<PAGE> 1
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
COMMISSION FILE NUMBER 0-24913
BIOSHIELD TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
GEORGIA 58-2181628
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
4405 INTERNATIONAL BLVD.
SUITE B-109
NORCROSS, GEORGIA 30093
(Address of principal executive offices and zip code)
(770) 925-3432
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports) and (2) and has
been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of May 13, 1999, there were 6,147,591 outstanding shares of the
Registrant's Common Stock, no par value per share.
<PAGE> 2
BIOSHIELD TECHNOLOGIES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
<TABLE>
<CAPTION>
Page
<S> <C> <C>
1) Balance Sheets as of March 31, 1999 (unaudited) and June 30, 1998.................................... 3
2) Statements of Operations for the three and nine month periods ended
March 31, 1999 and 1998 (unaudited).................................................................. 4
3) Statements of Operations from June 1, 1995 (inception) thru March 31,
1999 and 1998 (unaudited)............................................................................ 5
4) Statement of Changes in Stockholders' Equity (Deficit) for the nine month
period ended March 31, 1999 (unaudited).............................................................. 6
5) Statements of Cash Flows for the nine month periods ended March 31, 1999
and 1998 (unaudited) and from June 1, 1995 (inception) thru
March 31, 1999 and 1998 (unaudited).................................................................. 7
6) Notes to Financial Statements........................................................................ 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS............................................ 11
PART II. OTHER INFORMATION........................................................................ 14
ITEM 6. Exhibits and Reports on Form 8-KSB
Signatures................................................................................................. 15
Exhibit Index.............................................................................................. 16
</TABLE>
2
<PAGE> 3
BioShield Technologies, Inc.
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
(Unaudited)
March 31, June 30,
1999 1998
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 2,868,543 $ 1,636
Marketable securities 91,000 --
Accounts receivable 127,254 110,081
Inventories 100,350 157,784
Prepaid expenses and other current assets 53,574 2,500
----------- -----------
Total current assets 3,240,721 272,001
PROPERTY AND EQUIPMENT, NET 120,341 104,711
DEPOSITS AND OTHER LONG-TERM
ASSETS 115,450 60,911
----------- -----------
$ 3,476,512 $ 437,623
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ -- $ 450,000
Notes payable - other 12,500 205,000
Accounts payable 71,466 309,538
Accrued payroll 10,289 315,361
Accrued expenses and interest payable 78,943 18,377
----------- -----------
Total current liabilities 173,198 1,298,276
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, no par value; 50,000,000
shares authorized, 6,144,125 and 4,395,040
issued and outstanding at March 31, 1999,
and June 30, 1998, respectively 6,480,738 1,153,001
Additional paid-in capital 715,300 329,050
Accumulated other comprehensive losses (14,000) --
Deficit accumulated during the development stage (3,878,724) (2,342,704)
----------- -----------
3,303,314 (860,653)
----------- -----------
$ 3,476,512 $ 437,623
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
BioShield Technologies, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
March 31, March 31,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 53,486 $ 115,658 $ 286,182 $ 324,270
Cost of sales 24,654 38,167 120,726 113,154
----------- ----------- ----------- -----------
Gross profit 28,832 77,491 165,456 211,116
Operating expenses
Marketing and selling 196,442 135,172 610,436 278,660
General and administrative 348,401 301,333 936,858 766,417
Research and development 98,561 37,887 211,345 117,366
----------- ----------- ----------- -----------
643,404 474,392 1,758,639 1,162,443
----------- ----------- ----------- -----------
Loss from operations (614,572) (396,901) (1,593,183) (951,327)
Other income (expense)
Interest income 36,870 880 74,123 3,121
Interest expense (308) -- (16,960) --
----------- ----------- ----------- -----------
Net loss before
income taxes (578,010) (396,021) (1,536,020) (948,206)
Income tax (expense) benefit -- -- -- --
----------- ----------- ----------- -----------
Net loss (578,010) (396,021) (1,536,020) (948,206)
Other comprehensive income (loss),
unrealized holding income (loss)
on securities 21,000 -- (14,000) --
----------- ----------- ----------- -----------
Comprehensive loss $ (557,010) $ (396,021) $(1,550,020) $ (948,206)
=========== =========== =========== ===========
Net loss per common share
Basic $ (0.09) $ (0.09) $ (0.27) $ (0.22)
=========== =========== =========== ===========
Weighted average shares 6,144,125 4,395,040 5,675,024 4,395,040
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
BioShield Technologies, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
June 1, 1995 (inception)
to March 31,
1999 1998
----------- -----------
<S> <C> <C>
Net sales $ 1,523,968 $ 1,099,585
Cost of sales 591,207 428,976
----------- -----------
Gross profit 932,761 670,609
Operating expenses
Marketing and selling 1,302,376 497,655
General and administrative 2,967,269 1,662,116
Research and development 627,473 376,242
----------- -----------
4,897,118 2,536,013
----------- -----------
Loss from operations (3,964,357) (1,865,404)
Other income (expense)
Consulting income, net 39,908 39,908
Interest income 81,061 6,515
Interest expense (35,336) --
----------- -----------
Net loss before
income taxes (3,878,724) (1,818,981)
Income tax (expense) benefit -- --
----------- -----------
Net loss (3,878,724) (1,818,981)
Other comprehensive income (loss),
unrealized holding income (loss) on securities (14,000) --
----------- -----------
Comprehensive loss $(3,892,724) $(1,818,981)
=========== ===========
Net loss per common share
Basic $ (0.86) $ (0.43)
=========== ===========
Weighted average shares 4,512,746 4,215,400
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
BioShield Technologies, Inc.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
For the Nine Months Ended March 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Common stock Accumulated accumulated
no par value Additional other during the
------------------------- paid-in comprehensive development
Shares Amount capital income (loss) stage Total
--------- ---------- ---------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1998 4,395,040 $1,153,001 $329,050 $ -- $(2,342,704) $ (860,653)
Net proceeds from initial public
offering of shares 1,300,000 5,103,195 -- -- -- 5,103,195
Contribution of capital -- -- 325,000 -- -- 325,000
Exercise of stock warrants 449,085 224,542 -- -- -- 224,542
Issuance of stock options for
services rendered -- -- 61,250 -- -- 61,250
Unrealized loss on securities -- -- -- (14,000) -- (14,000)
Net loss - July 1, 1998
through March 31, 1999 -- -- -- -- (1,536,020) (1,536,020)
--------- ---------- -------- -------- ----------- -----------
Balance at March 31, 1999 6,144,125 $6,480,738 $715,300 $(14,000) $(3,878,724) $ 3,303,714
========= ========== ======== ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
BioShield Technologies, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Nine months ended June 1, 1995 (inception)
March 31, to March 31,
1999 1998 1999 1998
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $(1,536,020) $(948,206) $(3,878,724) $(1,818,981)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation expense 16,762 10,288 49,228 28,328
Issuance of stock and stock
options for services rendered 61,250 58,200 340,300 180,600
Changes in operating assets
and liabilities:
(Increase) decrease in:
Accounts receivable (17,173) (74,367) (127,254) (103,661)
Inventory 57,434 (18,699) (100,350) (160,893)
Deposits and other assets (105,613) 16,462 (184,129) (78,515)
Increase (decrease) in:
Accounts payable (238,072) 19,917 71,466 188,797
Accrued liabilities and
payroll (244,506) 13,195 89,232 320,127
----------- --------- ----------- -----------
Net cash used in operating
activities (2,005,938) (923,210) (3,740,231) (1,444,198)
----------- --------- ----------- -----------
Cash flows from investing activities:
Purchase of marketable securities (105,000) -- (105,000) --
Capital expenditures (32,392) (72,368) (154,464) (117,960)
----------- --------- ----------- -----------
Net cash used in investing
activities (137,392) (72,368) (259,464) (117,960)
----------- --------- ----------- -----------
Cash flows from financing activities:
Proceeds from debt -- 630,000 655,000 630,000
Principal payments on debt (642,500) -- (642,500) --
Contribution to capital 325,000 -- 375,000 --
Private offering of stock, net -- 187,500 1,153,001 1,153,001
Proceeds of public offering 6,500,000 -- 6,500,000 --
Stock issuance costs (1,396,805) -- (1,396,805) --
Proceeds from warrants 224,542 -- 224,542 --
----------- --------- ----------- -----------
Net cash provided by
financing activities 5,010,237 817,500 6,868,238 1,783,001
----------- --------- ----------- -----------
Net increase (decrease) in cash 2,866,907 (178,078) 2,868,543 220,843
Cash at beginning of period 1,636 398,921 -- --
----------- --------- ----------- -----------
Cash at end of period $ 2,868,543 $ 220,843 $ 2,868,543 $ 220,843
=========== ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE> 8
BioShield Technologies, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
NOTE A - BASIS OF PRESENTATION
The interim financial statements included herein have been prepared by the
Company without audit. These statements reflect all adjustments, which are,
in the opinion of management, necessary to present fairly the financial
position as of March 31, 1999 and the results of operations and cash flows
for the period then ended. All such adjustments are of a normal recurring
nature. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these financial statements be read in conjunction with the Financial
Statements and notes for the fiscal year ended June 30, 1998.
NOTE B - INVENTORIES
Inventories consist primarily of raw materials, work in progress and
finished goods, which are stated at the lower of cost or market. Cost is
determined under the first-in, first-out (FIFO) valuation method.
NOTE C - LOSS PER COMMON SHARE
The Company has adopted Statement of Financial Accounting Standards No. 128
(SFAS 128), Earnings Per Share. Basic loss per common share is based upon
the weighted average number of common shares outstanding during the period.
Diluted loss per common share is not disclosed because the effect of the
exchange or exercise of common stock equivalents would be antidilutive.
NOTE D - INITIAL PUBLIC OFFERING
On September 29, 1998, the Company offered 650,000 Units for sale pursuant
to regulations established by the Securities Act of 1934 ("the Offering").
Each Unit consists of two shares of common stock ("the Shares") no par
value, and two Redeemable Common Stock Purchase Warrants ("the Warrants").
The initial public offering price of the Units was $10.00 per Unit. The
Shares and Warrants included in the Units were split apart and began to
trade separately on the NASDAQ Small Cap Market effective March 29, 1999.
The entire 650,000 Units offered were purchased by investors at $10.00 per
Unit. The gross proceeds of $6,500,000 was reduced by costs associated with
the Offering. Costs associated with the Offering totaled $1,396,805. Net
proceeds of the Offering were $5,103,195.
8
<PAGE> 9
BioShield Technologies, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999
NOTE E - STOCK OPTIONS AND WARRANTS
During the nine months ended March 31, 1999, the following changes occurred
in outstanding stock options and warrants:
<TABLE>
<S> <C>
Options outstanding at June 30, 1998 270,000
Options granted 592,000
Options cancelled --
Options exercised --
---------
Options outstanding at March 31, 1999 862,000
=========
Warrants outstanding at June 30, 1998 1,138,252
Warrants granted 1,365,000
Warrants cancelled --
Warrants exercised (449,085)
---------
Warrants outstanding at March 31, 1999 2,054,167
=========
</TABLE>
9
<PAGE> 10
BioShield Technologies, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
March 31, 1999
NOTE F - COMPREHENSIVE LOSS
The Company was required to adopt SFAS No. 130, Reporting Comprehensive
Income, for its fiscal year beginning July 1, 1998. The statement
establishes standards for reporting and display of comprehensive income or
loss and their components (revenues, expenses, gains and losses) in a full
set of general purpose financial statements.
10
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
BioShield Technologies. Inc. (the "Company"), a Georgia Corporation organized
in June, 1995 has since inception been a development stage company engaged
primarily in research and development, patent filings, regulatory approvals and
related activities geared towards the sale of its retail, industrial and
institutional products. These products may provide long term killing action of
microorganisms responsible for cross contamination and viral contamination.
Many of these products inhibit and control the growth of over 100 viral,
bacteria, fungi and yeast organisms.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net sales for the three month period ended March 31, 1999 were $53,486, a
decrease of $62,172 over the same period last year. Net sales for the nine
month period ended March 31, 1999 were $286,182, a decrease of 12% compared to
the same period one year ago. The decrease in sales was due mainly to initial
shipments of products to stock new grocery chain customers during the same
periods in the previous year.
Gross profit as a percentage of net sales decreased to 54% for the three month
period ended March 31, 1999 from 67% for the same three month period last year.
Also, gross profit as a percentage of net sales decreased to 58% for the nine
month period ended March 31, 1999 from 65% for the same nine month period in
the prior year. These decreases were mainly due to a product mix weighed more
toward retail sales which have lower profit margins rather than industrial
sales which have higher profit margins during both the three and nine month
periods.
Marketing and selling expenses were $196,442 for the three month period and
$610,436 for the nine month period ended March 31, 1999. This represents an
increase of $61,270 and $331,776 over the same prior year periods. The increase
reflects the impact of additional staffing and related expenses to support the
retail and private label sales program as well as an increase in advertising
costs associated with the initial phases of the OdorFree(TM) product line
rollout. The OdorFree(TM) product line is designed to compete in the
multimillion dollar odor elimination packaged goods category.
General and administrative expenses were $348,401 for the three month and
$936,858 for the nine month periods ending March 31, 1999. These amounts
represent a $47,068 increase for the three month and $170,441 increase for the
nine month periods compared to last year. These higher costs were primarily due
to an increase in staff and expenses associated with staffing the Company's
corporate infrastructure.
Research and development expenses of $98,561 for the three months ended March
31, 1999 were $60,674 higher than the same quarter last year. For the nine
month period ended March 31, 1999, these costs increased $93,979 when compared
to the prior year. The increase was due to additional staff and costs
associated with ongoing projects and testing related to future EPA
applications.
11
<PAGE> 12
Interest income was $36,870 for the three month and $74,123 for the nine month
periods ended March 31, 1999. This represents an increase of $35,990 and
$71,002 over the respective period last year. The increase was due to a larger
invested cash balance as a result of the initial public offering.
Interest expense was $308 for the three month period and $16,960 for the nine
month period ended March 31, 1999. The interest expense relates mainly to
interest paid to private note holders who loaned an aggregate of $450,000 to
the Company in the first and second quarter of 1998. All such notes have been
paid as of March 31, 1999.
LIQUIDITY
The Company's cash and cash equivalents totaled $2,868,543 on March 31, 1999,
an amount $2,866,907 higher than at the end of the previous fiscal year due to
the completion of the initial public offering during the period. The Company
believes that it has sufficient resources to meet its short term operating
needs. The Company expects to continue to incur substantial operating losses
and use substantial sums of cash in its operations for an indefinite period.
Accordingly, the Company will be required to obtain additional capital within
the near future. No assurance can be given that the Company will be successful
in its efforts to obtain additional capital, that capital will be available on
terms acceptable to the Company or on terms that will not significantly dilute
the interests of existing shareholders.
FORWARD-LOOKING STATEMENTS
When used in this form 10-QSB, the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties including
changes in economic conditions in the Company's market area, changes in
policies by regulatory agencies, fluctuations in interest rates, demand for
loans in the Company's market area and competition, that could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected. The Company wishes to caution readers not to place
undue reliance on any such forward-looking statements, which speak only as to
the date made. The Company wishes to advise readers that the factors listed
above could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements. The Company does not undertake, and specifically disclaims any
obligation, to publicly release the result of any revisions which may be made
to any forward-looking statements to reflect events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
YEAR 2000 ISSUES
The Company has developed and is implementing a comprehensive plan to address
issues related to Year 2000. The organizational simplicity of the Company's
business structure, which relies heavily on third party manufacturers and a
network of third party distributors, greatly limits the direct financial impact
on the Company to become fully Year 2000 compliant.
The Company's management believes that the risks facing the Company related to
Year 2000 issues are minimal. The Company is currently upgrading all computers
and software to insure
12
<PAGE> 13
Year 2000 compliance. Critical raw material and manufacturing requirements are
available from multiple sources and the Company can serve its customers without
reliance on computers.
RECENTLY ISSUED ACCOUNTING STANDARDS
On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (FAS 133). FAS 133 is effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999 (July 1, 1999
for the Company). FAS 133 requires that all derivative instruments be recorded
on the balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is the type of hedge transaction. Management of the
Company anticipates that, due to its limited use of derivative instruments, the
adoption of FAS 133 will not have a significant effect on the Company's results
of operations or its financial position.
SUBSEQUENT EVENTS
In April 1999, the Company formed a wholly-owned subsidiary named Allergy
Superstore.com, Inc. to sell drugs, certain of the Company's products and other
allergy related products to consumers over the internet. This subsidiary is
still in its organization stages. The Company expects that this subsidiary will
commence sales of allergy products over the internet in the third or fourth
calendar quarters of 1999. The Company will initially fund the development
costs of this subsidiary. However, the Company anticipates requiring
substantial capital in order to complete the development and implement the
operation of this subsidiary. The Company anticipates raising additional
capital for this new venture through a private placement of securities in the
very near future. The terms and structure of such a private placement
transaction have not as yet been determined.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEMS 1, 2, 3, 4, AND 5. NOT APPLICABLE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-KSB.
(a) Exhibits
<TABLE>
<S> <C>
10.21 Employment Agreement between the Company and Daniel E. Swaye,
dated October 8, 1998 (1)
10.22 Amendment to Exclusive Sales and Distribution Agreement between
the Company and Sanitary Coating Systems, LLP, dated as of
February 12, 1999 (1)
10.23 Agreement between the Company and John T. Adams, dated April 1, 1999 (1)
10.24 Financial Advisory and Consulting Agreement between the Company
and Grayson Financial Services, LLP, dated as of April 1, 1999
(1)
10.25 Financial Advisory and Consulting Agreement between the Company
and C.L.R. Associates, dated as of April 1, 1999 (1)
10.26 Certificate of Incorporation of Allergy Superstore.com, Inc. (1)
10.27 Bylaws of Allergy Superstore.com, Inc. (1)
10.28 1999 Directors Stock Option Plan of Allergy Superstore.com, Inc. (1)
10.29 Form of Directors Nonqualified Initial Stock Option Grant of Allergy
Superstore.com, Inc. (1)
10.30 Form of Directors Nonqualified Succeeding Stock Option Grant of
Allergy Superstore.com, Inc. (1)
27 Financial Data Schedule (for SEC use only)
</TABLE>
- ------------------------
(1) Filed herewith
(b) Reports on Form 8-KSB
None.
14
<PAGE> 15
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 thereunto duly authorized.
BioShield Technologies, Inc.
Date: May 13, 1999 /s/ Timothy C. Moses
----------------------------------------
TIMOTHY C. MOSES
President and Chief Executive Officer
Date: May 13, 1999 /s/ Daniel E. Swaye
----------------------------------------
DANIEL E. SWAYE
Vice President Finance
(Principal Financial Officer)
15
<PAGE> 16
BIOSHIELD TECHNOLOGIES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page
- ------- ----------- ----
<S> <C> <C>
10.21 Employment Agreement between the Company and Daniel E. Swaye, dated
October 8, 1998
10.22 Amendment to Exclusive Sales and Distribution Agreement between the
Company and Sanitary Coating Systems, LLP, dated as of February 12, 1999
10.23 Agreement between the Company and John T. Adams, dated April 1, 1999
10.24 Financial Advisory and Consulting Agreement between the Company and
Grayson Financial Services, LLP, dated as of April 1, 1999
10.25 Financial Advisory and Consulting Agreement between the Company and
C.L.R. Associates, dated as of April 1, 1999
10.26 Certificate of Incorporation of Allergy Superstore.com, Inc.
10.27 Bylaws of Allergy Superstore.com, Inc.
10.28 1999 Directors Stock Option Plan of Allergy Superstore.com, Inc.
10.29 Form of Directors Nonqualified Initial Stock Option Grant of Allergy
Superstore.com, Inc.
10.30 Form of Directors Nonqualified Succeeding Stock Option Grant of Allergy
Superstore.com, Inc.
27 Financial Data Schedule (for SEC use only)
</TABLE>
16
<PAGE> 1
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is entered into
as of this 8th day of October, 1998, between BIOSHIELD TECHNOLOGIES, INC., a
Georgia corporation (the "COMPANY"), and DANIEL E. SWAYE, a Georgia resident
(the "EXECUTIVE").
1. Employment. The Company hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein.
2. Term. The employment of the Executive by the Company as
provided in Section 1 will commence on October 27 1998 (the "COMMENCEMENT
DATE") and will terminate at 12:01 a.m. on October 27, 2001 (the "INITIAL
Term") unless same terminated as hereinafter provided. Thereafter, this
Agreement will be automatically renewed annually for additional one (1) year
terms (hereinafter referred to individually a "RENEWAL TERM") after the end of
the Initial Term or any Renewal Term, unless terminated as hereinafter provided
or either party notifies the other party by giving written notice to the other
party that they do not wish to renew the Agreement for a subsequent term. Such
notice must be given at least ninety (90) days before the end of the Initial
Term, or the then Renewal Term, as the case may be. The term of the Employee's
employment with the Company shall be referred to herein as the "EMPLOYMENT
PERIOD."
3. Position, Duties and Responsibilities.
(a) Position. The Executive hereby agrees to serve as
Chief Financial Officer of the Company. The Executive shall devote his best
efforts and substantially full time and attention to the performance of
services to the Business of the Company in his capacity as an officer thereof
and as may reasonably be requested by the Board. The Company retains the right
to direct the means and methods by which the Executive performs the above
services. For purposes of this Agreement, "BUSINESS" shall mean development,
marketing, and sale of surface modifying antimicrobials and biostatic products.
(b) Place of Employment. During the term of this
Agreement, the Executive shall perform the services required by this Agreement
at the Company's principal place of business in Atlanta, Georgia; provided,
however, that should the Company relocate its principal place of business to
another city or state more than fifty (50) miles from its principal place of
business as of the effective date of this Agreement and require Executive to
relocate to such principal place of business, Executive may terminate this
Agreement in accordance with Section 5(e) below.
(c) Other Activities. Except with the prior written
approval of the Board (which the Board may grant or withhold in its sole and
absolute discretion), the Executive, during the Employment Period, will not (i)
accept any other employment, (ii) serve as an officer or on the board of
directors or similar body of any other business entity (except as otherwise set
forth below) that is or may be competitive with, or that might place him in a
competing position
<PAGE> 2
to, the Business of the Company or any of its affiliates, or (iii) engage,
directly or indirectly, in any other business activity (whether or not pursued
for pecuniary advantage) that is or may be competitive with, or that might
place him in a competing position to, the Business of the Company or any of its
affiliates. Notwithstanding the foregoing, the Company agrees that the
Executive (or affiliates of the Executive) shall be permitted (i) to undertake
the activities set forth in Section 8, (ii) to make any other passive personal
investment that is not in a business activity that is directly or indirectly
competitive with the Business of the Company, (iii) to participate in industry
organizations, and (iv) to participate in charitable or educational activities.
4. Compensation and Related Matters.
(a) Salary. During the Employment Period, the Company
shall pay the Executive a salary of not less than $130,000 annually during the
Employment Period. All salary is to be paid consistent with the standard
payroll practices of the Company (e.g., timing of payments and standard
employee deductions, such as income tax withholdings, social security), but not
less frequently than monthly with each payment being that portion of the annual
salary which is payable based upon the applicable period.
(b) Bonus. In addition to the Base Salary set forth
above, Employee shall be entitled to bonuses as indicated in the periodically
adjusted bonus guidelines that may be presented from time to time to Employee
by the President of Employer. Employee understands that Employer is under no
obligation to pay bonuses or create guidelines, and that such bonus guidelines
if adopted, will likely change, due in part to a changing emphasis of Employer
goals, focus and objectives.
(c) Business Expenses. The Company shall reimburse the
Executive in connection with the conduct of the Company's business upon
presentation of sufficient tangible evidence of such expenditures consistent
with the Company's policies as in place from time to time.
(d) Stock Option Benefits. The Company agrees to grant
the Executive a non-qualified stock option to acquire up to 100,000 shares of
the Company's common stock at an exercise price of $5.00 per share pursuant to
the Company's 1997 Stock Incentive Plan (the "OPTION PLAN"). The option shall
vest in three (3) installments of 30,000 beginning on the first and second
anniversaries of the Commencement Date and 40,000 on the third anniversary of
the Commencement Date. In the event the Executive is terminated without cause
pursuant to Section 5(d) below or the Executive terminates this Agreement for
Good Cause pursuant to Section 5(e) below, then the vesting period shall be
accelerated such that any option shares that would have vested at the end of
the year in which the Date of Termination occurs (the "TERMINATION YEAR") shall
become immediately vested; provided, however, that the Executive shall exercise
all options vested upon termination no later than 180 days following Date of
Termination. The Company agrees that within a reasonable time following the
execution of this Agreement it will execute an option agreement with the
Executive (the "OPTION AGREEMENT") on these terms. Except as otherwise set
forth in this Section 4 and except with respect to the Company's obligations
under this Agreement with respect to the Option Agreement and the Option Plan,
nothing herein is intended, or shall be construed to require the Company to
institute or continue any, or any particular, plan or benefits.
(e) Health and Similar Benefits. The Executive shall be
entitled to participate in or receive health, welfare, life insurance,
long-term disability insurance and similar benefits as
<PAGE> 3
the Company provides generally from time to time to its executives. In the
event that the Company does not provide health benefits to its executives as of
the Commencement Date then Company will reimburse Executive for the cost of
medical insurance premiums of the Executive as provided under his COBRA
benefits for a period of 120 days from the Commencement Date.
(f) Fringe Benefits. The Executive will be entitled to
fringe benefits as may be determined or granted from time-to-time by the Board.
(g) Vacation. The Executive shall be entitled to four
vacation weeks (20 business days) in each calendar year on a pro-rated basis.
The Executive will be entitled to all Company holidays.
5. Termination. The Executive's employment hereunder shall be,
or may be, as the case may be, terminated under the following circumstances:
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. The Executive's employment hereunder
shall terminate on the Executive's physical or mental disability or infirmity.
Disability shall be conclusively established if the Executive is unable to
perform his duties under this Agreement for more than 85 business days during
any 180 calendar day period.
(c) Cause. The Company may terminate the Executive's
employment hereunder for Cause. "CAUSE" shall mean (i) Employee's material
breach of any of the terms of this Agreement, (ii) his conviction of a crime
involving moral turpitude or constituting a felony under the laws of any state,
the District of Columbia or of the United States, or (iii) his gross
negligence, willful misconduct or fraud in the performance of his duties
hereunder.
(d) Termination for Any Reason. Subject to Section 6
hereof, the Executive hereby agrees that the Company may dismiss him at any
time under this Section 5(d) without regard (i) to any general or specific
policies (whether written or oral) of the Company relating to the employment or
termination of its employees, or (ii) to any statements made to the Executive,
whether made orally or contained in any document, pertaining to the Executive's
relationship with the Company. Notwithstanding anything to the contrary
contained herein, including Sections 2 and 4, the Executive's employment with
the Company is not for any specified term, is at will and may be terminated by
the Company at any time by delivery of a notice of termination to the
Executive, for any reason, with or without cause, without liability except with
respect to the payments provided for by Section 6.
(e) Voluntary Resignation. The Executive may voluntarily
resign his position and terminate his employment with the Company at any time
for any reason or for Good Cause. For purposes of this Agreement, "GOOD CAUSE"
shall mean, without the express written consent of Executive, the occurrence of
any of the following events unless such events are substantially corrected
within thirty (30) days following written notification by Executive to the
Company that he intends to terminate his employment hereunder for one of the
following reasons: (i) any material reduction or diminution in the duties,
responsibilities and status of Executive's position; (ii) a material breach by
the Company of any provision of this Agreement; (iii) a relocation by the
Company of its principal place of business to another city or state more than
fifty (50) miles
<PAGE> 4
from its principal place of business as of the effective date of this Agreement
and the Company requires the Executive to relocate to such new principal place
of business; and (iv) the occurrence of a Change in Control. The Executive
understands, acknowledges and agrees that any voluntary resignation by him as a
result of any personal or family reasons not otherwise set forth in this
Section 5(e) shall not constitute Good Cause. As used in this Agreement,
"CHANGE OF CONTROL" means the occurrence of any of the following: (i) the
adoption of a plan relating to the liquidation or dissolution of the Company,
(ii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any person or group, other
than Jacques Elfersy or Timothy C. Moses or their affiliates (the
"PRINCIPALS"), becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934), directly or
indirectly, of more than eighty percent (80%) of the total voting power of the
total outstanding voting stock of the Company on a fully diluted basis or (iii)
the consummation of the first transaction (including, without limitation, any
merger or consolidation) the result of which is that any person or group, other
than the Principals, becomes the beneficial owner, directly or indirectly, of
more than eighty percent (80%) of the total voting power of the total
outstanding voting stock of the Company. If the Executive elects to resign for
any reason or for Good Cause, the Executive shall deliver written notice of
resignation to the Company (the "NOTICE OF RESIGNATION"). The Notice of
Resignation shall set forth the date such resignation shall become effective
(the "DATE OF RESIGNATION"), which date shall, in any event, be at least thirty
(30) days and no more than sixty (60) days from the date the Notice of
Resignation is delivered to the Company. At its option, the Company may reduce
such notice period to any length, upon ten (10) days written notice to the
Executive.
(f) Notice. Any termination of the Executive's employment
by the Company shall be communicated by written Notice of Termination to the
Executive. For purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean
a notice that shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(g) "DATE OF TERMINATION" shall mean (i) if the
Executive's employment is terminated by his death, the date of his death, (ii)
if the Executive's employment is terminated by reason of his disability, the
date that the Company declares the disability referred to in Section 5(b),
above, (iii) if the Executive's employment is terminated by the Company for
Cause pursuant to subsection 5(c) above, or without Cause by the Company
pursuant to subsection 5(d) above, the date specified in the Notice of
Termination and (iv) if the Executive voluntarily resigns pursuant to
subsection 5(e) above, the date of the Notice of Resignation.
(h) Termination Obligations.
(i) The Executive hereby acknowledges and agrees
that all Personal Property and equipment furnished to or prepared by the
Executive in the course of or incident to his employment, belongs to the
Company and shall be promptly returned to the Company upon termination of the
Employment Period. "PERSONAL PROPERTY" includes, without limitation, all books,
manuals, records, reports, notes, contracts, lists, formulae, blueprints, and
other documents, or materials, or copies thereof (including computer files),
and all other proprietary information relating to the business of the Company.
Following termination, the Executive will not retain any written or other
tangible material containing any proprietary information of the Company.
<PAGE> 5
(ii) Upon termination of the Employment Period,
the Executive shall be deemed to have resigned from all offices then
held with the Company or any affiliate.
(iii) The representations and warranties contained
herein and the Executive's obligations under Sections 5(h), 6, 7, 8, 9
and 15 through 18 shall survive termination of the Employment Period
and the expiration of this Agreement.
(i) Release. In exchange for the Company entering into
the Agreement, the Executive agrees that, at the time of his resignation or
termination from the Company, he will execute a release acceptable to the
Company of all liability of the Company and its officers, shareholders,
employees and directors to the Executive in connection with or arising out of
his employment with the Company, except with respect to any then-vested rights
under the Company's Option Plan and except with respect to any Severance
Payments which may be payable to him under the terms of the Agreement.
6. Compensation Upon Termination.
(a) Death. If the Executive's employment shall be
terminated pursuant to Section 5(a), the Company shall pay the estate of the
Executive (the "ESTATE") his base salary payable pursuant to Section 4(a) and
benefits described in Sections 4.1(d) and 4(e) through the Date of Termination.
At the Estate's expense, the Executive's dependents shall also be entitled to
any continuation of health insurance coverage rights under any applicable law.
(b) Disability. If the Executive's employment shall be
terminated by reason of disability pursuant to Section 5(b), the Executive
shall receive his base salary payable pursuant to Section 4(a) and benefits
described in Sections 4(d) and 4(e) up to the Date of Termination and for 90
days thereafter; provided, however, that payments so made to the Executive
during the disability shall be reduced by the sum of the amounts, if any,
payable to the Executive at or prior to the time of any such payment under any
disability benefit plan of the Company. At the Executive's own expense, the
Executive and his dependents shall also be entitled to any continuation of
health insurance coverage rights under any applicable law.
(c) Cause. If the Executive's employment shall be
terminated for Cause pursuant to Section 5(c) hereof, the Company shall pay the
Executive his base salary pursuant to Section 4(a) through the Date of
Termination. At the Executive's own expense, the Executive and his dependents
shall also be entitled to any continuation of health insurance coverage rights
under any applicable law.
(d) Other Terminations by the Company. If the Company
shall terminate the Executive's employment without cause pursuant to Section
5(d) hereof, the Company shall pay the Executive his then current base salary
at the Date of Termination pursuant to Section 4(a) for a period of the lesser
of (i) the remaining unexpired term of this Agreement or (ii) nine (9) months
from the Date of Termination (the "SEVERANCE PAYMENT"). The Company shall pay
on behalf of the Executive the cost of any continuation of the then existing
health insurance coverage of the Executive for a period of the lesser of (i)
the remaining unexpired term of this Agreement, (ii) nine (9) months from the
Date of Termination or (iii) until the Executive obtains Full Time Employment
(the "SEVERANCE BENEFIT"). For purposes of this Agreement, "FULL TIME
EMPLOYMENT" shall mean employment at a subsequent full time employer or in
connection with
<PAGE> 6
a full time consulting practice or other self-employment or any full time
venture founded by the Executive.
(e) Voluntary Resignation. If the Executive terminates
his employment with the Company pursuant to Section 5(e) hereof for Good Cause,
the Company shall pay the Executive his Severance Payment and Severance
Benefit.
(f) If the Executive terminates his employment with the
Company pursuant to Section 5(e) hereof without Good Cause, the Company shall
have no obligation to pay the Severance Payment or Severance Benefit or
otherwise compensate the Executive following the Date of Resignation.
(g) In the event of any Termination pursuant to Section
5, the Executive shall be entitled to retain any and all options to purchase
capital stock of the Company granted to the Executive pursuant to the terms and
conditions of the Option Agreement that have vested, either by passage of time
or by virtue of acceleration pursuant to Section 4(c), as of the Date of
Termination.
(h) Any Severance Payment made pursuant to this Section 6
shall be payable in accordance with the regular pay schedule for the Company
over the required duration set forth in Sections 6(a) through 6(e).
(i) The continuing obligation of the Company to make the
Severance Payment to the Executive is expressly conditioned upon the Executive
complying and continuing to comply with his obligations and covenants under
Sections 7 and 8 of this Agreement following termination of employment with the
Company.
7. Confidentiality and Non-Solicitation Covenants.
(a) Confidentiality. In addition to the agreements set
forth in Section 5(h)(i), the Executive hereby agrees that the Executive will
not, during the Employment Period or at any time thereafter directly or
indirectly disclose or make available to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, any
Confidential Information (as defined below). The Executive agrees that, upon
termination of his employment with the Company, all Confidential Information in
his possession that is in written or other tangible form (together with all
copies or duplicates thereof, including computer files) shall be returned to
the Company and shall not be retained by the Executive or furnished to any
third party, in any form except as provided herein; provided, however, that the
Executive shall not be obligated to treat as confidential, or return to the
Company copies of any Confidential Information that (i) was publicly known at
the time of disclosure to the Executive, (ii) becomes publicly known or
available thereafter other than by any means in violation of this Agreement or
any other duty owed to the Company by any person or entity or (iii) is lawfully
disclosed to the Executive by a third party. As used in this Agreement the term
"CONFIDENTIAL INFORMATION" means: information disclosed to the Executive or
known by the Executive as a consequence of or through his relationship with the
Company, about the owners, customers, employees, business methods, public
relations methods, organization, procedures or finances, including, without
limitation, information of or relating to owner or customer lists of the
Company and its affiliates.
<PAGE> 7
(b) Non-Solicitation. In the event of termination for any
reason other than pursuant to Section 5(d) or Section 5(e) if termination is
for "GOOD CAUSE", the Executive agrees that during the Employment Period and
for one (1) year thereafter the Executive will not, either on his own account
or jointly with or as a manager, agent, officer, employee, consultant, partner,
joint venturer, owner or shareholder or otherwise on behalf of any other
person, firm or corporation, (i) carry on or be engaged or interested directly
or indirectly in, or solicit, the manufacture or sale of goods or provision of
services to any person, firm or corporation which, at any time during the
Employment Period has been or is a customer of or in the habit of dealing with
the Company in its Business, (ii) endeavor directly or indirectly to canvas or
solicit in competition with Company or to interfere with the supply of orders
for goods or services from or by any person, firm or corporation which during
the Employment Period has been or is a supplier of goods or services to Company
or (iii) directly or indirectly solicit or attempt to solicit away from Company
any of its officers or employees or offer employment to any person who, on or
during the six (6) months immediately preceding the date of such solicitation
or offer, is or was an officer or employee of Company.
8. Covenant Not to Compete.
(a) The Executive agrees that during the Employment
Period he will devote substantially full-time to the Business of the Company
and not engage in any type of business in competition with the Business of the
Company. Subject to such full-time requirement and the restrictions set forth
below in this Section 8 and Section 3(c) above, the Executive shall be
permitted to continue his existing business investments and activities and may
pursue additional business investments; provided, however, that the Executive
shall not serve as officer or director of any public company resulting from
such business investments. The Executive agrees that he shall not (i) invest
in, manage, consult or participate in any way in any other business in
competition with the Business (in either an active or passive manner), (ii)
participate in or advise any business wherein activities similar to the
Business are a relevant business segment or (iii) act for or on behalf of any
business that intends to enter or participate in the activities similar to the
Business, in each case unless the independent members of the Company's Board of
Directors determine that such action is in the best interest of the Company.
Notwithstanding the foregoing, the Executive may purchase stock as a
stockholder in any publicly traded company, including any company which is
involved in activities similar to the Business; provided, however, that the
Executive does not own (together or separately or through his affiliates) more
than 5% of any company (other than the Company) in such business.
(b) The provisions of this Section 8 shall survive for
one (1) year following any termination of employment, except in the event of
termination pursuant to Section 5(d) or Section 5(e) herein.
9. Injunctive Relief and Enforcement. In the event of breach by
the Executive of the terms of Sections 5(h), 5(i), 7 or 8, and only following
mediation or attempted mediation as set forth in Section 16 below (unless the
Company is suffering irreparable injury, in which case Section 16 will not
prevent the Company from seeking injunctive relief against the Executive in any
court or forum), the Company shall be entitled to institute legal proceedings
to enforce the specific performance of this Agreement by the Executive and to
enjoin the Executive from any further violation of Sections 5(h), 5(i), 7 or 8
and to exercise such remedies cumulatively or in conjunction with all other
rights and remedies provided by law and not otherwise limited by this
Agreement. The Executive acknowledges, however, that the remedies at law for
any breach by
<PAGE> 8
him of the provisions of Sections 5(h), 5(i), 7 or 8 may be inadequate. In
addition, in the event the agreements set forth in Sections 5(h), 5(i), 7 or 8
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of extending for too great a period of time or over too great a
geographical area or by reason of being too extensive in any other respect,
each such agreement shall be interpreted to extend over the maximum period of
time for which it may be enforceable and to the maximum extent in all other
respects as to which it may be enforceable, and enforced as so interpreted, all
as determined by such court in such action.
10. Notice. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered when
transmitted by telecopy with receipt confirmed, or one day after delivery to an
overnight air courier guaranteeing next day delivery, addressed as follows:
If to the Executive: Daniel E. Swaye
1220 Northcliff Trace
Roswell, Georgia 30076
If to the Company: BioShield Technologies, Inc.
4405 International Boulevard
Suite B-109
Norcross, Georgia 30093
Attention: Timothy C. Moses
With a copy to: Schreeder, Wheeler & Flint, LLP
127 Peachtree Street, N.E.
Suite 1600
Atlanta, Georgia 30303
Attention: Edward H. Brown, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect; provided, however, that if any one or more of the terms
contained in Sections 5(h), 7 or 8 hereto shall for any reason be held to be
excessively broad with regard to time, duration, geographic scope or activity,
that term shall not be deleted but shall be reformed and constructed in a
manner to enable it to be enforced to the extent compatible with applicable
law.
12. Assignment. This Agreement may not be assigned by the
Executive, but may, subject to the provisions of Section 5(e), be assigned by
the Company to any successor to its Business and will inure to the benefit and
be binding upon any such successor.
13. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
<PAGE> 9
14. Headings. The headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
15. Choice of Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Georgia, except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.
16. LIMITATION ON LIABILITIES. IF EITHER THE EXECUTIVE OR THE
COMPANY IS AWARDED ANY DAMAGES AS COMPENSATION FOR ANY BREACH OR ACTION RELATED
TO THIS AGREEMENT, A BREACH OF ANY COVENANT CONTAINED IN THIS AGREEMENT
(WHETHER EXPRESS OR IMPLIED BY EITHER LAW OR FACT), OR ANY OTHER CAUSE OF
ACTION BASED IN WHOLE OR IN PART ON ANY BREACH OF ANY PROVISION OF THIS
AGREEMENT, SUCH DAMAGES SHALL BE LIMITED TO CONTRACTUAL DAMAGES AND SHALL
EXCLUDE (I) PUNITIVE DAMAGES, AND (II) CONSEQUENTIAL AND/OR INCIDENTAL DAMAGES
(E.G., LOST PROFITS AND OTHER INDIRECT OR SPECULATIVE DAMAGES). THE MAXIMUM
AMOUNT OF DAMAGES THAT THE EXECUTIVE MAY RECOVER FOR ANY REASON SHALL BE THE
AMOUNT EQUAL TO ALL AMOUNTS OWED (BUT NOT YET PAID) TO THE EXECUTIVE PURSUANT
TO THIS AGREEMENT THROUGH ITS NATURAL TERM OR THROUGH ANY SEVERANCE PERIOD,
PLUS INTEREST ON ANY DELAYED PAYMENT AT THE MAXIMUM RATE PER ANNUM ALLOWABLE BY
APPLICABLE LAW FROM AND AFTER THE DATE(S) THAT SUCH PAYMENTS WERE DUE.
17. Entire Agreement. This Agreement contains the entire agreement
and understanding between the Company and the Executive with respect to the
employment of the Executive by the Company as contemplated hereby, and no
representations, promises, agreements or understandings, written or oral, not
herein contained shall be of any force or effect. This Agreement shall not be
changed unless in writing and signed by both the Executive and the Company (by
duly adopted resolution of its Board of Directors).
18. The Executive's Acknowledgment. The Executive acknowledges (a)
that he has had the opportunity to consult with independent counsel of his own
choice concerning this Agreement, and (b) that he has read and understands the
Agreement, is fully aware of its legal effect, and has entered into it freely
based on his own judgment.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date and year first above written.
BIOSHIELD TECHNOLOGIES, INC.
By: /s/ Jacques Elfersy
-----------------------------------
Title: Sr. Vice Pres.
--------------------------------
<PAGE> 10
"EXECUTIVE"
/s/ Daniel E. Swaye
--------------------------------------
Daniel E. Swaye
Signed, sealed and delivered this 19 day
of November, 1998.
/s/ Ashley Meeks [SEAL]
--------------------------------
NOTARY PUBLIC
Notary Public, Rockdale County, Georgia
My Commission Expires April 27, 2001
<PAGE> 1
EXHIBIT 10.22
BIOSHIELD (TM)
BIOSHIELD TECHNOLOGIES, INC.
AMENDMENT
This Amendment modifies the terms and conditions of the Exclusive Sales and
Distributorship Agreement (the "Agreement") BioShield Technologies, Inc. and
Sanitary Coating Systems, LLP, dated October 20th, 1997. In accordance with
Paragraph 9(n), the parties agree to the following revisions of the Agreement:
1.) Attachment II
Supplier agrees to sell BioSure 500 for $5.00 lb. for calender 1999. Purchaser
shall use its best efforts to place a minimum order of at least 100,000 pounds
of BioSure 500 in 1999.
2.) Paragraph C(4)(b) and (c):
Supplier and Purchaser agree to a moratorium on the payments under this
Paragraph for a period of one year. Purchaser shall not be responsible for the
payment of Annual Minimum Royalty Fees or any Other Payments in 1999. Instead,
Purchaser shall make payments for ten (10) consecutive years (from 1/1/2000 to
1/1/2010) under the terms indicated in this Paragraph for 1/1/1999 beginning
1/1/2000.
Further, Purchaser personally guarantees to pay the outstanding debt owed to
Supplier for 1998 in the amount of $93,750.00 by March 31st, 1999. If such
amount is not paid in full by said date, the price of the AM500 product will be
raised to $6.00.
3.) Paragraph 9(a):
The term of the Agreement shall be extended to 12/31/2009 and Purchaser may at
its option, renew this Agreement for unlimited additional terms of five (5)
years each, provided that at the time of renewal:
a) The Purchaser shall have given the Supplier written notice that it
is exercising this option to renew not less than six (6) months or
more than twelve (12) months prior to the end of the current term.
b) The Purchaser is not in default of any provision of this Agreement
and of any amendments hereto; and
c) The Purchaser has paid all monies owing to the Supplier for the
current term in accordance with the term of this Agreement and of
any Amendment hereto.
<PAGE> 2
BIOSHIELD (TM)
BIOSHIELD TECHNOLOGIES, INC.
AMENDMENT
PAGE 2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
the EXCLUSIVE SALES AND DISTRIBUTORSHIP AGREEMENT as of this the 12th
day February, 1999.
SUPPLIER: PURCHASER:
BIOSHIELD TECHNOLOGIES, SANITARY COATING SYSTEMS, LLP;
INC.; A GEORGIA CORPORATION A FLORIDA CORPORATION
By: /s Jacques Elfersy By: /s/ Edwin Schwartz
----------------------------- ---------------------------
Title: Sr. V. Pres. Title: Pres.
-------------------------- ------------------------
<PAGE> 1
EXHIBIT 10.23
AGREEMENT
THIS AGREEMENT MADE THIS 1ST DAY OF APRIL, 1999 BY AND BETWEEN BIOSHIELD
TECHNOLOGIES, INC. ("THE CLIENT"), 4405 INTERNATIONAL BOULEVARD, SUITE B-109,
NORCROSS GEORGIA 30093 AND JOHN T. ADAMS, 1523 WYNFIELD TRACE NW, NORCROSS,
GEORGIA 30092, ("THE CONSULTANT").
WHEREAS The Client is in the business of manufacturing, marketing and selling
proprietary and non-proprietary antimicrobial, and similar chemicals, desires
the services performed by the Consultant; and
WHEREAS The Consultant seeks to provide its professional services to the Client
in accordance with the terms and conditions set forth in this Agreement.
Now, THEREFORE, in consideration of the mutual premises set forth herein, The
Client and the Consultant hereby agrees as follows:
I. SERVICES
The Consultant will provide professional services, counsel, advice and
representation to The Client as follows:
a. Participate in the development of the annual and long-term plan for
Bioshield.
b. Provide and develop market strategy for Bioshield branded and private
label products including industry models and forecasts.
c. Describe product and market concepts appropriate to the core business,
technology and business requirements of the Client.
d. Offer strategic and long-range business, marketing and sales planning,
counsel and direction.
e. As needed, prepare formal, flexible business and marketing plans.
II. TERM OF AGREEMENT
The Client and The Consultant agree to an initial term of (3) three months,
automatically renewable on at least the same terms and conditions for at least
an additional three months, unless terminated by either party for cause, with
(30) thirty days notice, one to the other, in writing, by certified mail.
III. PLACE OF WORK
Although The Consultant services shall be performed at The Consultant's
facilities, The Consultant will travel both to The Client's facility and to
other places designated as appropriate in the opinion of The Consultant to
perform its professional role pursuant to this Agreement.
<PAGE> 2
IV. TIME TO BE DEVOTED
The Consultant will devote 100% of his professional time to perform under this
Agreement. The services, time and performance of the Consultant are all
entirely the sole judgment of The Consultant.
V. COMPENSATION
The Consultant will be retained by The Client in the amount of $3000 per month,
commencing April 12, 1999, continuing for an uninterrupted period of at least
(3) three months. Payment is due and payable on or before the first (1st) of
the month following invoices (or against blanket invoice). Plus 4,000 options
exercisable at price to be discounted to market by $17,000 per month as per the
Company Stock Incentive Plan dated December 1997.
The Client will reimburse The Consultant for expenses, such as travel and other
ancillary expense items in pursuit of the relationship. Reimbursement will be
made to The Consultant within five (5) working days of The Consultant's
submission of the formal expense report.
VI. STATUS OF THE CONSULTANT
The Consultant will perform the services to eb rendered by it under the
Agreement as an independent contractor, and no individual associated with The
Consultant will be considered an employee of The Client for any purpose.
All IRS reporting will utilize From 1099.
VII. INFORMATION
The Client will provide to The Consultant information and access to such of the
Client's offices, employees and representatives as The Consultant shall
reasonably request to perform under this Agreement. All information so obtained
by the Consultant will be maintained in full confidence during and after the
term of this Agreement, except such information as the Client agrees may be
disclosed, such information disclosed to the public, other than through a
breach of this Agreement and such information as The Consultant is required by
law to disclose.
VIII. INDEMNIFICATION
The Client shall indemnify The Consultant and hold The Consultant harmless from
and against and all claims, liability, loss cost, damage or exposure (including
reasonable attorney fees) asserted against or incurred by reason of, based
upon, in connection with or in any way related to this Agreement or the other
services performed or alleged to have been performed hereunder.
IX. UTILIZATION OF PROPRIETARY CONTRIBUTIONS
All services and contributions made by The Consultant to The Client in the
capacity as Consultant, under the terms of this Agreement, may be fully
utilized by The Client. In the event that such contributions are considered
patent-able. The Client will have full patent property rights; The Consultant
will have no patent property rights.
<PAGE> 3
X. CONFIDENTIALITY
The Consultant agrees to maintain professional standards with regard to
confidentiality and shall not disclose to any person or business entity, except
as required by law or, in its regular course of providing services hereunder,
any information concerning The Client's business without prior written consent.
XI. MISCELLANEOUS
This Agreement contains the entire agreement of the parties with respect to the
subject matter hereof. No waiver, modification or alteration of any of the
provisions hereof shall be binding unless in writing and signed by The Client
and The Consultant. Neither party shall assign this Agreement of any of the
rights or duties hereunder without the prior written consent of the other
party. Any notice hereunder by either party shall be in writing sent to the
other party at its address as shall be specified by such other party. In the
event of any controversy arising out of or relating to this Agreement, it shall
be settled by arbitration to be held in Atlanta, Georgia in accordance with
rules then in practice by the American Arbitration Association.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
this Agreement to be executed by The Client and The Consultant.
THE CLIENT THE CONSULTANT
---------- --------------
Bioshield Technologies, Inc. John T. Adams
/s/ Jacques Elfersy /s/ John T.Adams
- -------------------------------- -----------------------------
Jacques Elfersy/ Senior Vice Presient
Witnesses: Witnessed:
---------------------- --------------------
<PAGE> 1
EXHIBIT 10.24
FINANCIAL ADVISORY AND CONSULTING AGREEMENT
This agreement ("Agreement") is made and entered into this 1st day of
April, 1999, between BioShield Technologies, Inc., a Georgia corporation (the
"Company"), and Grayson Financial, LLC (the "Consultant").
In consideration of and for the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Purpose. The Company hereby retains the Consultant on a
non-exclusive basis during the term specified to render consulting advice to
the Company as the Company may reasonably request relating to financial and
similar matters, upon the terms and conditions as set forth herein.
2. Term and Compensation. This Agreement shall be effective for a
period of three months commencing on the date first written above (the
"Engagement Period"). During the Engagement Period, the Company shall pay the
Consultant a monthly fee payable in arrears of $5000 per month (the "Monthly
Fee"). At the end of the Engagement Period, the Company may determine in its
sole discretion to award to Consultant as additional compensation , a warrant
to purchase up to 160,000 shares of common stock of the Company (the
"Warrant"). The Warrant if and when issued shall be exercisable for a period of
five years at an exercise price of $5.00 per share, subject to proportional
adjustment in the event of a stock split.
3. Duties of Consultant. During the term of this Agreement, the
Consultant will provide the Company with such regular and customary
non-exclusive consulting advice as is reasonably requested by the Company,
provided that the Consultant shall not be required to undertake duties not
reasonable within the scope of the consulting advisory services contemplated by
this Agreement. In performance of these duties, the Consultant shall provide
the Company with the benefits of its best judgment and efforts. It is
understood and acknowledged by the parties that the value of the Consultant's
advice is not measurable in any quantitative manner, and that the Consultant
shall not be obligated to spend any specific amount of time doing so. The
Consultant's duties may at the direction of the Company include, but not
necessarily be limited to on a non-exclusive basis:
A. Providing sponsorship and exposure in connection with the
dissemination of corporate information regarding the Company to the investment
community at large.
B. Assisting in the Company's financial public relations,
including discussions between the Company and the financial community.
C. Advice regarding the financial structure of the Company and
its divisions or subsidiaries or any programs and projects, as such issues
relate to the public market for the Company's equity securities.
<PAGE> 2
D. Rendering advice with respect to any acquisition program of
the Company, as such program relates to the public market for the Company's
equity securities.
E. Rendering advice regarding the public market for the Company's
securities and the timing and structure of any future public offering of the
Company's equity securities.
It is expressly understood that no actual or express authority on
behalf of the Company is granted by the Company hereunder to Consultant.
4. Relationships with others. The Company acknowledges that the
Consultant or its affiliates is in the business of providing, among other
things, financial service and consulting advice (of all types contemplated by
this Agreement) to others. Nothing herein contained shall be construed to limit
or restrict the Consultant in conducting such business with respect to others,
or in rendering such advise to others. In connection with the rendering of
services hereunder, Consultant has been or will be furnished with confidential
information concerning the Company including, but not limited to, financial
statements and information, cost and expense data, production data, trade
secrets, marketing and customer data, and such other information not generally
obtained from public or published information or trade sources. Such
information shall be deemed "Confidential Material" and, except as specifically
provided herein, shall not be disclosed by Consultant or its employees or
agents without prior written consent of the Company. In the event Consultant is
required by applicable law or legal process to disclose any of the Confidential
Material, it is agreed that Consultant will deliver to the Company immediate
notice of such requirement prior to disclosure of same to permit the Company to
seek an appropriate protective order and/or waive compliance of this provision.
If, in the absence of a protective order or receipt of written waiver,
Consultant is nonetheless, in the reasonable written opinion of Consultant's
counsel, compelled to disclose any Confidential Material, Consultant may do so
without liability hereunder provided that notice of such prospective disclosure
is delivered to the Company at least five (5) days prior to actual disclosure,
Following the termination of this Agreement, Consultant shall deliver to the
Company all Confidential Material. Neither party hereto will issue any public
announcement concerning this Agreement without the approval of the other party,
provided however that nothing shall prevent the Company from fulfilling its
obligations to disclose the contents of this Agreement with the U.S. Securities
& Exchange Commission (the "SEC").
5. Consultant's Liability. The Consultant agrees to defend,
indemnify, and hold the Company, its officers, directors, employees, advisors,
attorneys and agents harmless from and shall indemnify the foregoing persons
and entities against any and all costs, expenses and liability (including
reasonable attorney's fees paid in connection with the investigation and/or the
defense of the such entities and persons) which may in any way result from a
breach of any representation, warranty or covenant made by Consultant or from
any services rendered by the Consultant pursuant to or in any connection with
this Agreement.
6. Expenses. The Company, upon receipt of appropriate supporting
documentation, shall reimburse the Consultant for any and all reasonable and
actual out-of-pocket expenses incurred in connection with services provided to
the Company, subject in each case to prior written approval of the Company.
<PAGE> 3
7. Limitation Upon the Use of Advice and Services.
(a) No person or entity, other than the Company or any of its
subsidiaries or directors or officers of each of the foregoing, shall be
entitled to make use of or rely upon the advice of the Consultant to be given
hereunder.
(b) It is clearly understood that the Consultant, for services
rendered under this Agreement, makes no commitment whatsoever as to recommend
or advise its clients to purchase the securities of the Company. Research
reports or corporate finance reports that may be prepared by the Consultant
will, when and if prepared, be done solely on the merits or judgment of
analysts of the Consultant or any senior finance personnel of the Consultant.
(c) Use of the Consultant's name in annual reports or any other
report of the Company or releases by the Company must have the prior approval
of the Consultant unless the Company is required by law to include Consultant's
name in such annual reports, other report or release of the Company, in which
event Consultant will be furnished with copies of such annual reports or other
reports or releases using Consultant's name in advance of publication by the
Company.
8. Severability. Every provision of this Agreement is intended to
be severable. If any term or provision hereof is deemed unlawful or invalid for
any reason whatsoever, such unlawfulness or invalidity shall not affect the
validity of this Agreement.
9. Miscellaneous.
(a) Any notice or other communication between parties hereto shall
be sufficiently given if sent by certified or registered mail, postage prepaid,
or faxed and confirmed if to the Company, addressed to it at BioShield
Technologies, Inc., Attention: Timothy C. Moses, 4405 International blvd.,
Suite B109, Norcross, Georgia 30093 or if to the Consultant, addressed to it at
Grayson Financial, LLC, 39 Broadway, 21St Floor, New York, New York 10006,
Attention: Gregg deRocco. Such notice or other communication shall be deemed to
be given on the date of receipt.
(b) If the Consultant shall cease to do business, the provisions
hereof relating to duties of the Consultant and all compensation to be paid by
the Company as it applies to the Consultant shall thereupon terminate and cease
to be in effect.
(c) This Agreement embodies the entire agreement and understanding
between the Company and the Consultant and supersedes any and all negotiations,
prior discussions and preliminary and prior agreements and understandings
related to the central subject matter hereof.
(d) This Agreement has been duly authorized, executed and
delivered by and on behalf of the Company and the Consultant.
(e) The validity, interpretation, and construction of this
Agreement will be governed by the laws of the State of Georgia applicable to
contracts entered into and performed entirely with said state without regard to
the principles of conflict of laws. Any dispute or controversy between the
parties arising in connection with this Agreement or the subject matter
contemplated by this Agreement shall be resolved by arbitration before a
three-member panel of the American
<PAGE> 4
Arbitration Association in accordance with the commercial arbitration rules of
said forum and the Federal Arbitration Act, 9 U.S.C. 1 et seq., with the
resulting award being final and conclusive. Said arbitrators shall be empowered
to award all forms of relief and damages claimed, including, but not limited
to, attorney's fees, expenses of litigation and arbitration, exemplary damages,
and prejudgment interest. The parties further agree that any arbitration action
between them shall be heard in Atlanta, Georgia. Notwithstanding anything
contained herein to the contrary, nothing contained herein shall prevent either
party from, initiating a civil action for temporary or permanent injunctive and
other equitable relief against the other for a breach of this Agreement. The
parties expressly consent to the jurisdiction and venue of the Superior Court
of Fulton County, Georgia and the United States District Court for the Northern
District of Georgia, Atlanta Division for the adjudication of any civil action
asserted pursuant to this Paragraph.
(f) There is no relationship or partnership, agency, employment,
franchise or joint venture between the parties. Neither party has the authority
to bind the other or incur any obligation on its behalf.
(g) This Agreement and the rights hereunder may not be assigned by
either party (except by operation of law or merger) and shall be binding upon
and inure to the benefit of the parties and their respective successors,
assigns and legal representatives.
(h) Consultant is a broker-dealer in good standing and is
registered with the NASD and the SEC. Consultant is not a party to any
proceeding or action which would prevent it from performing services pursuant
to this Agreement.
(i) Sections 4 and 5 shall survive the expiration or termination
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date hereof.
BIOSHIELD TECHNOLOGIES, INC.
By: /s/ Timothy C. Moses
-------------------------
Name: Timothy C. Moses
Title: CEO
GRAYSON FINANCIAL, LLC
By: /s/ Gregory deRocco
-------------------------
Name: Gregory deRocco
Title: CEO
<PAGE> 1
EXHIBIT 10.25
FINANCIAL ADVISORY AND CONSULTING AGREEMENT
This agreement ("Agreement") is made and entered into this 1st day of
April, 1999, between BioShield Technologies, Inc., a Georgia corporation (the
"Company"), and C.L.R. Associates (the "Consultant").
In consideration of and for the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Purpose. The Company hereby retains the Consultant on a
non-exclusive basis during the term specified to render consulting advice to the
Company as the Company may reasonably request relating to financial and similar
matters, upon the terms and conditions as set forth herein.
2. Term and Compensation. This Agreement shall be effective for a
period of three months commencing on the date first written above (the
"Engagement Period"). During the Engagement Period, the Company shall pay the
Consultant a monthly fee payable in arrears of $5000 per month (the "Monthly
Fee"). At the end of the Engagement Period, the Company may determine in its
sole discretion to award to Consultant as additional compensation, a warrant to
purchase up to 240,000 shares of common stock of the Company (the "Warrant").
The Warrant if and when issued shall be exercisable for a period of five years
at an exercise price of $5.00 per share, subject to proportional adjustment in
the event of a stock split.
3. Duties of Consultant. During the term of this Agreement, the
Consultant will provide the Company with such regular and customary
non-exclusive consulting advice as is reasonably requested by the Company,
provided that the Consultant shall not be required to undertake duties not
reasonable within the scope of the consulting advisory services contemplated by
this Agreement. In performance of these duties, the Consultant shall provide the
Company with the benefits of its best judgment and efforts. It is understood and
acknowledged by the parties that the value of the Consultant's advice is not
measurable in any quantitative manner, and that the Consultant shall not be
obligated to spend any specific amount of time doing so. The Consultant's duties
may at the direction of the Company include, but not necessarily be limited to
on a non-exclusive basis:
A. Providing sponsorship and exposure in connection with the
dissemination of corporate information regarding the Company to the investment
community at large.
B. Assisting in the Company's financial public relations, including
discussions between the Company and the financial community.
C. Advice regarding the financial structure of the Company and its
divisions or subsidiaries or any programs and projects, as such issues relate to
the public market for the Company's equity securities.
<PAGE> 2
D. Rendering advice with respect to any acquisition program of the
Company, as such program relates to the public market for the Company's equity
securities.
E. Rendering advice regarding the public market for the Company's
securities and the timing and structure of any future public offering of the
Company's equity securities.
It is expressly understood that no actual or express authority on
behalf of the Company is granted by the Company hereunder to Consultant.
4. Relationships with others. The Company acknowledges that the
Consultant or its affiliates is in the business of providing, among other
things, financial service and consulting advice (of all types contemplated by
this Agreement) to others. Nothing herein contained shall be construed to limit
or restrict the Consultant in conducting such business with respect to others,
or in rendering such advise to others. In connection with the rendering of
services hereunder, Consultant has been or will be furnished with confidential
information concerning the Company including, but not limited to, financial
statements and information, cost and expense data, production data, trade
secrets, marketing and customer data, and such other information not generally
obtained from public or published information or trade sources. Such information
shall be deemed "Confidential Material" and, except as specifically provided
herein, shall not be disclosed by Consultant or its employees or agents without
prior written consent of the Company. In the event Consultant is required by
applicable law or legal process to disclose any of the Confidential Material, it
is agreed that Consultant will deliver to the Company immediate notice of such
requirement prior to disclosure of same to permit the Company to seek an
appropriate protective order and/or waive compliance of this provision. If, in
the absence of a protective order or receipt of written waiver, Consultant is
nonetheless, in the reasonable written opinion of Consultant's counsel,
compelled to disclose any Confidential Material, Consultant may do so without
liability hereunder provided that notice of such prospective disclosure is
delivered to the Company at least five (5) days prior to actual disclosure,
Following the termination of this Agreement, Consultant shall deliver to the
Company all Confidential Material. Neither party hereto will issue any public
announcement concerning this Agreement without the approval of the other party,
provided however that nothing shall prevent the Company from fulfilling its
obligations to disclose the contents of this Agreement with the U.S. Securities
& Exchange Commission (the "SEC").
5. Consultant's Liability. The Consultant agrees to defend, indemnify,
and hold the Company, its officers, directors, employees, advisors, attorneys
and agents harmless from and shall indemnify the foregoing persons and entities
against any and all costs, expenses and liability (including reasonable
attorney's fees paid in connection with the investigation and/or the defense of
the such entities and persons) which may in any way result from a breach of any
representation, warranty or covenant made by Consultant or from any services
rendered by the Consultant pursuant to or in any connection with this Agreement.
6. Expenses. The Company, upon receipt of appropriate supporting
documentation, shall reimburse the Consultant for any and all reasonable and
actual out-of-pocket expenses incurred in connection with services provided to
the Company, subject in each case to prior written approval of the Company.
<PAGE> 3
7. Limitation Upon the Use of Advice and Services.
(a) No person or entity, other than the Company or any of its
subsidiaries or directors or officers of each of the foregoing, shall be
entitled to make use of or rely upon the advice of the Consultant to be given
hereunder.
(b) It is clearly understood that the Consultant, for services rendered
under this Agreement, makes no commitment whatsoever as to recommend or advise
its clients to purchase the securities of the Company. Research reports or
corporate finance reports that may be prepared by the Consultant will, when and
if prepared, be done solely on the merits or judgment of analysts of the
Consultant or any senior finance personnel of the Consultant.
(c) Use of the Consultant's name in annual reports or any other report
of the Company or releases by the Company must have the prior approval of the
Consultant unless the Company is required by law to include Consultant's name in
such annual reports, other report or release of the Company, in which event
Consultant will be furnished with copies of such annual reports or other reports
or releases using Consultant's name in advance of publication by the Company.
8. Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is deemed unlawful or invalid for any
reason whatsoever, such unlawfulness or invalidity shall not affect the validity
of this Agreement.
9. Miscellaneous.
(a) Any notice or other communication between parties hereto shall be
sufficiently given if sent by certified or registered mail, postage prepaid, or
faxed and confirmed if to the Company, addressed to it at BioShield
Technologies, Inc., Attention: Timothy C. Moses, 4405 International Blvd., Suite
B109, Norcross, Georgia 30093 or if to the Consultant, addressed to it at C.L.R.
Associates,_______________________________________, Attention:___________. Such
notice or other communication shall be deemed to be given on the date of
receipt.
(b) If the Consultant shall cease to do business, the provisions hereof
relating to duties of the Consultant and all compensation to be paid by the
Company as it applies to the Consultant shall thereupon terminate and cease to
be in effect.
(c) This Agreement embodies the entire agreement and understanding
between the Company and the Consultant and supersedes any and all negotiations,
prior discussions and preliminary and prior agreements and understandings
related to the central subject matter hereof.
(d) This Agreement has been duly authorized, executed and delivered by
and on behalf of the Company and the Consultant.
(e) The validity, interpretation, and construction of this Agreement
will be governed by the laws of the State of Georgia applicable to contracts
entered into and performed entirely with said state without regard to the
principles of conflict of laws. Any dispute or controversy between the parties
arising in connection with this Agreement or the subject matter contemplated by
this Agreement shall be resolved by arbitration before a three-member panel of
the American Arbitration Association in accordance with the commercial
arbitration rules of said forum and
<PAGE> 4
the Federal Arbitration Act, 9 U.S.C. 1 et seq., with the resulting award being
final and conclusive. Said arbitrators shall be empowered to award all forms of
relief and damages claimed, including, but not limited to, attorney's fees,
expenses of litigation and arbitration, exemplary damages, and prejudgment
interest. The parties further agree that any arbitration action between them
shall be heard in Atlanta, Georgia. Notwithstanding anything contained herein to
the contrary, nothing contained herein shall prevent either party from,
initiating a civil action for temporary or permanent injunctive and other
equitable relief against the other for a breach of this Agreement. The parties
expressly consent to the jurisdiction and venue of the Superior Court of Fulton
County, Georgia and the United States District Court for the Northern District
of Georgia, Atlanta Division for the adjudication of any civil action asserted
pursuant to this Paragraph.
(f) There is no relationship or partnership, agency, employment,
franchise or joint venture between the parties. Neither party has the authority
to bind the other or incur any obligation on its behalf.
(g) This Agreement and the rights hereunder may not be assigned by
either party (except by operation of law or merger) and shall be binding upon
and inure to the benefit of the parties and their respective successors, assigns
and legal representatives.
(h) Consultant is not a party to any proceeding or action which would
prevent it from performing services pursuant to this Agreement.
(i) Sections 4 and 5 shall survive the expiration or termination of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date hereof.
BIOSHIELD TECHNOLOGIES, INC.
By: /s/ Timothy C. Moses
---------------------
Name: Timothy C. Moses
Title: CEO
C.L.R. ASSOCIATES
By: /s/ Burt Rhodes
-----------------
Name: Burt Rhodes
Title: President
<PAGE> 1
EXHIBIT 10.26
CERTIFICATE OF INCORPORATION
OF
ALLERGY SUPERSTORE.COM, INC.
ARTICLE I
The name of the corporation is Allergy Superstore.com, Inc.
ARTICLE II
The address of the registered office of the corporation in the State of
Delaware is 15 East North Street, City of Dover, County of Kent. The name of its
registered agent at that address is Incorporating Services, Ltd.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock which the corporation
has the authority to issue is One Hundred Million (100,000,000) shares,
consisting of two classes: Ninety-Five Million (95,000,000) shares of Common
Stock, $0.001 par value per share, and Five Million (5,000,000) shares of
Preferred Stock, $0.001 par value per share.
The Board of Directors is authorized, subject to any limitations prescribed
by the law of the State of Delaware, to provide for the issuance of the shares
of Preferred Stock in one or more series, and, by filing a Certificate of
Designation pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each such
series, to fix the designation, powers, preferences and rights of the shares of
each such series and any qualifications, limitations or restrictions thereof,
and to increase or decrease the number of shares of any such series (but not
below the number of shares of such series then outstanding). The number of
authorized shares of Preferred Stock may also be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the stock of the corporation entitled to vote,
unless a vote of any other holders is required pursuant to a Certificate or
Certificates establishing a series of Preferred Stock.
Except as otherwise expressly provided in any Certificate of Designation
designating any series of Preferred Stock pursuant to the foregoing provisions
of this Article IV, any new series of Preferred Stock may be designated, fixed
and determined as provided herein by the Board of Directors without approval of
the holders of Common Stock or the
<PAGE> 2
holders of Preferred Stock, or any series thereof, and any such new series may
have powers, preferences and rights, including, without limitation, voting
rights, dividend rights, liquidation rights, redemption rights and conversion
rights, senior to, junior to or pari passu with the rights of the Common Stock,
the Preferred Stock, or any future class or series of Preferred Stock or Common
Stock.
ARTICLE V
The name and address of the incorporator is Raymond L. Moss, Esq., Sims
Moss Kline & Davis LLP, 400 Northpark Town Center, Suite 310, 1000 Abernathy
Road, N.E., Atlanta, Georgia 30328.
ARTICLE VI
The Board of Directors of the corporation shall have the power to
adopt, amend or repeal Bylaws of the corporation.
ARTICLE VII
A. Election of directors need not be by written ballot unless the
Bylaws of the corporation shall so provide.
B. The directors, other than those who may be elected by the holders of
Preferred Stock under specified circumstances, shall be divided into three
classes with the term of office of the first class (Class I) to expire at the
annual meeting of the stockholders held in 2000; the term of office of the
second class (Class II) to expire at the annual meeting of stockholders held in
2001; the term of office of the third class (Class III) to expire at the annual
meeting of stockholders held in 2002; and thereafter for each such term to
expire at each third succeeding annual meeting of stockholders after such
election. All directors shall hold office until the expiration of the term for
which elected, and until their respective successors are elected, except in the
case of the death, resignation, or removal of any director.
C. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation or other cause may be filled (a) by the
stockholders at any meeting, (b) by a majority of the directors, although less
than a quorum, or (c) by a sole remaining director, and directors so chosen
shall hold office for a term expiring at the next annual meeting of stockholders
at which the term of office of the class to which they have been elected
expires, and until their respective successors are elected, except in the case
of the death, resignation, or removal of any director. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.
<PAGE> 3
D. Any action required or permitted to be taken by the stockholders of
the corporation may be effected by any consent in writing by such stockholders.
E. Special meetings of stockholders of the corporation may be called
only by either the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption), the Chairman of the Board or
the Chief Executive Officer.
ARTICLE VIII
A. To the fullest extent permitted by law, no director of the
corporation shall be personally liable for monetary damages for breach of
fiduciary duty as a director. Without limiting the effect of the preceding
sentence, if the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of a director of the corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
B. To the fullest extent permitted by applicable law, this corporation
is also authorized to provide indemnification of (and advancement of expenses
to) agents (and any other persons to which Delaware law permits this corporation
to provide indemnification) through bylaw provisions, agreements with such
agents or other persons, vote of stockholders or disinterested directors or
otherwise, in excess of the indemnification and advancement otherwise permitted
by Section 145 of the Delaware General Corporation Law, subject only to limits
created by applicable Delaware law (statutory or non-statutory), with respect to
actions for breach of duty to the corporation, its stockholders, and others.
C. Neither any amendment nor repeal of this Article VII, nor the
adoption of any provision of this Certificate of Incorporation inconsistent with
this Article VII, shall eliminate, reduce or otherwise adversely affect any
limitation on the personal liability of a director of the corporation existing
at the time of such amendment, repeal or adoption of such an inconsistent
provision.
IN WITNESS WHEREOF, this Certificate of Incorporation of Allergy
Superstore.com, Inc. has been signed and attested as of this 28th day of April,
1999.
By: /s/ Raymond L. Moss
---------------------------------
Raymond L. Moss
Incorporator
<PAGE> 4
ATTEST:
- ----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE> 1
EXHIBIT 10.27
BYLAWS
OF
ALLERGY SUPERSTORE.COM, INC.
(A DELAWARE CORPORATION)
ARTICLE I
STOCKHOLDERS
Section 1.1: Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as the Board of Directors shall each
year fix. Any other proper business may be transacted at the annual meeting.
Section 1.2: Special Meetings. Special meetings of the stockholders,
for any purpose or purposes described in the notice of the meeting, may be
called only by (i) the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board of Directors for adoption), (ii) the
Chairman of the Board or (iii) the Chief Executive Officer and shall be held at
such place, on such date, and at such time as they shall fix. Business
transacted at special meetings shall be confined to the purpose or purposes
stated in the notice.
Section 1.3: Notice of Meetings. Written notice of all meetings of
stockholders shall be given stating the place, date and time of the meeting and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise required by applicable law or the Certificate of
Incorporation of the Corporation as currently in effect (the "Certificate of
Incorporation"), such notice shall be given not less than ten (10) nor more than
sixty (60) days before the date of the meeting to each stockholder entitled to
vote at such meeting, by leaving such notice with him or her or at his or her
residence or usual place of business, or by depositing it postage prepaid in the
United States mail, directed to each stockholder at his or her address as it
appears on the records of the corporation. An affidavit of the Secretary,
Assistant Secretary, or transfer agent of the corporation that the notice has
been given shall, in the absence of fraud, be prima facie evidence of the facts
stated therein. No notice need be given to any person with whom communication is
unlawful or to any person who has waived such notice either (a) in writing
(which writing need not specify the business to be transacted at, or the purpose
of, the meeting) signed by such person before or after the time of the meeting
or (b) by attending the meeting except for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
<PAGE> 2
Section 1.4: Adjournments. Any meeting of stockholders may adjourn from
time to time to reconvene at the same or another place, and notice need not be
given of any such adjourned meeting if the time, date and place thereof are
announced at the meeting at which the adjournment is taken; provided, however,
that if the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, then a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting. At the adjourned meeting the Corporation may transact
any business that might have been transacted at the original meeting.
Section 1.5: Quorum. At each meeting of stockholders the holders of a
majority of the shares of stock entitled to vote at the meeting, present in
person or represented by proxy, shall constitute a quorum for the transaction of
business, except if otherwise required by applicable law. Where a separate vote
by a class or classes is required, a majority of the shares of such class or
classes then outstanding and entitled to vote present in person or by proxy
shall constitute a quorum entitled to take action with respect to that vote on
that matter. If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares entitled to vote who are
present, in person or by proxy, at the meeting may adjourn the meeting. Shares
of the Corporation's stock belonging to the Corporation (or to another
corporation, if a majority of the shares entitled to vote in the election of
directors of such other corporation are held, directly or indirectly, by the
Corporation), shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
Corporation or any other corporation to vote any shares of the Corporation's
stock held by it in a fiduciary capacity.
Section 1.6: Organization. Meetings of stockholders shall be presided
over by such person as the Board of Directors may designate, or, in the absence
of such a person, the Chairman of the Board, or, in the absence of such person,
the President of the Corporation, or, in the absence of such person, such person
as may be chosen by the holders of a majority of the shares entitled to vote who
are present, in person or by proxy, at the meeting. Such person shall be
chairman of the meeting and, subject to Section 1.11 hereof, shall determine the
order of business and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of discussion as seems to him or her to be
in order. The Secretary of the Corporation shall act as secretary of the
meeting, but in his or her absence the chairman of the meeting may appoint any
person to act as secretary of the meeting.
Section 1.7: Voting; Proxies. Unless otherwise provided by law or the
Certificate of Incorporation, and subject to the provisions of Section 1.8 of
these Bylaws, each stockholder shall be entitled to one (1) vote for each share
of stock held by such stockholder of record according to the records of the
corporation. Persons holding stock in a fiduciary capacity shall be entitled to
vote the shares so held. Persons whose stock is pledged shall be entitled to
vote unless the pledgor in a transfer on the books of the corporation has
expressly empowered the pledgee to vote the pledged shares, in which case only
the pledgee or his or her proxy shall be entitled to vote. Each stockholder
entitled to vote at a meeting of stockholders may authorize another person or
persons to act for such stockholder by proxy. Such a proxy may be prepared,
transmitted and delivered in any manner permitted by applicable law. Voting at
meetings of stockholders need not be by written ballot unless such is demanded
at the meeting before voting
<PAGE> 3
begins by a stockholder or stockholders holding shares representing at least one
percent (1%) of the votes entitled to vote at such meeting, or by such
stockholder's or stockholders' proxy; provided, however, that an election of
directors shall be by written ballot if demand is so made by any stockholder at
the meeting before voting begins. If a vote is to be taken by written ballot,
then each such ballot shall state the name of the stockholder or proxy voting
and such other information as the chairman of the meeting deems appropriate.
Unless otherwise provided in the Certificate of Incorporation or a Certificate
of Designation relating to a series of Preferred Stock, directors shall be
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. Unless otherwise provided by applicable law, the Certificate of
Incorporation or these Bylaws, every matter other than the election of directors
shall be decided by the affirmative vote of the holders of a majority of the
shares of stock entitled to vote thereon that are present in person or
represented by proxy at the meeting and are voted for or against the matter.
Section 1.8 Action at Meeting. When a quorum is present at any meeting,
action of the stockholders on any matter properly brought before such meeting,
other than the election of directors, shall require, and may be effected by, the
affirmative vote of the holders of a majority in interest of the stock present
or represented by proxy and entitled to vote on the subject matter, except where
a different vote is expressly required by law, the Certificate of Incorporation
or these Bylaws, in which case such express provision shall govern and control.
The election of directors shall be determined by a plurality of votes cast. If
the Certificate of Incorporation so provides, no ballot shall be required for
the election of directors unless requested by a stockholder present or
represented at the meeting and entitled to vote in the election.
Section 1.9: Fixing Date for Determination of Stockholders of Record.
(a) Generally. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not precede the date upon which the resolution fixing the record
date is adopted by the Board of Directors and which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) days prior to any other action. If no record date is fixed by the
Board of Directors, then the record date shall be as provided by applicable law.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 1.10: List of Stockholders Entitled to Vote. A complete list of
stockholders entitled to vote at any meeting of stockholders, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in the name of each stockholder, shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
<PAGE> 4
also be produced and kept at the time and place of the meeting during the whole
time thereof and may be inspected by any stockholder who is present at the
meeting.
Section 1.11: Inspectors of Elections.
(a) Applicability. Unless otherwise provided in the Corporation's
Certificate of Incorporation or required by the Delaware General Corporation
Law, the following provisions of this Section 1.11 shall apply only if and when
the Corporation has a class of voting stock that is: (i) listed on a national
securities exchange; (ii) authorized for quotation on an interdealer quotation
system of a registered national securities association; or (iii) held of record
by more than 2,000 stockholders; in all other cases, observance of the
provisions of this Section 1.11 shall be optional, and at the discretion of the
Corporation.
(b) Appointment. The Corporation shall, in advance of any meeting of
stockholders, appoint one or more inspectors of election to act at the meeting
and make a written report thereof. The Corporation may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person
presiding at the meeting shall appoint one or more inspectors to act at the
meeting.
(c) Inspector's Oath. Each inspector of election, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector with strict impartiality and according to the best of
his ability.
(d) Duties of Inspectors. At a meeting of stockholders, the inspectors
of election shall (i) ascertain the number of shares outstanding and the voting
power of each share, (ii) determine the shares represented at a meeting and the
validity of proxies and ballots, (iii) count all votes and ballots, (iv)
determine and retain for a reasonable period of time a record of the disposition
of any challenges made to any determination by the inspectors, and (v) certify
their determination of the number of shares represented at the meeting, and
their count of all votes and ballots. The inspectors may appoint or retain other
persons or entities to assist the inspectors in the performance of the duties of
the inspectors.
(e) Opening and Closing of Polls. The date and time of the opening and
the closing of the polls for each matter upon which the stockholders will vote
at a meeting shall be announced by the inspectors at the meeting. No ballot,
proxies or votes, nor any revocations thereof or changes thereto, shall be
accepted by the inspectors after the closing of the polls unless the Court of
Chancery upon application by a stockholder shall determine otherwise.
(f) Determinations. In determining the validity and counting of proxies
and ballots, the inspectors shall be limited to an examination of the proxies,
any envelopes submitted with those proxies, any information provided in
connection with proxies in accordance with Section 212(c)(2) of the Delaware
General Corporation Law, ballots and the regular books and records of the
Corporation, except that the inspectors may consider other reliable information
for the limited purpose of reconciling proxies and ballots submitted by or on
behalf of banks, brokers, their nominees or similar persons which represent more
votes than the holder of a proxy is
<PAGE> 5
authorized by the record owner to cast or more votes than the stockholder holds
of record. If the inspectors consider other reliable information for the limited
purpose permitted herein, the inspectors at the time they make their
certification of their determinations pursuant to this Section 1.11 shall
specify the precise information considered by them, including the person or
persons from whom they obtained the information, when the information was
obtained, the means by which the information was obtained and the basis for the
inspectors' belief that such information is accurate and reliable.
Section 1.12: Notice of Stockholder Business; Nominations.
(a) Annual Meeting of Stockholders.
(i) Nominations of persons for election to the Board of Directors and
the proposal of business to be considered by the stockholders shall be made at
an annual meeting of stockholders (A) pursuant to the corporation's notice of
such meeting, (B) by or at the direction of the Board of Directors or (C) by any
stockholder of the corporation who was a stockholder of record at the time of
giving of the notice provided for in this Section 1.12, who is entitled to vote
at such meeting and who complies with the notice procedures set forth in this
Section 1.12.
(ii) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (C) of subparagraph (a)(i) of
this Section 1.12, the stockholder must have given timely notice thereof in
writing to the Secretary of the corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice must be delivered to the Secretary at the principal
executive offices of the corporation not later than the close of business on the
sixtieth (60th) day nor earlier than the close of business on the ninetieth
(90th) day prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the annual
meeting is more than thirty (30) days before or more than sixty (60) days after
such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such annual meeting or the close of
business on the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made by the corporation. Such stockholder's
notice shall set forth: (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected; (b) as to
any other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(1) the name and address of such stockholder, as they appear on the
corporation's books, and of such beneficial owner, and (2) the class and number
of shares of
<PAGE> 6
the corporation that are owned beneficially and held of record by such
stockholder and such beneficial owner.
(iii) Notwithstanding anything in the second sentence of subparagraph
(a)(ii) of this Section 1.12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the corporation is
increased and there is no public announcement by the corporation naming all of
the nominees for director or specifying the size of the increased board of
directors at least seventy (70) days prior to the first anniversary of the
preceding year's annual meeting (or, if the annual meeting is held more than
thirty (30) days before or sixty (60) days after such anniversary date, at least
seventy (70) days prior to such annual meeting), a stockholder's notice required
by this Section 1.12 shall also be considered timely, but only with respect to
nominees for any new positions created by such increase, if it shall be
delivered to the Secretary of the corporation at the principal executive office
of the corporation not later than the close of business on the tenth (10th) day
following the day on which such public announcement is first made by the
corporation.
(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the corporation's notice of such meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
corporation's notice of such meeting (i) by or at the direction of the Board of
Directors or (ii) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice of
the special meeting, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this Section 1.12. In the event
the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the corporation's notice of meeting, if the
stockholder's notice required by subparagraph (a)(ii) of this Section 1.12 shall
be delivered to the Secretary of the corporation at the principal executive
offices of the corporation not earlier than the ninetieth (90th) day prior to
such special meeting and not later than the close of business on the later of
the sixtieth (60th) day prior to such special meeting or the tenth (10th) day
following the day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting.
(c) General.
(i) Only such persons who are nominated in accordance with the
procedures set forth in this Section 1.12 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 1.12. Except as otherwise provided by law or these
bylaws, the chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made or proposed, as the case may be, in accordance with the procedures set
forth in this Section 1.12 and, if any proposed nomination or business is not in
compliance herewith, to declare that such defective proposal or nomination shall
be disregarded.
<PAGE> 7
(ii) For purposes of this Section 1.12, the term "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the corporation with the Securities and Exchange Commission pursuant to
section 13, 14 or 15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Section 1.12, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in this Section 1.12 shall be deemed to affect any rights
of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1: Number; Qualifications. The Board of Directors shall
consist of one or more members. The initial number of directors shall be five
(5), and thereafter shall be fixed from time to time by resolution of the Board
of Directors. No decrease in the authorized number of directors constituting the
Board of Directors shall shorten the term of any incumbent director. Directors
need not be stockholders of the Corporation.
Section 2.2: Election; Resignation; Removal; Vacancies. The directors
shall be divided into three classes, with the term of office of the first class,
which class initially consists of two directors, to expire at the annual meeting
of stockholders held in 2000; the term of office of the second class, which
class initially consists of two directors, to expire at the annual meeting of
stockholders held in 2001, the term of office of the third class, which class
initially consists of one director, to expire at the annual meeting of
stockholders held in 2002; and thereafter for each such term to expire at each
third succeeding annual meeting of stockholders after such election. Subject to
the provisions of the Corporation's Certificate of Incorporation, each Director
shall serve until his or her successor is elected and qualified, or until his or
her earlier resignation or removal. Any director may resign at any time upon
written notice to the Corporation. Subject to the rights of any holders of
Preferred Stock then outstanding: (i) any director or the entire Board of
Directors may be removed, with cause, by the holders of a majority of the shares
then entitled to vote at an election of directors and (ii) any vacancy occurring
in the Board of Directors for any cause, and any newly created directorship
resulting from any increase in the authorized number of directors to be elected
by all stockholders having the right to vote as a single class, shall, unless
the Board of Directors determines by resolution that such vacancy or newly
created directorship shall be filled by the stockholders, be filled only by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director. No director nor the entire Board of Directors may be
removed without cause.
Section 2.3: Regular Meetings. Regular meetings of the Board of
Directors may be held at such places, within or without the State of Delaware,
and at such times as the Board of Directors may from time to time determine.
Notice of regular meetings need not be given if the date, times and places
thereof are fixed by resolution of the Board of Directors.
<PAGE> 8
Section 2.4: Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President or a
majority of the members of the Board of Directors then in office and may be held
at any time, date or place, within or without the State of Delaware, as the
person or persons calling the meeting shall fix. Notice of the time, date and
place of such meeting shall be given, orally or in writing, by the person or
persons calling the meeting to all directors at least four (4) days before the
meeting if the notice is mailed, or at least forty-eight (48) hours before the
meeting if such notice is given by telephone, hand delivery, telegram, telex,
mailgram, facsimile or similar communication method. Unless otherwise indicated
in the notice, any and all business may be transacted at a special meeting.
Section 2.5: Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee of the Board, may participate in a meeting of the
Board or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to
conference telephone or similar communications equipment shall constitute
presence in person at such meeting.
Section 2.6: Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the total number of authorized directors shall
constitute a quorum for the transaction of business. Except as otherwise
provided herein or in the Certificate of Incorporation, or required by law, the
vote of a majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 2.7: Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, or in his or her absence by the
President, or in his or her absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8: Written Action by Directors. Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
such committee, as the case may be, consent thereto in writing, and the writing
or writings are filed with the minutes of proceedings of the Board or committee,
respectively.
Section 2.9: Powers. The Board of Directors may, except as otherwise
required by law or the Certificate of Incorporation, exercise all such powers
and do all such acts and things as may be exercised or done by the Corporation.
Section 2.10: Compensation of Directors. Directors, as such, may
receive, pursuant to a resolution of the Board of Directors, fees and other
compensation for their services as directors, including without limitation their
services as members of committees of the Board of Directors.
<PAGE> 9
ARTICLE III
COMMITTEES
Section 3.1: Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of the committee, the
member or members thereof present at any meeting of such committee who are not
disqualified from voting, whether or not he, she or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent provided in a resolution of the Board of Directors, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers that may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the Board of Directors as provided in subsection (a) of
Section 151 of the Delaware General Corporation Law, fix the designations and
any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the Corporation, or the
conversion into, or the exchange of such shares for, shares of any other class
or classes or any other series of the same or any other class or classes of
stock of the Corporation, or fix the number of shares of any series of stock or
authorize the increase or decrease of the shares of any series), adopting an
agreement of merger or consolidation under Sections 251 or 252 of the Delaware
General Corporation Law, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the Bylaws of the Corporation; and
unless the resolution of the Board of Directors expressly so provides, no such
committee shall have the power or authority to declare a dividend, authorize the
issuance of stock or adopt a certificate of ownership and merger pursuant to
section 253 of the Delaware General Corporation Law.
Section 3.2: Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board may make, alter and repeal
rules for the conduct of its business. In the absence of such rules each
committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these Bylaws.
ARTICLE IV
OFFICERS
Section 4.1: Generally. The officers of the Corporation shall consist
of a Chief Executive Officer and/or a President, one or more Vice Presidents, a
Secretary, a Treasurer and such other officers, including a Chairman of the
Board of Directors and/or Chief Financial Officer, as may
<PAGE> 10
from time to time be appointed by the Board of Directors. All officers shall be
elected by the Board of Directors; provided, however, that the Board of
Directors may empower the Chief Executive Officer of the Corporation to appoint
officers other than the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer or the Treasurer. Each officer shall hold
office until his or her successor is elected and qualified or until his or her
earlier resignation or removal. Any number of offices may be held by the same
person. Any officer may resign at any time upon written notice to the
Corporation. Any vacancy occurring in any office of the Corporation by death,
resignation, removal or otherwise may be filled by the Board of Directors.
Section 4.2: Chief Executive Officer. Subject to the control of the
Board of Directors and such supervisory powers, if any, as may be given by the
Board of Directors, the powers and duties of the Chief Executive Officer of the
Corporation are:
(a) To act as the general manager and, subject to the control of the
Board of Directors, to have general supervision, direction and control of the
business and affairs of the Corporation;
(b) To preside at all meetings of the stockholders;
(c) To call meetings of the stockholders to be held at such times and,
subject to the limitations prescribed by law or by these Bylaws, at such places
as he or she shall deem proper; and
(d) To affix the signature of the Corporation to all deeds,
conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and
other papers and instruments in writing which have been authorized by the Board
of Directors or which, in the judgment of the Chief Executive Officer, should be
executed on behalf of the Corporation; to sign certificates for shares of stock
of the Corporation; and, subject to the direction of the Board of Directors, to
have general charge of the property of the Corporation and to supervise and
control all officers, agents and employees of the Corporation. The President
shall be the Chief Executive Officer of the Corporation unless the Board of
Directors shall designate another officer to be the Chief Executive Officer. If
there is no President, and the Board of Directors has not designated any other
officer to be the Chief Executive Officer, then the Chairman of the Board shall
be the Chief Executive Officer.
Section 4.3: Chairman of the Board. The Chairman of the Board shall
have the power to preside at all meetings of the Board of Directors and shall
have such other powers and duties as provided in these Bylaws and as the Board
of Directors may from time to time prescribe.
Section 4.4: President. The President shall be the Chief Executive
Officer of the Corporation unless the Board of Directors shall have designated
another officer as the Chief Executive Officer of the Corporation. Subject to
the provisions of these Bylaws and to the direction of the Board of Directors,
and subject to the supervisory powers of the Chief Executive Officer (if the
Chief Executive Officer is an officer other than the President), and subject to
such supervisory powers and authority as may be given by the Board of Directors
to the Chairman of the Board, and/or to any other officer, the President shall
have the responsibility for the general
<PAGE> 11
management the control of the business and affairs of the Corporation and the
general supervision and direction of all of the officers, employees and agents
of the Corporation (other than the Chief Executive Officer, if the Chief
Executive Officer is an officer other than the President) and shall perform all
duties and have all powers that are commonly incident to the office of President
or that are delegated to the President by the Board of Directors.
Section 4.5: Vice President. Each Vice President shall have all such
powers and duties as are commonly incident to the office of Vice President, or
that are delegated to him or her by the Board of Directors or the Chief
Executive Officer. A Vice President may be designated by the Board to perform
the duties and exercise the powers of the Chief Executive Officer in the event
of the Chief Executive Officer's absence or disability.
Section 4.6: Chief Financial Officer. Subject to the direction of the
Board of Directors and the President, the Chief Financial Officer shall perform
all duties and have all powers that are commonly incident to the office of chief
financial officer.
Section 4.7: Treasurer. The Treasurer shall have custody of all monies
and securities of the Corporation. The Treasurer shall make such disbursements
of the funds of the Corporation as are authorized and shall render from time to
time an account of all such transactions. The Treasurer shall also perform such
other duties and have such other powers as are commonly incident to the office
of Treasurer, or as the Board of Directors or the President may from time to
time prescribe.
Section 4.8: Secretary. The Secretary shall issue or cause to be issued
all authorized notices for, and shall keep, or cause to be kept, minutes of all
meetings of the stockholders and the Board of Directors. The Secretary shall
have charge of the corporate minute books and similar records and shall perform
such other duties and have such other powers as are commonly incident to the
office of Secretary, or as the Board of Directors or the President may from time
to time prescribe.
Section 4.9: Delegation of Authority. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.
Section 4.10: Removal. Any officer of the Corporation shall serve at
the pleasure of the Board of Directors and may be removed at any time, with or
without cause, by the Board of Directors. Such removal shall be without
prejudice to the contractual rights of such officer, if any, with the
Corporation.
ARTICLE V
STOCK
Section 5.1: Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the Corporation by the Chairman
or Vice-Chairman of the Board of Directors, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or
<PAGE> 12
the Secretary or an Assistant Secretary, of the Corporation, certifying the
number of shares owned by such stockholder in the Corporation. Any or all of the
signatures on the certificate may be a facsimile.
Section 5.2: Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The Corporation may issue a new certificate of stock in the
place of any certificate previously issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or such owner's legal representative, to agree
to indemnify the Corporation and/or to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.
Section 5.3: Other Regulations. The issue, transfer, conversion and
registration of stock certificates shall be governed by such other regulations
as the Board of Directors may establish.
ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification of Officers and Directors. Each person who
was or is made a party to, or is threatened to be made a party to, or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "proceeding"), by reason of the fact that he
or she (or a person of whom he or she is the legal representative), is or was a
director or officer of the Corporation or a Reincorporated Predecessor (as
defined below) or is or was serving at the request of the Corporation or a
Reincorporated Predecessor (as defined below) as a director, officer or employee
of another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, shall be
indemnified and held harmless by the Corporation to the fullest extent permitted
by the Delaware General Corporation Law, against all expenses, liability and
loss (including attorneys' fees, judgments, fines, ERISA excise taxes and
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith, and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that the Corporation shall indemnify any such person seeking
indemnity in connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. As used herein, the term "Reincorporated
Predecessor" means a corporation that is merged with and into the Corporation in
a statutory merger where (a) the Corporation is the surviving corporation of
such merger; (b) the primary purpose of such merger is to change the corporate
domicile of the Reincorporated Predecessor to Delaware.
Section 6.2: Advance of Expenses. The Corporation shall pay all
expenses (including attorneys' fees) incurred by such a director or officer in
defending any such proceeding as they are incurred in advance of its final
disposition; provided, however, that if the Delaware General Corporation Law
then so requires, the payment of such expenses incurred by such a director or
officer in advance of the final disposition of such proceeding shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all
<PAGE> 13
amounts so advanced if it should be determined ultimately that such director or
officer is not entitled to be indemnified under this Article VI or otherwise;
and provided, further, that the Corporation shall not be required to advance any
expenses to a person against whom the Corporation directly brings a claim, in a
proceeding, alleging that such person has breached his or her duty of loyalty to
the Corporation, committed an act or omission not in good faith or that involves
intentional misconduct or a knowing violation of law, or derived an improper
personal benefit from a transaction.
Section 6.3: Non-Exclusivity of Rights. The rights conferred on any
person in this Article VI shall not be exclusive of any other right that such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, Bylaw, agreement, vote or consent of stockholders
or disinterested directors, or otherwise. Additionally, nothing in this Article
VI shall limit the ability of the Corporation, in its discretion, to indemnify
or advance expenses to persons whom the Corporation is not obligated to
indemnify or advance expenses pursuant to this Article VI. The Board of
Directors of the Corporation shall have the power to delegate to such officer or
other person as the Board of Directors shall specify the determination of
whether indemnification shall be given to any person pursuant to this Section
6.3.
Section 6.4: Indemnification Contracts. The Board of Directors is
authorized to cause the Corporation to enter into indemnification contracts with
any director, officer, employee or agent of the Corporation, or any person
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including employee benefit plans, providing indemnification rights
to such person. Such rights may be greater than those provided in this Article
VI.
Section 6.5: Effect of Amendment. Any amendment, repeal or modification
of any provision of this Article VI shall be prospective only, and shall not
adversely affect any right or protection conferred on a person pursuant to this
Article VI and existing at the time of such amendment, repeal or modification.
ARTICLE VII
NOTICES
Section 7.1: Notice. Except as otherwise specifically provided herein
or required by law, all notices required to be given pursuant to these Bylaws
shall be in writing and may in every instance be effectively given by hand
delivery (including use of a delivery service), by depositing such notice in the
mail, postage prepaid, or by sending such notice by prepaid telegram, telex,
overnight express courier, mailgram or facsimile. Any such notice shall be
addressed to the person to whom notice is to be given at such person's address
as it appears on the records of the Corporation. The notice shall be deemed
given (i) in the case of hand delivery, when received by the person to whom
notice is to be given or by any person accepting such notice on behalf of such
person, (ii) in the case of delivery by mail, upon deposit in the mail, (iii) in
the case of delivery by overnight express courier, on the first business day
after such notice is dispatched, and (iv) in the case of delivery via telegram,
telex, mailgram, or facsimile, when dispatched.
<PAGE> 14
Section 7.2: Waiver of Notice. Whenever notice is required to be given
under any provision of these Bylaws, a written waiver of notice, signed by the
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice.
ARTICLE VIII
INTERESTED DIRECTORS
Section 8.1: Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board or committee thereof that authorizes
the contract or transaction, or solely because his, her or their votes are
counted for such purpose, if: (i) the material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board or committee
in good faith authorizes the contract or transaction by the affirmative votes of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; (ii) the material facts as to his, her or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (iii) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified by the Board of Directors, a
committee thereof, or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee which authorizes the contract or transaction.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Fiscal Year. The fiscal year of the Corporation shall be
determined by resolution of the Board of Directors.
Section 9.2: Seal. The Board of Directors may provide for a corporate
seal, which shall have the name of the Corporation inscribed thereon and shall
otherwise be in such form as may be approved from time to time by the Board of
Directors.
<PAGE> 15
Section 9.3: Form of Records. Any records maintained by the Corporation
in the regular course of its business, including its stock ledger, books of
account and minute books, may be kept on, or be in the form of, magnetic tape,
diskettes, photographs, microphotographs or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time. The Corporation shall so convert any records so
kept upon the request of any person entitled to inspect the same.
Section 9.4: Reliance Upon Books and Records. A member of the Board of
Directors, or a member of any committee designated by the Board of Directors
shall, in the performance of his or her duties, be fully protected in relying in
good faith upon records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of the Corporation's
officers or employees, or committees of the Board of Directors, or by any other
person as to matters the member reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
Section 9.5: Certificate of Incorporation Governs. In the event of any
conflict between the provisions of the Corporation's Certificate of
Incorporation and Bylaws, the provisions of the Certificate of Incorporation
shall govern.
Section 9.6: Severability. If any provision of these Bylaws shall be
held to be invalid, illegal, unenforceable or in conflict with the provisions of
the Corporation's Certificate of Incorporation, then such provision shall
nonetheless be enforced to the maximum extent possible consistent with such
holding and the remaining provisions of these Bylaws (including without
limitation, all portions of any section of these Bylaws containing any such
provision held to be invalid, illegal, unenforceable or in conflict with the
Certificate of Incorporation, that are not themselves invalid, illegal,
unenforceable or in conflict with the Certificate of Incorporation) shall remain
in full force and effect.
ARTICLE X
AMENDMENT
Section 10.1: Amendments. Subject to Section 6.5 of these Bylaws,
Stockholders of the Corporation holding at least sixty-six and two-thirds
percent of the Corporation's outstanding voting stock shall have the power to
adopt, amend or repeal Bylaws. To the extent provided in the Corporation's
Certificate of Incorporation, the Board of Directors of the Corporation shall
also have the power to adopt, amend or repeal Bylaws of the Corporation, except
insofar as Bylaws adopted by the stockholders shall otherwise provide.
<PAGE> 1
EXHIBIT 10.28
ALLERGY SUPERSTORE.COM, INC.
1999 DIRECTORS STOCK OPTION PLAN
As Adopted _________________, 1999
1. PURPOSE. This 1999 Directors Stock Option Plan (this "PLAN") is
established to provide equity incentives for certain nonemployee members of the
Board of Directors of Allergy Superstore.com, Inc. (the "COMPANY"), who are
described in Section 6.1 below, by granting such persons options to purchase
shares of stock of the Company.
2. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective
upon the adoption by the Board of Directors (the "BOARD") of the Company (the
"EFFECTIVE DATE"). This Plan shall be approved by the stockholders of the
Company, consistent with applicable laws, within twelve (12) months after the
date this Plan is adopted by the Board.
3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan shall
be non-qualified stock options ("NQSOS"). The shares of stock that may be
purchased upon exercise of Options granted under this Plan (the "SHARES") are
shares of the Common Stock of the Company.
4. NUMBER OF SHARES. The maximum number of Shares that may be issued
pursuant to Options granted under this Plan (the "MAXIMUM NUMBER") is 2,000,000
Shares, subject to adjustment as provided in this Plan. If any Option is
terminated for any reason without being exercised in whole or in part, the
Shares thereby released from such Option shall be available for purchase under
other Options subsequently granted under this Plan. At all times during the term
of this Plan, the Company shall reserve and keep available such number of Shares
as shall be required to satisfy the requirements of outstanding Options granted
under this Plan; provided, however that if the aggregate number of Shares
subject to outstanding Options granted under this Plan plus the aggregate number
of Shares previously issued by the Company pursuant to the exercise of Options
granted under this Plan equals or exceeds the Maximum Number, then
notwithstanding anything herein to the contrary, no further Options may be
granted under this Plan until the Maximum Number is increased or the aggregate
number of Shares subject to outstanding Options granted under this Plan plus the
aggregate number of Shares previously issued by the Company pursuant to the
exercise of Options granted under this Plan is less than the Maximum Number.
5. ADMINISTRATION. This Plan shall be administered by the Board or by a
committee of not less than two members of the Board appointed to administer this
Plan (the "COMMITTEE"). As used in this Plan, references to the Committee shall
mean either such Committee or the Board if no Committee has been established.
The
<PAGE> 2
interpretation by the Committee of any of the provisions of this Plan or any
Option granted under this Plan shall be final and binding upon the Company and
all persons having an interest in any Option or any Shares purchased pursuant to
an Option.
6. ELIGIBILITY AND AWARD FORMULA.
6.1 Eligibility. Options shall be granted only to directors of the
Company who are not employees of the Company or any Parent, Subsidiary or
Affiliate of the Company, as those terms are defined in Section 17 below (each
such person referred to as an "OPTIONEE").
6.2 Initial Grant. Each Optionee who first becomes a member of the
Board on or after the Effective Date will automatically be granted an Option for
30,000 Shares (an "INITIAL GRANT") on the earlier of the Effective Date or on
the date such Optionee first becomes a member of the Board.
6.3 Succeeding Grants. At each Annual Meeting of the Company, each
Optionee will automatically be granted an Option for 5,000 Shares (a "SUCCEEDING
GRANT"), provided the Optionee is a member of the Board on such date and has
served continuously as a member of the Board since the date of such Optionee's
Initial Grant or, if such Optionee was ineligible to receive an Initial Grant,
since the Effective Date.
7. TERMS AND CONDITIONS OF OPTIONS. Subject to the following and to
Section 6 above:
7.1 Form of Option Grant. Each Option granted under this Plan shall be
evidenced by a written Stock Option Grant ("GRANT") in such form (which need not
be the same for each Optionee) as the Committee shall from time to time approve,
which Grant shall comply with and be subject to the terms and conditions of this
Plan.
7.2 Vesting. The date an Optionee receives an Initial Grant or a
Succeeding Grant is referred to in this Plan as the "START DATE" for such
Option.
(a) Initial Grants. Each Initial Grant will vest as to twenty-
five percent (25%) of the Shares on the first anniversary of the Start Date for
such Initial Grant, and as to 2.08333% of the Shares on each subsequent monthly
anniversary of the Start Date, so long as the Optionee continuously remains a
director or a consultant of the Company.
(b) Succeeding Grants. Each Succeeding Grant will vest as to
twenty-five percent (25%) of the Shares on the first anniversary of the Start
Date for such Succeeding Grant, and as to 2.08333% of the Shares on each
subsequent monthly anniversary of the Start Date, so long as the Optionee
continuously remains a director or a consultant of the Company.
7.3 Exercise Price. The exercise price of an Option shall be the Fair
Market Value (as defined in Section 17.4) of the Shares, at the time that the
Option is granted.
<PAGE> 3
7.4 Termination of Option. Except as provided below in this Section,
each Option shall expire ten (10) years after its Start Date (the "EXPIRATION
DATE"). The Option shall cease to vest when the Optionee ceases to be a member
of the Board or a consultant of the Company. The date on which the Optionee
ceases to be a member of the Board or a consultant of the Company shall be
referred to as the "TERMINATION DATE". An Option may be exercised after the
Termination Date only as set forth below:
(a) Termination Generally. If the Optionee ceases to be a member
of the Board or a consultant of the Company for any reason except death of the
Optionee or disability of the Optionee (whether temporary or permanent, partial
or total, as determined by the Committee), then each Option then held by such
Optionee, to the extent (and only to the extent) that it would have been
exercisable by the Optionee on the Termination Date, may be exercised by the
Optionee no later than seven (7) months after the Termination Date, but in no
event later than the Expiration Date.
(b) Death or Disability. If the Optionee ceases to be a member of
the Board or a consultant of the Company because of the death of the Optionee or
the disability of the Optionee (whether temporary or permanent, partial or
total, as determined by the Committee), then each Option then held by such
Optionee to the extent (and only to the extent) that it would have been
exercisable by the Optionee on the Termination Date, may be exercised by the
Optionee (or the Optionee's legal representative) no later than twelve (12)
months after the Termination Date, but in no event later than the Expiration
Date.
8. EXERCISE OF OPTIONS.
8.1 Exercise Period. Subject to the provisions of Section 8.5 below,
Options shall be exercisable as they vest; provided that the Committee may
provide that such Options shall be immediately exercisable subject to repurchase
in accordance with the vesting schedule set forth in Section 7.
8.2 Notice. Options may be exercised only by delivery to the Company of
an exercise agreement in a form approved by the Committee stating the number of
Shares being purchased, the restrictions imposed on the Shares and such
representations and agreements regarding the Optionee's investment intent and
access to information as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
8.3 Payment. Payment for the Shares purchased upon exercise of an
Option may be made (a) in cash or by check; (b) by surrender of shares of Common
Stock of the Company that have been owned by the Optionee for more than six (6)
months (and which have been paid for within the meaning of SEC Rule 144 and, if
such shares were purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares) or were obtained by the
Optionee in the open public market, having a Fair Market Value equal to the
exercise price of the Option; (c) by waiver of
<PAGE> 4
compensation due or accrued to the Optionee for services rendered; (d) provided
that a public market for the Company's stock exists, through a "same day sale"
commitment from the Optionee and a broker-dealer that is a member of the
National Association of Securities Dealers (an "NASD DEALER") whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; (e) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the exercise price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company; or (f) by any combination of the
foregoing.
8.4 Withholding Taxes. Prior to issuance of the Shares upon exercise of
an Option, the Optionee shall pay or make adequate provision for any federal or
state withholding obligations of the Company, if applicable.
8.5 Limitations on Exercise. Notwithstanding the exercise periods set
forth in the Grant, exercise of an Option shall always be subject to the
following limitations:
(a) An Option shall not be exercisable unless such exercise is in
compliance with the Securities Act and all applicable state securities laws, as
they are in effect on the date of exercise.
(b) The Committee may specify a reasonable minimum number of
Shares that may be purchased upon any exercise of an Option, provided that such
minimum number will not prevent the Optionee from exercising the full number of
Shares as to which the Option is then exercisable.
9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee,
an Option shall be exercisable only by the Optionee or by the Optionee's
guardian or legal representative, unless otherwise determined by the Committee.
No Option may be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent and distribution,
unless otherwise determined by the Committee.
10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a stockholder with respect to any Shares subject to an Option until
the Option has been validly exercised. No adjustment shall be made for dividends
or distributions or other rights for which the record date is prior to the date
of exercise, except as provided in this Plan. The Company shall provide to each
Optionee a copy of the annual financial statements of the Company at such time
after the close of each fiscal year of the Company as they are released by the
Company to its stockholders.
<PAGE> 5
11. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration,
the number of Shares available under this Plan and the number of Shares subject
to outstanding Options and the exercise price per share of such outstanding
Options shall be proportionately adjusted, subject to any required action by the
Board or stockholders of the Company and compliance with applicable securities
laws; provided, however, that no fractional shares shall be issued upon exercise
of any Option and any resulting fractions of a Share shall be rounded up to the
nearest whole Share.
12. NO OBLIGATION TO CONTINUE AS DIRECTOR. Nothing in this Plan or any
Option granted under this Plan shall confer on any Optionee any right to
continue as a director of the Company.
13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of
Shares upon exercise of any Options shall be subject to and conditioned upon
compliance with all applicable requirements of law, including without limitation
compliance with the Securities Act, compliance with all other applicable state
securities laws and compliance with the requirements of any stock exchange or
national market system on which the Shares may be listed. The Company shall be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration or qualification requirement of any state securities laws,
stock exchange or national market system.
14. ACCELERATION OF OPTIONS ON CERTAIN CORPORATE TRANSACTIONS. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Options granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption, conversion or
replacement will be binding on all Optionees), (c) a merger in which the Company
is the surviving corporation but after which the stockholders of the Company
(other than any stockholder which merges (or which owns or controls another
corporation which merges) with the Company in such merger) cease to own their
shares or other equity interests in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction, the vesting of all options granted pursuant to this Plan
will accelerate and the options will become exercisable in full prior to the
consummation of such event at such times and on such conditions as the Committee
determines, and must be exercised, if at all, within seven months of the
consummation of said event. Any options not exercised within such seven-month
period shall expire.
<PAGE> 6
15. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan or any outstanding option, provided that the Board
may not terminate or amend the terms of any outstanding option without the
consent of the Optionee. In any case, no amendment of this Plan may adversely
affect any then outstanding Options or any unexercised portions thereof without
the written consent of the Optionee.
16. TERM OF PLAN. Options may be granted pursuant to this Plan from
time to time within a period of ten (10) years from the Effective Date.
17. CERTAIN DEFINITIONS. As used in this Plan, the following terms
shall have the following meanings:
17.1 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
17.2 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
17.3 "AFFILIATE" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
17.4 "FAIR MARKET VALUE" means, as of any date, the value of a share of
the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market,
its closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the date of determination on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading as reported in The Wall Street Journal;
<PAGE> 7
(c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date
of determination as reported in The Wall Street Journal;
(d) in the case of an Option granted on the Effective Date, the price
per share at which shares of the Company's Common Stock are initially offered
for sale to the public by the Company's underwriters in the initial public
offering of the Company's Common Stock pursuant to a registration statement
filed with the SEC under the Securities Act; or
(e) if none of the foregoing is applicable, by the Committee in good
faith.
<PAGE> 1
EXHIBIT 10.29
INITIAL GRANT
ALLERGY SUPERSTORE.COM, INC.
1999 DIRECTORS STOCK OPTION PLAN
DIRECTORS NONQUALIFIED INITIAL STOCK OPTION GRANT
This Stock Option Grant (this "GRANT") is made and entered into as of
the Date of Grant set forth below (the "DATE OF GRANT") by and between Allergy
Superstore.com, Inc., a Delaware corporation (the "COMPANY"), and the Optionee
named below ("OPTIONEE"). Capitalized terms not defined herein shall have the
meanings ascribed to them in the Company's 1999 Director's Stock Option Plan
(the "PLAN").
Optionee:_________________________________________________________
Optionee's Address:_______________________________________________
_______________________________________________
Total Shares Subject to Option: 30,000
Exercise Price Per Share:_________________________________________
Date of Grant:____________________________________________________
Expiration Date:__________________________________________________
(unless earlier terminated under Section 4 hereof)
1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(this "OPTION") to purchase up to the total number of shares of Common Stock of
the Company set forth above as Total Shares Subject to Option (collectively, the
"SHARES") at the Exercise Price Per Share set forth above (the "EXERCISE
PRICE"), subject to all of the terms and conditions of this Grant and the Plan.
2. EXERCISE AND VESTING OF OPTION. Subject to the terms and conditions
of the Plan and this Grant, this Option shall be exercisable as it vests.
Subject to the terms and conditions of the Plan and this Grant, this Option
shall vest as to twenty-five percent (25%) of the Shares on the first annual
anniversary of the Date of Grant and as to 2.08333% of the Shares on each
subsequent monthly anniversary of the Date of Grant, so long as the Optionee
continuously remains a member of the Board of Directors (a "BOARD MEMBER") or a
consultant of the Company.
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless
such exercise is in compliance with the Securities Act, and all applicable state
securities laws, as they are in effect on the date of exercise, and the
requirements of any stock exchange or national market system on which the
Company's Common Stock may be
<PAGE> 2
listed at the time of exercise. Optionee understands that the Company is under
no obligation to register, qualify or list the Shares with the SEC, any state
securities commission or any stock exchange or national market system to effect
such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section,
this Option shall terminate and may not be exercised if Optionee ceases to be a
Board Member or consultant of the Company. The date on which Optionee ceases to
be a Board Member or consultant of the Company shall be referred to as the
"TERMINATION DATE."
4.1 Termination Generally. If Optionee ceases to be a Board Member or
consultant of the Company for any reason except death or disability, then this
Option, to the extent that it has vested as of the Termination Date, may be
exercised by Optionee no later than seven (7) months after the Termination Date,
but in no event later than the Expiration Date.
4.2 Death or Disability. If Optionee ceases to be a Board Member or
consultant of the Company because of the death of Optionee or the disability of
Optionee (whether temporary or permanent, partial or total, as determined by the
Committee) then this Option, to the extent that it has vested as of the
Termination Date, may be exercised by Optionee (or Optionee's legal
representative) no later than twelve (12) months after the Termination Date, but
in no event later than the Expiration Date.
5. MANNER OF EXERCISE.
5.1 Exercise Agreement. This Option shall be exercisable by delivery to
the Company of an executed written Directors Stock Option Exercise Agreement in
the form attached hereto as Exhibit A, or in such other form as may be approved
by the Committee, which shall set forth Optionee's election to exercise some or
all of this Option, the number of Shares being purchased, any restrictions
imposed on the Shares and such other representations and agreements as may be
required by the Company to comply with applicable securities laws.
5.2 Payment. Payment for the Shares purchased upon exercise of this
Option may be made (a) in cash or by check; (b) by surrender of shares of Common
Stock of the Company that have been owned by Optionee for more than six (6)
months (and which have been paid for within the meaning of SEC Rule 144 and, if
such shares were purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares) or were obtained by the
Optionee in the open public market, having a Fair Market Value equal to the
Exercise Price of the Option; (c) by waiver of compensation due or accrued to
Optionee for services rendered; (d) provided that a public market for the
Company's stock exists, through a "same day sale" commitment from the Optionee
and a broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD DEALER") whereby the Optionee irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased to pay for the
Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward
<PAGE> 3
the Exercise Price directly to the Company; (e) provided that a public market
for the Company's stock exists, through a "margin" commitment from the Optionee
and an NASD Dealer whereby the Optionee irrevocably elects to exercise the
Option and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Company; or (f) by any
combination of the foregoing.
5.3 Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee shall pay or make adequate provision for any
applicable federal or state withholding obligations of the Company.
5.4 Issuance of Shares. Provided that such notice and payment are in
form and substance satisfactory to counsel for the Company, the Company shall
cause the Shares to be issued in the name of Optionee or Optionee's legal
representative. To enforce any restrictions on Optionee's Shares, the Committee
may require Optionee to deposit all certificates, together with stock powers or
other instruments of transfer approved by the Committee appropriately endorsed
in blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee may
cause a legend or legends referencing such restrictions to be placed on the
certificates.
6. NONTRANSFERABILITY OF OPTION. During the lifetime of the Optionee,
this Option shall be exercisable only by Optionee or by Optionee's guardian or
legal representative, unless otherwise permitted by the Committee. This Option
may not be sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent and distribution.
7. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Committee that
administers the Plan, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Committee shall be final and
binding on the Company and on Optionee. Nothing in the Plan or this Grant shall
confer on Optionee any right to continue as a Board Member or to provide
services to the Company as a consultant.
8. ENTIRE AGREEMENT. The Plan and the Directors Stock Option Exercise
Agreement in the form attached hereto as Exhibit A, and the terms and conditions
thereof, are incorporated herein by reference. This Grant, the Plan and the
Directors Stock Option Exercise Agreement constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior understandings and agreements with respect to such
subject matter.
<PAGE> 4
ALLERGY SUPERSTORE.COM, INC.
By: _______________________________
Name: ______________________________
Title: _____________________________
<PAGE> 5
ACCEPTANCE OF STOCK OPTION GRANT
Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all of the terms and conditions of the Plan and
this Grant. Optionee acknowledges that there may be adverse tax consequences
upon exercise of this Option or disposition of the Shares and that Optionee has
been advised by the Company that Optionee should consult a qualified tax advisor
prior to such exercise or disposition.
____________________________________
__________________________, Optionee
[ACCEPTANCE SIGNATURE PAGE TO DIRECTORS NONQUALIFIED INITIAL STOCK OPTION GRANT]
<PAGE> 1
EXHIBIT 10.30
SUCCEEDING GRANT
ALLERGY SUPERSTORE.COM, INC.
1999 DIRECTORS STOCK OPTION PLAN
DIRECTORS NONQUALIFIED SUCCEEDING STOCK OPTION GRANT
This Stock Option Grant (this "GRANT") is made and entered into as of the
Date of Grant set forth below (the "DATE OF GRANT") by and between Allergy
Superstore.com, Inc., a Delaware corporation (the "COMPANY"), and the Optionee
named below ("OPTIONEE"). Capitalized terms not defined herein shall have the
meanings ascribed to them in the Company's 1999 Directors Stock Option Plan (the
"PLAN").
Optionee: __________________________________________________
Optionee's Address: __________________________________________________
__________________________________________________
Total Shares Subject to Option: 5,000
Exercise Price Per Share: __________________________________________________
Date of Grant: __________________________________________________
Expiration Date: __________________________________________________
(unless earlier terminated under Section 4 hereof)
1. GRANT OF OPTION. The Company hereby grants to Optionee an option
(this "OPTION") to purchase up to the total number of shares of Common Stock of
the Company set forth above as Total Shares Subject to Option (collectively, the
"SHARES") at the Exercise Price Per Share set forth above (the "EXERCISE
PRICE"), subject to all of the terms and conditions of this Grant and the Plan.
2. EXERCISE AND VESTING OF OPTION. Subject to the terms and conditions
of the Plan and this Grant, this Option shall be exercisable as it vests.
Subject to the terms and conditions of the Plan and this Grant, this Option
shall vest as to twenty-five percent (25%) of the Shares on the first annual
anniversary of the Date of Grant and as to 2.08333% of the Shares on each
subsequent monthly anniversary of the Date of Grant, so
<PAGE> 2
long as the Optionee continuously remains a member of the Board of Directors (a
"BOARD MEMBER") or a consultant of the Company.
3. RESTRICTION ON EXERCISE. This Option may not be exercised unless
such exercise is in compliance with the Securities Act, and all applicable state
securities laws, as they are in effect on the date of exercise, and the
requirements of any stock exchange or national market system on which the
Company's Common Stock may be listed at the time of exercise. Optionee
understands that the Company is under no obligation to register, qualify or list
the Shares with the SEC, any state securities commission or any stock exchange
or national market system to effect such compliance.
4. TERMINATION OF OPTION. Except as provided below in this Section,
this Option shall terminate and may not be exercised if Optionee ceases to be a
Board Member or consultant of the Company. The date on which Optionee ceases to
be a Board Member or consultant of the Company shall be referred to as the
"TERMINATION DATE".
4.1 Termination Generally. If Optionee ceases to be a Board Member or
consultant of the Company for any reason except death or disability, then this
Option, to the extent that it has vested as of the Termination Date, may be
exercised by Optionee no later than seven (7) months after the Termination Date,
but in no event later than the Expiration Date.
4.2 Death or Disability. If Optionee ceases to be a Board Member or
consultant of the Company because of the death of Optionee or the disability of
Optionee (whether temporary or permanent, partial or total, as determined by the
Committee) then this Option, to the extent that it has vested as of the
Termination Date, may be exercised by Optionee (or Optionee's legal
representative) no later than twelve (12) months after the Termination Date, but
in no event later than the Expiration Date.
5. MANNER OF EXERCISE.
5.1 Exercise Agreement. This Option shall be exercisable by delivery to
the Company of an executed written Directors Stock Option Exercise Agreement in
the form attached hereto as Exhibit A, or in such other form as may be approved
by the Committee, which shall set forth Optionee's election to exercise some or
all of this Option, the number of Shares being purchased, any restrictions
imposed on the Shares and such other representations and agreements as may be
required by the Company to comply with applicable securities laws.
5.2 Payment. Payment for the Shares purchased upon exercise of this
Option may be made (a) in cash or by check; (b) by surrender of shares of Common
Stock of the Company that have been owned by Optionee for more than six (6)
months (and which have been paid for within the meaning of SEC Rule 144 and, if
such shares were purchased from the Company by use of a promissory note, such
note has been fully paid with respect to such shares) or were obtained by the
Optionee in the open public market,
<PAGE> 3
having a Fair Market Value equal to the Exercise Price of the Option; (c) by
waiver of compensation due or accrued to Optionee for services rendered; (d)
provided that a public market for the Company's stock exists, through a "same
day sale" commitment from the Optionee and a broker-dealer that is a member of
the National Association of Securities Dealers (an "NASD DEALER") whereby the
Optionee irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; (e) provided that a public market for the Company's
stock exists, through a "margin" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to pledge the
Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or (f) by any combination of the
foregoing.
5.3 Withholding Taxes. Prior to the issuance of the Shares upon
exercise of this Option, Optionee shall pay or make adequate provision for any
applicable federal or state withholding obligations of the Company.
5.4 Issuance of Shares. Provided that such notice and payment are in
form and substance satisfactory to counsel for the Company, the Company shall
cause the Shares to be issued in the name of Optionee or Optionee's legal
representative. To enforce any restrictions on Optionee's Shares, the Committee
may require Optionee to deposit all certificates, together with stock powers or
other instruments of transfer approved by the Committee appropriately endorsed
in blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated, and the Committee may
cause a legend or legends referencing such restrictions to be placed on the
certificates.
6. NONTRANSFERABILITY OF OPTION. During the lifetime of the Optionee,
this Option shall be exercisable only by Optionee or by Optionee's guardian or
legal representative, unless otherwise permitted by the Committee. This Option
may not be sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent and distribution.
7. INTERPRETATION. Any dispute regarding the interpretation of this
Grant shall be submitted by Optionee or the Company to the Committee that
administers the Plan, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Committee shall be final and
binding on the Company and on Optionee. Nothing in the Plan or this Grant shall
confer on Optionee any right to continue as a Board Member or to provide
services to the Company as a consultant.
8. ENTIRE AGREEMENT. The Plan and the Directors Stock Option Exercise
Agreement in the form attached hereto as Exhibit A, and the terms and conditions
thereof, are incorporated herein by this reference. This Grant, the Plan and the
Directors Stock Option Exercise Agreement constitute the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior understandings and agreements with respect to such
subject matter.
ALLERGY SUPERSTORE.COM, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
<PAGE> 4
ACCEPTANCE OF STOCK OPTION GRANT
Optionee hereby acknowledges receipt of a copy of the Plan, represents that
Optionee has read and understands the terms and provisions thereof, and accepts
this Option subject to all of the terms and conditions of the Plan and this
Grant. Optionee acknowledges that there may be adverse tax consequences upon
exercise of this Option or disposition of the Shares and that Optionee has been
advised by the Company that Optionee should consult a qualified tax advisor
prior to such exercise or disposition.
____________________________________
__________________________, Optionee
[ACCEPTANCE SIGNATURE PAGE TO DIRECTORS NONQUALIFIED SUCCEEDING STOCK OPTION
GRANT]
<PAGE> 5
EXHIBIT A
DIRECTORS STOCK OPTION EXERCISE AGREEMENT
<PAGE> 6
EXHIBIT A
ALLERGY SUPERSTORE.COM, INC.
1999 DIRECTORS STOCK OPTION PLAN (THE "PLAN")
DIRECTORS STOCK OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of
ALLERGY SUPERSTORE.COM, INC. (the "COMPANY") as set forth below:
Optionee:_____________________________________________________
Number of Shares Purchased:___________________________________
Social Security Number:_______________________________________
Purchase Price per Share:_____________________________________
Address:______________________________________________________
Aggregate Purchase Price:_____________________________________
Date of Stock: _______________________________________________
Option Grant:_________________________________________________
Type of Stock Option: ________________________________________
Exact Name of Title to Shares:________________________________
Nonqualified Stock Option: ___________________________________
1. DELIVERY OF PURCHASE PRICE. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Directors Nonqualified
Stock Option Grant referred to above (the "GRANT") as follows (check as
applicable and complete):
[ ] in cash or by check in the amount of $___________________________,
receipt of which is acknowledged by the Company;
[ ] by delivery of _______________________ fully-paid, nonassessable
and vested shares of the Common Stock of the Company owned by Optionee
for at least six (6) months prior to the date hereof (and which have
been paid for within the meaning of SEC Rule 144), or obtained by
Optionee in the open public market, and owned free and clear of all
liens, claims, encumbrances or security interests, valued at the
current Fair Market Value of $___________________ per share;
[ ] by the waiver hereby of compensation due or accrued to Optionee for
services rendered in the amount of $_______________________________;
[ ] through a "same-day-sale" commitment, delivered herewith, from
Optionee and the NASD Dealer named therein, in the amount of
$____________________; or
<PAGE> 7
[ ] through a "margin" commitment, delivered herewith from Optionee and
the NASD Dealer named therein, in the amount of
$_________________________.
2. MARKET STANDOFF AGREEMENT. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements. Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.
3. TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.
4. ENTIRE AGREEMENT. The Plan and the Grant are incorporated herein by
reference. This Agreement, the Plan and the Grant constitute the entire
agreement of the parties and supersede in their entirety all prior
understandings and agreements of the Company and Optionee with respect to the
subject matter hereof, and are governed by Georgia law except for that body of
law pertaining to conflict of laws.
DATE:_______________________ ________________________________________
SIGNATURE OF OPTIONEE
<PAGE> 8
ALLERGY SUPERSTORE.COM, INC.
1999 DIRECTORS STOCK OPTION PLAN
SPOUSE'S CONSENT
I acknowledge that I have read the foregoing Directors Stock Option
Exercise Agreement (the "AGREEMENT") and that I know its contents. I hereby
consent to and approve all of the provisions of the Agreement and agree that the
shares of the Common Stock of Allergy Superstore.Com, Inc. purchased thereunder
(the "SHARES") and any interest I may have in such Shares are subject to all the
provisions of the Agreement. I will take no action at any time to hinder
operation of the Agreement on these Shares or any interest I may have on them.
Date:________________________
------------------------------------
SIGNATURE OF OPTIONEE'S SPOUSE
------------------------------------
SPOUSE'S NAME - TYPED OR PRINTED
------------------------------------
OPTIONEE'S NAME - TYPED OR PRINTED
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BIOSHIELD TECHNOLOGIES, INC. FOR THE 9 MONTHS ENDED
MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 2,868,543
<SECURITIES> 91,000
<RECEIVABLES> 157,254
<ALLOWANCES> 30,000
<INVENTORY> 100,350
<CURRENT-ASSETS> 3,240,721
<PP&E> 154,464
<DEPRECIATION> 34,123
<TOTAL-ASSETS> 3,476,512
<CURRENT-LIABILITIES> 173,198
<BONDS> 0
0
0
<COMMON> 6,480,738
<OTHER-SE> (3,177,424)
<TOTAL-LIABILITY-AND-EQUITY> 3,476,512
<SALES> 286,182
<TOTAL-REVENUES> 286,182
<CGS> 120,726
<TOTAL-COSTS> 610,436
<OTHER-EXPENSES> 1,148,203
<LOSS-PROVISION> 18,095
<INTEREST-EXPENSE> 16,960
<INCOME-PRETAX> (1,536,020)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,536,020)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,536,020)
<EPS-PRIMARY> (0.27)<F1>
<EPS-DILUTED> 0
<FN>
<F1>DILUTED LOSS PER COMMON SHARE IS NOT DISCLOSED BECAUSE THE EFFECT OF THE
EXCHANGE OR EXERCISE OF COMMON STOCK EQUIVALENTS WOULD BE ANTIDILUTIVE
</FN>
</TABLE>
