As filed with the Securities and Exchange Commission on May 24, 2000.
Registration No. 333- ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
ZIASUN TECHNOLOGIES, INC.
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
NEVADA 84-1376402
- ------------------------------ --------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
462 Stevens Avenue, Suite 106, Solana Beach, California 92075
- ------------------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
1999 Stock Option Plan
------------------------
(Full Title of the Plan)
Allen D. Hardman
President and CEO
462 Stevens Avenue, Suite 106
Solana Beach, California 92075
--------------------------------------
(Name and Address of Agent For Service)
(858) 350-4060
-----------------------------------------------------------
(Telephone Number, Including Area Code of Agent For Service)
Copies of Communications to:
George G. Chachas, Esq.
Wenthur & Chachas
4180 La Jolla Village Drive, Suite 500
La Jolla, California 92037
(858) 457-3800
Calculation of Registration Fee
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
===========================================================================================================================
Title Of Securities To Be Amount To Be Proposed Maximum Proposed Maximum Amount Of
Registered Registered(1) Offering Price Per Share Aggregate Offering Price Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------
Common Stock,
par value $0.001 per share 2,500,000 Shares $6.75 (2) $16,875,000(2) $4,455
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the ZiaSun Technologies,
Inc., 1999 Stock Option Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without
the Registrant's receipt of consideration which results in an increase
in the number of the outstanding shares of Registrant's Common Stock.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h)(1) of the Securities Act of
1933, as amended, (the "Securities Act"), and based on the closing
price on May 23, 2000.
<PAGE>
PART II.
--------
Information Required in the Registration Statement
--------------------------------------------------
Item 3. Incorporation of Documents by Reference
---------------------------------------
ZiaSun Technologies, Inc., (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Registration Statement on Form 10-SB September
10, 1999, Commission file No. 000-27349, filed with the Commission on
September 16, 1999, and all amendments thereto.
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 ("the Exchange Act")
since September 30, 1999.
(c) The Company has one class of securities authorized, consisting of
50,000,000 shares, $0.001 par value per share of common voting stock. The
holders of the Company's common stock are entitled to one vote per share on
each matter submitted to a vote at a meeting of shareholders. The shares of
common stock do not carry cumulative voting rights in the election of
directors. Shareholders of the Registrant have no pre-emptive rights to
acquire additional shares of common stock or other securities. The common
stock is not subject to redemption rights and carries no subscription or
conversion rights. In the event of liquidation of the Registrant, the
shares of common stock are entitled to share equally in corporate assets
after satisfaction of all liabilities.
(d) In addition, all documents subsequently filed pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this registration statement
and to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
-------------------------
The terms, rights and provisions applicable to the Common Stock are set
forth in the Registrant's Registration Statement No. 000-27349, on Form 10-SB,
as amended, which is incorporated by reference into this Registration Statement
pursuant to Item 3(c).
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
Not applicable.
Page 2 of 8
<PAGE>
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Under the Nevada Revised Statutes a corporation has the power to indemnify
any person who is made a party to any civil, criminal, administrative or
investigative proceeding, other than an action by or in the right of the
corporation, by reason of the fact that such person was a director, officer,
employee or agent of the corporation, against expenses, including reasonable
attorneys' fees, judgments, fines and amounts paid in settlement of any such
actions; provided, however, in any criminal proceeding, the Indemnified person
shall have had no reason to believe the conduct committed was unlawful.
The Registrant's Restated Articles of Incorporation (the "Restated Articles
of Incorporation") provides that the liability of a director of the Registrant
shall be eliminated or limited to the fullest extent permitted by the Nevada
Revised Statutes (the "NRS").
The NRS specifically provide as follows:
Section 78.751(1) of the Nevada Revised Statutes ("NRS") authorizes a
Nevada corporation to indemnify any director, officer, employee, or corporate
agent "who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation" due to his corporate role. Section 78.751(1) extends this
protection "against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful."
Section 78.751(2) of the NRS also authorizes indemnification of the
reasonable defense or settlement expenses of a corporate director, officer,
employee or agent who is sued, or is threatened with a suit, by or in the right
of the corporation. The party must have been acting in good faith and with the
reasonable belief that his actions were not opposed to the corporation's best
interests. Unless the court rules that the party is reasonably entitled to
indemnification, the party seeking indemnification must not have been found
liable to the corporation.
To the extent that a corporate director, officer, employee, or agent is
successful on the merits or otherwise in defending any action or proceeding
referred to in Section 78.751(1) or 78.751(2), Section 78.751(3) of the NRS
requires that he be indemnified "against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense."
Section 78.751 (4) of the NRS limits indemnification under Sections 78.751
(1) and 78.751(2) to situations in which either (1) the stockholders, (2)the
majority of a disinterested quorum of directors, or (3) independent legal
counsel determine that indemnification is proper under the circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation may advance an
officer's or director's expenses incurred in defending any action or proceeding
upon receipt of an undertaking. Section 78.751(6)(a) provides that the rights to
indemnification and advancement of expenses shall not be deemed exclusive of any
other rights under any bylaw, agreement, stockholder vote or vote of
disinterested directors. Section 78.751(6)(b) extends the rights to
indemnification and advancement of expenses to former directors, officers,
employees and agents, as well as their heirs, executors, and administrators.
Page 3 of 8
<PAGE>
Regardless of whether a director, officer, employee or agent has the right
to indemnity, Section 78.752 allows the corporation to purchase and maintain
insurance on his behalf against liability resulting from his corporate role.
Article VIII. of the Company's Bylaws restates the above-referenced
indemnification provisions of the NRS. This right to indemnification continues
as to persons who have ceased to be agents of the Company and inures to the
benefit of such persons' heirs, executors and administrators.
In addition, the Registrant has purchased insurance pursuant to which its
directors and officers are insured against liability which they may incur in
their capacity as such.
It is the position of the Securities and Exchange Commission (the
"Commission") that indemnification against liabilities for violations under the
federal securities laws, rules and regulations is against public policy. See
subparagraph (h) of Item 9 below.
Item 7. Exemption from Registration Claimed.
-----------------------------------
None. Not applicable.
Item 8. Exhibits.
--------
Exhibit
-------
4.1 Restated Articles of Incorporation of the Registrant (incorporated
herein by reference to Exhibit 3.1(e) to the Registrant's Registration
Statement on Form 10-SB, filed with the Commission on September 16,
1999 (Commission File No. 000-27349).
4.2 Amended and Restated Bylaws of the Registrant (incorporated herein by
reference to Exhibit 3.2 to the Registrant's Registration Statement on
Form 10-SB, filed with the Commission on September 16, 1999
(Commission File No. 000-27349).
4.3 ZiaSun Technologies, Inc., 1999 Stock Option Plan.
5.1 Opinion of Wenthur & Chachas
23.1 Consent of Jones, Jensen & Company.
23.2 Consent of Wenthur & Chachas (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
Item 9. Undertakings.
------------
The undersigned registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "1933 Act");
Page 4 of 8
<PAGE>
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(iii) To include any additional or changed material information
with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information
in the Registration Statement; provided, however, only to the extent
required by the general rules and regulations of the Commission.
(2) That, for the purpose of determining any liability under the 1933
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.
(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) That for purposes of determining any liability under the 1933 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.
(h) Insofar as indemnification for liabilities arising under the 1933 Act,
as amended, may be permitted to directors, executive officers and controlling
persons of the Registrant as outlined above or otherwise, the Registrant has
been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, executive officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, executive 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 by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the 1933 Act and will be governed by
the final adjudication of such issue.
Page 5 of 8
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Solana Beach, State of California on the date written
below.
ZIASUN TECHNOLOGIES, INC.
A Nevada Corporation
Dated: May 23, 2000 /S/ Allen D. Hardman
------------------------------
By: Allen D. Hardman
Its: President and CEO
Page 6 of 8
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
That each person whose signature appears below constitutes and appoints
Allen D. Hardman, as such person's true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for such person and in such
person's name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as such person might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/S/ Allen D. Hardman
- ------------------------- May 23, 2000
Allen D. Hardman Chief Executive Officer, President
and Director (Principal Executive
Officer)
/S/ Allen D. Hardman
- -------------------------
Allen D. Hardman Interim Chief Financial Officer May 23, 2000
(Principal Financial Officer and
Principal Accounting Officer)
/S/ Dennis McGrory
- -------------------------
Dennis McGrory Secretary May 23, 2000
/S/ D. Scott Elder
- -------------------------
D. Scott Elder Chairman of the Board of Directors May 18, 2000
/S/ Ross W. Jardine
- -------------------------
Ross W. Jardine Director May 22, 2000
/S/ Hans Von Meiss
- ------------------------- Director May 23, 2000
Hans Von Meis
Page 7 of 8
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Description
------- -----------
4.1 Restated Articles of Incorporation of the Registrant (incorporated
herein by reference to Exhibit 3.1(e) to the Registrant's Registration
Statement on Form 10-SB, filed with the Commission on September 16,
1999 (Commission File No. 000-27349).
4.2 Amended and Restated Bylaws of the Registrant (incorporated herein by
reference to Exhibit 3.2 to the Registrant's Registration Statement on
Form 10-SB, filed with the Commission on September 16, 1999
(Commission File No. 000-27349).
4.3 ZiaSun Technologies, Inc., 1999 Stock Option Plan.
5.1 Opinion of Wenthur & Chachas
23.1 Consent of Jones, Jensen & Company.
23.2 Consent of Wenthur & Chachas (included in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
Page 8 of 8
<PAGE>
EXHIBIT 4.3
-----------
ZIASUN TECHNOLOGIES, INC.
(A Nevada Corporation)
1999 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
The following constitutes the provisions of the 1999 Stock Option Plan of
ZiaSun Technologies, Inc.
ARTICLE 1.
----------
OVERVIEW
1.1 Purpose. The purpose of the 1999 Stock Option Plan (the "Plan") is to
attract, retain, and reward persons providing services to ZiaSun Technologies,
Inc., a Nevada Corporation, and any successor corporation thereto (collectively
referred to as the "Company"), and any present or future parent and/or
subsidiary corporations of such corporation (all of which along with the Company
being individually referred to as a "Participating Company" and collectively
referred to as the "Participating Company Group"), and to motivate such persons
to contribute to the growth and profits of the Participating Company Group in
the future. For purposes of the Plan, a parent corporation and a subsidiary
corporation shall be as defined in Sections 424(e) and 424(f) of the Internal
Revenue Code of 1986, as amended (the "Code").
1.2 Administration. The following provisions shall govern the
administration of the Plan:
(a) Administration By Board And/Or Committee. The Plan shall be
administered by the Board of Directors of the Company (the "Board")
and/or by a duly appointed committee of the Board having such powers
as shall be specified by the Board. Any subsequent references herein
to the Board shall also mean the committee if such committee has been
appointed, and unless the powers of the committee have been
specifically limited.
(b) Committee Powers. The Committee shall effect the grant of options
under the Plan by execution of instruments in writing in a form
approved by the Committee. Subject to the express terms and conditions
of the Plan, the Committee shall have full power to construe the Plan
and the terms of any option granted under the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan or
options and to make all other determinations necessary or advisable
for the Plan's administration, including, without limitation, the
power to:
(i) determine which persons meet the requirements of Sections 2,
3, and 4 hereof for selection as participants in the Plan;
(ii) determine to whom of the eligible persons, if any, options
shall be granted under the Plan;
(iii) establish the terms and conditions required or permitted to
be included in every option agreement or any amendments thereto,
including whether options to be granted hereunder shall be
"Incentive Stock Options," as defined in section 422 of the Code,
or nonqualified stock options not described in sections 422(b) or
423(a) of the Code;
Page 1 of 16
<PAGE>
(iv) specify the number of shares to be covered by each option;
(v) determine the method by which fair market value of shares of
the Company's common stock will be established under the Plan;
(vi) take appropriate action to amend any option hereunder,
provided that no such action may be taken without the written
consent of the affected optionee;
(vii) cancel outstanding options and issue replacement options
therefore with the consent of the affected optionee; and
(viii) make all other determinations deemed necessary or
advisable for administering the Plan.
The Committee's determination on the foregoing matters shall be conclusive.
(c) Special Rule for Officers and Directors. The grant of options to
employees who are officers or directors of the Company and to
nonemployee directors of the Company may be made by and all discretion
with respect to the material terms of the options may be exercised by
either (i) the Board of Directors, or (ii) a duly appointed committee
of the Board composed solely of two or more nonemployee directors
having full authority to act in the matter. The term "nonemployee
directors" shall have the meaning set forth in Rule 16b-3 as
promulgated by the Securities and Exchange Commission ("SEC") under
section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as that rule may be amended from time to time, and as
interpreted by the SEC ("Rule 16b-3").
(d) Options Authorized. Options may be either Incentive Stock Options
as defined in Section 422 of the Code ("Incentive Stock Options") or
nonqualified stock options.
1.3 Eligibility.
------------
(a) Eligible Persons. Options may be granted only to employees
(including officers) and directors of the Participating Company Group,
or to individuals who are rendering services as consultants, advisors,
or other independent contractors to the Participating Company Group.
The Board shall, in its sole discretion, determine which persons shall
be granted Options (an "Optionee"). Notwithstanding any other
provision of the Plan, no Eligible Person shall in any single calendar
year be granted options to purchase more than an aggregate of three
hundred thousand (300,000) shares of the Company's common stock under
the Plan, as adjusted pursuant to Section 6.2.
(b) Restrictions on Option Grants. A director of a Participating
Company may only be granted a nonqualified stock option unless the
director is also an employee of the Participating Company Group. An
individual who is rendering services as a consultant, advisor, or
other independent contractor may only be granted a nonqualified stock
option.
1.4 Shares Subject to Option. Options shall be for the purchase of shares
of the authorized but unissued common stock or treasury shares of common stock
$0.001 par value of the Company (the "Stock"), subject to adjustment as provided
in Section 6.2 below. The maximum number of shares of Stock which may be issued
under the Plan shall be Two Million Five Hundred Thousand (2,500,000) shares. In
the event that any outstanding Option for any reason expires or is terminated or
canceled and/or shares of Stock subject to repurchase are repurchased by the
Company, the shares allocable to the unexercised portion of such Option, or such
repurchased shares, may again be subject to an Option grant. Notwithstanding the
foregoing, any such shares shall be made subject to a new Option only if the
grant of such new Option and the issuance of such shares pursuant to such new
Option would not cause the Plan or any Option granted under the Plan to
contravene Rule 16b-3.
Page 2 of 16
<PAGE>
1.5 Time for Granting Options. All Options shall be granted, if at all,
within seven (7) years from the earlier of the date the Plan is adopted by the
Board or the date the Plan approved by the stockholders of the Company.
1.6 Terms, Conditions and Form of Options. Subject to the provisions of the
Plan, the Board shall determine for each Option (which need not be identical)
the number of shares of Stock for which the Option shall be granted, the
exercise price of the Option, the timing and terms of exercisability and vesting
of the Option, the time of expiration of the Option, the effect of the
Optionee's termination of employment or service, whether the Option is to be
treated as an Incentive Stock Option or as a nonqualified stock option, the
method for satisfaction of any tax withholding obligation arising in connection
with the Option, including by the withholding or delivery of shares of stock,
and all other terms and conditions of the Option not inconsistent with the Plan.
Options granted pursuant to the Plan shall be evidenced by written agreements
specifying the number of shares of Stock covered thereby, in such form as the
Board shall from time to time establish, which agreements may incorporate all or
any of the terms of the Plan by reference and shall comply with and be subject
to the following terms and conditions:
ARTICLE 2.
----------
INCENTIVE STOCK OPTIONS
-----------------------
2.1 Incentive Stock Option Terms and Conditions. Options granted to
employees (but not to nonemployee directors) under the terms and conditions of
this Section 2 are intended to be Incentive Stock Options under section 422 of
the Code. Each Incentive Stock Option granted under the Plan shall be authorized
by action of the Committee and shall be evidenced by a written agreement in such
form as the Committee shall from time to time approve, which agreement shall
comply with and be subject to the following terms and conditions:
(a) Exercise Price. The exercise price for each Option shall be
established at the sole discretion of the Board; provided, however,
that:
(i) the exercise price per share for an Incentive Stock Option
shall be not less than one hundred percent (100%) of the fair market
value, as determined by the Board, of a share of Stock on the date of
the granting of the Option;
(ii) no Incentive Stock Option granted to an Optionee who at the
time the Option is granted owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of a
Participating Company within the meaning of Section 422(b)(6) of the
Code (a "Ten Percent Owner Optionee") shall have an exercise price per
share less than one hundred ten percent (110%) of the fair market
value, as determined by the Board, of a share of Stock on the date of
the granting of the Option. Notwithstanding the foregoing, an Option
may be granted with an exercise price lower than the minimum exercise
price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying
with the provisions of Section 424(a) of the Code.
Page 3 of 16
<PAGE>
(b) Exercise Period of Options. The Board shall have the power to set,
including by amendment of an Option, the time or times within which
each Option shall be exercisable or the event or events upon the
occurrence of which all or a portion of each Option shall be
exercisable and the term of each Option; provided, however, that no
Option shall be exercisable after the expiration of seven (7) years
after the date such Option is granted. No Incentive Stock Option
granted to an individual who owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company, as determined under the stock ownership rules
specified in Subsection 2.1(c), shall be exercisable after the
expiration of seven (7) years from the date on which that option is
granted.
(c) Determination of Stock Ownership. For purposes of determining in
Subsections 2.1(a) and 2.1(b) whether an employee owns stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, an employee shall be
considered as owning the stock owned, directly or indirectly, by or
for his or her brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants. Stock owned,
directly or indirectly, by or for a corporation, partnership, estate,
or trust shall be considered as being owned proportionately by or for
its shareholders, partners, or beneficiaries. Stock with respect to
which the employee holds an option shall not be counted.
(d) Right to Exercise. Each Incentive Stock Option shall become
exercisable and vest according to the terms and conditions established
by the Board and reflected in the written agreement evidencing the
option. Notwithstanding the preceding sentence, all outstanding
Incentive Stock Options shall immediately become exercisable in full
in the event that (i) the shareholders of the Company approve a
dissolution or liquidation of the Company or a sale of all or
substantially all of the Company's assets to another entity; (ii) a
tender within the meaning of section 14 of the Securities Exchange Act
of 1934, as amended, is made for five percent (5%) or more of the
Company's outstanding capital stock by any person other than the
Company or an affiliate; or (iii) the Company effects an underwritten
public offering of its securities pursuant to a registration statement
filed under the Securities Act of 1933. Each Incentive Stock Option
shall be subject to termination before its date of expiration as
provided in Subsection 2.1(e).
(e) Termination of Employee Options. If an optionee who is an employee
ceases to be an employee of the Company, his or her rights to exercise
an Incentive Stock Option then held shall be only as follows:
(i) Death. If an optionee dies while he or she is employed by the
Company, the optionee's estate shall have the right for a period
of six (6) months (or such longer period as the Committee may
determine at the date of grant or during the term of the option)
after the date of death to exercise the option to the extent the
optionee was entitled to exercise the option on that date,
provided the date of exercise is in no event after the expiration
of the term of the option. To the extent the option is not
exercised within this period, the option will terminate. An
optionee's "estate" shall mean the optionee's legal
representative or any person who acquires the right to exercise
an option by reason of the optionee's death.
Page 4 of 16
<PAGE>
(ii) Disability. If an optionee's employment with the Company
ends because the optionee becomes disabled, the optionee or his
or her qualified representative (in the event of the optionee's
mental disability) shall have the right for a period of twelve
(12) months after the date on which the optionee's employment
ends to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of
the option. To the extent the option is not exercised within this
period, the option will terminate.
(iii) Resignation. If an optionee voluntarily resigns from the
Company, the optionee shall have the right for a period of two
(2) months after the date of resignation to exercise the option
to the extent the optionee was entitled to exercise the option on
that date, provided the date of exercise is in no event after the
expiration of the term of the option. To the extent the option is
not exercised within this period, the option will terminate.
(iv) Termination for Reasons other than Cause. If an optionee's
employment is terminated by the Company for reasons other than
"Cause," the optionee shall have the right for a period of two
(2) months after the date of termination to exercise the option
to the extent the optionee was entitled to exercise the option on
that date, provided the date of exercise is in no event after the
expiration of the term of the option. To the extent the option is
not exercised within this period, the option will terminate. The
termination of an optionee's employment by the Company will be
for reasons other than Cause if the termination is NOT due to an
act by the optionee that is described below under "Termination
for Cause."
(v) Termination for Cause. If an optionee's employment is
terminated by the Company for "Cause," the optionee shall have
the right for a period of one (1) month after the date of
termination to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of
the option. To the extent the option is not exercised within this
period, the option will terminate. For the purpose of this
clause, "Cause" shall mean that: the optionee is determined by
the Committee to have committed an act of embezzlement, fraud,
dishonesty, or breach of fiduciary duty to the Company, or to
have deliberately disregarded the rules of the Company which
resulted in loss, damage, or injury to the Company, or because
the optionee has made any unauthorized disclosure of any of the
secrets or confidential information of the Company, has induced
any client or customer of the Company to break any contract with
the Company, has induced any principal for whom the Company acts
as agent to terminate the agency relationship, or has engaged in
any conduct that constitutes unfair competition with the Company.
(f) Notice of Sale. If an optionee sells or otherwise disposes of any
Shares acquired upon exercise of an Incentive Stock Option, the
optionee shall give the Company notice of the sale or disposition
within five business (5) days thereafter.
(g) Other Reasons. If an optionee's employment with the Company ends
for any reason not mentioned above in this Subsection 2(e), all rights
of the optionee in an Incentive Stock Option, to the extent that it
has not been exercised, shall terminate 30 days after the date the
optionee's employment ends.
Page 5 of 16
<PAGE>
(h) Limit on Exercise of Incentive Stock Options. To the extent that
the aggregate fair market value (determined as of the time the option
is granted) of the Stock with respect to which Incentive Stock Options
are exercisable for the first time by any individual during any
calendar year (under all plans of the Company and its parent and
subsidiary corporations) exceeds One Hundred Thousand Dollars
($100,000), the options shall be treated as options that are not
Incentive Stock Options.
ARTICLE 3.
----------
NONQUALIFIED STOCK OPTION
-------------------------
3.1 Nonqualified Stock Option Terms and Conditions. The options granted
under the terms and conditions of this Section 3 are nonqualified stock options
and are not intended to qualify as either a qualified stock option or an
Incentive Stock Option as those terms are defined by applicable provisions of
the Code. Each nonqualified stock option granted under the Plan shall be
authorized by action of the Committee and shall be evidenced by a written
agreement in such form as the Committee shall from time to time approve, which
agreement shall comply with and be subject to the following terms and
conditions:
(a) Exercise Price. The exercise price of each nonqualified stock
option shall not be less than eighty five percent (85%) of the fair
market value of a Share of the Company on the date the option is
granted; provided, however, that the exercise price of a nonqualified
stock option granted to an individual who owns stock possessing more
than ten percent (10%) of the combined voting power of the Company,
its parent, or subsidiaries shall not be less than one hundred ten
percent (110%) of the fair market value of a Share of the Company on
the date the option is granted.
(b) Exercise Period of Options. The Board shall have the power to set,
including by amendment of an Option, the time or times within which
each Option shall be exercisable or the event or events upon the
occurrence of which all or a portion of each Option shall be
exercisable and the term of each Option; provided, however, that no
Option shall be exercisable after the expiration of seven (7) years
after the date such Option is granted. No nonqualified stock option
granted to an individual who owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company, as determined under the stock ownership rules
specified in Subsection 3.1(c), shall be exercisable after the
expiration of seven (7) years from the date on which that option is
granted.
(c) Determination of Stock Ownership. For purposes of determining in
Subsections 3.1(a)and 3.1(b) whether an employee owns stock possessing
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company, an employee shall be considered as
owning the stock owned, directly or indirectly, by or for his or her
brothers and sisters (whether by the whole or half blood), spouse,
ancestors, and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate, or trust
shall be considered as being owned proportionately by or for its
shareholders, partners, or beneficiaries. Stock with respect to which
the employee holds an option shall not be counted.
(d) Right to Exercise. Each nonqualified stock option shall become
exercisable and vest according to the terms and conditions established
by the Committee and reflected in the written agreement evidencing the
option. Each nonqualified stock option shall be subject to termination
before its date of expiration as provided in Subsection 3.1(e).
Page 6 of 16
<PAGE>
(e) Terminations of Options. If an optionee ceases to be an employee
of the Company, his or her rights to exercise a nonqualified stock
option then held shall be only as follows:
(i) Death. If an optionee dies while he or she is employed by the
Company, the optionee's estate shall have the right for a period
of six (6) months (or such longer period as the Committee may
determine at the date of grant or during the term of the option)
after the date of death to exercise the option to the extent the
optionee was entitled to exercise the option on that date,
provided the date of exercise is in no event after the expiration
of the term of the option. To the extent the option is not
exercised within this period, the option will terminate. An
optionee's "estate" shall mean the optionee's legal
representative or any person who acquires the right to exercise
an option by reason of the optionee's death.
(ii) Disability. If an optionee's employment with the Company
ends because the optionee becomes disabled, the optionee or his
or her qualified representative (in the event of the optionee's
mental disability) shall have the right for a period of twelve
(12) months after the date on which the optionee's employment
ends to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of
the option. To the extent the option is not exercised within this
period, the option will terminate.
(iii) Resignation. If an optionee voluntarily resigns from the
Company, the optionee shall have the right for a period of two
(2) months after the date of resignation to exercise the option
to the extent the optionee was entitled to exercise the option on
that date, provided the date of exercise is in no event after the
expiration of the term of the option. To the extent the option is
not exercised within this period, the option will terminate.
(iv) Termination For Reasons Other Than Cause. If an
optionee's employment is terminated by the Company for reasons
other than "Cause," the optionee shall have the right for a
period of two (2) months after the date of termination to
exercise the option to the extent the optionee was entitled to
exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the
option will terminate. The termination of an optionee's
employment by the Company will be for reasons other than Cause if
the termination is NOT due to an act by the optionee that is
described below under "Termination for Cause."
(v) Termination For Cause. If an optionee's employment is
terminated by the Company for "Cause," the optionee shall have
the right for a period of one (1) month after the date of
termination to exercise the option to the extent the optionee was
entitled to exercise the option on that date, provided the date
of exercise is in no event after the expiration of the term of
the option. To the extent the option is not exercised within this
period, the option will terminate. For the purpose of this
clause, "Cause" shall mean that: the optionee is determined by
the Committee to have committed an act of embezzlement, fraud,
dishonesty, or breach of fiduciary duty to the Company, or to
have deliberately disregarded the rules of the Company which
resulted in loss, damage, or injury to the Company, or because
the optionee has made any unauthorized disclosure of any of the
secrets or confidential information of the Company, has induced
any client or customer of the Company to break any contract with
the Company, has induced any principal for whom the Company acts
as agent to terminate the agency relationship, or has engaged in
any conduct that constitutes unfair competition with the Company.
Page 7 of 16
<PAGE>
ARTICLE 4.
----------
NON-EMPLOYEE DIRECTOR OPTIONS
-----------------------------
4.1 Grants to Non-Employee Directors. All options granted to nonemployee
directors shall be subject to the following terms and conditions:
(a) Limits. The aggregate amount of Shares (as adjusted pursuant to
Section 6.2) subject to options granted to all nonemployee directors
as a group shall not exceed twenty percent (20%) of the Shares plus
Shares underlying expired or terminated options that are added back to
the number of Shares available under the Plan.
(b) Nonqualified Options. All stock options granted to nonemployee
directors pursuant to the Plan shall be nonqualified stock options.
(c) Exercise Price. The exercise price of each option granted to a
nonemployee director shall not be less than 85% of fair market value
per Share; provided, however, that the exercise price of an option
granted to a nonemployee director who owns stock possessing more than
ten percent (10%) of the combined voting power of the Company, its
parent, or subsidiaries shall not be less than one hundred ten percent
(110%) of the fair market value of a Share of the Company on the date
the option is granted. The fair market value of the Shares shall be
determined by the Board.
(d) Duration of Options. Each option granted to a nonemployee director
shall be for a term determined by the Board; provided, however, that
the term of any option may not exceed seven (7) years.
(e) Right to Exercise. Each option granted to a nonemployee director
shall become exercisable and vest according to the terms and
conditions established by the Board and reflected in the written
agreement evidencing the option. Each option granted to a nonemployee
director shall be subject to termination before its date of expiration
as provided in Subsection 4.1(f).
(f) Terminations of Non-employee Director Options. If a non-employee
director ceases to be a director of the Company, his or her rights to
exercise an option then held shall be only as follows:
(i) Death. If a nonemployee director dies while he or she is
serving on the Board of the Company, the director's estate shall
have the right for a period of six (6) months (or such longer
period as the Committee may determine at the date of grant or
during the term of the option) after the date of death to
exercise the option to the extent the director was entitled to
exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the
option will terminate. A director's "estate" shall mean the
director's legal representative or any person who acquires the
right to exercise an option by reason of the director's death.
Page 8 of 16
<PAGE>
(ii) Disability. If a nonemployee director's Board membership
ends because the director becomes disabled, the director or his
or her qualified representative (in the event of the director's
mental disability) shall have the right for a period of twelve
(12) months after the date on which the director's Board
membership ends to exercise the option to the extent the director
was entitled to exercise the option on that date, provided the
date of exercise is in no event after the expiration of the term
of the option. To the extent the option is not exercised within
this period, the option will terminate.
(iii) Resignation. If a nonemployee director voluntarily resigns
from the Company's Board, the director shall have the right for a
period of six (6) months after the date of resignation to
exercise the option to the extent the director was entitled to
exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the
option will terminate.
(iv) Termination for Reasons other than Cause. If a nonemployee
director's Board membership is terminated by the Company for
reasons other than "Cause," the director shall have the right for
a period of six (6) months after the date of termination to
exercise the option to the extent the director was entitled to
exercise the option on that date, provided the date of exercise
is in no event after the expiration of the term of the option. To
the extent the option is not exercised within this period, the
option will terminate. The termination of a nonemployee
director's Board membership will be for reasons other than Cause
if the termination is NOT due to an act by the director that is
described below under "Termination for Cause."
(v) Termination For Cause. If a nonemployee director's Board
membership is terminated by the Company for "Cause," the director
shall have the right for a period of one (1) month after the date
of termination to exercise the option to the extent the director
was entitled to exercise the option on that date, provided the
date of exercise is in no event after the expiration of the term
of the option. To the extent the option is not exercised within
this period, the option will terminate. For the purpose of this
clause, "Cause" shall mean that: the director is determined by
the Committee to have committed an act of embezzlement, fraud,
dishonesty, or breach of fiduciary duty to the Company, or to
have deliberately disregarded the rules of the Company which
resulted in loss, damage, or injury to the Company, or because
the director has made any unauthorized disclosure of any of the
secrets or confidential information of the Company, has induced
any client or customer of the Company to break any contract with
the Company, has induced any principal for whom the Company acts
as agent to terminate the agency relationship, or has engaged in
any conduct that constitutes unfair competition with the Company.
(vi) Other Reasons. If a nonemployee director's Board membership
ends for any reason not mentioned above in this Subsection
4.1(f), all rights of the director in an option, to the extent
that it has not been exercised, shall terminate on the date the
director's Board membership ends.
Page 9 of 16
<PAGE>
ARTICLE 5.
----------
STANDARD FORMS OF STOCK OPTION AGREEMENT
----------------------------------------
5.1 Incentive Stock Options. Unless otherwise provided for by the Board at
the time an Option is granted, an Option designated as an Incentive Stock Option
shall comply with and be subject to the terms and conditions of an Incentive
Stock Option Agreement which shall be in such form as designated by the Board of
Directors or Committee from time to time.
5.2 Nonqualified Stock Options. Unless otherwise provided for by the Board
at the time an Option is granted, an Option designated as a Nonqualified Stock
Option shall comply with and be subject to the terms and conditions of a
Nonqualified Stock Option Agreement which shall in in such form as designated by
the Board of Directors or Committee from time to time.
5.3 Standard Term For Options. Unless otherwise provided for by the Board
in the grant of an Option, any Option granted hereunder shall be exercisable for
a term of seven (7) years.
5.4 Authority To Vary Terms. The Board shall have the authority from time
to time to modify, extend, renew or vary the terms of any of the standard forms
of Stock Option Agreement described in Article 6 below either in connection with
the grant or amendment of an individual Option or in connection with the
authorization of a new standard form or forms; provided, however, that the terms
and conditions of such revised or amended standard form or forms of stock option
agreement shall be in accordance with the terms of the Plan. Such authority
shall include, but not by way of limitation, the authority to grant Options
which are not immediately exercisable.
ARTICLE 6.
----------
ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS
---------------------------------------------------------
The following terms and conditions shall apply to all options granted
pursuant to the plan:
6.1 Payment of Exercise Price.
--------------------------
(a) Excersise of Options. Optionees may exercise options only by
providing written notice to the Company at the address specified in
the written agreement evidencing the option. The notice must be
accompanied by full payment in cash for the Shares as to which the
options are exercised.
(b) Forms of Payment Authorized. Payment of the exercise price for the
number of shares of Stock being purchased pursuant to any Option shall
be made (i) in cash, by check, or cash equivalent, (ii) by tender to
the Company of shares of the Company's stock owned by the Optionee
having a fair market value, as determined by the Board (but without
regard to any restrictions on transferability applicable to such stock
by reason of federal or state securities laws or agreements with an
underwriter for the Company), not less than the exercise price, (iii)
by the assignment of the proceeds of a sale of some or all of the
shares being acquired upon the exercise of the Option (including,
without limitation, through an exercise complying with the provisions
of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System), (iv) by the withholding of
shares being acquired upon exercise of the Option having a fair market
value, as determined by the Board (but without regard to any
restrictions on transferability applicable to such stock by reason of
federal or state securities laws or agreements with an underwriter for
the Company), not less than the exercise price, or (v) by any
combination thereof. The Board may at any time or from time to time
grant Options which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price and/or which
otherwise restrict one (1) or more forms of consideration.
Page 10 of 16
<PAGE>
(c) Tender of Company Stock. Notwithstanding the foregoing, an Option
may not be exercised by tender to the Company of shares of the
Company's stock to the extent such tender of stock, as determined by
the Board, would constitute a violation of the provisions of any law,
regulation and/or agreement restricting the redemption of the
Company's stock. Unless otherwise provided by the Board, an Option may
not be exercised by tender to the Company of shares of the Company's
stock unless such shares of the Company's stock either have been owned
by the Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Company. An optionee may also
exercise an option by the delivery and surrender of Shares which (i)
have been owned by the optionee for at least six (6) months or for
such other period as the Committee may require; and (ii) have an
aggregate fair market value on the date of surrender equal to the
exercise price. In addition, an option may be exercised by delivering
to the Company (i) an exercise notice instructing the Company to
deliver the certificates for the Shares purchased to a designated
brokerage firm; and (ii) a copy of irrevocable instructions delivered
to the brokerage firm to sell the Shares acquired upon exercise of the
option and to deliver to the Company from the sale proceeds sufficient
cash to pay the exercise price and applicable withholding taxes
arising as a result of the exercise
(d) Assignment of Proceeds of Sale. The Company reserves, at any and
all times, the right, in the Company's sole and absolute discretion,
to establish, decline to approve and/or terminate any program and/or
procedures for the exercise of Options by means of an assignment of
the proceeds of a sale of some or all of the shares of Stock to be
acquired upon such exercise.
6.2 Adjustment of and Changes In Capitalization.
--------------------------------------------
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each
outstanding option, and the number of Shares which have been
authorized for issuance under the Plan but as to which no options have
yet been granted, as well as the price per Share covered by each
outstanding option, shall be proportionately adjusted for any increase
or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, recapitalization,
combination or reclassification of the Shares, or any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have
been "effected without receipt of consideration." Such adjustment
shall be made by the Board of Directors, whose determination in that
respect shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an option.
Page 11 of 16
<PAGE>
(b) Dissolution, Liquidation, Sale, or Merger. In the event of a
proposed dissolution or liquidation of the Company, options
outstanding under the Plan shall terminate immediately before the
consummation of such proposed action. The Board will, in such
circumstances, provide written notice to the optionees of the expected
dates of termination of outstanding options and consummation of the
proposed dissolution or liquidation.
In the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into
another corporation in a transaction in which the Company is not the
surviving corporation, outstanding options may be assumed or
equivalent options may be substituted by the successor corporation (or
a parent or subsidiary of the successor corporation), unless the
successor corporation does not agree to assume the options or to
substitute equivalent options. If outstanding options are not assumed
or substituted by equivalent options, all outstanding options shall
terminate immediately before the consummation of the sale or merger
(subject to the actual consummation of the sale or merger) and the
Company shall provide written notice to the optionees of the expected
dates of termination of the options and consummation of the
transaction. If the transaction is not consummated, unexercised
options shall continue in accordance with their original terms.
(c) Notice of Adjustments, Fractional Shares. To the extent the
foregoing adjustments relate to stock or securities of the Company,
such adjustments shall be made by the Committee, whose determination
in that respect shall be final, binding, and conclusive. No right to
purchase fractional shares shall result from any adjustment in options
pursuant to this Section 6.2. In case of any such adjustment, the
shares subject to the option shall be rounded down to the nearest
whole share. Notice of any adjustment shall be given by the Company to
each holder of an option which was in fact so adjusted and the
adjustment (whether or not notice is given) shall be effective and
binding for all purposes of the Plan.
No adjustment shall be made for dividends or other rights for
which the record date is prior to the date of such issuance, except as
provided in this Section 6.2.
Any issue by the Company of shares of stock of any class, or
securities convertible into shares of any class, shall not affect the
number or price of Shares subject to the option, and no adjustment by
reason thereof shall be made. The grant of an option pursuant to the
Plan 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 or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
6.3 Transfer of Control. A "Transfer of Control" shall be deemed to have
occurred in the event any of the following occurs with respect to the Company:
(a) the acquisition of direct or indirect ownership of stock by any
person, entity or group of persons or entities acting in concert
possessing more than a majority of the beneficial interest in the
voting stock of the Company;
(b) the direct or indirect sale or exchange by the stockholders of the
Company of all or substantially all of the stock of the Company where
the stockholders of the Company before such sale or exchange do not
retain, directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the Company after such sale or
exchange;
Page 12 of 16
<PAGE>
(c) a merger or consolidation where the stockholders of the Company
before such merger or consolidation do not retain, directly or
indirectly, at least a majority of the beneficial interest in the
voting stock of the Company after such merger or consolidation;
(d) the sale, exchange, or transfer of all, or substantially all, of
the assets of the Company other than a sale, exchange, or transfer to
one (1) or more subsidiary of the Company; or
(e) a liquidation or dissolution of the Company. For purposes of the
foregoing, if a group of persons or entities begins to act in concert,
and if such group meets the beneficial ownership requirements set
forth in clause (a) above, then such acquisition shall be deemed to
have occurred on the date the Company first becomes aware of such
group or its actions.
(f) a Stock Option Agreement may, in the discretion of the Board,
provide for accelerated vesting in the event of a Transfer of Control.
In the event of a Transfer of Control, the surviving, continuing,
successor, or purchasing corporation or parent corporation thereof, as
the case may be (the "Acquiring Corporation"), shall either assume the
Company's rights and obligations under outstanding stock option
agreements or substitute options for the Acquiring Corporation's stock
for such outstanding Options. In the event the Acquiring Corporation
elects not to assume or substitute for such outstanding Options in
connection with the Transfer of Control, any unexercisable and/or
unvested shares subject to such outstanding stock option agreements
shall be immediately exercisable and fully vested as of the date
thirty (30) days prior to the proposed effective date of the Transfer
of Control. The exercise and/or vesting of any Option that was
permissible solely by reason of this Section 6.3 shall be conditioned
upon the consummation of the Transfer of Control. Any Options which
are neither assumed or substituted for by the Acquiring Corporation in
connection with the Transfer of Control nor exercised as of the date
of the Transfer of Control shall terminate and cease to be outstanding
effective as of the date of the Transfer of Control.
6.4 Options Non-Transferable. During the lifetime of the Optionee, the
Option shall be exercisable only by the Optionee. No Option shall be assignable
or transferable by the Optionee, except by will or by the laws of descent and
distribution. In addition, in order for Shares acquired upon exercise of
Incentive Stock Options to receive the tax treatment afforded such Shares, the
Shares may not be disposed of within two years from the date of the option grant
nor within one year after the date of transfer of such Shares to the optionee.
6.5 Termination or Amendment of Plan or Options. The Board, including any
duly appointed committee of the Board, may terminate or amend the Plan or any
Option at any time; provided, however, that without the approval of the
Company's stockholders, there shall be (a) no increase in the total number of
shares of Stock covered by the Plan (except by operation of the provisions of
Section 6.2 above), (b) no change in the class eligible to receive Incentive
Stock Options, and (c) no expansion in the class eligible to receive
nonqualified stock options. In addition to the foregoing, the approval of the
Company's stockholders shall be sought for any amendment to the Plan for which
the Board deems stockholder approval necessary in order to comply with Rule
16b-3. In any event, no amendment may adversely affect any then outstanding
Option or any unexercised portion thereof, without the consent of the Optionee,
unless such amendment is required to enable an Option designated as an Incentive
Stock Option to qualify as an Incentive Stock Option.
Page 13 of 16
<PAGE>
The Plan, unless sooner terminated, shall terminate on December 14, 2006,
seven (7) years from the date the Plan was originally adopted by the Board. An
option may not be granted under the Plan after the Plan is terminated.
6.6 Information to Optionees. The Company shall provide to each Optionee
during the period for which he or she has one or more outstanding options,
copies of all annual reports and all other information which is provided to
shareholders of the Company. The Company shall not be required to provide such
information to key employees whose duties in connection with the Company assure
their access to equivalent information.
6.7 Privileges of Stock Ownership, Securities Law Compliance. No Optionee
shall be entitled to the privileges of stock ownership as to any Shares not
actually issued and delivered to the Optionee. The exercise of any option under
the Plan shall be conditioned upon the registration of the Shares with the SEC
and qualification of the options and underlying Shares under the California
securities laws, unless in the opinion of counsel to the Company registration or
qualification is not necessary. The Company shall diligently endeavor to comply
with all applicable securities laws before any options are granted under the
Plan and before any Shares are issued pursuant to the exercise of such options.
6.8 Limitation of Rights.
(a) No Right to an Option. Nothing in the Plan shall be construed to
give any employee or any nonemployee director of the Company any right
to be granted an option.
(b) No Employment Rights. Neither the Plan nor the granting of an
option nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express
or implied, that the Company will employ or continue the Board
membership of an optionee for any period of time, or in any position,
or at any particular rate of compensation.
ARTICLE 7.
----------
MISCELLANEOUS PROVISIONS
------------------------
7.1 Effective Date of Plan. The Plan will become effective upon approval by
the Company's shareholders within twelve (12) months of the date the Plan is
adopted by the Company's Board of Directors. Options may be granted under the
Plan at any time after the Plan becomes effective and before the termination of
the Plan.
7.2 Indemnification. To the extent permitted by applicable law in effect
from time to time, no member of the Board or the Committee shall be liable for
any action or omission of any other member of the Board or Committee nor for any
act or omission on the member's own part, excepting only the member's own
willful misconduct or gross negligence. The Company shall pay expenses incurred
by, and satisfy a judgment or fine rendered or levied against, a present or
former director or member of the Committee in any action against such person
(whether or not the Company is joined as a party defendant) to impose liability
or a penalty on such person for an act alleged to have been committed by such
person while a director or member of the Committee arising with respect to the
Plan or administration thereof or out of membership on the Committee or by the
Company, or all or any combination of the preceding; provided the director or
Committee member was acting in good faith, within what such director or
Committee member reasonably believed to have been within the scope of his or her
employment or authority and for a purpose which he or she reasonably believed to
be in the best interests of the Company or its shareholders. Payments authorized
hereunder include amounts paid and expenses incurred in settling any such action
or threatened action. This section does not apply to any action instituted or
maintained in the right of the Company by a shareholder or holder of a voting
trust certificate representing shares of the Company. The provisions of this
section shall apply to the estate, executor, administrator, heirs, legatees or
devisees of a director or Committee member, and the term "person" as used in
this section shall include the estate, executor, administrator, heirs, legatees
or devisees of such person.
Page 14 of 16
<PAGE>
7.3 Withholding. The Company shall have the right to condition the issuance
of Shares upon exercise of an option upon payment by the optionee of any
applicable taxes required to be withheld under federal, state or local tax laws
or regulations in connection with the exercise. To the extent permitted in an
optionee's stock option agreement, an optionee may elect to pay such tax by (i)
requesting the Company to withhold a sufficient number of Shares from the total
number of Shares issuable upon exercise of the option or (ii) delivering a
sufficient number of Shares which have been held by the optionee for at least
six (6) months (or such other period as the Committee may require) to the
Company. This election is subject to approval or disapproval by the Committee.
The value of Shares withheld or delivered shall be the fair market value of the
Shares on the date the exercise becomes taxable as determined by the Committee.
7.4 Further Assurances. All parties to this Plan agree to perform any and
all further acts and to execute and deliver any documents that may reasonably be
necessary to carry out the provisions of this Plan.
7.5 Attorneys' Fees. In any legal action or other proceeding brought by any
party to enforce or interpret the terms of this Plan, the prevailing party shall
be entitled to recover reasonable attorneys' fees and costs.
7.6 Governing Law. The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by the law of the State
of California.
7.7 Notices. Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the chief personnel officer or to
the chief executive officer of the Company, and shall become effective when it
is received by the office of the chief personnel officer or the chief executive
officer.
7.8 Entire Agreement. This Plan, together with those documents that are
referenced in the Plan, are intended to be the final, complete, and exclusive
statement of the terms of the agreement between Employee and the Company with
regard to the subject matter of this Plan. This Agreement supersedes all other
prior agreements, communications, and statements, whether written or oral,
express or implied, pertaining to that subject matter. This Plan may not be
contradicted by evidence of any prior or contemporaneous statements or
agreements, oral or written, and may not be explained or supplemented by
evidence of consistent additional terms. This Plan does not effect the terms and
conditions of any options granted by the Company prior to the date of adoption
of this Plan by the Board of Directors.
7.9 Successors and Assigns. Optionee agrees that he will not assign, sell,
transfer, delegate, or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Plan, except as expressly permitted by this Plan. Any such purported assignment,
sale, transfer, delegation, or other disposition shall be null and void. Subject
to the limitations set forth in this Plan, the Plan shall be binding on and
inure to the benefit of the successors and assigns of the Company and any
successors and permitted assigns of Employee, including any of his executors,
administrators, or other legal representatives. It shall not benefit any person
or entity other than those specifically enumerated in this Agreement.
Page 15 of 16
<PAGE>
7.10 Severability. If any provision of this Plan, or its application to any
person, place, or circumstance, is held by an arbitrator or a court of competent
jurisdiction to be invalid, unenforceable, or void, that provision shall be
enforced to the greatest extent permitted by law, and the remainder of this
Agreement and of that provision shall remain in full force and effect as applied
to other persons, places, and circumstances.
7.11 Interpretation. This Plan shall be construed as a whole, according to
its fair meaning, and not in favor of or against any party. By way of example
and not in limitation, this Plan shall not be construed in favor of the party
receiving a benefit nor against the party responsible for any particular
language in this Plan. Captions are used for reference purposes only and should
be ignored in the interpretation of the Plan. Unless the context requires
otherwise, all references in this Plan to Paragraphs are to the paragraphs of
this Plan.
The undersigned hereby certify that the foregoing Stock Option Plan was
duly adopted and approved by the Board of Directors on December 15, 1999.
/S/ D. Scott Elder /S/ Allen D. Hardman
- ------------------------------ ----------------------------------
D. Scott Elder Allen D. Hardman
Chairman of the Board & CEO Vice-President
Page 16 of 16
<PAGE>
EXHIBIT 5.1
-----------
OPINION OF COUNSEL
------------------
[LETTERHEAD OF WENTHUR & CHACHAS]
May 22, 2000
ZiaSun Technologies, Inc.
Board of Directors
462 Stevens Avenue
Suite 106
Solana Beach, CA 92075
Re: Opinion concerning the legality of the securities to be issued pursuant to
the Registration Statement on Form S-8 to be filed by ZiaSun Technologies,
Inc., a Nevada corporation
Dear Board of Directors:
As counsel for ZiaSun Technologies, Inc., a Nevada corporation (the
"Registrant" or the "Company"), and in connection with the issuance of up to
2,500,000 shares of the Company's common stock, $0.001 par value per share (the
"Securities") pursuant to the ZiaSun Technologies, Inc., 1999 Stock Option Plan
adopted by the Board of Directors of the Company on December 15, 1999 (the
"Plan"), I have been asked to render an opinion as to the legality of these
Securities, which are to be covered by a Registration Statement to be filed by
the Company on Form S-8 of the Securities and Exchange Commission (the
"Commission"), and as to which this opinion is to be filed as an exhibit.
As you are aware, no services to be performed and billed to you which are
in any way related to a "capital raising" transaction may be paid by the
issuance of Securities pursuant to the Plan.
In connection with rendering my opinion, which is set forth below, I have
reviewed and examined originals or copies of the following documents, to wit:
1. Articles of Incorporation and all restatements and amendments thereto;
2. By-laws and all restatements and amendments thereto;
3. Registration Statement on Form 10-SB, and all amendments thereto;
4. Quarterly Reports on Form 10-QSB for the quarter ended September 30,
1999, as amended and March 31, 2000;
5. The Annual Report on Form 10-KSB for the fiscal year ended December
31, 1999; as amended;
6. A copy of the Plan; and
7. The Unanimous Consent of the Board of Directors adopting the Plan,
designating the name of the Plan and the name, address and telephone
number of the Plan's Administrative Committee.
<PAGE>
Opinion of Counsel
Page 2
- --------------------------------------------------------------------------------
I have also examined various other documents, books, records, instruments
and certificates of public officials, directors, executive officers and agents
of the Company, and have made such investigations as I have deemed reasonable,
necessary or prudent under the circumstances. Also, in rendering this opinion, I
have reviewed various statutes and judicial precedence as I have deemed relevant
or necessary.
Further, as counsel for the Company, I have discussed the items relied upon
in rendering this opinion and the documents I have examined with one or more
directors and executive officers of the Company, and in all instances, I have
assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals, the
conformity with the original documents of all documents submitted to me as
certified or photostatic copies and the authenticity of the originals of such
copies. I have further assumed that the recipients of these Securities under the
Plan will have paid the consideration required under the terms of the Plan prior
to the issuance of the Securities, and that none of the services performed by
the recipients shall be related to "capital raising transactions."
I have also provided the individual participants in the Plan with a copy of
the documents enumerated in paragraphs 3 through 6, inclusive, above.
Based upon the foregoing and in reliance thereon, it is my opinion that,
subject to the limitations set forth in the Plan, the Securities to be issued
pursuant to the Plan will, upon their issuance and delivery to the recipients
thereof, after receipt of full payment therefore, be deemed duly and validly
authorized, legally issued and fully paid and non-assessable. This opinion is
expressly limited in scope to the Securities described herein and which are to
be expressly covered by the above referenced Registration Statement and does not
cover any subsequent issuances of any securities to be made in the future
pursuant to any other plans, if any, pertaining to services performed in the
future. Any such transactions are required to be included in a new Registration
Statement or a post-effective amendment to the above referenced Registration
Statement, which will be required to include a revised or a new opinion
concerning the legality of the Securities to be issued.
Further, this opinion is limited to the corporate laws of the State of
Nevada and the securities laws, rules and regulations of the United States, and
I express no opinion with respect to the laws of any other jurisdiction.
This opinion is based upon my knowledge of the law and facts as of the date
hereof, and I assume no duty to communicate with you with respect to any matter
which may hereafter come to my attention.
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, including any amendment thereto; however, this opinion
is not to be used, circulated, quoted or otherwise referred to for any other
purpose without my prior written consent
Sincerely,
/S/ George G. Chachas
George G. Chachas
GGC:lp
encl.
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
---------------------------------------------------
[LETTERHEAD OF JONES, JENSEN & COMPANY]
May 22, 2000
ZiaSun Technologies, Inc.
Board of Directors
462 Stevens Avenue
Suite 106
Solana Beach, CA 92075
Ladies and Gentlemen:
We hereby consent to the use of our report dated March 25, 2000, in the
Form S-8 of ZiaSun Technologies, Inc., a Nevada corporation. We also consent to
the use of our name as experts in the Form S-8.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Certified Public Accountants
