As filed with the Securities and Exchange Commission on June 30, 1999
Registration No. 333-________
- --------------------------------------------------------------------------------
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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NBG RADIO NETWORK INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0362102
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
520 S. W. 6th Avenue, Suite 75O, Portland, Oregon 97204
(Address of Principal Executive Offices) (Zip Code)
NBG Radio Network Inc. 1998 Stock Incentive Plan
(Full title of the plan)
J.J. Brumfield
Vice President/Controller
NBG Radio Network, Inc.
520 SW 6th Avenue, Suite 750
Portland, Oregon 97204
(Name and address of agent for service)
(503) 802-4624
(Telephone number, including area code,
of agent for service)
Copies to:
Carmen M. Calzacorta
Schwabe, Williamson & Wyatt, P.C.
1211 S.W. Fifth Avenue, 18th Floor, Pacwest Center
Portland, Oregon 97204
(503) 222-9981
Calculation of Registration Fee
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------- ---------------------- ----------------------- ------------------------ --------------------
Proposed Maximum
Title of Securities to Amount to be Proposed Maximum Aggregate Offering Amount of
be Registered Registered Offering Price Price Registration Fee
- ------------------------- ---------------------- ----------------------- ------------------------ --------------------
- ------------------------- ---------------------- ----------------------- ------------------------ --------------------
Common Stock, $.001
par value 3,000,000(2) $2.0625(1) $6,187,500(1) $1,720
- ------------------------- ---------------------- ----------------------- ------------------------ --------------------
</TABLE>
(1) This estimate is based on the average of the bid and ask sales prices
of the common stock of NBG Radio Network, Inc., as reported on the OTC
Bulletin Board on June 25, 1999, pursuant to Rule 457(c) and (h),
solely for purposes of determining the registration fee.
(2) Pursuant to Rule 416(a), also covers additional securities that may be
offered as a result of stock splits, stock dividends recapitalizations
or similar transactions.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be included in
Part I of this Registration Statement will be sent or given to all persons who
are eligible to participate in the NBG Radio Network, Inc. 1998 Stock Incentive
Plan as specified by Rule 428. Pursuant to Rule 424, those documents are not
required to be filed with the Securities and Exchange Commission either as part
of this Registration Statement or as prospectuses or prospectus supplements.
Those documents and the documents incorporated by reference in this Registration
Statement pursuant to Item 3 constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act of 1933, as amended (the "Securities
Act").
I - 1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The SEC allows us to "incorporate by reference" the documents that we
file with them pursuant to the Securities Exchange Act of 1934 (the "Exchange
Act"). This means that we can disclose important information to you by referring
to those documents. The information in the documents incorporated by reference
is considered to be part of this Registration Statement, and information in
documents that we file with the SEC in the future will automatically update and
supersede this information. We have filed the following documents with the SEC,
which are incorporated by reference in this Registration Statement:
(a) Our annual report on Form 10-KSB for the year ended November 30,
1998, as amended by Form 10-KSB/A filed on June 4, 1999;
(b) Our quarterly report on Form 10-QSB for the period ended
February 28, 1999;
(c) The description of our common stock contained in our Registration
Statement on Form 10SB, which we filed with the SEC on April 23,
1998, as amended on November 2, 1998;
(d) All documents we file pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date of this Registration
Statement and prior to the filing of a post-effective amendment
that indicates that all the securities offered hereby have been
sold or that deregisters all the securities remaining unsold.
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 Company is a Nevada corporation. The Nevada General Corporation Law
provides in relevant part as follows:
Section 78.7502 Indemnification of Officers, Directors, Employees and
Agents.
1. 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, suit or proceeding, whether civil, criminal,
administrative or investigative, except 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,
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<PAGE>
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 him in connection with the action, suit or
proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal
action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.
2. 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 or suit by or in the right of the corporation to
procure a judgment in its favor 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 amounts
paid in settlement and attorneys' fees actually and reasonably
incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction
determines upon application that in view of all the circumstances of
the case, the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections 1 and 2,
or in defense of any claim, issue or matter therein, he must be
indemnified by the corporation against expenses, including attorneys'
fees, actually and reasonably incurred by him in connection with the
defense.
Section 78.751 Authorization for Discretionary Indemnification;
Advancement of Expenses.
1. Any discretionary indemnification under NRS 78.7502, unless
ordered by a court or advanced pursuant to subsection 2, may be made
by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee
or agent is proper in the circumstances. The determination must be
made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action,
suit or proceeding;
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<PAGE>
(c) If a majority vote of a quorum consisting of directors who
were not parties to the action, suit or proceeding so
orders, by independent legal counsel in a written opinion;
or
(d) If a quorum consisting of directors who were not parties to
the action, suit or proceeding cannot be obtained, by
independent legal counsel in a written opinion.
2. The articles of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and
directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in
advance of the final disposition of the action, suit or proceeding,
upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a court
of competent jurisdiction that he is not entitled to be indemnified by
the corporation. The provisions of this subsection do not affect any
rights to advancement of expenses to which corporate personnel other
than directors or officers may be entitled under any contract or
otherwise by law.
3. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled
under the articles of incorporation or any bylaw, agreement,
vote of stockholders or disinterested directors or
otherwise, for either an action in his official capacity or
an action in another capacity while holding his office,
except that indemnification, unless ordered by a court
pursuant to NRS 78.7502 of this act or for the advancement
of expenses made pursuant to subsection 2, may not be made
to or on behalf of any director or officer if a final
adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the
law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the
heirs, executors and administrators of such a person.
Section 78.752 Insurance and Other Financial Arrangement Against
Liability of Directors, Officers, Employees and
Agents.
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who 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 for any liability asserted against him and
liability and expenses incurred by him in his capacity as a director,
officer, employee or agent, or arising out of his status as such,
whether or not the corporation has the authority to indemnify him
against such liability and expenses.
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2. The other financial arrangements made by the corporation pursuant
to subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by
granting a security interest or other lien on any assets of
the corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may
provide protection for a person adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable
for intentional misconduct, fraud or a knowing violation of law,
except with respect to the advancement of expenses or indemnification
ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a
person pursuant to this section may be provided by the corporation or
any other person approved by the board of directors, even if all or
part of the other person's stock or other securities is owned by the
corporation.
4. In the absence of fraud:
(a) The decision of the board of directors as to the propriety
of the terms and conditions of any insurance or other
financial arrangement made pursuant to this section and the
choice of the person to provide the insurance or other
financial arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to personal
personal liability for his action, even if a director
director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other
financial arrangement.
5. A corporation or its subsidiary which provides self-insurance for
itself or for another affiliated corporation pursuant to this section
is not subject to the provisions of Title 57 of the Nevada Revised
Statutes.
Article V of the Registrant's Bylaws provides as follows:
"The corporation shall indemnify any and all of its Directors and
Officers, and its former Directors and Officers, or any person who may
have served at the corporation's request as a Director or Officer of
another corporation in which it owns shares of capital stock or of
which it is a creditor, against expenses actually and necessarily
incurred by them in connection with the defense of any action, suit or
proceeding in which they or any of them, are made parties, or a party,
by reason of being or having been Director(s) or Officer(s) of the
corporation, or of such other corporation, except, in relation to
matters as to which any such Director or Officer or former Director of
Officer or person shall be adjudged in such action, suit or proceeding
II-4
<PAGE>
to be liable for negligence or misconduct in the performance of duty.
Such indemnification shall not be deemed exclusive of any other rights
to which those indemnified may be entitled, under By-Law, agreement,
vote of shareholders or otherwise."
The Company has directors and officers liability insurance for the benefit
of its directors and officers.
Item 7. Exemptions from Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<S> <C>
Exhibit Number Description of Exhibit
4 NBG Radio Network, Inc. 1998 Stock Incentive Plan
5.1 Opinion of Schwabe, Williamson & Wyatt, P.C.
23.1 Consent of Moss Adams, LLP, Independent Public Accountants
23.2 Consent of Andersen Andersen & Strong, L.C.
23.2 Consent of Schwabe, Williamson & Wyatt, P.C. is contained in
Exhibit 5.1.
24 Powers of Attorney of directors and officers of the
Registrant are included on the signature page of this
Registration Statement
</TABLE>
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; and
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<PAGE>
(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 clauses (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference into
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; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland, State of Oregon, on June 24, 1999.
NBG RADIO NETWORK, INC.
John A. Holmes, III, Chief Executive
Officer and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of John Holmes and J.J. Brumfield his true
and lawful attorney-in-fact and agent, each with full power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign any or
all amendments to this Registration Statement, and to file the same with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each said attorney-in-fact and
agent with 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 to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that each said attorney-in-fact and agent, or his substitute, may
lawfully do or cause to be done 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 date indicated.
Date: June 24, 1999
John A. Holmes, III, Chairman, Board of
Directors; Chief Executive Officer and
President (Principal Executive Officer)
Date: June 24, 1999
John J. Brumfield, Chief Financial
Officer and Vice President, Finance
(Principal Financial and Accounting
Officer)
Date: June 24, 1999
Peter Jacobsen, Director
Date: June 24, 1999
Dick Versace, Director
Date: June 24, 1999
Steven R. Sears, Director
Date: June 24, 1999
Christopher J. Miller, Director
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<PAGE>
Exhibit Index
<TABLE>
<S> <C>
Exhibit Number Description of Exhibit
4 NBG Radio Network, Inc. Stock Incentive Plan
5.1 Opinion of Schwabe, Williamson & Wyatt, P.C. (and Consent)
23.1 Consent of Independent Public Accountants - Moss Adams, LLP
23.2 Consent of Independent Public Accountants - Andersen
Andersen & Strong, P.C.
23.3 Consent of Schwabe, Williamson & Wyatt, P.C. is contained in
Exhibit 5.1
24 Powers of Attorney of directors and officers of the
Registrant are included on page II-5
</TABLE>
II-8
NBG RADIO NETWORK, INC.
1998 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the APlan@) is to
enable NBG Radio Network, Inc., a Nevada corporation (the ACompany@) to attract
and retain the services of (1) selected employees, officers and directors of the
Company or of any subsidiary of the Company and (2) selected nonemployee agents,
consultants, advisors, persons involved in the sale or distribution of the
Company's products and independent contractors of the Company or any subsidiary.
2. Shares Subject to the Plan. Subject to adjustment as provided below and in
Section 13, the shares to be offered under the Plan shall consist of Common
Stock of the Company, and the total number of shares of Common Stock that may be
issued under the Plan shall not exceed 3,000,000 shares. The shares issued
under the Plan may be authorized and unissued shares or reacquired shares. If
an option, stock appreciation right or performance unit granted under the Plan
expires, terminates or is canceled, the unissued shares subject to such option,
stock appreciation right or performance unit shall again be available under the
Plan. If shares sold or awarded as a bonus under the Plan are forfeited to the
Company or repurchased by the Company, the number of shares forfeited or
repurchased shall again be available under the Plan.
3. Effective Date and Duration of Plan.
(a) Effective Date. The Plan shall become effective as of June 12, 1998.
No incentive stock option granted under the Plan shall become exercisable,
however, until the Plan is approved by the affirmative vote of the holders of a
majority of the shares of Common Stock represented at a shareholders meeting at
which a quorum is present and any such awards under the Plan prior to such
approval shall be conditioned on and subject to such approval. Subject to this
limitation, options, stock appreciation rights and performance units may be
granted and shares may be awarded as bonuses or sold under the Plan at any time
after the effective date and before termination of the Plan.
(b) Duration. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions on
such shares have lapsed. The Board of Directors may suspend or terminate the
Plan at any time except with respect to options, performance units and shares
subject to restrictions then outstanding under the Plan. Termination shall not
affect any outstanding options, any right of the Company to repurchase shares or
the forfeitability of shares issued under the Plan.
4. Administration.
(a) Board of Directors. The Plan shall be administered by the Board of
Directors of the Company, which shall determine and designate from time to time
the individuals to whom awards shall be made, the amount of the awards and the
1
<PAGE>
other terms and conditions of the awards. Subject to the provisions of the
Plan, the Board of Directors may from time to time adopt and amend rules and
regulations relating to administration of the Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan. The interpretation and
construction of the provisions of the Plan and related agreements by the Board
of Directors shall be final and conclusive. The Board of Directors may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any related agreement in the manner and to the extent it shall deem expedient
to carry the Plan into effect, and it shall be the sole and final judge of such
expediency.
(b) Committee. The Board of Directors may, by resolution, delegate to a
committee comprised solely of two (2) or more Non-Employee Directors (the
"Committee") any or all authority for administration of the Plan. If authority
is delegated to a Committee, all references to the Board of Directors in the
Plan shall mean and relate to the Committee except (i) as otherwise provided by
the Board of Directors and (ii) that only the Board of Directors may amend or
terminate the Plan as provided in Sections 3 and 14. "Non-Employee Director"
shall mean a Director who:
(i) Is not currently an officer of the Company or a parent or
subsidiary of the Company, or otherwise currently employed by the Company or a
parent or subsidiary of the Company;
(ii) Does not receive compensation, either directly or indirectly,
from the Company or a parent or subsidiary of the Company, for services rendered
as a consultant or in any capacity other than as a Director, except for an
amount that does not exceed the dollar amount for which disclosure would be
required pursuant to Item 404(a) of Regulation S-B.
(iii) Does not possess an interest in any other transaction for which
disclosure would be required pursuant to Item 404(a) of Regulation S-B; and
(iv) Is not engaged in a business relationship for which disclosure
would be required pursuant to Item 404(b) of Regulation S-B.
5. Types of Awards; Eligibility. The Board of Directors may, from time to
time, take the following actions, separately or in combination, under the Plan:
(i) grant Incentive Stock Options, as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), as provided in Sections 6(a) and
6(b); (ii) grant options other than Incentive Stock Options ("Non-Statutory
Stock Options") as provided in Sections 6(a) and 6(c); (iii) award stock bonuses
as provided in Section 7; (iv) sell shares subject to restrictions as provided
in Section 8; (v) grant stock appreciation rights as provided in Section 9;
(vi) grant cash bonus rights as provided in Section 10; (vii) grant performance
units as provided in Section 11 and (viii) grant foreign qualified awards as
provided in Section 12. Any such awards may be made to employees, including
employees who are officers or directors, and to other individuals described in
Section 1 who the Board of Directors believes have made or will make an
important contribution to the Company or any subsidiary of the Company;
2
<PAGE>
provided, however, that only employees of the Company shall be eligible to
receive Incentive Stock Options under the Plan. The Board of Directors shall
select the individuals to whom awards shall be made and shall specify the action
taken with respect to each individual to whom an award is made. At the
discretion of the Board of Directors, an individual may be given an election
to surrender an award in exchange for the grant of a new award.
6. Option Grants.
(a) General Rules Relating to Options.
(i) Terms of Grant. The Board of Directors may grant options under
the Plan. With respect to each option grant, the Board of Directors shall
determine the number of shares subject to the option, the option price, the
period of the option, the time or times at which the option may be exercised,
whether the option is an Incentive Stock Option or a Non-Statutory Stock Option.
At the time of the grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an option with Common Stock
of the Company shall automatically receive a new option to purchase additional
shares equal to the number of shares surrendered and may specify the terms and
conditions of such new options.
(ii) Exercise of Options. Except as provided in Section 6(a)(iv) or
as determined by the Board of Directors, no option granted under the Plan may be
exercised unless at the time of such exercise the optionee is employed by or in
the service of the Company or any subsidiary of the Company and shall have been
so employed or provided such service continuously since the date such option was
granted. Absence on leave or on account of illness or disability, as described
in 6(a)(iv)(1), shall not, however, be deemed an interruption of employment or
service for this purpose. Unless otherwise determined by the Board of
Directors, vesting of options shall not continue during an absence on leave
(including an extended illness) or on account of disability. Except as provided
in Sections 6(a)(iv) and 13, options granted under the Plan may be exercised
from time to time over the period stated in each option in such amounts and at
such times as shall be prescribed by the Board of Directors, provided that
options shall not be exercised for fractional shares. Unless otherwise
determined by the Board of Directors, if the optionee does not exercise an
option in any one year with respect to the full number of shares to which the
optionee is entitled in that year, the optionee's rights shall be cumulative and
the optionee may purchase those shares in any subsequent year during the term of
the option.
(iii) Nontransferability. Each Incentive Stock Option and, unless
otherwise determined by the Board of Directors, each other option granted under
the Plan by its terms shall be nonassignable and nontransferable by the
optionee, either voluntarily or by operation of law, except (i) to an optionee's
family member (as defined in General Instruction A.1(a)(5) to Form S-8) by gift
or domestic relations order; or (ii) by will or by the laws of descent and
distribution of the state or country of the optionee's domicile at the time of
death.
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<PAGE>
(iv) Termination of Employment or Service.
(1) General Rule. Unless otherwise determined by the Board of
Directors, in the event the employment or service of the optionee with the
Company or a subsidiary terminates for any reason other than because of physical
disability or death as provided in subsections 6(a)(iv)(2) and (3), the option
may be exercised at any time prior to the expiration date of the option or the
expiration of thirty (30) days after the date of such termination, whichever is
the shorter period, but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.
(2) Termination Because of Total Disability. Unless otherwise
determined by the Board of Directors, in the event of the termination of
employment or service because of total disability, the option may be exercised
at any time prior to the expiration date of the option or the expiration of 12
months after the date of such termination, whichever is the shorter period, but
only if and to the extent the optionee was entitled to exercise the option at
the date of such termination. The term "total disability" means a medically
determinable mental or physical impairment which is expected to result in death
or which has lasted or is expected to last for a continuous period of 12 months
or more and which causes the optionee to be unable, in the opinion of the
Company and two independent physicians, to perform his or her duties as an
employee, director, officer or consultant of the Company and to be engaged in
any substantial gainful activity. Total disability shall be deemed to have
occurred on the first day after the Company and the two independent physicians
have furnished their opinion of total disability to the Company.
(3) Termination Because of Death. Unless otherwise determined
by the Board of Directors, in the event of the death of an optionee while
employed by or providing service to the Company or a subsidiary, the option may
be exercised at any time prior to the expiration date of the option or the
expiration of 12 months after the date of death, whichever is the shorter
period, but only if and to the extent the optionee was entitled to exercise the
option at the date of death and only by the person or persons to whom such
optionee's rights under the option shall pass by the optionee's will or by the
laws of descent and distribution of the state or country of domicile at the time
of death.
(4) Amendment of Exercise Period Applicable to Termination. The
Board of Directors, at the time of grant or, with respect to an option that is
not an Incentive Stock Option, at any time thereafter, may extend the 30-day and
12-month exercise periods any length of time not longer than the original
expiration date of the option, and may increase the portion of an option that is
exercisable, subject to such terms and conditions as the Board of Directors may
determine.
(5) Failure to Exercise Option. To the extent that the option
of any deceased optionee or of any optionee whose employment or service
terminates is not exercised within the applicable period, all further rights to
purchase shares pursuant to such option shall cease and terminate.
4
<PAGE>
(6) Termination for Cause. Notwithstanding any other provision
of this plan to the contrary, any options granted under this plan shall
terminate as of the date the optionee ceases to be in the service of the Company
if the optionee was terminated for "cause" or could have been terminated for
"cause." If the optionee has an employment or consulting agreement with the
Company, the term "cause" shall have the meaning given that term in the
employment or consulting agreement. If the optionee does not have an employment
or consulting agreement with the Company, or if such employment or consulting
agreement does not define the term "cause," the term "cause" shall mean:
(A) misconduct or dishonesty that materially adversely affects the Company,
including without limitation (i) an act materially in conflict with the
financial interests of the Company, (ii) an act that could damage the reputation
or customer relations of the Company, (iii) an act that could subject the
Company to liability, (iv) an act constituting sexual harassment or other
violation of the civil rights of coworkers, (v) failure to obey any lawful
instruction of the Board or any officer of the Company and (vi) failure to
comply with, or perform any duty required under, the terms of any
confidentiality, inventions or non-competition agreement the optionee may have
with the Company, or (B) acts constituting the unauthorized disclosure of any of
the trade secrets or confidential information of the Company, unfair competition
with the Company or the inducement of any customer of the Company to breach any
contract with the Company. The right to exercise any option shall be suspended
automatically during the pendency of any investigation by the Board, or its
designee, and/or any negotiations by the Board, or its designee, and the
optionee, regarding any actual or alleged act or omission by the optionee of the
type described in this subsection.
(v) Purchase of Shares. Unless the Board of Directors determines
otherwise, shares may be acquired pursuant to an option granted under the Plan
only upon receipt by the Company of notice in writing from the optionee of the
optionee's intention to exercise, specifying the number of shares as to which
the optionee desires to exercise the option and the date on which the optionee
desires to complete the transaction, and if required in order to comply with the
Securities Act of 1933, as amended, containing a representation that it is the
optionee's present intention to acquire the shares for investment and not with a
view to distribution. Unless the Board of Directors determines otherwise, on or
before the date specified for completion of the purchase of shares pursuant to
an option, the optionee must have paid the Company the full purchase price of
such shares in cash (including, with the consent of the Board of Directors, cash
that may be the proceeds of a loan from the Company (provided that, with respect
to an Incentive Stock Option, such loan is approved at the time of option
grant)) or, with the consent of the Board of Directors, in whole or in part, in
Common Stock of the Company valued at fair market value, restricted stock,
performance units or other contingent awards denominated in either stock or
cash, promissory notes and other forms of consideration. The Board of Directors
shall make a good faith determination of the fair market value of Common Stock
provided in payment of the purchase price. If the Common Stock of the Company
is not publicly traded on the date the option is exercised, the Board of
Directors may consider any valuation methods it deems appropriate and may, but
is not required to, obtain one or more independent appraisals of the Company.
If the Common Stock of the Company is publicly traded on the date the option is
exercised, the fair market value of Common Stock provided in payment of the
purchase price shall be the closing price of the Common Stock as reported on the
5
<PAGE>
OTC Bulletin Board, any exchange or NASDAQ on the last trading day preceding the
date the option is exercised, or such other reported value of the Common Stock
as shall be specified by the Board of Directors. No shares shall be issued
until full payment for the shares has been made. With the consent of the Board
of Directors (which, in the case of an Incentive Stock Option, shall be given
only at the time of option grant), an optionee may request the Company to apply
automatically the shares to be received upon the exercise of a portion of a
stock option (even though stock certificates have not yet been issued) to
satisfy the purchase price for additional portions of the option. Each optionee
who has exercised an option shall immediately upon notification of the amount
due, if any, pay to the Company in cash amounts necessary to satisfy any
applicable federal, state and local tax withholding requirements. If additional
withholding is or becomes required beyond any amount deposited before delivery
of the certificates, the optionee shall pay such amount to the Company on
demand. If the optionee fails to pay the amount demanded, the Company may
withhold that amount from other amounts payable by the Company to the optionee,
including salary, subject to applicable law. With the consent of the Board of
Directors an optionee may satisfy this obligation, in whole or in part, by
having the Company withhold from the shares to be issued upon the exercise that
number of shares that would satisfy the withholding amount due or by delivering
to the Company Common Stock to satisfy the withholding amount. Upon the
exercise of an option, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued upon exercise of the option.
(b) Incentive Stock Options. Incentive Stock Options shall be subject to
the following additional terms and conditions:
(i) Limitation on Amount of Grants. No employee may be granted
Incentive Stock Options under the Plan if the aggregate fair market value, on
the date of grant, of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by that employee during any calendar
year under the Plan and under all incentive stock option plans (within the
meaning of Section 422 of the Code) of the Company or any parent or subsidiary
of the Company exceeds $100,000.
(ii) Limitations on Grants to 10 Percent Shareholders. An Incentive
Stock Option may be granted under the Plan to an employee possessing more than
10 percent of the total combined voting power of all classes of stock of the
Company or of any parent or subsidiary of the Company only if the option price
is at least 110 percent of the fair market value, as described in Section
6(b)(iv), of the Common Stock subject to the option on the date it is granted
and the option by its terms is not exercisable after the expiration of five
years from the date it is granted.
(iii) Duration of Options. Subject to Sections 6(a)(ii) and 6(b)(ii),
Incentive Stock Options granted under the Plan shall continue in effect for the
period fixed by the Board of Directors, except that no Incentive Stock Option
shall be exercisable after the expiration of 10 years from the date it is
granted.
6
<PAGE>
(iv) Option Price. The option price per share shall be determined by
the Board of Directors at the time of grant. Except as provided in Section
6(b)(ii), the option price shall not be less than 100 percent of the fair market
value of the Common Stock covered by the Incentive Stock Option at the date the
option is granted. The Board of Directors shall make a good faith determination
of the fair market value. If the Common Stock of the Company is not publicly
traded on the date the option is granted, the Board of Directors may consider
any valuation methods it deems appropriate and may, but is not required to,
obtain one or more independent appraisals of the Company. If the Common Stock
of the Company is publicly traded on the date the option is exercised, the fair
market value shall be deemed to be the closing price of the Common Stock as
reported on the OTC Bulletin Board, any exchange or NASDAQ on the last trading
day preceding the date the option is granted, or, if there has been no sale on
that date, on the last preceding date on which a sale occurred or such other
value of the Common Stock as shall be specified by the Board of Directors.
(v) Limitation on Time of Grant. No Incentive Stock Option shall be
granted on or after the tenth anniversary of the effective date of the Plan.
(vi) Conversion of Incentive Stock Options. The Board of Directors
may at any time without the consent of the optionee convert an Incentive Stock
Option to a Non-Statutory Stock Option.
(c) Non-Statutory Stock Options. Non-Statutory Stock Options shall be
subject to the following terms and conditions in addition to those set forth in
Section 6(a) above:
(i) Option Price. The option price for Non-Statutory Stock Options
shall be determined by the Board of Directors at the time of grant and may be
any amount determined by the Board of Directors.
(ii) Duration of Options. Non-Statutory Stock Options granted under
the Plan shall continue in effect for the period fixed by the Board of
Directors.
7. Stock Bonuses. The Board of Directors may award shares under the Plan as
stock bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions, and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with such other restrictions as may be
determined by the Board of Directors. The Board of Directors may require the
recipient to sign an agreement as a condition of the award, but may not require
the recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements. The agreement may contain any terms,
conditions, restrictions, representations and warranties required by the Board
of Directors. The certificates representing the shares awarded shall bear any
legends required by the Board of Directors. The Company may require any
recipient of a stock bonus to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements. If the recipient fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
recipient, including salary or fees for services, subject to applicable law.
With the consent of the Board of Directors, a recipient may deliver Common Stock
to the Company to satisfy this withholding obligation. Upon the issuance of a
stock bonus, the number of shares reserved for issuance under the Plan shall be
reduced by the number of shares issued.
7
<PAGE>
8. Restricted Stock. The Board of Directors may issue shares under the Plan
for such consideration (including promissory notes and services) as determined
by the Board of Directors. Shares issued under the Plan shall be subject to the
terms, conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability, repurchase by
the Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Board of Directors. All Common Stock
issued pursuant to this Section 8 shall be subject to a purchase agreement,
which shall be executed by the Company and the prospective recipient of the
shares prior to the delivery of certificates representing such shares to the
recipient. The purchase agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares shall bear any legends required by the
Board of Directors. The Company may require any purchaser of restricted stock
to pay to the Company in cash upon demand amounts necessary to satisfy any
applicable federal, state or local tax withholding requirements. If the
purchaser fails to pay the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the purchaser, including salary,
subject to applicable law. With the consent of the Board of Directors, a
purchaser may deliver Common Stock to the Company to satisfy this withholding
obligation. Upon the issuance of restricted stock, the number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
issued.
9. Stock Appreciation Rights.
(a) Grant. The Board of Directors may grant stock appreciation rights
under the Plan, subject to such rules, terms, and conditions as the Board of
Directors prescribes.
(b) Exercise.
(i) Each stock appreciation right shall entitle the holder, upon
exercise, to receive from the Company in exchange therefor an amount equal in
value to the excess of the fair market value on the date of exercise of one
share of Common Stock of the Company over its fair market value on the date of
grant (or, in the case of a stock appreciation right granted in connection with
an option, the excess of the fair market value of one share of Common Stock of
the Company over the option price per share under the option to which the stock
appreciation right relates), multiplied by the number of shares covered by the
stock appreciation right or the option, or portion thereof, that is surrendered.
Payment by the Company upon exercise of a stock appreciation right may be made
in Common Stock valued at fair market value, in cash, or partly in Common Stock
and partly in cash, all as determined by the Board of Directors.
(ii) A stock appreciation right shall be exercisable only at the time
or times established by the Board of Directors. If a stock appreciation right
is granted in connection with an option, the following rules shall apply:
(1) the stock appreciation right shall be exercisable only to the extent and on
8 the same conditions that
<PAGE>
the related option could be exercised; (2) the stock appreciation rights shall
be exercisable only when the fair market value of the stock exceeds the option
price of the related option; (3) the stock appreciation right shall be for no
more than 100 percent of the excess of the fair market value of the stock at the
time of exercise over the option price; (4) the stock appreciation right expires
no later than expiration of the underlying option; (5) upon exercise of the
stock appreciation right, the option or portion thereof to which the stock
appreciation right relates terminates; and (6) upon exercise of the option, the
related stock appreciation right or portion thereof terminates.
(iii) The Board of Directors may withdraw any stock appreciation righ
granted under the Plan at any time and may impose any conditions upon the
exercise of a stock appreciation right or adopt rules and regulations from time
to time affecting the rights of holders of stock appreciation rights. If the
stock appreciation right is granted in conjunction with an incentive stock
option, no change to the stock appreciation right shall give the optionee
additional benefits under the incentive stock option. Such rules and
regulations may govern the right to exercise stock appreciation rights granted
prior to adoption or amendment of such rules and regulations as well as stock
appreciation rights granted thereafter.
(iv) For purposes of this Section 9, the fair market value of the
Common Stock shall be determined as of the date the stock appreciation right is
exercised, under the methods set forth in Section 6(b)(iv).
(v) No fractional shares shall be issued upon exercise of a stock
appreciation right. In lieu thereof, cash may be paid in an amount equal to the
value of the fraction or, if the Board of Directors shall determine, the number
of shares may be rounded downward to the next whole share.
(vi) Each stock appreciation right granted in connection with an
Incentive Stock Option, and unless otherwise determined by the Board of
Directors, each other stock appreciation right granted under the Plan by its
terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder's domicile at the time of
death. Each stock appreciation right by its terms shall be exercisable during
the holder's lifetime only by the holder. However, if the holder is disabled as
described in 6(a)(iv)(2), a legal representative may exercise the option on the
holder's behalf.
(vii) Each participant who has exercised a stock appreciation right
shall, upon notification of the amount due, pay to the Company in cash amounts
necessary to satisfy any applicable federal, state and local tax withholding
requirements. If the participant fails to pay the amount demanded, the Company
may withhold that amount from other amounts payable by the Company to the
participant including salary, subject to applicable law. With the consent of
the Board of Directors a participant may satisfy this obligation, in whole or in
part, by having the Company withhold from any shares to be issued upon the
exercise that number of shares that would satisfy the withholding amount due or
by delivering Common Stock to the Company to satisfy the withholding amount.
9
<PAGE>
(viii) Upon the exercise of a stock appreciation right for shares, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued. Cash payments of stock appreciation rights shall not
reduce the number of shares of Common Stock reserved for issuance under the
Plan.
10. Cash Bonus Rights.
(a) Grant. The Board of Directors may grant cash bonus rights under the
Plan in connection with (i) options granted or previously granted, (ii) stock
appreciation rights granted or previously granted, (iii) stock bonuses awarded
or previously awarded and (iv) shares sold or previously sold under the Plan.
Cash bonus rights will be subject to rules, terms and conditions as the Board of
Directors may prescribe. Unless otherwise determined by the Board of Directors,
each cash bonus right granted under the Plan by its terms shall be nonassignable
and nontransferable by the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the holder's domicile at the time of death. The payment of a cash
bonus shall not reduce the number of shares of Common Stock reserved for
issuance under the Plan.
(b) Cash Bonus Rights in Connection With Options. A cash bonus right
granted in connection with an option will entitle an optionee to a cash bonus
when the related option is exercised (or terminates in connection with the
exercise of a stock appreciation right related to the option) in whole or in
part if, in the sole discretion of the Board of Directors, the bonus right will
result in a tax deduction that the Company has sufficient taxable income to use.
If an optionee purchases shares upon exercise of an option and does not exercise
a related stock appreciation right, the amount of the bonus, if any, shall be
determined by multiplying the excess of the total fair market value of the
shares to be acquired upon the exercise over the total option price for the
shares by the applicable bonus percentage. If the optionee exercises a related
stock appreciation right in connection with the termination of an option, the
amount of the bonus, if any, shall be determined by multiplying the total fair
market value of the shares and cash received pursuant to the exercise of the
stock appreciation right by the applicable bonus percentage. The bonus
percentage applicable to a bonus right, including a previously granted bonus
right, may be changed from time to time at the sole discretion of the Board of
Directors but shall in no event exceed 75 percent.
(c) Cash Bonus Rights in Connection With Stock Bonus. A cash bonus right
granted in connection with a stock bonus will entitle the recipient to a cash
bonus payable when the stock bonus is awarded or restrictions, if any, to which
the stock is subject lapse. If bonus stock awarded is subject to restrictions
and is repurchased by the Company or forfeited by the holder, the cash bonus
right granted in connection with the stock bonus shall terminate and may not be
exercised. The Board of Directors shall determine the amount and timing of
payment of a cash bonus.
(d) Cash Bonus Rights in Connection With Stock Purchases. A cash bonus
right granted in connection with the purchase of stock pursuant to Section 8
will entitle the recipient to a cash bonus when the shares are purchased or
restrictions, if any, to which the stock is subject lapse. Any cash bonus right
granted in connection with shares purchased pursuant to Section 8 shall
terminate and may not be exercised in the event the shares are repurchased by
the Company or forfeited by the holder pursuant to applicable restrictions. The
amount of any cash bonus to be awarded and timing of payment of a cash bonus
shall be determined by the Board of Directors.
10
<PAGE>
(e) Taxes. The Company shall withhold from any cash bonus paid pursuant
to Section 10 the amount necessary to satisfy any applicable federal, state and
local withholding requirements.
11. Performance Units. The Board of Directors may grant performance units
consisting of monetary units which may be earned in whole or in part if the
Company achieves certain goals established by the Board of Directors over a
designated period of time, but not in any event more than 10 years. The goals
established by the Board of Directors may include earnings per share, return on
shareholders' equity, return on invested capital, and such other goals as may be
established by the Board of Directors. In the event that the minimum
performance goal established by the Board of Directors is not achieved at the
conclusion of a period, no payment shall be made to the participants. In the
event the maximum corporate goal is achieved, 100 percent of the monetary value
of the performance units shall be paid to or vested in the participants.
Partial achievement of the maximum goal may result in a payment or vesting
corresponding to the degree of achievement as determined by the Board of
Directors. Payment of an award earned may be in cash or in Common Stock or in a
combination of both, and may be made when earned, or vested and deferred, as the
Board of Directors determines. Deferred awards shall earn interest on the terms
and at a rate determined by the Board of Directors; however, such rate shall be
no less than the long-term federal rate in effect under Section 1274(d) of the
Internal Revenue Code of 1986, as amended (as of the date the award is made),
compounded semi-annually. Unless otherwise determined by the Board of
Directors, each performance unit granted under the Plan by its terms shall be
nonassignable and nontransferable by the holder, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution of
the state or country of the holder's domicile at the time of death. Each
participant who has been awarded a performance unit shall, upon notification of
the amount due, pay to the Company in cash amounts necessary to satisfy any
applicable federal, state and local tax withholding requirements. If the
participant fails to pay the amount demanded, the Company may withhold that
amount from other amounts payable by the Company to the participant, including
salary or fees for services, subject to applicable law. With the consent of the
Board of Directors a participant may satisfy this obligation, in whole or in
part, by having the Company withhold from any shares to be issued that number of
shares that would satisfy the withholding amount due or by delivering Common
Stock to the Company to satisfy the withholding amount. The payment of a
performance unit in cash shall not reduce the number of shares of Common Stock
reserved for issuance under the Plan. The number of shares reserved for
issuance under the Plan shall be reduced by the number of shares issued upon
payment of an award.
12. Foreign Qualified Grants. Awards under the Plan may be granted to such
officers and employees of the Company and its subsidiaries and such other
persons described in Section 1 residing in foreign jurisdictions as the Board of
11
<PAGE>
Directors may determine from time to time. The Board of Directors may adopt
such supplements to the Plan as may be necessary to comply with the applicable
laws of such foreign jurisdictions and to afford participants favorable
treatment under such laws; provided, however, that no award shall be granted
under any such supplement with terms which are more beneficial to the
participants than the terms permitted by the Plan.
13. Changes in Capital Structure.
(a) Stock Splits; Stock Dividends. If the outstanding Common Stock of the
Company is hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company by reason
of any stock split, combination of shares or dividend payable in shares,
recapitalization or reclassification appropriate adjustment shall be made by the
Board of Directors in the number and kind of shares available for grants under
the Plan. In addition, the Board of Directors shall make appropriate adjustment
in the number and kind of shares as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, so that the optionee's
proportionate interest before and after the occurrence of the event is
maintained. Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Board of
Directors. Any such adjustments made by the Board of Directors shall be
conclusive.
(b) Mergers, Reorganizations, Etc. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a subsidiary is a party
or a sale of all or substantially all of the Company's assets (each, a
"Transaction"), the Board of Directors shall, in its sole discretion and to the
extent possible under the structure of the Transaction, select one of the
following alternatives for treating outstanding options under the Plan:
(i) Outstanding options shall remain in effect in accordance with
their terms.
(ii) Outstanding options ("old options") shall be converted into
options (Anew options@) to purchase stock in the corporation that is the
surviving or acquiring corporation in the Transaction. The amount, type of
securities subject thereto and exercise price of the new options shall be
determined by the Board of Directors of the Company, taking into account th
relative values of the companies involved in the Transaction and the exchange
rate, if any, used in determining shares of the surviving corporation to be
issued to holders of shares of the Company. However, with respect to an
incentive stock option, the excess of the fair market value of the stock subject
to the option over the option price before the conversion shall equal or exceed
such excess after the conversion, and the new option shall not give the holder
additional benefits that were not available under the old option. The Board of
Directors shall make a good faith determination of the fair market value of the
stock subject to the old option and the stock subject to the new option. Unless
otherwise determined by the Board of Directors, the new options shall be vested
only to the extent that the vesting requirements relating to options granted
hereunder have been satisfied.
12
<PAGE>
(iii) The Board of Directors shall provide a 30-day period prior to the
consummation of the Transaction during which outstanding options may be
exercised to the extent then exercisable, and upon the expiration of such 30-day
period, all unexercised options shall immediately terminate. The Board of
Directors may, in its sole discretion, accelerate the exercisability of options
so that they are exercisable in full during such 30-day period.
(c) Dissolution of the Company. In the event of the dissolution of the
Company, options shall be treated in accordance with Section 13(b)(iii).
(d) Rights Issued by Another Corporation. The Board of Directors may also
grant options, stock appreciation rights, performance units, stock bonuses and
cash bonuses and issue restricted stock under the Plan having terms, conditions
and provisions that vary from those specified in this Plan provided that any
such awards are granted in substitution for, or in connection with the
assumption of, existing options, stock appreciation rights, stock bonuses, cash
bonuses, restricted stock and performance units granted, awarded or issued by
another corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a Transaction.
14. Amendment of Plan. The Board of Directors may at any time, and from time
to time, modify or amend the Plan in such respects as it shall deem advisable
because of changes in the law while the Plan is in effect or for any other
reason. Except as provided in Sections 6(a)(iv), 9, 10 and 13, however, no
change in an award already granted shall be made without the written consent of
the holder of such award. In addition, administrative changes to the Plan made
by the Board of Directors pursuant to Section 4 shall not be deemed a change in
an award.
15. Approvals. The obligations of the Company under the Plan are subject to
the approval of state and federal authorities or agencies with jurisdiction in
the matter. The Company will use its reasonable efforts to take steps required
by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company's shares may then be listed, in connection with the grants
under the Plan. The foregoing notwithstanding, the Company shall not be
obligated to issue or deliver Common Stock under the Plan if such issuance or
delivery would violate applicable state or federal securities laws. Unless
registered, each certificate representing shares of Common Stock (or other
securities) issued under the Plan shall bear a legend substantially as follows:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 or any state securities laws. The shares may not be
sold, offered for sale, pledged or hypothecated in the absence of an effective
registration statement for the shares under said Acts and laws or an opinion of
counsel satisfactory to the Company that such registration is not required with
respect to such sale or offer."
13
<PAGE>
16. Employment and Service Rights. Nothing in the Plan or any award pursuant
to the Plan shall (i) confer upon any employee any right to be continued in the
employment of the Company or any subsidiary or interfere in any way with the
right of the Company or any subsidiary by whom such employee is employed to
terminate such employee's employment at any time, for any reason, with or
without cause, or to decrease such employee's compensation or benefits, or
(ii) confer upon any person engaged by the Company any right to be retained or
employed by the Company or to the continuation, extension, renewal, or
modification of any compensation, contract, or arrangement with or by the
Company.
17. Rights as a Shareholder. The recipient of any award under the Plan shall
have no rights as a shareholder with respect to any Common Stock until the date
of issue to the recipient of a stock certificate for such shares. Except as
otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date occurs prior to the date
such stock certificate is issued.
Adopted as of June 12, 1998
NBG Radio Network, Inc.
/s/ John A. Holmes, President
John. A. Holmes, President
14
[Schwabe, Williamson & Wyatt, P.C. Letterhead]
June 29, 1999
NBG Radio Network, Inc.
520 SW 6th Avenue, Suite 750
Portland, Oregon 97204
Ladies and Gentlemen:
We are acting as counsel to NBG Radio Network, Inc., a Nevada Corporation (the
"Company"), in connection with the Registration Statement on Form S-8 (the
"Registration Statement"), filed by the Company under the Securities Act of
1933, relating to the registration of up to 3,000,000 shares ("Shares") of the
common stock, $.001 par value (the "Common Stock"), of the Company issuable
under the Company's 1998 Incentive Stock Option Plan (the "Plan").
We have examined and relied upon originals or copies, certified or otherwise
identified to our satisfaction, of the Company's Certificate of Incorporation,
as amended, the Company's By-laws as currently in effect, the Registration
Statement, the Plan, and such other corporate documents and records and other
certificates, and we have made such investigations of law, as we have deemed
necessary to render this opinion.
Based upon and subject to the foregoing, we are of the opinion that the Shares,
when issued in accordance with the Plan and the respective stock option
agreements issued thereunder (including payment of the option exercise price
provided for therein), will be legally issued, full paid and nonassessable
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement. In giving our consent we do not admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations of the Securities and Exchange Commission.
Very truly yours,
Schwabe, Williamson & Wyatt
[Moss Adams LLP Letterhead]
May 21, 1999
NBG Radio Network, Inc.
520 SW 5th Ave., Suite 750
Portland, OR 97204
Re: NBG Radio Network, Inc. - Form S-8 Registration Statement
To NBG Radio Network, Inc.:
We consent to the Incorporation by reference in this Registration Statement
of NBG Radio Network, Inc., on Form S-8 of our report dated January 25, 1999,
relating to the audited financial statements for the year ended November 30,
1998, which report appears in the Annual Report on Form 10-KSB of NBG Radio
Network, Inc., for the year ended November 30, 1998, and to all references to
our firm included in the registration statement.
/s/
Moss Adams LLP
[Andersen Andersen & Strong, L.C. Letterhead]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference of our report on the financial
statements of NBG Radio Network, Inc., a Nevada Corporation (NBG), into a
registration statement on form S-8 to be filed by NBG. Our report which is
dated March 26, 1998, is included in NBG's annual report on Form 10K for the
fiscal year ended November 30, 1997, which report is incorporated by reference
into the S-8 registration Statement.
/s/
Andersen Andersen & Strong L.C.
Salt Lake City, Utah
May 27, 1999
