<PAGE> 1
=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-8
Registration Statement
Under
The Securities Act of 1933, as amended.
REWARD ENTERPRISES INC.
(Exact name of registrant as specified in charter.)
NEVADA 98-0203927
(State or other jurisdiction (I.R.S. Employer of incorporation
or organization) Identification Number)
12880 Railway Avenue
Unit 35
Richmond, British Columbia, Canada V7E 6G4
(604) 275-6519
(Address and telephone of executive offices, including zip code.)
REWARD ENTERPRISES INC.
2000 STOCK OPTION PLAN
Gerald Williams, President
Reward Enterprises Inc.
12880 Railway Avenue
Unit 35
Richmond, British Columbia, Canada V7E 6G4
(604) 644-5139
(Name, address and telephone of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
Conrad C. Lysiak, Esq.
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 644-5139
In addition, pursuant to rule 416(c) under the Securities Act of
1933, this registration statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
=================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
Aggregate
Proposed Proposed
Title of Each Maximum Maximum
Class of Offering Aggregate Amount of
Securities to Amount to be Price per Offering Registration
be Registered Registered Unit/Share Price [1] Fee [1]
-------------------------------------------------------------------------------
Common
Shares,
$0.001 par value,
issuable upon
exercise of
stock options
by Grantees 7,000,000 $0.50 $3,500,000 $ 924.00
-------------------------------------------------------------------------------
Totals 7,000,000 $0.50 $3,500,000 $ 924.00
------------------------------------------------------------------------------
[1] Based upon the mean between the closing bid and ask prices for
common shares on December 5, 2000, in accordance with Rule
457(c).
<PAGE> 3
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference into
this Registration Statement and made a part hereof:
(a) The Registrant's Form 10-SB (SEC file #000-27259) filed with
the Securities and Exchange Commission on September 7, 1999
(the "Commission") and all amendments thereof.
(b) The Registrant's Form 10Q-SB filed with Commission on December
29, 1999.
(c) The Registrant's Form 10Q-SB filed with Commission on February
15, 2000.
(d) The Registrant's Form 10Q-SB filed with Commission on May 15,
2000.
(e) The Registrant's Form 10K-SB filed with Commission on October
12, 2000 and all exhibits thereto.
(f) The Registrant's Form 10Q-SB filed with Commission on November
14, 2000.
(g) All other reports filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "Exchange Act") since
filing the aforementioned Form 10-SB.
ITEM 4. DESCRIPTION OF SECURITIES.
Common Stock.
The authorized Common Stock of the Company consists of
200,000,000 shares of $0.001 par value Common Stock. As of
December 5, 2000, 12,915,000 shares are issued and outstanding.
Shares owned by existing "affiliates" of the Company, are subject
to the limitations of Reg. 144 promulgated under the Securities Act
of 1933 (the "Act").
In general, under Reg. 144, a person (or persons whose shares
are aggregated) who has satisfied a one (1) year holding period may
sell in ordinary market transactions through a broker or with a
market maker, within any three (3) month period a number of shares
which does not exceed the greater of one percent (1%) of the number
of outstanding shares of Common Stock or the average of the weekly
trading volume of the Common Stock during the four calendar weeks
<PAGE> 4
prior to such sale. Sales under Reg. 144 require the filing of
Form 144 with the Securities and Exchange Commission. If the
shares of Common Stock have been held for more than two (2) years
by a person who is not an affiliate, there is no limitation on the
manner of sale or the volume of shares that may be sold and no Form
144 is required. Sales under Reg. 144 may have a depressive effect
on the market price of the Company's Common Stock.
All shares have equal voting rights and are not assessable.
Voting rights are not cumulative and, therefore, the holders of
more than 50% of the Common Stock could, if they chose to do so,
elect all of the directors of the Company.
Upon liquidation, dissolution or winding up of the Company,
the assets of the Company, after the payment of liabilities, will
be distributed pro rata to the holders of the Common Stock. The
holders of the Common Stock do not have preemptive rights to
subscribe for any securities of the Company and have no right to
require the Company to redeem or purchase their shares. The shares
of Common Stock presently outstanding are fully paid and
non-assessable.
Dividends
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is
contemplated in the foreseeable future.
Transfer Agent
The Registrant's transfer agent is Pacific Stock Transfer
Company, 5844 South Pecos Road, Suite D, Las Vegas, Nevada 89120
and its telephone number is (702) 361-3033.
The Registrant is authorized to issue only one class of
securities, being comprised of $0.001 par value common stock.
Common Stock.
The holders of the $0.001 par value common stock of the
Registrant have traditional rights as to voting, dividends and
liquidation. All shares of common Stock are entitled to one vote
on all matters. There are no pre-emptive rights and cumulative
voting is not allowed. The common stock is not subject to
redemption and carries no subscription or conversion rights. In
the event of liquidation of the Registrant, the holders of common
stock are entitled to share equally in corporate assets after
<PAGE> 5
satisfaction of all liabilities. Copies of the Articles of
Incorporation and Bylaws were filed as Exhibits to a Registration
Statement filed by the Registrant on Form 10-SB, SEC File
000-27259, on September 7, 1999, which became effective by
operation of law sixty days thereafter, are incorporated herein by
reference.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Nevada Revised Statutes and certain provisions of the
Company's Bylaws under certain circumstances provide for
indemnification of the Company's Officers, Directors and
controlling persons against liabilities which they may incur in
such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the
Company's Bylaws and to the statutory provisions.
In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments
arising in connection with a legal proceeding to which such person
is a party, if that person's actions were in good faith, were
believed to be in the Company's best interest, and were not
unlawful. Unless such person is successful upon the merits in such
an action, indemnification may be awarded only after a
determination by independent decision of the Board of Directors, by
legal counsel, or by a vote of the shareholders, that the
applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is
generally the same as those set forth above; however, with respect
to such actions, indemnification is granted only with respect to
expenses actually incurred in connection with the defense or
settlement of the action. In such actions, the person to be
indemnified must have acted in good faith and in a manner believed
to have been in the Company's best interest, and have not been
adjudged liable for negligence or misconduct.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered in the future or pursuant to a vote
of shareholders or Directors. The statutory provision cited above
also grants the power to the Company to purchase and maintain
<PAGE> 6
insurance which protects its Officers and Directors against any
liabilities incurred in connection with their service in such a
position, and such a policy may be obtained by the Company.
ITEM 7. EXEMPTION FROM REGISTRATION.
None; not applicable.
ITEM 8. EXHIBITS.
The following documents are incorporated herein by reference
from the Company's Form 10-SB Registration Statement, SEC file
#000-27259, as filed with the Commission.
Exhibit No. Description
Exhibit
3.1 Articles of Incorporation.
3.2 Amended Articles of Incorporation
3.3 Bylaws
4.1 Specimen Stock Certificate
10.1 Contract with Chartwell Technologies
99.1 Consulting Agreement with Gerald Williams
99.2 Consulting Agreement with Brian Doutaz
99.3 Consulting Agreement with Frank J. Rigney
99.4 1999 Stock Option Plan
The following documents are incorporated herein by reference
from the Company's Form 10K-SB filed with the Commission on October
12, 2000.
Exhibit No. Description
Exhibit
99.5 1999 Stock Option Plan
The following documents are incorporated herein:
5.1 Opinion of Conrad C. Lysiak, regarding the legality
of the securities registered under this
Registration Statement.
10.2 2000 Stock Option Plan.
23.1 Consent of Williams & Webster, P.S., independent
certified public accountants.
<PAGE> 7
23.2 Consent of Conrad C. Lysiak, Attorney at Law
ITEM 9. UNDERTAKINGS.
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 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.
2. that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof; and,
3. to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the 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.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended the Registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-8
and has duly caused this Registration Statement thereto to be
signed on its behalf by the undersigned, thereunto duly authorized
on the 5th day of December, 2000.
REWARD ENTERPRISES INC.
BY: /s/ Gerald W. Williams
Gerald W. Williams, President
and Chief Executive Officer
BY: /s/ Robert Dinning
Robert Dinning, Treasurer and
Principal Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement thereto has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Gerald W. Williams
Gerald W. Williams President, Chief Executive Dec. 5, 2000
Officer and a member of
the Board of Directors
/s/ Brian Doutaz
Brian Doutaz Secretary and a member of Dec. 5, 2000
the Board of Directors
/s/ Robert Dinning
Robert Dinning Treasurer, Principal Dec. 5, 2000
Accounting Officer,
and a member of the
Board of Directors
<PAGE> 10
Exhibit 10.2
REWARD ENTERPRISES, INC.
2000 STOCK OPTION PLAN
TABLE OF CONTENTS
Page
1. PURPOSES..........................................1
2. ADMINISTRATION....................................1
3. ELIGIBILITY.......................................2
4. STOCK.............................................2
5. TERMS AND CONDITIONS OF OPTIONS..................3
6. EFFECT DATE; TERM.................................8
7. NO OBLIGATIONS TO EXERCISE........................8
8. NO RIGHT TO OPTIONS OR EMPLOYMENT.................8
9. APPLICATION OF FUNDS..............................8
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.............8
11. AMENDMENT OF PLAN.................................9
12. EFFECTIVE DATE....................................9
<PAGE> 11
REWARD ENTERPRISES INC.
2000 STOCK OPTION PLAN
This 2000 Stock Option Plan (the "Plan") provides for the grant
of options to acquire shares of common stock, (the "Common Stock"),
of REWARD ENTERPRISES INC., a Nevada corporation (the "Company").
Stock options granted under this Plan that qualify under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), are
referred to in this Plan as "Incentive Stock Options." Incentive
Stock Options and stock options that do not qualify under Section 422
of the Code ("Non-Qualified Stock Options") granted under this Plan
are referred to collectively as "Options."
1. PURPOSES.
The purposes of this Plan are to retain the services of valued
key employees and consultants of the Company and such other persons
as the Plan Administrator shall select in accordance with Section 3
below, to encourage such persons to acquire a greater proprietary
interest in the Company, thereby strengthening their incentive to
achieve the objectives of the shareholders of the Company, and to
serve as an aid and inducement in the hiring of new employees and to
provide an equity incentive to consultants and other persons selected
by the Plan Administrator.
2. ADMINISTRATION.
This Plan shall be administered initially by the Board of
Directors of the Company (the "Board"), except that the Board may, in
its discretion, establish a committee composed of two (2) or more
members of the Board or two (2) or more other persons to administer
the Plan, which committee (the "Committee") may be an executive,
compensation or other committee, including a separate committee
especially created for this purpose. The Committee shall have the
powers and authority vested in the Board hereunder (including the
power and authority to interpret any provision of the Plan or of any
Option). The members of any such Committee shall serve at the
pleasure of the Board. A majority of the members of the Committee
shall constitute a quorum, and all actions of the Committee shall be
taken by a majority of the members present. Any action may be taken
by a written instrument signed by all of the members of the Committee
and any action so taken shall be fully effective as if it had been
taken at a meeting. The Board or, if applicable, the Committee is
referred to herein as the "Plan Administrator."
If and when the Company becomes subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Plan Administrator will be either the full Board
of Directors or a committee composed of two (2) or more members of
the Board who are "Non-Employee Directors" as defined under Rule 16b-3
(as amended from time to time) promulgated under the Exchange Act
or any successor rule or regulatory requirement.
<PAGE> 12
In addition, if the Board decides to maintain eligibility for the
benefits of Section 162(m) of the Code, the Plan Administrator will
be either the full Board of Directors if each director is an "Outside
Director," as defined under Section 162(m) of the Code (as amended
from time to time) and the regulations (or any successor regulations)
promulgated thereunder ("Section 162(m) of the Code" or the Committee
which will be composed of two (2) or more members of the Board who
are Outside Directors.
Subject to the provisions of this Plan, and with a view to
effecting its purpose, the Plan Administrator shall have sole
authority, in its absolute discretion, to (i) construe and interpret
this Plan; (ii) define the terms used in the Plan; (iii) prescribe,
amend and rescind the rules and regulations relating to this Plan;
(iv) correct any defect, supply any omission or reconcile any
inconsistency in this Plan; (v) grant Options under this Plan;
(vi) determine the individuals to whom Options shall be granted under
this Plan and whether the Option is an Incentive Stock Option or a
Non-Qualified Stock Option; (vii) determine the time or times at
which Options shall be granted under this Plan; (viii) determine the
number of shares of Common Stock subject to each Option, the exercise
price of each Option, the duration of each Option and the times at
which each Option shall become exercisable; (ix) determine all other
terms and conditions of the Options; and (x) make all other
determinations and interpretations necessary and advisable for the
administration of the Plan. All decisions, determinations and
interpretations made by the Plan Administrator shall be binding and
conclusive on all participants in the Plan and on their legal
representatives, heirs and beneficiaries.
The Board or, if applicable, the Committee may delegate to one
or more executive officers of the Company the authority to grant
Options under this Plan to employees of the Company who, on the Date
of Grant, are not subject to Section 16 of the Exchange Act with
respect to the Common Stock ("Insiders"), and are not "covered
employees" as such term is defined for purposes of Section 162(m) of
the Code ("Covered Employees"), and in connection therewith the
authority to determine: (i) the number of shares of Common Stock
subject to such Options; (ii) the duration of the Option; (iii) the
vesting schedule for determining the times at which such Option shall
become exercisable; and (iv) all other terms and conditions of such
Options. The exercise price for any Option granted by action of an
executive officer or officers pursuant to such delegation of
authority shall not be less than the fair market value per share of
the Common Stock on the Date of Grant. Unless expressly approved in
advance by the Board or the Committee, such delegation of authority
shall not include the authority to accelerate vesting, extend the
period for exercise or otherwise alter the terms of outstanding
Options.
<PAGE> 13
The term "Plan Administrator" when used in any provision of this Plan
other than Sections 2, 5(f), 5(m), and 11 shall be deemed to refer to
the Board or the Committee, as the case may be, and an executive
officer who has been authorized to grant Options pursuant thereto,
insofar as such provisions may be applied to persons that
are not Insiders and not Covered Employees and Options granted to
such persons.
3. ELIGIBILITY.
Incentive Stock Options may be granted to any individual who, at
the time the Option is granted, is an employee of the Company or any
Related Corporation (as defined below) ("Employees"). Non-Qualified
Stock Options may be granted to Employees and to such other persons
other than directors who are not Employees as the Plan Administrator
shall select. Options may be granted in substitution for outstanding
Options of another corporation in connection with the merger,
consolidation, acquisition of property or stock or other
reorganization between such other corporation and the Company or any
subsidiary of the Company. Options also may be granted in exchange
for outstanding Options. . Any person to whom an Option is granted
under this Plan is referred to as an "Optionee." Any person who is
the owner of an Option is referred to as a "Holder."
As used in this Plan, the term "Related Corporation" shall mean
any corporation (other than the Company) that is a "Parent
Corporation" of the Company or "Subsidiary Corporation" of the
Company, as those terms are defined in Sections 424(e) and 424(f),
respectively, of the Code (or any successor provisions) and the
regulations thereunder (as amended from time to time).
4. STOCK.
The Plan Administrator is authorized to grant Options to acquire
up to a total of seven million (7,000,000) shares of the Company's
authorized but unissued, or reacquired, Common Stock. The number of
shares with respect to which Options may be granted hereunder is
subject to adjustment as set forth in Section 5(m) hereof. If any
outstanding Option expires or is terminated for any reason, the
shares of Common Stock allocable to the unexercised portion of such
Option may again be subject to an Option granted to the same Optionee
or to a different person eligible under Section 3 of this Plan.
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted under this Plan shall be evidenced by a
written agreement approved by the Plan Administrator (the
"Agreement"). Agreements may contain such provisions, not
inconsistent with this Plan, as the Plan Administrator in its
discretion may deem advisable. All Options also shall comply with
the following requirements:
<PAGE> 14
(a) Number of Shares and Type of Option.
Each Agreement shall state the number of shares of Common
Stock to which it pertains and whether the Option is intended to be
an Incentive Stock Option or a Non-Qualified Stock Option. In the
absence of action to the contrary by the Plan Administrator in
connection with the grant of an Option, all Options shall be
Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock with
respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (granted under
this Plan and all other Incentive Stock Option plans of the Company,
a Related Corporation or a predecessor corporation) shall not exceed
$100,000, or such other limit as may be prescribed by the Code as it
may be amended from time to time. Any portion of an Option which
exceeds the annual limit shall not be void but rather shall be a
Non-Qualified Stock Option.
(b) Date of Grant.
Each Agreement shall state the date the Plan Administrator
has deemed to be the effective date of the Option for purposes of
this Plan (the "Date of Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common
Stock at which it is exercisable. The exercise price shall be fixed
by the Plan Administrator at whatever price the Plan Administrator
may determine in the exercise of its sole discretion; provided that
the per share exercise price for an Incentive Stock Option or any
Option granted to a "covered employee" as such term is defined for
purposes of Section 162(m) of the Code ("Covered Employee") shall not
be less than the fair market value per share of the Common Stock at
the Date of Grant as determined by the Plan Administrator in good
faith; provided further, that with respect to Incentive Stock Options
granted to greater-than-ten percent (> 10%) shareholders of the
Company (as determined with reference to Section 424(d) of the Code),
the exercise price per share shall not be less than one hundred ten
percent (110%) of the fair market value per share of the Common Stock
at the Date of Grant as determined by the Plan Administrator in good
faith; and, provided further, that Options granted in substitution
for outstanding options of another corporation in connection with the
merger, consolidation, acquisition of property or stock or other
reorganization involving such other corporation and the Company or
any subsidiary of the Company may be granted with an exercise price
equal to the exercise price for the substituted option of the other
corporation, subject to any adjustment consistent with the terms of
the transaction pursuant to which the substitution is to occur.
<PAGE> 15
(d) Duration of Options.
At the time of the grant of the Option, the Plan
Administrator shall designate, subject to paragraph 5(g) below, the
expiration date of the Option, which date shall not be later than ten
(10) years from the Date of Grant in the case of Incentive Stock
Options; provided, that the expiration date of any Incentive Stock
Option granted to a greater-than-ten percent ( > 10%) shareholder of
the Company (as determined with reference to Section 424(d) of the
Code) shall not be later than five (5) years from the Date of Grant.
In the absence of action to the contrary by the Plan Administrator in
connection with the grant of a particular Option, and except in the
case of Incentive Stock Options as described above, all Options
granted under this Section 5 shall expire ten (10) years from the
Date of Grant.
(e) Vesting Schedule.
No Option shall be exercisable until it has vested. The
vesting schedule for each Option shall be specified by the Plan
Administrator at the time of grant of the Option prior to the
provision of services with respect to which such Option is granted;
provided, that if no vesting schedule is specified at the time of
grant, the Option shall vest according to the following schedule:
Number of Years Percentage of Total
Following Date of Grant Option Vested
----------------------- --------------------
One 100%
The Plan Administrator may specify a vesting schedule for
all or any portion of an Option based on the achievement of
performance objectives established in advance of the commencement by
the Optionee of services related to the achievement of the
performance objectives. Performance objectives shall be expressed in
terms of one or more of the following: return on equity, return on
assets, share price, market share, sales, earnings per share, costs,
net earnings, net worth, inventories, cash and cash equivalents,
gross margin or the Company's performance relative to its internal
business plan. Performance objectives may be in respect of the
performance of the Company as a whole (whether on a consolidated or
unconsolidated basis), a Related Corporation, or a subdivision,
operating unit, product or product line of either of the foregoing.
Performance objectives may be absolute or relative and may be
expressed in terms of a progression or a range. An Option that is
exercisable (in full or in part) upon the achievement of one or more
performance objectives may be exercised only following written notice
to the Optionee and the Company by the Plan Administrator that the
performance objective has been achieved.
<PAGE> 16
(f) Acceleration of Vesting.
The vesting of one or more outstanding Options may be
accelerated by the Plan Administrator at such times and in such
amounts as it shall determine in its sole discretion. The vesting of
Options also shall be accelerated under the circumstances described
in Section 5(m) below.
(g) Term of Option.
Vested Options shall terminate, to the extent not
previously exercised, upon the occurrence of the first of the
following events: (i) the expiration of the Option, as designated by
the Plan Administrator in accordance with Section 5(d) above;
(ii) the date of an Optionee's termination of employment or
contractual relationship with the Company or any Related Corporation
for cause (as determined in the sole discretion of the Plan
Administrator); (iii) the expiration of three (3) months from the
date of an Optionee's termination of employment or contractual
relationship with the Company or any Related Corporation for any
reason whatsoever other than cause, death or Disability (as defined
below) unless, in the case of a Non-Qualified Stock Option, the
exercise period is extended by the Plan Administrator until a date
not later than the expiration date of the Option; or (iv) the
expiration of one year from termination of an Optionee's employment
or contractual relationship by reason of death or Disability (as
defined below) unless, in the case of a Non-Qualified Stock Option,
the exercise period is extended by the Plan Administrator until a
date not later than the expiration date of the Option. Upon the
death of an Optionee, any vested Options held by the Optionee shall
be exercisable only by the person or persons to whom such Optionee's
rights under such Option shall pass by the Optionee's will or by the
laws of descent and distribution of the state or county of the
Optionee's domicile at the time of death and only until such Options
terminate as provided above. For purposes of the Plan, unless
otherwise defined in the Agreement, "Disability" shall mean medically
determinable physical or mental impairment which has lasted or can be
expected to last for a continuous period of not less than twelve (12)
months or that can be expected to result in death. The Plan
Administrator shall determine whether an Optionee has incurred a
Disability on the basis of medical evidence acceptable to the Plan
Administrator. Upon making a determination of Disability, the Plan
Administrator shall, for purposes of the Plan, determine the date of
an Optionee's termination of employment or contractual relationship.
Unless accelerated in accordance with Section 5(f) above,
unvested Options shall terminate immediately upon termination of
employment of the Optionee by the Company for any reason whatsoever,
including death or Disability. For purposes of this Plan, transfer
of employment between or among the Company and/or any Related
Corporation shall not be deemed to constitute a termination of
employment with the Company or any Related Corporation.
<PAGE> 17
For purposes of this subsection, employment shall be deemed to
continue while the Optionee is on military leave, sick leave or other
bona fide leave of absence (as determined by the Plan Administrator).
The foregoing notwithstanding, employment shall not be deemed to
continue beyond the first ninety (90) days of such leave, unless the
Optionee's re-employment rights are guaranteed by statute or by
contract.
(h) Exercise of Options.
Options shall be exercisable, in full or in part, at any
time after vesting, until termination. If less than all of the
shares included in the vested portion of any Option are purchased,
the remainder may be purchased at any subsequent time prior to the
expiration of the Option term. No portion of any Option for less
than fifty (50) shares (as adjusted pursuant to Section 5(m) below)
may be exercised; provided, that if the vested portion of any Option
is less than fifty (50) shares, it may be exercised with respect to
all shares for which it is vested. Only whole shares may be issued
pursuant to an Option, and to the extent that an Option covers less
than one (1) share, it is unexercisable.
Options or portions thereof may be exercised by giving
written notice to the Company, which notice shall specify the number
of shares to be purchased, and be accompanied by payment in the
amount of the aggregate exercise price for the Common Stock so
purchased, which payment shall be in the form specified in
Section 5(i) below. The Company shall not be obligated to issue,
transfer or deliver a certificate of Common Stock to the Holder of
any Option, until provision has been made by the Holder, to the
satisfaction of the Company, for the payment of the aggregate
exercise price for all shares for which the Option shall have been
exercised and for satisfaction of any tax withholding obligations
associated with such exercise. During the lifetime of an Optionee,
Options are exercisable only by the Optionee or in the case of a Non-Qualified
Stock Option, transferee who takes title to such Option in
the manner permitted by subsection 5(k) hereof. It shall be a
condition precedent to the exercise of any Option granted hereunder
that the Holder shall enter into a Stock Transfer Agreement with the
Company.
(i) Payment upon Exercise of Option.
Upon the exercise of any Option, the aggregate exercise
price shall be paid to the Company in cash or by certified or
cashier's check. In addition, the Holder may pay for all or any
portion of the aggregate exercise price by complying with one or more
of the following alternatives:
<PAGE> 18
(1) by delivering to the Company shares of Common Stock
previously held by such Holder, or by the Company withholding shares
of Common Stock otherwise deliverable pursuant to exercise of the
Option, which shares of Common Stock received or withheld shall have
a fair market value at the date of exercise (as determined by the
Plan Administrator) equal to the aggregate exercise price to be paid
by the Optionee upon such exercise;
(2) by delivering a properly executed exercise notice
together with irrevocable instructions to a broker promptly to sell
or margin a sufficient portion of the shares and deliver directly to
the Company the amount of sale or margin loan proceeds to pay the
exercise price; or
(3) by complying with any other payment mechanism approved
by the Plan Administrator at the time of exercise.
(j) Rights as a Shareholder.
A Holder shall have no rights as a shareholder with respect
to any shares covered by an Option until such Holder becomes a record
holder of such shares, irrespective of whether such Holder has given
notice of exercise. Subject to the provisions of Section 5(m)
hereof, no rights shall accrue to a Holder and no adjustments shall
be made on account of dividends (ordinary or extraordinary, whether
in cash, securities or other property) or distributions or other
rights declared on, or created in, the Common Stock for which the
record date is prior to the date the Holder becomes a record holder
of the shares of Common Stock covered by the Option, irrespective of
whether such Holder has given notice of exercise.
(k) Transfer of Option.
Options granted under this Plan and the rights and
privileges conferred by this Plan may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or
otherwise) other than by will, by applicable laws of descent and
distribution or (except in the case of an Incentive Stock Option)
pursuant to a qualified domestic relations order, and shall not be
subject to execution, attachment or similar process; provided
however, that any Agreement may provide or be amended to provide that
a Non-Qualified Stock Option to which it relates is transferable
without payment of consideration to immediate family members of the
Optionee or to trusts or partnerships or limited liability companies
established exclusively for the benefit of the Optionee and the
Optionee's immediate family members. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of any Option or of
any right or privilege conferred by this Plan contrary to the
provisions hereof, or upon the sale, levy or any attachment or
similar process upon the rights and privileges conferred by this
Plan, such Option shall thereupon terminate and become null and void.
<PAGE> 19
(l) Securities Regulation and Tax Withholding.
(1) Shares shall not be issued with respect to an Option
unless the exercise of such Option and the issuance and delivery of
such shares shall comply with all relevant provisions of law,
including, without limitation, Section 162(m) of the Code, any
applicable state securities laws, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations thereunder and
the requirements of any stock exchange or automated inter-dealer
quotation system of a registered national securities association upon
which such shares may then be listed, and such issuance shall be
further subject to the approval of counsel for the Company with
respect to such compliance, including the availability of an
exemption from registration for the issuance and sale of such shares.
The inability of the Company to obtain from any regulatory body the
authority deemed by the Company to be necessary for the lawful
issuance and sale of any shares under this Plan, or the
unavailability of an exemption from registration for the issuance and
sale of any shares under this Plan, shall relieve the Company of any
liability with respect to the non-issuance or sale of such shares.
As a condition to the exercise of an Option, the Plan
Administrator may require the Holder to represent and warrant in
writing at the time of such exercise that the shares are being
purchased only for investment and without any then-present intention
to sell or distribute such shares. At the option of the Plan
Administrator, a stop-transfer order against such shares may be
placed on the stock books and records of the Company, and a legend
indicating that the stock may not be pledged, sold or otherwise
transferred unless an opinion of counsel is provided stating that
such transfer is not in violation of any applicable law or
regulation, may be stamped on the certificates representing such
shares in order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may from
time to time be necessary to comply with federal and state securities
laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF
OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF OPTIONS.
(2) The Holder must pay to the Company by certified or
cashier's check, promptly upon exercise of an Option or, if later,
the date that the amount of such obligations becomes determinable,
all applicable federal, state, local and foreign withholding taxes
that the Plan Administrator, in its discretion, determines to result
upon exercise of an Option or from a transfer or other disposition of
shares of Common Stock acquired upon exercise of an Option or
otherwise related to an Option or shares of Common Stock acquired in
connection with an Option. Upon approval of the Plan Administrator,
a Holder may satisfy such obligation by complying with one or more of
the following alternatives selected by the Plan Administrator:
<PAGE> 20
(A) by delivering to the Company shares of Common
Stock previously held by such Holder or by the Company
withholding shares of Common Stock otherwise deliverable
pursuant to the exercise of the Option, which shares of Common
Stock received or withheld shall have a fair market value at the
date of exercise (as determined by the Plan Administrator) equal
to any withholding tax obligations arising as a result of such
exercise, transfer or other disposition;
(B) by executing appropriate loan documents approved
by the Plan Administrator by which the Holder borrows funds from
the Company to pay any withholding taxes due under this
Paragraph 2, with such repayment terms as the Plan Administrator
shall select; or
(C) by complying with any other payment mechanism
approved by the Plan Administrator from time to time.
(3) The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at
the discretion of the Plan Administrator, until the Plan
Administrator is satisfied that the applicable requirements of the
federal and state securities laws and the withholding provisions of
the Code have been met and that the Holder has paid or otherwise
satisfied any withholding tax obligation as described in (2) above.
(m) Stock Dividend or Reorganization.
(1) If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor
provision) or any "corporate transaction" described in the
regulations thereunder; (ii) the Company shall declare a dividend
payable in, or shall subdivide or combine, its Common Stock or
(iii) any other event with substantially the same effect shall occur,
the Plan Administrator shall, subject to applicable law, with respect
to each outstanding Option, proportionately adjust the number of
shares of Common Stock subject to such Option and/or the exercise
price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to such
event, and to the extent that such action shall include an increase
or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under Section 4
of this Plan shall automatically be increased or decreased, as the
case may be, proportionately, without further action on the part of
the Plan Administrator, the Company, the Company's shareholders, or
any Holder.
(2) In the event that the presently authorized capital
stock of the Company is changed into the same number of shares with a
different par value, or without par value, the stock resulting from
any such change shall be deemed to be Common Stock within the meaning
of the Plan, and each Option shall apply to the same number of shares
of such new stock as it applied to old shares immediately prior to
such change.
<PAGE> 21
(3) If the Company shall at any time declare an
extraordinary dividend with respect to the Common Stock, whether
payable in cash or other property, the Plan Administrator may,
subject to applicable law, in the exercise of its sole discretion and
with respect to each outstanding Option, proportionately adjust the
number of shares of Common Stock subject to such Option and/or adjust
the exercise price per share so as to preserve the rights of the
Holder substantially proportionate to the rights of the Holder prior
to such event, and to the extent that such action shall include an
increase or decrease in the number of shares of Common Stock subject
to outstanding Options, the number of shares available under
Section 4 of this Plan shall automatically be increased or decreased,
as the case may be, proportionately, without further action on the
part of the Plan Administrator, the Company, the Company's
shareholders, or any Holder.
(4) The foregoing adjustments in the shares subject to
Options shall be made by the Plan Administrator, or by any successor
administrator of this Plan, or by the applicable terms of any
assumption or substitution document.
(5) The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to
merge, consolidate or dissolve, to liquidate or to sell or transfer
all or any part of its business or assets.
6. EFFECTIVE DATE; TERM.
Incentive Stock Options may be granted by the Plan Administrator
from time to time on or after the date on which this Plan is adopted
(the "Effective Date") through the day immediately preceding the
tenth anniversary of the Effective Date. Non-Qualified Stock Options
may be granted by the Plan Administrator on or after the Effective
Date and until this Plan is terminated by the Board in its sole
discretion. Termination of this Plan shall not terminate any Option
granted prior to such termination. Any Incentive Stock Options
granted by the Plan Administrator prior to the approval of this Plan
by the shareholders of the Company in accordance with Section 422 of
the Code shall be granted subject to ratification of this Plan by the
shareholders of the Company within twelve (12) months before or after
the Effective Date. If such shareholder ratification is sought and
not obtained, all Options granted prior thereto and thereafter shall
be considered Non-Qualified Stock Options and any Options granted to
Covered Employees will not be eligible for the exclusion set forth in
Section 162(m) of the Code with respect to the deductibility by the
Company of certain compensation.
7. NO OBLIGATIONS TO EXERCISE OPTION.
The grant of an Option shall impose no obligation upon the
Optionee to exercise such Option.
<PAGE> 22
8. NO RIGHT TO OPTIONS OR TO EMPLOYMENT.
The Plan Administrator will determine whether or not any Options
are to be granted under this Plan in its sole discretion, and nothing
contained in this Plan shall be construed as giving any person any
right to participate under this Plan. The grant of an Option shall
in no way constitute any form of agreement or understanding binding
on the Company or any Related Company, express or implied, that the
Company or any Related Company will employ or contract with an
Optionee for any length of time, nor shall it interfere in any way
with the Company's or, where applicable, a Related Company's right to
terminate Optionee's employment at any time, which right is hereby
reserved.
9. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common
Stock issued upon the exercise of Options shall be used for general
corporate purposes, unless otherwise directed by the Board.
10. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may have
as members of the Board, members of the Plan Administrator shall be
indemnified by the Company for all reasonable expenses and
liabilities of any type or nature, including attorneys' fees,
incurred in connection with any action, suit or proceeding to which
they or any of them are a party by reason of, or in connection with,
this Plan or any Option granted under this Plan, and against all
amounts paid by them in settlement thereof (provided that such
settlement is approved by independent legal counsel selected by the
Company), except to the extent that such expenses relate to matters
for which it is adjudged that such Plan Administrator member is
liable for willful misconduct; provided, that within fifteen (15)
days after the institution of any such action, suit or proceeding,
the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the
Company may have the opportunity to make appropriate arrangements to
prosecute or defend the same.
11. AMENDMENT OF PLAN.
The Plan Administrator may, at any time, modify, amend or
terminate this Plan or modify or amend Options granted under this
Plan, including, without limitation, such modifications or amendments
as are necessary to maintain compliance with applicable statutes,
rules or regulations; provided however, no amendment with respect to
an outstanding Option which has the effect of reducing the benefits
afforded to the Holder thereof shall be made over the objection of
such Holder; further provided, that the events triggering
acceleration of vesting of outstanding Options may be modified,
expanded or eliminated without the consent of Holders.
<PAGE> 23
The Plan Administrator may condition the effectiveness of any such
amendment on the receipt of shareholder approval at such time and in
such manner as the Plan Administrator may consider necessary for the
Company to comply with or to avail the Company and/or the Optionees
of the benefits of any securities, tax, market listing or other
administrative or regulatory requirement. Without limiting the
generality of the foregoing, the Plan Administrator may modify grants
to persons who are eligible to receive Options under this Plan who
are foreign nationals or employed outside the United States to
recognize differences in local law, tax policy or custom.
Effective Date: October 01, 2000___________.
<PAGE> 24
EXHIBIT 23.1
WILLIAMS & WEBSTER, P.S.
CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS CONSULTANTS
Bank of America Financial Center
601 W. Riverside
Suite 1940
Spokane, Washington 99201-0611
(509) 838-5111
FAX (509) 838-5114
[email protected]
Board of Directors
Reward Enterprises
Richmond, BC V7B 1Y3
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use of our audit report dated August 4, 2000, on
the financial statements of Reward Enterprises as of June 30, 2000,
for filing with and attached to the Form S-8.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
December 1, 2000
<PAGE> 25
EXHIBIT 23.2
CONRAD C. LYSIAK
Attorney and Counselor at Law
601 West First Avenue
Suite 503
Spokane, Washington 99201
(509) 624-1475
FAX: (509) 747-1770
CONSENT
I HEREBY CONSENT to the inclusion of my name in connection with
the Form S-8 Registration Statement to be filed with the Securities
and Exchange Commission as attorney for the Issuer, Reward
Enterprises Inc. and to the reference to my firm under the subcaption
"Opinion of Counsel."
DATED this 5th day of December, 2000.
Yours truly,
/s/ Conrad C. Lysiak
Conrad C. Lysiak
