TSSI TSS Inc (QB)

 

As filed with the Securities and Exchange Commission on September 24, 2015

 

Registration Statement No. ___________________

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

TSS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware	20-2027651
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
110 E. Old Settlers Blvd., Austin, Texas	78664
(Address of principal executive offices)	(zip code)

 

TSS, INC. 2015 Omnibus Incentive Compensation Plan,

 

AWARD AGREEMENT BETWEEN TSS, INC. AND MARTIN T. OLSEN,

 

AWARD AGREEMENT BETWEEN TSS, INC. AND JOHN K. PENVER, and

 

Option award agreements between TSS, Inc. and EIGHT of its employees

in connection with an acquisition by TSS, Inc. of a systems integration business on June 5, 2013.

(Full title of the plan)

 

Anthony Angelini

Chief Executive Officer

TSS, Inc.

110 E. Old Settlers Blvd.,

Austin, Texas 78664

(512) 310-1000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

Christopher R. Johnson, Esq.

Miles & Stockbridge P.C.

100 Light Street

Baltimore, Maryland 21202

(410) 727-6464

Fax No.: (410) 698-4505

 

Indicated by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a smaller reporting company)

  

CALCULATION OF REGISTRATION FEE

 

				Proposed Maximum		Proposed Maximum
Title of Securities		Amount to Be		Offering		Aggregate		Amount of
to Be Registered		Registered1		Price per Share2		Offering Price2		Registration Fee2
Common Stock, $.0001 par value per share to be issued under:
TSS, Inc. 2015 Omnibus Incentive Compensation Plan3		2,500,000 shares		$0.15		$375,000		$43.58
Award Agreement between TSS, Inc. and Martin T. Olsen4		450,000 shares		$0.15		$67,500		$7.85
Award Agreement between TSS, Inc. and John K. Penver5		450,000 shares		$0.15		$67,500		$7.85
Option award agreements between TSS, Inc. and eight of its employees6		480,000 shares		$0.15		$72,000		$8.37

 __________________

1	Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers any additional securities that may be offered or issued to prevent dilution resulting from any stock split, stock dividend or other similar transaction.
2	This calculation is made solely for the purpose of determining the registration fee pursuant to the provisions of Rule 457(c) and (h) under the Securities Act, based on the average of the bid and asked prices of the Registrant’s common stock on  September 23, 2015 as reported on the OTCQB marketplace.
3	TSS, Inc.’s 2015 Omnibus Incentive Compensation Plan (the “Plan”) authorizes the issuance of a maximum of 2,505,541 shares of common stock, 5,541 of which were previously registered in connection with the 2006 Omnibus Incentive Compensation Plan. This Registration Statement covers the additional 2,500,000 shares reserved for issuance under the Plan.
4	The Award Agreement, dated January 14, 2014, between TSS, Inc. and Mr. Olsen authorizes the issuance of a maximum of 450,000 shares of common stock.
5	The Award Agreement, dated August 29, 2014, between TSS, Inc. and Mr. Penver authorizes the issuance of a maximum of 450,000 shares of common stock.
6	The option award agreements between TSS, Inc. and eight of its employees in connection with an acquisition by TSS, Inc. of a systems integration business on June 5, 2013 authorizes the issuance of a maximum of 480,000 shares of common stock.

  

 

EXPLANATORY NOTE

 

This Registration Statement is intended to register a total of 3,880,000 shares of common stock, par value $.0001 per share, to be issued by TSS, Inc., a Delaware corporation (the “Registrant”) in the following manner: 450,000 shares granted to Martin T. Olsen under that certain Award Agreement, dated January 14, 2014, between the Registrant and Mr. Olsen; 450,000 shares granted to John K. Penver under that certain Award Agreement, dated August 29, 2014, between the Registrant and Mr. Penver; 480,000 shares granted to eight employees of the Registrant in connection with an acquisition by the Registrant of a systems integration business on June 5, 2013; and 2,500,000 shares available for grant under the TSS, Inc. 2015 Omnibus Incentive Compensation Plan approved by the Registrant’s shareholders at the 2015 annual meeting of shareholders of the Registrant.

 

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

Item 1.

Plan Information.

 

The information specified by Item 1 of Part I of Form S-8 is omitted from this Registration Statement in accordance with the provisions of Rule 428 under the Securities Act and the introductory Note to Part I of Form S-8.

 

Item 2.

Registrant Information and Employee Plan Annual Information.

 

The information specified by Item 2 of Part I of Form S-8 is omitted from this Registration Statement in accordance with the provisions of Rule 428 under the Securities Act and the introductory Note to Part I of Form S-8.

 

 

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3.

Incorporation of Documents by Reference.

 

The following documents filed by the Registrant with the United States Securities and Exchange Commission (the “Commission”) are incorporated by reference into this Registration Statement, excluding information and exhibits deemed furnished (but not filed) pursuant to Item 2.02, Item 7.01 or Item 9.01 of our Forms 8-K listed below:

 

(a) the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on April 22, 2015;

 

(b) the Current Report on Form 8-K filed by the Registrant on June 12, 2015;

 

(c) the Registrant’s Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2015, filed on May 20, 2015 and for the quarterly period ended June 30, 2015, filed on August 18, 2015; and

 

(d) the description of the Registrant’s Common Stock which is contained in a registration statement on Form 8-A filed on July 27, 2007 (File No. 001-33627) under the Exchange Act, including any amendment or report filed for the purpose of updating such description.

 

All reports and other documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities covered hereby then remaining unsold, are incorporated by reference herein and are a part of this Registration Statement from the date of the filing of such reports and documents. Any such information so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this Registration Statement.

 

You may obtain a copy of any of the above-referenced filings, without charge, by written or oral request directed to TSS, Inc., 110 E. Old Settlers Blvd., Austin, Texas 78664, Attention: Investor Relations, telephone: (512) 310-1000.

 

Item 4.

Description of Securities.

 

Not applicable.

 

 

Item 5.

Interests of Named Experts and Counsel.

 

Not applicable.

 

Item 6.

Indemnification of Directors and Officers.

 

The Registrant has adopted provisions in its Second Amended and Restated Certificate of Incorporation, as amended, that limit or eliminate the personal liability of the Registrant’s directors to the maximum extent permitted by the Delaware General Corporation Law (the “DGCL”). The DGCL expressly permits a corporation to provide that its directors will not be liable for monetary damages for a breach of their fiduciary duties as directors, except for liability: (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the DGCL (relating to unlawful stock repurchases, redemptions or other distributions or payment of dividends); or (iv) for any transaction from which the director derived an improper personal benefit. These limitations of liability do not generally affect the availability of equitable remedies such as injunctive relief or rescission.

 

The Registrant’s Second Amended and Restated Certificate of Incorporation, as amended, also obligates it to indemnify the Registrant’s directors, officers, employees and agents to the fullest extent permitted under the DGCL, subject to limited exceptions. Section 145 of the DGCL provides, in effect, that any person made a party to any action by reason of the fact that he is or was our director, officer, employee or agent may and, in certain cases, must be indemnified by us against, in the case of a non-derivative action, judgments, fines, amounts paid in settlement and reasonable expenses (including attorneys’ fees) incurred by him as a result of such action, and in the case of a derivative action, against expenses (including attorneys’ fees), if in either type of action he acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interests. This indemnification does not apply, (i) in a derivative action, to matters as to which it is adjudged that the director, officer, employee or agent is liable to us, unless upon court order it is determined that, despite such adjudication of liability, but in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for expenses, and, (ii) in a non-derivative action, to any criminal proceeding in which such person had no reasonable cause to believe his conduct was unlawful. Also, the Registrant may be required to advance expenses to its directors, officers, employees and agents in connection with legal proceedings, subject to limited exceptions.

 

The Registrant may enter into separate indemnification agreements with its directors and officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements could require the Registrant, among other things, to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors and officers, other than liabilities arising from willful misconduct. These indemnification agreements may also require the Registrant to advance any expenses incurred by the directors and officers as a result of any proceeding against them as to which they could be indemnified and to obtain directors’ and officers’ insurance if available on reasonable terms.

 

Item 7.

Exemption from Registration Claimed.

 

Not applicable.

 

 

Item 8.

Exhibits.

 

See Exhibit Index.

 

Item 9.

Undertakings.

 

(a)   The undersigned registrant hereby undertakes:

 

(1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

(i)

To include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(ii)

To reflect in the prospectus any facts or events arising after the effective date of this 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 this 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 reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;

 

(iii)

To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this 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 reports filed with or furnished to the Commission by the Registrant pursuant to Sections 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.

 

(2)   That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

  

 

(b)   The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act , each filing of the Registrant’s annual report pursuant to Sections 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(c)   Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

 

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 the City of Austin, Texas, on September 24, 2015.

 

	TSS, INC.
	By:	/s/ Anthony Angelini
		Anthony Angelini
		Chief Executive Officer and Director

 

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Anthony Angelini and John K. Penver as his true and lawful attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place or stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement on Form S-8, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons on behalf of the registrant on the dates and in the capacities indicated. This document may be executed by the signatories hereto on any number of counterparts, all of which shall constitute one and the same instrument.

 

Name		Position		Date
/s/ Anthony Angelini		Chief Executive Officer and Director (Principal Executive Officer)		September 24, 2015
Anthony Angelini
/s/ John K. Penver		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)		September 24, 2015
John K. Penver
/s/ Peter H. Woodward		Chairman of the Board		September 24, 2015
Peter H. Woodward
/s/ Gerard J. Gallagher		Chief Technical Officer and Director		September 23, 2015
Gerard J. Gallagher
/s/ Daniel J. Phelps		Director		September 24, 2015
Daniel J. Phelps

 

 

EXHIBIT INDEX  

 

Exhibit No.		Description of Exhibit
4.1		Second Amended and Restated Certificate of Incorporation (previously filed with the Commission as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on January 25, 2007, and incorporated herein by reference).
4.2		Amendment to the Second Amended and Restated Certificate of Incorporation (previously filed with the Commission as Exhibit A-1 to the Registrant’s Definitive Proxy Statement filed on May 22, 2007, and incorporated herein by reference).
4.3		Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (previously filed with the Commission as Exhibit A to the Registrant’s Definitive Proxy Statement filed on April 29, 2011, and incorporated herein by reference).
4.4		Certificate of Amendment to Second Amended and Restated Certificate of Incorporation (previously filed with the Commission as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 7, 2013, and incorporated herein by reference).
4.5		Amended and Restated By-laws (previously filed with the Commission as Exhibit 4.2 to the Registrant’s Registration Statement on Form S-8 No. 333-142906, filed on May 14, 2007, and incorporated herein by reference).
4.6		Specimen of common stock certificate (previously filed with the Commission as Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 (File No. 333-123504) and amendments thereto, declared effective July 13, 2005, and incorporated herein by reference).
5.1		Opinion of Miles & Stockbridge P.C.
23.1		Consent of Grant Thornton LLP.
23.2		Consent of Miles & Stockbridge P.C. (incorporated herein by reference from Exhibit 5.1).
24.1		Power of Attorney to file future amendments (set forth on the signature page of this Registration Statement).
99.1		Award Agreement, dated January 13, 2014, between the Registrant and Martin T. Olsen (previously filed with the Commission as Exhibit 99.3 to the Registrant’s Current Report on Form 8-K filed on January 13, 2014, and incorporated herein by reference).
99.2		Award Agreement, dated August 29, 2014, between the Registrant and John K. Penver (previously filed with the Commission as Exhibit 99.3 to the Registrant’s Current Report on Form 8-K filed on September 2, 2014, and incorporated herein by reference).
99.3		TSS, Inc. 2015 Omnibus Incentive Compensation Plan (previously filed with the Commission in the Registrant’s Definitive Proxy Statement filed on April 30, 2015, and incorporated herein by reference).
99.4		Form of Award Agreement, dated June 5, 2013, between the Registrant and eight of its employees.

 

 

Exhibit 5.1

 

[Miles & Stockbridge P.C. Letterhead]

 

September 24, 2015

 

TSS, Inc.

110 E. Old Settlers Blvd.

Austin, Texas 78664

 

Re:

Registration Statement on Form S-8

 

Ladies and Gentlemen:

 

We have acted as counsel to TSS, Inc., a Delaware corporation (the “Company”), in connection with the registration under the Securities Act of 1933, as amended (the “Securities Act”), of 3,880,000 shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), which may be issued from time to time under that certain Award Agreement, dated January 14, 2014, between the Company and Martin T. Olsen, that certain Award Agreement, dated August 29, 2014, between the Company and John K. Penver, and in connection with an acquisition by the Company of a systems integration business on June 5, 2013 (together, the “Stock Agreements”), pursuant to the Company’s Registration Statement on Form S-8 (the “Registration Statement”) filed today with the Securities and Exchange Commission.

 

We have examined the Registration Statement and such corporate records, certificates, and documents as we deemed necessary for the purpose of this opinion. Based on that examination, it is our opinion that the shares of the Common Stock being registered pursuant to the Registration Statement (the “Shares”), when issued in accordance with the terms and conditions of the Stock Agreements, will be legally issued, fully paid, and non-assessable.

 

In giving our opinion, we are assuming that, at the time of issuance of the Shares, the Company will have a sufficient number of authorized but unissued shares of the Common Stock for the issuance. We are also assuming that issuance of the Shares will not conflict with or violate any provisions of the certificate of incorporation of the Company in effect at the time of issuance.

 

Our opinion expressed herein is limited to the General Corporation Law of the State of Delaware. The opinion expressed herein is limited to the matters expressly set forth in this letter and no other opinion should be inferred beyond the matters expressly stated.

 

We hereby consent to the filing of this opinion with the Registration Statement as Exhibit 5 thereto. In giving our consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder.

 

Very truly yours,

 

Miles & Stockbridge P.C.

 

	By:	/s/ Christopher R. Johnson
		Principal

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We have issued our report dated April 22, 2015, with respect to the consolidated financial statements included in the Annual Report of TSS, Inc., on Form 10-K for the year ended December 31, 2014, which is incorporated by reference in this Registration Statement. We consent to the incorporation by reference of the aforementioned report in this Registration Statement.

 

 

/s/ Grant Thornton LLP
McLean, Virginia September 23, 2015

 

 

 

 

Exhibit 99.4

 

STOCK OPTION AGREEMENT

 

This Stock Option Agreement (this “Agreement”) is made effective as of June 5, 2013 (“Grant Date”), between TSS, Inc. (the “Company”) and [Name of Recipient] (the “Option Holder”). The Compensation Committee of the Company’s Board of Directors has authorized the grant of an option (the “Option”) to purchase shares of the Company’s common stock (“Common Stock”) to the Option Holder, subject to the terms and provisions of this Agreement. For the avoidance of doubt, the Option is not being granted under the Company’s 2006 Omnibus Incentive Compensation Plan.

 

The Company and the Option Holder agree as follows:

 

1.

The Company grants to the Option Holder, subject to the terms and conditions of this Agreement, an Option to purchase [Amount] shares of Common Stock (“Option Shares”) in installments as set forth in paragraph 2 of this Agreement at an exercise per share equal to the average of the high and low bid prices for the Common Stock reported daily on the OTCQB marketplace during the 20 trading days following the Grant Date (the “Exercise Price”).

 

2.

The Option shall become exercisable and may be exercised in installments in accordance with the following schedule: (a) with respect to [1/3 Amount] Option Shares, on the first anniversary of the Grant Date; (b) with respect to [1/3 Amount] Option Shares, on the second anniversary of the Grant Date; and (c) with respect to [1/3 Amount] Option Shares, on the third anniversary of the Grant Date.

 

3.

Upon a Change in Control, the Option shall become immediately exercisable. For purposes of this Agreement, a “Change in Control” means any one or more of the following: (a) the Company is merged, consolidated or reorganized into or with another corporation, partnership, limited liability company, trust, or other legal person (collectively, a “Business Entity”), and immediately after such merger, consolidation, or reorganization less than fifty percent (50%) of the combined voting power of the then-outstanding securities of such Business Entity immediately after such transaction are held in the aggregate by the holders of voting stock of the Company immediately prior to such transaction; (b) the Company sells all or substantially all of its assets to any other Business Entity, and less than fifty percent (50%) of the combined voting power of the then-outstanding securities of such Business Entity immediately after such sale are held in the aggregate by the holders of voting stock of the Company immediately prior to such sale; or (c) any person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or group of persons acting in concert has become the beneficial owner (as the term “beneficial owner” is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing fifty percent (50%) or more of the voting stock of the Company.

 

4.

Notwithstanding paragraphs 2 and 3 of this Agreement, the Option may not be exercised after June 5, 2023.

 

5.

The Option is nontransferable otherwise than by will or the laws of descent and distribution, and, during the lifetime of the Option Holder, the Option may be exercised only by the Option Holder or, during the period the Option Holder is under a legal disability, by the Option Holder’s guardian or legal representative. Except as provided above, the Option may not be assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.

 

 

6.

Except as otherwise set forth in this Agreement, if the Option Holder ceases to be actively employed for any reason by the Company or a Subsidiary, the Option shall terminate effective the close of business on the date the Option Holder ceases to be a regular, full-time employee of the Company or a Subsidiary, except (a) to the extent previously exercised, (b) as provided in paragraph 7 of this Agreement, and (c) in the case of involuntary termination of employment, for a period of 60 days thereafter the Option Holder shall be entitled to exercise that portion of the Option that was exercisable at the close of business on the date the Option Holder ceased to be a regular, full-time employee of the Company or a Subsidiary, provided that in no event may any Option be exercised after June 5, 2023. For purposes of this Agreement, “Subsidiary” means any corporation, partnership, joint venture, affiliate or other entity in which the Company has a majority voting interest.

 

7.

If the Option Holder dies without the Option covered by this Agreement having been exercised in full, the executor or administrator of the Option Holder’s estate or the person who inherits the right to exercise the Option by bequest or inheritance shall have the right within three years of the Option Holder’s death to purchase the number of Option Shares the Option Holder was entitled to purchase at the date of death, after which such Option will lapse, provided that in no event may such Option be exercised after June 5, 2023.

 

8.

The Option shall be exercised by the delivery of a written notice of exercise to the Company, setting forth the number of Option Shares with respect to which the Option is to be exercised, accompanied by full payment for the Option Shares. The Exercise Price shall be payable to the Company in full either: (a) in cash or its equivalent, (b) by tendering previously acquired shares of Common Stock having an aggregate fair market value at the time of exercise equal to the total Exercise Price (provided that the shares that are tendered must have been held by the Option Holder for at least six (6) months prior to their tender to satisfy the Exercise Price), (c) by withholding shares of Common Stock issuable pursuant to the exercise of the Option having an aggregate fair market value at the time of exercise equal to the total Exercise Price, or (d) such other methods as the Company shall authorize. The Company may permit the exercise of the Option upon the receipt from a third party of payment (or a commitment to make payment) in full in cash for the Exercise Price prior to the issuance of the Option Shares in the manner and subject to the procedures as may be established by the Company. As soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver to the Option Holder, in the Option Holder’s name, certificates in an appropriate amount based upon the number of Option Shares purchased under the Option.

 

9.

The Option may be exercised non-sequentially in respect of any other option to acquire Common Stock granted to the Option Holder, whether in the Option Holder’s possession or hereafter acquired.

 

10.

At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Option Holder hereby authorizes withholding from payroll or any other payment of any kind due the Option Holder and otherwise agrees to make adequate provision for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in connection with the Option. The Company may require the Option Holder to make a cash payment to cover any withholding tax obligation as a condition of exercise of the Option or issuance of share certificates representing Option Shares.

 

The Company may permit the Option Holder to satisfy, in whole or in part, any withholding tax obligation that may arise in connection with the Option either by electing to have the Company withhold from the shares of Common Stock to be issued upon exercise that number of shares of Common Stock, or by electing to deliver to the Company already-owned shares of Common Stock, in either case having a fair market value equal to the amount necessary to satisfy the statutory minimum withholding amount due. If the Option Holder elects to satisfy the tax withholding obligation by having the Company withhold shares of Common Stock upon the exercise of the Option, the number of shares of Common Stock to be withheld shall be based on the minimum estimated federal, state and local taxes payable by the Option Holder as a result of the exercise of the Option.

 

 

11.

Nothing in this Agreement shall interfere with or limit in any way the right of the Company to terminate the Option Holder’s employment at any time, nor confer upon the Option Holder any right to continue in the employ of the Company.

 

12.

No provision of this Agreement may be amended unless such amendment is in writing and signed by the Option Holder and the Company.

 

13.

All obligations of the Company under this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

 

14.

To the extent not preempted by federal law, this Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without giving effect to the conflict of laws principles thereof.

 

The undersigned parties have executed this Agreement as of the day and year first above written.

 

	TSS, INC.
	By:
		Maura A. McNerney
		Chief Financial Officer
	OPTION HOLDER
	[Name of Recipient]