AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1999
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1040 13-3858917
(State or other jurisdiction (Primary Standard (I.R.S. employer
of incorporation or organization) Classification Code Number) identification number)
</TABLE>
200 EAST PALMETTO PARK ROAD
SUITE 200BOCA RATON, FLORIDA 33431
(561) 393-6685
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
STOCK OPTION AND INCENTIVE PLAN
(Full Title of the Plan)
HARRY WINDERMAN, ESQ.GENERAL COUNSEL
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
200 EAST PALMETTO PARK ROAD
SUITE 200 BOCA RATON, FLORIDA 33431
(561) 393-6685
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At a time or
times as may be determined by the selling stockholders after this registration
statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
<PAGE>
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If any of the securities being registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount to be Proposed Proposed Amount of
Securities to be Registered registered Maximum Maximum registration
Aggregate Aggregate Fee
Offering Price Offering Price
Per Share
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 250,000(1) $2.75(1)(2) $687,500(1) $191.13
- ------------------------------------------------------------------------------------------------------------
Total $
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes shares issuable under the registrant's Stock Option and
Incentive Plan. Also registered are the undetermined number of
shares of common stock that may be issued to adjust for any mergers
or other anti-dilutive events described in the Stock Option and
Incentive Plan.
(2) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457 under the Securities Exchange Act of
1933, as amended, based on $2.75, the per share average of high and
low sales prices of the common stock on the Nasdaq Over-the-Counter
Market on August 5, 1999.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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<PAGE>
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference by Atlantic
International Entertainment, Ltd. (the "Company") and made a part hereof:
(a) The Company's Registration Statement Form 10-SB filed with the
Commission on November 15, 1995 and amended on Form 10-SB/A filed with the
Commission on March 1, 1996;
(b) The Company's Annual Report on Form 10-KSB for the year ending
December, 1998 and the Quarterly Report on Form 10-QSB for the
Quarter ended March 31, 1999; and
(c) The Company's Current Reports on Form 8-K dated July 16, 1996,
November 18, 1996, December 19, 1996, January 30, 1997, and July 6, 1999.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which de-registers all
securities remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of the filing of such reports and
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
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<PAGE>
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law, as amended,
allows a corporation to eliminate the personal liability of directors of a
corporation to the corporation or its stockholders for monetary damages for a
breach of fiduciary duty as a director, except where the director breached his
or her duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a dividend or
approved a stock repurchase in violation of Delaware corporate law or obtained
an improper personal benefit. The Registrant has limited the liability of its
directors for money damages in Article VIII of its Amended and Restated
Certificate of Incorporation (its "Charter"), which reads as follows:
No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except liability for (i) any breach of the director's duty
of loyalty to the Corporation or its stockholders; (ii) any acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) under Section 174 of the General Corporation Law; or (iv) any
transaction from which the director derived any improper personal benefit. The
foregoing sentence notwithstanding, if the
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<PAGE>
General Corporation Law is hereafter amended to authorize further elimination or
a limitation on the liability of a director of a corporation, then the liability
of a director of this Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law, as so amended.
Any repeal or modification of this Article VIII by (i) the
stockholders of the Corporation or (ii) amendment to the General Corporation Law
of Delaware (unless statutory amendment specifically provides to the contrary)
shall not adversely affect any right or protection, existing immediately prior
to the effectiveness of repeal or modification with respect to any acts or
omissions occurring either before or after repeal or modification, of a person
serving as a director at the time of repeal or modification.
Section 145 of the Delaware General Corporation Law, as amended, provides that a
corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), by reason of the fact that he
is or was a director, officer, employee or agent of the corporation or is or was
serving at its request in capacity in another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
Registrant has provided for indemnification of directors, officers, employees
and agents in Article VII of its Charter, which reads as follows:
The Corporation shall indemnify, and advance expenses to, its directors,
officers, employees and agents, and all persons who at any time served as
directors, officers, employees or agents of the Corporation, to the maximum
extent permitted, and in the manner provided by, Section 145 of the Delaware
General Corporation Law, as amended, or any successor provisions, and shall have
power to make any other or further indemnity permitted under the laws of the
State of Delaware. The indemnification provided for herein shall not be deemed
exclusive of any other right to which those indemnified may be entitled under
any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of a person. Any repeal or
modification of this Article VIII by (i) the stockholders of the Corporation or
(ii) amendment to the General Corporation Law of Delaware (unless statutory
amendment specifically provides to the contrary) shall not adversely affect any
right or protection, existing immediately prior to the effectiveness of repeal
or modification with respect to any acts or omissions occurring either before or
after repeal or modification, of a person serving as a director at the time of
repeal or modification.
In addition, Section 5 of Article VII of the Bylaws of the Registrant, as
amended, provides as follows:
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
5
<PAGE>
Commission indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against 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 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 indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of issue.
Item 7. Exemption From Registration Claimed
Not applicable.
6
<PAGE>
Item 8. Exhibits and Financial Statement Schedules.
(a) Exhibits:
4.1 -- Specimen common stock certificate.
*5.1 -- Opinion of Harry Winderman, Esq.
(included in Exhibit 23.2).
10.1 -- Incentive stock Option Plan for Employees,
Directors, Consultants and Advisers.
*10.1a -- Incentive Stock Option Plan effective January 1,
1999.
*23.1 -- Consent of Moore Stephens, P.C.
*23.2 -- Consent of Harry Winderman, Esq.
*24.0 -- Power of Attorney, included on the signature page to
this registration statement
__________________________
* Included herein.
Item 9. Undertakings.
The undersigned registrant undertakes:
a. File, during any period in which it offers or sales
securities, a post-effective amendment to this registration
statement to;
(i) Include any prospectus required by Section 10 (a) (3) of the
Securities Act of 1993;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information in the registration statement;
(iii) Include any additional or changed material information on the
plan of distributionnot previously disclosed in the
Registration Statement or any material changes to such
information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) above 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 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;
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<PAGE>
b. For determining liability under the Securities Act of 1933,
treat each post-effective amendment as a new registration
statement of the securities offered, and in the offering of
securities at that time to be the initial bona fide offering.
c. File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
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 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.
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 each such liabilities (other than the payment by the registrant of
expenses incurred or paid by a trustee, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, 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
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 Boca Raton, Florida, on the 2nd day of August, 1999.
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
By: /s/ Richard Iamunno
-----------------------------------
Richard Iamunno, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Norman J. Hoskin and Richard Iamunno and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place, and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, or any related registration
statement that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Securities Act"), and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
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<PAGE>
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ John Copelyn Chairman of the Board August 2, 1999
- ----------------------------
John Copelyn
/s/ Richard A. Iamunno President, Chief Executive August 2, 1999
- ---------------------------- Officer and Director
Richard A. Iamunno
Director
- ----------------------------
Jeffrey Hurwitz
Director
- ----------------------------
Martin McCarthy
/s/ Marcel Golding Director August 2, 1999
- ----------------------------
Marcel Golding
Director
- ----------------------------
Dr. Leonard Haimes
/s/ Peter Lawson Chief Financial Officer, August 2, 1999
- ---------------------------- Principal Accounting
Peter Lawson Officer and Director
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
STOCK OPTION AND INCENTIVE PLAN
1. PURPOSE OF THE PLAN. In January, 1997, Atlantic International
Entertainment, Ltd. ("AIE"), by and through its Board of Directors adopted an
Incentive Stock Option Plan that granted to the Board of Directors discretion in
the enactment of the plan. The Board, having determined the specific
requirements of the Plan has adopted this Stock Option and Incentive Plan. The
Plan shall be known as the Atlantic International Entertainment, Ltd. 1999 Stock
Option and Incentive Plan (the "Plan"). The purpose of the Plan is to attract
and retain the best available personnel as officers, directors and key employees
and to provide additional incentive to employees of AIE or any present or future
parent or subsidiary of AIE to promote the success of the business. The Plan is
intended to provide for the grant of "Incentive Stock Options", within the
meaning of Section 422 of the Internal Revenue Code of 1954, as amended (the
"Code") and Non-Incentive Stock Options. Each and every one of the provisions of
the Plan relating to Incentive Stock Options shall be interpreted to conform to
the requirements of Section 422 of the Code.
2. DEFINITIONS. As used herein, the following definitions shall apply.
(a) "AIE" shall mean Atlantic International Entertainment, Ltd.
(b) "Award" means the grant by the Committee of an Incentive Stock
Option or a Non-Incentive Stock Option or any combination thereof, as provided
in the Plan.
(c) "Board" shall mean the Board of Directors of AIE.
(d) "Common Stock" shall mean common stock, par value $0.001 per
share, of AIE.
(e) "Code" shall mean the Internal Revenue Code of 1954, as amended.
(f) "Committee" shall mean the Stock Option Committee appointed by the
Board in accordance with paragraph 4(a) of the Plan.
(g) "Continuous Employment" or "Continuous Status as an Employee"
shall mean the absence of any interruption or termination of employment by AIE
or any present or future Parent or Subsidiary of AIE. Employment shall not be
considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by AIE or in the case of transfers between payroll
locations of AIE or between AIE, its Parent, its Subsidiaries or a successor.
(h) "Effective Date" shall mean January 1, 1999.
(i) "Employee" shall mean any person employed on a full-time basis by
AIE or any present or future Parent or Subsidiary of AIE.
(j) "Incentive Stock Option" means an option to purchase Shares
granted by the Committee pursuant to Section 7 hereof which is subject to the
limitations and restrictions of Section 7 hereof and is intended to qualify
under Section 422 of the Code.
<PAGE>
(k) "Non-Incentive Stock Option" means an option to purchase Shares
granted by the Committee pursuant to Section 8, which option is not intended to
qualify under Section 422 of the Code.
(l) "Option" shall mean an Incentive Stock Option granted pursuant to
this Plan.
(m) "Optioned Stock" shall mean stock subject to an Option granted
pursuant to the Plan.
(n) "Optionee" shall mean any person who receives an Option.
(o) "Parent" shall mean any present or future corporation which would
be a "parent corporation" as defined in Subsections 425(e) and (g) of the Code.
(p) "Participant" means any director, officer or employee of AIE or
any Parent or Subsidiary of AIE or any other person providing a service to AIE
who is selected by the Committee.
(q) "Plan" shall mean this plan.
(r) "Share" shall mean one share of the Common Stock.
(s) "Subsidiary" shall mean any present or future corporation which
would be a "subsidiary corporation" as defined in Subsections 425(f) and (g) of
the Code.
3. SHARES SUBJECT TO THE PLAN. Except as otherwise required by the
provisions of Section 11 hereof, the aggregate number of Shares with respect to
which Awards may be made pursuant to the Plan shall not exceed 250,000 shares,
allocated in accordance with Exhibit "A" attached hereto and made a part hereof.
Such Shares may either be authorized but unissued or treasury shares.
4. ADMINISTRATION OF THE PLAN.
(a) Composition of the Committee. The Plan shall be administered by
the Committee, consisting of not less than three persons appointed by the Board.
The Board may from time to time appoint members of the committee in substitution
for members previously appointed and may fill vacancies. Officers, directors,
key employees and other persons who are designated by the Committee shall be
eligible to receive Awards under the Plan. All persons designated as members of
the Committee shall be "disinterested persons" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, and shall be ineligible to receive
Awards under the Plan.
(b) Powers of the Committee. The Committee is authorized (but only to
the extent not contrary to the express provisions of the Plan or to resolutions
adopted by the Board) to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the form and content of
Awards to be issued under the Plan and to make other determinations necessary or
advisable for the administration or the Plan, and shall have and may exercise
such other power and authority as may be delegated to it by the Board from time
to time. A majority of the entire Committee shall constitute a quorum and the
action of a majority of the members present at any meeting at which a quorum is
present shall be deemed the action of the Committee. In no
<PAGE>
event may the Committee revoke outstanding Awards without the consent of the
Participant. Any action permitted to be taken by the Committee at a meeting may
be taken without a meeting if a consent in writing, setting forth the action so
taken, is signed by all members of the Committee. The President of AIE and such
other officers as shall be designated by the Committee are hereby authorized to
execute instruments evidencing Awards on behalf of AIE and to cause them to be
delivered to the Participants.
(c) Effect of Committee's Decision. All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.
5. ELIGIBILITY. Awards may be granted to officers, directors, key employees
and other persons. The Committee, shall from time to time determine the
officers, directors, key employees and other persons who shall be granted
Options or Awards under the Plan, the number to be granted to each such
officers, directors, key employees and other persons under the Plan, and whether
Options granted to each such Employee under the Plan shall be Incentive and/or
Non-Incentive Stock Options. In selecting Participants and in determining the
number of shares of Common Stock to be granted to each such Participant pursuant
to each Award granted under the Plan, the Committee may consider the nature of
the services rendered by each such Participant, each such Participant's current
and potential contribution to AIE, and such other factors as the Committee may,
in its sole discretion, deem relevant. Officers, directors, key employees or
other persons who have been granted an Award may, if otherwise eligible, be
granted additional Options or Awards.
The aggregate fair market value (determined as of the date the Option is
granted) of the Shares for which any Employee may be granted Options in any
calendar year (under all Incentive Stock Option plans, as defined in Section 422
of the Code, of the Corporation or any present or future Parent or Subsidiary of
AIE) shall not exceed $1,000,000, plus any unused limit carryover to such year,
as defined in Section 422(c) of the Code. Notwithstanding the prior provisions
of this Section 5, the Committee may grant Options in excess of the foregoing
limitations, provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options, as defined in Section 422 of the Code.
6. TERM OF PLAN. The Plan shall continue in effect for a term of ten (10)
years from the Effective Date, unless sooner terminated pursuant to Section 16.
No Option shall be granted under the Plan after ten (10) years from the
Effective Date.
7. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Incentive Stock Options
may be granted only to Participants who are Employees. Each Incentive Stock
Option granted pursuant to the Plan shall be evidenced by an instrument in such
form as the Committee shall from time to time approve. Each and every Incentive
Stock Option granted pursuant to the Plan shall comply with, and be subject to,
the following terms and conditions:
(a) Option Price.
(i) The price per share at which each Incentive Stock Option
granted under the Plan may be exercised shall not, as to any particular
Incentive Stock Option, be less than the fair market value of the Common Stock
at the time such Incentive Stock Option is granted. For such purposes, if the
<PAGE>
Common Stock is traded otherwise than on a national securities exchange at the
time of the granting of an Option, then the price per share of the Optioned
Stock shall be not less than the mean between the bid and asked price on the
date the Incentive Stock Option is granted or, if there be no bid and asked
price on said date, then on the next prior business day on which there was a bid
and asked price. If no such bid and asked price is available, then the price per
share shall be determined by the Committee. If the Common Stock is listed on a
national securities exchange at the time of the granting an Incentive Stock
Option, then the price per share shall be not less than the average of the
highest and lowest selling price on such exchange on the date such Incentive
Stock Option is granted or, if there were no sales on said date, then the price
shall be not less than the mean between the bid and asked price on such date.
(ii) In the case of an Employee who owns Common Stock
representing more than ten percent (10%) of the outstanding Common Stock at the
time the Incentive Stock Option is granted, the Incentive Stock Option price
shall not be less than one hundred and ten percent (110%) of the fair market
value of the Common Stock at the time the Incentive Stock Option is granted.
(b) Payment.
Full payment for each share of Common Stock purchased upon the
exercise of any Incentive Stock Option granted under the Plan shall be made
within 15 days of the date of exercise of each such Incentive Stock Option and
shall be paid in cash (in United States Dollars), Common Stock or a combination
of cash and Common Stock. Common Stock utilized in full or partial payment of
the exercise price shall be valued at its fair market value at the date of
exercise. AIE shall accept full or partial payment in Common Stock only to the
extent permitted by applicable law. No shares of Common Stock shall be issued
until full payment therefor has been received by AIE, and no Optionee shall have
any of the rights of a shareholder or AIE until shares of Common Stock are
issued to him.
(c) Term of Incentive Stock Option.
The term of each Incentive Stock Option granted pursuant to the
Plan shall be five (5) years from the date each such Incentive Stock Option is
granted.
(d) Exercise Generally.
Except as otherwise provided in Section 9 hereof, no Incentive Stock Option may
be exercised unless the Optionee shall have been in the employ of AIE at all
times during the period beginning with the date of grant of any such Incentive
Stock Option and ending on the date one (1) year after said date of grant of any
such Incentive Stock Option. In the event the Optionee shall have been in the
employ of AIE for One (1) year from the date of the grant of the Incentive Stock
Option, then the Optionee shall be entitled to exercise no more than 20% of the
Incentive Stock Options then issued to the Optionee. In the event the Optionee
shall have been in the employ of AIE for two (2) years from the date of the
grant of the Incentive Stock Options, then the Optionee shall be entitled to
exercise no more than 60% of the Incentive Stock Options then issued to the
Optionee. In the event the Optionee shall have been in the employ of AIE for
three (3) years from the date of the grant of the Incentive Stock Options, then
the Optionee shall be entitled to exercise all of the Incentive Stock Options
<PAGE>
then issued to the Optionee. The Committee, may impose additional conditions
upon the right of an Optionee to exercise any Incentive Stock Option granted
hereunder which are not inconsistent with the terms of the Plan or the
requirements for qualification as an Incentive Stock Option under Section 422 of
the Code.
(e) Transferability.
Except as otherwise provided, any Incentive Stock Option granted
pursuant to the Plan shall be exercised during any Optionee's lifetime only by
the Optionee to whom it was granted and shall not be assignable or transferable
otherwise than by will or by the laws of descent and distribution.
8. TERMS AND CONDITIONS OF NON-INCENTIVE STOCK OPTIONS. Each Non-Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve.
(a) Grant.
(1) Individual Performance. Each Participant that is an Employee
may be granted an Award in the event said employee's immediate supervisor
determines that said employee's annual performance is either exceeds standard
performance or is determined to be rated "excellent" in accordance with the
policies and procedures of AIE. The number of Options to be granted shall be
determined by dividing (a) the amount of gross salary of each Participant that
is an Employee by (b) the percentage set forth on Exhibit "A" (depending on the
supervisor's evaluation).
(2) Company Performance. Each Participant shall be granted
Options in the event AIE's net income before taxes, as defined by generally
accepted accounting principles (GAAP), exceeds $1,000,000 in any fiscal year.
However, in no event shall the total number of Options granted hereunder exceed
options on 60,000 Shares. The number of Options to be granted shall be
determined by multiplying (a) the amount of AIE net income in excess of
$1,000,000 by (b) 5%.
(b) Terms. Each and every Non-Incentive Stock Option granted pursuant
to the Plan shall comply with and be subject to the following terms and
conditions: (1) Option Price. The exercise price per share of Common Stock for
each Non-Incentive Stock Option granted pursuant to the Plan shall be 20% below
the bid price for the Shares at the close of trading in New York on December 31
of each year of the Plan.
(2) Payment.
Full payment for each share of Common Stock purchased upon the
exercise of any Non-Incentive Stock Option granted under the Plan shall be made
at the time of exercise of each such Non-Incentive Stock Option and shall be
paid in cash (in United States Dollars), Common Stock or a combination of cash
and Common Stock. Common Stock utilized in full or partial payment of the
exercise price shall be valued at its fair market value at the date of exercise.
The Corporation shall accept full or partial payment in Common Stock only to the
<PAGE>
extent permitted by applicable law. No shares of Common Stock shall be issued
until full payment therefor has been received by the Corporation, and no
Optionee shall have any of the rights of a shareholder of the Corporation until
the shares of Common Stock are issued to him.
(c) Term.
The term of each Non-Incentive Stock Option granted pursuant to
the Plan shall be not more than five (5) years from the date each such
Non-Incentive Stock Option is granted.
(d) Exercise Generally.
The Committee may impose additional conditions upon the right of
any Participant to exercise any Non-Incentive Stock Option granted hereunder
which are not inconsistent with the terms of the Plan.
(e) Transferability.
Any Non-Incentive Stock Option granted pursuant to the Plan shall
be exercised during any Optionee's lifetime only by the Optionee to whom it was
granted and shall not be assignable or transferable otherwise than by will or by
the laws of descent and distribution.
9. EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY OR DEATH ON INCENTIVE
STOCK OPTIONS.
(a) Termination of Employment.
In the event that any Optionee's employment by AIE shall
terminate for any reason, other than Permanent and Total Disability (as such
term is defined in Section 105(d)(4) of the Code), death or termination for
cause, all of any such Optionee's Awards, and all of any such Optionee's rights
to purchase or receive shares of Common Stock pursuant thereto, as the case may
be, shall automatically terminate on the date of such termination of employment.
However, no termination of an Optionee's Incentive Stock Options shall occur if,
and to the extent that such Incentive Stock Options are exercised at any time
prior to the earlier of (i) the respective expiration dates of any such
Incentive Stock Options or (ii) the expiration of not more than three (3) months
after the date of such termination of employment, but only if, and to the extent
that, the Optionee was entitled to exercise any such Incentive Stock Options at
the date of such termination of employment. In the event that a subsidiary
ceases to be a subsidiary of AIE, the employment of all of its employees who are
not immediately thereafter employees of AIE shall be deemed to terminate upon
the date such subsidiary so ceases to be a subsidiary of AIE.
(b) Disability.
In the event that any Optionee's employment by AIE shall
terminate as the result of the Permanent and Total disability of such Optionee,
such Optionee may exercise any Incentive Stock Options granted to him pursuant
to the Plan at any time prior to the earlier of (i) the respective expiration
dates of any such Incentive Stock Options or (ii) the date which is one (1) year
after the date of such termination of employment, but only if, and to the extent
<PAGE>
that, the Optionee was entitled to exercise any such Incentive Stock Options at
the date of such termination of employment.
(c) Death.
In the event of the death of any Optionee, any Awards granted to
any such Optionee may be exercised by the person or persons to whom the
Optionee's rights under any such Awards pass by will or by the laws of descent
and distribution (including the Optionee's estate during the period of
administration) at any time prior to the earlier of (i) the respective
expiration dates of any such Incentive Stock Options or (ii) the date which is
one (1) year after the date of death of such Optionee (or such later period not
exceeding one (1) year to which the Committee may, in its discretion, extend
such period), but only if, and to the extent that, the Optionee was entitled to
exercise any such Incentive Stock Options at the date of death. For purposes of
this Section 8(c), any Incentive Stock Option held by an Optionee shall be
considered exercisable at the date of his death if the only unsatisfied
condition precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time.
(d) Termination for Cause.
In the event any Optionee's employment by AIE is terminated for
"cause" which includes, but is not limited to, termination for personal
dishonesty, willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, regulation (other than a law, rule or regulation relating to a
traffic violation or similar offense), termination under the provisions of any
employment agreement, or material breach of any provision of an employment
agreement, then Optionee's Awards shall terminate.
(e) Termination of Awards.
To the extent that any Award granted under the Plan to any
Optionee whose employment by AIE terminates shall not have been exercised within
the applicable period set forth in this Section, any such Award, and all rights
to purchase or receive shares of Common Stock pursuant thereto, as the case may
be, shall terminate on the last day of the applicable period.
10. RIGHT OF REPURCHASE AND RESTRICTIONS ON DISPOSITION AND RIGHT OF FIRST
REFUSAL. AIE, in its sole discretion, as a term of any Awards, shall have the
right (the "Repurchase Right"), but not the obligation, to repurchase all or any
amount of the Shares acquired by an Optionee pursuant to the exercise of any
such Options. The intent of the Repurchase Right is to encourage the continued
employment of the Optionee. The Repurchase Right shall provide for a duration of
the Repurchase Right for Five (5) years from the date of issuance of the Shares,
a price per Share at the closing bid price for the Shares on the date of the
exercise of AIE's rights hereunder, to be paid upon the exercise of the
Repurchase Right and a restriction on the disposition of the Shares by the
Optionee during the period of the Repurchase Right. The Repurchase Right may be
transferred or assigned by AIE to another party. AIE may exercise the Repurchase
Right only to the extent permitted by applicable law.
<PAGE>
11. RECAPITALIZATION, MERGER, CONSOLIDATION, CHANGE IN CONTROL AND SIMILAR
TRANSACTIONS.
(a) Adjustment.
Subject to any required action by the shareholders of AIE, the
aggregate number of shares of Common Stock for which stock options may be
granted hereunder, the number of shares of Common Stock covered by each
outstanding stock option, and the exercise price per share of Common Stock of
each such stock option, shall all be proportionately adjusted for any increase
or decrease in the number of issued and outstanding shares of Common Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of such shares of common Stock effected without the receipt of
consideration by AIE.
(b) Change in Control.
All outstanding options shall become immediately exercisable in
the event of change in control or imminent change in control of AIE, as
determined by the Committee. For purposes of this Section, "change in control"
shall mean: (i) the execution of an agreement for the sale of all, or a material
portion, of the assets of AIE; (ii) the execution of an agreement for a merger
or recapitalization of AIE or any merger or recapitalization whereby AIE is not
the surviving entity; (iii) a change of control of AIE, as otherwise defined or
determined by the Securities Exchange Commission or regulations promulgated by
it; or (iv) the acquisition, directly or indirectly, of the beneficial ownership
(within the meaning of that term as it is used in Section 13(d) of the
Securities Exchange Act of 1934 and the rules promulgated thereunder) of
twenty-five percent (25%) or more of the outstanding voting securities of AIE by
any person, trust, entity or group.
(c) Extraordinary Corporate Action.
Subject to any required action by the shareholders of AIE, in the
event of any Change in Control, recapitalization, merger, consolidation,
exchange of shares, spin-off, reorganization, tender offer, liquidation or other
extraordinary corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:
(i) appropriately adjust the number of shares of Common Stock
subject to each stock option, the exercise price per share of Common Stock, and
the consideration to be given or received by AIE upon the exercise of any
outstanding Option;
(ii) cancel any or all previously granted Options, provided that
appropriate consideration is paid to the Optionee in connection therewith;
and/or
(iii) make such other adjustments in connection with the Plan as
the Committee, in its sole discretion, deems necessary, desirable, appropriate
or advisable; provided, however, that no action shall be taken by the Committee
which would cause Incentive Stock Options granted pursuant to the Plan to fail
to meet the requirements of Section 422 of the Code.
<PAGE>
Except as expressly provided herein, no Optionee shall have any
rights by reason of the occurrence of any of the events described in this
Section.
(d) Acceleration.
The Committee shall at all times have the power to accelerate the
exercise date of Options previously granted under the Plan.
12. TIME OF GRANTING OPTIONS. The initial date of grant of the Options
under the Plan as set forth in Exhibit "A", shall, for all purposes, be January
1, 1999 and thereafter on each July 1 and January 1 thereafter for any employee
who at the time of the grant shall have been an employee for one year from the
initial grant or at least one year from each January and July or any other
person on which the Committee makes the determination of granting such Option.
Notice of the determination shall be given to each Employee to whom an Option is
so granted within a reasonable time after the date of such grant.
13. EFFECTIVE DATE. The Plan shall become effective on January 1, 1999.
Options may be granted prior to ratification of the Plan by the stockholders if
the exercise of such Options is subject to such stockholder ratification.
14. APPROVAL BY SHAREHOLDERS. The Plan shall be approved by stockholders of
AIE within twelve (12) months before or after the date it becomes effective.
15. MODIFICATION OF OPTIONS. At any time and from time to time, the Board
may authorize the Committee to direct the execution of an instrument providing
for the modification of any outstanding Option, provided no such modification,
extension or renewal shall confer on the holder of said Option any right or
benefit which could not be conferred on him by the grant of a new Option at such
time, or shall not materially decrease the Optionee's benefits under the Option
without the consent of the holder of the Option, except as otherwise permitted
under this Plan.
16. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Action by the Board.
The Board may alter, suspend or discontinue the Plan, except that
no action of the Board may increase (other than as provided in Section 11) the
maximum number of shares permitted to be optioned under the Plan, materially
increase the benefits accruing to participants under the Plan or materially
modify the requirements for eligibility for participation in the Plan unless
such action of the Board shall be subject to approval or ratification by the
shareholders of AIE.
(b) Change in Applicable Law.
Notwithstanding any other provision contained in the Plan, in the
event of a change in any federal or state law, rule or regulation which would
make the exercise of all or part of any previously granted Incentive Stock
Option unlawful or subject AIE to any penalty, the Committee may restrict any
such exercise without the consent of the Optionee or other holder thereof in
order to comply with any such law, rule or regulation or to avoid any such
penalty.
<PAGE>
17. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to any Option granted under the Plan unless the issuance and delivery of
such Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, any applicable state securities law and the requirements
of any stock exchange upon which the Shares may then be listed. The inability of
AIE to obtain permission from any regulatory body or authority deemed by AIE's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder
shall relieve AIE of any liability in respect of the non-issuance or sale of
such Shares. As a condition to the exercise of an Option, AIE may require the
person exercising the Option to make such representations and warranties as may
be necessary to assure the availability of an exemption from the registration
requirements of federal or state securities law.
18. RESERVATION OF SHARES. During the term of the Plan, AIE, will reserve
and keep available a number of Shares sufficient to satisfy the requirements of
the Plan.
19. UNSECURED OBLIGATION. No Participant under the Plan shall have any
interest in any fund or special asset of AIE by reason of the Plan or the grant
of any Award to him under the Plan. No trust fund shall be created in connection
with the Plan or any grant of any Award hereunder and there shall be no required
funding of amounts which may become payable to any participant.
20. WITHHOLDING TAX. AIE shall have the right to deduct from all amounts
paid in cash with respect to the exercise of any Award under the Plan any taxes
required by law to be withheld with respect thereto.
21. GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Delaware.
Exhibit 23.1
Consent of Moore Stephens
Board Of Directors
Atlantic International Entertainment, Ltd.
We consent to the incorporation by reference in the registration
statement of Atlantic International Entertainment, Ltd. on Form S-8 of our
report dated February 6, 1999, on our audits of the consolidated financial
statements of Atlantic International Entertainment, Ltd. as of December 31, 1998
and for the two years in the period ended December 31, 1998, which report is
included in the Annual Report on Form 10-KSB.
/s/ Moore Stephens, P.C,
----------------------------------------
MOORE STEPHENS, P.C.
Certified Public Accountants
MOORE STEPHENS
Cranford, New Jersey
August 5, 1999
Exhibit 23.2
Consent of Harry Winderman, Esq.
August 2, 1999
Board of Directors
Atlantic International Entertainment, Ltd.
Gentlemen:
I have acted as counsel for Atlantic International Entertainment,
Ltd. (the "Corporation") in connection with the registration on Form S-8 (the
"registration statement") of 1,250,000 shares of the Corporation's common stock,
$.0001 par value per share registering the shares of common stock.
On the basis of investigation as I deemed necessary, I am of the
opinion that:
(1) the Corporation has been duly incorporated and is validly
existing under the laws of the State of Delaware; and
(2) the common shares have been duly authorized and are validly
issued, fully paid and nonassessable.
I consent to the use of my name under the heading "Validity of
shares of common stock" in the prospectus included in the
registration statement and to the filing of this opinion as an
Exhibit to the registration statement.
Very truly yours,
/s/ HARRY WINDERMAN, ESQ.
HARRY WINDERMAN, ESQ.
