AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 13, 1999
REGISTRATION STATEMENT NO. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
COMPLETE WELLNESS CENTERS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
52-1910135
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(I.R.S. EMPLOYER IDENTIFICATION NO.)
666 11TH STREET, N.W., SUITE 200,
WASHINGTON, D.C. 20001
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
1994 STOCK OPTION PLAN
1996 STOCK OPTION PLAN, AS AMENDED
1996 RESTRICTED STOCK OPTION PLAN FOR HEALTH CARE PROFESSIONALS
1998 OUTSIDE DIRECTORS STOCK OPTION PLAN
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(FULL TITLE OF THE PLANS)
JOSEPH RAYMOND, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
666 11TH STREET, N.W.
SUITE 200,
WASHINGTON, D.C. 20001
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(NAME AND ADDRESS, INCLUDING ZIP CODE OF AGENT FOR SERVICE)
(202) 639-9700
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(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
HANK GRACIN, ESQ.
LEHMAN & EILEN LLP
50 CHARLES LINDBERGH BLVD., SUITE 505
UNIONDALE, NEW YORK 11553
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
check the following box. [X]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Amount and Amount Offering Aggregate
Title of Securities to be Price Per Offering Registration
to be Registered Registered Share* Price* Fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001665 par
value, under the 1994
Stock Option Plan 400,000 $2.00 $ 800,000 $222.40
Common Stock, $.0001665
par value, under the
1996 Stock Option Plan,
as amended 400,000 $2.00 $ 800,000 $222.40
Common Stock, $.0001665
par value, under the
1996 Restricted Stock
Option Plan for Health Care
Professionals 100,000 $2.00 $ 200,000 $ 55.60
Common Stock, $.0001665
par value, under the
1998 Outside Directors
Stock Option Plan 50,000 $2.00 $ 100,000 $ 27.80
TOTALS 950,000 $2.00 $1,900,000 $528.20
======= ===== ========== =======
<FN>
*Estimated solely for the purpose of computing the registration fee pursuant to
Rule 457, on the basis of the closing sales price of the Registrant's Common
Stock as reported on NASDAQ on August 9, 1999.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this
registration statement.
(a) Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1998 filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended.
(b) Registrant's Quarterly Reports on Form 10-QSB for the
fiscal quarters ended March 31, 1998, as amended, June 30, 1998, as amended,
September 30, 1998, as amended, and March 31, 1999.
(c) Registrant's Current Reports on Form 8-K dated March 15,
1999, March 12, 1999, March 9, 1999, December 30, 1998, December 3, 1998,
September 21, 1998, August 21, 1998, July 10, 1998, June 3, 1998, March 12,
1998, February 9, 1998 and January 16, 1998.
(d) The description of Registrant's Common Stock contained in
the Registration Statement on Form 8-A filed with the Commission on February 7,
1997 under Section 12 of the Securities Exchange Act of 1934.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after the date of
this registration statement and prior to the filing of a post-effective
amendment to this registration statement which indicates that all securities
offered hereunder have been sold, or which deregisters all securities then
remaining unsold under this registration statement, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof
from the date of filing of such documents.
Item 4. DESCRIPTION OF SECURITIES
Not applicable; the class of securities to be offered is registered
under Section 12 of the Securities Exchange Act of 1934.
Item 5. INTEREST OF NAMED EXPERTS AND COUNSEL
None.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a
court to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms
<PAGE>
sufficiently broad to permit such indemnification under certain circumstances
for liabilities (including reimbursement for expenses incurred) arising under
the Securities Act of 1933, as amended (the "Act"). Article VII of the
Registrant's Bylaws provides for mandatory indemnification of its directors and
permissible indemnification of its officers, employees and other agents to the
maximum extent permitted by the Delaware General Corporation Law. The Registrant
has entered into indemnification agreements with its officers and directors with
further indemnification to the maximum extent permitted by the Delaware General
Corporation Law. Reference is also made to Section XII B of the Investor Rights
Agreement, which contains provisions indemnifying officers and directors of the
Registrant against certain liabilities. Reference is also made to the
Underwriting Agreements entered into in connection with the Company's initial
public offering indemnifying officers and directors of the Company and other
persons against certain liabilities, including those arising under the Act.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
Exhibit
Number Description of Document
------- -------------------------------------------------------------
4.1 Form of Common Stock Certificate (incorporated herein by
reference to Exhibit 4.1 of the Registrant's Registration
Statement on Form SB-2 (File No. 333-18291), as amended.)
4.3 1994 Stock Option Plan
4.4 1996 Stock Option Plan, as amended
4.5 1996 Restricted Stock Option Plan for Health Care
Professionals
4.6 1998 Outside Directors Stock Option Plan
5.1 Opinion of counsel re: legality of securities being registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Amper, Politziner & Mattia, P.A.
23.3 Consent of Counsel (included in Exhibit 5.1).
Item 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
<PAGE>
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such
<PAGE>
indemnification by it is against public policy as expressed in the act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Washington, D.C., on the 13th day of August, 1999.
COMPLETE WELLNESS CENTERS, INC.
By /s/ Joseph Raymond, Jr.
-------------------------------------------
Joseph Raymond, Jr., Chairman of the Board
and Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Date
/s/ Joseph Raymond, Jr. August 13, 1999
- -------------------------
Name: Joseph Raymond, Jr.
Title: Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
/s/ Sergio Vallejo August 13, 1999
- -------------------------
Name: Sergio Vallejo
Title: President, Chief Operating Officer and Director
/s/ E. Eugene Sharer August 13, 1999
- -------------------------
Name: E. Eugene Sharer
Title: Director
/s/ Jack Pawlowski August 13, 1999
- -------------------------
Name: Jack Pawlowski
Title: Director
/s/ Eric Kaplan August 13, 1999
- -------------------------
Name: Eric Kaplan
Title: Director
/s/ Michael Brigante August 13, 1999
- -------------------------
Name: Michael Brigante
Title: Chief Financial Officer
(Principal Accounting and Financial Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Document
------- --------------------------------------------------------------
4.1 Form of Common Stock Certificate (incorporated herein by
reference to Exhibit 4.1 of the Registrant's Registration
Statement on Form SB-2 (File No. 333-18291), as amended.)
4.3 1994 Stock Option Plan
4.4 1996 Stock Option Plan, as amended
4.5 1996 Restricted Stock Option Plan for Health Care
Professionals
4.6 1998 Outside Directors Stock Option Plan
5.1 Opinion of counsel re: legality of securities being registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Amper, Politziner & Mattia, P.A.
23.3 Consent of Counsel (included in Exhibit 5.1).
EXHIBIT 4.3
COMPLETE WELLNESS CENTERS, INC.
1994 STOCK OPTION PLAN
Section 1. Purpose.
This 1994 Stock Option Plan is intended to provide incentives: (a) to
the officers and other employees of Complete Wellness Centers, Inc. (the
"Company") by providing such employees with opportunities to purchase stock in
the Company pursuant to options granted hereunder that qualify as "incentive
stock options" under Section 422(b) of the Internal Revenue Code of 1986, as
amended; (b) to the officers and other employees of the Company by providing
such persons with opportunities to purchase stock in the Company pursuant to
options granted hereunder which do not qualify as "incentive stock options;" and
(c) to consultants and certain other persons rendering services to the Company
by providing such persons with opportunities to purchase stock in the Company
pursuant to options granted hereunder which do not qualify as "incentive stock
options."
SECTION 2. DEFINITIONS.
(a) "Agreements" shall have the meaning ascribed to the term as set
forth in Section 6 hereof.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Common Stock" means the common stock, $.0000555 par value per
share, of the "Company" means Complete Wellness., Centers, Inc., a
Delaware corporation.
(d) "Company" means Complete Wellness Centers, Inc., a Delaware
Corporation.
(e) "Employee" means every individual performing services for the
Company if the relationship between him/her and the person for whom
he/she performs such services is the legal relationship of employer and
employee as determined in accordance with Section 3401(c) of Internal
Revenue Code and Treasury Regulations promulgated thereunder. A member
of the Board of Directors in his/her sole capacity as such is not
an Employee.
(f) "Incentive Stock Option" means a right granted pursuant to this
Plan to purchase Common Stock that satisfies the requirements of
Section 422 of the Internal Revenue Code.
1
<PAGE>
(g) "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Nonqualified Stock Option" means a right granted pursuant to this
Plan to purchase Common Stock that does not satisfy the requirements of
Section 422 of the Internal Revenue Code.
(i) "Option" means a right granted pursuant to this Plan to purchase
Common Stock which may be either an Incentive Stock Option or a
Nonqualified Stock Option as determined by the Board of Directors.
(j) "Optionee" means an individual who has received an Option under the
Plan.
(k) "Plan" means this stock option plan authorizing the granting of
stock Options.
(l) "Plan Administrators" shall have the meaning ascribed to the term
as set forth in Section 5 hereof
(m) "Reserved Shares" shall have the meaning ascribed to the term as
set forth in Section 3 hereof
SECTION 3. SHARES SUBJECT TO THE PLAN.
Subject to adjustments pursuant to Section 8 of the Plan, no more than
four hundred thousand (400,000) shares in the aggregate of the Company's Common
Stock (the "Reserved Shares") may be issued pursuant to the Plan to eligible
participants. The number of the Reserved Shares shall be reduced by the number
of Options granted under the Plan. The Reserved Shares may be made available
from authorized but unissued Common Stock of the Company, from Common Stock of
the Company held as treasury stock, from any shares which may become available
due to the expiration, cancellation or other termination of any Option
previously granted by the Company, or from any combination of the foregoing,
SECTION 4. ELIGIBILITY.
The individuals eligible to receive Options under this Plan shall be
such valued Employees of the Company, and such consultants and, certain other
persons rendering services to the Company, as the Board of Directors may from
time to time determine and select. Employees shall be eligible to receive both
Incentive Stock Options and Nonqualified Stock Options. Consultants and certain
other persons rendering services to the Company shall be eligible to receive
Nonqualified Stock Options.
An Optionee may hold more than one Option. No Employee of the Company
is eligible to receive any Incentive Stock Options if such Employee, at the time
the option is granted,
2
<PAGE>
owns, beneficially or of record, in excess of 10% of the outstanding voting
stock of the Company or a subsidiary thereof, provided, however, that such
Employee will be eligible to receive an Incentive Stock Option if at the time
such Option is granted the Option price is at least 110% of the fair market
value (determined with regard to Section 422(c)(7) of the Internal Revenue Code)
of the stock subject to the Option and such Option by its terms is not
exercisable after the expiration of five (5) years from the date such Option is
granted.
Pursuant to Section, 422(d) of the Internal Revenue Code, no Option
granted pursuant to this Plan shall be treated as an Incentive Stock Option to
the extent that the aggregate fair market value (determined at the time the
Option was granted) of Common Stock with respect to which Options (that
otherwise qualify as Incentive Stock Options) are exercisable for the first time
by an Employee during any calendar year (under all plans of the Company and its
subsidiaries) exceeds $100,000.
SECTION 5. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by those members of the Board of
Directors, or by a committee appointed by the Board of Directors, (in either
event, the "Plan Administrators") who are disinterested persons within the
meaning of Rule 16b-3(c)(2)(i) of the Securities Exchange Act of 1934, as
amended ("Disinterested Persons").
(b) The Plan Administrators shall have the power, subject to, and
within the limits of, the express provisions of the Plan:
(i) To determine from time, to time which eligible persons
shall be granted Options under the Plan, and the time when any
Option shall be granted to them;
(ii) To determine the number of Options to be granted to any
person;
(iii) To grant Incentive Stock ~Options, Nonqualified Stock
Options, or both, under the Plan to such persons;
(iv) To determine the duration and purposes of leaves of
absence which may be granted to Optionee without constituting
a termination of their employment for purposes of the Plan;
(v) To prescribe the terms and provisions of each Option
granted under the Plan (which need not be identical);
(vi) To determine the maximum period during which Options may
be exercised;
(vii) To construe and interpret the Plan and Options granted
under it, and to
3
<PAGE>
establish, amend, and revoke rules and regulations for its
administration; and
(viii) Generally, to exercise such powers and to perform such
acts as are deemed necessary or expedient to promote the best
interests of the Company with respect to the Plan.
(c) Notwithstanding the foregoing, neither the Board of Directors, any
committee thereof nor any person designated pursuant to paragraph (d) below may
take any action which would cause any Plan Administrator to cease to be a
Disinterested Person with regard to this Plan or any other stock option or other
equity plan of the Company.
(d) The Plan Administrators, in the exercise of these powers, may
correct any defect or supply any omission, or reconcile any inconsistency in the
Plan, or in any Option, in the manner and to the extent it shall deem necessary
or, expedient to make the Plan fully effective. All determinations of the Plan
Administrators shall be made by majority vote. Subject to any applicable
provisions of the Company's By-laws, all decisions made by the Plan
Administrators pursuant to the provisions of the Plan and related orders or
resolutions of the Plan Administrators shall be final, conclusive and binding on
all persons, including the Company, stockholders of the Company, Employees and
Optionees.
(e) The Plan Administrators may designate the Secretary of the Company,
or other employees of the Company or competent professional advisors, to assist
in the administration of this Plan and may grant authority to such persons to
execute agreements or other documents on behalf of the Plan Administrators.
(f) The Plan Administrators may employ such legal counsel, consultants
and agents as they may deem desirable for the administration of this Plan and
may rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. No present or former
Plan Administrator shall be liable for any action or determination made in good
faith with respect to this Plan or any Option granted hereunder. To the maximum
extent permitted by applicable law and the Company's Certificate of
Incorporation and By-laws, each present or former Plan Administrator shall be
indemnified and held harmless by the Company against any cost or expenses
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act in connection with this Plan unless arising out of such person's own fraud
or bad faith. Such indemnification shall be in addition to any rights of
indemnification the person may have as a director, officer or employee or under
the Certificate of Incorporation of the Company, the By-laws of the Company or
otherwise. Expenses incurred by the Plan Administrators in the engagement of
such counsel, consultant or agent shall be paid by the Company.
4
<PAGE>
SECTION 6. OPTION TERMS AND CONDITIONS.
The Options granted under the Plan shall be evidenced by written Option
Agreements (the "Agreements") consistent with the terms of the Plan which shall
be executed by the Company and the Optionee. The Agreements, in such form as the
Plan Administrators shall from time to time approve, shall, incorporate the
following terms and conditions:
(a) Time of Exercise. Options shall be exercisable in accordance with
the terms of the Agreements as approved by the Plan Administrators from time to
time. Incentive Stock Options may be exercised only if, at all times during the
period that begins on the date of the granting of the Incentive Stock Option and
that ends on the day three (3) months before the date of such exercise, the
Optionee was an Employee of the Company; provided, however, that if the Optionee
is "disabled" within the meaning of Section, 22(e) of the Internal Revenue Code,
then the end of the preceding post-employment exercise period shall be extended
to one (1) year.
(b) Purchase Price. Except as otherwise provided in Section 4 hereof,
the purchase price per share of Common Stock deliverable upon the exercise of an
Incentive Stock Option shall not be less than the fair market value of the
Common Stock on the date the Option is granted. The purchase price per share of
Common Stock deliverable upon the exercise of a Nonqualified Stock Option shall
be determined by the Plan Administrators in their sole discretion.
(c) Method of Exercise. In order to exercise an Option in whole or in
part, the Optionee shall give written notice to the Company at its principal
place of business of such exercise, stating the number of shares with respect to
which the Option is being exercised. Such notice shall be accompanied by full
payment of the purchase price thereof in cash. The exercise date of the Option
shall be the date the Company receives such notice with any necessary
accompaniments in satisfactory order.
(d) Cashless Exercise. Each optionee shall also be entitled to exercise
an option in a "cashless exercise" by delivering the number of options to be
exercised (with no payment of the exercise price) to the Company and receiving
in return options shares equal to the number of shares by (i) multiplying the
then current "fair market value" of the Company's outstanding public shares of
Common Stock by the number of options to be exercised, (ii) then deducting the
aggregate exercise price associated with the options being exercised, and (iii)
dividing the remaining number by the current "fair market values". For purposes
of the option, the "fair market value" of a share of Common Stock as of a
certain date shall be the closing sale price of the Common Stock on the NASDAQ
Stock Market or, if the Common Stock is not then traded on the NASDAQ Stock
Market, such exchange as the Common Stock is then traded, on the trading date
immediately preceding the date "fairs, market value" is being determined.
(e) Transferability. An Option shall not be transferable by the
Optionee other than
5
<PAGE>
at death and an Option granted to such Optionee is exercisable, during his
lifetime, only by such Optionee.
The Agreements may also contain such other terms, provisions, and
conditions consistent with the Plan and applicable provisions of the Internal
Revenue Code as the Plan Administrators may determine are necessary or proper.
SECTION 7. RIGHTS OF STOCKHOLDERS AND OPTIONEE.
An Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such Option,
unless and until: (a) the Option shall have been exercised pursuant to the terms
thereof; (b) the Company shall have issued and delivered the shares to the
Optionee; and (c) the Optionee's name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full
voting and other ownership rights with respect to such shares.
SECTION 8. ADJUSTMENTS IN THE EVENT, OF CHANGES IN THE CAPITAL STRUCTURE,
REORGANIZATION ANTI-DILUTION OR ACCOUNTING CHANGES.
(a) Changes in Capital Structure. In the event of a change in the
corporate structure or shares of the Company, the Plan Administrators (subject
to any required action by the stockholders) shall make such equitable
adjustments designed to protect against dilution as they may deem appropriate in
the number and kind of shares authorized by the Plan and, with respect to
outstanding Options in the number and kind of shares covered thereby and in the
exercise price of such Options on the dates granted. For the purpose of this
Section, a change in the corporate structure or shares of the Company shall
include, but is not limited to, changes resulting from a recapitalization, stock
split, consolidation, rights offering, stock dividend, reorganization, or
liquidation.
(b) Reorganization-Continuation of the Plan. Upon the effective date of
the dissolution or liquidation of the Company, or a reorganization, merger or
consolidation of the Company with one or more corporations in which the Company
is not the surviving corporation, or of a transfer of substantially all of the
Company's property or more than 80% of the then outstanding shares of the
Company to another corporation not controlled by the Company's stockholders, the
Plan and any Option previously granted under the Plan shall terminate unless
provision be made in writing in connection with such transaction for the
continuation of the Plan and for the assumption of the Options previously
granted, or for the substitution of new Options covering the shares of a
successor employer corporation, or a parent or subsidiary thereof, with
appropriate adjustments (in accordance with the applicable provisions of the
Internal Revenue Code) as to the number and kind of shares and price per share,
in which event the Plan and the Options previously granted or new Options
substituted therefor shall continue in the manner and under the terms as
provided.
6
<PAGE>
Upon the occurrence of a "change in control" of the Company (as defined
below), each option outstanding shall become immediately fully exercisable. For
purposes of such options, a "change in control" of the Company shall mean (i)
the acquisition at any time by a person" or group" (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act of beneficial ownership (as
defined by rule 13d-3 under the Exchange Act)), directly or indirectly, of
securities representing 50% or more of the combined voting power in the election
of directors of the then outstanding securities of the Company or any successor
of the Company; (ii) the termination of service of directors, for any reason
other than death, disability or retirement from the Board of Directors, during
any period of two consecutive years or less, of individuals who at the beginning
of such period constituted a majority of the Board of Directors, unless the
election of or nomination for election of each new director during such period
was approved by a vote of a least two-thirds of the directors still in office
who were directors at the beginning of the period; (iii) approval by the
stockholders of the Company of any merger, consolidation, or statutory share
exchange as a result of which the Common Stock shall be changed, converted, or
exchanged (other than a merger, consolidation, or share exchange with a
wholly-owned-subsidiary) or liquidation of the Company; or any sale or
disposition of 80% or more of the assets or earning power of the Company; or
(iv) approval by the stockholders of the Company of any merger, consolidation,
or statutory share exchange to which the Company is a party as a result of which
the stockholders immediately prior to the effective date of the merger,
consolidation or share exchange shall have beneficial ownership of less than 50%
of the combined voting power in the election of directors of the surviving
corporation; provided, however, that no change in control shall be deemed to
have occurred if, prior to such time as a change in control would otherwise be
deemed to have occurred, the Company's Board of Directors deems otherwise.
(c) Reorganization-Termination of the Plan. In the event of a
dissolution, liquidation, reorganization, merger, consolidation, transfer of
assets or transfer of shares, as provided in Section 8(b) above, and if
provision is not made in such transaction for the continuance of the Plan and
for the assumption of Options previously granted or the substitution of new
Options covering the shares of a successor employer corporation or a parent or
subsidiary thereof, then an Optionee under the Plan shall be entitled to written
notice prior to the effective date of any such transactions stating that rights
under his Option must be exercised within thirty (30) days of the date of such
notice or they will be terminated.
SECTION 9. GENERAL RESTRICTIONS.
Each Option shall be subject to the requirement that, if at any time
the Plan Administrators shall determine, in their discretion, that the listing
or qualification of the shares or other securities subject to such Option upon
any securities exchange, or under any state or federal law or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with the granting thereof or the issue or
purchase of shares or payments of any amount thereunder, such Option may not be
exercised in whole or in part and no amounts may be received thereunder unless
such listing, qualification,
7
<PAGE>
consent or approval shall have been effected or obtained free of any conditions
unacceptable to the Plan Administrators.
SECTION 10. EMPLOYMENT.
Nothing in this Plan shall be deemed to any right of continued
employment to a participating employee or to limit or waive any rights of the
Company to terminate such employment at any time, with or without cause.
SECTION 11. AMENDMENT.
Subject to the provisions of Sections 5(c) and 5(d) hereof, the Board
of Directors of the Company shall have, the power to amend or revise the terms
of this Plan or any part thereof without further action of the stockholders;
provided, however, that no such amendment shall impair any Option or deprive any
Optionee of shares that may have been granted to him under the Plan without his
consent; and provided, further, that no such amendment shall, without
stockholder approval:
(a) increase the aggregate number of the served Shares for the purpose
of the Plan;
(b) change the class of individuals eligible to receive Options under
the Plan;
(c) extend the maximum period during which any Option may be granted or
exercised;
(d) reduce the Option price per share under any Option below fair
market value; or
(e) extend the term of the Plan.
SECTION 12. EFFECTIVE DATE AND TERMINATION OF PLAN.
(a) The effective date of the Plan shall be April 15, 1995; provided,
however, in the event that the Plan is not approved by the voting stockholders
of the Company on or before December 31, 1994~ the Plan and all Options granted
and to be granted hereunder shall be null and void and the Company shall have no
obligation of any nature whatsoever to any employee or other person arising out
of the Plan or any options granted or to be granted hereunder.
(b) The Board of Directors of the Company may terminate the Plan at any
time with respect to any shares that are not subject to Options. Unless
terminated earlier by the Board of Directors, the Plan shall terminate on April
15, 2004, and no Options shall be granted under this Plan after it has been
terminated. Termination of. this Plan shall not affect the right and obligation
of any Optionee with respect to Options granted prior to termination.
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SECTION 13. WITHHOLDING TAXES.
Whenever under the Plan shares are to be issued in satisfaction of
Options granted hereunder, the Company shall have the right to require the
recipient to make arrangements to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any, prior to
or following the delivery of any certificate or certificates for such shares.
SECTION 14. QUALIFICATION.
This Plan is adopted pursuant to, and is intended to comply with, the
applicable provisions of the Internal Revenue Code and the regulations
thereunder. Incentive Stock Options granted pursuant to this Plan are intended
to be "incentive stock options" as that term is defined in Section 422 of the
Internal Revenue Code and the~regulations thereunder, In the event this Plan or
any Incentive Stock Option granted pursuant to this Plan is in any way
inconsistent with the applicable legal requirements of the Internal Revenue Code
or any regulation thereunder, this Plan and any Incentive Stock Option granted
pursuant, to this Plan shall be deemed automatically amended as of the date
hereof to conform to such legal requirements, if such conformity can be achieved
by amendment.
SECTION 15. NOTICE TO COMPANY OF DISQUALIFICATION DISPOSITION
Each Employee who receives an Incentive Stock Option must agree to
notify the Company in writing immediately after the Employee, makes a
disqualifying disposition of any Common Stock acquired pursuant to the exercise
of an Incentive Stock Option. For purposes of this Plan, a "disqualifying
disposition" is any disposition (including any sale) of such Common Stock before
the later of (i) two years after the date the Employee was granted the Incentive
Stock Option, or (ii) one year after the date the Employee acquired Common Stock
by exercising the Incentive Stock Option.
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EXHIBIT 4.4
COMPLETE WELLNESS CENTERS, INC.
1996 STOCK OPTION PLAN
1. Purpose.
This 1996 Stock Option Plan is intended to provide incentives: (a) to
the officers and other employees of Complete Wellness Centers, Inc. (the
"Company") or any of its subsidiaries by providing such employees with
opportunities to purchase stock in the Company pursuant to options granted
hereunder that qualify as "incentive stock options" under Section 422(b) of the
Internal Revenue Code of 1986, as amended; (b) to the officers and other
employees of the Company or any of its subsidiaries by providing such persons
with opportunities to purchase stock in the Company pursuant to options granted
hereunder which do not qualify as "incentive stock options;" and (c) to
consultants and certain other persons rendering services to the Company or any
of its subsidiaries (including without limitation members of the Scientific
Advisory Board) by providing such persons with opportunities to purchase stock
in the Company pursuant to options granted hereunder which do not qualify as
"incentive stock options,"
2. DEFINITIONS.
(a) "Agreements" shall have the meaning ascribed to the term as set
forth in Section 6 hereof.
(b) "Board of Directors" means the Board of Directors of the Company.
(c) "Common Stock" means the common stock, $.0001665 par value per
share, of the Company.
(d) "Company" means Complete Wellness Centers, Inc., a Delaware
corporation.
(e) "Employee" means every individual performing services for the
Company or any, subsidiary if the relationship between him/her and the person
for whom he/she performs such services is the legal relationship of employer and
employee as determined in accordance with Section 3401(c) of Internal Revenue
Code and Treasury Regulations promulgated thereunder. Neither a member of the
Board of Directors in his/her sole capacity as such, nor a member of the
Scientific Advisory Board in his/her sole capacity as such, is an Employee.
(f) "Fair market value" of a share of Common Stock as of any date shall
be determined for purposes of this Plan as follows: (i) if the Common Stock is
listed on a securities exchange or quoted through the Automated Quotation
National Market System of the
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National Association of Securities Dealers, Inc. (NASDAQ), the fair market value
shall equal the mean between the high and low sales prices on such exchange or
through such market system, as the case may be, on such day or in the absence of
reported sales on such day, the mean between the closing reported bid and asked
prices on such exchange or through such market system, as the case may be, on
such day, (ii) if the Common Stock is not listed or quoted as described in the
preceding clause but is quoted through NASDAQ (but not through the National
Market System), the fair market value shall equal the mean between the closing
bid and asked prices as quoted by the National Association of Securities
Dealers, Inc., through NASDAQ for such day, and (iii) if the Common Stock is not
listed or quoted on a securities exchange or through NASDAQ, then the fair
market value shall be determined by such other method as the Plan Administrators
determine to be reasonable and consistent with applicable requirements of the
Internal Revenue Code and the regulations issued thereunder applicable to
incentive options; provided, however, that if pursuant to clause (i) or (ii)
fair market value is to be determined based upon the mean of bid and asked
prices and the Plan Administrators determine that such mean does not properly
reflect fair market value, then the fair market value shall be determined by the
Plan Administrators as provided in clause (iii).
(g) "Incentive Stock Option" means a right granted pursuant to this
Plan to purchase Common Stock that satisfies the requirements of Section 422 of
The Internal Revenue Code.
(h) "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended.
(i) "Nonqualified Stock Option" means a right granted pursuant to this
Plan to purchase Common Stock that does not satisfy the requirements of Section
422 of the Internal Revenue Code.
(j) "Option" means a right granted pursuant to this Plan to purchase
Common Stock which may be either an Incentive Stock Option or a Nonqualified
Stock Option as determined by the Board of Directors.
(k) "Optionee" means an individual who has received an Option under the
Plan.
(1) "Plan" means this stock option plan authorizing the granting of
stock Options.
(m) "Plan Administrators" shall have the meaning ascribed to the term
as set forth in Section 5 hereof.
(n) "Reserved Shares" shall have the meaning ascribed to the term as
set forth in Section 3 hereof.
(o) "Scientific Advisory Board" means the advisory panel consisting of
individuals with experience in the areas of scientific, clinical, and regulatory
strategy and standards that
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will meet periodically and consult with the Board of Directors and management
of the Company.
(p) "Subsidiary" or "subsidiaries" means any subsidiary(ies) of the
Company now existing or which become such after the effective date of the Plan.
3. SHARES SUBJECT TO THE PLAN.
Subject to adjustments pursuant to Section 8 of the Plan, no more than
four hundred thousand (4OO,000) shares in the aggregate of the Company's Common
Stock (the "Reserved Shares" may be issued pursuant to the Plan to eligible
participants. The number of the Reserved Shares shall be reduced by the number
of Options granted under the Plan. The Reserved Shares may be made available
from authorized but unissued Common Stock of the Company, from Common Stock of
the Company held as treasury stock, from any shares which may become available
due to the expiration, cancellation or other termination of any Option
previously granted by the Company, or from any combination of the foregoing.
4. ELIGIBILITY.
The individuals eligible to receive Options under this Plan shall be
such valued Employees of the Company or any of its subsidiaries, and such
consultants and certain other persons rendering services to the Company or any
of its subsidiaries (including without limitation members of the Scientific
Advisory Board), as the Board of Directors may from time to time determine and
select. Employees shall be eligible to receive both Incentive Stock Options and
Nonqualified Stock Options. Consultants and certain other persons rendering
services to the Company shall be eligible to receive Nonqualified Stock Options.
An Optionee may hold more than one Option. No Employee of the Company
or any of its subsidiaries is eligible to receive any Incentive Stock Options if
such Employee, at the time the option is granted, owns, beneficially or of
record, in excess of 10% of the outstanding voting stock of the Company or any
of its subsidiaries; provided, however, that such Employee will be eligible to
receive an Incentive Stock Option if at the time such Option is granted the
Option price is at least 110% of the fair market value (determined with regard
to Section 422(c)(7) of the Internal Revenue Code) of the stock- subject to the
Option and such Option by its terms is not exercisable after the expiration of
five (5) years from the date such Option is granted.
Pursuant to Section 422(d) of the Internal Revenue Code, no Option
granted pursuant to this Plan shall be treated as an Incentive Stock Option to
the extent that the aggregate fair market value (determined at the time the
Option was granted) of Common Stock with respect to which Options (that
otherwise qualify as Incentive Stock Options) are exercisable for the first time
by an Employee during any calendar year (under all plans of the Company and its
subsidiaries) exceeds $100,000.
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5. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by those members of the Board of
Directors, or by a committee appointed by the Board of Directors, (in either
event, the "Plan Administrators") who are disinterested persons within the
meaning of Rule l6b-3(c)(2)(i) of the Securities Exchange Act of 1934, as
amended ("Disinterested Persons").
(b) The Plan Administrators shall have the power, subject to, and
within the limits of, the express provisions of the Plan:
(i) To determine from time to time which eligible persons
shall be granted Options under the Plan, and the time
when any Option shall be granted to them;
(ii) To determine the number of Options to be granted to
any person;
(iii) To grant Incentive Stock Options, Nonqualified Stock
Options, or both, under a the Plan to such persons;
(iv) To determine the duration and purposes of leaves of
absence which may be granted to Optionees without
constituting a termination of their employment for
purposes of the Plan;
(v) To prescribe the terms and provisions of each Option
granted under the Plan (which need not be identical);
(vi) To determine the maximum period during which Options
may be exercised;
(vii) To construe and interpret the Plan and Options
granted under it, and to establish, amend, and revoke
rules and regulations for its administration; and
(viii) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to
promote the best interests of the Company and its
subsidiaries with respect to the Plan.
(c) Notwithstanding the foregoing, neither the Board of Directors, any
committee thereof nor any person designated pursuant to paragraph (d) below may
take any action which would cause any Plan Administrator to cease to be a
Disinterested Person with regard to this Plan or any other stock option or other
equity plan of the Company.
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(d) The Plan Administrators, in the exercise of these powers, may
correct any defect or supply any omission, or reconcile any inconsistency in the
Plan, or in any Option, in the manner and to the extent it shall deem necessary
or expedient to make the Plan fully effective. All determinations of the Plan
Administrators shall be made by majority vote. Subject to any applicable
provisions of the Company's Bylaws, all decisions made by the Plan
Administrators pursuant to the provisions of the Plan and related orders or
resolutions of the Plan Administrators shall be final, conclusive and binding on
all persons, including the Company and its subsidiaries, stockholders of the
Company, Employees and Optionees.
(e) The Plan Administrators may designate the Secretary of the Company,
or other employees of the Company or competent professional advisors, to assist
in the administration of this Plan and may grant authority to such persons to
execute agreements or other documents on behalf of the Plan Administrators.
(f) The Plan Administrators may employ such legal counsel, consultants
and agents as they may deem desirable for the administration of this Plan and
may rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. No present or former
Plan Administrator shall be liable for any action or determination made in good
faith with respect to this Plan or any Option granted hereunder. To the maximum
extent permitted by applicable law and the Company's Certificate of
Incorporation and Bylaws, each present or former Plan Administrator shall be
indemnified and held harmless by the Company against any cost or expenses
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act in connection with this Plan unless arising out of such person's own fraud
or bad faith. Such indemnification shall be in addition to any rights of
indemnification the person may have as a director, officer or employee or under
the Certificate of Incorporation of the Company, the Bylaws of the Company or
otherwise. Expenses incurred by the Plan Administrators in the engagement of
such counsel, consultant or agent shall be paid by the Company.
6. OPTION TERMS AND CONDITIONS.
The Options granted under the Plan shall be evidenced by written Option
Agreements (the "Agreements") consistent with the terms of the Plan which shall
be executed by the Company and the Optionee. The Agreements, in such form as the
Plan Administrators shall from time to time approve, shall, incorporate the
following terms and conditions:
(a) Time of Exercise. Options shall be exercisable in accordance with
the terms of the Agreements as approved by the Plan Administrators from time to
time. Incentive Stock Options may be exercised only if, at all times during the
period that begins on the date of the granting of the Incentive Stock Option and
that ends on the day three (3) months before the date of such exercise, the
Optionee was an Employee of the Company or any of its subsidiaries; provided,
however, that if the Optionee is "disabled" within the meaning of
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Section 22(e) of the Internal Revenue Code, then the end of the preceding
post-employment exercise period shall be extended to one (1) year.
(b) Purchase Price. Except as otherwise provided in Section 4 hereof,
the purchase price per share of Common Stock deliverable upon the exercise of an
Incentive Stock Option shall not be less than the fair market value of the
Common Stock on the date the Option is granted. The purchase price per share of
Common Stock deliverable upon the exercise of a Nonqualified Stock Option shall
be determined by the Plan Administrators in their sole discretion.
(c) Method of Exercise. In order to exercise an Option in whole or in
part, the Optionee shall give written notice to the Company at its principal
place of business of such exercise, stating the number of shares with respect to
which the Option is being exercised. Such notice shall be accompanied by full
payment of the purchase price thereof. The exercise date of the Option shall be
the date the Company receives such notice with any necessary accompaniments in
satisfactory order.
(d) Method of Payment. The purchase price shall be paid for (i) in cash
or by certified check or bank draft or money order payable to the order of the
Company or (ii) with the consent of the Plan Administrators, and to the extent
permitted by them (not later than the time of grant, in the case of an Incentive
Stock Option), through delivery of shares of Common Stock having a fair market
value on the date of exercise equal to the purchase price (but only if such
shares have been held by the Option holder for a period of time sufficient to
prevent a pyramid exercise that would create a charge to the Company's earnings)
or (iii) any combination of the foregoing methods of payment.
Each optionee shall also be entitled to exercise an option in a
"cashless exercise" by delivering the number of options to be exercised (with no
payment of the exercise price) to the Company and receiving in return options
shares equal to the number of shares by (i) multiplying the then current "fair
market value" of the Company's outstanding public shares of Common Stock by the
number of options to be exercised, (ii) then deducting the aggregate exercise
price associated with the options being exercised, and (iii) dividing the
remaining number by the current "fair market values." For purposes of the
option, the "fair market value" of a share of Common Stock as of a certain date
shall be the closing sale price of the Common Stock on the NASDAQ Stock Market
or, if the Common Stock is not then traded on the NASDAQ Stock Market, such
exchange as the Common Stock is then traded, on the trading date immediately
preceding the date "fair market value" is being determined.
(e) Transferability. An Option shall not be transferable by the
Optionee other than at death and an Option granted to such Optionee is
exercisable, during his lifetime, only by such Optionee.
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The Agreements may also contain such other terms, provisions and
conditions consistent with the Plan and applicable provisions of the Internal
Revenue Code as the Plan Administrators may determine are necessary or proper.
7. RIGHTS OF STOCKHOLDERS AND OPTIONEE.
An Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such Option,
unless and until: (a) the Option shall have been exercised pursuant to the terms
thereof; (b) the Company shall have issued and delivered the shares to the
Optionee; and (c) the Optionee's name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full
voting and other ownership rights with respect to such shares.
8. ADJUSTMENTS IN THE EVENT OF CHANGES IN THE CAPITAL STRUCTURE, CHANGE IN
CONTROL, REORGANIZATION, ANTI-DILUTION OR ACCOUNTING CHANGES.
(a) Changes in Capital Structure. In the event of a change in the
corporate structure or shares of the Company, the Plan Administrators (subject
to any required action by the stockholders) shall make such equitable
adjustments designed to protect against dilution as they may deem appropriate in
the number and kind of shares authorized by the Plan and with respect to
outstanding Options in the number and kind of shares covered thereby and in the
exercise price of such Options on the dates granted. For the purpose of this
Section, a change in the corporate structure or shares of the Company shall
include, but is not limited to, changes resulting from a recapitalization, stock
split, consolidation, rights offering, stock dividend, reorganization, or
liquidation.
(b) Upon the occurrence of a "change in control" of the Company (as
defined below), each option outstanding shall become immediately fully
exercisable. For purposes of such options, a "change in control" of the Company
shall mean (i) the acquisition at any time by a "person" or "group" (as such
terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) of beneficial
ownership (as defined by Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities representing 50% or more of the combined voting power
in the election of directors of the then outstanding securities of the Company
or any successor of the Company; (ii) the termination of service of directors,
for any reason other than death, disability or retirement from the Board of
Directors, during any period of two consecutive years or less, of individuals
who at the beginning of such period constituted a majority of the Board of
Directors, unless the election of or nomination for election of each new
director during such period was approved by a vote of at least two thirds of the
directors still in office who were directors at the beginning of the period;
(iii) approval by the stockholders of the Company of any merger, consolidation,
or statutory share exchange as a result of which the Common Stock shall be
changed, converted, or exchanged (other than a merger, consolidation, or share
exchange with a wholly-owned subsidiary) or liquidation of the Company; or any
sale or disposition of 80% or more of the assets or earning power of the
Company; or (iv) approval
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by the stockholders of the Company of any merger, consolidation, or statutory
share exchange to which the Company is a party as a result of which the
stockholders immediately prior to the effective date of the merger,
consolidation or share exchange shall have beneficial ownership of less than 50%
of the combined voting power in the election of directors of the surviving
corporation; provided, however, that no change in control shall be deemed to
have occurred if, prior to such time as a change in control would otherwise be
deemed to have occurred, the Company's Board of Directors deems otherwise.
(c) Reorganization--Continuation of the Plan. Upon the effective date
of the dissolution or liquidation of the Company, or a reorganization, merger or
consolidation of the Company with one or more corporations in which the Company
is not the surviving corporation, or of a transfer of substantially all of the
Company's property or more than 80% of the then outstanding shares of the
Company to another corporation not controlled by the Company's stockholders, the
Plan and any Option previously granted under the Plan shall terminate unless
provision be made in writing in connection with such transaction for the
continuation of the Plan and for the assumption of the Options previously
granted, or for the substitution of new Options covering the shares of a
successor employer corporation, or a parent or subsidiary thereof, with
appropriate adjustments (in accordance with the applicable provisions of the
Internal Revenue Code) as to the number and kind of shares and price per share,
in which event the Plan and the Options previously granted or new Options
substituted therefore shall continue in the manner and under the terms as
provided.
(d) Reorganization--Termination of Plan. In the event of dissolution,
liquidation, reorganization, merger, consolidation, transfer of assets or
transfer of shares, as provided in Section 8(c) above, and if provision is not
made in such transaction for the continuance of the Plan and for the assumption
of Options previously granted or the substitution of new Options covering the
shares of a successor employer corporation or a parent or subsidiary thereof,
then an Optionee under the Plan shall be entitled to written notice prior to the
effective date of any such transactions stating that rights under his Option
must be exercised within thirty (30) days of the date of such notice or they
will be terminated.
9. GENERAL RESTRICTIONS.
Each Option shall be subject to the requirement that, if at any time
the Plan Administrators shall determine, in their discretion, that the listing
or qualification of the shares or other securities subject to such Option upon
any securities exchange, or under any state or federal law or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with the granting thereof or the issue or
purchase of shares or payments of any amount thereunder, such Option may not be
exercised in whole or in part and no amounts may be received thereunder unless
such listing, qualification, consent or approval shall have been effected or
obtained free of any conditions unacceptable to the Plan Administrators.
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10. EMPLOYMENT.
Nothing in this Plan shall be deemed to grant any right of continued
employment to a participating employee or to limit or waive any rights of the
Company or any of its subsidiaries to terminate such employment at any time,
with or without cause.
11. AMENDMENT.
Subject to the provisions of Sections 5(c) and 5(d) hereof, the Board
of Directors of the Company shall have the power to amend or revise the terms of
this Plan or any part thereof without further action of the stockholders;
provided, however, that no such amendment shall impair any Option or deprive any
Optionee of shares that may have been granted to him under the Plan without his
consent; and provided, further, that no such amendment shall, without
stockholder approval:
(a) increase the aggregate number of the Reserved Shares for the
purpose of the Plan;
(b) change the class of individuals eligible to receive Options
under the Plan;
(c) extend the maximum period during which any Option may be
granted or exercised;
(d) reduce the Option price per share under any Incentive Stock
Option below fair market value; or
(e) extend the term of the Plan.
12. EFFECTIVE DATE AND TERMINATION OF PLAN.
(a) The effective date of the Plan shall be October 9, 1996; provided,
however, in the event that the Plan is not approved by the voting stockholders
of the Company on or before October 8, 1997, the Plan and all Options granted
and to be granted hereunder shall be null and void and the Company shall have no
obligation of any nature whatsoever to any employee or other person arising out
of the Plan or any options granted or to be granted hereunder.
(b) The Board of Directors may terminate the Plan at any time with
respect to any shares that are not subject to Options. Unless terminated earlier
by the Board of Directors, the Plan shall terminate on September 30, 2006, and
no Options shall be granted under this Plan after it has been terminated.
Termination of this Plan shall not affect the right and obligation of any
Optionee with respect to Options granted prior to termination.
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13. WITHHOLDING TAXES.
Whenever under the Plan shares are to be issued in satisfaction of
Options granted hereunder, the Company shall have the right to require the
recipient to make arrangements to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any, prior to
or following the delivery of any certificate or certificates for such shares.
14. QUALIFICATION.
This Plan is adopted pursuant to, and is intended to comply with, the
applicable provisions of the Internal Revenue Code and the regulations
thereunder. Incentive Stock Options granted pursuant to this Plan are intended
to be "incentive stock options" as that term is defined in Section 422 of the
Internal Revenue Code and the regulations thereunder. In the event this Plan or
any Incentive Stock Option granted pursuant to this Plan is in any way
inconsistent with the applicable legal requirements of the Internal Revenue Code
or any regulation thereunder, this Plan and any Incentive Stock Option granted
pursuant to this Plan shall be deemed automatically amended as of the date
hereof to conform to such legal requirements, if such conformity can be achieved
by amendment.
15. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Employee who receives an Incentive Stock Option must agree to
notify the Company in writing immediately after the Employee makes a
disqualifying disposition of any Common Stock acquired pursuant to the exercise
of an Incentive Stock Option. For purposes of this Plan, a "disqualifying
disposition" is any disposition (including any sale) of such Common Stock before
the later of (i) two years after the date the Employee was granted the Incentive
Stock Option, or (ii) one year after the date the Employee acquired Common Stock
by exercising the Incentive Stock Option.
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Exhibit 4.5
COMPLETE WELLNESS CENTERS, INC.
1996 RESTRICTED STOCK OPTION PLAN FOR HEALTH CARE PROFESSIONALS
1. The Purpose of the Plan. This 1996 Restricted Stock Option Plan (the "Plan")
is intended to provide an opportunity for licensed health care professionals
affiliated with Complete Wellness Centers, Inc., a Delaware corporation
("Company"), to acquire shares of this Company's common stock, $.0001665 par
value per share ("Common Stock"). The Plan provides for the grant of options
which are not intended to qualify as incentive stock options, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended ("Restricted Stock
Options"),
2. Stock Subject to the Plan. The maximum numbers of shares of Common Stock
which may be issued under Restricted Stock Options granted under the Plan shall
be 100,000 which may be either authorized and unissued shares of Common Stock or
shares of Common Stock held in the treasury of the Company, as shall be
determined by the Board of Directors of the Company. If a Restricted Stock
Option expires or terminates for any reason without being exercised in full, the
unpurchased shares of Common Stock subject to such Restricted Stock Option shall
again be available for purposes of the Plan.
3. Administration of the Plan. This Plan shall be administered by the Board of
Directors of the Company or a committee appointed by the Board of Directors for
the administration of the Plan, in the discretion of the Board of Directors. As
used herein, the term "Committee" refers to such committee or, in the absence of
appointment of such committee, to the Board of Directors. The Committee shall
have full authority in its discretion to determine the eligible licensed health
care professionals to whom Restricted Stock Options shall be granted and the
terms and provisions of Restricted Stock Options, subject to the Plan. In making
such determinations, the Committee may take into account such factors which the
Committee deems relevant. Subject to the provisions of the Plan, the Committee
shall have full and conclusive authority to interpret the Plan; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine the
terms and provisions of the Restricted Stock Option agreements (which need not
be identical); to determine the restrictions on transferability of Common Stock
acquired upon exercise of Restricted Stock Options; and to make all other
determinations necessary or advisable for the proper administration of the Plan.
4. Terms and Conditions of Options. Subject to the following provisions, all
Restricted Stock Options shall be in such form and upon such terms and
conditions as the Committee, in its discretion, may from time to time determine.
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(a) Option Price. The option price per share shall in no event be less
85% of the fair market value per share of Common Stock on the date the
Restricted Stock Option is granted. "Fair market value" of a share of Common
Stock as of any date shall be determined for purposes of the Plan as follows,
(i) if the Common Stock, is listed on a securities exchange or quoted through
the Automated Quotation National Market System of the National Association of
Securities Dealers, Inc. (NASDAQ), the fair market value shall equal the mean
between the high and low sales prices on such exchange or through such market
system, as the case may be, on such day or in the absence of reported sales on
such day, the mean between the closing reported bid and asked prices on such
exchange or through such market system, as the case may be, on such day, (ii) if
the Common Stock is not listed or quoted as described in the preceding clause
but is quoted through NASDAQ (but not through the National Market System), the
fair market value shall equal the mean between the closing bid and asked prices
as quoted by the National Association of Securities Dealers, Inc., through
NASDAQ for such day, and (iii) if the Common Stock is not listed or quoted on a
securities exchange or through NASDAQ, then the fair market value shall be
determined by such other method as the Committee determines to be reasonable;
provided, however, that if pursuant to clause (i) or (ii) fair market value is
to be determined based upon the mean of bid and asked prices and the Committee
determine that such mean does not properly reflect fair market value, then the
fair market value shall be determined by the Committee as provided in clause
(iii).
(b) Date of Grant. For purposes of this subparagraph (b), the date a
Restricted Stock Option is granted shall be the date on which the Committee has
approved the terms and conditions of a stock option agreement evidencing the
Restricted Stock Option ("Option Agreement") and has determined the recipient of
the Restricted Stock Option and the number of shares covered by the Restricted
Stock Option and has taken all such other action as is necessary to complete the
grant of the Restricted Stock Option ("Option Agreement") and has determined the
recipient of the Restricted Stock Option and the number of shares covered by the
Restricted Stock Option and has taken all such other action as is necessary to
complete the grant of the Restricted Stock Option.
(c) Restricted Stock Option Term. No Restricted Stock Option shall be
exercisable after the expiration of ten years from the date the Restricted Stock
Option is granted.
(d) Payment. Payment for all shares of Common Stock purchased pursuant
to exercise of a Restricted Stock Option shall be made in cash or, if approved
by the Committee either at the time of grant or at the time of exercise, by
delivery of Common Stock of the Company at its fair market value on the date of
delivery. Such payment shall be made at the time that the Restricted Stock
Option or any part thereof is exercised, and no shares shall be issued until
full payment therefore has been made. The holder of a Restricted Stock Option
shall, as such, have none of the rights of a stockholder.
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(e) Nontransferability of Restricted Stock Options. Restricted Stock
Options shall not be transferable or assignable except by will or by the laws of
descent and distribution and shall be exercisable, during the holder's lifetime,
only by the holder.
(f) Disability. If the holder of a Restricted Stock Option ceases to be
affiliated with the Company as a result of a disability as defined under Section
22(e) of the Code ("Disability"), Restricted Stock Options held by the holder
may be exercised at any time during the 12 month period following the
Disability, subject to any vesting schedule and the other terms and conditions
of the holder's Option Agreement.
6. CHANGES IN CAPITALIZATION; MERGER, LIQUIDATION.
6. 1. The number of shares of Common Stork subject to Restricted Stock
Options, the number of shares of Common Stork as to which Restricted Stock
Options may be granted, the number of shares covered by each outstanding
Restricted Stock Option and the price per share of each outstanding Restricted
Stock Option shall be proportionately adjusted for (i) any increase or decrease
in the number of issued shares of Common Stock resulting from a subdivision or
combination of shares, (ii) the payment of a stock dividend in shares of Common
Stock to holders of outstanding shares of Common Stock, or (iii) any other
increase or decrease in the number of such shares effected without receipt of
consideration by the Company.
If the Company shall be the surviving corporation in any merger, share
exchange or consolidation, recapitalization, reclassification of shares or
similar reorganization, the holder of each outstanding Restricted Stock Option
shall be entitled to purchase, at the same times and upon the same terms and
conditions as are then provided in the Restricted Stock Option, the number and
class of shares of Common Stock or other shares securities to which a holder of
the number of Common Stock at the time of such transaction would have been
entitled to receive as a result of such transaction. Upon a merger, share
exchange, consolidation or other business combination in which the Company is
not the surviving corporation, the surviving corporation shall substitute
another award of restricted stock options with equivalent value to outstanding
Restricted Stock Options in a transaction to which Section 424(a) of the Code is
applicable.
In the event of a change in the Company's shares of Common Stock into
the same number of shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be Common Stock with in
the meaning of the Plan.
A dissolution or liquidation of the Company shall cause each
outstanding Restricted Stock Option to terminate.
6.2. In the event of any such changes in capitalization of the Company,
the Committee may make such additional adjustments in the number and class of
shares of Common Stock or
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other securities with respect to which Restricted Stock Options are outstanding
and with respect to future grants of Restricted Stock Options as the Committee
in its sole discretion shall deem equitable or appropriate, subject to the
provisions of this Section 6.
6.3. The existence of the Plan and the Restricted Stock Options granted
pursuant to the Plan shall not affect in any way the right or power of the
Company to make or authorize any adjustment, reclassification, reorganization or
other change in its capital or business structure, any merger, share exchange or
consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its business or assets, or any other corporate act or proceeding.
7. Termination and Amendment of the Plan. The Plan shall termination
the date ten years after adoption of the Plan by the Board of Directors, and no
Restricted Stock Options shall be granted under the Plan after that date, but
Restricted Stock Options granted before termination of the Plan shall remain
exercisable thereafter until they expire or lapse according to their terms. The
Plan may be terminated, modified or amended by the stockholders or the Board of
Directors of the Company, provided, however, that no such termination,
modification or amendment without the consent of the holder of a Restricted
Stock Option shall adversely affect his or her rights under such Restricted
Stock Option.
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EXHIBIT 4.6
COMPLETE WELLNESS CENTERS, INC.
1998 OUTSIDE DIRECTORS STOCK OPTION-PLAN
1. PURPOSE.
The 1998 Outside Directors Stock Option Plan (the "Plan") is intended
to provide incentives: (a) to the directors of Complete Wellness Centers, Inc.
(the "Company") or any of its subsidiaries by providing such Outside Directors
with opportunities to purchase stock in the Company pursuant to options granted
hereunder that qualify as "incentive stock options" under Section 422(b) of the
Internal Revenue Code of 1986, as amended; and by providing such persons with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which do not qualify as "incentive stock options."
2. DEFINITIONS.
(a) "Agreements" shall have the meaning ascribed to the term as
set forth in Section 6 hereof.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Common Stock"means the common stock, $.0001665 par value per
share, of the Company.
(d) "Company" means Complete Wellness Centers, Inc., a Delaware
corporation.
(e) "Outside Director" means every individual serving as a member
of the Company's Board of Directors or as a member of the
Board of Directors of any subsidiary if the relationship
between him/her and the person for whom he/she performs such
services is the legal relationship of an elected and qualified
Outside Director as determined in accordance with Section 3401
(c) of the Internal Revenue Code and Treasury Regulations
promulgated thereunder. An outside member of the Board of
Directors in his/her sole capacity as such, is not an
employee.
(f) "Fair market value" of a shut of Common Stock as of any date
shall be determined for purposes of this Plan as follows: (i)
if the Common Stock is listed on a securities exchange or
quoted through the Automated Quotation National Market System
of the National Association of Securities Dealers, Inc.
(NASDAQ), the fair market value shall equal the mean between
the high and
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low sales prices on such exchange or through such market
system, as the case may be, on such day or in such absence of
reported sales on such day, the mean between the closing
reported bid and asked prices on such exchange or through such
market system, as the case may be, on such day, (ii) if the
Common Stock is not listed or quoted as described in the
preceding clause but is quoted through NASDAQ (but not through
the National Market System), the fair market value shall equal
the mean between the closing bid mid asked prices as quoted by
the National Association of Securities Dealers, Inc., through
NASDAQ for such day, and (iii) if the Common Stock is not
listed or quoted on a securities exchange or through NASDAQ,
then the fair market value shall be determined by such other
method as the Plan Administrators determine reasonable and
consistent with applicable requirements of the Internal
Revenue Code and the regulations issued thereunder applicable
to incentive options; provided, however,. that if pursuant to
clause (i) or (ii) fair market value is to be determined based
upon the mean of bid and asked prices and the Plan
Administrators determine that such mean does not properly
reflect fair market value shall be determined by the Plan
Administrators as provided in clause (iii).
(g) "Incentive Stock Option" means a right granted pursuant to
this Plan to purchase Common Stock that satisfies the
requirements of Section 422 of the Internal Revenue Code.
(h) "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended.
(i) "Nonqualified Stock Option" means a right granted pursuant to
this Plan to purchase Common Stock that does not satisfy the
requirements of Section 422 of the Internal Revenue Code.
(j) "Option" means a right granted pursuant to this Plan to
purchase Common Stock which may be either an Incentive Stock
Option or a Nonqualified Stock Option as determined by the
Board of Directors.
(k) "Optionee" means an Outside Director who has received an
Option under the Plan.
(l) "Plan" means this stock option plan , authorizing the granting
of stock Options.
(m) "Plan Administrators" shall have the meaning ascribed to the
term as set forth in Section 3 hereof
(n) "Reserved Shares" shall have the meaning ascribed to the term
as set forth in Section 3 hereof.
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(o) "Subsidiary" or "subsidiaries" means any subsidiary(ies) of
the Company now existing of which become such after the
effective date of the Plan.
3. SHARES SUBJECT TO THE PLAN.
Subject to adjustments pursuant to Section 8 of the Plan, no more than
fifty thousand (50,000) shares in the aggregate of the Company's Common Stock
(the "Reserved Shares") may be issued pursuant to the Plan to eligible
participants, The number of the Reserved Shares shall be reduced by the number
of Options granted under the Plan. The Reserved Shares may be made available
from authorized but unissued Common Stock of the Company, from Common Stock of
the Company held as treasury stock, from any shares which may become available
due to the expiration, cancellation or other termination of any Option
previously granted by the Company, or from any combination of the foregoing.
4. ELIGIBILITY.
The individuals eligible to receive Options under this Plan shall be
such valued Outside Directors, as the Board of Directors may from time to time
determine and select. Outside Directors shall be eligible to receive both
Incentive Stock Options and Nonqualified Stock Options.
An Optionee may hold more than one Option,: No Outside Director is
eligible to receive any Incentive Stock Options if such Outside Director, at the
time the option is granted, owns, beneficially or of record, in excess of 10% of
the outstanding voting stock of the Company or any of its subsidiaries-,
provided, 'however, that such Outside Director will be eligible to receive an
Incentive Stock Option if at the time such Option is granted the Option price is
at least 110% of the fair market value (determined with regard to Section
422(c)(7) of the Internal Revenue Code) of the stock subject to the Option and
such Option by its terms is not exercisable after the expiration of five (5)
years from the date such Option is granted. Pursuant to Section 422(d) of the
internal Revenue Code, no Option granted pursuant to this Plan shall be treated
as an Incentive Stock Option to the extent that the aggregate fair market value
(determined at the time the Option was granted) of Common Stock with respect to
which Options (that otherwise qualify as Incentive Stock Options) are
exercisable for the first time by an Outside Director during any calendar year
(under all plans of the Company and its subsidiaries) exceeds $100,000,
5. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by those members of the Board
of Directors, or by a committee appointed by the Board of
Directors,(in either event, the "Plan Administrators') who are
disinterested persons within the meaning of Rule 16b-
3(c)(2)(1) of the Securities Exchange Act of 1934, as amended
("Disinterested Persons").
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(b) The Plan Administrators shall have the power, subject to, and
within the limits of, the express provisions of the Plan:
(i) To determine from time to time which eligible persons
shall be granted Options under the Plan, and the time
when any Options shall be granted to them;
(ii) To determine the number of Options to be granted to
any person;
(iii) To grant Incentive Stock Options, or both, under the
Plan to such persons;
(iv) To prescribe tile terms and provisions of each Option
granted under the Plan (which need not be identical);
(v) To determine the maximum period during which Options
may be exercised;
(vi) To construe and interpret the Plan and Options
granted under it, and to establish, amend, and revoke
rules and regulations for its administration; and
(vii) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to
promote the best interests of the Company and its
subsidiaries with respect to the Plan.
(c) Notwithstanding the foregoing, neither the Board of Directors,
any committee thereof nor any person designated pursuant to
paragraph (d)below may take action which would cause any Plan
Administrator to cease to be a Disinterested Person with
regard to this Plan or any other stock option or other equity
plan of the Company.
(d) The Plan Administrators, in the exercise of these powers, may
correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, or in any Option, in the manner and
to the extent it shall deem necessary or expedient to make the
Plan fully effective. All determinations of the Plan
Administrators shall be made by majority vote. Subject to any
applicable provisions of the Company's Bylaws, all decisions
made by the Plan Administrators pursuant to the provisions of
the Plan and related orders or resolutions of the Plan
Administrators shall be final, conclusive and binding on all
persons, including the Company and its subsidiaries,
stockholders of the Company, and Optionees.
(e) The Plan Administrators may designate the Secretary of the
Company, or other
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employees of the Company or competent professional advisors,
to assist in the administration of this Plan and may grant
authority to such persons to execute agreements or other
documents an behalf of the Plan Administrators.
(f) The Plan Administrators may employ such legal counsel,
consultants and agents as they may deem desirable for the
administration of this Plan and may rely upon any opinion
received from any such counsel or consultant and any
computation received from any such consultant or agent. No
present or former Plan Administrator shall be liable for any
action or determination made in good faith with respect to
this Plan or any Option granted hereunder, To the maximum
extent permitted by applicable law and the Company's
Certificate of Incorporation and Bylaws, each present or
former Plan Administrator shall be indemnified and held
harmless by the Company against any cost or expenses
(including counsel fees) or liability (including any sum paid
in settlement of a claim with the approval of the Company)
arising out of any act or omission to act in connection with
this Plan unless arising out of such person's own fraud or bad
faith. Such indemnification shall be in addition to any rights
of indemnification the person may have as a director, officer
or employee or under the Certificate of Incorporation of the
Company, the Bylaws of the Company or otherwise. Expenses
incurred by the Plan Administrators in the engagement of such
counsel, consultant or agent shall be paid by the Company.
6. OPTION TERMS AND CONDITIONS.
The Options granted under the Plan shall be evidenced by written Option
Agreements (the "Agreements") consist with the terms of the Plan which shall be
executed by the Company and the Optionee, The Agreements, in such form as the
Plan Administrators shall from time to time approve, shall, incorporate the
following terms and conditions:
(a) Time of Exercise. Options shall be exercisable in accordance
with the terms of the Agreements as approved by the Plan
Administrators from time to time. Incentive Stock Options may
be exercised only if, at all times during the period that
begins on the date of the granting of the Incentive Stock
Option and that ends on the day three (3) months before the
date of such exercise, the Optionee was an Outside Director of
the Company or any of its subsidiaries; provided, however,
that if the Optionee is "disabled" within the meaning of
Section 22(e) of the Internal Revenue Code, then the end of
the preceding post-employment exercise period shall be
extended to one (1) year.
(b) Purchase Price. Except as otherwise provided in Section 4
hereof, the purchase price per share of Common Stock
deliverable upon the exercise of an Incentive Stock Option
shall not be less than the fair market value of the Common
Stock
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on the date the Option is granted. The purchase price per
share of Common Stock deliverable upon the exercise of a
Nonqualified Stock Option shall be determined by the Plan
Administrators in their sole discretion.
(c) Method of Exercise. In order to exercise an Option in whole or
in part, the Optionee shall give written notice to the Company
at its principal place of business of such exercise, stating
the number of shares with respect to which the Option is being
exercised. Such notice shall be accompanied by full payment of
the purchase price thereof The exercise date of the Option
shall be the date the Company receives such notice with any
necessary accompaniments in satisfactory order.
(d) Method of Payment. The purchase price shall be paid for (i) in
cash or by certified check or bank draft or money order
payable to the order of the Company or (ii) with the consent
of the Plan Administrators, and to the extent permitted by
them (not later than the time of grant, in the case of an
Incentive Stock Option), through delivery of shares of Common
Stock having a fair market value on the date of exercise equal
to the purchase p rice ( but only if such shares have been
held by the Option holder for a period of time sufficient to
prevent a pyramid exercise that would create a charge to the
Company's earnings) or (iii) any combination of the foregoing
methods of payment with the consent of the Plan Administrators
or (iv) each optionee shall also be entitled to exercise an
option in a "cashless exercise" by delivering the number of
options to be exercised (with no payment of the exercise
price) to the Company and receiving in return options shares
equal to the number of shares by (i) multiplying the then
current "fair market value" of the Company's outstanding
public shares of Common Stock by the number of options to be
exercised, (ii) then deducting the aggregate exercise price
associated with the options being exercised, and (iii)
dividing the remaining number by the current "fair market
value," For purposes of the option, the "fair market value" of
a share of Common Stock as of a certain date shall be the
closing sale price of the Common Stock on the NASDAQ Stock
Market or, if the Common Stock is not then traded on the
NASDAQ Stock Market, such exchange as the Common Stock is then
traded, on the trading date immediately preceding the date
"fair market value" is being determined.
(e) Transferability. An Option shall not be transferable by the
Optionee other than at death and an Option granted to such
Optionee is exercisable, during his lifetime, only by such
Optionee.
The Agreements may also contain such other terms, provisions, and
conditions consistent with the Plan and applicable provisions of the Internal
Revenue Code as the Plan Administrators may determine are necessary or Proper.
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7. RIGHTS OF STOCKHOLDERS AND OPTIONEE.
An Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such Option,
unless and until: (a) the Option shall have been exercised pursuant to the terms
thereof; (b) the Company shall have issued and delivered the shares to the
Optionee; and (c) the Optionee's name shall have been entered as a stockholder
of record on the books of the Company. Thereupon, the Optionee shall have full
voting and other ownership rights with respect to such shares.
8. ADJUSTMENTS IN THE EVENT OF CHANGES IN THE CAPITAL STRUCTURE,
REORGANIZATION, ANTI-DILUTION OR ACCOUNTING CHANGES.
(a) Changes in Capital Structure. In the event of a change in the
corporate structure or shares of the Company, the Plan
Administrators (subject to any required action by the
stockholders) shall make such equitable adjustments designed
to protect against dilution as they may deem appropriate in
the number and kind of shares authorized by the Plan and, with
respect to outstanding Options in the number and kind of
shares covered thereby and in the exercise price of such
Options on the dates granted. For the purpose of this Section,
a change in the corporate structure or shares of the Company
shall include, but is not limited to, changes resulting from a
recapitalization, stock split, consolidation, rights offering,
stock dividend, reorganization or liquidation.
(b) Reorganization-Continuation of the Plan. Upon the effective
date of the dissolution or liquidation of the Company, or a
reorganization, merger or consolidation of the Company with
one or more of corporations in which the Company is not the
surviving corporation, or of a transfer of substantially all
of the Company's property or more than 80% of the then
outstanding shares of the Company to another corporation not
controlled by the Company's stockholders, the Plan and any
Option previously granted under the Plan shall terminate
unless provision be made in writing in connection with such
transaction for the continuation of the Plan and for the
assumption of the Options previously granted, or for the
substitution of new Options covering the shares of a successor
employer corporation, or a parent or subsidiary thereof, with
appropriate adjustments (in accordance with the applicable
provisions of the Internal Revenue Code) as to the number and
kind of shares and price per share, in which event the Plan
and the Options previously granted or new Options substituted
therefor shall continue in the manner and the terms as
provided.
Upon the occurrence of a "change in control" of the Company
(as defined below), each option outstanding shall become
immediately fully exercisable. For purposes of such options, a
"change in control" of the Company shall mean (i) the
acquisition at any time by a "person" or group" (as such terms
are used in
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Sections 13(d) and 14(d)(2) of the Exchange Act of beneficial
ownership (as defined by rule 13d-3 under the Exchange Act)),
directly or indirectly, of securities representing 50% or more
of the combined voting power in the election of directors of
the then outstanding securities of the Company or any
successor of the Company; (ii) the termination of service of
directors, for any reason other than death, disability or
retirement from the Board of Directors, during any period of
two consecutive years or less, of individuals who at the
beginning of such period constituted a majority of the Board
of Directors, unless the election of or nomination for
election of each new director during such period was approved
by a vote of a least two-thirds of the directors still in
office who were directors at the beginning of the period;
(iii) approval by the stockholders of the Company of any
merger, consolidation, or statutory share exchange as a result
of which the Common Stock shall be changed, converted, or
exchanged (other than, a merger, consolidation, or share
exchange with a wholly-owned subsidiary) or liquidation of the
Company; or any sale or disposition of 80% or more of the
assets or earning power of the Company; or (iv) approval by
the stockholders of the Company of any merger, consolidation,
or statutory share exchange to which the Company is a party as
a result of which the stockholders immediately prior to the
effective date of the merger, consolidation or share exchange
shall have beneficial ownership of less than 50% of the
combined voting power in the election of directors of the
surviving corporation; provided, however, that no change in
control shall be deemed to have occurred if, prior to such
time as a change in control would otherwise be deemed to have
occurred, the Company's Board of Directors deems otherwise.
(c) Reorganization-Termination of the Plan. In the event of a
dissolution, liquidation, reorganization, merger,
consolidation, transfer of assets or transfer of shares, as
provided in Section 8(b) above, and if provision is not made
in such transaction for the continuance of the Plan and for
the assumption of Options previously granted or the
substitution of new Options covering the shares of a successor
employer corporation or a patent or subsidiary thereof, then
an Optionee under the Plan shall be entitled to written notice
prior to the effective date of any such transactions stating
that rights under his Option must be exercised within thirty
(30) days of the date of such notice or they will be
terminated.
9. GENERAL RESTRICTIONS.
Each Option shall be subject to the requirement tat if at any time the
Plan Administrators shall determine, in their discretion, that the listing or
qualification of the shares or other securities subject to such Option upon any
securities exchange, or under any state or federal law or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with the granting thereof or the issue or
purchase
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of shares or payments of any amount thereunder, such Option may not be exercised
in whole or in part and no amounts may be received thereunder unless such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions unacceptable to the Plan Administrators.
10. CONTINUED SERVICE.
Nothing in this Plan shall be deemed to grant any right of continued
service to a participating Outside Director or to limit or waive any rights of
the Shareholders of the Company or any of its subsidiaries to terminate such
service at any time, with or without cause.
11. AMENDMENT.
Subject to the provisions of Sections 5(c) and 5(d) hereof, the Board
of Directors of the Company shall have the power to amend or revise the terms of
this Plan or any part thereof without further action of the stockholders;
provided, however, that no such amendment shall impair any Option or deprive any
Optionee of shares that may have been granted to him under the Plan without his
consent; and provided, farther, that no such amendment shall, without
stockholder approval:
(a) increase the aggregate number of the Reserved Shares for the
purpose of the Plan;
(b) change the class of individuals eligible to receive Options
under the Plan;
(c) extend the maximum period during which any Option may be
granted or exercised;
(d) reduce the Option price per share under any Incentive Stock
Option below fair market value; or
(e) extend the term of the Plan.
12. EFFECTIVE DATE AND TERMINATION OF PLAN.
(a) The effective date of the Plan shall be May 26, 1998; provided
however, in the event that the Plan is not approved by the
voting stockholders of the Company on or before May 26, 1998,
the Plan and all Options granted and to be granted hereunder
shall be null and void and the Company shall have no
obligation of any nature whatsoever to any employee or other
person arising out of the Plan or any options granted or to be
granted hereunder.
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(b) The Board of Directors may terminate the Plan at any time with
respect to any shares that are not subject to Options. Unless
terminated earlier by the Board of Directors, the Plan shall
terminate on May 31, 2008, and no Options shall be granted
under this Plan after it has been terminated. Termination of
this Plan shall not affect the right and obligation of any
Optionee with respect to Options granted prior to termination.
13. WITHHOLDING TAXES.
Whenever under the Plan shares are to be issued in satisfaction of
Options granted hereunder, the Company shall have the right to require the
recipient to make arrangements to remit to the Company an amount sufficient to
satisfy federal, state and local withholding tax requirements, if any, prior to
or following the delivery of any certificate or certificates for such shares.
14. QUALIFICATION.
This Plan is adopted pursuant to, and is intended to comply with, the
applicable provisions of the Internal Revenue Code and the regulations
thereunder, Incentive Stock Options granted pursuant to this Plan are intended
to be "incentive stock options" as that term is defined in Section 422 of the
Internal Revenue Code and the regulations thereunder. In the event this Plan or
any Incentive Stock Option granted pursuant to this Plan is in any way
inconsistent with the applicable legal requirements of the Internal Revenue Code
or any regulation thereunder, this Plan and any Incentive Stock Option granted
pursuant to this Plan shall be deemed automatically amended as of the date
hereof to conform to such legal requirements, if such conformity can be achieved
by amendment.
15. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Outside Director who receives an Incentive Stock Option must agree
to notify the Company in writing immediately after the Outside Director makes a
disqualifying disposition of any Common Stock acquired pursuant to the exercise
of an Incentive Stock Option. For purposes of this Plan, a "disqualifying
disposition" is any disposition (including any sale) of such Common Stock before
the later of (i) two years after the date the Outside Director was granted the
Incentive Stock Option., or (ii) one year after the date the Outside Director
acquired Common Stock by exercising the Incentive Stock Option.
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EXHIBIT 5.1
LEHMAN & EILEN LLP
50 Charles Lindbergh Boulevard
Suite 505
Uniondale, New York 11553
August 13, 1999
Board of Directors
Complete Wellness Centers, Inc.
666 11th St., N.W., Suite 200
Washington, D.C. 20001
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, this letter relates to the Registration Statement on
Form S-8 filed by Complete Wellness Centers, Inc. (the "Company") with the
Securities and Exchange Commission on August 13, 1999 (the "Registration
Statement"), in connection with the registration under the Securities Act of
1933, as amended, of 950,000 shares of common stock issuable under the 1994
Stock Option Plan, the 1996 Stock Option Plan, as amended, the 1996 Restricted
Stock Option Plan for Health Care Professionals, and the 1998 Outside Directors
Stock Option Plan (herein, the "Shares").
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the proceedings taken by the
Company in connection with the issuance of the Shares, the Registration
Statement and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives, as we have deemed relevant or necessary as
a basis for the opinions hereinafter set forth.
In such examination, we have assumed without independent verification,
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to original documents of documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such latter documents. As to all questions of fact material to this opinion
that have not been independently established, we have relied upon
representations of the Company in the Registration Statement, certificates or
comparable documents of officers of the Company and of public officials.
Based on the foregoing, and subject to the qualifications stated
herein, as of the date hereof, it is our opinion that upon the issuance and sale
in the manner described in the Registration Statement, such Shares will be
validly issued, fully paid and non-assessable. This opinion relates only to the
number of Shares set forth above.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Lehman & Eilen LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the 1994 Stock Option Plan, 1996 Restricted Stock Option Plan
for Health Care Professionals, and the 1998 Outside Directors Stock Opetion Plan
of our report dated March 31, 1998, with respect to the consolidated financial
statements of Complete Wellness Centers, Inc. included in its Annual Report
(Form 10-KSB) for the year ended December 31, 1997, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Washington, D.C.
August 13, 1999
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 31, 1999, with respect to the
consolidated financial statements of Complete Wellness Centers, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1998, filed with
the Securities and Exchange Commission.
AMPER, POLITZINER & MATTIA P.A.
August 16, 1999
Edison, New Jersey
