<PAGE> 1
As Filed With the Securities and Exchange Commission on February 1, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MICRO GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-2621545
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2510 REDHILL, SUITE 200, SANTA ANA, CALIFORNIA 92705
(Address of Principal Executive Offices) (Zip Code)
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1999 STOCK INCENTIVE PLAN
(Full title of the plans)
----------
M'Liss Jones Kane
Vice President and Secretary
Micro General Corporation
2510 Redhill, Suite 200, Santa Ana, California 92705
(Name and address of agent for service)
(949) 622-4444
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Title of Securities Amount To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered(1) Offering Aggregate Offering Registration Fee
Price Per Share(2) Price(2)
====================================================================================================================
<S> <C> <C> <C> <C>
Common Stock, 2,000,000(3) shares $15.50 $31,000,000 $8,184.00
$.05 par value
====================================================================================================================
</TABLE>
(1) Also registered hereunder are an indeterminate number of shares which may
become issuable pursuant to the anti-dilution adjustment provisions of the
Registrant's 1999 Stock Incentive Plan (the "Incentive Plan").
(2) In accordance with Rule 457(h), the aggregate offering price of the
2,000,000 shares of Common Stock registered hereby is estimated, solely for
purposes of calculating the registration fee, on the basis of the price of
securities of the same class, as determined in accordance with Rule 457(c),
using the average of the bid and the asked prices reported by the
over-the-counter market for the Common Stock on January 28, 2000, which was
$15.50 per share.
(3) Issuable pursuant to the Incentive Plan.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Micro General Corporation (the
"Registrant" or the "Company") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are incorporated by reference in this registration statement:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998, as amended;
(b) The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1999, June 30, 1999 and September 30,
1999;
(c) The Company's Amended Current Report on Form 8-K dated January
29, 1999, the Company's Current Report on Form 8-K dated March
5, 1999, the Company's Current Report on Form 8-K dated April
14, 1999 and the Company's Current Report on Form 8-K dated
May 13, 1999; and
(d) The description of the Registrant's common stock, par value
$.05 per share (the "Common Stock"), contained in the
Registrant's Registration Statement filed under Section 12 of
the Exchange Act, including any amendment or report filed for
the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all of such securities then remaining unsold, shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents, except as to any
portion of any future annual or quarterly report to stockholders or document
that is not deemed filed under such provisions. For the purposes of this
Registration Statement, any statement in a document incorporated by reference
shall be deemed to be modified or superseded to the extent that a statement
contained in this Registration Statement modifies or supersedes a statement in
such document. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
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 Registrant's Certificate of Incorporation eliminates the liability
of the Registrant's directors for monetary damages for breach of fiduciary duty
as directors to the maximum extent provided by Delaware Law. The Registrant's
Bylaws provide that the Registrant shall indemnify its officers, directors and
persons who are or were serving as officers or directors of another entity at
the request of the Corporation to the maximum extent permitted by Delaware Law.
Section 145 of the DGCL provides that a corporation may indemnify any
person made a party to an action (other than an action by or in the right of the
corporation) by reason of the fact that he or she was a director, officer,
employee or agent of the corporation or was serving at the request of the
corporation against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action if he or she acted in good faith and in a manner he
or she reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal action (other than an action
by or in the right of the corporation), has no reasonable cause to believe his
or her conduct was unlawful.
2
<PAGE> 3
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this Registration
Statement:
Number Description
------ -----------
4.1 1999 Stock Incentive Plan.
5.1 Opinion of Stradling Yocca Carlson & Rauth.
23.1 Consent of KPMG Peat Marwick LLP, independent
auditors, with respect to the financial
statements of the Registrant.
23.2 Consent of Stradling Yocca Carlson & Rauth
(included in the Opinion filed as Exhibit
5.1).
24.1 Power of Attorney (included on the signature page).
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(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.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of
this section do not apply if the information required to be included in a
post-effective amendment by these paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference 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.
(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.
3
<PAGE> 4
(b) The undersigned Registrant hereby undertakes 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 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tustin, State of California, on the 26th day of
January, 2000.
MICRO GENERAL CORPORATION
By: /s/ JOHN R. SNEDEGAR
-----------------------
John R. Snedegar
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of Micro General
Corporation, do hereby constitute and appoint William P. Foley, II, Patrick F.
Stone and John R. Snedegar, and each of them, our true and lawful attorneys and
agents, to sign for us or any of us in our names and in the capacities indicated
below, any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents required in connection therewith, and to do any and all acts and
things in our names and in the capacities indicated below, which said attorneys
and agents, or either of them, may deem necessary or advisable to enable said
corporation to comply with the Securities Act of 1933, as amended, and any
rules, regulations, and requirements of the Securities and Exchange Commission,
in connection with this Registration Statement; and we do hereby ratify and
confirm all that the said attorneys and agents, or either of them, shall 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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Patrick F. Stone Chairman of the Board January 26, 2000
- ---------------------------------------
Patrick F. Stone
/s/ John R. Snedegar Chief Executive Officer, President January 26, 2000
- --------------------------------------- and Director
John R. Snedegar (Principal Executive Officer)
/s/ Dale W. Christensen Chief Financial Officer and Treasurer January 26, 2000
- --------------------------------------- (Principal Financial Officer and
Dale W. Christensen Principal Accounting Officer)
/s/ William P. Foley, II Director January 26, 2000
- ---------------------------------------
William P. Foley, II
</TABLE>
5
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<TABLE>
<S> <C> <C>
Director January 26, 2000
/s/ Richard F. Pickup
- ---------------------------------------
Richard F. Pickup
/s/ Carl A. Strunk Director January 26, 2000
- ---------------------------------------
Carl A. Strunk
/s/ Dwayne M. Walker Director January 26, 2000
- ---------------------------------------
Dwayne M. Walker
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<C> <S>
4.1 1999 Stock Incentive Plan.
5.1 Opinion of Stradling Yocca Carlson & Rauth.
23.1 Consent of KPMG Peat Marwick LLP, independent auditors, with respect to the
financial statements of the Registrant.
23.2 Consent of Stradling Yocca Carlson & Rauth (included in the Opinion filed as
Exhibit 5.1).
24.1 Power of Attorney (included on the signature page).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
MICRO GENERAL CORPORATION
1999 STOCK INCENTIVE PLAN
This 1999 STOCK INCENTIVE PLAN (the "Plan") is hereby established by
Micro General Corporation, a Delaware corporation (the "Company"), and adopted
by its Board of Directors as of the 17th day of November, 1999 (the "Effective
Date").
ARTICLE 1.
PURPOSES OF THE PLAN
1.1 PURPOSES. The purposes of the Plan are (a) to enhance the Company's
ability to attract and retain the services of qualified employees, officers and
directors (including non-employee officers and directors), and consultants and
other service providers upon whose judgment, initiative and efforts the
successful conduct and development of the Company's business largely depends,
and (b) to provide additional incentives to such persons or entities to devote
their utmost effort and skill to the advancement and betterment of the Company,
by providing them an opportunity to participate in the ownership of the Company
and thereby have an interest in the success and increased value of the Company.
ARTICLE 2.
DEFINITIONS
For purposes of this Plan, the following terms shall have the meanings
indicated:
2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board
delegates responsibility for any matter to the Committee, the term Administrator
shall mean the Committee.
2.2 AFFILIATED COMPANY. "Affiliated Company means any subsidiary of the
Company, any business venture which the Company has a significant interest, as
determined at the discretion of the Administrator.
2.3 BOARD. "Board" means the Board of Directors of the Company.
2.4 CHANGE IN CONTROL. "Change in Control" shall mean (i) the
acquisition, directly or indirectly, by any person or group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the
beneficial ownership of securities of the Company possessing more than fifty
percent (50%) of the total combined voting power of all outstanding securities
of the Company; (ii) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction in which the holders of the
outstanding voting securities of the Company immediately prior to such merger or
consolidation hold, in the aggregate, securities possessing more than fifty
percent (50%) of the total combined voting power of all outstanding voting
securities of the surviving entity immediately after such merger or
consolidation; (iii) a reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of all outstanding voting securities of the Company
are transferred to or acquired by a person or persons different from the persons
holding those securities immediately prior to such merger; (iv) the sale,
transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company; or (v)
the approval by the shareholders of a plan or proposal for the liquidation or
dissolution of the Company.
2.5 CODE. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
2.6 COMMITTEE. "Committee" means a committee of two or more members of
the Board appointed to administer the Plan, as set forth in Section 7.1 hereof.
2.7 COMMON STOCK. "Common Stock" means the Common Stock, $.05 par value
of the Company, subject to adjustment pursuant to Section 4.2 hereof.
2.8 DISABILITY. "Disability" means permanent and total disability as
defined in Section 22(e)(3) of the Code. The Administrator's determination of a
Disability or the absence thereof shall be conclusive and binding on all
interested parties.
2.9 EFFECTIVE DATE. "Effective Date" means the date on which the Plan
is adopted by the Board, as set forth on the first page hereof.
<PAGE> 2
2.10 EXERCISE PRICE. "Exercise Price" means the purchase price per
share of Common Stock payable upon exercise of an Option.
2.11 FAIR MARKET VALUE. "FAIR MARKET VALUE" ON ANY GIVEN DATE MEANS THE
VALUE OF ONE SHARE OF COMMON STOCK, DETERMINED AS FOLLOWS:
(a) If the Common Stock is then listed or admitted to trading
on a national stock exchange or a NASDAQ market system which reports
closing sale prices, the Fair Market Value shall be the closing sale
price on the date of valuation on the principal stock exchange or
NASDAQ market system on which the Common Stock is then listed or
admitted to trading, or, if no closing sale price is quoted on such
day, then the Fair Market Value shall be the closing sale price of the
Common Stock on such exchange or NASDAQ market system on the next
preceding day for which a closing sale price is reported.
(b) If the Common Stock is not then listed or admitted to
trading on a national stock exchange or NASDAQ market system which
reports closing sale prices, the Fair Market Value shall be the average
of the closing bid and asked prices of the Common Stock in the
over-the-counter market on the date of valuation.
(c) If neither (a) nor (b) is applicable as of the date of
valuation, then the Fair Market Value shall be determined by the
Administrator in good faith using any reasonable method of evaluation,
which determination shall be conclusive and binding on all interested
parties.
2.12 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member
of the National Association of Securities Dealers, Inc.
2.13 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that
is not an Incentive Option.
2.14 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement"
means an Option Agreement with respect to a Nonqualified Option.
2.15 OPTION. "Option" means any option to purchase Common Stock granted
pursuant to the Plan.
2.16 OPTION AGREEMENT. "Option Agreement" means the written agreement
entered into between the Company and the Optionee with respect to an Option
granted under the Plan.
2.17 OPTIONEE. "Optionee" means a Participant who holds an Option.
2.18 PARTICIPANT. "Participant" means an individual or entity who holds
an Option under the Plan.
2.19 SERVICE PROVIDER. "Service Provider" means a consultant or other
person or entity who provides services to the Company or an Affiliated Company
and who the Administrator authorizes to become a Participant in the Plan.
2.20 STOCK PURCHASE AGREEMENT. "Stock Purchase Agreement" means the
written agreement entered into between the Company and the Offeree with respect
to a Right to Purchase offered under the Plan.
2.21 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.
ARTICLE 3.
ELIGIBILITY
3.1 NONQUALIFIED OPTIONS. Officers and other key employees of the
Company or of an Affiliated Company, members of the Board (whether or not
employed by the Company or an Affiliated Company), and Service Providers are
eligible to receive Nonqualified Options.
3.2 LIMITATION ON SHARES. In no event shall any Participant be granted
Options in any one calendar year pursuant to which the aggregate number of
shares of Common Stock that may be acquired thereunder exceeds 500,000 shares.
<PAGE> 3
ARTICLE 4.
PLAN SHARES
4.1 SHARES SUBJECT TO THE PLAN. A total of 2,000,000 shares of Common
Stock may be issued under the Plan subject to adjustment as to the number and
kind of shares pursuant to Section 4.2 hereof. For purposes of this limitation,
in the event that (a) all or any portion of any Option granted or offered under
the Plan can no longer under any circumstances be exercised, or (b) any shares
of Common Stock are reacquired by the Company pursuant to a Nonqualified Option
Agreement or Stock Purchase Agreement, the shares of Common Stock allocable to
the unexercised portion of such Option, or the shares so reacquired, shall again
be available for grant or issuance under the Plan.
4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Option Agreements
and Stock Purchase Agreements in order to preserve, as nearly as practical, but
not to increase, the benefits to Participants.
ARTICLE 5.
OPTIONS
5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall
be evidenced by an Option Agreement which shall specify the number of shares
subject thereto, the Exercise Price per share, and that such Option is a
Nonqualified Option. As soon as is practical following the grant of an Option,
an Option Agreement shall be duly executed and delivered by or on behalf of the
Company to the Optionee to whom such Option was granted. Each Option Agreement
shall be in such form and contain such additional terms and conditions, not
inconsistent with the provisions of this Plan, as the Administrator shall, from
time to time, deem desirable, including, without limitation, the imposition of
any rights of first refusal and resale obligations upon any shares of Common
Stock acquired pursuant to an Option Agreement. Each Option Agreement may be
different from each other Option Agreement.
5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock
covered by each Option shall be determined by the Administrator, however, the
Option shall not be less than 100% of Fair Market Value on the date the Option
is granted.
5.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall be
made upon exercise of an Option and may be made, in the discretion of the
Administrator, subject to any legal restrictions, by: (a) cash; (b) check; (c)
the surrender of shares of Common Stock owned by the Optionee that have been
held by the Optionee for at least six (6) months, which surrendered shares shall
be valued at Fair Market Value as of the date of such exercise; (d) the
Optionee's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Optionee; (f) the waiver of compensation due or accrued to the Optionee for
services rendered; (g) provided that a public market for the Common Stock
exists, a "same day sale" commitment from the Optionee and an NASD Dealer
whereby the Optionee irrevocably elects to exercise the Option and to sell a
portion of the shares so purchased to pay for the Exercise Price and whereby the
NASD Dealer irrevocably commits upon receipt of such shares to forward the
Exercise Price directly to the Company; (h) provided that a public market for
the Common Stock exists, a "margin" commitment from the Optionee and an NASD
Dealer whereby the Optionee irrevocably elects to exercise the Option and to
pledge the shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the Exercise Price directly to the Company; or (I) any combination of
the foregoing methods of payment or any other consideration or method of payment
as shall be permitted by applicable corporate law.
5.4 TERM AND TERMINATION OF OPTIONS. The term and provisions for
termination of each Option shall be as fixed by the Administrator, but no Option
may be exercisable more than ten (10) years after the date it is granted.
5.5 VESTING AND EXERCISE OF OPTIONS. Each Option shall vest and become
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives, as shall be determined by the Administrator.
<PAGE> 4
5.6 NONTRANSFERABILITY OF OPTIONS. Except as otherwise provided by the
Administrator, no Option shall be assignable or transferable except by will or
the laws of descent and distribution, and during the life of the Optionee shall
be exercisable only by such Optionee.
5.7 RIGHTS AS SHAREHOLDER. An Optionee or permitted transferee of an
Option shall have no rights or privileges as a shareholder with respect to any
shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.
ARTICLE 6.
ADMINISTRATION OF THE PLAN
6.1 ADMINISTRATOR. Authority to control and manage the operation and
administration of the Plan shall be vested in the Board, which may delegate such
responsibilities in whole or in part to a committee consisting of two (2) or
more members of the Board (the "Committee"). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
As used herein, the term "Administrator" means the Board or, with respect to any
matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee.
6.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or
authority conferred upon the Administrator elsewhere in the Plan or by law, the
Administrator shall have full power and authority: (a) to determine the persons
to whom, and the time or times at which, Nonqualified Options shall be granted,
the number of shares to be represented by each Option and the consideration to
be received by the Company upon the exercise thereof; (b) to interpret the Plan;
(c) to create, amend or rescind rules and regulations relating to the Plan; (d)
to determine the terms, conditions and restrictions contained in, and the form
of, Option Agreements and Stock Purchase Agreements; (e) to determine the
identity or capacity of any persons who may be entitled to exercise a
Participant's rights under any Option under the Plan; (f) to correct any defect
or supply any omission or reconcile any inconsistency in the Plan or in any
Option Agreement or Stock Purchase Agreement; (g) to accelerate the vesting of
any Option; (h) to extend the exercise date of any Option; (i) to provide for
rights of first refusal and/or repurchase rights; (j) to amend outstanding
Option Agreements and Stock Purchase Agreements to provide for, among other
things, any change or modification which the Administrator could have provided
for upon the grant of an Option or in furtherance of the powers provided for
herein; and (k) to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Any action, decision, interpretation or determination
made in good faith by the Administrator in the exercise of its authority
conferred upon it under the Plan shall be final and binding on the Company and
all Participants.
6.3 LIMITATION ON LIABILITY. No employee of the Company or member of
the Board or Committee shall be subject to any liability with respect to duties
under the Plan unless the person acts fraudulently or in bad faith. To the
extent permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the Plan, who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person's conduct in the performance of duties
under the Plan.
ARTICLE 7.
CHANGE IN CONTROL
7.1 CHANGE IN CONTROL. In order to preserve a Participant's rights in
the event of a Change in Control of the Company, (I) the time period relating to
the exercise or realization of all outstanding Options shall automatically
accelerate immediately prior to the consummation of such Change in Control, and
(ii) with respect to Options, the Administrator in its discretion may, at any
time an Option is granted, or at any time thereafter, take one or more of the
following actions: (A) provide for the purchase or exchange of each Option or
Right to Purchase for an amount of cash or other property having a value equal
to the difference, or spread, between (x) the value of the cash or other
property that the Participant would have received pursuant to such Change in
Control transaction in exchange for the shares issuable upon exercise of the
Option had the Option been exercised immediately prior to such Change in Control
transaction and (y) the Exercise Price of such Option, (B) adjust the terms of
the Options in a manner determined by the Administrator to reflect the Change in
Control, (C) cause the Options to be assumed, or new rights substituted
therefor, by another entity, through the continuance of the Plan and the
assumption of outstanding Options, or the substitution for such Options of new
options of comparable value covering shares of a successor corporation, with
appropriate adjustments as to the number and kind of shares and Exercise Prices,
in which event the Plan and such Options, or the new options substituted
therefor, shall continue in the
<PAGE> 5
manner and under the terms so provided, or (D) make such other provision as the
Administrator may consider equitable. If the Administrator does not take any of
the forgoing actions, all Options shall terminate upon the consummation of the
Change in Control, unless the Common Stock remains listed or admitted to trading
on a national stock exchange or a NASDAQ market system. The Administrator shall
cause written notice of the proposed Change in Control transaction to be given
to all Participants not less than fifteen (15) days prior to the anticipated
effective date of the proposed transaction.
ARTICLE 8.
AMENDMENT AND TERMINATION OF THE PLAN
8.1 AMENDMENTS. The Board may from time to time alter, amend, suspend
or terminate the Plan in such respects as the Board may deem advisable. The
Board may alter or amend the Plan to comply with requirements under the Code
relating to Options which give Optionees more favorable tax treatment than that
applicable to Options granted under this Plan as of the date of its adoption.
Upon any such alteration or amendment, any outstanding Option granted hereunder
may, if the Administrator so determines and if permitted by applicable law, be
subject to the more favorable tax treatment afforded to an Optionee pursuant to
such terms and conditions.
8.2 PLAN TERMINATION. Unless the Plan shall theretofore have been
terminated, the Plan shall terminate on the tenth (10th) anniversary of the
Effective Date and no Options may be granted under the Plan thereafter, but
Option Agreements then outstanding shall continue in effect in accordance with
their respective terms.
ARTICLE 9.
TAX WITHHOLDING
9.1 WITHHOLDING. The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
any applicable Federal, state, and local tax withholding requirements with
respect to any Options exercised issued under the Plan. To the extent
permissible under applicable tax, securities and other laws, the Administrator
may, in its sole discretion and upon such terms and conditions as it may deem
appropriate, permit a Participant to satisfy his or her obligation to pay any
such tax, in whole or in part, up to an amount determined on the basis of the
highest marginal tax rate applicable to such Participant, by (a) directing the
Company to apply shares of Common Stock to which the Participant is entitled as
a result of the exercise of an Option or (b) delivering to the Company shares of
Common Stock owned by the Participant. The shares of Common Stock so applied or
delivered in satisfaction of the Participant's tax withholding obligation shall
be valued at their Fair Market Value as of the date of measurement of the amount
of income subject to withholding.
ARTICLE 10.
MISCELLANEOUS
10.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits
under the Plan may not be assigned or alienated, whether voluntarily or
involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other
disposition shall be without effect.
10.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a
voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of any
Participant. Nothing contained in the Plan shall be deemed to give the right to
any Participant to be retained as an employee of the Company or any Affiliated
Company or to limit the right of the Company or any Affiliated Company to
discharge any Participant at any time.
10.3 APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of Common Stock pursuant to Option Agreements and Stock Purchase
Agreements, except as otherwise provided herein, will be used for general
corporate purposes.
<PAGE> 1
EXHIBIT 5.1
[STRADLING YOCCA CARLSON & RAUTH LETTERHEAD]
January 25, 2000
Micro General Corporation
14711 Bentley Circle
Tustin, California 92780-7226
RE: Registration Statement on Form S-8
Ladies and Gentlemen:
At your request, we have examined the form of Registration Statement on
Form S-8 (the "Registration Statement") being filed by Micro General
Corporation, a Delaware corporation (the "Company"), with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933, as amended, of an aggregate of 2,000,000 shares of the Company's common
stock, $.05 par value ("Common Stock"), issuable under the Company's 1999 Stock
Incentive Plan (the "Plan").
We have examined the proceedings heretofore taken and are familiar with
the additional proceedings proposed to be taken by the Company in connection
with the authorization, issuance and sale of the securities referred to above.
Based on the foregoing, it is our opinion that the 2,000,000 shares of
Common Stock, when issued under the Plans and against full payment therefor in
accordance with the respective terms and conditions of the Plans, will be
legally and validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
STRADLING YOCCA CARLSON & RAUTH
/s/ Stradling Yocca Carlson & Rauth
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Micro General Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 relating to the 1999 Stock Incentive Plan of Micro General Corporation of
our reports dated March 31, 1999, relating to the consolidated balance sheets of
Micro General Corporation and Subsidiaries as of December 31, 1998 and 1997, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1998, which report appears in the December 31, 1998 annual report on Form 10-K
of Micro General Corporation and Subsidiaries, and dated January 15, 1999
relating to the balance sheet of LD Exchange.com, Inc. as of December 31, 1997,
and the related statements of operations, stockholders'equity, and cash flows
for the period January 15, 1997 (inception) to December 31, 1997, which report
appears in the Form 8-K of Micro General Corporation and Subsidiaries dated
January 29, 1999.
/s/ KPMG LLP
-------------------
KPMG LLP
Los Angeles, California
January 28, 2000
