TECHLABS INC, S-8, 2000-02-11

TECHLABS INC
S-8, 2000-02-11
COMMUNICATIONS SERVICES, NEC

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<PAGE> 1
As filed with the Securities and Exchange Commission on February 11, 2000
Registration No. ___-________

================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------

FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

TECHLABS, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)

FLORIDA 65-0843965
------------------------ ------------------------
(State of Incorporation) (I.R.S. Employer
Identification Number)

3435 GALT OCEAN DRIVE, FT. LAUDERDALE, FL 33308
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)

1999 STOCK INCENTIVE PLAN
- --------------------------------------------------------------------------------
(Full title of the plan)

----------

Thomas J. Taule
Chairman of the Board of Directors
TECHLABS, INC.
3435 Galt Ocean Drive
Ft. Lauderdale, FL 33308
(Name and address of agent for service)
(954) 630-0027
(Telephone number, including area code, of agent for service)

----------

Copy to:
David M. Glassberg, Esquire
GLASSBERG & GLASSBERG, P.A.
1570 Madruga Avenue
Suite 211
Coral Gables, FL 33146
Telephone: (305) 669-9535

<PAGE> 2

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>

Common Stock to be
issued under the 1999
Stock Incentive Plan 1,500,000(1) $3.13 $4,695,000.00 $1,239.48
- -------------------------------------------------------------------------------------------------------

</TABLE>

(1) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee, based on 85% of the average of the
high and low prices per share of the Common Stock as reported on The
Over The Counter Bulletin Board on February 3, 2000.

2
<PAGE> 3

TECHLABS, INC.

REGISTRATION STATEMENT ON FORM S-8

PART II

INFORMATION REQUIRED IN REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.

There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission:

1. The Company's Registration Statement on Form 10SB (File No.
000-26233 as amended (the "Registration Statement"), filed pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
Company's registration of its Common Stock.

2. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 10SB (File No. 000- 26233) filed
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including any amendment or report filed for the purpose of
updating such description.

All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act on or after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicated
that all securities offered 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 part hereof from the date of filing of such
documents.

ITEM 4. DESCRIPTION OF SECURITIES.

Not applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.

Not applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company's Articles of Incorporation limits the liability of
Directors to the maximum extent permitted by Florida law. Florida law provides
that Directors of a company will not be personally liable for monetary damages
for breach of their fiduciary duties as Directors, except for liability (i) for
any breach of their duty of loyalty to the company or its stockholders, (ii) for
acts or omissions not in good faith or which involve

<PAGE> 4

intentional misconduct or knowing violation of law, (iii) for unlawful payments
or dividends or unlawful stock repurchase or redemptions as provided by Florida
Law or (iv) for transactions from which the director derived an improper
personal benefit.

The Company's Bylaws provide that the Company shall indemnify its
Officers and Directors and may indemnify its employees and other agents to the
fullest extent provided by Florida law, including those circumstance where
indemnification would otherwise be discretionary under its Bylaws covers at
least negligence on the part of indemnified parties. The Bylaws authorize the
use of indemnification agreements and the Company has entered into such
agreements with each of its Directors and Officers.

Florida law does not permit a corporation to eliminate a Director's
duty of care and the provisions of the Company's Certificate of Incorporation
have no effect on the availability of equitable remedies such as injunction or
rescission, based upon a Director's breach of the duty of care. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to foregoing provisions and agreements, the has been informed that in
the opinion of the staff of the Commission such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.

Not applicable.

ITEM 8. EXHIBITS.

DESCRIPTION
-----------

5.1 Opinion of counsel as to legality of securities being
registered
10.3 1999 Stock Incentive Plan and form of agreements
thereunder
23.1 Consent of independent auditors
23.2 Consent of counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page II-5)

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 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.

<PAGE> 5

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act") 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.

II-3

(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, 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 of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to Directors, Officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a Director, Officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such Director, Officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled bu 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 and will be governed by the final adjudication of such issue.

<PAGE> 6

II-4

SIGNATURES

Pursuant to the requirements of the securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto, duly
authorized in the City of Fort Lauderdale, State of Florida, on February 8,
2000.

/s/ Thomas J. Taule
----------------------------------------
Thomas J. Taule, Chairman of the Board

<PAGE> 7

POWER OF ATTORNEY

KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas J. Taule his attorney-in-fact,
with the power of substitution, for him in any and all capacities, to sign any
amendments to this Registration Statement on Form S-8 and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorney-in-fact, or his substitution or substitute, may do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed on February 8, 2000 by the following persons in the
capacities indicated.

SIGNATURE TITLE
--------- -----

/s/ Thomas J. Taule
- ----------------------------------- Director and Chairman of the Board
Thomas J. Taule of Directors

/s/ John J. Bennett
- ----------------------------------- President
John J. Bennett

II-5

INDEX TO EXHIBITS

DESCRIPTION
-----------

<PAGE> 1
EXHIBIT 5.1

OPINION OF COUNSEL

February 3, 2000

Techlabs, Inc.
3435 Galt Ocean Drive
Ft. Lauderdale, FL 33308

RE: REGISTRATION STATEMENT ON FORM S-8

Ladies and Gentlemen:

We have examined the Registration Statement on Form S-8 to be filed by
you with the Securities and Exchange Commission on or about February 8, 2000
(the "Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of 1,500,000 shares of your
Common Stock issuable under your 1999 Stock Incentive Plan. Such shares of
Common Stock are referred to herein as the "Shares" and the 1999 Stock Incentive
Plan is referred to herein as the "Plan". As your counsel in connection with
this transaction, we have examined the proceedings taken and are familiar with
the proceedings proposed to be taken by you in connection with the issuance and
sale of the Shares pursuant to the Plan.

It is our opinion that, upon completion of the actions being taken, or
contemplated by us as your counsel to be taken by you prior to the issuance of
the Shares pursuant to the Registration Statement and the Plan and upon
completion of the actions being taken in order to permit such transactions to be
carried out in accordance with the securities laws of the various states where
required, the Shares will be legally and validly issued, fully-paid and
non-assessable.

We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement and any amendments thereto.

Very truly yours,

GLASSBERG & GLASSBERG, P.A., a
Florida Professional Association

/s/ David M. Glassberg
--------------------------------

<PAGE> 1
Exhibit 10.3
TECHLABS, INC.

1999 STOCK INCENTIVE PLAN

ARTICLE 1. INTRODUCTION.

The Plan was adopted by the Board effective October, 25, 1999. The
purpose of the Plan is to promote the long-term success of the Company and the
creation of stockholder value by (a) encouraging Employees, Outside Directors
and Consultants to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Employees, Outside Directors and Consultants with
exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to stockholder interests through increased stock ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares or Options (which may constitute incentive stock options or
nonstatutory stock options).

The Plan shall be governed by, and construed in accordance with, the
laws of the State of Florida.

ARTICLE 2. ADMINISTRATION.

2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more Outside
Directors of the Company, who shall be appointed by the Board. In addition, the
composition of the Committee shall satisfy:

(a) Such requirements as the Securities and Exchange
Commission may establish for administrators acting
under plans intended to qualify for exemption under
Rule 16b-3 (or its successor) under the Exchange Act;
and

(b) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans
intended to qualify for exemption under section
162(m)(4)(C) of the Code.

2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) review
management's recommendation as to the Employees, Outside Directors and
Consultants who are to receive Awards under the Plan, (b) determine the type,
number, vesting requirements and other features and conditions of such Awards,
(c) interpret the Plan and (d) make all other decisions relating to the
operation of the Plan. The Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.

<PAGE> 2

2.3 COMMITTEE FOR NON-OFFICER GRANTS. The Board may also appoint a
secondary committee of the Board, which shall be composed of one or more
directors of the Company who need not satisfy the requirements of Section 2.1.
Such secondary committee may administer the Plan with respect to Employees and
Consultants who are not considered officers or directors of the Company under
section 16 of the Exchange Act or covered employees under Section 162(m)(3) of
the Code, may grant Awards under the Plan to such Employees and Consultants and
may determine all features and conditions of such Awards. Within the limitations
of this Section 2.3, any reference in the Plan to the Committee shall include
such secondary committee.

ARTICLE 3. SHARES AVAILABLE FOR GRANTS.

3.1 BASIC LIMITATION. Common Shares issued pursuant to the Plan may be
authorized but unissued shares or treasury shares. The aggregate number of
Options and Restricted Shares awarded under the Plan shall not exceed (a)
1,500,000 plus (b) the additional Common Shares described in Sections 3.2 and
3.3. The limitations of this Section 3.1 and Section 3.2 shall be subject to
adjustment pursuant to Article 9.

3.2 ANNUAL INCREASE IN SHARES. As of the first day of each calendar
year, commencing with January 1, 2000, the aggregate number of Options and
Restricted Shares that may be awarded under the Plan shall automatically
increase by a number equal to the lesser of (a) 1.5% of the total number of
Common Shares then outstanding (assuming for this purpose the conversion to
common stock of any outstanding convertible securities) or (b) 300,000.

3.3 ADDITIONAL SHARES. If Options are forfeited or terminated for any
other reason before being exercised, then the corresponding Common Shares shall
again become available for the grant of Options or Restricted Shares under the
Plan. If Restricted Shares or Common Shares issued upon the exercise of Options
are forfeited, then such Common Shares shall again become available for the
grant of NSOs and Restricted Shares under the Plan. The aggregate number of
Common Shares that may be issued under the Plan upon the exercise of ISOs shall
not be increased when Restricted Shares or other Common Shares are forfeited.

ARTICLE 4. ELIGIBILITY.

4.1 NONSTATUTORY STOCK OPTIONS AND RESTRICTED SHARES. Only Employees,
Outside Directors and Consultants shall be eligible for the grant of NSOs and
Restricted Shares.

4.2 INCENTIVE STOCK OPTIONS. Only Employees who are common-law
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. In addition, an Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(5) of the Code are
satisfied.

<PAGE> 3

ARTICLE 5. OPTIONS.

5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a reduction in
the Optionee's other compensation. A Stock Option Agreement may provide that a
new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in the form described in
Section 6.2.

5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 9. Options granted to any
Optionee in a single fiscal year of the Company shall not cover more than
1,000,000 Common Shares, except that Options granted to a new Employee in the
fiscal year of the Company in which his or her service as an Employee first
commences shall not cover more than 500,000 Common Shares. The limitations set
forth in the preceding sentence shall be subject to adjustment in accordance
with Article 9.

5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price; provided that the Exercise Price under an ISO shall in no event
be less than 100% of the Fair Market Value of a Common Share on the date of
grant and the Exercise Price under an NSO shall in no event be less than 85% of
the Fair Market Value of a Common Share on the date of grant. In the case of an
NSO, a Stock Option Agreement may specify an Exercise Price that varies in
accordance with a predetermined formula while the NSO is outstanding.

5.4 VESTING, EXERCISABILITY AND TERM. Options granted hereunder shall
vest as determined by the Committee. The Stock Option Agreement shall also
specify the term of the Option; provided that the term of an ISO shall in no
event exceed 10 years from the date of grant. A Stock Option Agreement may
provide for accelerated exercisability in the event of the Optionee's death,
disability or retirement or other events and may provide for expiration prior to
the end of its term in the event of the termination of the Optionee's service.

5.5 EFFECT OF CHANGE IN CONTROL. Notwithstanding Section 5.4 above,
each Option shall automatically fully vest (e.g., become exercisable) as to all
or part of the Common Shares subject to such Option in the event that a Change
in Control (as defined in Section 15.4 below) occurs with respect to the
Company, subject to the following limitations:

(a) In the case of an ISO, the acceleration of
exercisability shall not occur without the
Optionee's written consent.

<PAGE> 4

(b) If the Company and the other party to the
transaction constituting a Change in Control
agree that such transaction is to be treated
as a "pooling of interests" for financial
reporting purposes, and if such transaction
in fact is so treated, then the acceleration
of exercisability shall not occur to the
extent that the Company's independent
accountants and such other party's
independent accountants separately determine
in good faith that such acceleration would
preclude the use of "pooling of interests"
accounting.

5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of
the Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.

5.7 BUYOUT PROVISIONS. The Committee may at any time (a) offer to buy
out for a payment in cash or cash equivalents an Option previously granted or
(b) authorize an Optionee to elect to cash out the vested portion of an Option
previously granted, in either case at such time and based upon such terms and
conditions as the Committee shall establish.

ARTICLE 6. PAYMENT FOR OPTION SHARES.

6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued
upon exercise of Options shall be payable in cash or cash equivalents at the
time when such Common Shares are purchased, except as follows:

(a) In the case of an ISO granted under the
Plan, payment shall be made only pursuant to
the express provisions of the applicable
Stock Option Agreement. The Stock Option
Agreement may specify that payment may be
made in any form(s) described in this
Article 6.

(b) In the case of an NSO, the Committee may at
any time accept payment in any form(s)
described in this Article 6.

6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is
applicable, all or any part of the Exercise Price may be paid by surrendering,
or attesting to the ownership of, Common Shares that are already owned by the
Optionee. Such Common Shares shall be valued at their Fair Market Value on the
date when the new Common Shares are purchased under the Plan. The Optionee shall
not surrender, or attest to the ownership of, Common Shares in payment of the
Exercise Price if such action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to the Option for
financial reporting purposes.

<PAGE> 5

6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part of the Common
Shares being purchased under the Plan and to deliver all or part of the sales
proceeds to the Company.

6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to
pledge all or part of the Common Shares being purchased under the Plan to a
securities broker or lender approved by the Company, as security for a loan, and
to deliver all or part of the loan proceeds to the Company.

6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
all or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note. However, the par value of the Common Shares being purchased under the
Plan, if newly issued, shall be paid in cash or cash equivalents.

6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.

ARTICLE 7. AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS.

7.1 INITIAL GRANTS. Each Outside Director who first becomes a member of
the Board after the date of the Company's initial public offering shall receive
a one-time grant of a NSO covering 20,000 Common Shares (subject to adjustment
under Article 9). Such NSO shall be granted on the date when such Outside
Director first joins the Board and shall become exercisable in 36 equal
installments at monthly intervals over the 36-month period commencing on the
date of grant.

7.2 ANNUAL GRANTS. Upon the conclusion of each regular annual meeting
of the Company's stockholders held in the year following the Company's initial
public offering or thereafter, each Outside Director who will continue serving
as a member of the Board thereafter shall receive a NSO covering 5,000 Common
Shares (subject to adjustment under Article 9), except that such NSO shall not
be granted in the fiscal year in which the same Outside Director received the
NSO described in Section 7.1. NSOs granted under this Section 7.2 shall become
exercisable in full on the first anniversary of the date of grant.

<PAGE> 6

7.3 ACCELERATED EXERCISABILITY. All NSOs granted to an Outside Director
under this Article 7 shall become exercisable in full in the event of:

(a) The termination of such Outside Director's
service because of death, total and
permanent disability or retirement at or
after age 70; or

(b) a Change in Control (as defined in Section
15.4 below) with respect to the Company,
except as provided in the next following
sentence. If the Company and the other party
to the transaction constituting a Change in
Control agree that such transaction is to be
treated as a "pooling of interests" for
financial reporting purposes, and if such
transaction in fact is so treated, then the
acceleration of exercisability shall not
occur to the extent that the Company's
independent accountants and such other
party's independent accountants separately
determine in good faith that such
acceleration would preclude the use of
"pooling of interests" accounting.

7.4 EXERCISE PRICE. The Exercise Price under all NSOs granted to an
Outside Director under this Article 7 shall be equal to 100% of the Fair Market
Value of a Common Share on the date of grant, payable in one of the forms
described in Sections 6.1, 6.2, 6.3 and 6.4.

7.5 TERM. All NSOs granted to an Outside Director under this Article 7
shall terminate on the earliest of (a) the 10th anniversary of the date of
grant, (b) the date three months after the termination of such Outside
Director's service for any reason other than death or total and permanent
disability or (c) the date 12 months after the termination of such Outside
Director's service because of death or total and permanent disability.

7.6 AFFILIATES OF OUTSIDE DIRECTORS. The Committee may provide that the
NSOs that otherwise would be granted to an Outside Director under this Article 7
shall instead be granted to an affiliate of such Outside Director. Such
affiliate shall then be deemed to be an Outside Director for purposes of the
Plan, provided that the service-related vesting and termination provisions
pertaining to the NSOs shall be applied with regard to the service of the
Outside Director.

ARTICLE 8. RESTRICTED SHARES.

8.1 RESTRICTED STOCK AGREEMENT. Each grant of Restricted Shares under
the Plan shall be evidenced by a Restricted Stock Agreement between the
recipient and the Company. Such Restricted Shares shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.

6
<PAGE> 7

8.2 PAYMENT FOR AWARDS. Subject to the following sentence, Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash equivalents,
full-recourse promissory notes, past services and future services. To the extent
that an Award consists of newly issued Restricted Shares, the Award recipient
shall furnish consideration with a value not less than the par value of such
Restricted Shares in the form of cash, cash equivalents or past services
rendered to the Company (or a Parent or Subsidiary), as the Committee may
determine.

8.3 VESTING CONDITIONS. Unless otherwise provided in the Restricted
Stock Agreement, the Restricted Shares shall vest over a period of four (4)
years with 25% of the Restricted Shares vesting on the first anniversary of the
date of Award and the remaining 75% of the Restricted Shares vesting as to
one-thirtysixth (1/36th) each month thereafter over the next three (3) years. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant's death, disability or retirement or other events. All
Restricted Shares shall become vested in the event that a Change in Control (as
defined in Section 15.4) occurs with respect to the Company, except as provided
in the next following sentence. If the Company and the other party to the
transaction constituting a Change in Control agree that such transaction is to
be treated as a "pooling of interests" for financial reporting purposes, and if
such transaction in fact is so treated, then the acceleration of vesting shall
not occur to the extent that the Company's independent accountants and such
other party's independent accountants separately determine in good faith that
such acceleration would preclude the use of "pooling of interests" accounting.

8.4 VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares
awarded under the Plan shall have the same voting, dividend and other rights as
the Company's other stockholders. A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends received
in additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to
which the dividends were paid.

ARTICLE 9. PROTECTION AGAINST DILUTION.

9.1 ADJUSTMENTS. In the event of a subdivision of the outstanding
Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an
amount that has a material effect on the price of Common Shares, a combination
or consolidation of the outstanding Common Shares (by reclassification or
otherwise) into a lesser number of Common Shares, a recapitalization, a spin-off
or a similar occurrence, the Committee shall make such adjustments as it, in its
sole discretion, deems appropriate in one or more of (a) the number of Options
and Restricted Shares available for future Awards under Article 3, (b) the
limitations set forth in Section 5.2, the number of NSOs to be granted to
Outside Directors under Article 7; (d) the number of Common Shares covered by
each outstanding Option or (e) the Exercise Price under each outstanding Option.
Except as provided in this Article 9, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

<PAGE> 8

9.2 DISSOLUTION OR LIQUIDATION. To the extent not previously exercised,
Options shall terminate immediately prior to the dissolution or liquidation of
the Company.

9.3 REORGANIZATIONS. In the event that the Company is a party to a
merger or other reorganization, outstanding Options and Restricted Shares shall
be subject to the agreement of merger or reorganization. Such agreement shall
provide for (a) the continuation of the outstanding Awards by the Company, if
the Company is a surviving corporation, (b) the assumption of the outstanding
Awards by the surviving corporation or its parent or subsidiary, the
substitution by the surviving corporation or its parent or subsidiary of its own
awards for the outstanding Awards, (d) full exercisability or vesting and
accelerated expiration of the outstanding Awards or (e) settlement of the full
value of the outstanding Awards in cash or cash equivalents followed by
cancellation of such Awards.

ARTICLE 10. DEFERRAL OF DELIVERY OF SHARES

The Committee (in its sole discretion) may permit or require an
Optionee to have Common Shares that otherwise would be delivered to such
Optionee as a result of the exercise of an Option converted into amounts
credited to a deferred compensation account established for such Optionee by the
Committee as an entry on the Company's books. Such amounts shall be determined
by reference to the Fair Market Value of such Common Shares as of the date when
they otherwise would have been delivered to such Optionee. A deferred
compensation account established under this Article 10 may be credited with
interest or other forms of investment return, as determined by the Committee. An
Optionee for whom such an account is established shall have no rights other than
those of a general creditor of the Company. Such an account shall represent an
unfunded and unsecured obligation of the Company and shall be subject to the
terms and conditions of the applicable agreement between such Optionee and the
Company. If the conversion of Options is permitted or required, the Committee
(in its sole discretion) may establish rules, procedures and forms pertaining to
such conversion, including (without limitation) the settlement of deferred
compensation accounts established under this Article 10.

ARTICLE 11. AWARDS UNDER OTHER PLANS.

The Company may grant awards under other plans or programs. Such awards
may be settled in the form of Common Shares issued under this Plan. Such Common
Shares shall be treated for all purposes under the Plan like Restricted Shares
and shall, when issued, reduce the number of Common Shares available under
Article 3.

ARTICLE 12. LIMITATION ON RIGHTS.

12.1 RETENTION RIGHTS. Neither the Plan nor any Award granted under the
Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director or Consultant. The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the service of any Employee, Outside
Director or Consultant at any time, with or without cause, subject to applicable
laws, the Company's certificate of incorporation and by-laws and a written
employment agreement (if any).

<PAGE> 9

12.2 STOCKHOLDERS' RIGHTS. A Participant shall have no dividend rights,
voting rights or other rights as a stockholder with respect to any Common Shares
covered by his or her Award prior to the time when a stock certificate for such
Common Shares is issued or, in the case of an Option, the time when he or she
becomes entitled to receive such Common Shares by filing a notice of exercise
and paying the Exercise Price. No adjustment shall be made for cash dividends or
other rights for which the record date is prior to such time, except as
expressly provided in the Plan.

12.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the
issuance of such Common Shares, to their registration, qualification or listing
or to an exemption from registration, qualification or listing.

ARTICLE 13. WITHHOLDING TAXES.

13.1 GENERAL. To the extent required by applicable federal, state,
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares or make any cash payment under the Plan
until such obligations are satisfied.

13.2 SHARE WITHHOLDING. The Committee may permit a Participant to
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Common Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued at
their Fair Market Value on the date when taxes otherwise would be withheld in
cash.

ARTICLE 14. FUTURE OF THE PLAN.

14.1 TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on October 25, 1999. The Plan shall remain in effect until it is
terminated under Section 14.2, except that no ISOs shall be granted on or after
the 10th anniversary of the later of (a) the date when the Board adopted the
Plan or (b) the date when the Board adopted the most recent increase in the
number of Common Shares available under Article 3 which was approved by the
Company's stockholders.

14.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's stockholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan.

<PAGE> 10

ARTICLE 15. DEFINITIONS.

15.1 "AFFILIATE" means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.

15.2 "AWARD" means any award of an Option or a Restricted Share under
the Plan.

15.3 "BOARD" means the Company's Board of Directors, as constituted
from time to time.

15.4 "CHANGE IN CONTROL" shall mean:

(a) The consummation of a merger or
consolidation of the Company with or into
another entity or any other corporate
reorganization, if more than 50% of the
combined voting power of the continuing or
surviving entity's securities outstanding
immediately after such merger, consolidation
or other reorganization is owned by persons
who were not stockholders of the Company
immediately prior to such merger,
consolidation or other reorganization;

(b) The sale, transfer or other disposition of
all or substantially all of the Company's
assets;

(c) At such time as the Company's Board of
Directors becomes fully constituted (e.g.,
the number of directors reaches five (5)), a
cumulative change in the identity of a
majority of the members of the Company's
first fully constituted Board of Directors
(provided, however, that the appointment of
a new director upon the death or resignation
of a director by the remaining directors
then in office shall not constitute a change
in identity with respect to such departed
director); or

(d) Any transaction as a result of which any
person is the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the
Company representing at least 50% of the
total voting power represented by the
Company's then outstanding voting
securities. For purposes of this Subsection
(d), the term "person" shall have the same
meaning as when used in sections 13(d) and
14(d) of the Exchange Act but shall exclude
(i) a trustee or other fiduciary holding
securities under an employee benefit plan of
the Company or of a Parent or Subsidiary and
(ii) a corporation owned directly or
indirectly by the stockholders of the
Company in substantially the same
proportions as their ownership of the common
stock of the Company.

<PAGE> 11

A transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Company's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such transaction.

15.5 "CODE" means the Internal Revenue Code of 1986, as amended.

15.6 "COMMITTEE" means a committee of the Board, as described in
Article 2.

15.7 "COMMON SHARE" means one share of the common stock of the Company.

15.8 "COMPANY" means TECHLABS, INC., a Florida corporation.

15.9 "CONSULTANT" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 4.2.

15.10 "EMPLOYEE" means a common-law employee of the Company, a Parent,
a Subsidiary or an Affiliate.

15.11 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

15.12 "EXERCISE PRICE" means the amount for which one Common Share may
be purchased upon exercise of such Option, as specified in the applicable Stock
Option Agreement.

15.13 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee in good faith on such basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in The Wall Street Journal. Such determination
shall be conclusive and binding on all persons.

15.14 "ISO" means an incentive stock option described in section 422(b)
of the Code.

15.15 "NSO" means a stock option not described in sections 422 of the
Code.

15.16 "OPTION" means an ISO or NSO granted under the Plan and entitling
the holder to purchase Common Shares.

15.17 "OPTIONEE" means an individual or estate who holds an Option.

15.18 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not an
Employee. Service as an Outside Director shall be considered employment for all
purposes of the

<PAGE> 12

Plan, except as provided in Section 4.2.

15.19 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

15.20 "PARTICIPANT" means an individual or estate who holds an Award.

15.21 "PLAN" means this TECHLABS, INC. 1999 Stock Incentive Plan, as
amended from time to time.

15.22 "RESTRICTED SHARE" means a Common Share awarded under the Plan.

15.23 "RESTRICTED STOCK AGREEMENT" means the agreement between the
Company and the recipient of a Restricted Share that contains the terms,
conditions and restrictions pertaining to such Restricted Share.

15.24 "STOCK OPTION AGREEMENT" means the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions pertaining
to his or her Option.

15.25 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE> 13

ARTICLE 16. EXECUTION.

To record the adoption of the Plan by the Board, the Company has caused
its duly authorized officer to execute this document in the name of the Company.

TECHLABS, INC.

By: /s/ Thomas J. Taule
-------------------------------
Title: Chairman of the Board
----------------------------

Date approved by Board of Directors:
-------------------------------
Date Approved by Shareholders:
-------------------------------

[SIGNATURE PAGE TO 1999 STOCK INCENTIVE PLAN]

<PAGE> 14
FORM OF
TECHLABS, INC.
STOCK OPTION AGREEMENT
(INCENTIVE STOCK OPTION)

This Stock Option Agreement (the "Agreement") is made and entered into
effective as of the date set forth on the Signature Page attached hereto by and
between TECHLABS, INC., a Florida corporation (the "Corporation"), and that
person identified on the Signature Page attached hereto (the "Optionee"). This
option is intended to qualify as an "incentive stock option" with the meaning of
Section 422 of the Internal Revenue Code, as amended (the "Code").

The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants. Defined terms not explicitly
defined in this agreement but defined in TECHLABS, INC. 1999 Stock Incentive
Plan (the "Plan) shall have the same definitions as in the Plan.

1. GRANT OF OPTION. Subject to the vesting provisions of Section 3 and
4, the Corporation hereby grants to Optionee, as of the date hereof the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of the aggregate number of shares of Common Stock set forth on the
Signature Page attached hereto (the "Option"), subject to adjustment in
accordance with the provisions of Section 18 below. The Plan provides for the
issuance of Incentive Stock Options ("ISO"). Subject to Section 25, it is
understood and acknowledged that (a) if the Optionee complies with the terms of
this Agreement, (b) the Option was designated as an ISO at the time of grant and
(c) the Optionee is an employee of the Corporation at all times from the date of
this Agreement through the date which is three months prior to the exercise of
the Option, the Option is intended to be an Incentive Stock Option which will
qualify under Section 422(b) of the Code.

2. OPTION PRICE. The Option Price is 100% of the fair market value of
the Common Stock at the time that the Option is granted (110% of such fair
market value if the Option is granted to a Ten Percent Shareholder).

3. RIGHT TO EXERCISE. The right to exercise the Option shall vest over
a three (3) year period as set in Section 5.4 of the Plan.

4. SECURITIES LAW REQUIREMENTS. No part of the Option shall be
exercised if counsel to the Corporation determines that any applicable
registration requirement under the Securities Act of 1933, as amended, or any
other applicable requirement of Federal or state law has not been met.

<PAGE> 15

5. TERM OF OPTION. The Option shall terminate in any event on the
earliest of (a) the date set forth on the Signature Page, (b) the expiration of
the period described in Section 6 below, (c) the expiration of the period
described in Section 7 below, (d) the expiration of the period described in
Section 8 below; (e) the expiration of the period described in Section 9 below;
or (f) the expiration of ten (10) years (five (5) years in the case of an Option
granted to a Ten Percent Shareholder) from the date the Option was granted.

6. EXERCISE FOLLOWING TERMINATION OF EMPLOYMENT, EXCEPT BY DEATH,
DISABILITY OR RETIREMENT. If the Optionee's service with the Corporation
terminates for any reason other than death, disability or retirement, the Option
(to the extent it has not previously been exercised and is then exercisable) may
be exercised within the period of three (3) consecutive months commencing
immediately following the date of such termination (but not later than the
termination date set forth in Section 5(a) above). The foregoing
notwithstanding, the Option shall cease to be exercisable on the date of such
termination if the termination is for cause. For this purpose, "cause" shall
mean conviction of a felony, misappropriation of assets of the Corporation or
any subsidiary, continued or repeated insobriety, continued or repeated absence
from service during the usual working hours of the Optionee's position for
reason other than disability or sickness, or refusal to carry out the reasonable
directions of the Corporation's Board of Directors or senior executive officers.

7. EXERCISE FOLLOWING DEATH. If the Optionee's service with the
Corporation terminates by reason of the Optionee's death, or if the Optionee
dies after termination of service but while the Option would have been
exercisable hereunder, the Option (to the extent it has not previously been
exercised and is then exercisable) may be exercised within twelve (12) months
after the date of Optionee's death (but not later than the termination date set
forth in Section 5(a) above). The exercise may be made by Optionee's
representative or by the person entitled thereto under Optionee's will or the
laws of descent and distribution; provided that such representative or such
person consents in writing to abide by and be subject to the terms of this
Agreement and such writing is delivered to the President of the Corporation.

8. EXERCISE FOLLOWING DISABILITY. If the Optionee's service with the
Corporation terminates by reason of the Optionee's disability, the Option (to
the extent not previously exercised and is then exercisable) may be exercised
for a period of twelve (12) months after the date of termination for reason of
disability (but not later than the termination date set forth in Section 5(a)
above).

9. EXERCISE FOLLOWING RETIREMENT. If the Optionee's service with the
Corporation terminates by reason of retirement, pursuant to the Corporation's
formal retirement policy, the Option (to the extent it has not previously been
exercised and is then exercisable) may be exercised within three (3) consecutive
months after the date of the Optionee's retirement (but not later than the
termination date set forth in Section 5(a) above).

<PAGE> 16

10. TIME OF TERMINATION OF SERVICE. For the purposes of this Agreement,
Optionee's service shall be deemed to have terminated on the earlier of (a) the
date when Optionee's service in fact terminated or (b) the date when the
Optionee gave or received written notice that his or her service is to
terminate.

11. NONTRANSFERABILITY. Unless the Corporation otherwise consents in
writing, the option and all rights and privileges granted hereunder shall be
non-assignable and non-transferable by the Optionee, either voluntarily or by
operation of law, except by will or by operation of the laws of descent and
distribution, shall not be pledged or hypothecated in any way, and shall be
exercisable during lifetime only by the Optionee. Except as otherwise provided
herein, any attempted alienation, assignment, pledge, hypothecation, attachment,
execution or similar process, whether voluntary or involuntary, with respect to
all or any part of the Option or any right thereunder, shall be null and void
and, at the Corporation's option, shall cause all of Optionee's rights under
this Agreement to terminate.

12. EFFECT OF EXERCISE. Upon exercise of all or any part of the Option,
the number of shares of Common Stock subject to the Option under this Agreement
shall be reduced by the number of shares with respect to which such exercise is
made.

13. PARTIAL EXERCISE. Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in whole or in part
at any time prior to the time when the Option or portion thereof becomes
unexercisable under Section 5; provided, however, that each partial exercise
shall be for not less than one hundred (100) shares and shall be for whole
shares only.

14. METHOD OF EXERCISE. Each exercise of the Option shall be by means
of a written notice of exercise in substantially the form of attached Exhibit A
delivered to the Secretary of the Corporation at its principal office and
accompanied by payment in full of the option price for each share of Common
Stock purchased under the Option. Such notice shall specify the number of shares
of Common Stock with respect to which the Option is exercised and shall be
signed by the person exercising the Option. If the Option is exercised by a
person other than the Optionee, such notice shall be accompanied by proof,
reasonably satisfactory to the Corporation, of such person's right to exercise
the Option.

The Purchase Price specified in Section 2 above shall be paid in full
upon the exercise of the Option (i) by cash, in United States dollars; by the
surrender of Shares in good form for transfer, owned by the person exercising
the Option and having a Fair Market Value on the date of exercise equal to the
Purchase Price, or in any combination of cash and Shares, as long as the sum of
the cash so paid and the Fair Market Value of the Shares so surrendered equal
the Purchase Price; (ii) by cancellation of indebtedness owed by the Corporation
to the Optionee; or (iii) by any combination of the foregoing. The Board of
Directors may, but is not obligated to, accept a secured recourse promissory
note of Optionee (bearing such rate of interest and such other terms as they may
reasonably determine) as payment of the exercise price; PROVIDED, HOWEVER, no
stock certificate representing the shares be released until the note shall have
been paid in full.

<PAGE> 17

15. WITHHOLDING TAXES. If the Optionee is an employee or former
employee of the Corporation when all or part of the option is exercised, unless
the Option qualifies as an ISO under Section 422 of the Code, the Corporation
may require the Optionee to deliver payment of any withholding taxes (in
addition to the Option exercise price) in cash with respect to the difference
between the Option exercise price and the Fair Market Value of the Common Stock
acquired upon exercise. Alternatively, the Corporation may accept shares having
a Fair Market Value equal to the amount of the withholding taxes.

16. ISSUANCE OF SHARES. Subject to the foregoing conditions, the
Corporation, as soon as reasonably practicable after receipt of a proper notice
of exercise and without transfer or issue tax or other incidental expense to the
person exercising the Option, shall deliver to such person at the principal
office of the Corporation, or such other location as may be acceptable to the
Corporation and such person, one or more certificates for the shares of Common
Stock with respect to which the option has been exercised. Such shares shall be
fully paid and nonassessable and shall be issued in the name of such person.
However, at the request of the Optionee, such shares may be issued in the names
of the Optionee and his or her spouse (a) as joint tenants with right of
survivorship, (b) as community property or (c) as tenants in common without
right of survivorship.

17. LIMITATION OF OPTIONEE'S RIGHTS. Neither Optionee nor any person
entitled to exercise the Option shall be or have any of the rights of a
shareholder of the Corporation in respect of any share issuable upon the
exercise of the Option unless and until a certificate or certificates
representing shares of Common Stock shall have been issued and delivered upon
exercise of the Option in full or in part. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued. This option is not an employment contract and
nothing in this option shall be deemed to create in any way whatsoever any
obligation on the Optionee's part to continue in the employ of the Company, or
of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective shareholders, Board of Directors, officers or
employees to continue any relationship which the Optionee might have as a
Director or Consultant for the Company or Affiliate of the Company.

18. CONSENT REQUIRED TO TRANSFER. In connection with any underwritten
public offering by the Corporation of its equity securities pursuant to an
effective registration statement filed under the 1933 Act, including the
Corporation's initial public offering, Optionee shall not sell, make any short
sale of, loan, hypothecate, pledge, grant any option for the purchase of, or
otherwise dispose or transfer for value or otherwise agree to engage in any of
the foregoing transactions with respect to, any shares of Common Stock purchased
under the Option without the prior written consent of the Corporation or its
underwriters. Such limitations shall be in effect for such period of time from
and after the effective date of such registration statement as may be requested
by the Corporation or such underwriters.

<PAGE> 18

Common Stock or the payment of a stock dividend (but only of Common Stock) or
any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Corporation, appropriate
adjustments shall be made in the number and/or kind of shares or securities for
which the unexercised portions of this Option may thereafter be exercised, all
without any change in the aggregated exercise price applicable to the
unexercised portions of this Option, but with a corresponding adjustment in the
exercise price per share or other unit. Subject to the provisions of the Stock
Option Plan, if the Corporation is the surviving corporation in any merger or
consolidation, this Option shall pertain and apply to the securities to which a
holder of the number of Common Stock subject to the Option would have been
entitled. In the event of a merger or consolidation in which the Corporation is
not the surviving corporation, the date of exercisability of this Option shall
be accelerated to a date prior to such merger or consolidation, unless, in order
to qualify for "pooling-of-interest treatment, the agreement of merger or
consolidation provides for the assumption of the Option by the successor to the
Corporation. To the extent that the foregoing adjustments relate to securities
of the Corporation, such adjustments shall be made by the Board, whose
determination shall be conclusive and binding on all persons. Except as
expressly provided in this Section 19, the Optionee shall have no rights by
reason of subdivision or consolidation of shares of Common Stock of any class,
the payment of any Common Stock dividend or any other increase or decrease in
the number of shares of Common Stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or
Common Stock of another corporation, and any issue by the Corporation of shares
of Common Stock of any class, or securities convertible into shares of Common
Stock of any class, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or Option Price of Common Stock subject to
an Option.

20. RESTRICTED STOCK PROVISIONS. In addition to certain federal and
state securities laws restrictions, until such time as the Corporation shall
have consummated an initial public offering of its common stock, the Shares of
Common Stock issued on exercise of this Option shall upon issuance be subject to
the following restrictions (and, as used herein, "restricted stock" means shares
issued on exercise of this Option which are still subject to the restrictions
imposed under this Section that have not yet expired or terminated):

(a) Such shares of restricted stock may not be sold or
otherwise transferred or hypothecated;

(b) If the employment of the Optionee with the Company or a
subsidiary of the Company is terminated for any reason, including death,
disability or retirement, the Company (or any subsidiary designated by it) shall
have the option for sixty (60) days after such termination of employment to
purchase for cash all or any part of his restricted stock at the lesser of (i)
the price paid therefor upon exercise of this Option, or (ii) the Fair Market
Value of the restricted stock on the date of such termination of employment (for
which purpose Fair Market Value shall have the same meaning as set forth in the
Plan);

<PAGE> 19

(c) The restrictions imposed under this section 20 shall apply
as well to all shares or other securities issued in respect of restricted stock
in connection with any stock split, reverse stock split, stock dividend,
recapitalization, reclassification, spin-off, split-off merger, consolidation or
reorganization, but such restrictions imposed under this section 20 shall expire
or terminate with respect to the Shares on the earliest to occur of the
following:

(i) The ninetieth (90th) day after the date on which
shares of the same class of Common Stock as such restricted stock first become
registered pursuant tot he Exchange Act (which term for this purpose has the
same meaning as set forth in the Plan);

(ii) The fifth (5th) anniversary of the date of grant
hereof;

(iii) As to any shares for which the Company's (or a
subsidiary's) sixty (60) day option to purchase upon termination of employment
shall have become exercisable but shall expire without having been exercised, on
the first business day following the expiration of such sixty (60) day option
period; or

(iv) The occurrence of any event or transaction upon
which this Option terminates by reason of the provisions of Section 5 hereof.

(d) All certificates representing shares of Common Stock
purchased upon the exercise of the Option shall bear the following legend:

"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH SECURITIES
WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH REGISTRATION IS
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."

21. STOCK INCENTIVE PLAN. This Agreement is subject to, and the Company
and the Optionee agree to be bound by, all of the terms and conditions of the
Company's 1999 Stock Incentive Plan under which this Option was granted, as the
same shall have been amended from time to time in accordance with the terms
thereof, provided that no such amendment shall deprive the Optionee, without his
consent, of this Option or any of his rights hereunder. Pursuant to said Plan,
the Board of Directors of the Company or its Committee established for such
purposes is vested with final authority to interpret and construe the Plan and
this Option, and is authorized to adopt rules and regulations for carrying out
the Plan. A copy of the Plan in its present form is available for inspection
during business hours by the Optionee or other persons entitled to exercise this
Option at the Company's principal office.

22. NOTICES. Any notice to the Corporation contemplated by this
Agreement shall be addressed to it in care of its President; any notice to the
Optionee shall be addressed to him or her

<PAGE> 20

at the address on file with the Corporation on the date hereof or at such other
address as Optionee may hereafter designate in a writing delivered to the
Corporation as provided herein.

23. INTERPRETATION. The interpretation, construction, performance and
enforcement of this Agreement shall lie within the sole discretion of the Board,
and the Board's determinations shall be conclusive and binding on all interested
persons.

24. GOVERNING LAW. This Agreement has been made, executed and delivered
in, and the interpretation, performance and enforcement hereof shall be governed
by and construed under the laws of the State of Florida.

25. EFFECT OF EARLY DISPOSITION. If the Optionee exercises an Option
granted as an ISO within two years of the date on which the Option was granted,
or disposes of the stock obtained by the exercise of the Option within one year
from the date of such exercise, whichever is later, the Option will be a
Nonqualified Stock Option, and the gain, if any, on exercise will be treated as
compensation rather than as capital gain. The Optionee agrees to notify the
Corporation of such early exercise of the option or disposition of the stock
acquired within thirty (30) days thereof. Optionee shall not be required to hold
the Common Stock for any period of time following exercise, unless legal counsel
to the Corporation shall reasonably determine that such a sale would violate
federal or state securities laws.

********************

<PAGE> 21
FORM OF
TECHLABS, INC.
STOCK OPTION AGREEMENT
(NON-STATUTORY STOCK OPTION)

This Stock Option Agreement (the "Agreement") is made and entered into
effective as of the date set forth on the Signature Page attached hereto by and
between TECHLABS, INC., a Florida corporation (the "Corporation"), and that
person identified on the Signature Page above and attached hereto (the
"Optionee"). This option is not intended to qualify and will not be treated as
an "incentive stock option" with the meaning of Section 422 of the Internal
Revenue Code (the "Code")

1. GRANT OF OPTION. Subject to the vesting provisions of Section 3
and/or as set forth on the Signature Page attached hereto, the Corporation
hereby grants to Optionee, as of the date hereof the right and option to
purchase, on the terms and conditions hereinafter set forth, all or any part of
the aggregate number of shares of Common Stock set forth on the Signature Page
attached hereto (the "Option"), subject to adjustment in accordance with the
provisions of Section 18 below. It is understood and acknowledged that the
Option is designated as a Nonstatutory Stock Option which will not qualify as an
Incentive Stock Option under Section 422 of the Code.

2. OPTION PRICE. The price to be paid for the shares of Common Stock to
be issued upon exercise of the Option or any part thereof shall be as set forth
on the Signature Page (the "Purchase Price").

3. RIGHT TO EXERCISE. The right to exercise the Option shall vest over
a three (3) year period as set in Section 5.4 of the Plan.

5. TERM OF OPTION. The Option shall terminate in any event on the
earliest of (a) the date set forth on the Signature Page, (b) the expiration of
the period described in Section 6 below, (c) the expiration of the period
described in Section 7 below, (d) the expiration of the period described in
Section 8 below, or (e) the expiration of the period described in Section 9
below.

<PAGE> 22

9. EXERCISE FOLLOWING RETIREMENT. If the Optionee's service with the
Corporation terminates by reason of retirement, (the voluntary retirement of
employment upon attainment of 65 years of age and completion of 20 years of
service), the Option (to the extent it has not previously been exercised and is
then exercisable) may be exercised within three (3) consecutive months after the
date of the Optionee's retirement (but not later than the termination date set
forth in Section 5(a) above).

<PAGE> 23

laws of descent and distribution, shall not be pledged or hypothecated in any
way, and shall be exercisable during lifetime only by the Optionee. Except as
otherwise provided herein, any attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary or
involuntary, with respect to all or any part of the Option or any right
thereunder, shall be null and void and, at the Corporation's option, shall cause
all of Optionee's rights under this Agreement to terminate.

12. EFFECT OF EXERCISE. Upon exercise of all or any part of the Option,
the number of shares of Common Stock subject to option under this Agreement
shall be reduced by the number of shares with respect to which such exercise is
made.

14. METHOD OF EXERCISE. Each exercise of the Option shall be by means
of a written notice of exercise in substantially the form the attached Exhibit A
delivered to the Secretary of the Corporation at its principal office and
accompanied by payment in full of the option price for each share of Common
Stock purchased under the Option. Such notice shall specify the number of shares
of Common Stock with respect to which the Option is exercised and shall be
signed by the person exercising the Option. If the Option is exercised by a
person other than the Optionee, such notice shall be accompanied by proof,
reasonably satisfactory to the Corporation, of such person's right to exercise
the Option.

15. WITHHOLDING TAXES. If the Optionee is an employee or former
employee of the Corporation when all or part of the option is exercised, the
Corporation may require the Optionee to deliver payment of any withholding taxes
(in addition to the Option exercise price) in cash with respect to the
difference between the Option exercise price and the fair market value of the
Common Stock acquired upon exercise. Alternatively, the Corporation may accept
shares having a fair market value equal to the amount of the withholding taxes.

<PAGE> 24

17. LIMITATION OF OPTIONEE'S RIGHTS. Neither Optionee nor any person
entitled to exercise the Option shall be or have any of the rights of a
shareholder of the Corporation in respect of any share issuable upon the
exercise of the Option unless and until a certificate or certificates
representing shares of Common Stock shall have been issued and delivered upon
exercise of the Option in full or in part. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificates are issued. This option is not an employment contract and
nothing in this option shall be deemed to create in any way whatsoever any
obligation on your part to continue in the employ of the Company, or of the
Company to continue your employment with the Company. In addition, nothing in
this option shall obligate the Company or any Affiliate of the Company, or their
respective shareholders, Board of Directors, officers or employees to continue
any relationship which you might have as a Director or Consultant for the
Company or Affiliate of the Company.

19. RECAPITALIZATIONS. Subject to the provision of the Stock Option
Plan, if the outstanding shares of the class then subject to this option are
adjusted for any increase of decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of Common Stock or the
payment of a stock dividend (but only of Common Stock) or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Corporation, appropriate adjustments shall be made in
the number and/or kind of shares or securities for which the unexercised
portions of this Option may thereafter be exercised, all without any change in
the aggregated exercise price applicable to the unexercised

<PAGE> 25

portions of this Option, but with a corresponding adjustment in the exercise
price per share or other unit. Subject to the provisions of the Stock Option
Plan, if the Corporation is the surviving corporation in any merger or
consolidation, this Option shall pertain and apply to the securities to which a
holder of the number of Common Stock subject to the Option would have been
entitled. In the event of a merger or consolidation in which the Corporation is
not the surviving corporation, the date of exercisability of this Option shall
be accelerated to a date prior to such merger or consolidation, unless, in order
to quaify for "pooling-of-interest treatment, the agreement of merger or
consolidation provides for the assumption of the Option by the successor to the
Corporation. To the extent that the foregoing adjustments relate to securities
of the Corporation, such adjustments shall be made by the Board, whose
determination shall be conclusive and binding on all persons. Except as
expressly provided in this Section 19, the Optionee shall have no rights by
reason of subdivision or consolidation of shares of Common Stock of any class,
the payment of any Common Stock dividend or any other increase or decrease in
the number of shares of Common Stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or
Common Stock of another corporation, and any issue by the Corporation of shares
of Common Stock of any class, or securities convertible into shares of Common
Stock of any class, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or Option Price of Common Stock subject to
an Option.

(a) Such shares of restricted stock may not be sold or
otherwise transferred or hypothecated;

(b) If the employment of the Optionee with the Company or a
subsidiary of the Company is terminated for any reason, other than his death,
normal or early retirement in accordance with his employer's established
retirement policies and practices, or total disability, the Company (or any
subsidiary designated by it) shall have the option for sixty (60) days after
such termination of employment to purchase for cash all or any part of his
restricted stock at the lesser of (i) the price paid therefor upon exercise of
this Option, or (ii) the Fair Market Value of the restricted stock on the date
of such termination of employment (for which purpose Fair Market Value shall
have the same meaning as set forth in the Plan);

(c) The restrictions imposed under section 20 shall apply as
well to all shares or other securities issued in respect of restricted stock in
connection with any stock split, reverse stock split, stock dividend,
recapitalization, reclassification, spin-off, split-off merger,

<PAGE> 26

consolidation or reorganization, but such restrictions imposed under section 20
shall expire or terminate on the earliest to occur of the following:

(i) The ninetieth (90th) day after the date on which
shares of the same class of Common Stock as such restricted stock first become
Publicly Traded (which term for this purpose has the same meaning as set forth
in the Plan);

(ii) The fifth (5th) anniversary of the date of grant
hereof;

(iii) As to any shares for which the Company's (or a
subsidiary's) sixty (60) day option to purchase upon termination of employment
shall have become exercisable but shall expire without having been exercised, on
the first business day of the calendar month next following the expiration of
such sixty (60) day option period; or

(iv) the occurrence of any event or transaction upon
which this Option terminated by reason of the provisions of Section 19 hereof.

(d) All certificates representing shares of Common Stock
purchased upon the exercise of the Option shall bear the following legends:

22. NOTICES. Any notice to the Corporation contemplated by this
Agreement shall be addressed to it in care of its President; any notice to the
Optionee shall be addressed to him or her at the address on file with the
Corporation on the date hereof or at such other address as Optionee may
hereafter designate in a writing delivered to the Corporation as provided
herein.

<PAGE> 27

**********************

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

As independent certified public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of
Techlabs, Inc. of our report dated March 17, 1999, (and to all references to our
firm) included in or made part of the Registration Statement on Form 10SB (File
No. 000-26233) of Techlabs, Inc.

/s/ Reel & Swafford, PLLC

Knoxville, Tennessee
February 7, 2000