AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 1, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________________________________
JAWS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
98-0167013
(IRS Employer Identification Number)
1013 - 17TH AVENUE S.W.,
CALGARY, ALBERTA CANADA T2T OA7
(Address of principal executive offices)
ROBERT KUBBERNUS, CEO
JAWS TECHNOLOGIES, INC.
1013 - 17TH AVENUE S.W.,
CALGARY, ALBERTA CANADA T2T OA7
(Name and address of agent for service)
(403) 508-5055
(Telephone number, including area code of agent for service)
JAWS TECHNOLOGIES, INC.
STOCK OPTION PLAN
(Full title of the Plan)
_____________________________________________________________
COPY TO:
Robert L. Sonfield, Jr.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056-1913
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED SHARE (1) PRICE (2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value. . . 3,743,900 $ 5.16 $ 19,318,524 $ 5,854.10
<FN>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this
Registration Statement also covers indeterminate amount of interests to be offered or sold pursuant to
the employee benefit plan(s) described herein.
(2) Calculated pursuant to Rule 457(c) of the Securities Act of 1933, as amended, as permitted by Rule
457(h)(1) of the Securities Act of 1933, as amended, based upon the average of the bid and asked prices
for the Company's common shares as reported over-the-counter by the Electronic Bulletin Board on
November 29, 1999.
</TABLE>
<PAGE>
PART I
The documents containing the information specified in this Part I will be
sent or given to participants in the Stock Option Plan as specified by Rule
428(b)(1). Pursuant to the instructions for Form S-8, such documents need not
be filed with the Commission either as part of the Registration Statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents
and the documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Part II of this Registration Statement, taken together,
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933, as amended. See Rule 428(a)(1).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
-------------------------------------------
The documents listed in (a) through (c) below have been filed by the
Registrant, JAWS Technologies, Inc. ("JAWS" or the "Company"), with the
Securities and Exchange Commission (the "Commission") and are incorporated by
reference in this Registration Statement. All documents subsequently filed by
the Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) Registration Statement on Form SB-2 on October 13, 1998, a Form 8-A
on October 14, 1998 and amendments to the Registration Statement on Form SB-2 on
January 11, 1999, May 3, 1999 and August 9, 1999. The Company also filed a
Registration Statement on Form 10-SB on September 1, 1999 and amendments to that
Registration Statement on October 7, 1999, October 22, 1999, October 28, 1999
and November 1, 1999. The above referenced reports, which were previously filed
with the Commission, are incorporated herein by reference.
(b) All other reports filed pursuant to Section 13 or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Registrant's Form
10-SB referred to in (a) above.
Item 4: Description of Securities
---------------------------
Not Applicable
Item 5: Interests of Named Experts and Counsel.
-------------------------------------------
None
Item 6: Indemnification of Directors and Officers.
---------------------------------------------
The Nevada Revised Statutes provides that::
The Company has the power to indemnify its directors and officers against
liability for certain acts pursuant to the laws of Nevada, being the Company's
state of incorporation. In addition, under the Articles of Incorporation of the
Company, no director, officer or agent is personally liable to the Company or
its stockholders for monetary damages arising out of a breach of such person's
fiduciary duty to the Company, unless such breach involves intentional
misconduct, fraud or a knowing violation of law.
Liability of Directors and Officers. No director or officer shall be
---------------------------------------
personally liable to the Company or stockholders for monetary damages for any
breach of fiduciary duty by such person as a director or officer.
Notwithstanding the foregoing sentence, the director or officer shall be liable
to the extent provided by the applicable laws for acts or omissions, which
involve intentional misconduct, fraud or a knowing violation of law.
The provisions hereof shall not apply to or have any effect on the
liability or alleged liability of any officer or director of the Company for or
with respect to any acts or omissions of such person occurring prior to this
amendment. The Company's Articles state that it may, in its sole discretion
indemnify and advance expenses to any person who incurs liability or expense by
reason of such person acting as a director, officer, employee or agent of the
Company, to the fullest extent allowed by the Nevada Revised Statutes.
Section 78.7502 of the Nevada Revised Statutes provides that a corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the corporation, against
expenses, including amounts paid in settlement and attorneys' fees actually and
reasonably incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which such
a person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation or for
amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
the corporation shall indemnify him against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense.
The articles of incorporation of the Company provide that the Company will
exercise, to the extent permitted by law, its power of indemnification, and that
the foregoing right of indemnification shall not be exclusive of other rights to
which a person shall be entitled as a matter of law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
NRS 78.138 DIRECTORS AND OFFICERS: EXERCISE OF POWERS AND PERFORMANCE OF DUTIES.
1. Directors and officers shall exercise their powers in good faith and
with a view to the interests of the corporation.
2. In performing their respective duties, directors and officers are
entitled to rely on information, opinions, reports, books of account or
statements, including financial statements and other financial data, that are
prepared or presented by:
(a) One or more directors, officers or employees of the corporation
reasonably believed to be reliable and competent in the matters prepared or
presented;
(b) Counsel, public accountants, or other persons as to matters reasonably
believed to be within the preparer or presenter s professional or expert
competence; or
(c) A committee on which the director or officer relying thereon does not
serve, established in accordance with NRS 78.125, as to matters within the
committee s designated authority and matters on which the committee is
reasonably believed to merit confidence, but a director or officer is not
entitled to rely on such information, opinions, reports, books of account or
statements if he has knowledge concerning the matter in question that would
cause reliance thereon to be unwarranted.
3. Directors and officers, in exercising their respective powers with a
view to the interests of the corporation, may consider:
(a) The interests of the corporation's employees, suppliers, creditors and
customers;
(b) The economy of the state and nation;
(c) The interests of the community and of society; and
(d) The long-term as well as short-term interests of the corporation and
its stockholders, including the possibility that these interests may be best
served by the continued independence of the corporation.
This subsection does not create or authorize any causes of action against
the corporation or its directors or officers.
4. Directors may resist a change or potential change in control of the
corporation if the directors by a majority vote of a quorum determine that the
change or potential change is opposed to or not in the best interest of the
corporation:
(a) Upon consideration of the interests of the corporation's stockholders
and any of the matters set forth in subsection 3; or
(b) Because the amount or nature of the indebtedness and other obligations
to which the corporation or any successor to the property of either may become
subject in connection with the change or potential change in control provides
reasonable grounds to believe that, within a reasonable time:
(1) The assets of the corporation or any successor would be or become
less than its liabilities;
(2) The corporation or any successor would be or become insolvent; or
(3) Any voluntary or involuntary proceeding under the federal
bankruptcy laws concerning the corporation or any successor would be commenced
by any person.
Item 7. Exemption From Registration Claimed.
---------------------------------------
Not Applicable
Item 8: Exhibits
--------
The following documents are filed as Exhibits to this Registration
Statement:
4 -- Stock Option Plan
5 -- Opinion of Sonfield & Sonfield as to the authorization and issuance
of the shares being registered.
24.1 -- Consent of Sonfield & Sonfield (included in Exhibit 5)
24.2 -- Consent of Ernst & Young, LLP, Independent Accountants
Item 9: Undertakings
------------
The undersigned registrant hereby undertakes:
(a) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(b) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(c) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
<PAGE>
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Calgary, Alberta, CANADA, on the 22nd day of November, 1999.
JAWS TECHNOLOGIES, INC. JAWS TECHNOLOGIES, INC.
By: /s/ Robert Kubbernus By: /s/ Riaz Mamdani
------------------------ ------------------
Robert Kubbernus, Chief Executive Officer Riaz Mamdani,
Chief Financial Officer
<PAGE>
Exhibit 4 - Page 7
EXHIBIT 4
JAWS TECHNOLOGIES, INC.
STOCK OPTION PLAN
-----------------
1. PURPOSE. The purpose of this JAWS Technologies, Inc. Stock Option
-------
Plan ("Plan") is to further the growth and development of JAWS Technologies,
Inc. (the "Company") by providing, through ownership of stock of the Company, an
incen-tive to officers, other key employees and directors who are in a position
to contribute materially to the prosperity of the Company, to increase such
persons' interests in the Company's welfare, to encourage them to continue their
services to the Company or its subsidiaries, and to attract individuals of
outstanding ability to enter the employment of the Company or its subsidiaries,
to remain or become directors of the Company and to provide valuable services to
the Company or its subsidiaries.
2. INCENTIVE AND NON-QUALIFIED STOCK OPTIONS. Two types of Stock Options
--------------------------------------------
(referred to herein as "Options" without distinction between such two types) may
be granted under the Plan: Options intended to qualify as Incentive Stock
Options under Section 422 of the Code and Non-Qualified Stock Options not
specifically authorized or qualified for favorable income tax treatment by the
Code.
3. DEFINITIONS. The following definitions are applicable to the Plan:
-----------
3.1 BOARD. The Board of Directors of the Company.
-----
3.2 CODE. The Internal Revenue Code of 1986, as amended from time to time.
----
3.3 COMMON STOCK. The shares of the $.001 par value per share common stock
-------------
of the Company.
3.4 COMPANY. JAWS Technologies, Inc., a Delaware corporation.
-------
3.5 DISABLED OR DISABILITY. For the purposes of Section 7.4, a disability
------------------------
of the type defined in Section 22(e)(3) of the Code. The determination of
whether an individual is Disabled or has a Disability is determined under
procedures established by the Plan Administrator for purposes of the Plan.
<PAGE>
3.6 FAIR MARKET VALUE. For purposes of the Plan, the "fair market
-------------------
value" per share of Common Stock of the Company at any date shall be (a) if the
Common Stock is listed on an established stock exchange or exchanges or the
NASDAQ National Market System, the closing price per share on the last trading
day immediately preceding such date on the principal exchange on which it is
traded or as reported by NASDAQ, or (b) if the Common Stock is not then listed
on an exchange or the NASDAQ National Market System, the closing price per share
on the last trading day immediately preceding such date reported by NASDAQ, or
if sales are not reported by NASDAQ, the average of the closing bid and asked
prices per share for the Common Stock in the over-the-counter market as quoted
on NASDAQ on the last trading day immediately preceding such date, or (c) if the
Common Stock is not then listed on an exchange, the NASDAQ National Market
System or quoted on NASDAQ, an amount determined in good faith by the Plan
Administrator.
3.7 INCENTIVE STOCK OPTION. Any Stock Option intended to be and
------------------------
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
3.8 NON-QUALIFIED STOCK OPTION. Any Stock Option that is not an Incentive
----------------------------
Stock Option.
3.9 OPTIONEE. The recipient of a Stock Option.
--------
3.10 PLAN. The JAWS Technologies, Inc. Stock Option Plan, as amended from
----
time to time.
3.11 PLAN ADMINISTRATOR. The Board or the Compensation Committee designated
------------------
pursuant to Section 4.2 hereof to administer, construe and interpret the terms
of the Plan.
3.12 STOCK OPTION OR OPTION. Any option to purchase shares of Common Stock
-----------------------
granted pursuant to Section 7 hereof.
4. ADMINISTRATION.
--------------
4.1 ADMINISTRATION BY BOARD. Subject to Sec-tion 4.2 hereof, the Plan
-------------------------
Administrator shall be the Board of Directors of the Company (the "Board")
during such periods of time as all members of the Board are "outside directors"
as defined in Treas. Regs. '1.162-27(e)(3) ("outside directors"). Anything to
the contrary notwithstanding, the requirement that all members of the Board be
outside directors shall not apply for any period of time during which the
Company's Common Stock is not regis-tered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended. Subject to the provisions of the
Plan, the Plan Administrator shall have authority to construe and interpret the
Plan, to promulgate, amend, and rescind rules and regulations relating to its
administration, from time to time to select from among the eligible employees
and directors (as determined pursuant to Section 5) of the Company and its
subsidiaries those employees and directors to whom Stock Options will be
granted, to determine the timing and manner of the grant of the Options, to
determine the exercise price, the number of shares covered by and all of the
terms of the Stock Options, to determine the duration and purpose of leaves of
absence which may be granted to Stock Option holders without constituting
termination of their employment for purposes of the Plan, and to make all of the
determinations necessary or advis-able for administration of the Plan. The
interpretation and construction by the Plan Admin-istrator of any provision of
the Plan, or of any agreement issued and executed under the Plan, shall be final
and binding upon all parties. No member of the Board shall be liable for any
action or deter-mination undertaken or made in good faith with respect to the
Plan or any agreement executed pursuant to the Plan.
<PAGE>
4.2 ADMINISTRATION BY COMMITTEE. The Board may, in its sole discretion,
-----------------------------
delegate any or all of its duties as Plan Administrator and, subject to the
provisions of Section 4.1 of the Plan, at any time the Board includes any person
who is not an outside director, the Board shall delegate all of its duties as
Plan Administrator during such period of time to a compensation committee (the
"Committee") of not fewer than two (2) members of the Board, all of the members
of which Committee shall be persons who, in the opinion of counsel to the
Company, are outside directors and "non-employee directors" within the meaning
of Rule 16b-3(b)(3)(i) promulgated by the Securities and Exchange Commission, to
be appointed by and serve at the pleasure of the Board. Anything to the
contrary notwithstanding, the requirement that all members of the Committee be
non-employee directors and outside directors shall not apply for any period of
time during which the Company's Common Stock is not regis-tered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended. Those provisions
of the Plan that make express reference to Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, shall apply only to reporting persons. From
time to time, the Board may increase or decrease (to not less than two members)
the size of the Committee, and add additional members to, or remove members
from, the Committee. The Committee shall act pursuant to a majority vote, or
the written consent of a majority of its members, and minutes shall be kept of
all of its meetings and copies thereof shall be provided to the Board. Subject
to the provisions of the Plan and the directions of the Board, the Committee may
establish and follow such rules and regulations for the conduct of its business
as it may deem advisable. No member of the Committee shall be liable for any
action or determination undertaken or made in good faith with respect to the
Plan or any agreement executed pursuant to the Plan.
5. ELIGIBILITY. Any employee or director (including any officer or
-----------
director who is an employee) of the Company or any of its subsidiaries shall be
eligible to receive Options under the Plan; provided, however, that no person
who owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any of its parent or subsidiary
corporations shall be eligible to receive an Incentive Stock Option under the
Plan unless at the time such Incentive Stock Option is granted the Option price
(determined in the manner provided in Section 7.2 hereof) is at least 110% of
the Fair Market Value of the shares subject to the Option and such Option by its
terms is not exer-cisable after the expiration of five years from the date such
Option is granted. An Optionee may receive more than one Option under the Plan.
However, non-employee directors are not eligible to receive an Incentive Stock
Option under the Plan.
<PAGE>
6. SHARES SUBJECT TO OPTIONS. The stock available for grant of Options
-------------------------
under the Plan shall be shares of the Company's authorized but unissued, or
reacquired, Common Stock. The aggregate number of shares which may be issued
pursuant to exercise of Options granted under the Plan, as amended, shall not
exceed 20% of all outstanding common shares (subject to adjustment as provided
in Section 7.13 hereof), including shares previously issued under the Plan. The
maximum number of shares with respect to which options may be granted to any
employee in any one calendar year shall be 500,000 shares. In the event that
any outstanding Option under the Plan for any reason expires, or is terminated,
the shares of Common Stock allocable to the unexercised portion of the Option
shall again be available for Options under the Plan as if no Option had been
granted with respect to such shares.
7. TERMS AND CONDITIONS OF OPTIONS. Options granted under the Plan shall be
-------------------------------
evidenced by agreements (which need not be identical) in such form and
containing such provisions which are consistent with the Plan as the Plan
Administrator shall from time to time approve. Such agreements may incorporate
all or any of the terms hereof by reference and shall comply with and be subject
to the following terms and conditions:
7.1 NUMBER OF SHARES SUBJECT TO OPTION. Each Option agreement shall
-------------------------------------
specify the number of shares subject to the Option.
7.2 OPTION PRICE. The purchase price for the shares subject to any Option
-------------
shall be determined by the Plan Administrator at the time of grant, but shall
not be less than par value per share. Anything to the contrary notwithstanding,
the purchase price for the shares subject to any Incentive Stock Option shall
not be less than 100% of the Fair Market Value of the shares of Common Stock of
the Company on the date the Stock Option is granted. In the case of an
Incentive Stock Option granted to an employee who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any of its parent or subsidiary corporations, the Option price shall
not be less than 110% of the fair market value per share of the Common Stock of
the Company on the date the Option is granted.
7.3 NOTICE AND PAYMENT. Any exercisable portion of a Stock Option may be
--------------------
exercised only by:
(a) delivery of a written notice to the Company, prior to the time when
such Stock Option becomes unexercisable under Section 7.4 hereof, stating the
number of shares being purchased and complying with all applicable rules
established by the Plan Administrator;
(b) payment in full of the exercise price of such Option by, as applicable,
(i) cash or check for an amount equal to the aggregate Option exercise price for
the number of shares being purchased, (ii) in the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, a copy
of instructions to a broker directing such broker to sell the Common Stock for
which such Option is exercised, and to remit to the Company the aggregate
exercise price of such Options (a "cashless exercise"), or (iii) in the
discretion of the Plan Administrator, upon such terms as the Plan Administrator
shall approve, the Optionee may pay all or a portion of the purchase price for
the number of shares being purchased by tendering shares of the Company's Common
Stock owned by the Optionee, duly endorsed for transfer to the Company, with a
Fair Market Value on the date of delivery equal to the aggregate purchase price
of the shares with respect to which such Stock Option or portion is thereby
exercised (a "stock-for-stock exercise");
<PAGE>
(c) payment of the amount of tax required to be withheld (if any) by
the Company or any parent or subsid-iary corporation as a result of the exercise
of a Stock Option. At the discretion of the Plan Administrator, upon such terms
as the Plan Administrator shall approve, the Optionee may pay all or a portion
of the tax withholding by (i) cash or check payable to the Company, (ii)
cashless exercise, (iii) stock-for-stock exercise, or (iv) a combination of one
or more of the foregoing payment methods; and
(d) delivery of a written notice to the Company requesting that the Company
direct the transfer agent to issue to the Optionee (or to his designee) a
certificate for the number of shares of Common Stock for which the Option was
exer-cised or, in the case of a cashless exercise, for any shares that were not
sold in the cashless exercise.
Notwithstanding the foregoing, the Company may extend and main-tain, or
arrange for the extension and maintenance of, credit to any Optionee to finance
the Optionee's purchase of shares pur-suant to exercise of any Stock Option, on
such terms as may be approved by the Plan Administrator, subject to applicable
regulations of the Federal Reserve Board and any other laws or regulations in
effect at the time such credit is extended.
7.4 TERM OF OPTION. No Option shall be exercis-able after the
----------------
expiration of the earliest of (a) ten years after the date the Option is
granted, (b) three months after the date the Optionee's employment with the
Company and its subsidiaries terminates if such termination is for any reason
other than Disability or death, (c) one year after the date the Optionee's
employment with the Company and its subsidiaries terminates if such termination
is a result of death or Disability; provided, however, that the Option agreement
for any Option may provide for shorter periods in each of the foregoing
instances. In the case of an Incentive Stock Option granted to an employee who
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its parent or subsidiary corporations,
the term set forth in (a), above, shall not be more than five years after the
date the Option is granted.
7.5 EXERCISE OF OPTION. No Option shall be exercisable during the
---------------------
lifetime of an Optionee by any person other than the Optionee. Subject to the
foregoing, the Plan Administrator shall have the power to set the time or times
within which each Option shall be exercisable and to accelerate the time or
times of exercise. Unless otherwise provided by the Plan Administrator, each
Option granted under the Plan shall become exercisable on a cumulative basis as
to one-third (1/3) of the total number of shares covered thereby at any time
after one year from the date the Option is granted and an additional one-third
(1/3) of such total number of shares at any time after the end of each
consecutive one-year period thereafter until the Option has become exercisable
as to all of such total number of shares. To the extent that an Optionee has
the right to exercise an Option and purchase shares pursuant thereto, the Option
may be exercised from time to time by written notice to the Company, stating the
number of shares being purchased and accompanied by payment in full of the
exercise price for such shares.
<PAGE>
7.6 NO TRANSFER OF OPTION. No Option shall be transferable by an
------------------------
Optionee otherwise than by will or the laws of descent and distribution.
7.7 LIMIT ON INCENTIVE STOCK OPTIONS. The aggregate fair market value
---------------------------------
(determined at the time the Option is granted) of the stock with respect to
which Incentive Stock Options granted after 1986 are exercisable for the first
time by an Optionee during any calendar year (under all Incentive Stock Option
plans of the Company and its subsidiaries) shall not exceed $100,000. To the
extent that the aggregate Fair Market Value (determined at the time of the Stock
Option is granted) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year (under all Incentive Stock Option plans of the Company and any parent or
subsidiary corporations) exceeds $100,000, such Stock Options shall be treated
as Non-Qualified Stock Options. The determination of which Stock Options shall
be treated as Non-Qualified Stock Options shall be made by taking Stock Options
into account in the order in which they were granted.
7.8 RESTRICTION ON ISSUANCE OF SHARES. The issuance of Options and
-------------------------------------
shares shall be subject to compliance with all of the applicable requirements of
law with respect to the issuance and sale of securities, including, without
limita-tion, any required qualification under the California Corporate
Securities Law of 1968, as amended, or other state securities laws. If an
Optionee acquires shares of Common Stock pursuant to the exercise of an Option
at a time when the shares are not registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, the Plan Administrator, in its sole
discretion, may require as a condition of issuance of shares covered by the
Option that the shares of Common Stock shall be subject to restrictions on
transfer. The Company may place a legend on the certificates evidencing the
shares, reflecting the fact that they are subject to restrictions on transfer
pursuant to the terms of this Section. In addition, the Optionee may be
required to execute a shareholders' agreement in favor of the Company, its
designee and/or other shareholders with respect to all or any of the shares so
acquired. In such event, the terms of such agreement shall apply to such
shares.
7.9 INVESTMENT REPRESENTATION. Each Option shall contain and any
--------------------------
Optionee may be required, as a condition of the grant of the Option and the
issuance of shares covered by his or her Option, to represent that the Option
and the shares to be acquired pursuant to exercise of the Option will be
acquired for investment and without a view to distribution thereof; and in such
case, the Company may place a legend on the certificate evidencing the shares
reflecting the fact that they were acquired for investment and cannot be sold or
transferred unless registered under the Securities Act of 1933, as amended, or
unless counsel for the Company is satisfied that the circumstances of the
proposed transfer do not require such registration.
<PAGE>
7.10 RIGHTS AS A SHAREHOLDER OR EMPLOYEE. An Optionee or transferee of
-----------------------------------
an Option shall have no right as a shareholder of the Company with respect to
any shares covered by any Option until the date of the issuance of a share
certificate for such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether cash, securities, or other property) or
distributions or other rights for which the record date is prior to the date
such share certificate is issued, except as provided in Section 7.13. Nothing
in the Plan or in any Option agreement shall confer upon any employee any right
to continue in the employ of the Company or any of its subsidiaries or interfere
in any way with any right of the Company or any subsidiary to terminate the
Optionee's employment at any time.
7.11 NO FRACTIONAL SHARES. In no event shall the Company be required
----------------------
to issue fractional shares upon the exercise of an Option.
7.12 EXERCISABILITY IN THE EVENT OF DEATH. In the event of the death
--------------------------------------
of the Optionee, any Option or unexercised portion thereof granted to the
Optionee, to the extent exercis-able by him or her on the date of death, may be
exercised by the Optionee's personal representatives, heirs, or legatees subject
to the provisions of Section 7.4 hereof.
7.13 RECAPITALIZATION OR REORGANIZATION OF COMPANY. Except as
-------------------------------------------------
otherwise provided herein, appropriate and proportion-ate adjustments shall be
made in the number and class of shares subject to the Plan, to the Option rights
granted under the Plan, including the any formula grants or automatic grant
authorizations, and the exercise price of such Option rights, in the event that
the number of shares of Common Stock of the Company are increased or decreased
as a result of a stock dividend (but only on Common Stock), stock split, reverse
stock split, recapitalization, reorganization, merger, consolidation,
separation, or like change in the corporate or capital structure of the Company.
In the event there shall be any other change in the number or kind of the
outstanding shares of Common Stock of the Company, or any stock or other
securities into which such common stock shall have been changed, or for which it
shall have been exchanged, whether by reason of a complete liquidation of the
Company or a merger, reorganization, or conso-lidation of the Company with any
other corporation in which the Company is not the surviving corporation or the
Company becomes a wholly-owned subsidiary of another corporation, then if the
Plan Administrator shall, in its sole discretion, determine that such change
equitably requires an adjustment to shares of Common Stock currently subject to
Options under the Plan, or to prices or terms of outstanding Options, such
adjustment shall be made in accordance with such determination.
To the extent that the foregoing adjust-ments relate to stock or securities
of the Company, such adjustments shall be made by the Plan Administrator, the
determina-tion of which in that respect shall be final, binding, and conclusive.
No right to purchase fractional shares shall result from any adjustment of
Options pursuant to this Section. In case of any such adjustment, the shares
subject to the option shall be rounded down to the nearest whole share. Notice
of any adjustment shall be given by the Company to each Optionee whose Options
shall have been so adjusted and such adjustment (whether or not notice is given)
shall be effective and binding for all purposes of the Plan.
<PAGE>
In the event of a complete liquidation of the Company or a merger,
reorganization, or consolidation of the Company with any other corporation in
which the Company is not the surviving corporation or the Company becomes a
wholly-owned subsidiary of another corporation, any unexercised Options
theretofore granted under the Plan shall be deemed cancelled unless the
surviving corporation in any such merger, reorganization, or consolidation
elects to assume the Options under the Plan or to issue substitute Options in
place thereof; provided, however, that, notwithstanding the foregoing, if such
Options would be cancelled in accordance with the foregoing, the Optionee shall
have the right, exercisable during a ten-day period ending on the fifth day
prior to such liquidation, merger, or consolidation, to exercise such Option in
whole or in part without regard to any installment exercise provisions in the
Option agreement.
7.14 MODIFICATION, EXTENSION, AND RENEWAL OF OPTIONS. Subject to the
-------------------------------------------------
terms and conditions and within the limitations of the Plan, the Plan
Administrator may modify, extend, or renew outstanding Options granted under the
Plan, and accept the surrender of outstanding Options (to the extent not
theretofore exercised). The Plan Administrator shall not, however, modify any
outstanding Incentive Stock Option in any manner which would cause the Option
not to qualify as an Incen-tive Stock Option within the meaning of Section 422
of the Code. Notwithstanding the foregoing, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights of the Optionee
under the Option. However, a termination of the Option in which the Optionee
receives a cash payment equal to the difference between the Fair Market Value
and the exercise price for all shares subject to exercise under any outstanding
Option shall not alter or impair any rights of the Optionee.
7.15 OTHER PROVISIONS. Each Option may contain such other terms,
-----------------
provisions, and conditions not inconsistent with the Plan as may be determined
by the Plan Administrator.
8. TERMINATION OR AMENDMENT OF THE PLAN. The Board may at any time
----------------------------------------
terminate or amend the Plan; provided that, without approval of the holders of a
majority of the shares of Common Stock of the Company represented and voting at
a duly held meeting at which a quorum is present (which shares voting
affirmatively also constitute a majority of the required quorum) or by the
written consent of a majority of the outstanding shares of Common Stock, there
shall be, except by operation of the provisions of Section 7.13, no increase in
the total number of shares covered by the Plan, no change in the class of
persons eligible to receive Options granted under the Plan, and no extension of
the term of the Plan beyond ten (10) years after the earlier of the date the
Plan is adopted or the date the Plan is approved by the Company's shareholders;
and provided further that, without the consent of the Optionee or as provided by
Section 7.14 hereof, no amendment may adversely affect any then outstanding
Option or any unexercised portion thereof.
9. INDEMNIFICATION. To the extent permitted by law, the Certificate of
---------------
Incorporation of the Company, the Bylaws of the Company and any indemnity
agreements between the Company and its directors or employees, the Company shall
indemnify each member of the Board and of the Plan Administrator, and any other
employee of the Company with duties under the Plan, against expenses (including
any amount paid in settlement) reasonably incurred by him in connection with any
claims against him by reason of his conduct in the performance of his duties
under the Plan.
<PAGE>
10. EFFECTIVE DATE AND TERM OF PLAN. This Plan shall become effective
--------------------------------
(the "Effective Date") on July 1, 1998. No options granted under the Plan will
be effective unless the Plan is approved by shareholders of the Company within
12 months of the date of adoption. Unless sooner terminated by the Board in its
sole discretion, the Plan will expire on June 30, 2008.
Dated: _________, 1999
JAWS TECHNOLOGIES, INC.
By:__/s/Maggie Burry________________________
----------------
Maggie Burry, Vice President Human Resources
<PAGE>
Exhibit 5 & 24.1 - Page 1
EXHIBIT 5 & 24.1
<TABLE>
<CAPTION>
S O N F I E L D & S O N F I E L D
A PROFESSIONAL CORPORATION
<S> <C> <C>
LEON SONFIELD (1865-1934). . . . . . . ATTORNEYS AT LAW NEW YORK
GEORGE M. SONFIELD (1899-1967) . . . . LOS ANGELES
ROBERT L. SONFIELD (1893-1972) . . . . 770 SOUTH POST OAK LANE WASHINGTON, D.C.
________________. . . . . . . . HOUSTON, TEXAS 77056
FRANKLIN D. ROOSEVELT, JR. (1914-1988) [email protected]
TELECOPIER (713) 877-1547
ROBERT L. SONFIELD, JR.. . . . . . . . _____
MANAGING DIRECTOR. . . . . . . . . . . TELEPHONE (713) 877-8333
<PAGE>
</TABLE>
November 30, 1999
Board of Directors
JAWS Technologies, Inc.
603-7th Avenue S.W., Suite 380
Calgary, Alberta
Canada, T2T 0A7
Dear Gentlemen:
In our capacity as counsel for JAWS Technologies, Inc. (the "Company"), we
have participated in the corporate proceedings relative to the authorization and
issuance by the Company of a maximum of 3,743,900 shares of common stock
pursuant to the Plan as set out and described in the Company's Registration
Statement on Form S-8 (File No. _______) under the Securities Act of 1933 (the
"Registration Statement"). We have also participated in the preparation and
filing of the Registration Statement.
Based upon the foregoing and upon our examination of originals (or copies
certified to our satisfaction) of such corporate records of the Company and
other documents as we have deemed necessary as a basis for the opinions
hereinafter expressed, and assuming the accuracy and completeness of all
information supplied us by the Company, having regard for the legal
considerations which we deem relevant, we are of the opinion that:
(1) The Company is a corporation duly organized and validly existing
under the laws of the State of Nevada;
(2) The Company has taken all requisite corporate action and all action
required by the laws of the State of Nevada with respect to the authorization,
issuance and sale of common stock to be issued pursuant to the Registration
Statement;
(3) The maximum of 3,743,900 shares of common stock, when issued and
distributed pursuant to the Registration Statement, will be validly issued,
fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the references to our firm in the Registration
Statement.
Yours very truly,
/s/SONFIELD & SONFIELD
- ------------------------
SONFIELD & SONFIELD
<PAGE>
Exhibit 24.2 - Page 1
EXHIBIT 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Form S-8 Registration
Statement dated November 22, 1999, registering the shares of JAWS Technologies,
Inc. ("the Company") underlying the Stock Option Plan, of our audit report dated
March 22, 1999, accompanying the consolidated financial statements of the
Company included by reference in the Form 10-SB, No. 333-65583 for the year
ended 1998 and for the period from incorporation to December 31, 1997, filed
with the Securities and Exchange Commission.
/s/ERNST & YOUNG, LLP
- ------------------------
ERNST & YOUNG, LLP
Chartered Accountants
November 22, 1999
Calgary, Canada
