<PAGE> 1
As filed with the Securities and Exchange Commission on May 28, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CROSSWALK.COM, INC (FORMERLY AKA DIDAX INC.)
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
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<S> <C>
Delaware 54-1831588
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(State or other jurisdiction of (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
Address
-------
4206 F Technology Court
Chantilly, VA 20151
(703) 968-4808
(Address and telephone number of principal executive offices)
CROSSWALK.COM, INC. AKA DIDAX INC. 1998 STOCK OPTION PLAN
---------------------------------------------------------
(Full title of plan)
Willam M. Parker
4206 F Technology Court
Chantilly, VA 20151 (703)968-4808 Ext. 13
(Name, address and telephone number of agent for service)
Copies to:
Charles J. Rennert, Esq.
Berman Wolfe & Rennert, P.A.
NationsBank Tower, 35th Floor
100 Southeast Second Street, Miami, Florida 33131-2130
305-577-4171
CALCULATION OF REGISTRATION FEE
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<CAPTION>
===================================================================================================================
Proposed Maximum Proposed
Title of Securities Amount to Offering Price Maximum Aggregate Amount of
to be Registered be Registered Per Share(1) Offering Price (1) Registration Fee
- ---------------- ------------- ------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock
par value $.01 per share 800,000 $11.25 $9,000,000 $2,502(1)
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the average of the high and low prices of the Registrant's Common Stock
as reported on the Nasdaq SmallCap Market on May 26, 1999, the latest
practicable date prior to the filing of this Registration Statement.
<PAGE> 2
PREFACE
In April 1998, the Board of Directors adopted, and the stockholders approved the
Company's 1998 Stock Option Plan (the "Option Plan"). The Board of Directors in
February 1999 adopted and the stockholders in May 1999 approved among other
things, increasing by 400,000, the number of shares issuable under the Option
Plan. The purpose of the Option Plan is to advance the interests of the Company
by providing an opportunity to its directors, employees and consultants,
including ministry partners, to purchase shares of the Company's Common Stock.
By encouraging stock ownership, the Company seeks to attract, retain and
motivate directors, employees and consultants. The Option Plan provides for the
grant of (i) incentive stock options ("Incentive Options") as described in
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"); and
(ii) nonqualified stock options ("Nonqualified Options," and, together with the
Incentive Options, the "Options"). The Option Plan is administered by the Board
of Directors, or at its discretion, by a committee which is appointed by the
Board to perform such function. Under the terms of the Option Plan, the exercise
price for Incentive Options may not be less than the fair market value of the
underlying stock at the time the Incentive Option is granted.
The purpose of this Registration Statement is to provide for the registration of
shares of the Registrant's Common Stock, par value $.01 per share (the "Common
Stock), issuable upon the exercise of the stock options under the Plan.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
*ITEM 1. Plan Information.
*ITEM 2. Registrant Information and Employee Plan Annual Information.
- ------------------
* Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from this Registration Statement in accordance with Rule 428 under
the Securities Act of 1933 and the Note to Part I of Form S-8.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Certain Documents by Reference.
The following documents, filed by the Registrant with the Securities and
Exchange Commission (the "Commission"), are incorporated by reference in this
Registration Statement:
(1) The description of the Registrant's Common Stock, par value $.01 per
share, contained in the Registrant's Form SB-2, declared effective by the
Commission on September 24, 1997 and Post-Effective Amendment No. 2 to
this Form SB-2 declared effective by the Commission on May 4, 1999
(Registration No. 333-25937).
(2) The Registrant's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1998, filed with the Commission on March 22, 1999.
(3) The Registrant's Definitive Proxy Statement on Schedule 14A as filed with
the Commission on March 26, 1999 (Registration No. 000-22847).
(4) The Registrant's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999, filed with the Commission on May 14, 1999.
(5) The Registrant's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1998, filed with the Commission on November 10, 1998.
(6) The Registrant's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1998, filed with the Commission on August 14, 1998.
(7) The Registrant's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998, filed with the Commission on May 15, 1998.
In addition, all reports and other 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 have been sold or which deregisters all securities then remaining
unsold shall be deemed to be incorporated by reference herein and made a part
hereof from the date of filing of such documents. Any statements contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is incorporated by
reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed to constitute a part of this
Registration Statement except as so modified or superseded.
3
<PAGE> 4
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
ITEM 6. Indemnification of Directors and Officers.
To the fullest extent permitted by Delaware statutory or decisional law,
as amended or interpreted, no director of this Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director. This does not affect the availability of equitable
remedies for breach of fiduciary duties.
The Corporation shall, to the fullest extent legally permissible,
indemnify (fully or, if not possible, partially) each of its directors and
officers, and persons who serve at its request as directors or officers of
another organization in which it owns shares or of which it is a creditor,
against all liabilities (including expenses) imposed upon or reasonably incurred
by him in connection with any action, suit or other proceeding, civil or
criminal (including investigations, audits, the activities of, or service upon
special committees of the board) in which he may be involved or with which he
may be threatened, while in office or thereafter, by reason of his acts or
omissions as such director or officer, unless in any proceeding he shall be
finally adjudged not to have acted in good faith in the reasonable belief that
his action was in the best interest of the Corporation; provided, however, that
such indemnification shall not cover liabilities in connection with any matter
which shall be disposed of through a compromise payment by such director or
officer, pursuant to a consent decree or otherwise, unless such compromise shall
be approved as in the best interest of the Corporation, after notice that it
involved such indemnification, (a) by a vote of the directors in which no
interested director participates, or (b) by a vote or the written approval of
the holders of a majority of the outstanding stock at the time having the right
to vote for directors, not counting as outstanding any stock owned by any
interested director or officer. Such indemnification may include payment by the
Corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under these
provisions. The rights of indemnification hereby provided shall not be exclusive
of or affect other rights to which any director or officer may be entitled. As
used in this paragraph, the terms "director" and "officer" include their
respective heirs, executors and administrators, and an "interested" director or
officer is one against whom as such the proceedings in question or another
proceeding on the same or similar grounds is then pending.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
4
<PAGE> 5
ITEM 8. Exhibits.
See Index to Exhibits.
ITEM 9. Undertakings.
(a) 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:
(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 this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act 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 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 Exchange Act (and each filing of the Plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration
statement relating to the
5
<PAGE> 6
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 pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the SEC 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 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
the requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chantilly, State of Virginia, on May 26, 1999.
CROSSWALK.COM, INC.
By: /s/ William M. Parker
---------------------
William M. Parker
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William M. Parker, or in his absence, Gary A.
Struzik, his true and lawful attorney-in-fact and agent, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission granting unto said 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, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and conforming all that each said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this
6
<PAGE> 7
Registration Statement has been signed herein by the following persons in
the capacities and on the dates indicated.
<TABLE>
<S> <C>
May 26, 1999 By:/s/ WILLIAM M. PARKER
------------------------
William M. Parker,
Chief Executive Officer and President
May 26, 1999 By:/s/ GARY A. STRUZIK
----------------------
Gary A. Struzik,
Chief Financial Officer and Secretary,
and Principal Financial and Chief
Accounting Officer
May 26, 1999 By:/s/ JAMES G. BUICK
---------------------
James G. Buick,
Chairman of the Board of Directors
May 26, 1999 By:/s/ ROBERT C. VARNEY, PH.D.
------------------------------
Robert C. Varney, Ph.D.,
Vice-Chairman of the Board of Directors
May 26, 1999 By:/s/ DANE B. WEST
-------------------
Dane B. West,
Vice President Business Development and
Sales and director
May 26, 1999 By:/s/ WILLIAM H. BOWERS
------------------------
William H. Bowers,
Chief Technical Officer and director
May 26, 1999 By:/s/ BRUCE E. EDGINGTON
-------------------------
Bruce E. Edgington, director
May 26, 1999 By:/s/ JOHN J. MEINDL, JR.
--------------------------
John J. Meindl, Jr., director
May 26, 1999 By:/s/ CLAY T. WHITEHEAD
------------------------
Clay T. Whitehead, director
May 26, 1999 By:/s/ EARL E. GJELDE
---------------------
Earl E. Gjelde, director
May 26, 1999 By:/s/ W.R. "MAX" CAREY
-----------------------
W.R. "Max" Carey, director
</TABLE>
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
4.1* Certificate of Incorporation and Amendments thereto of DIDAX INC.
4.1A* Certificate of Correction regarding Certificate of Incorporation
4.1B Amendment to the Company's Certificate of Incorporation effective 5/13/99
4.2* Bylaws of the Registrant
4.3* Form of Stock Option Agreement
4.3A* Form of Stock Option Agreement as amended April, 6, 1998
4.4* Form of Certificate representing shares of Common Stock of the Registrant
5 Opinion of Berman Wolfe & Rennert P.A.
23.1 Consent of Berman Wolfe & Rennert P.A. (Included as part of Exhibit 5.1)
23.2 Consent of Hoffman, Morrison & Fitzgerald P.C.
24 Power of Attorney (included on signature page)
99.1 1998 Stock Option Plan, as amended February 26, 1999
</TABLE>
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* Incorporated by reference from the Registrant's Registration Statement on Form
SB-2 (SEC File No. 333-25937) declared effective by the Securities and Exchange
Commission on September 24, 1997, and the Registrant's Definitive Proxy
Statement on Schedule 14A (SEC File No. 000-22847) filed with the Securities and
Exchange Commission on April 10, 1998.
8
<PAGE> 1
EXHIBIT 4.1(b)
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "DIDAX INC.", CHANGING ITS NAME FROM "DIDAX INC." TO
"CROSSWALK.COM, INC.", FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF MAY, A.D.
1999, AT 9 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ EDWARD J. FREEL
[SEAL] ------------------------------------
Edward J. Freel, Secretary of State
2703861 8100 AUTHENTICATION: 9749367
991192180 DATE: 05-18-99
<PAGE> 2
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
The undersigned, being an Authorized Officer of DIDAX INC., a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of DIDAX INC. on January 26,
1999, a resolution was duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling for consideration thereof at the annual meeting of the
stockholders of said corporation. The resolution setting forth the proposed
amendment is as follows (in relevant part):
RESOLVED that the following items be presented to the stockholders for
vote at the Annual Stockholders Meeting to be held Wednesday, May 5,
1999:
2. Proposal to amend the Company's Certificate of Incorporation to
change the name of the Company to Crosswalk.com, Inc., as herein
adopted by the Board of Directors;
* * * *
4. Proposal to amend the Company's Certificate of Incorporation to
provide for an authorized class of Preferred Stock, consisting of
five million shares of Preferred Stock, par value $.001 per share,
with rights, preferences and designation of such shares to be
determined by the Company's Board of Directors;
* * * *
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
meeting of the stockholders of said corporation was duly called and held, upon
notice in accordance with Section 222 of the General Corporation Law of the
State of Delaware, at which meeting the necessary number of shares as required
by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
<PAGE> 3
FOURTH: That pursuant to said resolution of said corporation's Board of
Directors and said vote of said corporation's stockholders, paragraph one (1) of
the Certificate of Incorporation of this corporation is amended so that, as
amended, it shall be and read as follows:
"1. The name of the Corporation is CROSSWALK.COM, INC."
FIFTH: That pursuant to said resolution of said corporation's Board of Directors
and said vote of said corporation's stockholders, paragraph four (4) of the
Certificate of Incorporation of this corporation shall be and hereby is amended
so that, as amended, it shall be and read as follows:
"4. The total number of shares of all classes of stock that the
Corporation is authorized to issue is twenty million (20,000,000)
shares of Common Stock with a par value of $0.01 per share, and
five million (5,000,000) shares of Preferred Stock with a par
value of $.001 per share, with rights, preferences and designation
of such shares to be determined by the Corporation's Board of
Directors."
SIXTH: That the capital of said corporation shall not be reduced under or by
reason of said amendments.
IN WITNESS WHEREOF, said corporation has caused this certificate to be
signed by William M. Parker, an Authorized Officer, this twelfth day of May,
1999.
<TABLE>
<S> <C>
By: /s/ WILLIAM M. PARKER
--------------------------------
(Authorized Officer)
Name: William M. Parker
Title: President and Chief Executive Officer
Attest: /s/ GARY A. STRUZIK
---------------------------------------
Name: Gary A. Struzik
Title: Secretary and Chief Financial Officer
</TABLE>
<PAGE> 1
EXHIBIT 5
May 26, 1999
DIDAX INC.
4206F Technology Court
Chantilly, Virginia 20151-1214
Re: Registration Statement on Form S-8 of Crosswalk.com, Inc.
Gentlemen:
You have requested our opinion as counsel for Crosswalk.com, Inc.
(formerly DIDAX Inc.), a Delaware corporation (the "Company"), in connection
with the Registration Statement on Form S-8 (the "Registration Statement") filed
by the Company with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), with
respect to up to 800,000 shares of Common Stock, par value $.01 per share (the
"Shares"), of the Company issuable upon the exercise of options available for
grant under the Company's 1998 Stock Option Plan (the "Plan").
In rendering the opinion expressed herein, we have examined the following
documents and instruments:
1. The Registration Statement;
2. The Company's Certificate of Incorporation, as amended;
3. The Company's Bylaws; and
4. The resolutions adopted by the Board of Directors and shareholders
of the Company dated April 6, 1998, and April 29, 1998, and
February 26, 1999, and May 5, 1999, respectively, authorizing the
Plan.
In connection with our opinion, we have undertaken no independent review
of the operations of the Company. Instead, we have relied solely on the
documents described above. In examining such documents, we have assumed, without
independent investigation: (i) the authenticity of all documents submitted to us
as originals; (ii) the conformity to original documents of all documents
submitted to us as certified or photostatic copies; (iii) the authenticity of
the originals of such latter documents; (iv) that all factual information
supplied to us is accurate, true and complete; and (v) the genuineness of all
signatures. In addition, as to questions of fact material to the opinions
expressed herein, we have relied on the accuracy of all representations and
warranties as to factual matters contained in any of the documents submitted to
us for purposes of rendering the opinions expressed herein. We also assumed that
the exercise price of each Share will be in excess of the par value of the
Common Stock.
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<PAGE> 2
In addition, we have obtained from public officials and from officers of
the Company certificates, agreements and assurances and have examined originals
or copies, identified to our satisfaction, of such other certificates,
agreements and other assurances as we considered necessary for the purposes of
rendering the opinions hereinafter expressed.
We have also consulted with officers and directors of the Company and
have obtained such representations with respect to the matters of fact as we
have deemed necessary or advisable for purposes of rendering the opinions
hereinafter expressed. We have not independently verified the factual statements
made to us in connection therewith, nor the veracity of such representations.
Based on the foregoing, subject to the comments and exceptions contained
herein and limited in all respects to the General Corporation Laws of the State
of Delaware and the federal laws of the United States o f America, we are of the
opinion that:
After the Registration Statement is declared effective by the Commission
and when the applicable provisions of the "Blue Sky" or other state securities
laws shall have been complied with, and when the Shares are delivered in
accordance with the terms of the Plan, assuming no change in applicable law or
facts, the Shares will constitute legally issued securities of the Company,
fully paid and nonassessable.
We are qualified to act as counsel in the State of Florida and, as such,
are not experts in the laws of any other jurisdiction. You should be aware that
we are not admitted to practice law in the State of Delaware. Accordingly, any
opinion herein as to the laws of the State of Delaware is based solely upon the
latest generally available statutes and case law of such state.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Commission promulgated thereunder.
The information set forth herein is as of the date of this letter. We
disclaim any undertaking to advise you of changes which may be brought to our
attention after the date hereof.
Respectfully submitted,
BERMAN WOLFE & RENNERT, P.A.
10
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS'
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (File No. 33-69423); and the Registration Statement on Form SB-2 (File
No. 333-25937), the Post Effective Amendment No. 1 of Form SB-2 (File No.
333-25937) and the Post Effective Amendment No.2 of Form SB-2 (File No.
333-25937) of our report dated February 16, 1999, with respect to the
consolidated financial statements of DIDAX INC and Subsidiary, included in the
Annual Report on Form 10-KSB for the year ended December 31, 1998.
HOFFMAN, MORRISON & FITZGERALD, P.C.
McLEAN, VIRGINIA
MAY 26, 1999
11
<PAGE> 1
EXHIBIT 99.1
DIDAX INC.
1998 STOCK OPTION PLAN
As Amended February 26, 1999
1.PURPOSE. The purpose of this Plan is to advance the interests of DIDAX, INC.
(the "Company") by providing an opportunity to its selected directors, key
employees (as defined in Paragraph 2(b)) and consultants (as defined in
Paragraph 2(a)) to purchase shares (the "Shares") of the Common Stock, par value
$.01 per share (the "Common Stock"), of the Company. By encouraging stock
ownership, the Company seeks to attract, retain and motivate key employees,
consultants and ministry partners. It is intended that this purpose will be
effected by the granting of (i) incentive stock options ("Incentive Options") as
described in Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"); and (ii) nonqualified stock options ("Nonqualified Options," and,
together with the incentive options, the "Options") as provided herein.
(Collectively, the "Stock Incentives").
2.DEFINITIONS.
(a) The term "consultants" means those persons, other than employees of
the Company, who provide services to the Company, including nonemployee
directors of the Company, and who are determined by the Compensation
Committee to be eligible for Stock Incentives under this Plan.
(b) The term "key employees" means those executive, administrative,
operational, engineering or managerial employees who are determined by
the Compensation Committee to be eligible for Stock Incentives under this
Plan.
(c) The term "ministry partners" means those organizations or
individuals. other than employees and consultants, whose relationship
with DIDAX is critical to meeting the Company's business objectives and
who are determined by the Compensation Committee to be eligible for stock
incentives under this plan.
(d) The term "optionee" means an individual to whom an option is granted
under this Plan.
(e) The term "grantee" means an individual to whom a purchase right is
granted under this Plan.
3. EFFECTIVE DATE. This Plan becomes effective April 6, 1998, with amendment on
February 26, 1999 to increase the number of shares underlying the Plan from
400,000 to 800,000, as so adopted by the Board of Directors of the Company, and
approved by the shareholders on May 5, 1999.
4. STOCK SUBJECT TO THE PLAN. The Shares that may be purchased (through the
exercise of options) under this Plan shall not exceed in the aggregate 800,000
Shares. If any Stock Incentives granted under the Plan shall terminate, expire
or be cancelled as to any Shares, new Stock Incentives may thereafter be granted
covering such Shares. In addition, any Shares purchased under this Plan
subsequently repurchased by the Company pursuant to the terms hereof may again
be granted under the Plan. The Shares issued upon exercise of Stock Incentives
under this Plan may, in whole or in part, be either authorized but unissued
Shares or issued Shares reacquired by the Company. Notwithstanding any other
provisions of this Plan, the aggregate number of Shares subject to outstanding
options granted under the Plan, plus the aggregate number of shares issued upon
the exercise of all options granted under the Plan, shall never be permitted to
exceed the number of Shares specified in the first sentence of section 4, except
in accordance with subsection 8(a) below.
5. ADMINISTRATION. The Plan shall be administered by the Board of Directors of
the Company (the "Board"), or by a committee appointed by the Board which shall
not have less than two (2) members (in either case, the "Compensation
Committee"). No single participant may receive options to purchase more than the
total number of shares authorized for issuance under the 1998 Plan. The
Compensation Committee is tasked with the responsibility of recommending option
grants for approval
1
<PAGE> 2
by the Board of Directors and the Compensation Committee or the Board of
Directors may delegate administrative duties to such employees of the Company as
it deems proper. However, it is only through a majority vote of the Board of
Directors, either acting on its own or via the recommendation of the
Compensation Committee, that nonqualified stock options or incentive stock
options to purchase shares of Common Stock may be granted, and thus it is
ultimately the Board of Directors, subject to the provisions of the 1998 Plan,
that shall have the sole authority, in its discretion:"
(a) to determine to which of the eligible individuals, and the time or
times at which, options to purchase Common Stock of the Company shall be
granted;
(b) to determine the number of shares of Common Stock to be subject to
options granted to each eligible individual;
(c) to determine the price to be paid for the shares of Common Stock upon
the exercise of each option;
(d) to terminate the Plan or accelerate Option vesting, and to determine
the vesting and duration of each option granted;
(e) to determine the terms and conditions of each stock option agreement
(which need not be identical) entered into between the Company and any
eligible individual to whom the Board of Directors has granted an option;
(f) to interpret the Plan; and
(g) to make all determinations deemed necessary or advisable for the
administration of the Plan.
The Compensation Committee, if any, shall be appointed by and shall serve at the
pleasure of the Board of Directors of the Company. No member of the Compensation
Committee shall be liable for any action or determination made with respect to
the Plan.
6. ELGIBLE EMPLOYEES, CONSULTANTS AND MINISTRY PARTNERS. Incentive Options may
be granted to such key employees of the Company, including members of the Board
of Directors who are also employees of the Company, as are selected by the
Compensation Committee and approved by Board of Directors. Nonqualified Options
may be granted to such key employees, consultants and ministry partners,
including members of the Board of Directors, as are selected by the Compensation
Committee and approved by the Board of Directors. The term "employee" includes
an officer or director who is an employee of the Company or a parent or
subsidiary of it, as well as a nonofficer, nondirector employee of the Company
or a parent or subsidiary or it.
7. DURATION OF THE PLAN. This Plan shall terminate ten (10) years from the
effective date of this Plan, unless terminated earlier pursuant to Paragraph 13
hereof, and no Stock Incentives may be granted after such termination.
8. RESTRICTIONS ON INCENTIVE OPTIONS. Incentive Options (but not Nonqualified
Options) granted under this Plan shall be subject to the following restrictions:
(a) Limitation on Number of Shares. The aggregate fair market value,
determined as of the date the Incentive Option is granted, of the Shares
with respect to which Incentive Options are exercisable for the first
time by an employee during any calendar year shall not exceed $100,000.
If an employee is eligible to participate in any other incentive stock
option plans of the Company which are also intended to comply with the
provisions of Section 422A of the Code, the applicable annual limitation
shall apply to the aggregate number of Shares for which Incentive Options
may be granted under all such plans. An Incentive Option may be granted
which exceeds the $100,000 limitation, as long as under then applicable
law the portion of such option which is exercisable for
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shares in excess of the $100,000 limitation shall be treated as a
nonqualified option. No Incentive Options may be exercised until and
unless the Plan is approved by the shareholders within one year of the
date hereof, such approval to be expressed in any legal way under
Delaware law.
(b) 10% Stockholder. If any employee to whom an Incentive Option is
granted pursuant to the provisions of the Plan is on the date of grant
the owner of stock (as determined under Section 425(d) of the Code)
possessing more than 10% of the total combined voting power of all
classes of stock of the Company (or of any parent or subsidiary of the
Company), then the following special provisions shall be applicable to
the Incentive Option granted to such individual:
(i) The option price per Share subject to such Incentive Option
shall not be less than 110% of the fair market value of one Share
on the date of grant; and
(ii) The Incentive Option shall not have a term in excess of five
(5) years from the date of grant.
In determining stock ownership, an Optionee shall be considered as
owning the voting capital stock owned, directly or indirectly, by
or for his brother and sisters, spouse, ancestors, and lineal
descendants. Voting capital stock owned, directly or indirectly,
by or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its
shareholders, partners, or beneficiaries, as applicable. Common
Stock with respect to which any such Optionee holds an option
shall not be counted. Additionally, outstanding capital stock
shall include all capital stock actually issued and outstanding
immediately after the grant of the option to the Optionee.
Outstanding capital stock shall not include capital stock
authorized for issue under outstanding options held by the
Optionee or by any other person.
9. TERMS AND CONDITIONS OF OPTIONS. Incentive and Nonqualified Options granted
under this Plan shall be evidenced by stock option agreements in such form and
not inconsistent with the Plan as the Compensation Committee may recommend and
the Board of Directors shall approve from time to time, which agreements shall
evidence the following terms and conditions:
(a) Price.
(i) Incentive Options. Subject to the condition of subparagraph
(b)(i) of Paragraph 8, if applicable, with respect to each
Incentive Option, the purchase price per Share payable upon the
exercise of each Incentive Option granted hereunder shall be
recommended by the Compensation Committee and approved by the
Board of Directors and shall be not less than 100% of the fair
market value of one Share on the day the option is granted.
(ii) Nonqualified Options. With respect to each Nonqualified
Option, the purchase price per Share payable upon the exercise of
each Nonqualified Option granted hereunder shall be recommended by
the Compensation Committee and approved by the Board of Directors
at the time the Nonqualified Option is granted, but shall not be
less than 40% of fair market value at the time of grant.
(b) Number of Shares. Each option agreement shall specify the number of
Shares to which it pertains.
(c) Exercise. Subject to the conditions of subparagraphs (a) and (b) (ii)
of Paragraph 8, if applicable, each option shall be exercisable for the
full amount or for any part thereof and at such intervals or in such
installments as the Compensation Committee recommends and the Board of
Directors determines at the time it grants such option; provided,
however, that no option shall be exercisable with respect to any Shares
later than ten (10) years after the date of the grant of such option.
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(d) Notice of Exercise and Payment. An option shall be exercisable only
by delivery of a written notice to the Compensation Committee or the
Board of Directors, any member of the Compensation Committee or the Board
of Directors, the Company's Secretary, or any other officer of the
Company designated by the Compensation Committee and approved by the
Board of Directors to accept such notices on its behalf, specifying the
number of Shares for which it is exercised. If such Shares are not at the
time effectively registered under the Securities Act of 1933, as amended,
the Optionee shall include with such notice a letter, in form and
substance satisfactory to the Company confirming that such Shares are
being purchased for the Optionee's own account for investment and not
with a view to the resale or distribution thereof. Payment shall be made
in full at the time of delivery to the Optionee of a certificate or
certificates covering the number of Shares for which the option was
exercised. Payment shall be made (i) by cash or check, (ii) if permitted
by the Compensation Committee and approved by the Board of Directors, by
delivery and assignment to the Company of shares of the Company's stock
having a fair market value (as determined by the Compensation Committee)
equal to the exercise price, (iii) if permitted by the Compensation
Committee and approved by the Board of Directors, by a promissory note,
or (iv) by a combination of (i), (ii), and (iii). The value of the shares
of the Company's stock for such purpose shall be its fair market value as
of the date the option is exercised, as determined in accordance with
procedures to be established by the Compensation Committee and approved
by the Board of Directors.
(e) Withholding Taxes; Delivery of Shares. The Company's obligation to
deliver Shares upon exercise of a Nonqualified Option, in whole or in
part, shall be subject to the Optionee's satisfaction of all applicable
federal, state, and local income and employment tax withholding
obligations. The Optionee may satisfy the obligation, in whole or in
part, by electing to have the Company withhold Shares having a value
equal to the amount required to be withheld. The value of Shares to be
withheld shall be based on the fair market value of the Shares on the
date the amount of tax to be withheld is to be determined. If Common
Stock acquired by exercise of an incentive stock option granted pursuant
to this Plan is disposed of within two (2) years from the date of grant
of the option or within one (1) year after the transfer of the Common
Stock to the Optionee, the holder of the Common Stock immediately prior
to the disposition shall promptly notify the Company in writing of the
date and terms of the disposition and shall provide such other
information regarding the disposition as the Company may reasonably
require.
(f) Nontransferability. No option shall be transferable by the Optionee
otherwise than by will or the laws of descent or distribution, and each
option shall be exercisable during his lifetime only by him (except as
otherwise provided for in subparagraph (g) below).
(g) Termination of Options. Each option shall terminate and may no longer
be exercised if the Optionee ceases for any reason to be an employee of,
or consultant to, or ministry partner with the Company, except that:
(i) if the Optionee's performance of services shall have
terminated for any reason other than cause, resignation or other
voluntary action before his eligibility to retire, disability (as
defined below) or death, he may at any time within a period of
thirty (30) days after such termination of the performance of
services exercise his option to the extent that the option was
exercisable by him on the date of termination of his performance
of services;
(ii) if the Optionee's performance of services shall have been
terminated because of disability within the meaning of Section
22(e)(3) of the Internal Revenue Code, the Optionee may, at any
time within a period of one (1) year after the termination of
performance of services, exercise his option to the extent that
the option was exercisable by him on the date of termination of
his employment or performance of services; and
(iii) if the Optionee dies at a time when the option was
exercisable by him, then his estate, personal representative or
beneficiary to whom it has been transferred may, at any time
within a
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period of one (1) year following his death if the Optionee's
performance of services shall have been terminated by his death,
or for the period following the termination of his performance of
services during which the option would have remained exercisable
under clauses (i) or (ii) above if the Optionee's performance of
services shall have been terminated prior to his death, exercise
the option to the extent the Optionee might have exercised it at
the time of his death; provided, however, that no option may be
exercised to any extent by anyone after the date of expiration of
the option.
(iv) The Board of Directors determines to extend the option
exercise date for the nonqualified portion of the plan on a case
by case basis.
(h) Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Shares covered by his option until the
date of issuance of a stock certificate to him for such Shares.
(i) Repurchase of Shares by the Company. Any Shares purchased by
an Optionee upon exercise of an option may in the discretion of
the Compensation Committee and approved by the Board of Directors
be subject to repurchase by the Company if and to the extent
specifically set forth in the agreement pursuant to which the
Shares were purchased.
10. STOCK DIVIDENDS; STOCK SPLITS; STOCK COMBINATIONS; RECAPITALIZATIONS.
Appropriate adjustment shall be made in the maximum number of Shares of Common
Stock subject to the Plan and in the number, kind and price of Shares covered by
any Stock Incentive granted hereunder to give effect to any stock dividends or
other distributions, stock splits, stock combinations, recapitalizations and
other similar changes in the capital structure of the Company after the
effective date of the Plan.
11. MERGER; SALE OF ASSETS; DISSOLUTION. In the event of a change of the Common
Stock resulting from a merger or similar reorganization as to which the Company
is the surviving corporation, the number and kind of shares which thereafter may
be subject to Stock Incentives granted under this Plan and the number, kind and
price of Shares then subject to Stock Incentives shall be appropriately adjusted
in such manner as the Compensation Committee recommends and the Board of
Directors may deem equitable to prevent substantial dilution or enlargement of
the rights available or granted hereunder. Except as otherwise determined by the
Board of Directors of the Company, a merger or a similar reorganization that the
Company does not survive, or a sale of all or substantially all of the assets of
the Company, shall cause every nonvested Incentive Option and Nonqualified
Option outstanding hereunder to terminate, to the extent not then exercised,
unless any surviving entity agrees to assume the obligations hereunder.
12. NO RIGHTS. Except as hereinabove expressly provided in Sections 10, no
Optionee shall have any rights by reason of any subdivision or consolidation of
shares of the capital stock of any class or the payment of any stock dividend or
any other increase or decrease in the number of shares of any class or by reason
of any dissolution, liquidation, merger or consolidation or spin-off of assets
or stock of another corporation, and any issue by the Company of shares of stock
of any class or of securities convertible into shares of stock of any class
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares subject to any option granted hereunder. The
grant of an option pursuant to this Plan shall not affect in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure or to merge or consolidate or to
dissolve, liquidate, sell, or transfer all or any part of its business or
assets.
13. COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any other provision of the
Plan, the Company shall have no liability to issue any shares under the Plan
unless such issuance would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity. Prior to the issuance
of any shares under the Plan, the Company may require a written statement that
the recipient is acquiring the shares for investment and not for the purpose or
with the intention of distributing the shares.
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14. DEATH OF A PARTICIPANT. In the event of the death of an Optionee, any
options which the Optionee was entitled to exercise on the date immediately
preceding his death shall be exercisable by the person or persons to whom those
rights pass by will or by the laws of descent and distribution. Any such
exercise shall be by written notice thereof filed with the Secretary of the
Company at the Company's corporate headquarters prior to the option's expiration
date, and any person exercising such an option shall be treated as an Optionee
for purposes of the provisions of this Plan.
15. EMPLOYMENT AND SHAREHOLDER STATUS. The Plan does not constitute a contract
of employment, and selection as an Optionee will not give any employee the right
to be retained in the employ of the Company. The grant of an option under the
Plan shall not confer upon the holder thereof any right as a shareholder of the
Company. As of the date on which an Optionee exercises an option, the Optionee
shall have all rights of a stockholder of record with respect to the number of
shares of Common Stock as to which the option is exercised, irrespective of
whether certificates to evidence the shares of stock have been issued on such
date. If the redistribution of shares is restricted pursuant to Paragraph 12,
certificates representing such shares may bear a legend referred to such
restrictions.
16. TERMINATION OR AMENDMENT OF PLAN. The Board of Directors may at any time
terminate this Plan or make such changes in or additions to the Plan as it deems
advisable without further action on the part of the stockholders of the Company,
including revising the number of shares reserved for issuance hereunder,
provided that no such termination or amendment shall adversely affect or impair
any then outstanding Stock Incentive without the consent of the person holding
such Stock Incentive.
17. TERMINATION. The Plan shall terminate automatically on April 6, 2008, and
may be terminated at any earlier date by the Board. No option shall be granted
hereunder after the termination of the Plan, but such termination shall not
affect the validity of any option then outstanding.
18. TIME OF GRANTING OPTIONS. The date of grant of an option hereunder shall,
for all purposes, be the date on which the Board of Directors makes the
determination granting such option.
19. RESERVATION OF SHARES. The Company, during the terms of this Plan, will at
all times reserve and keep available such number of shares of its Common Stock
as shall be sufficient to satisfy the requirements of the Plan.
20. EFFECTIVE DATE. This Plan was adopted by the Board of Directors, pursuant to
shareholder approval in accordance with the requirements of the Internal Revenue
Code and the Delaware General Corporation Law of the Company, on April 6, 1998,
and shall be effective on said date, provided the Plan is approved within twelve
(12) months of said date. Options may be granted, but may not be exercised,
prior to the date of such shareholder approval.
21. CORPORATION FINANCIAL INFORMATION. The Company shall provide, upon request,
all Optionees on an annual basis with a balance sheet and income statement for
the then ending fiscal year.
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