EXHIBIT 99.0
STOCK OPTION PLAN
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PATHFINDER BUSINESS RESOURCES, INC.
2000 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
1. Purpose of Plan and Effective Date.
(a) The purpose of this 2000 Incentive and Non-Statutory Stock Option
Plan (hereinafter called the "Plan") is to further the success of Pathfinder
Business Resources, Inc. (hereinafter called the "Company" or "Employer
Corporation"), and any subsidiaries by making available Common Stock of the
Company for purchase by eligible directors, officers, consultants and key
employees of the Company and any subsidiaries and thus to provide an additional
incentive to such personnel to continue to serve the Company and any
subsidiaries and to give them a greater interest as stockholders in the success
of the Company. It is intended that this Plan be considered an "Employee Benefit
Plan" within the meaning of Regulation 405 of the Securities Act of 1933, as
amended (the "1934 Act").
(b) The Company intends this Plan to enable the Company to issue,
pursuant hereto, incentive stock options as such term is defined in Section 422
of the Internal Revenue Code of 1986, as amended from time to time (the "Code").
The Company also intends this Plan to enable it to issue similar options which
will not, however, be qualified as incentive stock options (also known as
"Non-Statutory" stock options).
(c) The Plan shall become effective on the date of approval by the
Board of Directors of the Company, which date is July 31, 2000; provided,
however, that the Plan shall be subject to approval and ratification by
stockholders of the Company holding a majority of its voting stock, voting in
person or by proxy, at a meeting of stockholders to be held within twelve months
from July 31, 2000.
2. Definitions.
As used in this Plan, the following terms have the following respective
meanings:
"Board" means the Board of Directors of the Company.
"Common Stock" means common stock, $.001 par value of the Company.
"Disability" means permanent total disability as defined in the Code.
"Fair Market Value of the Option Stock" means fair market value of the
Option Stock determined as of the date of grant of the option, in accordance
with Section 422(c)(7) of the Code and the Regulations applicable thereto.
"Grant" means the action of the Board or the appropriate committee at
the time of grant of an option.
"Incentive Stock Option" means any incentive stock option as defined in
Section 422(b) of the Code granted to an individual for any reason connected
with his employment by the Employer Corporation at the time of the granting of a
given option under the Plan.
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"Incentive Stock Option Under this Plan" means any Incentive Stock
Option granted pursuant to this Plan.
"Modification" means any change in the terms of an option which would
constitute a "modification" as defined in Section 424(h)(3) of the Code,
including, without limitation, such a modification to an option as effected by a
change in the Plan and any other change in the Plan which would increase the
number of shares reserved for options under the Plan, materially change the
administration of the Plan (except as permitted in paragraphs 4(c) hereof) or
that would otherwise materially increase the benefits accruing to, or available
for, participants in the Plan; provided, however, that registration of Option
shares under the Securities Act of 1933, as amended, shall not be deemed a
Modification.
"Non-Statutory Stock Option" means any option granted under this Plan
other than an Incentive Stock Option under this Plan.
"Option Stock" means stock subject to an option granted under this
Plan.
"Options" means any Incentive Stock Option or Non-Statutory Stock
Option, unless otherwise indicated or required by context.
"Subsidiary" means any corporation which is a "subsidiary corporation"
as defined in Section 424(f) of the Code, and the regulations thereto.
"10% Stockholder" means a person who owns stock possessing more than
10% of the total combined voting power of all classes of stock of Company or of
any parent or subsidiary of the Company after giving effect to the attribution
of stock ownership provisions of Section 424(d) of the Code.
References in these definitions to provisions of the Code shall, when
appropriate to effectuate the purposed of this Plan, be deemed to be references
to such provisions of the Code and regulations promulgated thereunder as the
same may be from time to time amended or to successor provisions to such
provisions. Terms defined elsewhere in this Plan shall have the meanings set
forth in such respective definitions. The term "Subsidiary" or "Subsidiaries"
shall be deemed to include any parent corporation (if any) as defined in Section
425(e) of the Code.
3. Stock Subject to Plan.
Subject to the provisions of paragraph 12 hereof, there shall be
reserved for issuance or transfer upon the exercise of Options to be granted
from time to time Under the Plan an aggregate of 400,000 shares of Common Stock,
which shares may be in whole or in part, as the Board of Directors of the
Company shall from time to time determine, authorized and unissued shares of
Common Stock or issued shares of Stock which shall have been reacquired by the
Company. If any Option granted under the Plan shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject
thereto shall again be available for the purposes of the Plan.
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4. Administration.
(a) The Board of Directors of the Company (the "Board") shall
administer the Plan. Members of the Board shall be entitled to receive Incentive
Stock Options Under this Plan if they are employees of the Company and/or its
subsidiaries, subject to the provisions of paragraph 5 hereof. Members of the
Board who are not such employees shall be eligible to receive Non-Statutory
Stock Options, subject to paragraphs 5 and 18 hereof.
(b) The Board shall have plenary authority in its discretion, but
subject to the express provisions of the Plan: to determine the purchase price
of the Common Stock covered by each Option, the persons to whom, and the time or
times when, Options shall be granted, and the number of shares to be subject to
each Option; to determine the time or times during which Options may or must be
exercised and the conditions for exercise; to determine the time or times and
conditions under which Option rights will vest and terminate; to interpret the
Plan; to prescribe, amend, and rescind rules and regulations relating to it; to
determine the terms and provisions (and amendments thereof) of the respective
Option agreements (which need not be identical), including such terms and
provisions (and amendments thereof) as shall be required in the judgment of the
Board to conform to any change in any law or regulation applicable thereto; and
to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Board's determination on the foregoing matters
shall be conclusive and binding on the Company and on all Optionees and their
legal representatives, except that any act constituting a modification of a plan
or of an Option must receive stockholder approval in accordance with paragraph
14 herein.
(c) To the extent permitted by the By-Laws of the Company, the Board,
by resolution, may delegate administration of the Plan to a committee composed
of not less than three (3) members of the Board. If administration is delegated
to a committee, the committee shall have the powers to administer the Plan
theretofore possessed by the Board. The committee's powers shall be subject,
however, to such resolutions as may from time to time be adopted by the Board in
exercise of the Board's final power to determine questions of policy and
expediency which arise in connection with the Plan. The Board at any time by
resolution may abolish the committee, revest the administration of the Plan in
the Board or grant options during the existence of the Committee.
5. Eligibility.
Incentive Stock Options Under this Plan may be granted under this Plan
only to officers (who are employees) and to other key employees of (a) the
Company and (b) subsidiary corporations (hereinafter called "subsidiaries") of
the Company. A director of the Company or any subsidiaries may receive an
Incentive Stock Option under this Plan if such person is otherwise an employee
of the Company and/or any subsidiaries. An employee, director or officer of the
Company (or any subsidiaries), may receive a Non-Statutory Stock Option. In
addition, consultants and advisors who the Board determines is providing bona
fide services to the Company or any subsidiaries, whether or not otherwise
compensated, may receive a Non-Statutory Stock Option so long as the Plan would
continue to qualify as an Employee Benefit Plan under the 1934 Act. In
determining the persons to whom Options shall be granted and the number of
shares to be covered by each Option, the Board may take into account the nature
of the services rendered by, and the responsibilities borne by, such respective
persons, their present and potential contributions to the Company's success and
such other factors as the Board in its discretion shall deem relevant. Subject
to the provisions of paragraph 7 hereof, Options may be granted to persons who
hold or have held options under previous plans, and a person who has been
granted an Option under the Plan may be granted an additional Option or Options
under the Plan or under any future option plan if the Board shall so determine.
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6. Option Prices.
The purchase price of the Common Stock under each Option shall be
determined by the Board. In the case of Incentive Stock Options, the purchase
price may not be less than the fair market value of the Common Stock at the time
of granting, except that in the case of a 10% Stockholder who receives an
Incentive Stock Option, the purchase price may not be less than 110% of such
fair market value. In no event shall the purchase price be less than par value
of the Common Stock.
7. Certain Limitations on Granting and Exercise of Options.
Any other provisions of this Plan to the contrary notwithstanding, the
granting and exercise of Options hereunder shall be subject to the following
limitations (which shall be in addition to the limitations, provisions and
conditions contained elsewhere in this Plan):
(a) The aggregate fair market value (determined at the time the option
is granted) of the optioned stock for which Incentive Stock Options are
exercisable for the first time by any employee during any calendar year (under
all such Plans of the individual's Employer Corporation and its parent and
subsidiary corporation) shall not exceed $100,000.
(b) Options may be granted as soon as practicable after the date of the
adoption of the Plan by the Board and instruments evidencing such grant(s) may
similarly be so issued, but in each case, such Options and such instruments
shall be subject to the approval and ratification of the Plan by the
stockholders of the Company as in paragraph 1 provided, and notwithstanding
anything in the Plan that may be deemed to be to the contrary, no Option may be
exercised unless and until such approval and ratification is obtained. In the
event such approval and ratification shall not be obtained, the Plan and all
Options that may have been granted pursuant thereto shall be null and void. The
shares of Common Stock underlying an Incentive Stock Option may be sold in a
disqualifying disposition under Section 421(b) of the Code.
(c) The exercise of any Option will be contingent upon receipt from the
Option holder of a representation that, at the time of such exercise, it is his
then present intention to acquire the shares being purchased for investment and
not with a view to the resale or distribution of any part thereof, unless, in
the opinion of counsel for the Company, such investment representation is not
required or unless such shares shall have been registered under the Securities
Act of 1933, as amended. The legend indicated below shall be placed on the
certificate or certificates for the shares to be delivered the Option holder
(unless such shares shall have been registered under the Securities Act of 1933,
as amended), reading as follows:
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"No sale, offer to sell or transfer of the securities represented by
the certificate shall be made unless a registration statement under the Federal
Securities Act of 1933, as amended, with respect to such securities is then in
effect or an exemption from the registration requirement of such Act is then in
fact applicable to such transfer."
Similarly and in conformity to the above the Option holder understands
that necessary stop transfer orders shall be placed upon the subject
certificates in accordance with the Securities Act of 1933, as amended.
8. Duration of Options.
The term of Options granted under the Plan shall be as fixed by the
Board at the time of grant; provided, however, that the term of an Option shall
not exceed 10 years from the date of grant. In the case of 10% Stockholders, the
term of an Incentive Stock Option shall not exceed 5 years from the date of
grant. The terms of options may, however, be foreshortened as provided in
paragraph 11 hereof. No Option may be exercised after expiration of such
Option's term.
9. Exercise of Options.
An Option granted under the Plan shall be exercisable at such time or
times, whether or not in installments, as the Board shall prescribe at the time
the Option is granted. An Option which has become exercisable may be exercised
in accordance with its terms as to any or all full shares purchasable under the
provisions of the Option, but not at any time as to less than 100 shares unless
the remaining shares which have become so purchasable are less than 100 shares.
The purchase price of the shares shall be paid in full, as provided in paragraph
13 hereof, upon the exercise of the Option, and the Company shall not be
required to deliver certificates for such shares until such payment has been
made. Except as provided in paragraph 11, an Incentive Stock Option may not be
exercised at any time unless the holder thereof is then an employee of the
Company or any subsidiaries and shall have been continuously employed by the
Company or any subsidiaries since the date of grant (As used in this Plan, the
terms "employ" and "employment" shall be deemed to refer to employment as an
employee in any such capacity, and "termination of employment" shall be deemed
to mean termination of employment as an employee in all of such capacities and
continuation of employment as an employee in none of such capacities.)
10. Nontransferability of Options.
No Option granted under this Plan shall be transferable other than in
the case of individuals by will or the laws of descent and distribution and an
option granted to an individual may be exercised during the lifetime of the
holder thereof, only by the holder.
11. Termination of Employment.
Except in the case of Optionee's death as provided below, in the event
of termination of employment of a person to whom an Incentive Stock Option has
been granted under the Plan, notwithstanding the reason for termination (such as
termination for cause, without cause, voluntary on the part of the optionee, or
by reason of death or disability), any Incentive Stock Option held by him under
the Plan, to the extent not theretofore exercised, shall on the 30th day after
termination of employment be null and void. Incentive Stock Options granted
under the Plan shall not be affected by any change of employment so long as the
holder continues in the employ of the Company or any subsidiaries. Nothing in
the Plan or in any Option granted pursuant to the Plan shall confer on any
individual any right to continue in the employ of the Company or any
subsidiaries or affiliates or interfere in any way with the right of the Company
or any subsidiaries or affiliates to terminate his employment or occupancy of
any corporate office at any time.
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In the event of the death of an Optionee to whom an Incentive Stock
Option has been granted under the Plan while he is in the employ of the Company
or a subsidiary, such Incentive Stock Option may be exercised (to the extent of
the number of shares covered by the Incentive Stock Option which were
purchasable by the Optionee at the date of his death) by the estate of the
Optionee, or by a person who acquired the right to exercise such Incentive Stock
Option by bequest or inheritance or by reason of the death of the Optionee, at
any time within a period of six months after his death, but in no event after
the day in which the Incentive Stock Option would otherwise terminate under
paragraph 8.
In the event of termination of employment of a person to whom an
Incentive Stock Option has been granted under the Plan by reason of the
disability of such person, the optionee may exercise his Incentive Stock Option
at any time within one year after such termination of employment but in no event
after the day in which the Incentive Stock Option would otherwise terminate, to
the extent of the number of shares covered by his Incentive Stock Option which
were purchasable by him at the date of the termination of employment.
In the case of Non-Statutory Stock Options, the disability or death of
optionee shall not terminate the options granted to an officer, director or
employee so long as such officer, director or employee was continuously
performing services for the Company up to the date of his disability or death,
as the case may be. In the case of Non-Statutory Options, the Board of Directors
shall determine other applicable termination provisions of these Options, if
any, in accordance with paragraph 4.
12. Adjustment upon Changes in Capitalization.
Subject to compliance with the requirements for qualification of the
Plan and of the Options issued or to be issued thereunder as "Incentive Stock
Options" under applicable provisions of federal laws and regulations, the
aggregate number and class of shares as to which Options may be granted under
the Plan, the number and class of shares covered by each outstanding Option and
the price per share thereof (but not the total price), and each such Option,
shall all be proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock of the Company resulting from a split-up or
consolidation of shares or any like capital adjustment, or the payment of any
stock dividends, or any other increase or decrease in the number of issued
shares of Common Stock of the Company without receipt of consideration by the
Company.
Subject to any required action by the stockholders, if the Company
shall be the surviving corporation in any merger or consolidation, any Option
granted hereunder shall be adjusted so as to pertain and apply to the securities
to which the holder of the number of shares of Common Stock of the Company
subject to the Option would have been entitled.
Upon (i) the dissolution or liquidation of the Company, (ii) a merger
or consolidation of the Company with one or more corporations as a result of
which the Company is not the surviving corporation, or (iii) a sale or other
disposition of all or substantially all of the assets of the Company, any Option
granted hereunder at the discretion of the Board of Directors by Resolution
shall terminate, but the Option holder shall have the right, prior to any such
event, to exercise his Option in whole or in part, but in no event after the day
in which the Option would otherwise terminate under paragraph 8. Notwithstanding
anything contained herein to the contrary, if the Company is merged into a
corporation which will be substantially (i.e. 70% or more) owned after the
merger by the same shareholders of the Company, then any Option granted
hereunder shall be adjusted so as to pertain and apply to the securities to
which the holder of the number of shares of Common Stock of the Company subject
to the Option would have been entitled.
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Adjustments under this Paragraph 12 shall be made by the Board, whose
determination as to what adjustment shall be made, and the extent thereof, shall
be final, binding and conclusive.
13. Payment of Purchase Price, Federal Income Tax or Other Withholding
Amount.
The shares to be purchased upon exercise of any Option shall be paid
for in full, in cash, at the time of such exercise. However, the Company may, at
the discretion of the Board, loan the Option Holder the funds necessary to pay
for the exercise price of the Options (and any tax withholding payments
applicable thereto) and shall secure the repayment of such loan with the stock
certificate issued in connection with the exercise of the Options.In respect to
Non-Statutory Stock Options or any Incentive Stock Options which fail to qualify
as such for any reason, any required federal income tax or other withholding
amount shall be paid (in full) by the Option Holder to the Company in cash or by
certified check at the time of such exercise. The Company shall not be required
to deliver certificates for such shares until all such payments have been made,
and until the Company has had an opportunity (at its sole option) to obtain
verification from the Option Holder that all federal income tax or other
withholding amounts have been properly calculated and paid.
14. Termination and Amendment.
(a) Unless the Plan shall theretofore have been terminated as
hereinafter provided, it shall terminate on, and no Options shall be granted
thereunder after July 31, 2010 (i.e., 10 years from the adoption of this Plan).
The Plan may be terminated earlier by the stockholders of the Company or by the
Board.
(b) Modifications or other amendments to the Plan may be made by the
stockholders of the Company. The Plan may also be amended by the Board;
provided, however, that no amendment which shall constitute a Modification shall
be effective unless approved by the stockholders of the Company within 12 months
before or after the adoption of the Modification.
(c) No termination, Modification, or amendment of the Plan, may,
without the consent of the optionee to whom any Option shall theretofore have
been granted, adversely affect the rights of such optionee under such Option;
nor shall any such Modification or amendment be deemed to effect a Modification,
extension or renewal of any such Option previously granted except pursuant to an
express written agreement to such effect, executed by the Company and the
optionee.
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15. Time of Granting Options.
Nothing contained in the Plan shall constitute the granting of any
Option hereunder. The granting of an Option pursuant to the Plan shall take
place only upon approval by the Board (or its delegate under paragraph 4
hereunder) of a resolution granting an Option under this Plan. Notice of the
determination shall be given to each person to whom an Option is so granted
within a reasonable time after the date of such grant. After the granting of an
Option under this Plan, a written Option agreement shall be duly executed by or
on behalf of the Company.
16. Form and Terms of Option Agreement.
Option agreements evidencing Options granted pursuant to the Plan
shall be in such form and shall contain such terms not inconsistent with the
Plan as the Board may approve. Option agreements may contain such restrictions
upon the exercise of Options and upon the transfer of Common Stock acquired upon
exercise of Options (and such provisions for the enforcement of such
restrictions) as the Board may consider necessary to insure compliance with the
Securities Act of 1933, as amended, and/or with state "Blue Sky" laws.
17. Partial Invalidity.
The invalidity or unenforceability of any particular provision of
this Plan shall not affect the other provisions of this Plan nor affect the
validity or enforceability of the other provisions of Options granted under this
Plan, and this Plan and the Options granted hereunder shall be construed in all
respects as if such invalid or unenforceable provision were omitted.
18. Special Provisions with Respect to Incentive Stock Options under this
Plan and Non- Statutory Stock Options.
Paragraph 5 provides for the persons eligible to receive Options
granted under this Plan. The Board in granting any Option shall indicate whether
it intends the Option to be an Incentive Stock Option Under this Plan or a
Non-Statutory Stock Option and shall cause the Option agreement with respect
thereto to indicate such intention. Should a person hold both one or more
Incentive Stock Options Under this Plan and one or more Non-Statutory Stock
Options, all of such Options shall be exercisable in accordance with their
respective terms and limitations, and nothing in this Plan shall be construed as
causing the exercise of any such Option to preclude the exercise of any such
other Option in accordance with its terms.
19. Miscellaneous
Shares of Common Stock of the Company which are subject to Option but
which have not yet been purchased or paid for shall have no subscription rights
and no Option holder shall be deemed to be a stockholder of the Corporation for
any purpose.
Plan Adopted by the Board of Directors on July 31, 2000 and ratified
by the stockholders on ________________.
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EXHIBIT 99.1
FORM OF SELLING SECURITY HOLDER REPRESENTATION LETTER
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Pathfinder Business Resources, Inc.
33 Eleventh Avenue
Huntington Station, New York 11746
Gentlemen:
The undersigned understands that Pathfinder Business Resources, Inc.
("Pathfinder") intends to file a Registration Statement on Form SB-2
(th"Registration Statement") with the Securities and Exchange Commission (the
"SEC"), for the purpose of registering for sale all shares of Common Stock (the
"Registrable Securities") of Pathfinder Common Stock beneficially owned by the
undersigned pursuant to certain registration rights granted by Pathfinder. The
undersigned understands that none of the Registrable Securities may be sold
until such Registration Statement (including the accompanying Prospectus) has
been filed and declared effective by the SEC (the "Effective Date"). Commencing
on or after the Effective Date, the undersigned has agreed with Pathfinder that
they may sell an amount equal to up to 10% of the undersigned's Common Stock
ownership during the first 150 days after the Effective Date and that the
balance of the undersigned's Common Stock may be sold at any time thereafter so
long as there is a current Prospectus.
By affixing the undersigned's signature in the space provided below,
the undersigned represents and confirms to, and agrees with you as follows:
(a) The undersigned is the sole beneficial owner of all shares of
Registrable Securities of Pathfinder listed on the last page herein and no other
person has any interest, directly or indirectly, in such shares or the proceeds
of any sales thereof.
(b) On or after the effectiveness of a Registration Statement
covering the sale of the undersigned's Registrable Securities, the undersigned
may sell the Registrable Securities from time to time in one or more
transactions, which may involve transactions, in the over-the-counter market or
in privately negotiated transactions. Sales may be affected at market prices
prevailing at the time of sale, at prices related to market prices or at
negotiated prices. In the event that sales take place in the over-the-counter
market, the undersigned shall sell the Registrable Securities, on an agency
basis, through the Underwriter of Pathfinder's initial public offering or a
broker-dealer approved by Pathfinder.
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Such broker-dealer may receive compensation in the form of
commissions from the undersigned at its normal commission rate, which would not
exceed the maximum amount permitted by the National Association of Securities
Dealers, Inc. guidelines and in no event more than 5% of the gross proceeds of
the sale.
The undersigned is aware that broker-dealers participating in the
distribution of Registrable Securities may be deemed to be underwriters under
the Securities Act of 1933 (the "1933 Act"), and any discounts or commissions
received by the broker-dealers and any profit on the sale of the Registrable
Securities may be deemed to be underwriting compensation under the 1933 Act.
(c) Before the undersigned makes any sales of Registrable Securities,
the undersigned shall first deliver a copy of the Final Prospectus to the
broker-dealer which is acting as agent or to the purchaser of the Registrable
Securities. Pathfinder will supply you with copies of the Final Prospectus when
the Registration Statement becomes effective.
(d) The undersigned may sell the Registrable Securities solely to
convert the undersigned's investment into cash and not because of any
undisclosed material information with respect to the then current and
prospective operations of the Pathfinder.
(e) The undersigned acknowledges that with respect to the Registrable
Securities, the undersigned may be deemed to be an "underwriter" for the
purposes of the 1933 Act and that brokers or dealers who execute sales for the
undersigned may also be considered "underwriters." In such connection, the
undersigned is aware that the provisions of the Securities Exchange Act of 1934,
as amended (the "1934 Act") will also be applicable to sales by the undersigned
of Registrable Securities. Your particular attention is called to Regulation M
of the General Rules and Regulations promulgated under the 1934 Act. Such rules
and regulations contain various prohibitions against trading by persons
interested in a distribution of securities and against so- called
"stabilization" activities. The sale by the undersigned of Registrable
Securities will constitute a distribution of securities. Among these
prohibitions is the prohibition which in effect states that it is unlawful for
the undersigned, either alone or with others, to bid or purchase, for any
account in which the undersigned has a beneficial interest, any securities of
Pathfinder or to attempt to induce any person to purchase such securities until
after Pathfinder has completed the sale of Registrable Securities. The
undersigned will comply with the aforesaid prohibition against trading by
persons interested in a distribution and will effect no transaction for the
purpose of stabilizing the price of the securities of Pathfinder.
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(f) The undersigned hereby requests registration with the SEC of the
Registrable Securities pursuant to certain piggyback registration rights granted
to the undersigned by Pathfinder.
Very truly yours,
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Signature of the undersigned
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Print Name
--------------------------------------
Print Address
--------------------------------------
Print telephone number
,2000
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Print date of signature
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LESTER MORSE P.C.
111 GREAT NECK ROAD
SUITE 420
GREAT NECK, NEW YORK 11021
TELEPHONE: (516) 487-1446
FACSIMILE: (516) 487-1452
September 22, 2000
Securities & Exchange Commission
450 Fifth Street NW
Washington, DC 20549
Re: Pathfinder Business Resources, Inc.
Gentlemen:
On behalf of the above captioned Issuer, we are enclosing herewith the
Issuer's Form SB-2 Registration Statement.
Very truly yours,
LESTER MORSE P.C.
By: /s/ Steven Morse
-----------------------
Steven Morse
SM:ag
Enclosure
