As filed with the Securities and Exchange Commission on
Registration No.
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT of 1933
Envirokare Tech, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0412-549
(Jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
2470 Chandler Avenue, Suite 5
Las Vegas, NV 89120
1999 Stock Plan
(Full title of the plan)
---------------------------------
Robert Davidson
c/o Envirokare Tech, Inc.
2470 Chandler Avenue, Suite 5
Las Vegas, NV 89120
(702) 262-1999
(Name, address including zip code and telephone number,
including area code, of agent for service)
---------------------------------
Copy to:
Kenneth A. Korb, Esq.
PERKINS, SMITH & COHEN, LLP
1 Beacon Street
Boston, MA 02108
(617) 854-4000
(Name and address of authorized representative
in the United States)
- --------------------------------------------------------------------------------
Exhibit Index on Sequentially Numbered Page: 7
<PAGE>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Titles of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered Per Share(1) Price(1) Fee
<S> <C> <C> <C> <C>
Common Shares(2) 1,150,000 Shares $1.15 $1,322,500 $349.14
$0.001 par value
Totals: 1,150,000 Shares $1,322,500 $349.14
========= ========== =======
</TABLE>
- ----------
(1) All such shares are re-issuable upon exercise of outstanding options with
fixed exercise prices based upon the fair value of the stock on the date of
grant authorization. The aggregate offering price and the fee for option
stocks have been computed upon the basis of the price at which the option
may be exercised.
(2) In addition, this Registration Statement also covers an indeterminate
amount of additional securities which may be issued under the
above-referenced Plan pursuant to the anti-dilution Provisions of such Plan
and, if interests in the above-referenced Plan are deemed to constitute
separate securities, pursuant to Rule 416(c) under the Securities Act of
1933, this registration statement shall also cover an indeterminate amount
of interests to be offered or sold pursuant to the above-referenced Plan.
-2-
<PAGE>
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
Item 1. Plan Information.
Omitted pursuant to the instructions and provisions of Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Omitted pursuant to the instructions and provisions of Form S-8.
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance with Rule
428 under the Securities Act of 1933 (the "1933 Act") and the Note to Part I of
Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Envirokare Tech, Inc. (the "Registrant")
with the Securities and Exchange Commission (the "Commission") are incorporated
by reference in this Registration Statement:
(a) The Registrant's registration under the Securities Exchange Act of 1934
(the "Exchange Act") on Form 10-SB dated May 14, 1999, as amended.
(b) The Registrant's quarterly report on Form 10-QSB for the calendar
quarter ended September 30, 1999.
(c) All other reports filed by the Registrant pursuant to the Exchange Act
since September 30, 1999.
All documents subsequently filed with the Commission by the Registrant
pursuant to the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered herein have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
-3-
<PAGE>
Item 5. Interest of Named Experts and Counsel.
The validity of the shares of Common Stock offered hereby will be passed
upon for the Registrant by Perkins, Smith & Cohen, LLP. Neither it nor any of
its partners has any interest in the Plan.
Item 6. Indemnification of Directors and Officers.
The Nevada Revised Statutes (the "NRS") provides for indemnification of
directors and officers in a variety of circumstances, which may include
liabilities under the 1933 Act. The Company's Bylaws have no specific provision
for indemnification.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors officers and persons controlling the Company pursuant
to the foregoing provisions, or otherwise, the Company has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit Identification Description of Exhibit
---------------------- ----------------------
<S> <C>
1. Exhibit 3(a) Registrant's registration under the Exchange Act, dated May 14,
1999, as amended, on Form 10-SB and incorporated herein by
reference.
2. Exhibit 3(b) Registrant's quarterly report on Form 10-QSB for the calendar
quarter ended September 30, 1999 and incorporated herein by
reference.
3. Exhibit 5.1 Opinion of Perkins, Smith & Cohen, LLP
[filed herewith]
4. Exhibit 8 1999 Stock Plan of Envirokare Tech, Inc.
[filed herewith]
5. Exhibit 23.1 Consent of Perkins, Smith & Cohen, LLP
(included in Exhibit 5.1)
6. Exhibit 23.2 Consent of Williams & Webster, accountants
[filed herewith]
7. Exhibit 24 Power of Attorney (included as part of the Signature page to the
Registration Statement)
</TABLE>
-4-
<PAGE>
8. Exhibit Index appearing on Page 7 of the Form S-8.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered, which remain,
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 6, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the controlling person in connection with the securities
being registered) the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Envirokare Tech, Inc., certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Las Vegas, Nevada, on this 4th day of February,
2000.
By:/s/ Jeannie M. Runnalls
--------------------------
Name: Jeannie M. Runnalls
Title: President
POWER OF ATTORNEY
We, the undersigned officers and directors of Envirokare Tech, Inc., hereby
severally constitute and appoint Robert Davidson and Kenneth A. Korb, and each
of them singly, our true and lawful attorneys, with full power to them and each
of them singly, to sign for us in our names in the capacities indicated below,
any amendments to this Registration Statement on Form S-8 (including
post-effective amendments), and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and generally to do all things in our names and on our behalf in our
capacities as officers and directors to enable Envirokare Tech, Inc. to comply
with the provisions of the Securities Act of 1933, as amended, hereby ratifying
and confirming our signatures as they may be signed by our said attorneys, or
any of them, to said Registration Statement and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Jeannie M. Runnalls President and Secretary February 4, 2000
---------------------------
Name: Jeannie M. Runnalls
/s/ Timothy Zuch Treasurer and February 4, 2000
--------------------------- Chief Financial Officer
Name: Timothy Zuch
/s/ James D. Scammell Director February 4, 2000
---------------------------
Name: James D. Scammell
/s/ Henry David Still IV Director February 4, 2000
---------------------------
Name: Henry David Still IV
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
INDEX OF EXHIBITS
1. Exhibit Identification Description of Exhibit
---------------------- ----------------------
<S> <C>
1. Exhibit 3(a) Registrant's registration under the Exchange Act, dated May 14,
1999, as amended, on Form 10-SB and incorporated herein by
reference.
2. Exhibit 3(b) Registrant's quarterly report on Form 10-QSB for the calendar
quarter ended September 30, 1999 and incorporated herein by
reference.
3. Exhibit 5.1 Opinion of Perkins, Smith & Cohen, LLP
[filed herewith]
4. Exhibit 8 1999 Stock Plan of Envirokare Tech, Inc.
[filed herewith]
5. Exhibit 23.1 Consent of Perkins, Smith & Cohen, LLP
(included in Exhibit 5.1)
6. Exhibit 23.2 Consent of Williams & Webster, accountants
[filed herewith]
7. Exhibit 24 Power of Attorney (included as part of the Signature page to the
Registration Statement)
</TABLE>
-7-
[LETTERHEAD OF PERKINS, SMITH & COHEN, LLP]
October 1, 1999
Envirokare Tech, Inc.
2470 Chandler Avenue, Suite 5
Las Vegas, NV 89120
Ladies and Gentlemen:
In connection with the proposed issuance and sale by Envirokare Tech, Inc.,
a Nevada corporation (the "Corporation"), pursuant to the Envirokare Tech, Inc.
1999 Stock Plan (the "Plan") of up to 2,000,000 additional shares of its
authorized but unissued common stock, par value .001 per share (the "Stock"), we
have examined, among other things, the following documents with respect to the
Corporation: (i) the Registration Statement on Form S-8, which is to be filed
under the Securities Act of 1933 (the "Registration Statement"), (ii) the
prospectus which is not filed with the Registration Statement, but is required
to be given to all persons receiving rights under the Plan, (iii) the vote of
the Board of Directors adopting the Plan and authorizing the issuance and sale
of the Stock pursuant to the Plan, (iv) the Articles of Organization, including
amendments thereto, and the Bylaws of the Corporation, each as filed with the
Securities and Exchange Commission as part of the registration of the
Corporation on Form 10-SB pursuant to the Securities Exchange Act of 1934, and
(v) the Plan.
We are of the opinion that when the Board of Directors of the Corporation
shall have duly authorized the issuance and sale of the Stock pursuant to the
Plan, and the Stock shall have been received by the grantees in accordance with
the Plan, and the Corporation shall have received the requisite consideration,
the Stock will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement as presently to be filed or thereafter amended, and to
the use of our name under the caption "Legal Opinions" in any prospectus
included in the Registration Statement. In giving this consent we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
Perkins, Smith & Cohen, LLP
by: /s/ Kenneth A. Korb
------------------------------
Kenneth A. Korb, a partner
ENVIROKARE TECH, INC.
1999 Stock Plan
Section 1. Purpose and Duration
1.1 Purposes. The purposes of the 1999 Stock Plan are to attract, retain
and motivate employees, directors and consultants of the Company, its Parent (if
any), and any present or future Subsidiaries and to enable them to participate
in the growth of the Company by providing for or increasing the proprietary
interests of such persons in the Company.
1.2 Effective Date. The Plan is effective September 30, 1999, the date of
its adoption by the Board, subject only to its ratification by the shareholders
of the Company at its next annual meeting. Any awards made under the Plan made
prior to such ratification shall be deemed rescinded if such shareholder
approval is not obtained.
1.3 Expiration Date. The Plan shall expire September 29, 2009, which is one
day less than ten (10) years from the date of the adoption of the Plan by the
Board. In no event shall any Awards be made under the Plan after such expiration
date, but Awards previously granted may extend beyond such date.
Section 2. Definitions
As used in the Plan, the following capitalized words shall have the
meanings indicated:
"Securities Act" means the Securities Act of 1933, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Award" means, individually or collectively, a grant under the Plan of
Options, SARs, Performance Shares, Restricted Stock or Stock Units.
"Award Agreement" means the written agreement setting forth the terms and
provisions applicable to an Award granted under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee of the Board appointed by the Board to
administer the Plan in accordance with Section 3.1.
"Company" means Envirokare Tech, Inc., a Nevada corporation, or any
successor thereto.
"Director" means any individual who is a member of the Board.
"Fair Market Value" means, with respect to a Share, the fair market thereof
as of the relevant date of determination, as determined in accordance with a
valuation methodology approved by the Board in good faith but in no event less
than, in the case of newly issued stock, the par value per Share; provided that
if the Board does not adopt or employ any such valuation methodology and Shares
are traded on an exchange or quoted on the Bulletin Board or any Nasdaq market,
fair market value shall mean, on the relevant date of determination, the closing
price of a Share traded
<PAGE>
on the principal Stock Exchange for the Shares or, if the Shares are not so
traded, the closing price or the average of the bid/asked prices (if lower) last
quoted on such Stock Exchange.
"Grant Date" means the effective date of an Award as specified by the Board
and set forth in the applicable Award Agreement.
"Incentive Stock Option" or "ISO" means an option to purchase Shares
awarded to a Participant under Section 6 of the Plan that is intended to meet
the requirements of Section 422 of the Code.
"Non-Employee Director" means a "non-employee director" as that term is
defined in Rule 16b-3 promulgated under the Exchange Act.
"Nonqualified Stock Option" or "NQO" means an option to purchase Shares
awarded to a Participant under Section 6 of the Plan that is not intended to be
an ISO.
"Option" means an ISO or an NQO.
"Parent" means a "parent corporation" as that term is defined in Section
424 of the Code.
"Participant" means an individual who has been selected by the Board to
receive an Award under the Plan.
"Performance Cycle" means the period of time selected by the Board during
which performance is measured for the purpose of determining the extent to which
an Award of Performance Shares has been earned. More than one Performance Cycle
may be in progress at any one time and the duration of Performance Cycles may
differ.
"Performance Share" means a Share awarded to a Participant under Section 8
of the Plan that entitles the Participant to acquire Shares upon the attainment
of specified performance goals.
"Plan" means the 1999 Stock Plan set forth in this document and as
hereafter amended from time to time in accordance with Section 13.
"Restricted Period" means the period of time contained in the Plan or
otherwise selected by the Board during which Shares of Restricted Stock are
subject to forfeiture and/or restrictions on transferability.
"Restricted Stock" means Shares awarded to a Participant under Section 9 of
the Plan pursuant to an Award that entitles the Participant to acquire Shares
for a purchase price (which may be zero), subject to such conditions, including
a Company right during a specified period or periods to repurchase the Shares at
their original purchase price (or to require forfeiture of the Shares if the
purchase price was zero) upon the Participant's termination of employment.
"SAR" or "Stock Appreciation Right" means an Award that is designated as an
SAR pursuant to Section 7 of the Plan, granted alone or in connection with a
related Award, entitling a Participant to receive an amount in cash or Shares or
a combination thereof having a value equal to (or if the Board shall so
determine at time of grant, less than) the excess of the Fair Market Value of a
Share on the date of exercise over the Fair Market Value of a Share on the Grant
Date (or over the Option exercise price, if the Stock Appreciation Right was
granted in tandem with an Option) multiplied by the number of Shares with
respect to which the Stock Appreciation Right is exercised.
"Shares" means shares of the Company's Common Stock, par value $.01 per
share.
-2-
<PAGE>
"Stock Unit" means an Award of a Share or a unit valued in whole or in part
by reference to, or otherwise based on, the value of a Share, granted to a
Participant under Section 10 of the Plan.
"Stock Exchange" means the New York Stock Exchange, the American Stock
Exchange, the Nasdaq markets, the Bulletin Board and any other stock exchange or
organized market upon which the securities of the Company have been listed with
the consent of the Company.
"Subsidiary" means a "subsidiary corporation" as that term is defined in
Section 424 of the Code.
Section 3. Administration of the Plan
3.1 The Board. The Plan shall be administered by the Board. The Board may,
in its discretion, delegate some or all of its powers with respect to the Plan
to the Committee, in which event all references in the Plan to the Board (except
references in Section 13.1) shall be deemed to refer to the Committee. The
Committee, if one is appointed, shall consist solely of two or more Non-Employee
Directors, provided that the failure to meet such condition shall not invalidate
any actions of the Committee.
3.2 Authority of the Board. The Board shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the operation of the Plan as it shall consider advisable from time to time, to
interpret the provisions of the Plan and any Award and to decide all disputes
arising in connection with the Plan. The Board's decisions and interpretations
shall be final and binding.
Section 4. Eligibility of Participants
The persons eligible to receive Awards under the Plan shall be all
executive officers of the Company, its Parent (if any), and any Subsidiaries,
and other employees, consultants and advisers who, in the opinion of the Board,
are in a position to make a significant contribution to the success of the
Company, its Parent (if any), and any Subsidiaries. Directors who are employees
of the Company, its Parent (if any), and any Subsidiaries shall be eligible to
receive Awards under the Plan. Consultants to the Company and non-employee
Directors shall be eligible to receive Awards other than ISO grants.
Section 5. Stock Available for Awards
5.1 Number of Shares. Awards may be made under the Plan for up to 2,000,000
Shares outstanding from time to time, of which up to 2,000,000 Shares may be
ISOs. Shares issued under the Plan may consist in whole or in part of authorized
but unissued Shares or treasury Shares.
5.2 Lapsed, Forfeited or Expired Awards. If any Award in respect of Shares
expires or is terminated before exercise or is forfeited for any reason, the
Shares subject to such Award, to the extent of such expiration, termination or
forfeiture, shall again be available for award under the Plan.
Section 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan, the
Board may award Options and determine the number of shares to be covered by each
Option, the exercise price therefor, the term of the Option, and any other
conditions and limitations applicable to the exercise of the Option. The Board
may grant ISOs, NQOs or a combination thereof.
-3-
<PAGE>
6.2 Exercise Price. Subject to the provisions of this Section 6, the
exercise price for each Option shall be determined by the Board in its sole
discretion.
6.3 Restrictions on Option Transferability and Exercisability. No Option
shall be transferable by the Participant other than by will or the laws of
descent and distribution, and all Options shall be exercisable, during the
Participant's lifetime, only by the Participant; provided, however, that the
Board may provide that an Option is transferable by the Participant and
exercisable by persons other than the Participant upon such terms and conditions
as the Board shall determine.
6.4 Certain Additional Provisions for Incentive Stock Options.
6.4.1 Exercise Price. In the case of an ISO, the exercise price shall
be not less than one hundred percent (100%) of the Fair Market Value on the
Grant Date of the Shares subject to the Option; provided, however, that if
on the Grant Date the Participant (together with persons whose stock
ownership is attributed to the Participant pursuant to Section 424(d) of
the Code) owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, its Parent
(if any) or any Subsidiaries, the exercise price shall be not less than one
hundred and ten percent (110%) of the Fair Market Value on the Grant Date
of the Shares subject to the Option.
6.4.2 Exercisability. Subject to Section 12.3 and Section 12.4, the
aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares
with respect to which ISOs are exercisable for the first time by any
Participant during any calendar year (under all plans of the Company, its
Parent (if any) and any Subsidiaries) shall not exceed $100,000.
6.4.3 Eligibility. ISOs may be granted only to persons who are
employees, including directors, of the Company, its Parent (if any) or any
Subsidiaries on the Grant Date.
6.4.4 Expiration. No ISO may be exercised after the expiration of one
day less than ten (10) years from the Grant Date; provided, however, that
if the Option is granted to a Participant who, together with persons whose
stock ownership is attributed to the Participant pursuant to Section 424(d)
of the Code, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, its Parent
(if any) or any Subsidiaries, the ISO may not be exercised after the
expiration of one day less than five (5) years from the Grant Date.
6.4.5 Compliance with Section 422 of the Code. The terms and
conditions of ISOs shall be subject to and comply with Section 422 of the
Code or any successor provision.
6.4.6 Notice to Company of Disqualifying Disposition. Each Participant
who receives an ISO agrees to notify the Company in writing immediately
after the Participant makes a Disqualifying Disposition of any Shares
received pursuant to the exercise of an ISO. The term "Disqualifying
Disposition" means any disposition (including any sale) of Shares before
the later of (a) two years after the Participant was granted the ISO under
which the Participant acquired such Shares, or (b) one year after the
Participant acquired the Shares by exercising the ISO.
6.4.7 Substitute Options. Notwithstanding the provisions of Section
6.4.1, in the event that the Company, its Parent (if any) or any Subsidiary
consummates a transaction described in Section 424(a) of the Code (relating
to the acquisition of property or stock from an unrelated corporation),
individuals who become employees or consultants of the Company, its Parent
(if any) or any Subsidiary on account of such transaction may be granted
ISOs in substitution for options granted by their former employer. The
Board, in
-4-
<PAGE>
its sole discretion and consistent with Section 4294(a) of the Code, shall
determine the exercise price of such substitute Options.
6.5 NQO Presumption. Options granted pursuant to the Plan shall be presumed
to be NQOs unless expressly designated ISOs in the Award Agreements or in the
minutes of the Board granting the Options.
Section 7. Grant of Stock Appreciation Rights
Subject to the terms and provisions of the Plan, the Board may award SARs
in tandem with another Award (at or after the Grant Date of the other Award), or
alone and unrelated to another Award, and may determine the terms and conditions
applicable thereto, including the form of payment.
Section 8. Performance Shares
8.1 Grant of Performance Shares. The Board may award Performance Shares to
Participants and determine the performance goals applicable to each such Award,
the number of Shares for each Performance Cycle, the duration of each
Performance Cycle and all other limitations and conditions applicable to the
awarded Performance Shares. The payment value of each Performance Share shall be
equal to the Fair Market Value of one Share on the date the Performance Share is
earned or, in the discretion of the Board, on the date the Board determines that
the Performance Share has been earned.
8.2 Adjustment of Performance Goals. Except as provided in an Award, during
any Performance Cycle, the Board may adjust the performance goals for the
Performance Cycle as it deems equitable in recognition of unusual or
non-recurring events affecting the Company or its Shares, changes in applicable
tax laws or accounting principles, or such other factors as the Board shall
determine.
8.3 Written Certification. As soon as practical after the end of a
Performance Cycle, the Board shall certify in writing the extent to which the
performance goals applicable to each Participant for the Performance Cycle were
achieved or exceeded and the number of Performance Shares which have been earned
on the basis of performance in relation to the established performance goals.
Section 9. Restricted Stock
9.1 Grant of Restricted Stock. The Board may award Shares of Restricted
Stock and determine the purchase price, if any, therefor, the duration of the
Restricted Period, the conditions under which the Shares may be forfeited to or
repurchased by the Company and any other terms and conditions of the Awards. The
Board may modify or waive any restrictions, terms and conditions with respect to
any Restricted Stock. Shares of Restricted Stock may be issued for whatever
consideration is determined by the Board, subject to applicable law.
9.2 Transferability. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the Board,
during the Restricted Period.
9.3 Evidence of Award. Shares of Restricted Stock shall be evidenced in
such manner as the Board may determine. Any certificates issued in respect of
Shares of Restricted Stock shall be registered in the name of the Participant
and, unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company. At the
expiration of the Restricted Period, the Company shall deliver the certificates
and stock power to the Participant.
-5-
<PAGE>
9.4 Shareholder Rights. A Participant shall have all the rights of a
shareholder with respect to Restricted Stock awarded, including voting and
dividend rights, unless otherwise provided in the Award Agreement.
Section 10. Stock Units
10.1 Grant of Stock Units. Subject to the terms and provisions of the Plan,
the Board may award Stock Units subject to such terms, restrictions, conditions,
performance criteria, vesting requirements and payment rules as the Board shall
determine.
10.2 Consideration. Shares awarded in connection with a Stock Unit may be
issued for whatever consideration is determined by the Board, subject to
applicable law.
Section 11. Grant of Other Awards
The Board shall have the authority to specify the terms and provisions of
other forms of equity-based or equity-related Awards not described above which
the Board determines to be consistent with the purposes of the Plan and the
interests of the Company, which Awards may provide for cash payments based in
whole or in part on the value or future value of Shares, for the acquisition or
future acquisition of Shares, or any combination thereof. Other Awards may also
include cash payments (including the cash payment of dividend equivalents) under
the Plan which maybe based on one or more criteria determined by the Board that
are unrelated to the value of the Shares and that maybe granted in tandem with,
or independent of, other Awards under the Plan.
Section 12. General Provisions Applicable to Awards
12.1 Legal and Regulatory Matters. The delivery of Shares shall be subject
to compliance with (i) applicable federal and state laws and regulations, (ii)
if the outstanding Shares are listed at the time on any Stock Exchange, the
listing requirements of such exchange, and (iii) the Company's counsel's
approval of all other legal matters in connection with the issuance and delivery
of the Shares. If the sale of the Shares has not been registered under the
Securities Act, the Company may require, as a condition to delivery of the
Shares, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing the Shares bear an appropriate legend restricting
transfer.
12.2 Written Award Agreement. The terms and provisions of an Award shall be
set forth in an Award Agreement approved by the Board and delivered or made
available to the Participant as soon as practicable following the Grant Date.
Where the Award is an Option Award, the Award Agreement shall specify whether
the Option is intended to be an ISO or a NQO.
12.3 Determination of Restrictions on the Award. The vesting,
exercisability, payment and other restrictions applicable to an Award (which may
include, without limitation, restrictions on transferability or provision for
mandatory resale to the Company) shall be determined by the Board and set forth
in the applicable Award Agreement. Notwithstanding the foregoing, the Board may
accelerate (i) the vesting or payment of any Award (including an ISO), (ii) the
lapse of restrictions on any Award (including an Award of Restricted Stock) and
(iii) the date on which any Option or SAR first becomes exercisable.
12.3.1 Restrictions on Sale. Unless otherwise provided in Section
6.4.6, in the Award Agreement, or approved by the Board, Option Shares may
be sold by the Participant in amounts equal to not more than twenty-five
percent (25%) of all Option Shares awarded to the Participant (whether or
not exercised) in the year in which
-6-
<PAGE>
the Options are exercised and twenty-five percent (25%) in each subsequent
year, except that any Shares which the Participant is entitled to exercise,
but does not do so in any year, shall be cumulated and may be exercised
thereafter in addition to shares which become first exercisable in such
subsequent year.
Notwithstanding the foregoing, Option Shares may only be sold in compliance
with applicable federal and state laws.
12.4 Mergers, etc. Notwithstanding any other provision of the Plan, in the
event of a consolidation or merger in which the Company is not the surviving
corporation or which results in the acquisition of substantially all the
Company's outstanding shares by a single person or entity or by a group of
persons and/or entities acting in concert, or in the event of the sale or
transfer of substantially all the Company's assets, then, if the Board so
determines, all outstanding Awards shall terminate, provided that at least
twenty (20) days prior to the effective date of any such merger, consolidation
or sale of assets, the Board shall either (i) make all outstanding Awards
exercisable immediately prior to the consummation of such merger, consolidation
or sale of assets or (ii) if there is a surviving or acquiring corporation,
arrange, subject to consummation of the merger, consolidation or sale of assets,
to have that corporation or an affiliate of that corporation grant to
Participants replacement Awards, which Awards in the case of ISOs shall satisfy,
in the discretion of the Board, the requirements of section 424(a) of the Code.
12.5 Termination of Employment. For purposes of the Plan, the following
events shall not be deemed a termination of employment of a Participant: (i) a
transfer to the employment of the Company from its Parent (if any) or from a
Subsidiary, or from the Company to its Parent (if any) or to a Subsidiary, or
from one Subsidiary to another, or from the Company's Parent (if any) to a
Subsidiary, or from a Subsidiary to the Company's Parent (if any); or (ii) an
approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the Participant's right to employment is
guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Board otherwise so provides in
writing. For purposes of the Plan, employees of a Subsidiary or Parent (if any)
shall be deemed to, have terminated their employment on the date on which such
Subsidiary or Parent ceases to be a Subsidiary or Parent of the Company, as the
case may be.
12.6 Date of and Effect of Termination of Employment. The date of a
Participant's termination of employment for any reason shall be determined in
the sole discretion of the Board. The Board shall have full authority to
determine and specify in the applicable Award Agreement the effect, if any, that
a Participant's termination of employment for any reason will have on the
vesting, exercisability, payment or lapse of restrictions applicable to an
outstanding Award.
12.6.1 Exercise of Awards After Termination of Employment. Unless
terminated earlier by reason of expiration of the term of the Awards, the
right to exercise Awards will terminate when the Participant ceases to be
an employee, consultant under written contract or director of the Company
for reasons other than death, disability or retirement.
If a Participant suffers an injury or illness while an employee,
director or consultant to the Company, its Parent (if any) or its
subsidiaries, that renders such person unable to serve in such capacity, in
the sole discretion of the Board, then the Awards may be exercised in full
by such person, or such person's guardian, at any time thereafter [but no
later than the earlier of six (6) months after the date of such injury or
illness or the date of expiration of the term of the Awards].
If a Participant retires after age sixty (60) with at least five (5)
years of service, a pro rata number of Shares of Restricted Stock (less
Shares previously vested) will vest immediately, calculated by using a five
(5) year vesting schedule and such vested Awards
-7-
<PAGE>
may be exercised at any time thereafter (but in no event later than the
earlier of the six (6) months after the date of retirement or the date of
expiration of the term of such Awards).
If a Participant dies while an employee, director or consultant of the
Company, any Parent or subsidiary, such Awards may be exercised in full by
the personal representatives of the estate at any time [but in no event
later than the earlier of six (6) months after the date of death, or the
date of expiration of the term of the Awards].
If a Participant is a consultant of the Company, any Parent or
subsidiary, such Awards may be exercised in full by such consultant after
the completion of the Consultant's engagement by the Company, but no later
than the earlier of six (6) months after the date of such competition or
the date of expiration of the term of the Awards, and the shares so
acquired may be sold without the time restriction referenced in Section
12.3.1.
12.7 Grant of Awards. Each Award may be made alone, in addition to or in
relation to any other Award. The terms of each Award need not be identical, and
the Board need not treat Participants uniformly.
12.8 Settlement of Awards. No Shares shall be delivered pursuant to any
exercise of an Award until payment in full of the price therefor, if any, is
received by the Company. Such payment may be made in whole or in part in cash or
by certified or bank check or, to the extent permitted by the Board at or after
the Grant Date, by delivery of a note or Shares, including Restricted Stock,
valued at their Fair Market Value on the date of delivery, or such other lawful
consideration as the Board shall determine. The Committee may permit a
Participant to elect to pay the exercise price upon the exercise of an Option by
authorizing a third party to sell Shares (or a sufficient portion of the Shares)
acquired upon exercise of the Option and remit to the Company a sufficient
portion of the sale proceeds to pay the entire exercise price and any tax
withholding resulting from such exercise, but only under such procedures as the
Board may adopt to assure payment to the Company.
12.9 Withholding Requirements and Arrangements. The Participant shall pay
to the Company or make provision satisfactory to the Board for payment of any
taxes required by law to be withheld in respect of Awards under the Plan no
later than the date of the event creating the tax liability. In the Board's
discretion, such tax obligations may be paid in whole or in part in Shares,
including Shares retained from the Award creating the tax obligation, valued at
their Fair Market Value on the date of delivery. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant.
12.10 No Effect on Employment. The Plan shall not give rise to any right on
the part of any Participant to continue in the employ of the Company, its Parent
(if any) or any Subsidiary. The loss of existing or potential profit in Awards
granted under the Plan shall not constitute an element of damages in the event
of termination of the relationship of a Participant even if the termination is
in violation of an obligation of the Company to the Participant by contract or
otherwise.
12.11 No Rights as Shareholder. Subject to the provisions of the Plan and
the applicable Award Agreement, no Participant shall have any rights as a
shareholder with respect to any Shares to be distributed under the Plan until he
or she becomes the holder thereof.
12.12 Adjustments. Upon the happening of any of the following described
events, a Participant's rights with respect to Awards granted hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
Award Agreement.
12.12.1 Stock Splits and Recapitalizations. In the event the Company
issues any of its Shares as a stock dividend upon or with respect to the
Shares, or in the event Shares shall be
-8-
<PAGE>
subdivided or combined into a greater or smaller number of Shares, or if,
upon a merger or consolidation (except those described in Section 12.4),
reorganization, split-up, liquidation, combination, recapitalization or the
like of the Company, Shares shall be exchanged for other securities of the
Company, securities of another entity, cash or other property, each
Participant upon exercising an Award (for the purchase price to be paid
under the Award) shall be entitled to purchase such number of Shares, other
securities of the Company, securities of such other entity, cash or other
property as the Participant would have received if the Participant had been
the holder of the Shares with respect to which the Award is exercised at
all times between the Grant Date of the Award and the date of its exercise,
and appropriate adjustments shall be made in the purchase price per Share.
12.12.2 Restricted Stock. If any person owning Restricted Stock
receives new or additional or different shares or securities ("New
Securities") in connection with a corporate transaction described in
Section 12.12.1 or a stock dividend described in Section 12.12.1 as a
result of owning such Restricted Stock, the New Securities shall be subject
to all of the conditions and restrictions applicable to the Restricted
Stock with respect to which such New Securities were issued.
12.12.3 Board Determination. Notwithstanding any provision to the
contrary, no adjustments shall be made pursuant to this Section 12.12.1
with respect to ISOs, unless (i) the Board, after consulting with counsel
for the Company, determines that such adjustments would not constitute a
modification, "extension" or "renewal" of such ISOs as such terms are
defined in Section 424 of the Code, (ii) would not cause any adverse tax
consequences for the holders of such ISOs or (iii) the holders of such ISOs
consent to the adjustment. No adjustments to ISOs shall be made for
dividends paid in cash or in property other than securities of the Company.
12.12.4 Fractional Shares. No fractional Shares shall be issued under
the Plan. Any fractional Shares which, but for this Section, would have
been issued shall be deemed to have been issued and immediately sold to the
Company for their Fair Market Value, and the Participant shall receive from
the Company cash in lieu of such fractional Shares.
12.12.5 Recapitalization. The Board may adjust the number of Shares
subject to outstanding Awards and the exercise price and the terms of
outstanding Awards to take into consideration material changes in
accounting practices or principles, extraordinary dividends, acquisitions
or dispositions of stock or property, or any other event if it is
determined by the Board that such adjustment is appropriate to avoid
distortion in the operation of the Plan.
12.12.6 Further Adjustment. Upon the happening of any of the events
described in Sections 12.12.1 or 12.12.5, the class and aggregate number of
Shares set forth in Sections 5.1 and 5.3 hereof that are subject to Awards
which previously have been or subsequently may be granted under the Plan
shall be appropriately adjusted to reflect the events described in such
Sections. The Board shall determine the specific adjustments to be made
under this Section 12.12.6.
Section 13. Amendment and Termination
13.1 Amendment, Suspension, Termination of the Plan. The Board may modify,
amend, suspend or terminate the Plan in whole or in part at any time; provided,
however, that no modification, amendment, suspension or termination of the Plan
shall be made without shareholder approval if such approval is necessary to
comply with any applicable tax or regulatory requirement; provided, further,
that such modification, amendment, suspension or termination shall not, without
a Participant's consent, affect adversely the rights of such Participant with
respect to any Award previously made.
-9-
<PAGE>
13.2 Amendment, Suspension, Termination Of an Award. The Board may modify,
amend or terminate any outstanding Award, including, without limitation,
substituting therefor another Award of the same or a different type, changing
the date of exercise or realization and converting an ISO to a NQO; provided,
however, that the Participant's consent to such action shall be required unless
the Board determines that the action, taking into account any related action,
would not materially and adversely affect the Participant.
Section 14. Legal Construction
14.1 Captions. The captions provided herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan or serve as a basis for interpretation or construction of
the Plan.
14.2 Severability. In the event any provision of the Plan is held invalid
or illegal for any reason, the illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
14.3 Governing Law. The Plan and all rights under the Plan shall be
construed in accordance with and governed by the internal laws of the State of
Nevada.
-10-
February 28, 2000
CONSENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
use of our audit report dated February 26, 1999 (and to all references to our
Firm) included in or made a part of the Form S-8 registration statement of
Envirokare Tech, Inc.
Williams & Webster, P.S.
by: /s/ John G. Webster
------------------------------
John G. Webster
