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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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VANDERBILT GOLD CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 88-0224117
(State of incorporation) (I.R.S. Employer Identification No.)
4625 WYNN ROAD, SUITE 103, BLDG. C
LAS VEGAS, NEVADA 89103
(Address of principal executive offices)
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1989 STOCK OPTION PLAN
(Full title of the Plans)
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KEITH W. FEGERT
PRESIDENT AND CHIEF EXECUTIVE OFFICER
VANDERBILT GOLD CORPORATION
4625 WYNN ROAD, SUITE 103, BLDG. C
LAS VEGAS, NEVADA 89103
(702) 362-3152
(Name, address and telephone number, including area code, of agent for service)
----------------
Copy to:
David A. Garcia, Esq.
Hale, Lane, Peek, Dennison, Howard, Anderson and Pearl
A Professional Corporation
100 West Liberty Street, 10th Floor
Reno, Nevada 89501
(702) 786-7900
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Maximum Amount of
Amount to be Offering Price Aggregate Registration
Title of Securities to be Registered Registered(1) Per Share Offering Price Fee
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<S> <C> <C> <C> <C>
1989 STOCK OPTION PLAN
Common Stock, $0.01 par value. . . . 265,000 Shares $ 0.08 (2) $ 21,200
Common Stock, $0.01 par value . . . 235,000 Shares $ 0.16 (3) $ 37,600
-------------- ------------
TOTAL 500,000 Shares $ 58,800 $18
</TABLE>
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(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under any of the Plans being
registered pursuant to this Registration Statement by reason of any
stock dividend, stock split, recapitalization or any other similar
transaction effected without the receipt of consideration which
results in an increase in the number of the Registrant's outstanding
shares of Common Stock.
(2) Computed in accordance with Rule 457(h) under the Securities Act solely for
the purpose of calculating the registration fee. Computation based on
the weighted average per share exercise price (rounded to nearest
cent) of outstanding options under the referenced plan, the shares
issuable under which are registered hereby.
(3) Estimated in accordance with Rule 457(h) under the Securities Act solely
for the purpose of calculating the registration fee. The computation
with respect to unissued options is based upon the average of the bid
and ask prices of the Common Stock on September 23, 1997.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "COMMISSION") are hereby incorporated by reference:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed pursuant to Section 13 of the Securities Exchange
Act of 1934, as amended (the "1934 ACT"), which contains audited financial
statements for the Registrant's latest fiscal year for which such statements
have been filed.
(b) The Registrant's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997, each pursuant to Section 13
of the 1934 Act.
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed with the Commission
under Section 12 of the Securities Exchange Act of 1934 (the "EXCHANGE ACT"),
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be part hereof from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES. Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation of the Company, as amended,
provides that no director of the Company shall be personally liable to the
Company or its stockholders for monetary damages for any breach of fiduciary
duty as a director, except: (i) for any breach of the duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
liability under Section 174 of the Delaware General Corporation Law
(involving certain unlawful dividends or stock repurchases) or (iv) for any
transaction from which the director derived an improper personal benefit.
The Certificate further provides that if the Delaware General Corporation Law
is hereafter amended to authorize the further elimination or limitation of
the liability of a director, then the liability of a director of the Company
shall be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law, as so amended.
Under Section 145 of the Delaware General Corporation Law, a
corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suite or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding (i) if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and (ii) in connection with any criminal action or proceeding, if
he had no reasonable cause to believe such conduct was unlawful. In actions
brought by or in the right of a corporation, a corporation may indemnify such
person against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the
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performance of his duty to the corporation unless and only to the extent that
that Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnification for such expenses
which the Court of Chancery or other such court shall deem proper. To the
extent that such person has been successful on the merits or otherwise in
defending any such action, suit or proceeding referred to above or any claim,
issue or matter therein, he is entitled to indemnification for reasonable
expenses (including attorneys' fees). The indemnification and advancement of
expenses provided for, or granted pursuant to, Section 145 is not exclusive of
any other rights of indemnification or advancement of expenses, and a
corporation may maintain insurance against liabilities for which indemnification
is not expressly provided by the statute.
The Bylaws of the Company provide that: (i) the Company is required
to indemnify its officers and directors to the fullest extent permitted by
law, including those circumstances in which indemnification would otherwise
be discretionary; (ii) the Company is required to advance expenses to its
officers and directors as incurred, provided that they undertake to repay the
amount advanced if it is ultimately determined that they are not entitled to
indemnification; (iii) an officer or director may bring suit against the
Company if a claim for indemnification is not timely paid; and (iv) the
Company may not reroactively amend the Bylaw provision in a way which is
adverse to its officers or directors or former officers and directors.
Moreover, the Bylaws provide that the Company must maintain insurance to the
extent reasonably available, at its expense, to rpotect itself and any
director, officer, employee or agent of the Company against any such loss,
expense or liability whether or not the Company would have the power to
indemnify such person against such loss, expense or liability. Due to the
prohibitive cost of such insurance, the Company does not maintain an
officers' and directors' liability insurance policy insuring the Company's
officers and directors against certain liabilities and expenses insurred by
them as such. In addition, the Bylaws of the Company authorize it to enter
into indemnification agreements with its directors, officers, employees or
agent. Although the Company has no present intention of entering into
indemnification agreemtns, it may do so in the future.
Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Commission, such indemnification is against
public policy as expressed in the 1933 Act and is therefore unenforceable.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable.
Item 8. EXHIBITS.
4.1 1989 Stock Option Plan, as amended to date.
5.1 Opinion of Hale, Lane, Peek, Dennison, Howard, Anderson
and Pearl.
23.1 Consent of Hale, Lane, Peek, Dennison, Howard, Anderson
and Pearl (included in Exhibit 5.1).
23.2 Consent of Independent Auditor (see p. 7).
24.1 Powers of Attorney (see p. 6).
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Item 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement 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;
(2) that, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
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(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as the indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in a successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the question has already been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
[Signature Page Follows]
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Vanderbilt Gold Corporation, a corporation organized and existing
under the laws of the State of Delaware, certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Las
Vegas, State of Nevada, on this 26th day of September, 1997.
VANDERBILT GOLD CORPORATION
By: /s/ KEITH W. FEGERT
-------------------------------------
KEITH W. FEGERT
President and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Keith W. Fegert and Howard T. Urband,
jointly and severally, his or her attorneys-in-fact and agents, each with the
power of substitution and resubstitution, for him or her and in his or her
name, place or stead, in any and all capacities, to sign any amendments to
this Registration Statement on Form S-8, and to file such amendments,
together with exhibits and other documents in connection therewith, with the
Securities and Exchange Commission, granting to each attorney-in-fact and
agent, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
as he or she might or could do in person, and ratifying and confirming all
that the attorneys-in-fact and agents, or his or her substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Keith W. Fegert President, Chief Financial Officer, September 26, 1997
- ----------------------------- Financial and Accounting, and Director
KEITH W. FEGERT
/s/ Howard T. Urband Vice President and Director September 26, 1997
- -----------------------------
HOWARD T. URBAND
/s/ Tom D. Scott Chairman of the Board of Directors September 26, 1997
- -----------------------------
TOM D. SCOTT
/s/ Barry L. Adams Director September 26, 1997
- -----------------------------
BARRY L. ADAMS
/s/ Ted E. Slanker Director September 26, 1997
- -----------------------------
TED E. SLANKER
</TABLE>
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
I consent to the incorporation by reference in the Registration
Statement on Form S-8 herein of my report dated April 14, 1997 related to the
consolidated Statement of Operations, changes in shareholders' equity and
cash flows of Vanderbilt Gold Corporation and subsidiaries for each of the
years in the three-year period ended December 31, 1996, which report appears
in the December 31, 1996 annual report on Form 10-K of Vanderbilt Gold
Corporation.
Sherman Oaks, California
September 26, 1997
/s/ Keith Rosen
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KEITH ROSEN
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INDEX TO EXHIBITS
Exhibit
Number
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4.1 1989 Stock Option Plan, as amended to date.
5.1 Opinion of Hale, Lane, Peek, Dennison, Howard, Anderson and Pearl.
23.1 Consent of Hale, Lane, Peek, Dennison, Howard, Anderson and Pearl
(included in Exhibit 5.1).
23.2 Consent of Independent Auditor (see p. 7).
24.1 Powers of Attorney (see p. 6).
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EXHIBIT 4.1
VANDERBILT GOLD CORPORATION
1989
STOCK OPTION PLAN
AS AMENDED APRIL 20, 1994
1. PURPOSE OF THE PLAN.
The purpose of the Vanderbilt Gold Corporation (the "Company") 1989
Stock Option Plan (the "Plan") is to provide the Company with a means of
attracting and retaining the services of highly motivated and qualified
directors and key personnel. The Plan is intended to advance the interests of
the Company and its stockholders by affording to key employees, consultants and
non-employee directors, upon whose skill, judgment, initiative and efforts the
Company is largely dependent for the successful conduct of its business, an
opportunity for investment in the Company and the incentives inherent in stock
ownership in the Company. The term Company shall include subsidiaries of the
Company.
2. LEGAL COMPLIANCE.
It is the intent of the Plan that all options granted to employees
under it (the "Options") shall be either "Incentive Stock Options" ("ISOs") as
such term is defined in Section 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), or non-qualified stock options ("NQOs"). An Option shall
be an ISO to the extent, and only to the extent, that such Option is so
identified in writing in the document or documents evidencing the grant of the
Option. All Options that are not so identified as ISOs are intended to be NQOs.
In addition, the Plan provides for the grant of non-qualified stock options to
consultants and non-employee directors ("Director NQOs"). It is the further
intent of the Plan that it conform in all respects with the requirements of Rule
16b-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934 ("Rule 16b-3"). To the extent that any aspect of the Plan or its
administration shall at any time be viewed as inconsistent with the requirements
of Rule 16b-3 or, in connection with ISOs, the Code, as amended from time to
time, such aspect shall be deemed to be modified, deleted, or otherwise changed
as necessary to ensure continued compliance with such provisions.
3. ADMINISTRATION OF THE PLAN.
a. PLAN COMMITTEE.
The Plan shall be administered by a committee (the "Committee"). The
members of the Committee shall be appointed from time to time by the Board of
Directors of the Company (the "Board") and shall consist of not less than three
(3) nor more than five (5) persons who are not eligible to receive Options under
the Plan and who are not, and have not at any time within one year, been
eligible to receive stock options pursuant to the terms of any other plan of the
Company or its affiliates. Such persons may, but need not, be directors of the
Company.
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b. GRANTS OF OPTIONS BY THE COMMITTEE.
In accordance with the provisions of the Plan, the Committee, by
resolution, shall select those eligible persons to whom Options shall be granted
(the "Optionees"); shall determine the time or times at which each Option shall
be granted, whether an Option is an ISO or an NQO and the number of shares to be
subject to each Option; and shall fix the time and manner in which the Option
may be exercise, the option exercise price, and the option period. The
Committee shall determine the form of option agreement to evidence the foregoing
terms and conditions of each Option, which need not be identical. Such option
agreement may include such other provisions as the Committee may deem necessary
or desirable consistent with the Code and Rule 16b-3.
c. COMMITTEE PROCEDURES.
The Committee from time to time may adopt such rules and regulations
for carrying out the purposes of the Plan as it may deem proper and in the best
interest of the Company. The Committee shall keep minutes of its meetings and
records of its actions. A majority of the members of the Committee shall
constitute a quorum for the transaction of any business by the Committee. the
Committee may act at any time by an affirmative vote of a majority of those
members voting. Such vote may be taken at a meeting (which may be conducted in
person or by any telecommunication medium) or by written consent of Committee
members without a meeting.
d. FINALITY OF COMMITTEE ACTION.
The Committee shall resolve all questions arising under the Plan and
option agreements entered into pursuant to the Plan. Each determination,
interpretation, or other action made or taken by the Committee shall be final
and conclusive and binding on all persons, including, without limitation, the
Company, its stockholders, the Committee and each of the members of the
Committee, and the directors, officers, employees and consultants of the
Company, including Optionees and their respective successors in interest.
e. NON-LIABILITY OF COMMITTEE MEMBERS.
No Committee member shall be liable for any action or determination
made by him in good faith with respect to the Plan or any option granted under
it.
f. DIRECTOR OPTIONS.
(1) A Director NQO to purchase the number of shares set forth
opposite each of their respective names is granted to each non-employee director
indicated below as of June 30, 1989.
Number of Shares
Name Subject to Option
---- -----------------
Ted E. Slanker, Sr. 15,000
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John J. Kaweske 5,000
Bernard O. Brynelsen 2,000
John M. Gordon 500
(2) A Director NQO to purchase 5,000 shares (as adjusted pursuant to
Section 13) shall be granted to each non-employee director automatically as of
the first trading day immediately following the date of his or her election or
reelection, as the case may be, to the Board.
(3) A Director NQO to purchase 2,500 shares (as adjusted pursuant to
Section 13) shall be granted automatically to each non-employee director on the
last trading day in each June through 1996, except that a non-employee director
shall not be entitled to receive such annual grant of an option to purchase
2,500 shares in any year during which he or she was elected or reelected, as the
case may be, to the Board and received a Director NQO to purchase 5,000 shares
as provided in subparagraph 3(f)(2) above.
(4) Except as expressly authorized by this Section 3(f), no other
grants of Director NQOs may be made under the Plan, and non-employee directors
of the Company are not otherwise eligible to participate in the Plan.
(5) Upon the grant of a Director NQO, the non-employee director shall
receive a written option agreement substantially in the form provided for in
Section 7. Such director shall not be an "Optionee" as defined by Section 3(b)
of the Plan.
(6) The exercise price for each Director NQO shall be one hundred
percent (100%) of the Fair Market Value of the Company's Common Stock on the
date of grant as determined by the Committee pursuant to Section 8 of the Plan.
Each Director NQO shall be for a term of five years and shall be subject to
earlier termination as hereinafter provided.
(7) Director NQOs may be exercised, and are subject to the rights and
obligations of Optionees, as provided in Section 11 of the Plan; including the
"stock swap feature" provided for in Section 11(c) of the Plan.
(8) Director NQOs shall be subject to the exercise and
non-transferability terms of Section 14 of the Plan. In the event of the
termination of service on the Board by the holder of any Director NQOs, then the
outstanding Director NQOs of such holder shall expire one year after such
termination, or their stated expiration date, whichever occurs first.
(9) Notwithstanding Sections 3(a) and 6 of the Plan, the grant of a
Director NQO shall not disqualify such director as a disinterested person for
purposes of serving on the Committee. The Committee shall have no power under
Sections 3(b) and 7 of the Plan to determine the grant or terms of the Director
NQOs, but shall retain its general authority under Section 3(d) of the Plan to
interpret and administer the Plan; provided, however, that, to the extent
practicable, an individual member of the Committee should disqualify himself or
herself from participation on any question which is unique to his or her option.
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4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN.
The Board may, from time to time, make such changes in or additions to
the Plan as it may deem proper and in the best interests of the Company. The
Board may also suspend or terminate the Plan at any time, without notice, and in
its sole discretion.
Notwithstanding the foregoing, no such change, addition, suspension,
or termination by the Board shall (i) materially impair any Option previously
granted under the Plan without the express written consent of the Optionee' (ii)
materially increase the number of shares subject to the Plan, materially
increase the benefits accruing to Optionees and non-employee directors holding
Director NQOs under the Plan, or materially modify the requirements as to
eligibility to participate in the Plan, without stockholder approval; or (iii)
alter the method of determining the option exercise price described in Section
8.
5. SHARES SUBJECT TO THE PLAN.
For purposes of the Plan, the Board is authorized to issue up to
1,000,000 shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), either treasury or authorized but unissued shares, or the
number and kind of shares of stock or other securities which, in accordance with
Section 13, shall be substituted for such shares of Common Stock or to which
such shares shall be adjusted. The Committee is authorized to grant Options and
Director NQOs under the Plan with respect to such shares. Any or all unsold
shares subject to an Option or Director NQO which for any reason expires or
otherwise terminates (excluding shares returned to the Company in payment of the
exercise price for additional shares) may again be made subject to grant under
the Plan.
6. OPTIONEES.
Options shall be granted only to full-time elected or appointed
officers or other full-time key employees or consultants of the Company or its
subsidiaries designated by the Committee from time to time as Optionees,
including, without limitation, members of the Board who are also such full-time
officers or key employees at the time of grant. In no event, however, may a
member of the Committee be an Optionee under the Plan. Any Optionee may hold
more than one option to purchase Common Stock, whether such option is an Option
held pursuant to the Plan or otherwise. An Optionee holding an Option must
remain a continuous full or part-time employee or consultant of the Company or
its subsidiaries from the time of grant of the Option to him until the time of
its exercise, except as provided in Section 10(c).
7. GRANTS OF OPTIONS.
The Committee shall have the sole discretion to grant Options under
the Plan and to determine whether any Option shall be an ISO or an NQO. The
terms and conditions of Options granted under the Plan may differ from one
another as the Committee, in its absolute discretion, shall determine as long as
all Options granted under the Plan satisfy the requirements of the Plan. Upon
determination by the Committee that an Option is to be granted to an Optionee, a
written option agreement evidencing such Option shall be given to the Optionee,
specifying the number
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of shares subject to the Option, the Option exercise price, whether the Option
is an ISO or an NQO, and the other individual terms and conditions of such
Option. Such option agreement may incorporate generally applicable provisions
from the Plan, a copy of which shall be provided to all Optionees at the time of
their initial grants under the Plan. The Option shall be deemed granted as of
the date specified in the grant resolution of the Committee, and the option
agreement shall be dated as of the date of such resolution.
8. OPTION EXERCISE PRICE.
The price per share to be paid by the Optionee at the time an Option
is exercised shall not be less than one hundred percent (100%) of the fair
market value of one share of the optioned Common Stock ("Fair Market Value") on
the date on which the Option is granted, as determined by the Committee in good
faith in its sole discretion. No ISO may be granted under the Plan to any
person who, at the time of such grant, owns (within the meaning of Section
425(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any parent or
subsidiary thereof, unless the exercise price of such Option is at least equal
to one hundred and ten percent (110%) of Fair Market Value on the date of grant.
Fair Market Value on any given date shall be reasonably and uniformly determined
by the Committee, and in a manner consistent with any regulations issued by the
Secretary of the Treasury for the purposes of determining Fair Market Value of
securities subject to an ISO Plan under the Code.
9. CEILING OF ISO GRANTS.
The aggregate Fair Market Value (determined at the time any ISO is
granted) of the Common Stock with respect to which an Optionee's ISOs, together
with incentive stock options granted under any other plan of the Company and any
parent or subsidiary, exercisable for the first time by such Optionee during any
calendar year shall not exceed $100,000. In the event that an Optionee holds
such incentive stock options that become first exercisable (including as a
result of acceleration of exercisability under the Plan) in any one year for
shares having a fair market value at the date of grant in excess of $100,000,
then the most recently granted of such incentive stock options, to the extent
that they are exercisable for shares having an aggregate fair market value in
excess of such limit, shall be deemed to be NQOs.
10. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.
a. OPTION PERIOD.
The option period shall be determined by the Committee with respect to
each Option granted. In no event, however, may the option period exceed ten
(10) years from the date on which the Option is granted, or five (5) years in
the case of a grant of an ISO to an optionee who is a ten percent (10%)
stockholder at the date on which the option is granted as described in Section
8.
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b. EXERCISABILITY OF OPTIONS AND ACCELERATION OF EXERCISABILITY.
The Committee may, in its discretion, provide that an Option shall be
exercisable in whole or in consecutive installments, cumulative or otherwise.
Notwithstanding the foregoing, the Committee at the time of grant may
provide that the vesting of the right to exercise a given Option or portion
thereof may be accelerated, during the term of an option, under one or more of
the following circumstances: (i) in the event that the Common Stock of the
Company shall be the subject of a tender offer by any person other than the
Company which, by its terms, could result in the offerer acquiring more than
twenty-five percent (25%) of the then outstanding shares of Common Stock of the
Company, or (ii) in the event that the stockholders shall consider, or be asked
to consider, merging or consolidating the Company with any other person, or
transferring all or substantially all of its assets to any other person, or
(iii) in the event that more than twenty-five percent (25%) of the Company's
then outstanding voting shares shall be purchased by any person other than the
Company, granted but unexercisable options may be exercised at any time
following the first public announcement of such event. In no event, however,
may an Option be exercised beyond its stated term.
c. TERMINATION OF OPTIONS DUE TO TERMINATION OF EMPLOYMENT OR
CONSULTANCY, DISABILITY, OR DEATH OF OPTIONEE; TERMINATION FOR
"CAUSE," OR RESIGNATION IN VIOLATION OF AN EMPLOYMENT OR CONSULTING
AGREEMENT.
All Options granted under the Plan to any Optionee shall terminate and
may no longer be exercised if the Optionee ceases, at any time during the period
between the grant of the Option and its exercise, to be an employee of or
consultant to the Company; provided however the Committee may alter the
termination date of the Option if the employee or consultant transfers to an
affiliate of the Company.
Notwithstanding the foregoing, (i) if the Optionee's employment or
consultancy with the Company shall have terminated for any reason (other than
involuntary dismissal for "cause" or voluntary resignation in violation of
any agreement to remain in the employ or consultancy of the Company
including, without limitation, any such agreement pursuant to Section 15), he
may, at any time before the expiration of three (3) months after such
termination or before expiration of the Option, whichever shall first occur,
exercise the Option (to the extent that the option was exercisable by him on
the date of the termination of his employment); (ii) if the Optionee's
employment or consultancy shall have terminated due to disability (as defined
in Section 22(e)(3) of the Code and subject to such proof of disability as
the Committee may require), such Option may be exercised by the Optionee (or
by his guardian(s), or conservator(s), or other legal representative(s))
before the expiration of twelve (12) months after such termination or before
expiration of the Option, whichever shall first occur, to the extent that the
Option was exercisable by him on the date of the termination of his
employment or consultancy; and (iii) in the event of the death of the
Optionee, an Option exercisable by him at the date of his death shall be
exercisable by his legal representative(s), legatee(s), or heir(s), or by his
beneficiary or beneficiaries so designated by him as permitted by Section 14,
as the case may be, within twelve (12) months after his death or, in the case
of an ISO, twelve (12) months after his
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death or before the expiration of the Option, whichever shall first occur, to
the same extent that the option was exercisable by him on the date of his
death.
Notwithstanding any other provision of the Plan, an Option shall be
deemed to terminate immediately on the date on which the Optionee's employment
or consultancy is terminated if such termination is for "cause," or in violation
of any agreement to remain in the employ or consultancy of the Company
including, without limitation, any such agreement pursuant to Section 15. For
purposes of the Plan, "cause" may include, without limitation, any illegal or
improper conduct (i) which injures or impairs the reputation, goodwill, or
business of the Company; (ii) which involves the misappropriation of funds of
the Company, or the misuse of data, information, or documents acquired in
connection with employment by the Company; or (iii) which violates any other
directive or policy promulgated by the company or any of its subsidiaries. A
termination for "cause" may also include any resignation in anticipation of
discharge for "cause" or resignation accepted by the Company in lieu of a formal
discharge for "cause."
11. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF OPTIONEES.
a. WRITTEN NOTICE OF EXERCISE.
An Optionee may elect to exercise an option in whole or in part, from
time to time, subject to the terms and conditions contained in the Plan and in
the agreement evidencing such Option, by giving written notice of exercise to
the Company at its Principal executive office.
b. CASH PAYMENT FOR OPTIONED SHARES.
In the event that an option is exercised for cash, such notice shall
be accompanied by a cashier's or personal check, or money order, made payable to
the Company for the full exercise price of the shares purchased.
c. STOCK SWAP FEATURE.
At the time of the Option exercise, and subject to the discretion of
the Committee to accept payment in cash only, the Optionee may determine whether
the total purchase price of the shares to be purchased shall be paid solely in
cash or by transfer from the Optionee to the Company of previously acquired
shares of Common Stock, or by a combination thereof. In the event that the
Optionee elects to pay the total purchase price in whole or in part with
previously acquired shares of Common Stock, the value of such shares shall be
equal to their Fair Market Value on the date of exercise, determined by the
Committee in the same manner used for determining Fair Market Value at the time
of grant for purposes of Section 8.
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d. INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND LEGALITY OF
ISSUANCE.
The receipt of shares of Common Stock upon the exercise of an Option
shall be conditioned upon the Optionee (or any other person who exercises the
Option on his or her behalf as permitted by Section 10(c)) providing to the
Committee a written representation that, at the time of such exercise, it is the
intent of such person(s) to acquire the shares for investment only and not with
a view toward distribution. The certificate for unregistered shares issued for
investment shall be restricted by the Company as to transfer unless the Company
receives an opinion of counsel satisfactory to the Company to the effect that
such restriction is not necessary under then pertaining law. The providing of
such representation and such restrictions on transfer shall not, however, be
required upon any person/s receipt of shares of Common Stock under the Plan in
the event that, at the time of such receipt, the shares subject to the Option
shall be covered by an effective and current registration statement under the
Securities Act of 1933, as amended. The Company shall, however, under no
circumstances be required to sell or issue any shares under the Plan if, in the
opinion of the Committee, (i) the issuance of such shares would constitute a
violation by the Optionee or the Company of any applicable law or regulation of
any governmental authority, or (ii) the consent or approval of any governmental
body is necessary or desirable as a condition of, or in connection with, the
issuance of such shares.
e. STOCKHOLDER RIGHTS OF OPTIONEE.
Upon exercise, the optionee (or any other person who exercises the
Option on his behalf as permitted by Section 10(c)) shall be recorded on the
books of the Company as the owner of the shares, and the Company shall deliver
to such record owner one or more duly issued stock certificates evidencing such
ownership. No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by an Option granted pursuant to the Plan until
such person shall have become the holder of record of such shares. Except as
provided in Section 13, no adjustments shall be made for cash dividends or other
distributions or other rights as to which there is a record date preceding the
date such person becomes the holder of record of such shares.
f. HOLDING PERIODS FOR TAX PURPOSES.
The Plan itself does not provide that an Optionee must hold shares of
Common Stock acquired under the Plan for any minimum period of time. Optionees
are urged to consult with their own tax advisors with respect to the tax
consequences to them of their individual participation in the Plan.
12. SUCCESSIVE GRANTS.
Successive grants of options may be made to any Optionee under the Plan.
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13. ADJUSTMENTS.
In the event that each share of the outstanding Common Stock of the
Company (other than shares held by dissenting stockholders) shall be changed
into, or exchanged for, a different number or kind of shares of stock or
other securities of the Company (or, if further changes or exchanges of any
stock or other securities into which such Common Stock shall have been
changed, or for which it shall have been exchanged, shall be made), whether
by reason of mergers, consolidations, reorganizations, recapitalization,
stock dividends, reclassifications, split-ups, combinations of shares, or
otherwise, for each such share of Common Stock of the Company (or such
further stock or other securities) subject to the Plan (whether or not such
shares are at the time subject to outstanding options), there shall be
substituted and exchanged therefore the number and kind of shares of stock or
other securities into which each outstanding share of Common Stock of the
Company (or such further stock or other securities) shall be so changed or
exchanged. In the event of any such change(s) or exchange(s), the Committee
may, in its sole discretion, determine that, in order to prevent dilution or
enlargement of rights under the Plan, an adjustment should be made in the
number, kind, or option exercise price of the shares of stock or other
securities then subject or potentially subject to an Option or Options. If
such adjustment is made, it shall be effective and binding for all purposes
of the Plan.
In the event of the dissolution or liquidation of the Company, any
outstanding and unexercised Option and Director NQO shall terminate as of a
future date to be fixed by the Committee.
In the event of a Reorganization (as hereinafter defined), then
a. If there is no plan or agreement with respect to the Reorganization
(the "Reorganization Agreement"), or if the Reorganization Agreement does not
specifically provide for the adjustment, change, conversion, or exchange of the
outstanding and unexercised Options and Director NQOs for cash or other property
or securities of another corporation, then any outstanding and unexercised
Options and Director NQOs shall terminate as of a future date to be fixed by the
Committee; or
b. If there is a Reorganization Agreement, and the Reorganization
Agreement specifically provides for the adjustment, change, conversion, or
exchange of the outstanding and unexercised Options and Director NQOs for cash
or other property or securities of another corporation, then the Committee shall
adjust the shares under such outstanding and unexercised Options and Director
NQOS, and shall adjust the shares remaining under the Plan which are then
available for the issuance of Options and Director NQOs under the Plan if the
Reorganization Agreement makes specific provisions therefor, in a manner not
inconsistent with the provisions of the Reorganization Agreement for the
adjustment, change, conversion, or exchange of such options and Director NQOs
and shares.
The term "Reorganization" as used in this Section 13 shall mean any
reorganization, merger, consolidation, share exchange, or other business
combination pursuant to which neither the Company nor a subsidiary of the
Company is the surviving parent corporation after the effective date of the
Reorganization, or any sale or lease of all or substantially all of the
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assets of the Company. Nothing herein shall require the Company to adopt a
Reorganization Agreement, or to make provision for the adjustment, change,
conversion, or exchange of any Options and Director NQOs, or the shares subject
thereto, in any Reorganization Agreement which it does adopt.
The Committee shall provide to each optionee then holding an
outstanding and unexercised option and Director NQOs not less than thirty (30)
calendar days' advanced written notice of any date fixed by the Committee
pursuant to this Section 13 and of the terms of any Reorganization Agreement
providing for the adjustment, change, conversion, or exchange of outstanding and
unexercised Options and Director NQOs. Except as the Committee may otherwise
provide, each optionee shall have the right during such period to exercise his
Option and Director NQO only to the extent that the Option and Director NQO was
exercisable on the date such notice was provided to the optionee.
Any adjustment to any outstanding ISO pursuant to this Section 13, if
made by reason of a transaction described in Section 425(a) of the Code, shall
be made so as to conform to the requirements of that Section and the regulations
thereunder. If any other transaction described in Section 425(a) of the Code
affects the Common Stock subject to any unexercised Option theretofore granted
under the Plan (hereinafter for purposes of this Section 13 referred to as the
"old option"), the Board of Directors of the Company or of any surviving or
acquiring corporation may take such action as it deems appropriate, in
conformity with the requirements of that Code Section and the regulations
thereunder, to substitute a new option for the old option, in order to make the
new option, as nearly as may be practicable, equivalent to the old option, or to
assume the old option.
No modification, extension, renewal, or other change in any Option
granted under the Plan may be made, after the grant of such Option, without the
Optionee's consent, unless the same is permitted by the provisions of the Plan
and the option agreement. In the case of an ISO, Optionees are hereby advised
that certain changes may disqualify the ISO from being considered as such under
Section 422A of the Code, or constitute a modification, extension, or renewal of
the ISO under Section 425(h) of the Code.
All adjustments and determinations under this Section 13 shall be made
by the Committee in good faith in its sole discretion.
14. NON-TRANSFERABILITY OF OPTIONS.
An Option shall be exercisable only by the Optionee, or in the event
of his disability, by his guardians, conservators, or other legal
representatives, during the Optionee's lifetime. In the event of the death of
the optionee, an option shall be exercisable by his legal representatives,
legatee(s), or heir(s), as the case may be, or by such person(s) as he may
designate as his beneficiary or beneficiaries in a signed statement included as
a part of the option agreement.
No Option shall be transferable by the Optionee, either voluntarily or
involuntarily, except by will or the laws of descent and distribution as
provided above. Any
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attempt to exercise, transfer or otherwise dispose of an interest in an option
in contravention of the terms and conditions of the Plan, or of the option
agreement for the Option, shall immediately void the Option.
15. CONTINUED EMPLOYMENT.
As determined in the sole discretion of the Committee at the time of
grant, each Option may have as a condition the agreement of the Optionee to
remain in the employ of the Company, or of its affiliates, and to render to it
his or her exclusive service, at such compensation as may be determined from
time to time by it, for a period not to exceed the term of the Option, except
for earlier termination of employment by or with the express written consent of
the Company or on account of disability or death. The failure of any Optionee
to abide by such agreement as to any Option under the Plan may result in the
termination of all of his or her then outstanding Options granted pursuant to
the Plan.
Neither the creation of the Plan nor the granting of Option(s) under
it shall be deemed to create a right in the Optionee to continued employment
with the Company, and each Optionee shall be and shall remain subject to
discharge by the Company as though the Plan had never come into existence.
16. TAX WITHHOLDING.
The exercise of any option granted under the Plan is subject to the
condition that if at any time the Company shall determine, in its discretion,
that the satisfaction of withholding tax or other withholding liabilities under
any state or federal law is necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or purchase of shares of Common
Stock pursuant thereto, then in such event, the exercise of the option shall not
be effective unless such withholding shall have been effected or obtained in a
manner acceptable to the Company. When an Optionee is required to pay to the
Company an amount required to be withheld under applicable income tax laws in
connection with the exercise of any Option, the optionee may satisfy the
obligation, in whole or in part, by electing to have the Company withhold shares
of Common Stock having a value equal to the amount required to be withheld. The
value of the Common Stock withheld pursuant to the election shall be determined
by the Committee, in accordance with the criteria set forth in Section 8 hereof,
with reference to the date the amount of tax to be withheld is determined (the
"Tax Determination Date"). The Optionee shall pay to the Company in cash any
amount required to be withheld that would otherwise result in the withholding of
a fractional share. The election by an Optionee, to be effective, must meet all
of the following requirements: (i) the election must be made on or prior to Tax
Determination Date; (ii) the election must be irrevocable; (iii) the election is
subject to the approval of the Committee and shall not have been disapproved at
any time after the election is made; and (iv) in addition to satisfying the
requirements of (i), (ii) and (iii), if the Optionee is an officer or director
of the Company within the meaning of Section 16 of the Securities Exchange Act
of 1934 ("Section 16"), (a) the exercise of an option and the election relating
to that option may only be made six months or more subsequent to the grant of
that option (except that this limitation will not apply in the event death or
disability of the optionee occurs prior to the expiration of the six-month
period), and (b) the election must be made either (1) six months or
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more prior to the Tax Determination Date or (2) within a ten-day "window period"
beginning on the third day following the release of the Company's annual or
quarterly summary statement of sales and earnings and ending on the twelfth
business day following the date of such release. Where the Tax Determination
Date of an officer or director of the Company within the meaning of Section 16
is deferred until six months after exercise and that officer or director elects
to have the Company withhold shares pursuant to the terms of this Section 16,
the full amount of option shares shall be issued or transferred to him upon
exercise but he will be unconditionally obligated to tender back to the Company
on the Tax Determination Date the proper number of shares of Common Stock to
satisfy withholding requirements, plus cash for any fractional amount. The
foregoing conditions are subject to modification and change at the discretion of
the Committee in the event all or any of the provisions relating to the election
to withhold shares pursuant to this Section 16 are found not to be exempt under
Section 16 and the rules and regulations promulgated thereunder.
17. TERM OF PLAN.
a. EFFECTIVE DATE.
The Plan became effective on June 6, 1989.
b. TERMINATION DATE.
Except as to Options and Director NQOs previously granted and
outstanding under the Plan, the Plan shall terminate at midnight on June 5,
1999, and no option shall be granted after that time. Options and Director NQOs
then outstanding may continue to be exercised in accordance with their terms.
The Plan may be suspended or terminated at any earlier time by the Board within
the limitations set forth in Section 4.
18. NON-EXCLUSIVITY OF THE PLAN.
Nothing contained in the Plan is intended to amend, modify, or rescind
any previously approved compensation plans, programs or options entered into by
the Company. This Plan shall be construed to be in addition to and independent
of any and all such other arrangements. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the Stockholders of the Company for
approval shall be construed as creating any limitations on the power or
authority of the Board to adopt, with or without stockholder approval, such
additional or other compensation arrangements as the Board may from time to time
deem desirable.
19. GOVERNING LAW.
The Plan and all rights and obligations under it shall be construed
and enforced in accordance with the laws of the State of Delaware.
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EXHIBIT 5.1
[LETTERHEAD]
HALE, LANE, PEEK, DENNISON, HOWARD,
ANDERSON AND PEARL
100 West Liberty Street, 10th Floor
P.O. Box 3237
Reno, Nevada 89501
(702) 786-7900 Phone (702) 786-6179 Facsimile
September 26, 1997
Vanderbilt Gold Corporation
4625 Wynn Road, Suite 103
Las Vegas, NV 89103
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by you with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of a total of 500 shares of your Common Stock (the "Shares") reserved for
issuance upon exercise of stock options issued or to be issued under the 1989
Stock Option Plan, as amended, of Vanderbilt Gold Corporation (the "Plan"). As
your counsel in connection with this transaction, we have examined the
proceedings taken and are familiar with the proceedings proposed to be taken by
you in connection with the sale and issuance of the Shares.
It is our opinion that upon conclusion of the proceedings being taken or
contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Shares when issued and sold in the manner
described in the Plan and the Registration Statement will be legally and validly
issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and in any amendment thereto.
Sincerely,
Hale, Lane, Peek, Dennison, Howard,
Anderson and Pearl
/s/ Hale, Lane, Peek, Dennison, Howard,
Anderson and Pearl
