SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Act of 1934 (Amendment No. )
Filed by the registrant x
---
Filed by a party other than the registrant___
Check the appropriate box:
x Preliminary proxy statement
- - - --
__ Definitive proxy statement
__ Definitive additional materials
__ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Sloan Electronics, Inc.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
Sloan Electronics, Inc.
-------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
x No fee required
- - - --
__ Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and O-11
1) Title of each class of securities to which transaction
applies:__________________________________________________________
2) Aggregate number of securities to which transaction
applies:__________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):______________________________________________________
4) Proposed maximum aggregate value of transaction:___________
__________________________________________________________________
5) Total fee paid:____________________________________________
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by
Exchange Act Rule O-11(a) (2) and identify the filing for which the
offseting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount previously paid:
_____________________________________________
(2) Form, Schedule or Registration Statement No.:
_____________________________________________
(3) Filing Party:
_____________________________________________
(4) Date Filed:
_____________________________________________
<PAGE>
Sloan Electronics, Inc.
2527 Monterey St., Sarasota FL 34231
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SATURDAY MAY 16, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Sloan Electronics, Inc., a Delaware corporation (the "Company"),
will be held at the Company's offices 2527 Monterey St., Sarasota
FL 34231, on May 16, 1998 at 2 pm, for the purpose of considering
and acting upon the following matters:
1. The election of five directors to serve until the 1999
Annual Meeting of Stockholders and until their respective
successors are elected and qualified.
2. The ratification of the appointment of Bobbitt Pittenger
and Company PA, to audit the company's financial statements.
3. The ratification of the 1998 Stock Option Plan.
4. The transaction of such other business as may
properly come before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April
16, 1998 as the record date for the determination of stockholders
entitled to notice of and to vote at the meeting. Accordingly,
only stockholders of record at the close of business on that date
will be entitled to vote at the meeting. A complete list of the
stockholders entitled to vote will be available for inspection by
any stockholder during the meeting. In addition, the list will be
open for examination by any stockholder, for any purpose germane
to the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting at the office of the Company,
located at 2527 Monterey St., Sarasota FL 34231.
The enclosed proxy is solicited by the Board of Directors of
the Company. Reference is made to the attached proxy statement
for further information with respect to the business to be
transacted at the meeting. The Board of Directors urges you to
sign, date and return the enclosed proxy promptly. You are
cordially invited to attend the meeting in person. The return of
the enclosed proxy will not affect your right to vote in person if
you do attend the meeting.
Larry Provost
Secretary
DATE
<PAGE>
Sloan Electronics, Inc.
2527 Monterey St., Sarasota FL 34231
PROXY STATEMENT
GENERAL
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Sloan
Electronics, Inc. (the "Company") for use at the Company's 1998
Annual Meeting of Stockholders (the "Meeting"), which will be held
on the date, at the time and place and for the purposes set forth
in the foregoing notice, and at any adjournment or postponement
thereof. This proxy statement, the foregoing notice and the
enclosed proxy are first being sent to stockholders of the Company
(the "Stockholders") on or about April 20, 1998.
The Board of Directors does not intend to bring any matter before
the Meeting except as specifically indicated in the notice and
does not know of anyone else who intends to do so. If any other
matters properly come before the Meeting, however, the persons
named in the enclosed proxy, or their duly constituted substitutes
acting at the Meeting, will be authorized to vote or otherwise act
thereon in accordance with their judgment on such matters. If the
enclosed proxy is properly executed and returned prior to voting
at the Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. In the absence
of instructions, the shares will be voted "FOR" the election of
the five nominees for director named herein, "FOR" the
ratification of the appointment of Bobbitt Pittenger and Company
PA, to audit the companys financial statements, and "FOR" the
ratification of the 1998 Stock Option Plan.
Any proxy may be revoked at any time prior to its exercise by
notifying the Secretary in writing, by delivering a duly executed
proxy bearing a later date, or by attending the Meeting and voting
in person.
VOTING SECURITIES AND SECURITY OWNERSHIP
Voting Securities
At the close of business on April 16, 1998, the record date
fixed for the determination of Stockholders entitled to notice of
and to vote at the Meeting, there were [ ] outstanding
shares of the Company's Common Stock, its only class of voting
securities. Each share of Common Stock entitles the record holder
thereof to one vote. The presence at the Meeting, in person or by
proxy, of a majority of such outstanding shares of Common Stock
will constitute a quorum.
<PAGE>
The affirmative vote of a majority of votes cast at the Meeting is
required to elect directors. The affirmative vote of a majority
of shares of Common Stock present, in person or by proxy, and
entitled to vote at the Meeting will be required to approve the
ratification of the appointment of Bobbitt Pittenger and Company
PA, to audit the companys financial statements. The affirmative
vote of a majority of shares of Common Stock present, in person or
by proxy, and entitled to vote at the Meeting will be required to
approve the 1998 Stock Option Plan.
Proxies submitted which contain abstentions or broker non-votes
will be deemed present at the Meeting in determining the presence
of a quorum. Shares of Common Stock that are voted to abstain
with respect to any matter are considered shares entitled to vote,
and cast, with respect to that matter. Shares of Common Stock
subject to broker non-votes with respect to any matter will not be
considered as shares entitled to vote with respect to that matter.
SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of April
16, 1998 regarding the beneficial ownership of the Company's
Common Stock by (i)each stockholder known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock,
(ii) by each Director and executive officer of the Company and
(iii) by all executive officer and Directors of the Company as a
group. Each of the persons named in the table has sole voting
and investment power with respect to Common Stock beneficially
owned.
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class
- - ------------------- ------------------ --------------
<S> <C> <C>
Larry Provost 1,293,492 13.74%
Chairman, Secretary
and Chief Financial Officer
116 Teatown Road
Croton, NY 10520
Paul Sloan 3,112,535 33.06%
President, Director
2527 Monterey St.
Sarasota, FL 34231
Lester Cohen (1) 588,763 6.25%
Director,
Vice President - Marketing
22317 Collington Dr.
Boca Raton, FL 33428
Margery Cohen Trust 588,763 6.25%
22317 Collington Dr.
Boca Raton, FL 33428
<PAGE>
Michael Solomon 288,626 3.06%
Director,
Senior Vice President
3 Chippewa Ct.
Suffern, NY 10901
James Vondra 414,758 4.40%
Director
216 Overcrest Dr.
Benbrook, TX 76126
Aaron Tsai (2) 819,917 8.71%
c/o MAS Financial Corp.
1710 E. Division St.
Evansville, IN 47711
MAS Financial Corp. 819,917 8.71%
1710 E. Division St.
Evansville, IN 47711
Gregory Tuai 693,234 7.36%
4809 52nd Ave. S.
Seattle, WA 98118
John Rothrock 693,234 7.36%
125 Dogwood Road
Peekskill, NY 10566
Walter Eckman 496,783 5.27%
412 West Cowan Dr.
Houston, TX 77007
All Directors & Officers 5,698,174 60.51%
as a group (5 persons)
</TABLE>
(1) Mr. Lester Cohen is the husband of Mrs. Margery Cohen.
(2) Aaron Tsai is the sole shareholder, President and a Director
of MAS Financial Corp.
The following table sets forth information at April 16, 1998 with
respect to the beneficial ownership of the Company's Common Stock
by (a) each director and each nominee for election as a director
of the Company, (b) each current executive officer named in the
Summary Compensation Table under the caption "EXECUTIVE
COMPENSATION" and (c) all directors and executive officers of the
Company as a group (5 persons). Unless otherwise indicated, each
person named below and each person in the group named below has
sole voting and dispositive power with respect to the shares of
Common Stock indicated as beneficially owned by such person or
group.
<PAGE>
<TABLE>
<CAPTION>
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Class
- - ------------------- ------------------ -----------
<S> <C> <C>
Larry Provost 1,293,492 13.74%
Chairman, Secretary
and Chief Financial Officer
116 Teatown Road
Croton, NY 10520
Paul Sloan 3,112,535 33.06%
President, Director
2527 Monterey St.
Sarasota, FL 34231
Lester Cohen (1) 588,763 6.25%
Director,
Vice President - Marketing
22317 Collington Dr.
Boca Raton, FL 33428
Margery Cohen Trust 588,763 6.25%
22317 Collington Dr.
Boca Raton, FL 33428
Michael Solomon 288,626 3.06%
Director,
Senior Vice President
3 Chippewa Ct.
Suffern, NY 10901
James Vondra 414,758 4.40%
Director
216 Overcrest Dr.
Benbrook, TX 76126
All Directors & Officers 5,698,174 60.51%
as a group (5 persons)
</TABLE>
(1) Mr. Lester Cohen is the husband of Mrs. Margery Cohen.
ELECTION OF DIRECTORS
The Company's By-Laws fix the number of directors of the
Company at five. At the Meeting, Stockholders will elect five
directors to serve for a term of one year, until the 1999 Annual
Meeting of Stockholders and the election and qualification of
their respective successors. Unless otherwise directed, proxies
will be voted for the election of Larry Provost, Paul Sloan,
Lester Cohen, Michael Solomon, and James Vondra as directors.
Each of the nominees has indicated a willingness to serve as a
director of the Company. In the event that any of the nominees
should become unavailable or unable to serve for any reason, the
persons named in the enclosed proxy will vote for one or more
alternate nominees as the Board of Directors may recommend.
<PAGE>
The following table sets forth certain information about each
nominee.
<TABLE>
<CAPTION>
Name Age Position
- - ---- --- --------
<S> <C> <C>
Larry Provost 49 Chairman of the Board of Directors,
Secretary and Chief Financial Officer.
Paul A. Sloan 39 President, Chief Executive Officer and
Director.
Michael Solomon 53 Senior Vice President and Director.
Lester H. Cohen 52 Vice President - Marketing and
Director.
James Vondra 57 Director.
</TABLE>
Mr. Larry Provost became Chairman, Secretary and Chief Financial
Officer of the Company since the merger on December 5, 1997. Mr.
Provost is presently President of Production Talent, Inc., a film
and video production company. Mr. Provost graduated with a B.A.
degree in Psychology from New York University in 1970. Mr. Provost
has 25 years of experience in equipment leasing.
Mr. Paul A. Sloan became President, Chief Executive Officer and
a Director of the Company since the merger on December 5, 1997.
Mr. Sloan co-founded Vorec Corporation in 1986 and served as
design team leader for Vorec's Voicenet and VISA RF products.
Mr. Michael Solomon became Senior Vice President and a Director
of the Company since the merger on December 5, 1997. Mr. Solomon
has worked at the New York City Police Department for 15 years.
Mr. Solomon founded Pro-Tech Security Systems, a company which
installs and services residential and commercial security systems,
after retirement from the New York City Police Department. Mr.
Solomon holds a Master's Degree in Criminal Justice Administration
from New York Institute of Technology.
Mr. Lester H. Cohen became Vice President - Marketing and a
Director of the Company since the merger on December 5, 1997. Mr.
Cohen served as New York State Division of Probation Training
Administrator, Chief of Planning Policy and Program Development
for the same department and as a Line Probation Officer in the
Steuben County Probation Department. Mr. Cohen received a Master's
Degree in Social Work from Adelphi University, School of Social
Work.
Mr. Vondra became a Director of the Company since the merger on
December 5, 1997. Mr. Vondra is a computer scientist with 29 years
experience on mainframe computers, and is an independent investor.
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met one time in 1997, all of the directors
attended the meeting except for Mr. Cohen and Mr. Solomon. In
addition, the Directors held several informal telephone
discussions and voted on issues by special ballot. The entire
Board of Directors considers issues before it and does not form
committees, but may in the future decide to do so.
COMPENSATION OF DIRECTORS
The Directors received no compensation in 1997.
EXECUTIVE COMPENSATION.
The primary objectives of the Company's executive compensation
structure are to maintain executive compensation at competitive
levels to retain qualified personnel and to reward individuals for
their respective contributions to the Company's success. Bonuses
may be granted in order to reward and acknowledge employees for,
among other things, individual initiative and achievement. A
number of factors are considered in determining compensation of
executives, such as historical financial results, anticipated
revenues and earnings for the next fiscal year, individual
contributions to, and length of service with, the Company,
compensation levels at other companies (both within and outside
the Company's industry), and equity and fairness within the top
levels of management. Decisions on executive officer compensation
are, however, primarily subjective. No predetermined weight is
generally assigned to any of the factors mentioned above. A
guideline in determining bonus compensation for division
presidents and other designated executive officers has
historically been the achievement of budgeted sales and earnings
levels, but no other specific corporate performance related
targets are otherwise used and the achievement of such goals is
not, in all cases, determinative of whether an executive officer
will receive bonus compensation or the amount of such
compensation.
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Principle All Other
Position Year Salary Compensation
- - ------------------ ---- ------ ------------
<S> <C> <C> <C>
Larry Provost 1997 $18,000 196,350 (1)
Chairman, Secretary 1996 12,000
and Chief Financial
Officer
Paul Sloan 1997 $60,000 (2)
President, Chief 1996 53,500
Executive Officer
and Director
</TABLE>
(1) Mr. Provost received an aggregate of 196,350 shares as part of
total compensation during fiscal year 1997.
(2) Mr. Sloan has received $40,000 as of December 31, 1997. The
balance of $20,000 is accrued and payable by the Company.
<PAGE>
In addition, the Company may award stock options to key
employees, member of management, directors and consultants under
stock option programs not yet adopted as bonuses based on service
and performance.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Bobbitt,
Pittenger and Company PA as the Company's principal certified
public accountants for the fiscal year ending December 31, 1998.
A representative of Bobbitt, Pittenger and Company is not expected
to be present at the Meeting, but will respond to appropriate
questions of stockholders.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
The firm of S. M. Ward and Company ("Ward") audited the
financial statements of the Company for the fiscal years ended
Dec. 31, 1995 through Dec. 31, 1997. On April 6, 1998 the Board
of Directors of the Company determined not to appoint Ward to
audit the financial statements of the Company for the fiscal year
ended Dec. 31, 1998. On April 6, 1998, pursuant to a vote of the
Board of Directors, the firm of Bobbitt, Pittenger and Company PA
was selected to audit the financial statements of the Company for
the year ended Dec. 31, 1998.
The report of Ward on the Companys financial statements for
the previous years did not contain an adverse opinion or a
disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope, or accounting principles. During the
entire period of the engagement of Ward, through Dec. 31, 1997,
there had been no disagreement on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved
to Wards satisfaction, would have caused Ward to make reference
in connection with its reports to the subject matter of the
disagreement.
<PAGE>
Accordingly, the Board of Directors will offer the following
resolution at the Annual Meeting:
RESOLVED, that the appointment by the Board of Directors of
Bobbitt, Pittenger and Company PA, independent public accountants,
to audit the financial statements of the Company for the year
ended Dec. 31, 1998 be, and hereby is, ratified and approved.
The affirmative vote of at least a majority of the shares
represented and voting at the Annual Meeting at which a quorum is
present (which shares voting affirmatively also constitute at
least a majority of the required quorum) is necessary for approval
of Proposal No. 2. Under Delaware law, there are no rights of
appraisal or dissenters rights which arise as a result of a vote
to ratify the selection of auditors.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 2 TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A
VOTE "FOR" APPROVAL THEREOF.
PROPOSAL NO. 3
ADOPTION OF 1998 STOCK OPTION PLAN
The purpose of the 1998 Stock Option Plan is to attract and retain
and provide additional incentive to selected employees, officers,
directors, agents, consultants and independent contractors of the
Company, or of any parent or subsidiary of the Company. Each option
granted pursuant to the 1998 Stock Option Plan is required to be
designated at the time of grant as either an "incentive stock option" or
as a "non-qualified stock option." The following description of the 1998
Stock Option Plan is qualified in its entirety by reference to the 1998
Stock Option Plan itself
Administration of the Plan
The 1998 Stock Option Plan is administered by the Board of
Directors of the Company or by any committee duly appointed by the
Board, which determines who among those eligible will be granted
options, the time or times at which options will be granted, the number
of shares to be subject to options, the durations of options, any
conditions to the exercise of options and the manner in and price at
which options may be exercised. The Board is authorized to amend,
suspend or terminate the 1998 Stock Option Plan, except that it is not
authorized without stockholder approval (except with regard to
adjustments resulting from changes in capitalization) to (i) increase
the maximum number of shares that may be issued pursuant to the exercise
of options granted under the 1998 Stock Option Plan; (ii) permit the
grant of a stock option under the 1998 Stock Option Plan with an option
price less than 85% of the fair market value of the shares at the time
such option is granted (or 11O% for greater than 1O% stockholders);
(iii) change the eligibility requirements for participation in the 1998
Stock Option Plan; (iv) extend the term of any option or the period
during which any option may be granted under the 1998 Stock Option Plan;
or (v) decrease an option exercise price (although an option may be
canceled and a new option granted at a lower exercise price).
<PAGE>
Shares Subject to the Plan
The 1998 Stock Option Plan provides that options may be granted
with respect to a total of 500,000 shares of Common Stock, subject to
adjustment upon certain changes in capitalization without receipt of
consideration by the Company. In addition, if the Company is involved
in a merger, consolidation, dissolution or liquidation, the options
granted under the 1998 Stock Option Plan will be adjusted or, under
certain conditions, will terminate, subject to the right of the option
holder to exercise his option or a comparable option substituted at the
discretion of the Company prior to such event. If any option expires or
terminates for any reason, without having been exercised in full, the
unpurchased shares subject to such option will be available again for
the purposes of the 1998 Stock Option plan.
Participation
Any employee, officer, director, agent, consultant or independent
contractor of the Company is eligible to receive incentive stock options
or non-qualified stock options granted under the 1998 Stock Option Plan.
Option Price
The exercise price of each option will be determined by the Board
(or any committee appointed by the Board), but incentive stock options
may not be priced less than 85% of the fair market value of the shares
of Common Stock covered by the option on the date the option is granted.
If an incentive stock option is to be granted to an employee who owns
over 10% of the total combined voting power of all classes of the
Company's stock, then the exercise price may not be less than 110% of
the fair market value of the Common Stock covered by the option on the
date the option is granted.
Terms of Options
The Board (or any committee appointed by the Board), in its
discretion, establishes the term of each option, provided that the
maximum term of each option is 1O years. Options granted to an employee
who owns over 1O% of the total combined voting power of all classes of
stock of the Company expires not more than five years after the date of
grant. The 1998 Stock Option Plan provides for the earlier expiration
of options of a participant in the event of certain terminations of
employment.
Options Grants
As of the date hereof, no options have been granted pursuant to the 1998
Stock Option Plan; however, the Company currently intends to grant
options to purchase approximately 10,000 shares of Common Stock to each
of the five board members elected at the 1998 Stockholders Meeting.
Approval and Termination
The 1998 Stock Option Plan was approved by the Board of Directors of the
Company on April 10, 1998 and, unless sooner terminated by the Board of
Directors (or any committee appointed by the Board), will terminate on
April 10, 2008.
<PAGE>
The Board of Directors will offer the following resolution at the Annual
Meeting:
RESOLVED, that the 1998 Stock Option Plan is approved and adopted.
The affirmative vote of at least a majority of the shares
represented and voting at the Annual Meeting at which a quorum is
present (which shares voting affirmatively also constitute at least a
majority of the required quorum) is necessary for approval of Proposal
No. 3.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 3 TO BE IN THE BEST
INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE
"FOR" APPROVAL THEREOF.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 1999
Annual Meeting of Stockholders must be received by the Company by
December 31, 1998 in order to be considered for inclusion in the
Company's proxy statement and form of proxy relating to that
meeting.
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies
for the Meeting, including the cost of preparing, assembling and
mailing proxy materials, the handling and tabulation of proxies
received and charges of brokerage and other institutions, nominees
and fiduciaries in forwarding such materials to beneficial owners.
The solicitation may be made in person or by telephone or
telegraph by directors, officers and regular employees of the
Company, or by a professional proxy solicitation organization
engaged by the Company.
ANNUAL REPORT ON FORM 10-KSB
The Company's audited financial statements for the year ending
December 31, 1997 and related disclosures are incorporated by
reference herein from the Companies 1997 Annual Report 10-KSB
which accompanies this proxy statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WE URGE YOU TO
FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
By order of the Board of Directors,
Larry Provost
Secretary
DATE:
<PAGE>
Sloan Electronics, Inc.
2527 Monterey St., Sarasota FL 34231
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SATURDAY MAY 16, 1998 2PM
FOR HOLDERS AS OF April 16, 1998
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned stockholder of SLOAN ELECTRONICS, INC. (the
"Company"), revoking all previous proxies, hereby appoints PAUL
SLOAN as the attorney and proxy of the undersigned, with full
power of substitution and resubstitution, to vote all shares of
Common Stock of the Company which the undersigned would be
entitled to vote if personally present at the Annual Meeting of
Stockholders of the Company, to be held at 2 PM. at the offices of
Sloan Electronics, Inc., 2527 Monterey St., Sarasota FL 34231 on
May 16, 1998, and at any adjournment or postponement thereof,
provided that said proxies are authorized and directed to vote as
indicated with respect to the following matters:
Indicate your vote by marking an "X"
DIRECTORS:
Directors recommend a vote for election of the following directors:
1-Larry Provost
2-Paul Sloan
3-Lester Cohen
4-Mike Solomon
5-James Vondra
____ FOR all nominees _____ WITHHOLD all nominees
____ WITHHOLD vote for any individual nominee. Write in numbers
below:
______________________________
PROPOSALS:
PROPOSAL 2- Ratification of appointment of Bobbitt, Pittenger and
Company PA as auditors for the year ending December 31, 1998.
Directors recommend a vote "FOR" Proposal 2.
____ FOR ____ AGAINST _____ ABSTAIN
PROPOSAL 3- Ratification of 1998 Stock Option Plan.
Directors recommend a vote "FOR" Proposal 3
____ FOR ____ AGAINST _____ ABSTAIN
Note: Such other business as may properly come before the meeting
or any adjournment thereof.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting, Proxy Statement and Annual Report of Sloan
Electronics, Inc.
Signature______________________________ Date_____________________
Print Name_____________________________
<PAGE>
ATTATCHMENT
SLOAN ELECTRONICS, INC.
1998 STOCK OPTION PLAN
SECTION 1. Purpose. The purpose of the Sloan Electronics, Inc.,
1998 Stock Option Plan (this "Plan") is to provide a means whereby
selected employees, officers, directors, agents, consultants and
independent contractors of Sloan Electronics, Inc., (the "Company") or
of any parent or subsidiary (as defined in subsection 5.7 and referred
to hereinafter as "related corporations") thereof, may be granted
incentive stock options and/or non-qualified stock options to purchase
the Common Stock (as defined in Section 3) of the Company, in order to
attract and retain the services or advice of such employees, officers,
directors, agents, consultants and independent contractors and to
provide added incentive to them by encouraging stock ownership in the
Company.
SECTION 2. Administration.
(a) This Plan shall be administered by the Board of Directors of
the Company (the "Board"), except to the extent the Board delegates
its authority to a committee of the Board to administer this Plan. The
administrator of this Plan shall hereinafter be referred to as the
"Plan Administrator."
(b) No Option shall be granted to a director or officer (subject
to Section 16 of the Exchange Act) of the Company by the Board unless
(i) approved in advance by the Board or the Plan Administrator in
accordance with the provisions of Rule 16b-3(d)(1) under the Exchange
Act (where the Plan Administrator, if not the entire Board, is a
committee of the Board composed solely of two or more non-employee
directors who satisfy the requirements of Rule 16b-3(b)(3) under
the Exchange Act), or (ii) approved in advance, or subsequently
ratified by, the stockholders in accordance with the provisions of
Rule 16b-3(d)(2) under the Exchange Act, except that an option may be
granted absent such approval if the option provides that no officer or
director of the Company may sell shares received upon the exercise of
such option during the six-month period immediately following the
grant of such option.
2.1 Procedures. The Board shall designate one of the
members of the Plan Administrator as chairman. The Plan Administrator
may hold meetings at such times and places as it shall determine. The
acts of a majority of the members of the Plan Administrator present at
meetings at which a quorum exists, or acts reduced to or approved in
writing by all Plan Administrator members, shall be valid acts of the
Plan Administrator.
<PAGE>
2.2 Responsibilities. Except for the terms and conditions
explicitly set forth in this Plan, the Plan Administrator shall have
the authority, in its discretion, to determine all matters relating to
the options to be granted under this Plan, including selection of the
individuals to be granted options, the number of shares to be subject
to each option, the exercise price, and all other terms and conditions
of the options, including the designation of such options as an
incentive stock option or non-qualified stock option. Grants under
this Plan need not be identical in any respect, even when made
simultaneously. The interpretation and construction by the Plan
Administrator of any terms or provisions of this Plan or any option
issued hereunder, or of any rule or regulation promulgated in
connection herewith, shall be conclusive and binding on all
interested parties, so long as such interpretation and construction
with respect to incentive stock options corresponds to the
requirements of Internal Revenue Code (the "Code") Section 422, the
regulations thereunder, and any amendments thereto.
2.3 Section 16(b) Compliance and Bifurcation of Plan. It
is the intention of the Company that this Plan comply in all respects
with Section 16(b) and Rule 16b-3 under the Exchange Act, to the
extent applicable, and, if any Plan provision is later found not to be
in compliance with such Section or Rule, as the case may be, the
provision shall be deemed null and void, and in all events the Plan
shall be construed in favor of its meeting the requirements of Section
16(b) and Rule 16b-3 under the Exchange Act. Notwithstanding anything
in the Plan to the contrary, the Board, in its absolute discretion,
may bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to participants who are officers and
directors or other persons subject to Section 16(b) of the Exchange
Act without so restricting, limiting or conditioning the Plan with
respect to other participants.
SECTION 3. Stock Subject to This Plan. The stock subject to this
Plan shall be the Company's Common Stock, par value $0.001 per share
(the "Common Stock"), presently authorized but unissued or
subsequently acquired by the Company. Subject to adjustment as
provided in Section 7 hereof, the aggregate amount of Common Stock to
be delivered upon the exercise of all options granted under this Plan
shall not exceed 500,000 shares as such Common Stock was constituted
on the effective date of this Plan. If any option granted under this
Plan shall expire, be surrendered, exchanged for another option,
canceled or terminated for any reason without having been exercised in
full, the unpurchased shares subject thereto shall thereupon again be
available for purposes of this Plan, including for replacement options
which may be granted in exchange for options.
SECTION 4. Eligibility. An incentive stock option may be granted
only to any individual who, at the time the option is granted, is an
employee of the Company or any related corporation. A nonqualified
stock option may be granted to any director, employee, officer, agent,
consultant or independent contractor of the Company or any related
corporation, whether an individual or an entity. Any party to whom an
option is granted under this Plan shall be referred to hereinafter as
an "Optionee".
<PAGE>
SECTION 5. Terms and Conditions of Options. Options granted
under this Plan shall be evidenced by written agreements which shall
contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and which are not inconsistent
with this Plan (the "Option Agreement"). Notwithstanding the
foregoing, options shall include or incorporate by reference the
following terms and conditions:
5.1 Number of Shares and Price. The maximum number of
shares that may be purchased pursuant to the exercise of each option
and the price per share at which such option is exercisable (the
"exercise price") shall be as established by the Plan Administrator,
provided that the Plan Administrator shall act in good faith to
establish the exercise price which shall be not less than the fair
market value per share of the Common Stock at the time the option
is granted with respect to incentive stock options and not less than
85% of the fair market value per share of the Common Stock at the time
the option is granted with respect to nonqualified stock options and
also provided that, with respect to incentive stock options granted
to greater than 10% stockholders, the exercise price shall be as
required by Section 6.
5.2 Term and Maturity. Subject to the restrictions
contained in Section 6 with respect to granting incentive stock
options to greater than 10% stockholders, the term of each incentive
stock option shall be as established by the Plan Administrator and, if
not so established, shall be 10 years from the date it is granted but
in no event shall the term of any incentive stock option exceed 10
years. The term of each nonqualified stock option shall be as
established by the Plan Administrator and, if not so established,
shall be 10 years from the date it is granted. To ensure that the
Company or related corporation will achieve the purpose and receive
the benefits contemplated in this Plan, any option granted to any
Optionee hereunder shall, unless the condition of this sentence is
waived or modified in the agreement
evidencing the option or by resolution adopted by the Plan
Administrator, be exercisable in three equal annual installments
unless otherwise determined by action of the Company's Stock Option
Committee; provided, however, all option shares shall become
immediately exercisable in the event that there is a merger,
consolidation, acquisition of property or stock, separation,
reorganization, liquidation or other Change of Control pursuant to
Section 7.1.1 hereof.
5.3 Exercise. Subject to any vesting schedule described in
subsection 5.2 above, each option may be exercised in whole or in
part; provided, however, that no fewer than 100 shares (or the
remaining shares then purchasable under the option, if less than 100
shares) may be purchased upon any exercise of an option hereunder and
that only whole shares will be issued pursuant to the exercise of any
option. Options shall be exercised by delivery to the Company of
notice of the number of shares with respect to which the
option is exercised, together with payment of the exercise price.
<PAGE>
5.4 Payment of Exercise Price. Payment of the option
exercise price shall be made in full at the time the notice of
exercise of the option is delivered to the Company and shall be in
cash, bank certified or cashier's check or personal check (unless at
the time of exercise the Plan Administrator in a particular case
determines not to accept a personal check) for the Common Stock
being purchased.
The Plan Administrator can determine at the time the
option is granted for incentive stock options, or at any time before
exercise for nonqualified stock options, that additional forms of
payment will be permitted. To the extent permitted by the Plan
Administrator and applicable laws and regulations (including, but not
limited to, federal tax and securities laws and regulations and state
corporate law), an option may be exercised by:
(a) delivery of shares of stock of the Company held by an
Optionee having a fair market value equal to the exercise price, such
fair market value to be determined in good faith by the Plan
Administrator;
(b) delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker, all in accordance
with the regulations of the Federal Reserve Board, to promptly deliver
to the Company the amount of sale or loan proceeds necessary to pay
the exercise price and any federal, state or local withholding tax
obligations that may arise in connection with the exercise; or
(c) delivery of a properly executed exercise notice
together with instructions to the Company to withhold from the shares
that would otherwise be issued upon exercise that number of shares
having a fair market value equal to the option exercise price.
5.5 Withholding Tax Requirement. The Company or any
related corporation shall have the right to retain and withhold from
any payment of cash or Common Stock under the Plan the amount of taxes
required by any government to be withheld or otherwise deducted and
paid with respect to such payment. At its discretion, the Company may
require an Optionee receiving shares of Common Stock to reimburse the
Company for any such taxes required to be withheld by the Company and
withhold such shares in whole or in part until the Company is so
reimbursed. In lieu thereof, the Company, at its option in its sole
discretion, shall (a) have the right to withhold from any other cash
amounts due or to become due from the Company to the Optionee an
amount equal to such taxes or (b) retain and withhold a number of
shares having a market value not less than the amount of such taxes
required to be withheld by the Company to reimburse the Company for
any such taxes and cancel (in whole or in part) any such shares so
withheld. If required by Section 16(b) of the Exchange Act, the
election to pay withholding taxes by delivery of shares held by any
person who at the time of exercise is subject to Section 16(b) of the
Exchange Act, shall be made either six months prior to the date the
option exercise becomes taxable or at such other times as the Company
may determine as necessary to comply with Section 16(b) of the
Exchange Act.
<PAGE>
5.6 Assignability and Transferability of Option. Options
granted under this Plan and the rights and privileges conferred hereby
may not be transferred, assigned, pledged or hypothecated in any
manner (whether by operation of law or otherwise) other than (i) by
will or by the applicable laws of descent and distribution, (ii)
pursuant to a qualified domestic relations order as defined in Section
414(p) of the Code, or Title I of the Employee Retirement Income
Securities Act of 1974, as amended, or the rules thereunder or
(iii) as otherwise determined by the Plan Administrator and set forth
in the Option Agreement. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under this Plan or of
any right or privilege conferred hereby, contrary to the Code or to
the provisions of this Plan, or the sale or levy or any attachment or
similar process upon the rights and privileges conferred hereby shall
be null and void. The designation by an Optionee of a beneficiary does
not, in and of itself, constitute an impermissible transfer under this
Section.
5.7 Termination of Relationship. If the Optionee's
relationship with the Company or any related corporation ceases for
any reason other than termination for cause, death, retirement,
permanent or total disability, and unless by its terms the option
sooner terminates or expires or is extended by the Plan Administrator,
then the Optionee may exercise, for a three-month period, that portion
of the Optionee's option which is exercisable at the time of such
cessation, but the Optionee's option shall terminate at the end of the
three-month period following such cessation as to all shares for which
it has not theretofore been exercised, unless, in the case of a
nonqualified stock option, such provision is waived in the agreement
evidencing the option or by resolution adopted otherwise by the Plan
Administrator within 90 days of such cessation. If, in the case of an
incentive stock option, an Optionee's relationship with the Company or
related corporation changes (i.e., fromemployee to non-employee, such
as a consultant), such change shall constitute a termination of an
Optionee's employment with the Company or related corporation and the
Optionee's incentive stock option shall become a non-qualified stock
option.
If an Optionee is terminated for cause, any option granted
hereunder shall automatically terminate as of the first discovery by
the Company of any reason for termination for cause, and such Optionee
shall thereupon have no right to purchase any shares pursuant to such
option. "Termination for cause" shall mean dismissal for willful
misconduct, gross negligence, dishonesty, conviction or confession of
a crime punishable by law (except minor violations), fraud, misconduct
or disclosure of confidential information; provided, however, in the
case of an employee who is a party to an employment agreement with the
Company or any related corporation, "cause" shall have the meaning set
forth in such employee's employment agreement. If an Optionee's
relationship with the Company or any related corporation is suspended
pending an investigation of whether or not the Optionee shall be
terminated for cause, all Optionee's rights under any option granted
hereunder likewise shall be suspended during the period of
investigation.
<PAGE>
If an Optionee's relationship with the Company or any
related corporation ceases because of a retirement, permanent or total
disability, the Optionee's option shall not terminate or, in the case
of an incentive stock option, cease to be treated as an incentive
stock option until the end of the 12-month period following such
cessation (unless by its terms it sooner terminates and expires). As
used in this Plan, the term "total disability" refers to a mental or
physical impairment of the Optionee which is expected to result in
death or which has lasted or is expected to last for a continuous
period of 12 months or more and which causes the Optionee to be
unable, in the opinion of the Company and two (if more than one is
required by the Company in its sole discretion) independent
physicians, to perform his or her duties for the Company and to be
engaged in any substantial gainful activity. Total disability shall be
deemed to have occurred on the first day after the Company and the two
(if more than one is required by the Company in its sole discretion)
independent physicians have furnished their opinion of total
disability to the Plan Administrator.
For purposes of this subsection 5.7, a transfer of
relationship between or among the Company and/or any related
corporation shall not be deemed to constitute a cessation of
relationship with the Company or any of its related corporations. For
purposes of this subsection 5.7, with respect to incentive stock
options, employment shall be deemed to continue while the Optionee is
on military leave, sick leave or other bona fide leave of absence (as
determined by the Plan Administrator). The foregoing notwithstanding,
employment shall not be deemed to continue beyond the first 90 days of
such leave, unless the Optionee's reemployment rights are guaranteed
by statute or by contract.
As used herein, the term "related corporation", when
referring to a subsidiary corporation, shall mean any corporation
(other than the Company) or other entity in, at the time of the
granting of the option, an unbroken chain of corporations ending with
the Company, if stock or other interests possessing 50% or more of the
total combined voting power of all classes of stock or other interests
of each of the corporations or other entities other than the Company
is owned by one of the other corporations or other entities in such
chain. When referring to a parent corporation or other entity, the
term "related corporation" shall mean any corporation or other entity
in an unbroken chain of corporations or other entities ending with the
Company if, at the time of the granting of the option, each of the
corporations or other entities other than the Company owns stock or
other interests possessing 50% or more of the total combined voting
power of all classes of stock or other interests in one of the
other corporations or other entities in such chain.
<PAGE>
5.8 Death of Optionee. If an Optionee dies while he or she
has a relationship with the Company or any related corporation or
within the three-month period (or 12-month period in the case of
totally disabled Optionees) following cessation of such relationship,
any option held by such Optionee to the extent that the Optionee would
have been entitled to exercise such option, may be exercised within
one year after his or her death by the personal representative of his
or her estate or by the person or persons to whom the Optionee's
rights under the option shall pass by will or by the applicable laws
of descent and distribution.
5.9 Status of Shareholder. Neither the Optionee nor any
party to which the Optionee's rights and privileges under the option
may pass shall be, or have any of the rights or privileges of, a
shareholder of the Company with respect to any of the shares issuable
upon the exercise of any option granted under this Plan unless and
until such option has been exercised.
5.10 Continuation of Employment. Nothing in this Plan or
in any option granted pursuant to this Plan shall confer upon any
Optionee any right to continue in the employ of the Company or of a
related corporation, or to interfere in any way with the right of the
Company or of any such related corporation to terminate his or her
employment or other relationship with the Company at any time.
5.1 Modification and Amendment of Option. Subject to the
requirements of Code Section 422 with respect to incentive stock
options and to the terms and conditions and within the limitations of
this Plan, the Plan Administrator may modify or amend outstanding
options granted under this Plan. The modification or amendment of an
outstanding option shall not, without the consent of the Optionee
impair or diminish any of his or her rights or any of the obligations
of the Company under such option. Except as otherwise provided
in this Plan, no outstanding option shall be terminated without the
consent of the Optionee. Unless the Optionee agrees otherwise, any
changes or adjustments made to outstanding incentive stock options
granted under this Plan shall be made in such a manner so as not to
constitute a "modification" as defined in Code Section 424(h) and so
as not to cause any incentive stock option issued hereunder to fail to
continue to qualify as an incentive stock option as defined in Code
Section 422(b).
5.12 Limitation on Value for Incentive Stock Options. As
to all incentive stock options granted under the terms of this Plan,
to the extent that the aggregate fair market value (determined at the
time the incentive stock option is granted) of the stock with respect
to which incentive stock options are exercisable for the first time by
the Optionee during any calendar year (under this Plan and all other
incentive stock option plans of the Company, a related corporation or
a predecessor corporation) exceeds $100,000, such options shall be
treated as nonqualified stock options. The previous sentence shall not
apply if the Code is amended or if the Internal Revenue Service
publicly rules, issues a private ruling to the Company, any Optionee,
or any legatee, personal representative or distributee of an Optionee
or issues regulations, changing or eliminating such annual limit, in
which case the limitation shall be that provided by the Code or the
Internal Revenue Service, as the case may be.
<PAGE>
5.13 Valuation of Common Stock Received Upon Exercise
5.13.1 Exercise of Options Under Sections 5.4(a) and (c).
The value of Common Stock received by the Optionee from an exercise
under Sections 5.4(a) and 5.4(c) hereof shall be the fair market
value, which shall mean the last reported sales price, regular way, of
the Common Stock on the date of receipt by the Company of the
Optionee's delivery of shares under Section 5.4(a) hereof or delivery
of the exercise notice under Section 5.4(c) hereof (or, if no sale
takes place on any such day, the closing bid price of the Common Stock
on such day), on the principal securities exchange (including the
National Association of Securities Dealers, Inc. (the "NASD'S")
National Market System) on which the Common Stock is admitted or
listed for trading, or, if the Common Stock is not listed on any such
exchange on any such day, the highest reported bid price for the
Common Stock as furnished by the NASD through NASDAQ, or a similar
organization if NASDAQ is no longer reporting such information, or, if
the Common Stock is not listed for trading on an exchange and is not
quoted on NASDAQ or any similar organization on any such day, the fair
value of a share of Common Stock on such day as determined by the
Plan Administrator of the Company in good faith.
5.13.2 Exercise of Option Under Section 5.4(b). The value
of Common Stock received by the Optionee from an exercise under
Section 5.4(b) hereof (a) in the case of the sale of the Common Stock
received as a result of the exercise by a broker on the date of
receipt by the Company of the Optionee's exercise notice, shall equal
the sales price received for such shares; and (b) in all other cases,
shall be determined as provided in Section 5.13.1 hereof.
SECTION 6. Greater Than 10% Stockholders.
6.1 Exercise Price and Term of Incentive Stock Options. If
incentive stock options are granted under this Plan to employees who
own more than 10% of the total combined voting power of all classes of
stock of the Company or any related corporation, the term of such
incentive stock options shall not exceed five years and the exercise
price shall be not less than 110% of the fair market value of the
Common Stock at the time the incentive stock option is granted.
This provision shall control notwithstanding any contrary terms
contained in an option agreement or any other document. The term and
exercise price limitations of this provision shall be amended to
conform to any change required (or, in the sole discretion of the Plan
Administrator, permitted) by a change in the Code or by a ruling or
pronouncement of the Internal Revenue Service.
<PAGE>
6.2 Attribution Rule. For purposes of subsection 6.1, in
determining stock ownership, an employee shall be deemed to own the
stock owned, directly or indirectly, by or for his or her brothers,
sisters, spouse, ancestors and lineal descendants. Stock owned,
directly or indirectly, by or for a corporation, partnership, estate
or trust shall be deemed to be owned proportionately by or for its
stockholders, partners or beneficiaries. If an employee or a person
related to the employee owns an unexercised option or warrant to
purchase stock of the Company, the stock subject to that portion of
the option or warrant which is unexercised shall not be counted in
determining stock ownership. For purposes of this Section 6, stock
owned by an employee shall include all stock owned by him which is
actually issued and outstanding immediately before the grant of the
incentive stock option to the employee.
SECTION 7. Adjustments Upon Changes in Capitalization. The
aggregate number and class of shares for which options may be granted
under this Plan, the number and class of shares covered by each
outstanding option, and the exercise price per share thereof (but not
the total price), shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock of
the Company resulting from a split-up or consolidation of shares or
any like capital adjustment, or the payment of any stock dividend.
7.1. Effect of Liquidation, Reorganization or Change in
Control.
7.1.1 Cash, Stock or Other Property for Stock. Except as
provided in subsection 7.1.2, upon a merger (other than a merger of
the Company in which the holders of Common Stock immediately prior to
the merger have the same proportionate ownership of common stock in
the surviving corporation immediately after the merger),
consolidation, acquisition of property or stock, separation,
reorganization (other than a mere reincorporation or the creation of a
holding company), liquidation of the Company, or other "Change of
Control" of the Company as a result of which the stockholders of the
Company receive cash or property other than capital stock in exchange
for or in connection with their shares of Common Stock, any option
granted hereunder shall terminate, but the Optionee shall have the
right immediately prior to any such merger,
consolidation, acquisition of property or stock, separation,
reorganization,liquidation or Change of Control to exercise such
Optionee's option in whole or in part whether or not the vesting
requirements set forth in the option agreement have been satisfied. A
"Change of Control" of the Company shall be deemed to have occurred in
addition to the events set forth in this subsection 7.1.1, if any change
occurs which would be required to be reported under item 1 on Form 8-K,
promulgated under the Exchange Act.
<PAGE>
7.1.2 Conversion of Options on Stock for Stock Exchange. If
the stockholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common
Stock in any transaction involving a merger (other than a merger of the
Company in which the holders of Common Stock immediately prior to the
merger have the same proportionate ownership of common stock in the
surviving corporation immediately after the merger), consolidation,
acquisition of property or stock, separation or reorganization (other
than a mere reincorporation or the creation of a holding company), all
options granted hereunder shall be converted into options to purchase
shares of Exchange Stock unless the Company and corporation issuing the
Exchange Stock, in their sole discretion, determine that any or all
such options granted hereunder shall not be converted into options to
purchase shares of Exchange Stock but instead shall terminate in
accordance with the provisions of subsection 7.1.1. The amount and
price of converted options shall be determined by adjusting the amount
and price of the options granted hereunder in the same proportion as
used for determining the number of shares of Exchange Stock the
holders of the Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. Unless
the Board determines otherwise, the converted options shall be fully
vested whether or not the vesting requirements set forth in the option
agreement have been satisfied.
7.2 Fractional Shares. In the event of any adjustment in
the number of shares covered by an option, any fractional shares
resulting from such adjustment shall be disregarded and each such
option shall cover only the number of full shares resulting from such
adjustment.
7.3 Determination of Board to Be Final. All Section 7
adjustments shall be made by the Board, and its determination as to
what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive. Unless an Optionee agrees otherwise,
any change or adjustment to an incentive stock option shall be made in
such a manner so as not to constitute a "modification" as defined in
Code Section 425(h) and so as not to cause his or her incentive stock
option issued hereunder to fail to continue to qualify as an incentive
stock option as defined in Code Section 422(b).
SECTION 8. Securities Regulation. Shares shall not be issued
with respect to an option granted under this Plan unless the exercise
of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all relevant provisions of law, including,
without limitation, any applicable state securities laws, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock
exchange or inter-dealer quotation system upon which the shares may
then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and
sale of any shares hereunder. Inability of the Company to obtain from
<PAGE>
any regulatory body having jurisdiction the authority deemed by the
Company's counsel to be necessary for the lawful issuance and sale of
any shares hereunder or the unavailability of an exemption from
registration for the issuance and sale of any shares hereunder shall
relieve the Company of any liability in respect of the nonissuance or
sale of such shares as to which such requisite authority shall not
have been obtained.
As a condition to the exercise of an option, the Company may
require the Optionee to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in
the opinion of counsel for the Company, such representation is
required by any relevant provision of the aforementioned laws. At the
option of the Company, a stop-transfer order against any shares of
stock may be placed on the official stock books and records of the
Company, and a legend indicating that the stock may not be pledged,
sold or otherwise transferred unless an opinion of counsel is provided
(concurred in by counsel for the Company) stating that such transfer
is not in violation of any applicable law or regulation, may be
stamped on stock certificates in order to assure exemption from
registration. The Company may also require such other action or
agreement by the Optionees as it may from time to time deem to be
necessary or advisable. The Company shall not be obligated, by reason
of this provision or otherwise, to undertake registration of the
options or stock thereunder.
Should any of the Company's capital stock of the same class as
the stock subject to options granted hereunder be listed on a national
securities exchange or inter-dealer quotation system, all stock issued
hereunder if not previously listed on such exchange or inter-dealer
quotation system shall be authorized by that exchange or system for
listing thereon prior to the issuance thereof.
SECTION 9. Amendment and Termination.
9.1 Board Action. The Board may at any time suspend, amend
or terminate this Plan, provided that except as set forth in Section
7, the approval of the holders of a majority of the Company's
outstanding shares of voting capital stock present and entitled to
vote at any meeting is necessary for the adoption by the Board of any
amendment which will:
(a) increase the number of shares which are to be
reserved for the issuance of options under this Plan;
(b) permit the granting of stock options to a class
of persons other than those presently permitted to receive stock
options under this Plan; or
(c) require shareholder approval under applicable
law, including Section 16(b) of the Exchange Act.
<PAGE>
9.2 Automatic Termination. Unless sooner terminated by the
Board, this Plan shall terminate ten years from the earlier of (a) the
date on which this Plan is adopted by the Board or (b) the date on
which this Plan is approved by the stockholders of the Company. No
option may be granted after such termination or during any suspension
of this Plan. The amendment or termination of this Plan shall not,
without the consent of the option holder, alter or impair any rights
or obligations under any option theretofore granted under this Plan.
SECTION 10. Effectiveness Of This Plan. This Plan shall become
effective upon adoption by the Board so long as it is approved by the
holders of a majority of the Company's outstanding shares of voting
capital stock present and entitled to vote at any meeting at any time
within 12 months before or after the adoption of this Plan.
Adopted by the Board of Directors on ______________, 1998 and
approved by the stockholders on _____________.
Sloan Electronics, Inc.
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
Date:__________________
TO: _________________
We are pleased to inform you that you have been selected by the
Plan Administrator of the 1998 Stock Option Plan (the "Plan") of Sloan
Electronics, Inc., (the "Company"). The Plan was adopted by the Board
of Directors, by the Stockholders at the Company's 1998 Annual Meeting
of Stockholders. When you sign and return to the Company the
Acceptance and Acknowledgment attached to this Stock Option Agreement
you will be entitled to receive a nonqualified option for the purchase
of _________ shares of the Company's common stock, par value $0.001
per share ("Common Stock"), at an exercise price of $__ per share (the
"exercise price"), and subject to the vesting provisions set forth
herein. A copy of the Plan is attached and the provisions thereof,
including, without limitation, those relating to withholding taxes,
are incorporated into this Agreement by reference. It is understood
that this Option is not intended to constitute an incentive stock
option as that term is defined in Section 422A of the Internal Revenue
Code of 1986, as amended.
The terms of the option are as set forth in the Plan and in this
Agreement. The most important of the terms set forth in the Plan are
summarized as follows:
<PAGE>
Number of Shares: The option granted to you covers an aggregate
of __________ shares of Common Stock.
Exercise Price: The exercise price per share of Common Stock
subject to your option is $______ per share (the "Exercise Price").
Adjustments. The number of shares of Common Stock subject to
your option and the Exercise Price may be subject to adjustment under
certain circumstances as described in the Plan.
Date of Grant: The date of grant of the option is _____________.
Term: The term of the option is ten years from date of grant,
unless sooner terminated.
Vesting: Your option shall vest in three equal annual
installments unless otherwise determined by the Plan Administrator.
Exercise: The vested position of the option may be exercised, in
whole or in part, but not as to any fractional shares, during the term
of the option. You should use a Notice of Exercise of Nonqualified
Stock Option in the form attached to this Agreement when you exercise
the option. During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal
representative of your estate or the beneficiary thereof following
your death.
Payment for Shares: The vested portion of this option may be exercised
by the delivery of:
(a) Cash, personal check (unless, at the time of exercise, the
Plan Administrator determines otherwise), certified or bank cashier's
checks in an amount equal to the aggregate Exercise Price for the
number of shares as to which the option is being exercised together
with a properly executed Notice of Exercise;
(b) Unless the Plan Administrator in its sole discretion
determines otherwise, shares of the capital stock of the Company held
by you having a fair market value at the time of exercise, as
determined by the Plan Administrator in accordance with the Plan,
equal to the aggregate Exercise Price for the number of shares as to
which the option is being exercised;
(c) Unless the Plan Administrator in its sole discretion
determines otherwise, a properly executed Notice of Exercise together
with instructions to the Company to withhold from the shares that
would otherwise be issued upon exercise that number of shares having a
fair market value equal to the aggregate Exercise Price for the number
of shares as to which the option is being exercised; or
<PAGE>
(d) A properly executed Notice of Exercise together with
irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds to pay the aggregate
Exercise Price for the number of shares as to which the option is
being exercised;.
Upon receipt of written Notice of Exercise and payment and
delivery of any other required documentation, the Company shall
deliver to the person exercising the option a certificate or
certificates for the appropriate number of shares of Common Stock. It
shall be a condition to the performance of the Company's obligation to
issue or transfer Common Stock upon exercise of this option that you
pay, or make provision satisfactory to the Company for the payment of,
any axes which the Company is obligated to collect with respect to the
issue or transfer of Common Stock upon exercise.
Termination: Your option will terminate immediately upon
termination for cause, as defined in the Plan, or three months after
cessation of your
relationship with the Company or a related corporation, unless
cessation is due to death, retirement, permanent or total disability,
in which case the portion of this option which is vested at the time
of such termination shall terminate one year after cessation of such
relationship.
All unvested options will terminate immediately upon the
cessation of your relationship with the Company or a related
corporation for any reason,including, without limitation,
termination for cause, resignation,death, retirement,
permanent or total disability.
Transfer of Option: The option is not transferable except by
will or by the applicable laws of descent and distribution or pursuant
to a qualified domestic relations order.
Notice: All notices sent in connection with this option shall be
in writing and, if to the Company, shall be delivered personally to
the President of the Company or mailed to its principal office,
addressed to the attention of the President, and, if to you, shall be
delivered personally or mailed to you at the address noted on the
attached Acceptance and Acknowledgment. Such addresses may be changed
at any time by notice from one party to the other.
YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 8 OF THE
PLAN WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO
FEDERAL ANDSTATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE
OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES
TO YOU. THE COMPANY HAS NO OBLIGATION TO REGISTER THE SHARES THAT WOULD
BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND IF IT NEVER REGISTERS
THE SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE OPTION UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME,
EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES
LAWS ARE VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE
EXPIRATION OF THE OPTION. CONSEQUENTLY, YOU MIGHT HAVE NO OPPORTUNITY
TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH EXERCISE.
IN ADDITION, YOU SHOULD CONSULT WITH YOUR TAX ADVISOR
CONCERNING THE RAMIFICATIONS TO YOU OF HOLDING OR EXERCISING
YOUR OPTIONS OR HOLDING OR SELLING THE SHARES UNDERLYING SUCH
OPTIONS.
<PAGE>
It is the intention of the Company that this Plan comply in all
respects with Section 16(b) and Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act"), to the extent applicable,
and, if any Plan provision is later found not to be in compliance with
such Section or Rule, as the case may be, the provision shall be
deemed null and void, and in all events the Plan shall be construed in
favor of its meeting the requirements of Section 16(b) and Rule 16b-3
under the Exchange Act. Notwithstanding anything in the Plan to the
contrary, the Board, in its absolute discretion, may bifurcate the
Plan so as to restrict, limit or condition the use of any provision of
the Plan to participants who are officers and directors or other
persons subject to Section 16(b) of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to
other participants.
All decisions or interpretations made by the Plan Administrator
with regard to any question arising hereunder or under the Plan shall
be binding and conclusive on the Company and you.
This Agreement shall bind and inure to the benefit of the
parties hereto and the successors and assigns of the Company and, to
the extent provided in the Plan, your executors, administrators,
legatees and heirs.
Please execute the Acceptance and Acknowledgment set forth below
on the enclosed copy of this Agreement and return it to the
undersigned.
Very truly yours,
Sloan Electronics, Inc
By:
________________________
[NAME AND TITLE]
<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ________________, accept the
nonqualified stock option described above and in Sloan Electronics,
Inc. 1998 Stock Option Plan, and acknowledge receipt of a copy of this
Agreement, including a copy of the Plan. I have read and understand
this Agreement and the Plan, including the provisions of Section 8.
Dated: ______________________
Signed: _____________________________________
____________________________________
Taxpayer I.D. Number
By his or her signature below, the spouse of the Optionee, if
such Optionee is legally married as of the date of his or her
execution of this Agreement, acknowledges that he or she has read this
Agreement and the Plan and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of
this Agreement and the Plan.
Dated: ______________________ ____________________________
Spouse's Signature
____________________________
Printed Name
<PAGE>
NOTICE OF EXERCISE
[NAME AND ADDRESS OF ISSUER]
Gentlemen:
I hereby exercise my right to purchase _______ shares of Common
Stock (the "Shares") of Sloan Electronics, Inc., a Delaware
corporation, pursuant to, and in accordance with, the Sloan
Electronics, Inc. 1998 Nonqualified Stock Option Agreement
("Agreement") dated ___________. As provided in that Agreement, I
deliver herewith a certified or bank cashier's check in the amount of
the aggregate option price (unless alternative payment methods have
been approved by the Plan Administrator). Please deliver to me stock
certificates representing the subject shares registered as follows:
Name: ________________________________________
Address: ______________________________________
______________________________________
Social Security Number: __________________________
The aggregate exercise price is $ ____________(total number of
shares to be purchased $____ per share).
1. If the sale of the Shares and the resale thereof has not,
prior to the date hereof, been registered pursuant to a registration
statement filed and declared effective under the Securities Act of
1933, as amended (the "Act"), the undersigned hereby agrees,
represents, and warrants that:
(a) the undersigned is acquiring the Shares for his or her
own account (and not for the account of others), for investment and
not with a view to the distribution or resale thereof;
(b) by virtue of his or her position, the undersigned has
access to the same kind of information which would be available in a
registration statement filed under the Act;
(c) the undersigned is a sophisticated investor;
(d) the undersigned understands that he or she may not
sell or otherwise dispose of the Shares in the absence of either (i) a
registration tatement filed under the Act or (ii) an exemption from
the registration provisions thereof; and
(e) the certificates representing the Shares may contain a
legend to the effect of subsection (d) of this Section 1.
2. If the sale of the Shares and the resale thereof has been
registered pursuant to a registration statement filed and declared
effective under the Act, the undersigned hereby represents and
warrants that he or she has received the applicable prospectus and a
copy of the most recent annual report, as well as all other material
sent to stockholders generally.
<PAGE>
3. The undersigned acknowledges that the number of shares of
Common Stock subject to the Agreement is hereafter reduced by the
number of shares of Common Stock represented by the Shares.
4. The undersigned understands that there are certain tax
implications to his or her exercise of his or her right to purchase
shares of Common Stock under the Agreement. The undersigned further
understands that it is his or her obligation to confer with his or her
own tax advisor with respect to such tax implications.
Very truly yours,
__________________________________
(signature)
__________________________________
(please type or print name)
<PAGE>
SLOAN ELECTRONICS, INC.
INCENTIVE STOCK OPTION LETTER AGREEMENT
Date:_______________
TO: ________________________
We are pleased to inform you that you have been selected by the
Plan Administrator of the 1998 Stock Option Plan (the "Plan") of Sloan
Electronics, Inc., (the "Company") to receive stock options. The Plan
was adopted by the Board of Directors and approved by the stockholders
of the Company at the Company's 1998 Annual Meeting of Stockholders.
When you sign and return to the Company the Acceptance and
Acknowledgment attached to this Stock Option Agreement you will be
entitled to receive an incentive option for the purchase of _________
shares of the Company's common stock, $0.001 par value ("Common
Stock"), at an exercise price of $______ per share (the "exercise
price"). A copy of the Plan is attached and the provisions thereof,
including, without limitation, those relating to withholding taxes,
are incorporated into this Agreement by reference.
The terms of the option are as set forth in the Plan and in this
Agreement. The most important of the terms set forth in the Plan are
summarized as follows:
Number of Shares: The option granted to you covers an aggregate
of _______ shares of Common Stock.
Exercise Price: The exercise price per share of Common Stock
subject to your option is $______ per share (the "Exercise Price").
Adjustments. The number of shares of Common Stock subject to
your option and the Exercise Price may be subject to adjustment under
certain circumstances as described in the Plan.
Date of Grant: The date of grant of the option is ___________.
Term. The term of the option is ten years from date of grant,
unless sooner terminated.
Vesting. Your option shall vest in three equal annual
installments unless otherwise determined by the Plan Administrator.
Exercise. The vested portion of the option may be exercised, in
whole or in part, but not as to any fractional shares, during the term
of the option. You should use a Notice of Exercise of Incentive Stock
Option in the form attached to this Agreement when you exercise the
option. During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal
representative of your estate or the beneficiary thereof following
your death.
Payment for Shares. The vested portion of this option may be
exercised by the delivery of:
<PAGE>
(a) Cash, personal check (unless at the time of exercise the
Plan Administrator determines otherwise), or certified or bank
cashier's checks in an amount equal to the aggregate Exercise Price
for the number of shares as to which the option is being exercised
together with a properly executed Notice of Exercise;
(b) Unless the Plan Administrator in its sole discretion
determines otherwise, a properly executed Notice of Exercise, together
with shares of the capital stock of the Company held by you having a
fair market value at the time of exercise, as determined by the Plan
Administrator in accordance with the Plan, equal to the aggregate
Exercise Price for the number of shares as to which the option is
being exercised;
(c) Unless the Plan Administrator in its sole discretion
determines otherwise, a properly executed Notice of Exercise together
with instructions to the Company to withhold from the shares that
would otherwise be issued upon exercise that number of shares having a
fair market value equal to the aggregate Exercise Price for the number
of shares as to which the option is being exercised; or
(d) A properly executed Notice of Exercise together with
irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds to pay the aggregate
Exercise Price for the number of shares as to which the option is
being exercised.
Upon receipt of written Notice of Exercise and payment and
delivery of any other required documentation, the Company shall
deliver to the person exercising the option a certificate or
certificates for the appropriate number of shares of Common Stock. It
shall be a condition to the performance of the Company's obligation to
issue or transfer Common Stock upon exercise of this option that you
pay, or make provision satisfactory to the Company for the payment of,
any taxes which the Company is obligated to collect with respect to
the issue or transfer of Common Stock upon exercise.
Termination. Your option will terminate immediately upon
termination for cause, as defined in the Plan, or three months after
cessation of your relationship with the Company or a related
corporation thereof, unless cessation is due to death, retirement,
permanent or total disability, in which case the portion of this
option which is vested at the time of such termination shall
terminate one year after cessation of such relationship. All unvested
options will terminate immediately upon the cessation of your
relationship with the Company or a related corporation for any
reason, including, without limitation, termination for cause,
resignation, death, retirement,permanent or total disability.
Transfer of Option. The option is not transferable except by
will or by the applicable laws of descent and distribution or pursuant
to a qualified domestic relations order.
<PAGE>
Notice: All notices sent in connection with this option shall be
in writing and, if to the Company, shall be delivered personally to
the President of the Company or mailed to its principal office,
addressed to the attention of the President, and, if to you, shall be
delivered personally or mailed to you at the address noted on the
attached Acceptance and Acknowledgment. Such addresses may be changed
at any time by notice from one party to the other.
YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 8 OF THE
PLAN WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO
FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE
OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES
TO YOU. THE COMPANY HAS NO OBLIGATION TO REGISTER THE SHARES THAT WOULD
BE ISSUED UPON THE EXERCISE OF YOUR OPTION, AND IF IT NEVER REGISTERS THE
SHARES, YOU WILL NOT BE ABLE TO EXERCISE THE OPTION UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. AT THE PRESENT TIME,
EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES LAWS ARE
VERY LIMITED AND MIGHT BE UNAVAILABLE TO YOU PRIOR TO THE
EXPIRATION OF THE OPTION. CONSEQUENTLY, YOU MIGHT HAVE NO OPPORTUNITY TO
EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH EXERCISE. IN
ADDITION, YOU SHOULD CONSULT WITH YOUR TAX ADVISOR CONCERNING THE
RAMIFICATIONS TO YOU OF HOLDING OR EXERCISING YOUR OPTIONS OR HOLDING
OR SELLING THE SHARES UNDERLYING SUCH OPTIONS.
It is the intention of the Company that this Plan comply in all
respects with Section 16(b) and Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act"), to the extent applicable,
and, if any Plan provision is later found not to be in compliance with
such Section or Rule, as the case may be, the provision shall be
deemed null and void, and in all events the Plan shall be construed in
favor of its meeting the requirements of Section 16(b) and Rule 16b-3
under the Exchange Act. Notwithstanding anything in the Plan to the
contrary, the Board, in its absolute discretion, may bifurcate the
Plan so as to restrict, limit or condition the use of any provision of
the Plan to participants who are officers and directors or other
persons subject to Section 16(b) of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to
other participants.
All decisions or interpretations made by the Plan Administrator
with regard to any question arising hereunder or under the Plan shall
be binding and conclusive on the Company and you.
This Agreement shall bind and inure to the benefit of the
parties hereto and the successors and assigns of the Company and, to
the extent provided in the Plan, your executors, administrators,
legatees and heirs.
<PAGE>
Please execute the Acceptance and Acknowledgment set forth below
on the enclosed copy of this Agreement and return it to the
undersigned.
Very truly yours,
[NAME AND TITLE]
By:
_________________________
[NAME AND TITLE]
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of __________, accept the stock
option described above granted under the Sloan Electronics, Inc., 1998
Stock Option Plan, and acknowledge receipt of a copy of this
Agreement, including a copy of the Plan. I have read and understand
this Agreement and the Plan, including the provisions of Section 8
thereof.
Dated: _______________________
_____________________________________
____________________________________
Taxpayer I.D. Number Signature
By his or her signature below, the spouse of the Optionee, if
such Optionee is legally married as of the date of such Optionee's
execution of this Agreement, acknowledges that he or she has read this
Agreement and the Plan and is familiar with the terms and provisions
thereof, and agrees to be bound by all the terms and conditions of
this Agreement and the Plan.
Dated: ____________________
_______________________________________
Spouse's Signature
_______________________________________
Printed Name
<PAGE>
NOTICE OF EXERCISE
[NAME AND ADDRESS OF ISSUER]
Gentlemen:
I hereby exercise my right to purchase _______ shares of Common
Stock (the "Shares") of Sloan Electronics, Inc., a Delaware
corporation, pursuant to, and in accordance with, the Sloan
Electronics, Inc., 1998 Incentive Stock Option Agreement ("Agreement")
dated ___________. As provided in that Agreement, I deliver herewith a
certified or bank cashier's check in the amount of the aggregate
option price (unless alternative payment methods have been approved by
the Plan Administrator). Please deliver to me stock certificates
representing the subject shares registered as follows:
Name: _________________________________
Address: ______________________________
________________________________
Social Security Number: _______________
The aggregate exercise price is $_____________ (total number of
shares to be purchased $________ per share).
1. If the sale of the Shares and the resale thereof has not,
prior to the date hereof, been registered pursuant to a registration
statement filed and declared effective under the Securities Act of
1933, as amended (the "Act"), the undersigned hereby agrees,
represents, and warrants that:
(a) the undersigned is acquiring the Shares for his or her
own account (and not for the account of others), for investment and
not with a view to the distribution or resale thereof.
(b) by virtue of his or her position, the undersigned has
access to the same kind of information which would be available in a
registration statement filed under the Act;
(c) the undersigned is a sophisticated investor;
(d) the undersigned understands that he or she may not
sell or otherwise dispose of the Shares in the absence of either (i) a
registration statement filed under the Act or (ii) an exemption from
the registration provisions thereof; and
(e) the certificates representing the Shares may contain a
legend to the effect of subsection (d) of this Section 1.
<PAGE>
2. If the sale of the Shares and the resale thereof has been
registered pursuant to a registration statement filed and declared
effective under the Act, the undersigned hereby represents and
warrants that he or she has received the applicable prospectus and a
copy of the most recent annual report, as well as all other material
sent to stockholders generally.
3. The undersigned acknowledges that the number of shares of
Common Stock subject to the Agreement is hereafter reduced by the
number of shares of Common Stock represented by the Shares.
4. The undersigned understands that there are certain tax
implications to his or her exercise of his or her right to purchase
shares of Common Stock under the Agreement. The undersigned further
understands that it is his or her obligation to confer with his or her
own tax advisor with respect to such tax implications.
Very truly yours,
___________________________________
(signature)
___________________________________
( please type or print name)
