As filed with the Securities and Exchange Commission on October 27,1999
Registration No. 333-9809
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
MCY.COM, INC.
(Exact name of registrant as specified in its charter)
Delaware 87-0561634
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1133 Avenue of the Americas, 28th Floor
New York, New York 10036
(Address of Principal Executive Offices) (Zip Code)
MCY.COM, INC. AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN
(Full title of the plan)
Bernhard Fritsch, President and Chief Executive Officer
MCY.com, Inc.
1133 Avenue of the Americas, 28th Floor
New York, New York 10036
(Name and address of agent for service)
(212) 944-6664
(Telephone number, including area code, of agent for service)
with a copy to:
Martin Eric Weisberg
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
(212) 704-6050
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this registration statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
EACH CLASS AMOUNT OF OFFERING AGGREGATE AMOUNT OF
OF SECURITIES SHARES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1)(3) SHARE (2) PRICE (2) FEE (2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.001
per share 375,450 (2) $1,075,050 $ 299
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 416(b), all additional securities resulting from
anti-dilution adjustments, if any, under the MCY.com, Inc. Amended and
Restated 1999 Stock Incentive Plan (the "Plan") shall also be deemed
covered.
(2) Pursuant to Rule 457(h), estimated solely for the purpose of calculating
the registration fee based upon the prices at which the options may be
exercised: (i) 86,700 underlying shares of common stock at an exercise
price of $ 1.50 per share; (ii) 281,250 underlying shares of common stock
at an exercise price of $ 3.20 per share; and (iii) 7,500 underlying
shares of common stock at an exercise price of $ 6.00 per share.
<PAGE>
(3) The total number of shares of common stock authorized to be issued under
the Plan is 15,000,000 shares of common stock.
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents previously filed by us with the Securities and
Exchange Commission (File No. 333-9809) pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "1934 Act") are incorporated by reference:
(a) Our annual report on Form 10-KSB for the fiscal year
ended December 31, 1998;
(b) Our quarterly reports on Form 10-QSB for the fiscal
quarters ended March 31, 1999 and June 30, 1999 and
our current reports on Form 8-KSB dated October 13,
1999 (date of earliest event reported) and dated
August 2, 1999 (date of earliest event reported);
All documents filed by us after the date of this registration statement
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act and before the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part of this registration statement from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this registration statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
We are registering shares of the common stock, par value of $0.001 per
share. Each holder of our common stock is entitled to one vote per share of
common stock standing in such holder's name on our records on each matter
submitted to a vote of our stockholders, except as otherwise required by law.
Holders of our common stock do not have cumulative voting rights so that,
subject to the rights of the holders of our Series I Voting Preferred Stock as
discussed below, the holders of more than 50% of the combined shares of our
common stock voting for the election of directors may elect all of the directors
if they choose to do so and, in that event, the holders of the remaining shares
of our common stock will not be able to elect any members to our board of
directors.
Holders of our common stock are entitled to equal dividends and
distributions, per share, when, as and if declared by our board of directors
from funds legally available. Holders of our common stock do not have
pre-emptive rights to subscribe for any of our securities nor are any shares of
our common stock redeemable or convertible into any of our other securities. If
we liquidate, dissolve or wind up our business or affairs, our assets will be
divided up pro-rata on a share-for-share basis among the holders of our common
stock after creditors and preferred shareholders, if any, are paid.
II-2
<PAGE>
Our amended and restated certificate of incorporation also provides
that the holders of our Series I Voting Preferred Stock are entitled to vote
with the holders of our common stock on all matters, except that holders of our
Series I Voting Preferred Stock are entitled to one hundred votes for each share
of Series I Voting Preferred Stock held. Except for these voting rights, holders
of our Series I Voting Preferred Stock are not entitled to any liquidation,
dividend, conversion or other rights.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
provides, in general, that a corporation incorporated under the laws of the
State of Delaware, such as the registrant, 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 (other than a derivative action by or in
the right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person 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 such person's
conduct was unlawful.
Article VII of our amended and restated certificate of incorporation
provides that to the fullest extent permitted by the Delaware General
Corporation Law as the same exists or as may hereafter be amended, none of our
directors shall be personally liable to us or to our stockholders for or with
respect to any acts or omissions in the performance of his or her duties as one
of our directors. If Article VII of our amended and restated certificate of
incorporation is amended or repealed, the amendment or repeal will not eliminate
or reduce the effect of any right or protection of our directors that existed
immediately prior to such amendment or repeal.
Our by-laws, as amended, provide that we shall indemnify our officers,
directors and employees. The rights to indemnity continue if even a person has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the person's heirs, executors and administrators. In addition, we
shall pay for any expenses incurred by a director or officer in defending any
action, suit or proceeding by reason of the fact that he or she is or was one of
our directors or officers unless such officer, director or employee is adjudged
liable for negligence or misconduct in performing his or her duties. If we do
not pay in full the claim for indemnification of any such officer, director or
employee within thirty days after we receive the written claim, the claimant may
at any time thereafter sue us to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. We may, by action of our board of
directors, indemnify our employees and agents with the same scope and effect as
the foregoing indemnification of our directors and officers.
We maintain directors and officers liability insurance coverage with a
$10,000,000 annual aggregate limit of liability. National Union Fire Insurance
Company provides us with a primary $ 2,000,000 layer while Royal Insurance
Company provides us with a $ 3,000,000 layer in excess of the National Union
policy. TIG
II-3
<PAGE>
Insurance Company provides us with a $ 5,000,000 layer in excess over the
National Union and Royal Insurance policies. All of these policies expire on
July 15, 2000.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
II-4
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------- -----------
4.1 Amended and Restated Certificate of Incorporation. (1)
4.2 By-Laws, as amended. (2)
5.1 Opinion of Parker Chapin Flattau & Klimpl, LLP. (3)
23.1 Consent of Pritchett, Siler & Hardy, P.C., Certified Public
Accountants. (3)
23.2 Consent of Richard A. Eisner & Company, LLP. (3)
23.3 Consent of Parker Chapin Flattau & Klimpl, LLP (included in
Exhibit 5.1).
24.1 Powers of Attorney of Directors and Certain Officers of the
Registrant.(4).
99.1 MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan. (5)
99.2 Form of Award Agreement ("Stock Option Agreement") under the
MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan (3)
- --------------
(1) Incorporated by reference from our current report on Form 8-K dated August
2, 1999 (date of earliest event reported).
(2) Incorporated by reference from Exhibit 3.3 to our registration statement on
Form SB-2 as filed with the Securities and Exchange Commission ("SEC") on
August 9, 1996, SEC File No. 333- 9809.
(3) Filed herewith.
(4) Filed herewith as part of the signature page to this registration
statement.
(5) Incorporated by reference from Exhibit 10.0 to our current report on Form
8-K dated October 13, 1999 (date of earliest event reported) as filed with
the SEC on October 15, 1999, SEC File No. 333-9809.
II-5
<PAGE>
ITEM 9. UNDERTAKINGS.
We undertake to do the following:
(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, as amended;
(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;
(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 registration statement is on Form S-3, Form S-8, Form F-3,
and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports that we
file 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, as amended, each
such post-effective amendment shall be deemed to be a
new registration statement relating to the securities
offered by such registration statement, and the
offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering.
(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.
We undertake that, for purposes of determining any liability
under the Securities Act of 1933, as amended, each filing of our annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934, as amended, that is incorporated by reference in
this registration statement shall be deemed to be a new registration
statement relating to the securities offered in such registration
statement, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering.
Regarding whether indemnification for liabilities arising
under the Securities Act of 1933, as amended, may be permitted to our
directors, officers and controlling persons pursuant to the provisions
described under Item 6 above, or otherwise, we have been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities
Act of 1933, as amended, and is, therefore, unenforceable. If a claim
for indemnification against such liabilities (other than our payment of
expenses incurred or paid by one of our directors, officers or
controlling persons 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, we will,
II-6
<PAGE>
unless in the opinion of our 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 of 1933, as amended, and
will be governed by the final adjudication of such issue.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
we certify that we have reasonable grounds to believe that we meet all of the
requirements for filing on Form S-8 and have duly caused this registration
statement to be signed on our behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 27th day of
October, 1999.
MCY.com, Inc.
/s/ Bernard Fritsch
By: __________________________________
Name: Bernhard Fritsch
Title: President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Bernhard Fritsch with the power of
substitution, as his attorney-in-fact, in all capacities, to sign any amendments
to this registration statement (including post-effective amendments) and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying and confirming all
that said attorney-in-fact or his substitute may do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities indicated on the 27th day of October, 1999.
Signature Title
--------- -----
/s/ Bernhard Fritsch
___________________________ Chairman of the Board of Directors, Chief
Name: Bernhard Fritsch Executive Officer, President and Director
/s/ Lisa Short
___________________________ Secretary
Name: Lisa Short
/s/ Hubertus von Hesse
___________________________ Director
Name: Hubertus von Hesse
II-8
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Amended and Restated Certificate of Incorporation. (1)
4.2 By-Laws, as amended. (2)
5.1 Opinion of Parker Chapin Flattau & Klimpl, LLP. (3)
23.1 Consent of Pritchett, Siler & Hardy, P.C., Certified Public
Accountants. (3)
23.2 Consent of Richard A. Eisner & Company, LLP. (3)
23.3 Consent of Parker Chapin Flattau & Klimpl, LLP (included in
Exhibit 5.1).
24.1 Powers of Attorney of Directors and Certain Officers of the
Registrant.(4).
99.1 MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan. (5)
99.2 Form of Award Agreement ("Stock Option Agreement") under the
MCY.com, Inc. Amended and Restated 1999 Stock Incentive Plan (3)
- ----------------------
(1) Incorporated by reference from our current report on Form 8-K dated August
2, 1999 (date of earliest event reported).
(2) Incorporated by reference from Exhibit 3.3 to our registration statement on
Form SB-2 as filed with the Securities and Exchange Commission ("SEC") on
August 9, 1996, SEC File No. 333- 9809.
(3) Filed herewith.
(4) Filed herewith as part of the signature page to this registration
statement.
(5) Incorporated by reference from Exhibit 10.0 to our current report on Form
8-K dated October 13, 1999 (date of earliest event reported) as filed with
the SEC on October 15, 1999, SEC File No. 333-9809.
II-9
<PAGE>
EXHIBIT 5.1
PARKER CHAPIN FLATTAU & KLIMPL, LLP
COUNSELLORS AT LAW
1211 Avenue of the Americas
New York, NY 10036-8735
(212) 704-6000
Cable LawPark
Fax (212) 704-6288
Telex 640367
175 Great Neck Road
Great Neck, NY 11021
(516) 482-4422
Fax (516) 482-4469
October 26, 1999
MCY.com, Inc.
1133 Avenue of the Americas
New York, New York 10036
RE: MCY.COM, INC.
-------------
Dear Ladies and Gentlemen:
We have acted as counsel to MCY.com, Inc., a Delaware corporation (the
"Company"), in connection with its Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission relating to the offering of up to 375,450 shares of common stock, par
value $0.001 per share, (the "Common Stock"), to key employees, non-employee
directors of, and consultants to, the Company or any parent or subsidiary of the
Company upon the exercise of options which have been, or may from time to time
be, granted by the Company under the Company's MCY.com, Inc. Amended and
Restated 1999 Stock Incentive Plan (the "Plan"), and such additional
indeterminate number of shares of Common Stock as may be issued under the
anti-dilution provisions of the Plan.
In rendering this opinion expressed below, we have examined the Amended
and Restated Certificate of Incorporation of the Company, as amended, the
By-laws of the Company, as amended, and minutes of the corporate proceedings of
the Company relating to the Plan. In addition, we have examined and relied upon
such matters of law, certificates and examinations of public officials as we
have deemed relevant to the rendering of this opinion. We have not examined each
award agreement in respect of options granted under the Plan. We have, however,
examined the form of award agreements which the Company has advised us is the
form of award agreement used by it under the Plan. We have also been informed by
the Company that each award agreement between the Company and option holders
under the Plan is substantially in the form of the award agreement we have
examined. In all of our examinations, we have assumed the accuracy of all
information furnished to us, the genuineness of all documents, the conformity to
originals of all documents submitted to us as certified, conformed, facsimile or
photostatic copies thereof, as well as the genuineness of all signatures on all
such documents.
Our opinion is limited to the date hereof and we do not in any event
undertake to advise you of any facts or circumstances occurring or coming to our
attention subsequent to the date hereof.
Finally, we are counsel admitted to practice only in the State of New
York, and we express no opinions as to the applicable laws of any jurisdiction
other than those of the State of New York and the United States of America.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that the
shares of the Company's Common Stock issued pursuant to the exercise of options
granted or to be granted under the Plan, when issued pursuant to the provisions
of the Plan, are legally issued, fully paid and non-assessable.
We consent to the filing of a copy of this opinion as an exhibit to the
Company's Registration Statement with respect to the Plan.
Very truly yours,
/s/ Parker Chapin Flattau & Klimpl, LLP
--------------------------------------------
PARKER CHAPIN FLATTAU & KLIMPL, LLP
<PAGE>
Exhibit 23.1
PRITCHETT, SILER & HARDY, P.C.
Certified Public Accountants
430 EAST 400 SOUTH
SALT LAKE CITY, UTAH 84111
(801) 328-2727; FAX (801) 328-1123
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the accompanying
registration statement on Form S-8, of our report dated February 26, 1999,
relating to the December 31, 1998 financial statements of Health Builders
International, Inc., appearing in the annual report of Health Builders
International, Inc. (currently known as MCY.com, Inc.) on Form 10-KSB for the
year ended December 31, 1998.
/s/ Pritchett, Siler & Hardy, P.C.
PRITCHETT, SILER & HARDY, P.C.
Salt Lake City, Utah
October 25, 1999
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
(Form S-8 No. 333- 9809) pertaining to the MCY.com, Inc. amended and restated
1999 Stock Incentive Plan of our reports dated September 17, 1999, with respect
to (i) the consolidated financial statements of MCY.com, Inc. as of July 31,
1999 and for the period from January 8, 1999 (inception) through July 31, 1999
and (ii) the combined financial statements of the predecessor companies of
MCY.com, Inc. as of and for the years ended December 31, 1996, 1997 and 1998 and
for the periods from January 1, 1999 through July 2, 1999 and January 1, 1996
through July 2, 1999 included in MCY.com, Inc. Current Report on Form 8-KSB
dated October 13, 1999, filed with the Securities and Exchange Commission.
/s/ Richard A. Eisner & Company, LLP
Richard A. Eisner & Company, LLP
New York, New York
October 25, 1999
Exhibit 99.2
STOCK OPTION AGREEMENT
AS OF_________, 1999
Subject to all of the terms and conditions contained herein, the
undersigned MCY.com, Inc. a Delaware corporation (the "Company"), hereby grants
to _______(the "Employee") the following options to purchase shares of the
Company's $0.001 par value common stock (the "Common Shares") as follows:
1. Options. The Company hereby grants to the Employee the right and
option to purchase from the Company ________(_______) Common Shares
(collectively, the "Options") upon the following terms and conditions:
(a) Term of Options. The Options shall be effective for a period
of Five (5) years from the date of grant.
(b) Purchase Price. The purchase price for the Options shall
be $______ per Option Share (the "Exercise Price).
(c) Options Non-transferable. The option rights with respect to
the Options are non-transferable and are personal to the Employee and may be
exercised only by the Employee and by no one else.
(d) Time of Exercise. Except as set forth herein, there are no
conditions to the exercise by the Employee of the Options.
(e) Vesting of Options. The Options shall become vested
subject to the following schedule, pursuant to the anniversary(s) of the date
first written above (the "Vesting Date (s)") provided, however, that if the
Employee discontinues his service as a Employee of the Company prior to the
Vesting Date(s), all of the Options not fully vested shall expire immediately
upon such Employee's discontinuance of services.
10% February 18, 2000
10% June 18, 2000
14% October 18, 2000
16% May 18, 2000
16% October 18, 2001
16% May 18, 2001
18% October 18, 2002
2. Securities Act etc. In the absence of an effective Registration
Statement under the Securities Act of 1933 (the "Act"), as from time to time in
effect relating thereto, the Company shall not be required to register a
transfer of shares delivered or deliverable upon exercise of the Options
("Delivered Shares") on its books unless the Company shall have been provided
with an opinion of
<PAGE>
counsel satisfactory to it prior to such transfer that registration under the
Act is not required in connection with the transaction resulting in such
transfer. Each certificate evidencing Delivered Shares or issued upon any
transfer of Delivered Shares shall bear an appropriate restrictive legend,
except that such certificate shall not bear such a restrictive legend if the
opinion of counsel referred to above is to the further effect that such legend
is not required in order to establish compliance with the provisions of the Act.
Nothing in this paragraph 2 shall modify or otherwise effect the provisions
applicable to the Delivered Shares.
3. Discontinuance of Services, Exercise, Etc.
(a) In the event of the Employee's discontinuance of services as
an Employee of the Company after the Vesting Date, the Options shall expire
unless exercised within a period of three months from the date on which the
Optionee ceased to be so employed, but in no event after the Expiration Date. In
the event of the death of Optionee during this three month period, this Option
shall be exercisable by his or her personal representatives, heirs or legatees
to the same extent that the Optionee could have exercised this Option if he or
she had not died, for the three months from the date of death, but in no event
after the Expiration Date. In the event of the permanent disability of Optionee
while an employee of the Company or of any subsidiary, this Option shall be
exercisable for twelve (12) months after the date of permanent disability, but
in no event after the Expiration Date. In the event of the death of the Optionee
while an employee of the Company or any Subsidiary, or during the twelve (12)
month period after the date of permanent disability of the Optionee, that
portion of the Option which had become exercisable on the date of death shall be
exercisable by his or her personal representatives, heir or legatees at any time
prior to the expiration of twelve (12) months from the date of the death of
Optionee, but in no event after the Expiration Date.
(b) Subject to the preceding paragraph 3(a) and the other
provisions of this Stock Option Agreement, the Options may, to the extent
exercisable but not previously exercised, be exercised at any time and from time
to time, in whole or in part, by written notice delivered to the Company signed
by the Employee or on behalf of such Employee's estate (the "Estate"), as
applicable. Such notices shall state the number of Common Shares in respect to
which the Options are being exercised, and shall contain representations and
warranties of the Employee or the Estate as the Company may then deem necessary
or desirable in order to comply with federal or state securities laws or as may
otherwise be reasonably requested by the Company, and shall be accompanied
either (i) by payment in full (in cash, by personal check or by any other method
acceptable to the Company) of the full Exercise Price in respect thereof or (ii)
delivery to the Company of a number of shares of Common Stock owned by the
Employee and having a fair market value equal to the full Exercise Price in
respect thereof. In addition, the Company shall have the right to require that
the Employee or the Estate when exercising the Options in whole or in part,
remit to the Company an amount sufficient to satisfy any federal, state or local
withholding tax requirements or make other arrangements satisfactory to the
Company with regard to such taxes prior to the delivery of any Delivered Shares
pursuant to such exercise, including without limitation by withholding Delivered
Shares otherwise deliverable upon such exercise, and, if requested by the
Employee or the Estate, the Company shall so withhold at least a number of
Delivered Shares requested to be withheld by the
-2-
<PAGE>
Employee at the time of such exercise. As soon as practicable after such notice
and payment shall have been received, the Company shall deliver a certificate or
certificates representing the number of Delivered Shares with respect to which
the Options were exercised, registered in the name of the Emplyee or such other
name as the Employee shall direct.
(c) All Delivered Shares that shall be purchased upon the
exercise of the Options as provided herein shall be fully paid and
non-assessable.
4. Certain Conditions. In the event the Company (i) subdivides its
outstanding shares of Common Stock into a greater number of shares, (ii)
combines its outstanding shares of Common Stock into a smaller number of shares,
(iii) makes a distribution on its Common Stock in shares of its capital stock
other than Common Stock, (iv) issues by reclassification of its Common Stock any
shares of its capital stock, or (v) consummates any merger reorganization
consolidation pursuant to which any securities or other consideration is issued
to the holder of outstanding shares of capital stock of the Company (each an
"Adjustment Event"), then the Options granted to the Employee hereunder shall so
be adjusted and upon the exercise of such Options, the Employee shall be
entitled to receive such securities of the Company or other considerations as
the Employee would have held immediately after the consummation of such
Adjustment Event had the Delivered Shares issuable upon such exercise been held
by the Employee on such record date.
5. Option Confers No Rights as Shareholder. The Employee shall not be
entitled to any privileges of ownership with respect to, and shall not be
treated as the owner of, the Common Shares except to the extent that the
Employee acquires such Common Shares through the exercise of the Option.
6. Effect on Employment. This Agreement does not confer on the Employee
any right to employment by the Company, nor does it infer in any way with (i)
any right which the Company may have to terminate or alter the duties of the
Employee at any time; or (ii) any right which the Employee may have to terminate
his duties at any time.
7. Decisions of the Board of Directors. The Board of Directors of the
Company shall have the exclusive right to resolve all questions which may arise
in connection with this Agreement, the Option or the exercise thereof. Any
interpretation, determination or other action made or taken by the Board of
Directors regarding this Agreement, the Option or the exercise thereof shall be
final, binding and conclusive.
8. Miscellaneous. Except as specifically otherwise provided in Section
3 hereof as to exercise by the Estate, the Options may not be assigned or
transferred, in whole or in part, whether by operation of law, upon death or
otherwise, by the Employee without the written consent of the Company which the
Company may withhold it its sole and absolute discretion, with or without any
reason. This Option does not qualify for "incentive stock option" treatment
under the provisions of Section 422A of the Internal Revenue Code of 1954, as
amended. ACCORDINGLY, YOU ARE URGED TO CONSULT WITH YOUR INDIVIDUAL TAX ADVISOR
PRIOR TO EXERCISING THIS OPTION SINCE THE EXERCISE OF THIS OPTION MAY RESULT IN
ADVERSE TAX CONSEQUENCES INCLUDING THE PAYMENT OF ADDITIONAL FEDERAL
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AND/OR STATE INCOME TAXES. THE OPTIONS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
MCY.COM, INC.
By: Bernhard Fritsch, President
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