<PAGE>
REGISTRATION STATEMENT ON FORM S-8
As filed with the Securities and Exchange Commission on January 14, 2000
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------------------------
DENMANS.COM, INC.
(Exact name of issuer as specified in its charter)
Colorado 98-0211839
--------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
#780-789 West Pender Street,
Vancouver, British Columbia, Canada V6C 1H2 (604) 684-7804
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(Address and telephone number, of Registrant's principal executive offices)
DENMANS.COM, INC.
1999 NON-QUALIFIED STOCK OPTION PLAN
(Full title of the plan)
Douglas Bolen
Denmans.com, Inc.
780-789 West Pender Street
Vancouver, British Columbia, Canada V6C 1H2
(604) 684-7804
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Registration
Securities To Be Maximum Offering Maximum Fee
Be Registered Registered Price Per Share* Aggregate
offering Price
- --------------------------------------------------------------------------------
Common 1,200,000 ($0.75) $900,000 $250.20 par
Shares $.001 value
par value
*Because there is currently no market for these securities and because the book
value of these securities as at May 31, 1999 is negative, for the purposes of
calculating the registration fee, the exercise price of the options granted to
date was used which price was determined by the Board of Directors in accordance
with the Plan.
<PAGE>
PART II
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INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
Denmans.com, Inc. (the "Company") hereby incorporates by reference in this
Registration Statement the following documents:
(a) The Company's Registration Statement on Form 10-SB, as amended, as declared
effective by the Securities and Exchange Commission on October 31, 1999,
including the description of the Company's Common Stock under the caption
"Description of Securities";
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, which
documents shall be deemed incorporated by reference in this Registration
Statement as a part hereof from the date of filing such documents until a
post-effective amendment to this Registration Statement is filed which indicates
that all shares of Common Stock being offered hereby have been sold or which
deregisters all shares of Common Stock then remaining unsold.
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 and Bylaws generally require the Company
to indemnify, to the maximum extent permitted by Colorado law, any person who is
or was a director, officer, agent, fiduciary or employee of the Company against
any claim, liability or expense arising against or incurred by such person made
party to a proceeding because he is or was a director, officer, agent, fiduciary
or employee of the Company.
<PAGE>
Section 7-108-402 (1) of the Colorado Business Corporation Act provides as
follows:
If so provided in the articles of incorporation, the corporation shall eliminate
or limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director;
except that any such provision shall not eliminate or limit the liability of a
director to the corporation or to its shareholders for monetary damages for any
breach of the director's duty of loyalty to the corporation or to its
shareholders, acts or omissions not in good faith or which involve the
intentional misconduct or a knowing violation of law, acts specified in section
7-108-403 [regarding unlawful corporate distributions], or any transaction from
which the director directly or indirectly derived an improper personal benefit.
No such provision shall eliminate or limit the liability of a director to the
corporation or it its shareholders for monetary damages for any act or omission
occurring before the date when such provision becomes effective.
ARTICLE SEVEN (c) of the Company's Articles of Incorporation provide as follows:
No director of this corporation shall have any personal liability for monetary
damages to the corporation or its shareholders for breach of his fiduciary duty
as a director, except that this provision shall not eliminate or limit the
personal liability of a director to the corporation or its shareholders for
monetary damages for any breach, act, omission or transaction as to which the
Colorado Business Corporation Act (as in effect from time to time) prohibits
expressly the elimination or limitation of liability. Nothing contained herein
will be construed to deprive any director of his right to all defenses
ordinarily available to a director nor will anything herein be construed to
deprive any director of any right he may have for contribution from any other
director or other person.
The above discussions of the Company's Articles of Incorporation, Bylaws and the
Colorado Business Corporation Act is only a summary and is qualified in its
entirety by the full text of each of the foregoing.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
Not Applicable.
Item 8. EXHIBITS
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5.1* Opinion of Law Office of Reed & Reed, P.C., Attorneys at Law as to the
legality of the Company's Common Stock being registered.
23.1* Consent of Ernst & Young LLP
23.2* Consent of Law Office of Reed & Reed, P.C. (contained in Exhibit 5.1)
99.1* Denmans.com, Inc. 1999 Non-Qualified Stock Option Plan
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* Filed herewith.
<PAGE>
Item 9. UNDERTAKINGS
------------
The Company 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
additional or changed material information on the plan of distribution.
(2) That, for the purpose of determining any liability under the Securities Act
each post-effective amendment shall be treated as a new registration statement
relating to the securities offered, and the offering of such securities at that
time shall be treated as the initial bona fide offering thereof.
(3) To file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
SIGNATURES
-----------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
Denmans.com, Inc. 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, as amended, to be signed on its behalf by the
undersigned, thereunto duly authorized, in Vancouver, British Columbia on
January 14, 2000.
DENMANS.COM, INC.
By: /s/ Kurt S. Dohlen
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Kurt S. Dohlen, Principal Executive Officer
By: /s/ C. Jamie Lanfranco
-------------------------------------------
C. Jamie Lanfranco, Principal Financial &
Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Date: January 14, 2000 By: /s/ Kurt S. Dohlen
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Kurt S. Dohlen, Director
Date: January 14, 2000 By: /s/ Douglas N. Bolen
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Douglas N. Bolen, Director
Date: January 14, 2000 By: /s/ Terry G. Bowering
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Terry G. Bowering, Director
Date: January 14, 2000 By: /s/ Drew C. Parker
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Drew C. Parker, Director
EX-5.1 OPINION OF LAW OFFICE OF REED & REED, P.C.
EXHIBIT 5.1
January 14, 2000
Law Office of Reed & Reed, P.C.
1919 14th Street, Suite 330
Boulder, Colorado, 80302
Tel: (303) 413-0691
Fax: (303) 413-0645
Denmans.com, Inc.
Suite 780-789 West Pender Street
Vancouver, British Columbia
Canada, V6C 1H2
Gentlemen:
In connection with the Registration Statement on Form S-8, being filed by
Denmans.com, Inc. (the "Company") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the registration of
1,200,000 shares of the Company's Common Stock offered under the Company's 1999
Non-Qualified Stock Option Plan (the "Plan"), we are of the opinion that:
1. The Company is a validly organized and existing corporation under the laws of
Colorado.
2. All necessary corporate action has been duly taken to authorize the
establishment of the Plan and the issuance of 1,200,000 shares of the Company's
Common Stock under the Plan; and
3. The shares of the Company's Common Stock, when issued in accordance with the
Plan, will be legally issued, fully paid and non-assessable shares of the Common
Stock of the Company.
We hereby consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement referred to above.
Very truly yours,
/s/ Law Office of Reed & Reed, P.C.
EXHIBIT 23.1
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
We consent to the incorporation by reference of our report dated July 16, 1999
(except as to Note 1 which is as at August 16, 1999) in the Registration
Statement (Form S-8 No. 333-__________) pertaining to the 1999 Non-Qualified
Stock Option Plan of DENMANS.COM, Inc. with respect to the consolidated
financial statements of DENMANS.COM, Inc. included in its Registration Statement
on Form 10-SB/A, as amended, filed with the Securities and Exchange Commission
on January 12, 2000.
Vancouver, Canada /s/ Ernst & Young LLP
January 11, 2000 Chartered Accountants
EXHIBIT 99.1
DENMANS.COM, INC.
1999 NON-QUALIFIED STOCK OPTION PLAN
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SECTION 1
INTRODUCTION
ESTABLISHMENT. Denmans.com, Inc., a Colorado corporation, hereby establishes the
Denmans.com, Inc. 1999 Stock Option Plan (the "Plan") for employees,
consultants, directors, and other advisors associated with the Company whom the
Board wishes to incentivize. Denmans.com, Inc., together with its affiliated
corporations, as defined in Section 2.1(a) hereafter, are referred to as the
"Company," except where the context otherwise requires.
1.2 PURPOSES. The purposes of the Plan are to provide the Eligible Participants
selected for participation in the Plan with added incentives to continue in the
long-term service of the Company and to create in such persons a more direct
interest in the future success of the operations of the Company by relating
incentive compensation to increases in stockholder value, so that rewards for
the Eligible Participants is more closely aligned with the pursuit of value for
the Company and the Company's stockholders. The Plan also is designed to attract
Eligible Participants and to retain and motivate such persons by providing an
opportunity for investment in the Company.
SECTION 2
DEFINITIONS
2.1 DEFINITIONS. The following terms will have the meanings set forth below:
(a) "AFFILIATED CORPORATION" means any corporation or other entity (including,
but not limited to, a partnership) that is affiliated with Denmans.com, Inc.
through stock ownership or otherwise and is treated as a common employer under
the provisions of Code Sections 414(b) and (c).
(b) "BOARD" means the Board of Directors of Denmans.com, Inc.
(c) "CODE" means the Internal Revenue Code of 1986, as it may be amended from
time to time.
(d) "EFFECTIVE DATE" means the effective date of the Plan, which will be
February 1, 1999.
(e) "ELIGIBLE PARTICIPANTS" means all employees (including, without limitation,
all officers), directors, consultants and all other advisors whom the Board
wishes to incentivize to contribute to the fortunes of the Company.
(f) "FAIR VALUE" means the value of a Share of Stock as determined by the Stock
Option Committee acting in good faith and in its sole discretion.
Notwithstanding the above, if the Stock is actively traded in an established
stock or quotation market, "FAIR VALUE" will mean the officially quoted closing
price of the Stock on such exchange (a "National Exchange") on a particular date
selected by the Stock Option Committee in establishing the purchase price of
Shares of the Option.
(g) "STOCK OPTION COMMITTEE" means the Board, as defined in Section 2.1(b).
(h) "NON-STATUTORY OPTION" means an Option granted under this Plan in accordance
with the requirements of Code Section 83.
(i) "OPTION" means a right to purchase Stock at a stated price for a specified
period of time.
<PAGE>
(j) "OPTION PRICE" means the price at which shares of Stock subject to an Option
may be purchased, determined in accordance with Section 6.2(b).
(k) "OPTION HOLDER" means an Eligible Participant designated by the Stock Option
Committee from time to time during the term of the Plan to receive one or more
Options under the Plan.
(l) "SHARE" or "SHARES" means a share or shares of Stock.
(m) "STOCK" means the common stock of the Company.
2.2 GENDER AND NUMBER. Except where otherwise indicated by the context, the
masculine gender also will include the feminine gender, and the definition of
any term herein in the singular also will include the plural.
SECTION 3
PLAN ADMINISTRATION
The Plan will be administered by the Stock Option Committee. In accordance with
the provisions of the Plan, the Stock Option Committee will, in accordance with
policies approved by the Board and otherwise in its sole discretion, select the
Eligible Participants to whom Options will be granted, the form of each Option,
the amount of each Option, and any other terms and conditions of each Option as
the Stock Option Committee may deem necessary or desirable and consistent with
the terms of the Plan. The Stock Option Committee will determine the form or
forms of the agreements with Option Holders. The agreements will evidence the
particular provisions, terms, conditions, rights and duties of the Company and
the Option Holders with respect to Options granted pursuant to the Plan, which
provisions need not be identical except as may be provided herein. The Stock
Option Committee may from time to time adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company. The Stock Option Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it will deem
expedient and it will be the sole and final judge of such expediency. No member
of the Stock Option Committee will be liable for any action or determination
made in good faith, and all members of the Committee will, in addition to their
rights as directors, be fully protected by the Company with respect to any such
action, determination or interpretation. The determinations, interpretations,
and other actions of the Stock Option Committee pursuant to the provisions of
the Plan will be binding and conclusive for all purposes and on all persons.
SECTION 4
STOCK SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. 1,200,000 Shares are authorized for issuance under the
Plan in accordance with the provisions of the Plan. Shares that may be issued
upon the exercise of Options will be applied to reduce the maximum number of
Shares remaining available under the Plan and while any Options are outstanding,
the Company will retain as authorized and unissued stock at least the number of
Shares from time to time required under the provisions of the Plan or otherwise
assure itself of its ability to perform its obligations hereunder.
4.2 UNUSED AND FORFEITED STOCK. Any Shares that are subject to an Option under
this Plan that are not used because the terms and conditions of the Option are
not met or any Shares that are used for full or partial payment of the purchase
price of Shares with respect to which an Option is exercised or any Shares
retained by the Company for any purpose of this Plan automatically will be
returned to the Plan pool and become available for use under the Plan.
<PAGE>
4.3 ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC. If the Company at any time
increases or decreases the number of its outstanding Shares of Stock, or changes
in any way the rights and privileges of such Shares by means of the payment of a
stock dividend or any other distribution upon such Shares payable in Stock, or
through a stock split, subdivision, consolidation, combination, reclassification
or recapitalization involving the Stock, then, in relation to the Stock that is
affected by the above events, the provisions of this Section 4.3 will apply. In
such event, the numbers, rights and privileges of the following will be
increased, decreased or changed in like manner as if such Shares had been issued
and outstanding, fully paid and non-assessable at the time of such event: (i)
adjustment to the shares of Stock as to which Options may be granted under the
Plan; and (ii) adjustment to the exercise price of each outstanding Option
granted hereunder.
4.4 GENERAL ADJUSTMENT RULES. If any adjustment or substitution provided for in
this Section 4 will result in the creation of a fractional Share under any
Option, the number of Shares subject to the option will be rounded to the next
higher Share.
4.5 DETERMINATION BY STOCK OPTION COMMITTEE, ETC. Adjustments under this Section
4 will be made by the Stock Option Committee, whose determinations with regard
thereto will be final and binding upon all parties.
SECTION 5
REORGANIZATION OR LIQUIDATION
In the event that the Company is merged or consolidated with another corporation
(other than a merger or consolidation in which the Company is the continuing
corporation and that does not result in any reclassification or change of
outstanding Shares), or if all or substantially all of the assets or more than
20% of the outstanding voting stock of the Company is acquired by any other
corporation, business entity or person (other than by a sale or conveyance in
which the Company continues as a holding company of an entity or entities that
conduct the business or businesses formerly conducted by the Company), or in
case of a reorganization (other than a reorganization under the United States
Bankruptcy Code) or liquidation of the Company, the Stock Option Committee will
have the power and discretion to prescribe the terms and conditions for the
exercise or modification of any outstanding Options granted hereunder. By way of
illustration, and not by way of limitation, the Stock Option Committee may
provide for the complete or partial acceleration of the dates of exercise of the
Options, or may provide that such Options will be exchanged or converted into
options to acquire securities of the surviving or acquiring corporation, or may
provide for a payment or distribution in respect of outstanding Options (or the
portion thereof that currently is exercisable) in cancellation thereof. The
Stock Option Committee may provide that Options granted hereunder must be
exercised in connection with the closing of such transaction, and that if not so
exercised such Options will expire. Any such determinations by the Stock Option
Committee may be made generally with respect to all Option Holders, or may be
made on a case-by-case basis with respect to particular Option Holders. The
provisions of this Section 5 will not apply to any transaction undertaken for
the purpose of reincorporating the Company under the laws of another
jurisdiction, if such transaction does not materially affect the beneficial
ownership of the Company's capital stock. Any determination by the Stock Option
Committee hereunder shall not amend the terms of any Option without the consent
of the Option Holder unless, in the opinion of the Committee acting reasonably,
such amendment is necessary to permit the alterations to the Company to be
effected and such is in the interest of shareholders generally.
SECTION 6
STOCK OPTIONS
6.1 GRANT OF OPTIONS. An Eligible Participant may be granted one or more
Options. Options granted under the Plan will be Non-Statutory Options.
<PAGE>
6.2 OPTION AGREEMENTS. Each Option granted under the Plan will be evidenced by a
written stock option agreement that will be entered into by the Company and the
Eligible Participant to whom the Option is granted (the "Option Holder"), and
will contain the following terms and conditions, as well as such other terms and
conditions not inconsistent therewith, as the Stock Option Committee may
consider appropriate in each case. In the event of any inconsistency between the
provisions of the Plan and any such agreement entered into hereunder, the
provisions of the agreement will govern where not inconsistent with law.
However, the provisions of the Plan will govern where the agreement omits to
provide for a matter governed by the Plan and the agreement will not be complete
nor enforceable where it fails to provide for the following matters, unless such
matters are elsewhere provided or are herein provided by the terms of this Plan:
(a) NUMBER OF SHARES. Each stock option agreement will state that it covers a
specified number of Shares, as determined by the Stock Option Committee.
(b) PRICE. The price at which each Share covered by an Option may be purchased
will be determined by the Stock Option Committee and set forth in the stock
option agreement.
(c) VESTING PERIOD. Each Stock Option will state the time and the amount of the
Shares of the Option which vest, and are exercisable thereafter, at specified
times during the Option Period. Unless otherwise provided in the Option
agreement, Options will vest and be exercisable for types of Option Holders a s
follows:
(i) Directors and senior officers to Vice-President- 25% of the amount of the
Shares under Option upon granting and 25% each six months thereafter;
(ii) Employees Generally - 10% at the end of the later of the first three months
or the stated probation period and 5% at the end of each calendar month
thereafter; and
(iii) Other Option Holders - 10% at the end of the first 30 days of engagement,
20% upon completion of 50% of the term, where a particular term, or upon 50% of
project completion, where project contract specific, and the remainder upon, and
for a period of 90 days thereafter, the Company's certifying substantial
satisfaction, acting reasonably, with contract and/or project completion.
(d) DURATION OF OPTIONS. Each stock option agreement will state the period of
time within which the Option may be exercised by the Option Holder (the "Option
Period"). The Option Period must expire, in all cases, not more than ten years
from the date an Option is granted. Unless otherwise stated, director and senior
officer Options shall be the lesser of five years or the term of their office
plus 60 days, employee Options the lesser of five years or the term of their
employment plus 60 days, and other Option Holders the lesser of five years or
the term of the engagement agreement plus 60 days. Notwithstanding any other
provisions hereof, unless otherwise determined by the Stock Option Committee,
any Option granted to an officer, director or more than 10% shareholder of the
company hereunder shall not become exercisable until at least six months
following the date of grant.
(e) TERMINATION OF EMPLOYMENT, DEATH, DISABILITY, ETC. Except as otherwise
determined by the Stock Option Committee, each stock option agreement will
provide as follows with respect to the exercise of the Option upon termination
of the employment or the death of the Option Holder:
<PAGE>
(i) If the Option Holder's employment or office with the Company is terminated
within the Option Period for cause, as determined by the Company in its sole
discretion, or if the Option Holder resigns without appropriate or agreed notice
and agreed termination terms, the Option thereafter will be void for all
purposes immediately upon notice of termination or resignation, as the case may
be, unless otherwise agreed by the Company. As used in this Section, "cause"
will mean a gross violation, as determined by the Company, of the Company's
established policies and procedures. If the Option Holder is terminated for
another reason, not contemplated in this agreement, then the Option shall be
exercisable, as to the vested portion only on the date of termination, for a
period of 30 days after termination, except as otherwise permitted by the Stock
Option Committee or the Option agreement and not to exceed the Option Period.
The effect of this Section will be limited to determining the consequences of a
termination, and nothing in this Section will restrict or otherwise interfere
with the Company's discretion with respect to the termination of any employee.
(ii) If the Option Holder's employment with the Company is terminated within the
Option Period because of the Option Holder's death or disability (within the
meaning of Code Section 22(e)), the Option will remain exercisable, to the
extent that it was vested and exercisable on the date of the Option Holder's
death or disability, for a period of twelve months after such date; provided,
however, that in no event may the Option be exercised after the expiration of
the Option Period.
(iii) For all purposes under this Section, an Eligible Participant who is not an
employee or office holder of the Company will be considered to have a
termination at the conclusion of the relevant contract or upon notice by the
Company of termination for default or breach of agreement. If the contract is
terminated for breach or default then the Option shall terminate immediately.
Otherwise the Option shall terminate in accordance with its terms or sections
6.2(c)(iii) and 6.2(d) above.
(f) TRANSFERABILITY OF OPTION. Each stock option agreement will provide that the
Option and exercise rights granted therein is not transferable or subject to
assignment or lien for security purposes by the Option Holder except to the
Option Holder's legal representative, his estate, a family corporation or
personal holding corporation, a bona fide lender or in such other circumstances
as the Stock Option Committee may approve, subject to legal advice and at its
sole unfettered discretion which may be exercised contrary without reason. Each
assignment of an interest in an Option must be approved before such will be
enforceable.
(g) EXERCISE, PAYMENTS, ETC.
(i) Each stock option agreement will provide that the method for exercising the
Option granted therein will be by delivery to the Corporate Secretary of the
Company of written notice specifying the particular Option (or portion thereof)
that is being exercised and the number of Shares with respect to which such
Option is exercised, together with payment of the Option Price. Such notice
shall be in a form satisfactory to the Stock Option Committee. The exercise of
the Option will be deemed effective upon receipt of such notice by the Corporate
Secretary and payment to the Company of the Option Price. The purchase of such
Stock will take place at the principal offices of the Company upon delivery of
such notice. A properly executed certificate or certificates representing the
Stock will be issued by the Company and delivered to the Option Holder. Unless
restricted by the Option agreement, the exercise price shall be paid by any of
the following methods or any combination of the following methods:
(A) in cash;
(B) by cashier's check, certified cheque, or other acceptable banker's note
payable to the order of the Company;
(C) by net exercise notice whereby the Option Holder will authorize the return
to the Plan pool, and deduction from the Option Holder's Stock Option, of
sufficient Option Shares whose net value (Share Fair Value less Option exercise
price) is sufficient to pay the Option Price of the Shares exercised, the Fair
Value of the Shares of the Option to be returned to the Plan pool as payment
will be determined by the closing price of the Company's Shares on the date
notice is delivered;
<PAGE>
(D) by delivery to the Company of properly executed notice of exercise together
with irrevocable instructions (referred to in the industry as 'delivery against
payment') to a broker to deliver to the Company promptly the amount of the
proceeds of the sale of all or a portion of the stock or of a loan from the
broker to the Option Holder necessary to pay the exercise price; or
(E) such other method as the Option Holder and the Stock Option Committee may
determine as adequate including delivery of acceptable securities (including
securities of the Company), set-off for wages or invoices due, property, or
other adequate value.
(ii) In the discretion of the Stock Option Committee, the Company may guarantee
a third-party loan obtained by an Option Holder to pay part or all of the Option
Price of the Shares provided that such loan or the Company's guaranty is secured
by the Shares.
(h) DATE OF GRANT. An Option will be considered as having been granted on the
date specified in the grant resolution of the Stock Option Committee.
6.3 STOCKHOLDER PRIVILEGES. Prior to the exercise of the Option and the transfer
of Shares to the Option Holder, an Option Holder will have no rights as a
stockholder with respect to any Shares subject to any Option granted to such
person under this Plan and, until the Option Holder becomes the holder of record
of such Stock, no adjustments, other than those described in Section 4, will be
made for dividends or other distributions or other rights as to which there is a
record date preceding the date such Option Holder becomes the holder of record
of such Stock.
SECTION 7
RIGHTS OF EMPLOYEES AND OPTION HOLDERS
7.1 EMPLOYMENT. Nothing contained in the Plan or in any Option will confer upon
any Eligible Participant any right with respect to the continuation of
employment by the Company, or interfere in any way with the right of the
Company, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or decrease
the compensation of such Eligible Participant from the rate in existence at the
time of the grant of an Option.
SECTION 8
GENERAL RESTRICTIONS
8.1 INVESTMENT REPRESENTATIONS. The Company may require any person to whom an
Option is granted, as a condition of exercising such Option or receiving Stock
under the Option, to give written assurances, in the substance and form
satisfactory to the Company and its counsel, to the effect that such person is
acquiring the Stock subject to the Option for his own account for investment and
not with any present intention of selling or otherwise distributing the same,
and to such other effects as the Company deems necessary or appropriate in order
to comply with U.S. and Canadian federal and applicable state and provincial
securities laws. Legends evidencing such restrictions may be placed on the
certificates evidencing the Stock.
8.2 COMPLIANCE WITH SECURITIES LAWS. Each Option will be subject to the
requirement that, if at any time counsel to the Company determines that the
listing, registration or qualification of the Shares subject to such Option upon
any securities exchange or under any U.S. or Canadian provincial, state or
federal law, or the consent or approval of any governmental or regulatory body,
is necessary as a condition of, or in connection with, the issuance or purchase
of Shares thereunder, such Option may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval will have
been effected or obtained on conditions acceptable to the Stock Option
Committee. Nothing herein will be deemed to require the Company to apply for or
to obtain such listing, registration or qualification.
<PAGE>
SECTION 9
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by an Option Holder as a
result of the exercise of an Option will not constitute "earnings" with respect
to which any other employee benefits of such Option Holder are determined,
including without limitation benefits under any pension, profit sharing, life
insurance or salary continuation plan. Any taxable consequences of any Option
are entirely the responsibility of the Option Holder and no contribution shall
be required of the Company and , further, if the Company should suffer liability
for unpaid taxes of an Option Holder then the full amount of such shall be a
debt of the Option Holder to the Company payable immediately and for which the
Company may seek judgment and , before judgment or process, may set-off against
any amounts due to the Option Holder or may recover, again before judgment or
process, by exercise of any Options of the Holder on the Option Holder's behalf,
at the discretion of the Stock Option Committee.
SECTION 10
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or modify,
the Plan; provided, however, that no amendment or modification may become
effective without approval of the amendment or modification by the stockholders
if stockholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, or if the Company, on the advice of
counsel, determines that stockholder approval otherwise is necessary or
desirable.
No amendment, modification or termination of the Plan will in any manner
adversely affect any Options theretofore granted under the Plan, without the
consent of the Option Holder holding such Options.
SECTION 11
WITHHOLDING
11.1 WITHHOLDING REQUIREMENT. The Company's obligations to deliver Shares upon
the exercise of an Option will be subject to the Option Holder's satisfaction of
all applicable federal, state and local income and other tax withholding
requirements.
11.2 WITHHOLDING WITH STOCK. At the time an Option is granted, the Stock Option
Committee, in its sole discretion, may permit the Option Holder to pay all such
amounts of tax withholding, or any part thereof that is due upon exercise of the
Option, by such adjustments as the Stock Option Committee determines, including
adjustment to a net exercise price or adjustment to the Option Price.
SECTION 12
BROKERAGE ARRANGEMENTS
The Stock Option Committee, in its discretion, may enter into arrangements with
one or more banks, brokers or other financial institutions to facilitate the
disposition of shares acquired upon exercise of Stock Options, including,
without limitation, arrangements for the simultaneous exercise of Stock Options
and sale of the Shares acquired upon such exercise.
SECTION 13
NONEXCLUSIVITY OF THE PLAN
The adoption of the Plan by the Board will not be construed as creating any
limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
that the Company or any Affiliated Corporation now has lawfully put into effect,
including, without limitation, any retirement, pension, savings and stock
purchase plan, insurance, death and disability benefits and executive short-term
incentive plans.
<PAGE>
SECTION 14
REQUIREMENTS OF LAW
14.1 REQUIREMENTS OF LAW. The issuance of Stock and the payment of cash pursuant
to the Plan will be subject to all applicable laws, rules and regulations.
14.2 GOVERNING LAW. The Plan and all agreements hereunder will be construed in
accordance with and governed by the laws of the State of Colorado.
SECTION 15
DURATION OF THE PLAN
The Plan will terminate at such time as may be determined by the Board, and no
Option will be granted after such termination. If not sooner terminated under
the preceding sentence, the Plan will fully cease and expire at midnight on
December 31, 2009. Options outstanding at the time of the Plan termination may
continue to be exercised in accordance with their terms.
