Enrollment Date under the Plan.
"Employee" refers to all full-time and part-time employees, employed by billserv.com or a Subsidiary on a continuous basis.
"Employee Contribution Amounts" refers to the amounts contributed by employees via payroll deduction.
"Enrollment Date" refers to July 1, 1999, the first Enrollment Date under the Plan, the first day of the initial six-month Participation Period ending December 31, 1999, and after that latter date, refers to January 1 and July 1, the first day of the succeeding six-month Participation Periods which continue thereafter.
"Enrollment Period" refers to the designated Period that precedes each Enrollment Date during which employees eligible to participate are Provided the opportunity to enroll in the Plan. The Enrollment Period is approximately two weeks in duration and, generally, will expire approximately 10 to 14 days prior to the Enrollment Date. The exact dates for each Enrollment Period will be communicated to all eligible employees prior to the Enrollment Period.
"Exercise Date" refers to the last stock Wading day in a Participation Period.
"Fair Market Value" refers to the Closing Market Price on either the first or last stock trading day in the Participation Period as determined in accordance with Section 9.
"Participant" refers to any employee meeting the eligibility requirements specified in Section 5 who has enrolled in the Plan.
"Participation Period" refers to the six-month period from the Effective Date through December 31, 1999, and after that latter date refers to periods of January 1 through June 30 and July 1 through December 31, during which periods payroll deductions will be made to purchase stock under the Plan, or such other period as the Committee may at any time prescribe.
"Plan" shall refer to this billserv.com Employee Stock Purchase Plan.
"Subsidiary" refers to any present or future corporation that is a "subsidiary corporation" of the Company within the meaning of Section 424 of the Code.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Employee Stock Purchase Plan Committee (the "Committee") appointed by the Board of Directors of billserv.com (the "Board"), which Committee shall consist of at least two (2) persons, who need not be members of the Board. The members of the Committee shall supervise the administration and enforcement of the Plan according to its terms and provisions and shall have all powers necessary to accomplish these purposes and discharge its duties hereunder including, but not limited to, the power to interpret the Plan, to make factual determinations and resolve issues of eligibility, stock price determination, or any other issues arising under the Plan or as a result of participation of Participants in the Plan.
The Committee may act by majority decision of its members at a regular or special meeting of the Committee or by decision reduced to writing and signed by all members of the Committee without holding a formal meeting. Vacancies in the membership of the Committee arising from death, resignation or other inability to serve shall be filled by appointment by the Board as soon as possible. All decisions by the Committee shall be final and conclusive and binding upon Participants and the Company.
4. NATURE AND NUMBER OF SHARES
The Common Stock subject to issuance under the terms of the Plan shall be shares of billserv.com's authorized but unissued shares. The aggregate number of shares that may be issued under the Plan shall not exceed one million (1,000,000) shares of Common Stock. If the total number of shares that Employees elect to purchase under the Plan exceeds the shares available, the Committee will allot shares among Employees.
In the event of any reorganization, recapitalization, stock split, reverse stock split, stock dividend, spin-off, combination of shares, merger, consolidation, offering of rights or other similar change in the capital structure of billserv.com, the Committee may make such adjustment, if any, as it deems appropriate in the number, kind and purchase price of the shares available for purchase under the Plan, in the maximum number of shares that may be issued under the Plan and in the Participation Periods, subject to the approval of the Board and in accordance with Section 20 of the Plan.
If billserv.com is acquired in a transaction whereby it is not the surviving entity or all or substantially all of billserv.com's assets are acquired, the Committee shall determine a Plan termination date. This date shall precede the expected effective date of such acquisition by not more than sixty (60) days. Employee Contribution Amounts accumulated during the period between the most recent Enrollment Date and Plan termination date shall be used to purchase shares for Participants in the manner provided in Section 9 utilizing the Plan termination date as the Exercise Date for determining the purchase price for shares of Common Stock. In the event the Plan is terminated and the acquisition transaction is not consummated, the Plan may be reactivated on a date determined by the Committee.
5. ELIGIBILITY REQUIREMENTS
Each Employee, except as described in the next following paragraph,
shall become eligible to participate in the Plan in accordance with this
Section 5 on the first Enrollment Date following employment by the
Company. Participation in the Plan is voluntary.
The following Employees are not eligible to Participate in the Plan:
(i) Employees who have not completed at least three (3) months of continuous service with the Company as of the Enrollment Date; and
(ii) Employees who would, immediately upon enrollment in the Plan, own directly or indirectly, or hold options or rights to acquire, an aggregate of five percent (5%) or more of the total combined voting power or value of all outstanding shares of all classes of billserv.com or any Subsidiary.
Employees of any corporation that may become a Subsidiary after the Effective Date shall automatically be deemed to be eligible for participation under this Plan effective as of the Enrollment Date following the date (1) the corporation became a Subsidiary and (2) the Employees satisfied the continuous service requirements described above.
All service with any parent corporation of billserv.com or any subsidiary of such parent will be taken into account as continuous service for purposes of this Section 5.
6. ENROLLMENT
Each eligible Employee of the Company as of the Effective Date will become an eligible Employee in the Plan on the Effective Date if immediately prior to the Effective Date he or she was eligible to participate in a plan of a future parent or subsidiary of billserv.com. Each other Employee of the Company who thereafter becomes eligible to participate may enroll in the Plan on the January 1 and July 1 Enrollment Dates following the date he or she first meets the eligibility requirements of Section 5 of the Plan. Any eligible Employee not enrolling in the Plan when first eligible may enroll in the Plan on the next succeeding January 1 or July 1 Enrollment Date. In order to enroll, an eligible Employee must complete, sign and submit the appropriate forms during the Enrollment Period to billserv.com's Human Resources Department. Continued enrollment in subsequent periods shall be automatic and no additional documentation is required, unless a Participant desires to revise the Employee Contribution Amount for the subsequent Participation Period. Employee Contribution Amounts shall remain constant if not changed at the Employee's request during an Enrollment Period. In order to terminate Plan participation, at any time, or change Employee Contribution Amounts during an Enrollment Period, the participant must complete, sign and submit the appropriate forms to billserv.com's Human Resources Department.
7. GRANT OF RIGHT TO PURCHASE SHARES ON ENROLLMENT
Enrollment in the Plan by an Employee on an Enrollment Date will constitute the grant by billserv.com to the Participant of the right to purchase shares of Common Stock under the Plan. Re-enrollment or continued enrollment by a Participant in the Plan will constitute a grant, on the Enrollment Date on which such re-enrollment or continued enrollment occurs, by billserv.com to the Participant of a new right to purchase shares of Common Stock. A Participant who has not terminated employment shall have shares of Common Stock automatically purchased for him or her on the applicable Exercise Date. The participant shall automatically be re-enrolled in the Plan for subsequent Participation Periods at the same Employee Contribution Amount, unless the Participant notifies billserv.com's Human Resources Department on the appropriate forms that he or she elects not to re-enroll or desires to change his or her Employee Contribution Amount. A Participant who has suspended payroll deductions during any Participation Period must re-enroll on the appropriate forms to participate in the Plan in any future Participation Periods.
Each right to purchase shares of Common Stock under the Plan during any participation Period shall have the following terms:
(1) the right to purchase shares of Common Stock during any Participation Period shall expire on the earlier of (A) the completion of the purchase of shares on the Exercise Date or (B) the date on which the Participant terminates employment;
(ii) in no event shall the right to purchase shares of Common Stock during any Participation Period extend beyond twenty-seven (27) months from the Enrollment Date;
(iii) payment for shares purchased shall be made only with amounts contributed through payroll deductions;
(iv) purchase of shares shall be accomplished only in accordance with
Section 9;
(v) the price per share shall be determined as provided in Section 9;
(vi) the right to purchase shares of Common Stock (taken together
with all other such rights then outstanding under this Plan and
under all other similar stock purchase plans of billserv.com or
any Subsidiary) will in no event give the Participant the right
to purchase a number of shares of Common Stock during a
Participation Period in excess of the number of shares of Common
Stock derived by dividing 1,000,000 by the Fair Market Value of
the Common Stock on the applicable Grant Date, as defined in
Section 9, determined in accordance with Section 9; and
(vii) the right to purchase shares of Common Stock shall in all respects be subject to the terms and conditions of the Plan, as interpreted by the Committee from time to time.
8. METHOD OF PAYMENT
Payment of shares of Common Stock shall be made as of the applicable Exercise Date with amounts contributed through payroll deductions collected over the Plan's designated Participation Period, with the first such deduction commencing with the payroll period ending after the Enrollment Date. Each Participant will authorize such deductions from his or her pay for each month during the Participation Period. No changes in monthly deduction amounts are permitted subsequent to the Enrollment Period other than ceasing ongoing payroll deductions for the remainder of the Participation Period. Payroll deductions will be made in equal installments on each of the first two payrolls of each month during the Participation Period. No lump sum or prepayments are permitted. Employees may select any monthly Employee Contribution Amount as long as the following requirements are met:
(i) at least $10.00 is deducted each month;
(ii) amount selected is a multiple of $5.00;
(iii) total amount deducted does not exceed Employee's net pay of their base salary; and
(iv) the aggregate of monthly deduction amounts does not exceed $10,625.00 in any Participation Period (under this Plan and under all other similar stock purchase plans of billserv.com or any Subsidiary). If for any reason a Participants's contributions to the Plan exceed $10,625.00 during any Participation Period, such excess amounts shall be refunded to the Participant as soon as practicable after such excess has been determined to exist.
A Participant may suspend payroll deductions at any time during a Participation Period by given written notice to billserv.com's Human Resources Department on the appropriate forms, which will be processed effective for the first payroll period that is administratively feasible. In such case, the Participant's account balance shall still be used to purchase Common Stock at the end of the Participation Period. Any Participant who suspends payroll deductions during any Participation Period cannot resume payroll deductions during such period and must re-enroll in the Plan during a subsequent Enrollment Period in order to participate in any future Participation Periods.
Except in the case of termination of employment, the amount in a Participant's account at the end of any Participation Period shall be applied to the purchase of shares, as provided in Section 9.
9. SHARES
The right to purchase shares of Common Stock granted by the Company under the Plan is for the term of a Participation Period. The price to be paid for the Common Stock to be purchased at the expiration of such Participation Period shall be determined as the lower of. (a) 85 % of the Closing Market Price on the first trading day of the Participation Period (Grant Date) or (b) 85% of the Closing Market Price on the last trading day in the Participation Period (Exercise Date). These dates constitute the date of grant and the date of exercise for valuation purposes under Section 423 of the Code.
The number of shares of Common Stock, including fractional shares, purchased on behalf of a Participant shall be recorded in the Designated Broker stock trading account established for each Participant as soon as administratively feasible, but no later than five (5) business days following the last business day of the preceding Participation Period. The number of shares purchased shall be computed by dividing the aggregate Employee Contribution Amount by the price for the Common Stock determined in the manner described in the preceding paragraph. Participants shall be treated as the record owners of the shares, with all rights of a stockholder, effective as of the date the shares are posted to the Participant's stock trading account. Any fees associated with maintaining these stock trading accounts shall be the obligation of the Company.
10. WITHDRAWAL OF SHARES
The record of shares of Common Stock purchased shall be maintained in an individual stock trading account established at the Designated Broker on behalf of the Participant until the shares are either withdrawn or sold. A Participant may elect to withdraw all shares held in his or her account at any time (without withdrawing from the Plan) by giving notice to the Designated Broker. Upon receipt of such notice, the Designated Broker will arrange for either (a) the issuance and delivery of all shares held in the Participant's account as soon as administratively feasible or (b) the sale of the shares, as described by the Participant.
Certificates shall be issued only in the following situations:
(i) if the Participant requests a certificate; or
(ii) if the Participant terminates employment with the Company and requests a certificate.
In both of these cases, the Participant will be required to notify the Designated Broker and pay an issuance fee. The share certificate will be issued to the Participant as soon as administratively feasible after the receipt by the Designated Broker of the required form and payment of the issuance fee.
Fractional shares shall be handled as follows: For share withdrawals, only whole shares will be certified and issued to Participants. A payment will be made to the Participant for any fractional shares owned by the Participant. This payment shall be computed using the Closing Market Price of a share of Common Stock on the date the withdrawal is processed by the Designated Broker. For shares sold, Participants shall receive credit for all whole and fractional shares at the actual price for which the shares were sold.
11. INCOME TAX OBLIGATIONS
Participants shall be responsible for all personal income tax obligations associated with selling shares of Common Stock purchased through this Plan. The Committee shall recommend that each Participant seek competent, professional tax advice prior to enrolling in the Plan to ensure he or she fully understands the tax consequences resulting from stock sales.
12. TERMINATION OF PARTICIPATION
The right to participate in the Plan terminates immediately when a Participant ceases to be employed by Billing or any Subsidiary. Employee Contribution Amounts collected prior to the date of termination of employment shall be paid in cash. The cash shall be delivered to the Participant as soon as administratively feasible following the end of the Participation Period in which the Participant's employment terminates. Employee Contribution Amounts for Participants who are on a Leave of Absence will be used to purchase Common Stock at the conclusion of the Participation Period in accordance with Section 9.
13. DEATH OF A PARTICIPANT
As soon as administratively feasible after receiving notification of the death of a Participant, Employee Contribution Amounts collected prior to the date of termination of employment shall be paid in cash to the Participant's estate. No additional shares of Common Stock may be purchased on behalf of a Participant after notification of death is received. All assets in a Participant's stock trading account will remain in the Participant's account until the person whom the Participant has elected a joint tenant, with or without right of survivorship, or the representative of the Participant's estate requests delivery thereof from the Designated Broker and submits such documentation as the Designated Broker may require to show proof of entitlement thereto.
14. ASSIGNMENT
The rights of a Participant under the Plan shall not be assignable or otherwise transferable by the Participant except by win or the laws of descent and distribution or pursuant to a qualified domestic relations order. No purported assignment or transfer of any rights of a Participant under the Plan, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the purported assignee or transferee any interest or right therein whatsoever, but immediately upon such assignment or transfer, or any attempt to make the same, such rights shall terminate and become of no further effect. If the foregoing provisions of this Section 14 are violated, the Participant's election to purchase Common Stock shall terminate and the only obligation of the Company remaining under the Plan shall be to pay the person entitled thereto the Employee Contribution Amount then credited to the Participant's account. No Participant may create a lien on any funds, securities, rights or other property held for the account of the Participant under the Plan, except to the extent permitted by will or the laws of descent and distribution if beneficiaries have not been designated. A Participant's right to purchase shares of Common Stock under the Plan shall be exercisable only during the Participant's lifetime and only by him or her.
15. COSTS
billserv.com will pay all expenses incident to establishing and administering the Plan. Expenses to be incurred by Participants shall be limited to brokerage fees relating to sales of stock from the Participant's account (as described herein), issuance fees (as described in Section 10) and any personal income tax obligations.
16. REPORTS
At least annually, the Company shall provide or cause to be provided to each Participant a report of their Employee Contribution Amounts and the shares Of Common Stock purchased with such Employee Contribution Amounts by that Participant on each Exercise Date.
17. EQUAL RIGHTS AND PRIVILEGES
All eligible Employees shall have equal rights and privileges with respect to the Plan so that the Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 or any successor provision of the Code and related regulations. Any provision of the Plan that is inconsistent with Section 423 or any successor provision of the Code shall without further act or amendment by the Company be reformed to comply with the requirements of Section 423. This Section 17 shall take precedence over all other provisions in the Plan.
18. RIGHTS AS A STOCKHOLDER
A Participant shall have no rights as a stockholder under his or her rights to purchase Common Stock until he or she becomes a stockholder as herein provided. A Participant will become a stockholder with respect to shares for which payment has been completed as provided in Section 9 effective as of the date the shares are posted to the Participant's stock trading account.
19. MODIFICATION AND TERMINATION
The Board may amend or terminate the Plan at any time as permitted by law, with the exception that the provisions of the Plan (including, without limitation, the provisions of Sections 8 and 9) that constitute a formula award for purposes of Rule l6b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"), may not be amended more than once every six (6) months, other than to comply with changes in the Code, or the rules thereunder. No amendment shall be effective unless within one (1) year after the change is adopted by the Board it is approved by the holders of a majority of the voting power of billserv.com's outstanding shares:
(i) if and to the extent such amendment is required to be approved by stockholders to continue the exemption provided for in Rule l6b-3 (or any successor provision); or
(ii) if such amendment would cause the rights granted under the Plan to purchase shares of Common Stock to fail to meet the requirements of Section 423 of the Code (or any successor provision).
20. BOARD AND STOCKHOLDER APPROVAL; EFFECTIVE DATE
The Plan was approved by the Board and by the sole stockholder of billserv.com on January 4, 1999. The Plan will become effective as of July 1, 1999.
21. GOVERNMENTAL APPROVALS OR CONSENTS
The Plan and any offering or sale made to Employees under the Plan are subject to any governmental approvals or consents that may be or become applicable in connection therewith. Subject to the provisions of Section 19, the Board may make such changes in the Plan and include such terms in any offering under the Plan as may be desirable to comply with the rules or regulations of any governmental authority.
22. USE OF FUNDS
All Employee Contribution Amounts received or held by the Company under this Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such amounts.
23. NO ADDITIONAL PURCHASE RIGHTS OR EMPLOYMENT RIGHTS
Other than for rights to purchase Common Stock under the Plan, the Plan does not, directly or indirectly, create any right for the benefit of any Employee or class of Employee to purchase any shares under the Plan, or create in any Employee or class of Employee any right with respect to continuance of employment with the Company, and it shall not be deemed to interfere in any way with the Company's right to terminate, or otherwise modify, any Employee's employment at any time.
24. EFFECT OF PLAN
The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Employee participating in the Plan, including, without limitation, such Employee's estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Employee.
25. GOVERNING LAW
The laws of the State of Nevada will govern all matters relating to the Plan except to the extent superseded by the laws of the United States or the property laws of any particular state.
26. NO PAYMENT OF INTEREST
No interest will be paid or allowed on any Employee Contribution Amounts or amounts credited to the account of any Participant.
27. OTHER PROVISIONS
The agreement to purchase shares of Common Stock under the Plan shall contain such other provisions as the Committee and the Board shall deem advisable, provided that no such provision shall in any way conflict with the terms of the Plan.
[ARTER & HADDEN LLP ATTORNEYS AT LAW LETTERHEAD]
EXHIBIT 5.1
February 14, 2000
billserv.com, Inc.
14607 San Pedro Avenue, Suite 100
San Antonio, Texas 78232
RE: billserv.com, Inc. 1999 Employee Stock Purchase Plan (the "Plan") Form S-8 Registration Statement No. (the "Registration Statement")
Ladies and Gentlemen:
We have been advised that on or about February 14, 2000, billserv.com, 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 1,000,000 shares of common stock, par value $.001 each, of the Company, which may be issued pursuant to 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.
billserv.com, Inc.
February 14, 2000
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,
ARTER & HADDEN LLP
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to billserv.com, Inc. Employee Stock Purchase Plan, of our report dated January 27, 2000, appearing in Annual Report Pursuant to Section 13 or 15(d) at the Securities Exchange Act of 1934, file No. 000-30152 (Form 10-K) filed with the Securities and Exchange Commission on February 11, 2000.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
San Antonio, Texas
February 14, 2000
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EXHIBIT 24.1
BILLSERV.COM, 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 Morris E. White III, 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.com, Inc., a Nevada corporation (the "Company"), 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 the billserv.com, Inc. Employee Stock Purchase 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 14th day of February, 2000.
/s/ MICHAEL R. LONG
Michael R. Long
/s/ LOUIS A. HOCH
Louis A. Hoch
/s/ DAVID S. JONES
David S. Jones
/s/ LORI TURNER
Lori Turner
/s/ MARSHALL MILLARD
Marshall Millard
/s/ E. SCOTT CRIST
E. Scott Crist
/s/ ROGER R. HEMMINGHAUS
Roger R. Hemminghaus
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