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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GENIUS PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Nevada 33-085292
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(State of Incorporation) (I.R.S. Employer ID No.)
11250 El Camino Real, Suite 100, San Diego, California 92130
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(Address of Principal Executive Offices)
Non-Qualified Stock Option Plan
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(Full title of the Plan)
Laughlin and Associates, 2533 N. Carson St., Carson City, NV 89706
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(Registered Agent for Service of Process)
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Title of Securities to Amount to be Offering Price Per Proposed Aggregate Amount of
be Registered Registered Share (1) Offering Price Registration Fee
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock 5,000,000 $0.54(2) $2,700,000 $715.50
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</TABLE>
(1) The Offering Price is used solely for purposes of estimating the
registration fee pursuant to Rule 457(h) promulgated pursuant to the Securities
Act of 1933.
(2) The Offering Price per Share is established pursuant to the option exercise
price set forth in the Non-Qualified Stock Option Plan, set forth in Exhibit 4.1
to this Form S-8.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
See Item 2 below.
ITEM 2. REGISTRANT INFORMATION AND NON-QUALIFIED STOCK OPTION PLAN.
The documents containing the information specified in Part I, Items 1
and 2, will be delivered to each of the participants in accordance with Form S-8
and Rule 428 promulgated under the Securities Act of 1933, as amended (the
"Act"). The participants shall be provided a written statement notifying them
that upon written or oral request they will be provided, without charge, (i) the
documents incorporated by reference in Item 3 of Part II of the registration
statement, and (ii) other documents required to be delivered pursuant to Rule
428(b). The statement will inform the participants that these documents are
incorporated by reference in the Section 10(a) prospectus, and shall include the
address (giving title or department) and telephone number to which the request
is to be directed.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following are hereby incorporated by reference:
(a) The Registrant's Form 10-SB, and subsequent
Amendments 1 and 2, which were cleared by the
Securities and Exchange Commission on January 14,
2000, containing a description of the securities of
the Registrant and audited financial statements for
the Registrant's latest fiscal year.
(b) Amendment No. 1 to Form 10-KSB filed May 1, 2000, and
all other reports filed by the Company.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934, 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 in the registration statement and to
be part thereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
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ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Other than as set forth below, no named expert or counsel was hired on
a contingent basis, will receive a direct or indirect interest in the small
business issuer, or was a promoter, underwriter, voting trustee, director,
officer, or employee of the Registrant.
Marc Tow, as Counsel for the Registrant regarding this Registration
Statement, will receive options for seventeen thousand five hundred forty
(17,540) shares of stock under the Non-Qualified Stock Option Plan in exchange
for legal work provided to the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation and Bylaws of the Registrant contain the
following provisions regarding indemnification of officers and directors: "The
Corporation shall indemnify all of its officers and directors, past, present and
future, against any and all expenses incurred by them and each of them including
but not limited to legal fees, judgments and penalties which may be incurred,
rendered or levied in any legal action brought against any or all of them for or
on account of any act or omission alleged to have been committed while acting
within the scope of their duties as officers or director of this Corporation."
The Nevada Revised Statutes, stated herein, provide further for permissive
indemnification of officers and directors.
A. NRS 78.7502 DISCRETIONARY AND MANDATORY INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS: GENERAL PROVISIONS.
1. A corporation may indemnify any person 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, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, 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. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act 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 that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
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director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit 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. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
B. NRS 78.751 AUTHORIZATION REQUIRED FOR DISCRETIONARY INDEMNIFICATION;
ADVANCEMENT OF EXPENSES; LIMITATION ON INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES.
1. Any discretionary indemnification under NRS 78.7502 unless ordered
by a court or advanced pursuant to subsection 2, may be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting
of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
2. The articles of incorporation, the bylaws or an agreement made by
the corporation may provide that the expenses of officers and directors incurred
in defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
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3. The indemnification and advancement of expenses authorized in NRS
78.7502 or ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to or for the advancement of
expenses made pursuant to subsection 2, may not be made to or on behalf of any
director or officer if a final adjudication establishes that his acts or
omissions involved intentional misconduct, fraud or a knowing violation of the
law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
C. NRS 78.752 INSURANCE AND OTHER FINANCIAL ARRANGEMENTS AGAINST
LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in his
capacity as a director, officer, employee or agent, or arising out of his status
as such, whether or not the corporation has the authority to indemnify him
against such liability and expenses.
2. The other financial arrangements made by the corporation pursuant to
subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a
person pursuant to this section may be provided by the corporation or any other
person approved by the board of directors, even if all or part of the other
person's stock or other securities is owned by the corporation.
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4. In the absence of fraud:
(a) The decision of the board of directors as to the propriety of the
terms and conditions of any insurance or other financial arrangement made
pursuant to this section and the choice of the person to provide the insurance
or other financial arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to
personal liability for his action,
even if a director approving the insurance or other financial arrangement is a
beneficiary of the insurance or other financial arrangement.
5. A corporation or its subsidiary which provides self-insurance for
itself or for another affiliated corporation pursuant to this section is not
subject to the provisions of Title 57 of NRS.
6. The Registrant, with approval of the Registrant's Board of
Directors, has obtained directors' and officers' liability.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached to this registration statement.
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:
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
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(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
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) 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.
(e) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information
(h) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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
authorize, in the City of San Diego, State of California, on May 25, 2000.
GENIUS PRODUCTS, INC.
By: /s/ Klaus Moeller
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Klaus Moeller, Chief Executive Officer
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SPECIAL POWER OF ATTORNEY
The undersigned constitute and appoint Klaus Moeller their true and
lawful attorney-in-fact and agent with full power of substitution, for him and
in his name, place, and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Form S-8 Registration
Statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the U.S. Securities and Exchange Commission, granting
such attorney-in-fact the full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated:
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<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ Klaus Moeller Chief Executive Officer and Director May 25, 2000
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Klaus Moeller
/s/ Deborah Cross Director May 25, 2000
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Deborah Cross
</TABLE>
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EXHIBIT INDEX
Method of
Exhibit Number Description Filing
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4.8 Non-Qualified Stock Option Plan See Below
5.1 Opinion Re: Legality See Below
23.1 Consent of Accountant See Below
23.2 Consent of Counsel See Below
24 Special Power of Attorney See Signature Page
GENIUS PRODUCTS, INC.
2000 NON-QUALIFIED STOCK OPTION PLAN
1. GENERAL PROVISIONS
1.1 PURPOSE.
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The 2000 Non-Qualified Stock Option Plan (the "PLAN") is intended to
allow designated officers, directors, consultants and employees (all of whom are
sometimes collectively referred to herein as "Participants") of Genius Products,
Inc., a Nevada corporation ("GENIUS") and its Subsidiaries (as that term is
defined below) which it may have from time to time (Genius and such Subsidiaries
are referred to herein as the "COMPANY") to receive certain options ("STOCK
OPTIONS") to purchase Genius's common stock, one tenth of one cent ($0.001) par
value ("COMMON STOCK"). As used in this Plan, the term "SUBSIDIARY" shall mean
each corporation which is a "subsidiary corporation" of Genius within the
meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended (the
"CODE"). The purpose of this Plan is to provide Participants with equity-based
compensation incentives to make significant and extraordinary contributions to
the long-term performance and growth of the Company.
1.2 ADMINISTRATION.
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1.2.1 The Plan shall be administered by the Board of Directors of
Genius or by any committee appointed by the Board, hereinafter collectively
referred to as the "ADMINISTRATOR". The Administrator shall select one of its
members as Chairman and shall act by vote of a majority of a quorum, or by
unanimous written consent. A majority of its members shall constitute a quorum.
The Administrator shall be governed by the provisions of Genius's Bylaws and of
Nevada law applicable to the Board, except as otherwise provided herein or
determined by the Board.
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1.2.2 The Administrator shall have full and complete authority, in its
discretion, but subject to the express provisions of the Plan: to approve the
Participants nominated by the management of the Company to be granted Stock
Options; to determine the number Stock Options to be granted to a Participant;
to determine the time or times at which Stock Options shall be granted; to
establish the terms and conditions upon which Stock Options may be exercised; to
remove or adjust any restrictions and conditions upon Stock Options; to specify,
at the time of grant, provisions relating to exercisability of Stock Options and
to accelerate or otherwise modify the exercisability of any Stock Options; and
to adopt such rules and regulations and to make all other determinations deemed
necessary or desirable for the administration of the Plan. All interpretations
and constructions of the Plan by the Administrator, and all of its actions
hereunder, shall be binding and conclusive on all persons for all purposes.
1.2.3 The Company hereby agrees to indemnify and hold harmless each
Administrator and each employee of the Company, and the estate and heirs of such
Administrator or employee, against all claims, liabilities, expenses, penalties,
damages or other pecuniary losses, including legal fees, which such
Admininstrator or employee, his or her estate or heirs may suffer as a result of
his or her responsibilities, obligations or duties in connection with the Plan,
to the extent that insurance, if any, does not cover the payment of such items.
No member of the Administrator or the Board shall be liable for any action or
determination made in good faith with respect to the Plan or Stock Option
granted pursuant to the Plan.
1.3 ELIGIBILITY AND PARTICIPATION.
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Participants eligible under the Plan shall be approved by the
Administrator from those Participants who, in the opinion of the management of
the Company, are in positions which enable them to make significant and
extraordinary contributions to the performance and growth of the Company. In
selecting Participants to whom Stock Options may be granted, consideration shall
be to a variety of factors.
A Participants eligibility to participate in the Plan shall terminate
(other than by reason of his or her death) on the date that the Participant (a)
if an employee, ceases to be employed by the Company, a parent of the Company or
a subsidiary of the Company, (b) if a director and not an employee, ceases to be
a member of the Company's Board of Directors, of (c) if a consultant, completes
or is terminated under the terms of the consulting agreement between the
consultant and the Company.
The options of a Participant whose eligibility under the Plan has
terminated shall expire (a) three (3) years from the date that the Participant
(i) "Resigns for Good Reason" if so provided in the Participant's employment or
consulting agreement with the Company, if any, or (ii) is terminated without
cause or completes the object of the consulting agreement, (b) four (4) months
from the date Participant is terminated for cause or resigns from the Company or
resigns from or is voted off the Board of Directors, as the case may be, (c)
twelve (12) months from the date on which the Participant's eligibility ceases
because of any "Disability" if so provided in the Participant's employment
contract, if any, or d) upon the date the option expires by its terms.
<PAGE>
If the Participant dies while eligible to participate in the Plan or
within four (4) months after the termination of his or her eligibility, the
Participant's executers or administrators or any persons who acquired the option
directly from the Participant by bequest or inheritance shall have the right to
exercise the Participant's option in accordance with its terms at any time
during the twelve (12) months immediately following Participant's death but only
in respect of the number of shares for which the right to exercise has vested at
the time of exercise.
1.4 SHARES SUBJECT TO THE PLAN.
--------------------------
The maximum number of shares of Common Stock that may be issued
pursuant to the Plan shall be Five Million (5,000,000) subject to adjustment
pursuant to the provisions of paragraph 4.1. If shares of Common Stock awarded
or issued under the Plan are reacquired by the Company due to a forfeiture or
for any other reason, such shares shall be cancelled and thereafter shall again
be available for purposes of the Plan. If a Stock Option expires, terminates or
is cancelled for any reason without having been exercised in full, the shares of
Common Stock not purchased thereunder shall again be available for purposes of
the Plan.
2. PROVISIONS RELATING TO STOCK OPTIONS
2.1 GRANTS OF STOCK OPTIONS.
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The Administrator may grant Stock Options in such amounts, at such
times, and to such Participants nominated by the management of the Company as
the Administrator, in its discretion, may determine. Stock Options shall be
designated non-statutory stock options by the Administrator on the date of
grant. Each Stock Option shall be evidenced by a written agreement (the "OPTION
AGREEMENT") in a form approved by the Administrator, which shall be executed on
behalf of the Company and by the Participant to whom the Stock Option is
granted, and which shall be subject to the terms and conditions of this Plan.
The holder of a Stock Option shall not be entitled to the privileges of stock
ownership as to any shares of Common Stock not actually issued to such holder.
2.2 PURCHASE PRICE.
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The purchase price (the "EXERCISE PRICE") of shares of Common Stock
subject to each Stock Option ("OPTION SHARES") shall be fifty-four cents ($0.54)
per share. The Exercise Price was determined by adding a premium of 12.5% to
closing price of the Company's shares on May 24, 2000. The Administrator shall
have the authority to change the price of the Options at any time.
2.3 OPTION PERIOD.
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The Stock Option period (the "TERM") shall commence on the date of
grant of the Stock Option and shall be three (3) years or such shorter period as
is determined by the Administrator. The Term for Stock Options shall be whatever
period, if any, is set by the Board. Each Stock Option shall provide that it is
exercisable over its term in such periodic installments as the Administrator in
its sole discretion may determine. Such provisions need not be uniform.
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2.4 EXERCISE OF OPTIONS.
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2.4.1 Each Stock Option may be exercised in whole or in part (but not
as to fractional shares) by delivering it for surrender or endorsement to the
Company, attention of the Corporate Secretary, at the principal office of the
Company, together with payment of the Exercise Price and an executed Notice and
Agreement of Exercise in the form prescribed by paragraph 2.4.2. Payment may be
made (i) in cash, (ii) by cashier's or certified check, (iii) by surrender of
owned shares of the Company's Common Stock valued pursuant to paragraph 2.2 (if
the Committee authorizes payment in stock in its discretion), (iv) by
withholding from the Option Shares which would otherwise be issuable upon the
exercise of the Stock Option that number of Option Shares equal to the exercise
price of the Stock Option, if such withholding is authorized by the Committee in
its discretion, in its discretion, (v) in the discretion of the Committee, by
the delivery to the Company of the optionee's promissory note secured by the
Option Shares, bearing interest at a rate sufficient to prevent the imputation
of interest under Sections 483 or 1274 of the Code, and having such other terms
and conditions as may be satisfactory to the Committee, or (vi) through a
cashless exercise program as established by Genius.
2.4.2 Exercise of each Stock Option is conditioned upon the agreement
of the Participant to the terms and conditions of this Plan and of such Stock
Option as evidenced by the Participant's execution and delivery of a Notice and
Agreement of Exercise in a form to be determined by the Administrator in its
discretion. Such Notice and Agreement of Exercise shall set forth the agreement
of the Participant that: (a) no Option Shares will be sold or otherwise
distributed in violation of the the Act or any other applicable federal or state
securities laws, (b) each Option Share certificate may be imprinted with legends
reflecting any applicable federal and state securities law restrictions and
conditions, (c) the Company may comply with said securities law restrictions and
issue "stop transfer" instructions to its Transfer Agent and Registrar without
liability, (d) if the Participant is a Section 16 Reporting Person, the
Participant will furnish to the Company a copy of each Form 4 or Form 5 filed by
said Participant and will timely file all reports required under federal
securities laws, and (e) the Participant will report all sales of Option Shares
to the Company in writing on a form prescribed by the Company.
2.4.3 No Stock Option shall be exercisable unless and until any
applicable registration or qualification requirements of federal and state
securities laws, and all other legal requirements, have been fully complied
with. The Company will use reasonable efforts to maintain the effectiveness of a
registration statement under the Securities Act for the issuance of Stock
Options and shares acquired thereunder, but there may be times when no such
registration statement will be currently effective. The exercise of Stock
Options may be temporarily suspended without liability to the Company during
times when no such registration statement is currently effective, or during
times when, in the reasonable opinion of the Administrator, such suspension is
necessary to preclude violation of any requirements of applicable law or
regulatory bodies having jurisdiction over the Company. If any Stock Option
would expire for any reason except the end of its term during such a suspension,
then if exercise of such Stock Option is duly tendered before its expiration,
such Stock Option shall be exercisable and exercised (unless the attempted
exercise is withdrawn) as of the first day after the end of such suspension. The
Company shall have no obligation to file any registration statement covering
resales of Option Shares.
<PAGE>
2.5 RESTRICTIONS ON TRANSFER.
------------------------
Each Stock Option granted under this Plan shall be transferable only by
will or the laws of descent and distribution. No interest of any Participant
under the Plan shall be subject to attachment, execution, garnishment,
sequestration, the laws of bankruptcy or any other legal or equitable process.
3. MISCELLANEOUS PROVISIONS
3.1 ADJUSTMENTS UPON CHANGE IN CAPITALIZATION.
-----------------------------------------
3.1.1 The number and class of shares subject to each outstanding Stock
Option, the Exercise Price thereof (but not the total price), the maximum number
of Stock Options that may be granted under the Plan, the minimum number of
shares as to which a Stock Option may be exercised at any one time, shall be
proportionately adjusted in the event of any increase or decrease in the number
of the issued shares of Common Stock which results from a split-up or
consolidation of shares, payment of a stock dividend or dividends exceeding a
total of five percent (5%) for which the record dates occur in any one fiscal
year, a recapitalization (other than the conversion of convertible securities
according to their terms), a combination of shares or other like capital
adjustment, so that (i) upon exercise of the Stock Option, the Participant shall
receive the number and class of shares such Participant would have received had
such Participant been the holder of the number of shares of Common Stock for
which the Stock Option is being exercised upon the date of such change or
increase or decrease in the number of issued shares of the Company.
3.1.2 Subject to any required shareholder action, if the Company shall
be the surviving corporation in any merger or consolidation, each outstanding
option shall pertain and apply to the sercurities that a holder of the number of
shares of Stock subject to the Option would have been entitled. The Company's
Board of Directors may grant each participant the right to exercise his or her
Stock Options in whole or in part immediately prior to the Company's dissolution
or liquidation, or merger or consolidation in which the corporation is not the
surviving corporation. If the Company is consolidated with or meged into any
other corporation, or if the Company sells or transfers all or substantially all
of its assets, or if any other similar event affecting shares of the Company
should occur, and if the exercisability of the Stock Options is not accelerated
by the Board of Directors and the acquiring company assumes the Company's
obligations under the options granted under the Plan, then each Participant
shall be entitled thereafter to purchase shares of stock and other secuirites
and property in the kind and amount, and at the price, which the Participant
would have been entitled to had his or her Stock Option been exercised prior to
such event. The Company shall make lawful provisions therefore as part of any
such tranasction.
3.1.3 To the extent that the foregoing adjustments relate to stock or
securities of the Company, they shall be made by the Administrator, whose
determinations shall be final, binding and conclusive.
<PAGE>
3.1.3 The grant of a Stock Option pursuant to the Plan shall not affect
in any way the Company's right or power 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.
3.2 WITHHOLDING TAXES.
-----------------
The Company shall have the right at the time of exercise of any Stock
Option, to make adequate provision for any federal, state, local or foreign
taxes which it believes are or may be required by law to be withheld with
respect to such exercise ("TAX LIABILITY"), to ensure the payment of any such
Tax Liability. The Company may provide for the payment of any Tax Liability by
any of the following means or a combination of such means, as determined by the
Administrator in its sole and absolute discretion in the particular case: (i) by
requiring the Participant to tender a cash payment to the Company, (ii) by
withholding from the Option Shares which would otherwise be issuable upon
exercise of the Stock Option, that number of Option Shares having an aggregate
fair market value (determined in the manner prescribed by paragraph 2.2) as of
the date the withholding tax obligation arises in an amount which is equal to
the Participant's Tax Liability or (iii) by any other method deemed appropriate
by the Administrator. Satisfaction of the Tax Liability of a Section 16
Reporting Person may be made by the method of payment specified in clause (ii)
above only if the following two conditions are satisfied:
(a) the withholding of Option Shares and the exercise of the related
Stock Option occur at least six months and one day following the date of grant
of such Stock Option; and
(b) the withholding of Option Shares is made either (i) pursuant to an
irrevocable election ("WITHHOLDING ELECTION") made by such Participant at least
six months in advance of the withholding of Options Shares, or (ii) on a day
within a ten-day "window period" beginning on the third business day following
the date of release of the Company's quarterly or annual summary statement of
sales and earnings.
Anything herein to the contrary notwithstanding, a Withholding Election may be
disapproved by the Administrator at any time.
3.3 AMENDMENTS AND TERMINATION.
--------------------------
The Board of Directors may at any time suspend, amend or terminate this
Plan. No amendment or modification of this Plan may be adopted, which would: (a)
materially increase the benefits accruing to Participants under this Plan, (b)
materially increase the number of securities which may be issued under this Plan
(except for adjustments pursuant to paragraph 3.1 hereof), or (c) materially
modify the requirements as to eligibility for participation in the Plan. The
Board of Directors or the Administrator may modify, extend, or renew outstanding
options (to the extent not theretofore exercised) and authorize the granting or
new options in substitution therefore (to the extent theretofore exercised).
<PAGE>
3.4 SUCCESSORS IN INTEREST.
----------------------
The provisions of this Plan and the actions of the Administrator shall
be binding upon all heirs, successors and assigns of the Company and of
Participants.
3.5 OTHER DOCUMENTS.
---------------
All documents prepared, executed or delivered in connection with this
Plan (including, without limitation, Option Agreements) shall be, in substance
and form, as established and modified by the Administrator; provided, however,
that all such documents shall be subject in every respect to the provisions of
this Plan, and in the event of any conflict between the terms of any such
document and this Plan, the provisions of this Plan shall prevail.
3.6 TERM OF PLAN.
------------
This Plan was adopted by the Board effective May 25, 2000. No Stock
Options or Awards may be granted under this Plan after May 25, 2003.
3.7 GOVERNING LAW.
-------------
This Plan shall be construed in accordance with, and governed by, the
laws of the State of Nevada.
3.8 DIRECTOR APPROVAL/USE OF PROCEEDS.
No Stock Option shall be exercisable, unless and until the Directors of
the Company have approved this Plan and all other legal requirements have been
fully complied with. The granting of an option shall impose no obligation upon
the Participant to exercise such option. The proceeds received by the Company
from the sale of the Stock pursuant to the Options under this Plan may be used
for general corporate purposes.
3.9 ASSUMPTION AGREEMENTS.
---------------------
The Company will require each successor, (direct or indirect, whether
by purchase, merger, consolidation or otherwise), to all or substantially all of
the business or assets of the Company, prior to the consummation of each such
transaction, to assume and agree to perform the terms and provisions remaining
to be performed by the Company under this Stock Option and to preserve the
benefits to the Participants thereunder. Such assumption and agreement shall be
set forth in a written agreement in form and substance satisfactory to the
Administrator (an "ASSUMPTION AGREEMENT"), and shall include such adjustments,
if any, in the application of the provisions of the Stock Options and such
additional provisions, if any, as the Administrator shall require and approve,
in order to preserve such benefits to the Participants. Without limiting the
generality of the foregoing, the Administrator may require an Assumption
Agreement to include satisfactory undertakings by a successor:
<PAGE>
(a) to provide liquidity to the Participants on the exercise of Stock
Options;
(b) to require any future successor to enter into an Assumption
Agreement; and
(c) to take or refrain from taking such other actions as the
Administrator may require and approve, in its discretion.
The Administrator referred to in this paragraph 3.12 is the Administrator
appointed by a Board of Directors in office prior to the succession then under
consideration.
3.10 COMPLIANCE WITH RULE 16B-3.
--------------------------
Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent that any provision of the Plan or action
by the Administrator fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Administrator.
IN WITNESS WHEREOF, this Plan has been executed effective as of the
25th day of May, 2000.
GENIUS PRODUCTS, INC.
By: /S/ KLAUS MOELLER
Klaus Moeller, Chief Executive Officer/Director
LAW OFFICES OF MARC TOW
3900 BIRCH STREET, SUITE 113
NEWPORT BEACH, CA 92660
(949) 975-0544
May 25, 2000
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Genius Products, Inc. - Form S-8
Dear Sir/Madame:
I have acted as counsel to Genius Products, Inc., a Nevada corporation
("Company"), in connection with its Registration Statement on Form S-8 relating
to the registration of five million (5,000,000) shares of its common stock
("Shares"), $0.001 par value per Share, which are issuable pursuant to the
Company's 2000 Non-Qualified Stock Option Plan.
In my preparation of this Form S-8, I have examined such documents,
corporate records and other instruments as were deemed necessary or appropriate
for purposes of this opinion and provided by the Company, including, but not
limited to, the Articles of Incorporation, and all amendments thereto, and
Bylaws of the Company.
Based upon the foregoing, it is my opinion that the Company is duly
organized and validly existing as a corporation under the laws of the State of
Nevada, and that the Shares, when issued and sold in accordance with the terms
of the Plan, will be validly issued, fully paid, and non-assessable.
Sincerely,
/S/ JAMES DEOLDEN
-----------------
James DeOlden, Esq.
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We consent to the incorporation by reference in the registration statement on
Form S-8 of Genius Products, Inc. and Subsidiaries of our report dated April 6,
2000 on our audit of the financial statements of Genius Products, Inc. and
Subsidiaries as of December 31, 1999 and for the year then ended.
/s/ Cacciamatta Accountancy Corporation
CACCIAMATTA ACCOUNTANCY CORPORATION
Irvine, California
May 16, 2000
LAW OFFICES OF MARC TOW
3900 BIRCH STREET, SUITE 113
NEWPORT BEACH, CA 92660
(949) 975-0544
May 25, 2000
U.S. Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Genius Products, Inc. - Form S-8
Dear Sir/Madame:
I have acted as counsel to Genius Products, Inc., a Nevada corporation
("Company"), in connection with this Registration Statement on Form S-8 relating
to the registration of five million (5,000,000) shares of its common stock
("Shares"), $0.001 par value per Share, which are issuable pursuant to the
Company's 2000 Non-Qualified Stock Option Plan. Consent to all references to
this firm included in this Registration Statement, including the opinion of
legality, is hereby given.
Sincerely,
/S/ JAMES DEOLDEN
-----------------
James DeOlden, Esq.
