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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 26, 1998
amdiv.com, inc.
(FORMERLY AMERICAN DIVERSIFIED HOLDINGS, INC.)
(Exact name of registrant as specified in its charter)
NEVADA 000-23615 86-0854150
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
10900 Wilshire Boulevard, 9th Floor 90024
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (310) 209-5090
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ITEM 5 OTHER EVENTS
Effective December 3, 1998, the Company changed its corporate name to:
amdiv.com, inc.
ITEM 7(C) EXHIBITS.
The following exhibit is filed as part of this report in accordance with
the provisions of Item 601 of Regulation S-B:
Exhibit Name of Exhibit
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3.1.7 Amendment to Articles of Incorporation dated December 3, 1998
10.6 1998 Stock Option and Incentive Plan adopted as of May 26, 1998
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
amdiv.com, inc
(registrant)
Date: December 8, 1998 By: /s/ James Buchanan Rea, Jr.
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James Buchanan Rea, Jr., President
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EXHIBIT INDEX
Exhibit Name of Exhibit
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3.1.7 Amendment to Articles of Incorporation dated December 3, 1998
10.6 1998 Stock Option and Incentive Plan adopted as of May 26, 1998
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EXHIBIT 3.1.7
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(AFTER ISSUANCE OF STOCK)
AMERICAN DIVERSIFIED HOLDINGS, INC
We the undersigned, James B. Rea, Jr., President and Michael B. Jeffers,
Secretary of American Diversified Holdings, Inc. do hereby certify:
That the Board of Directors of said corporation by unanimous written
consent dated November 25, 1998, adopted a resolution to amend the original
articles as follows:
Article FIRST is hereby amended to read as follows:
"FIRST The name of the corporation is: AMDIV.COM, INC."
The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 6,817,961; that the said
change and amendment have been consented to and approved by a majority vote of
the stockholders holding at least a majority of each class of stock outstanding
and entitled to vote thereon.
American Diversified Holdings, Inc.
Executed December 1, 1998 /s/ James B. Rea, Jr., President
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James B. Rea, Jr., President
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State of California )
) ss.
County of Los Angeles )
On December 2, 1998, before me, the undersigned, a notary public,
personally appeared James B. Rea, Jr., known to me, or proved to me on the basis
of satisfactory evidence, to be the person whose name is subscribed to this
instrument and acknowledged that he executed it.
/s/ Ann P. Ryan (Signature)
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Ann P. Ryan (Printed Name)
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Notary Public for the State of California.
My commission expires Feb 19, 2000
American Diversified Holdings, Inc.
Executed December 1, 1998 By: /s/Michael B. Jeffers, Secretary
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Michael B. Jeffers, Secretary
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EXHIBIT 10.6
AMERICAN DIVERSIFIED HOLDINGS, INC.
1998 STOCK OPTION AND INCENTIVE PLAN,
ADOPTED AS OF MAY 26, 1998
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AMERICAN DIVERSIFIED HOLDINGS, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
ADOPTED AS OF MAY 26, 1998
1. PURPOSE. The Plan is intended to provide incentive to key employees,
officers, directors and others expected to provide significant services to the
Company, to encourage proprietary interest in the Company, to encourage such key
employees to remain in the employ of the Company, to attract new employees with
outstanding qualifications, and to afford additional incentive to others to
increase their efforts in providing significant services to the Company.
2. DEFINITIONS.
a. "Act" shall mean the Securities Act of 1933, as amended, 15 U.S.C.
Section 77a et seq.
b. "Agreement" shall mean the agreement entered into between the Company
and the recipient of a Grant pursuant to section 7(b)(i) hereof.
c. "Board" shall mean the Board of Directors of the Company.
d. "Code" shall mean the Internal Revenue Code of 1986, as amended.
e. "Committee" shall mean the committee, consisting solely of
individuals who meet the qualifications to be a "Non-Employee Director" as
defined in Rule 16b-3("Rule 16-3"), 17 C.F.R. Section 240.16b-3, and "Outside
Directors" as defined in Treasury Regulation Section 1.162- 27(e)(3)(i),
appointed by the Board in accordance with Section 4 of the Plan.
f. "Common Stock" shall mean the Common Stock, par value $0.001 per
share, of the Company.
g. "Company" shall mean American Diversified Holdings, Inc., a Nevada
corporation.
h. "DER" shall mean a dividend equivalent right consisting of the right
to receive, as specified by the Committee or the Board at the time of Grant,
either (i) cash or (ii) PSRs, in an amount equal to the dividend distributions
paid on a share of Common Stock.
i. "Disability" shall mean the condition of an Employee or member of the
Board who is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
j. "Grant" shall mean the issuance of an Incentive Stock Option,
Non-statutory Stock Option, DER, SAR, PSR or any combination thereof to an
Eligible Person.
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k. "Eligible Persons" shall mean officers, directors and employees of
the Company and other persons expected to provide significant services to the
Company. For purposes of this Plan, or a consultant, vendor, customer, or other
provider of significant services to the Company will be eligible to receive
Non-statutory Stock Options, SARs, DERs or PSRs only after finding the value of
the services rendered or to be rendered to the Company is at least equal to the
value of the Grants being awarded.
l. "Employee" shall mean an individual, including an officer of the
Company, who is employed (within the meaning of Code Section 3401 and the
regulations thereunder) by the Company.
m. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, 15 U.S.C. Section 78a et seq.
n. "Exercise Price" shall mean the price per Share of Common Stock,
determined by the Board or the Committee, at which an Option may be exercised.
o. "Fair Market Value" shall mean the value of one (1) Share of Common
Stock, determined as follows:
i. If the Shares are traded on an exchange, the price at which
Shares traded at the close of business on the date of valuation;
ii. If the Shares are traded over-the-counter on the NASDAQ
System, the closing price if one is available, or the mean between the
bid and asked prices on said System at the close of business on the date
of valuation; and
iii. If neither (i) nor (ii) applies, the fair market value as
determined by the Board or the Committee in good faith. Such
determination shall be conclusive and binding on all persons.
p. "Incentive Stock Option" shall mean an Option of the type described
in Section 422(b) of the Code issued to an Employee.
q. "Non-statutory Stock Option" shall mean an Option not described in
Section 422(b) of the Code.
r. "Option" shall mean any option, whether an Incentive Stock Option or
a Non- statutory Stock Option, to purchase a share of Common Stock granted
pursuant to the Plan.
s. "Optionee" shall mean any Eligible Person who has received an Option.
t. "Plan" shall mean the American Diversified Holdings, Inc. 1998 Stock
Option and Incentive Plan, as it may be amended from time to time.
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u. "PSR" shall mean a phantom stock right, consisting of the unfunded
deferred obligation of the Company (i) to pay the recipient of a PSR upon
exercise an amount of cash equal to the Fair Market Value at the time of
exercise of the number of Shares to which the PSR Grant relates, and (ii) if so
provided in the applicable Agreement, to grant credits based on the cash
dividend that would be paid on the number of Shares to which the PSR Grant
relates.
v. "Purchase Price" shall mean the Exercise Price times the number of
Shares with respect to which an Option is exercised.
w. "SAR" shall mean a stock appreciation right, consisting of the
unfunded deferred obligation of the Company to pay the recipient of the SAR upon
exercise an amount of cash equal to the excess, if any, of (i) the Fair Market
Value of the number of Shares to which the SAR Grant relates at the time that
the recipient exercises the SAR over (ii) the Fair Market Value at the time that
the SAR was issued.
x. "Share" shall mean one (1) share of Common Stock, adjusted in
accordance with Section 10 of the Plan (if applicable).
y. "Subsidiary" shall mean any corporation, partnership, or other entity
at least fifty percent (50%) of the economic interest in the equity of which is
owned by the Company or by another Subsidiary.
z. "Termination of Employment" shall mean the time when the
employee-employer relationship or directorship between the Optionee and the
Company is terminated for any reason, with or without cause, including but not
limited to any termination by resignation, discharge, death or retirement;
provided, however, Termination of Employment shall not include a termination
where there is a simultaneous reemployment of the Optionee by the Company. The
Committee, in its absolute discretion, shall determine the effect of all matters
and questions relating to Termination of Employment, including but not limited
to the question of whether any Termination of Employment was for cause and all
questions of whether particular leaves of absence constitute Terminations of
Employment. With respect to Incentive Stock Options, a leave of absence for
disability shall constitute a Termination of Employment if, and to the extent
that, such leave of absence interrupts employment for the purposes of Section
422(c)(6) of the Code.
3. EFFECTIVE DATE. The Plan became effective as of May 26, 1998, the date that
is was adopted by the Board, subject to approval by the Company's shareholders.
The Plan will have been submitted to shareholders for their approval within
twelve months after receipt of Board approval. Any Grants awarded before
approval of the amendment and restatement of the Plan by the Company's
shareholders shall be accrued for the benefit of the participant until the Plan
has been approved by the shareholders.
4. ADMINISTRATION.
a. Membership on Committee. The Plan shall be administered by the
Committee. The Board shall appoint one of the members of the Committee as
Chairman of the Committee.
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b. Committee Meetings. The Committee shall hold meetings at such times
and places as it may determine. Acts of a majority of the Committee, or acts
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee.
c. Grant Awards. The Committee shall from time to time at its discretion
select the Eligible Persons who are to be issued Grants, determine the number of
Shares (i) to be optioned or (ii) with respect to which the Grant is to be
issued, and designate any Options granted as Incentive Stock Options or
Non-statutory Stock Options, except that no Incentive Stock Option may be
granted to an Eligible Person who is not an Employee of the Company. The
Committee shall determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Grants awarded hereunder (including, but not limited
to the performance goals and periods applicable to the award of Grants). The
interpretation and construction by the Committee of any provision of the Plan or
of any Option granted thereunder shall be final. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Grant hereunder.
d. The Board may abolish the Committee at any time and revest the
administration of the Plan in the Board or in a reconstituted Committee.
5. PARTICIPATION. Only Eligible Persons shall be eligible to receive grants of
Options under the Plan.
6. STOCK. The stock subject to Options granted under the Plan shall be Shares of
the Company's authorized but unissued or reacquired Common Stock. The aggregate
number of Shares which may be issued upon exercise of Options under the Plan
shall not exceed 1,000,000 Shares. The number of Shares subject to Options
outstanding at any time shall not exceed the number of Shares remaining
available for issuance under the Plan and shall not at any time exceed 5% of the
total outstanding shares of the Company's Common Stock. In the event that any
outstanding Option for any reason expires or is terminated, the Shares allocable
to the unexercised portion of such Option may again be made subject to any
Option. The limitations established by this Section 6 shall be subject to
adjustment in the manner provided in Section 10 hereof upon the occurrence of an
event specified therein.
7. TERMS AND CONDITIONS OF OPTIONS.
a. Agreements. Grants to Eligible Persons shall be evidenced by written
Agreements in such form as the Committee shall from time to time determine. Such
Agreements shall comply with and be subject to the terms and conditions set
forth below.
b. Number of Shares. Each Option or other Grant granted to an Eligible
Person shall state the number of Shares to which it pertains and shall provide
for the adjustment thereof in accordance with the provisions of Section 10
hereof.
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c. Grants. Subject to the terms and conditions of the Plan and
consistent with the Company's intention for the Committee to exercise the
greatest permissible flexibility under Rule 16b-3 in awarding Grants, the
Committee shall have the power:
i. To determine from time to time the Grants to be granted to
Eligible Persons under the Plan and to prescribe the terms and
provisions (which need not be identical) of Grants granted under the
Plan to such persons;
ii. To construe and interpret the Plan and Grants thereunder and
to establish, amend, and revoke rules and regulations for administration
of the Plan. In this connection, the Committee may correct any defect or
supply any omission, or reconcile any inconsistency in the Plan, in any
Agreement, or in any related agreements, in the manner and to the extent
it shall deem necessary or expedient to make the Plan fully effective.
All decisions and determinations by the Committee in the exercise of
this power shall be final and binding upon the Company and the Optionees
and Grantees;
iii. To amend any outstanding Grant, subject to Section 12
hereof, and to accelerate or extend the vesting or exercisability of any
Grant and to waive conditions or restrictions on any Grants, to the
extent it shall deem appropriate; and
iv. Generally, to exercise such powers and to perform such acts
as are deemed necessary or expedient to promote the best interests of
the Company with respect to the Plan. Each Option granted shall state
the Exercise Price. The Exercise Price for any Option shall not be less
than the Fair Market Value on the date of Grant.
d. Medium and Time of Payment. The Purchase Price for each Option
granted shall be payable in full in United States dollars upon the exercise of
the Option. In the event the Company determines that it is required to withhold
taxes as a result of the exercise of an Option, as a condition to the exercise
thereof, an Employee may be required to make arrangements satisfactory to the
Company to enable it to satisfy such withholding requirements in accordance with
Section 15 hereof. If the applicable Agreement so provides, the Purchase Price
may be paid in one or a combination of the following:
i. By the surrender of Shares in good form for transfer, owned
by the person exercising the Option and having a Fair Market Value on
the date of exercise equal to the Purchase Price, or in any combination
of cash and Shares, as long as the sum of the cash so paid and the Fair
Market Value of the Shares so surrendered equal the Purchase Price;
ii. By cancellation of indebtedness owed by the Company to the
Optionee;
iii. By a loan or extension of credit from the Company evidenced
by a full recourse promissory note executed by the Optionee. The
interest rate and other terms and conditions of such note shall be
determined by the Committee. The Committee may require that the Optionee
pledge his or her Shares to the Company for the purpose of securing the
payment
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of such note. In no event shall the stock certificate(s) representing
such Shares be released to the Optionee until such note shall have been
paid in full.
e. Term and Nontransferability of Grants and Options.
i. Each Grant shall state the time or times which all or part
thereof becomes exercisable, subject to the following restrictions.
ii. No Grant shall be exercisable except by the recipient.
iii. No Option shall be assignable or transferable, except
pursuant to a qualified domestic relations order as defined in Code
Section 414(p) or, in the event of the Optionee's death, by will or the
laws of descent and distribution.
iv. No Option shall be exercisable (i) until at least six (6)
months after the date of grant and (ii) after the expiration of ten (10)
years from the date it was granted.
v. Unless otherwise provided in the Agreement, no DERs, SARs and
PSRs shall be exercisable (i) until at least six (6) months after the
date of grant and (ii) after three (3) months after the recipient's
departure from employment for the Company, the Manager or Subsidiary,
subject to subsections (f), (g), (h), (i), (j), (k) and (l) below.
f. Termination of Employment, Except by Death or Disability. Upon any
Termination of Employment for any reason other than his or her death or
Disability, a recipient of a Grant shall have the right, subject to the
restrictions of (c) above, to exercise his or her Grant at any time within three
(3) months after Termination of Employment, but only to the extent that, at the
date of Termination of Employment, the recipient's right to exercise such Grant
had accrued pursuant to the terms of the applicable Agreement and had not
previously been exercised; provided, however, that if the recipient was
terminated as an Employee or removed as a member of the Board for cause (as
defined in the applicable Agreement or as determined by the Committee) any Grant
not exercised in full prior to such termination shall be canceled. For this
purpose, the employment relationship shall be treated as continuing intact while
the recipient is on military leave, sick leave or other bona fide leave of
absence (to be determined in the sole discretion of the Committee). The
foregoing notwithstanding, in the case of an Incentive Stock Option, employment
shall not be deemed to continue beyond the ninetieth (90th) day after the
Optionee's reemployment rights are guaranteed by statute or by contract.
g. Death of Recipient. If the recipient of a Grant dies while an
Eligible Person or within three (3) months after any Termination of Employment
other than for cause, and has not fully exercised the Grant, then the Grant may
be exercised in full, subject to the restrictions of (c) above, at any time
within twelve (12) months after the recipient's death, by the executors or
administrators of his or her estate or by any person or persons who have
acquired the Grant directly from the recipient by bequest or inheritance, but
only to the extent that, at the date of death, the recipient's right to exercise
such Grant had accrued and had not been forfeited pursuant to the terms of the
applicable Agreement and had not previously been exercised.
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h. Disability of Grant Recipient. Upon Termination of Employment for
reason of Disability, such Grant recipient shall have the right, subject to the
restrictions of (c) above, to exercise the Grant at any time within twelve (12)
months after Termination of Employment, but only to the extent that, at the date
of Termination of Employment, the Grant recipient's right to exercise such Grant
had accrued pursuant to the terms of the applicable Agreement and had not
previously been exercised.
i. Rights as a Shareholder. An Optionee, a transferee of an Optionee, or
the holder of a DER, PSR or SAR shall have no rights as a shareholder with
respect to any Shares covered by his or her Grant until, in the case of an
Optionee, the date of the issuance of a stock certificate for such Shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
provided in Section 10 hereof.
j. Modification, Extension and Renewal of Option. Within the limitations
of the Plan, and only with respect to Options granted, the Committee may modify,
extend or renew outstanding Options or accept the cancellation of outstanding
Options (to the extent not previously exercised) for the granting of new Options
in substitution therefor. The foregoing notwithstanding, no modification of an
Option shall, without the consent of the Optionee, alter or impair any rights or
obligations under any Option previously granted.
k. Grants to Committee Members. Grants to Committee members are subject
to approval by the Committee (or by the Board, in either case) without the
participation or vote of the proposed recipient.
l. Officers. Directors and officers who fall within the definition of
the term "Officer" under SEC Rule 16a-1(f), 17 C.F.R. Section 240.16a-1(f),
shall deliver to the Secretary of the Company an executed notice of any
intention to sell Shares acquired hereunder. Such notice, which shall specify
the number of Shares to be sold and the date such Shares were acquired, shall be
provided at least one full business day in advance of the proposed sale.
m. Unfunded Status of Plan. The Plan constitutes an unfunded incentive
compensation plan. A recipient of a Grant shall have only the rights of a
general creditor of the Company.
n. Other Provisions. The Agreements authorized under the Plan may
contain such other provisions not inconsistent with the terms of the Plan
(including, without limitation, restrictions upon the exercise of the Option) as
the Committee shall deem advisable.
8. LIMITATION ON VALUE OF EXERCISABLE SHARES. In the case of Incentive Stock
Options granted hereunder, the aggregate Fair Market Value (determined as of the
date of the grant thereof) of the Shares with respect to which Incentive Stock
Options become exercisable by any employee of the Company for the first time
during any calendar year (under this Plan and all other plans maintained by the
Company, its parent or its Subsidiaries) shall not exceed $100,000.
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9. TERM OF PLAN. Options may be granted pursuant to the Plan until the
expiration of ten (10) years from the effective date of the Plan.
10. RECAPITALIZATIONS AND CHANGES IN CONTROL.
a. Subject to any required action by shareholders, and provided that all
requirements of Rule 16b-3 are satisfied, the number of Shares covered by the
Plan as provided in Section 6 hereof, the number of Shares covered by each
outstanding Option and the Exercise Price thereof and the rights under the Grant
of a DER, PSR or SAR shall be proportionately adjusted for any increase or
decrease in the number of issued Shares resulting from a subdivision or
consolidation of Shares or the payment of a stock dividend (but only of Common
Stock) or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by the Company.
b. Subject to any required action by shareholders, if the Company is the
surviving corporation in any merger or consolidation, each outstanding Option
and the rights under the Grant of a DER, PSR or SAR shall pertain and apply to
the securities to which a holder of the number of Shares subject to the Option
would have been entitled. In the event of a merger or consolidation in which the
Company is not the surviving corporation, the date of exercisability of each
outstanding Grant shall be accelerated to a date prior to such merger or
consolidation, unless the agreement of merger or consolidation provides for the
assumption of the Grant by the successor to the Company.
c. To the extent that the foregoing adjustments relate to securities of
the Company, such adjustments shall be made by the Committee, whose
determination shall be conclusive and binding on all persons.
d. Except as expressly provided in this Section 10, the recipient of the
Grant shall have no rights by reason of subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock 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 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 Exercise Price of Shares subject to an Option.
e. Grants made pursuant to the Plan shall not affect in any way the
right or power to the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business assets.
f. Upon the occurrence of a Change of Control as defined in this Section
10:
i. Each outstanding Option and Stock Appreciation Right shall
automatically become fully exercisable.
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ii. All restrictions and conditions on each PSR and DER shall
automatically lapse and all Grants under the Plan shall be deemed fully
vested.
g. "Change of Control" shall mean the occurrence of any one of the
following events:
i. any "person," as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company, any of its Affiliates or any
trustee, fiduciary or other person or entity holding securities under
any employee benefit plan or trust of the Company or any of its
Affiliates) together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing 20% or more of either (A) the combined voting power of the
Company's then outstanding securities having the right to vote in an
election of the Board of Directors ("voting securities") or (B) the then
outstanding Shares (in either such case other than as a result of an
acquisition of securities directly from the Company); or
ii. persons who, as of the effective date of the amendment and
restatement of the Plan, constitute the Company's Board of Directors
(the "Incumbent Directors") cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a Director of the Company subsequent
to the Effective Date whose election or nomination for election was
approved by a vote of at least a majority of the Incumbent Directors
shall, for purposes of this Plan, be considered an Incumbent Director;
or
h. the shareholders of the Company shall approve (A) any consolidation
or merger of the Company or any Subsidiary where the shareholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate 80% or more of the voting securities of the
corporation issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (B) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company.
i. Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of Shares or other voting securities outstanding, increases (x) the
proportionate number of Shares beneficially owned by any person to 20% or more
of the Shares then outstanding or (y) the proportionate voting power represented
by the voting securities beneficially owned by any person to 20% or more of the
combined voting power of all then outstanding voting securities; provided,
however, that if any person referred to in clause (x) or (y) of this sentence
shall thereafter become the beneficial owner of any additional Shares or other
voting securities (other than pursuant to a stock split, stock dividend, or
similar transaction), then a "Change of Control" shall be deemed to have
occurred for purposes of this subsection (g).
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11. SECURITIES LAW REQUIREMENTS.
a. Legality of Issuance. The issuance of any Shares upon the exercise of
any Option and the grant of any Option shall be contingent upon the following:
i. the Company and the Optionee shall have taken all actions
required to register the Shares under the Act, and to qualify the Option
and the Shares under any and all applicable state securities or "blue
sky" laws or regulations, or to perfect an exemption from the respective
registration and qualification requirements thereof;
ii. any applicable listing requirement of any stock exchange on
which the Common Stock is listed shall have been satisfied; and
iii. any other applicable provision of state or federal law
shall have been satisfied.
b. Restrictions on Transfer. Regardless of whether the offering and sale
of Shares under the plan has been registered under the Act or has been
registered or qualified under the securities laws of any state, the Company may
impose restrictions on the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Company and its counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Act, the
securities laws of any state or any other law. In the event that the sale of
Shares under the Plan is not registered under the Act but an exemption is
available which required an investment representation or other representation,
each Optionee shall be required to represent that such Shares are being acquired
for investment, and not with a view to the sale or distribution thereof, and to
make such other representations as are deemed necessary or appropriate by the
Company and its counsel. Any determination by the Company and its counsel in
connection with any of the matters set forth in this Section 11 shall be
conclusive and binding on all persons. Stock certificates evidencing Shares
acquired under the Plan pursuant to an unregistered transaction shall bear the
following restrictive legend and such other restrictive legends as are required
or deemed advisable under the provisions of any applicable law.
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."
c. Registration or Qualification of Securities. The Company may, but
shall not be obligated to, register or qualify the issuance of Options and/or
the sale of Shares under the Act or any other applicable law. The Company shall
not be obligated to take any affirmative action in order to cause the issuance
of Options or the sale of Shares under the plan to comply with any law.
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d. Exchange of Certificates. If, in the opinion of the Company and its
counsel, any legend placed on a stock certificate representing shares sold under
the Plan is no longer required, the holder of such certificate shall be entitled
to exchange such certificate for a certificate representing the same number of
Shares but lacking such legend.
12. AMENDMENT OF THE PLAN. The Board or the Committee may from time to time,
with respect to any Shares at the time not subject to Options, suspend or
discontinue the Plan or revise or amend it in any respect whatsoever.
13. EFFECT OF CERTAIN TRANSACTIONS. In the case of (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger, consolidation or
other business combination in which the Company is acquired by another entity or
in which the Company is not the surviving entity, or (iii) the sale of all or
substantially all of the assets of the Company to another entity, the Plan and
the Grants issued hereunder shall terminate upon the effectiveness of any such
transaction or event, unless provision is made in connection with such
transaction for the assumption of Grants theretofore granted, or the
substitution for such Grants of new Grants, by the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and the
per share exercise prices, as provided in Section 10. In the event of such
termination, all outstanding Options and Grants shall be exercisable in full for
at least fifteen days prior to the date of such termination whether or not
otherwise exercisable during such period.
14. APPLICATION OF FUNDS. The proceeds received by the Company from the sale of
Common Stock pursuant to the exercise of an Option will be used for general
corporate purposes.
15. TAX WITHHOLDING.
a. Each recipient of a Grant shall, no later than the date as of which
the value of any Grant first become includable in the gross income of the
recipient for federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Company regarding payment of any federal, state
or local taxes of any kind that are required by law to be withheld with respect
to such income.
b. A recipient may elect to have such tax withholding satisfied, in
whole or in part, by (1) authorizing the Company to withhold a number of Shares
to be issued pursuant to a Grant equal to the Fair Market Value as of the date
withholding is effected that would satisfy the withholding amount due, (2)
transferring to the Company Shares owned by the recipient with a Fair Market
Value equal to the amount of the required withholding tax, or (3) in the case of
a recipient who is an employee of the Company at the time such withholding is
effected, by withholding from the recipient's cash compensation.
c. A recipient who is not an employee of the Company shall also
reimburse his employer, if an affiliate of the Company, for the tax on any
additional amount of compensation income deemed recognized by such recipient's
employer from the Company, reduced by the amount of the compensation deduction
permitted such recipient's employer as a result of such employee's receipt or
exercise of the Grant.
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16. EXECUTION. The Company has caused this Plan to be executed in the name and
on behalf of the Company by an officer of the Company thereunto duly authorized.
American Diversified Holdings, Inc.
a Nevada corporation
By: /s/ Michael B. Jeffers, Secretary
---------------------------------
Michael B. Jeffers, Secretary
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