As filed with the Securities and Exchange Commission on March 23, 2000
Registration No. 33_
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S_8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CAPITAL RESERVE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Colorado 84-088594
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
335 25th Street, S.E.
Calgary, Alberta Canada T2A 7H8
(Address of Principal Executive Offices) (Zip Code)
YEAR 2000 EMPLOYEES STOCK OPTION
AND STOCK AWARD PLAN
(Full Title of the Plan)
Mr. W. Scott Lawler
Director and President
Capital Reserve Corporation
335 25TH Street, S.E.
Calgary, Alberta Canada T2A JH8
(Name and Address of Agent for Service)
(888) 378-6633
(Telephone Number, Including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
=============================================================
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate Amount of
Securities to Amount to be Price Per Offering Registration
be Registered Registered Share (1) Price (1) Fee (1)
Common Stock
no par value 500,000 $1.00 $500,000 $132.00
Total 500,000 $132.00
=============================================================
(1) Pursuant to Rule 457(h)(1), the proposed maximum offering price per
share and the proposed maximum offering price have been calculated on the
basis of the exercise prices of options previously granted with respect to
500,000 shares.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
*Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from this Registration Statement in accordance with Rule 428 under
the Securities Act of 1933 (the "Securities Act"), and the Note to Part I of
Form S_8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Capital Reserve Corporation (the
"Registrant") with the Securities and Exchange Commission (the
"Commission") are hereby incorporated by reference in this Registration
Statement:
1. The audited consolidated financial statements of the Registrant and
its Subsidiaries contained in the Annual Report on Form 10-KSB for the period
ending December 31, 1998, filed on April 16, 1999, by the Registrant under
Rule 424(b) (File No. 0-17232).
2. The Registrant's Quarterly Reports on Form 10_QSB for the
Quarterly Periods ended March 31, 1999, June 30, 1999 and September 30,
1999 (File No. 0-17232).
3. The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form S-18 (File No. 33-21118-D)
including any subsequent amendment or report filed for the purpose of
updating that description.
In addition, 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 (the
"Exchange Act"), prior to the filing of a post_effective amendment indicating
that all of the securities offered hereunder have been sold or de-registering
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be part hereof from the date of
filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Registration Statement shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
The consolidated financial statements of the Registrant as of December 31,
1998, have been incorporated by reference in this Registration Statement in
reliance upon the report of Miller & McCollom, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. To the extent that Miller &
McCollom audits and reports on financial statements of the Registrant issued at
future dates, and consents to the use of their report thereon, such financial
statements also will be incorporated by reference in the registration statement
in reliance upon their report and said authority.
Item 4. Description of Securities
Inapplicable.
Item 5. Interests of Named Experts and Counsel
Inapplicable.
Item 6. Indemnification of Directors and Officers
Sections 7-109-102 and 7-109-107 of the Colorado General Corporate Law
provides that a corporation may indemnify directors and officers, as well as
employees, fiduciaries and agents, against reasonable expenses actually
incurred by any such person in connection with any proceeding in which such
person is made a party by reason of such person being or having been a
director, officer, employee or agent of the Registrant. The Colorado General
Corporate Law provides that Section 7-109-107 is not exclusive of other rights
to which those seeking indemnification may be entitled under any bylaw,
general or specific action of the board of directors or shareholders or by
contract. Article X of the Registrant's Articles of Incorporation and Article V
of the Registrant's Bylaws provide for indemnification by the Registrant of its
directors, officers, employees, fiduciaries and agents to the fullest extent
permitted by the Colorado General Corporate Law.
The Registrant has not, as of this time, obtained any directors' and/or
officers' insurance providing for indemnification of the Registrant's directors,
officers and/or employees for certain liabilities, but it expects to do so in
the future.
The Registrant has not entered into any indemnification agreements with any
of its current or past directors or officers providing for indemnification under
certain circumstances for acts and omissions which may not be covered by any
directors' and officers' liability insurance.
Item 7. Exemption From Registration Claimed
Inapplicable.
Item 8. Exhibits
Exhibit
Number Description
5.1 Opinion of Lawler & Associates
23.1 Consent of Lawler & Associates (included in Exhibit 5.1 to this
Registration Statement).
23.2 Consent of Miller & McCollom
24 Powers of Attorney (included on page 6).
99.1 Year 2000 Employees Stock Option and Stock Award Plan
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;
(ii) to reflect in the prospectus any facts or event arising out of
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) do not apply if
the information required to be included in a post_effective amendment by
those 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 Exchange Act that are incorporated by reference in the Registration
Statement; and
(iv) That, for the purpose of determining any liability under the
Securities Act, each such post_effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post_effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
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 Commission such indemnification is
against public policy as expressed in the Securities 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 Securities 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
authorized, in the City of Calgary, Alberta Canada, on the 8th of March, 2000.
CAPITAL RESERVE CORPORATION
(Registrant)
By: W. Scott Lawler
Title: President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose
signature appears below each severally constitutes and appoints W. Scott
Lawler, Esq., as true and lawful attorney_in_fact and agent, with full powers of
substitution and re-substitution, for them in their name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all which said attorney_in_fact and
agent, or his substitute or substitutes, 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 dates indicated, who constitute the entire board of directors.
Signature Capacity Date
/s/W. Scott Lawler Director and President March 21, 2000
(Principal Executive Officer)
/s/Sharon Patmore Director, Secretary and March 21, 2000
Treasurer (Principal Financial
and Accounting Officer)
EXHIBIT INDEX
Exhibit
Number Description
5.1 Opinion of Lawler & Associates
23.1 Consent of Lawler & Associates (included in Exhibit 5.1 to this
Registration Statement).
23.2 Consent of Miller & McCollom
24 Powers of Attorney (included on page 6 of this Registration
Statement).
99.1 Year 2000 Employees Stock Option and Stock Award Plan
EXHIBIT 5.1
March 15, 2000
Capital Reserve Corporation
335 25TH Street, S.E.
Calgary, Alberta Canada T2A 7H8
Re: Registration Statement on Form S_8 Capital Reserve
Corporation Capital Reserve Year 2000 Employees Stock
Option And Stock Award Plan
Ladies and Gentlemen:
At your request, I am rendering this opinion in connection with the proposed
issuance, pursuant to the Capital Reserve Corporation Year 2000 Employees
Stock Option And Stock Award Plan (the "Plan"), of up to 500,000 shares (the
"Shares") of common stock, no par value ("Common Stock"), of Capital Reserve
Corporation, a Colorado corporation (the "Company").
I have examined instruments, documents and records which we deemed relevant and
necessary for the basis of the opinion hereinafter expressed. In such
examination, I have assumed the following: (a) the authenticity of original
documents and the genuineness of all signatures; (b) the conformity to the
originals of all documents submitted to us as copies; and (c) the truth,
accuracy and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have
reviewed.
Based on such examination, I am of the opinion that the Shares issuable by the
Company pursuant to the Plan, when issued in accordance with the provisions of
the Plan and the stock option agreements entered into thereunder and in the
manner referred to in the prospectus associated with the Registration Statement
on Form S_8, will be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement on Form S_8. In giving such consent, I do not consider that I am an
"expert" within the meaning of such term as used in the Securities Act of 1933
or the rules and regulations of the Securities and Exchange Commission issued
thereunder with respect to any part of the Registration Statement.
I express no opinion as to matters of law in jurisdictions other than the
federal securities laws of the United States and the corporate law of the State
of Colorado, and the opinions herein as to such law are based solely on our
review of standard compilations of the official statutes of the State of
Colorado.
This opinion is rendered solely for your use as an exhibit to the Registration
Statement on Form S_8 and may not be relied upon for any other purpose. I
disclaim any obligation to update this opinion letter for events occurring or
coming to our attention after the date hereof.
Very truly yours,
/s/ W. Scott Lawler, Esq.
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S_8 of Capital Reserve Corporation of our
report dated March 31, 1999 relating to the consolidated financial
statements of Capital Reserve Corporation and Subsidiaries as of December
31, 1998.
/s/
Miller & McCollom
Denver, Colorado
March , 2000
<PAGE>
EXHIBIT 99.1
CAPITAL RESERVE CORPORATION
YEAR 2000 EMPLOYEES STOCK OPTION
AND STOCK AWARD PLAN
CAPITAL RESERVE CORPORATION
YEAR 2000 EMPLOYEES STOCK OPTION AND STOCK AWARD PLAN
1. Definitions.
Each of the following terms shall have the respective meanings set forth below
for purposes of this Plan, whether employed in the singular or plural unless the
particular context in which said term is used clearly indicates otherwise:
(1) "Option" shall mean the right to purchase a specified number shares of the
Common Stock pursuant to the terms and conditions set forth in this Plan.
(2) "Optionee" shall mean the recipient of Options hereunder. Any reference
herein to the employment or consultancy of an Optionee by the Company shall
include Optionee's employment or consultancy by the Company or its
subsidiaries, if any.
(3) "Effective Date" shall mean as of March 5, 2000.
(4) "Plan Termination Date" shall mean the date upon which this Plan terminates.
2. Purpose.
The purpose of the Capital Reserve Corporation Year 2000 Employees Stock Option
and Stock Award Plan (this "Plan") is to maintain the ability of Capital Reserve
Corporation (the "Company") and its subsidiaries to attract and retain highly
qualified and experienced employees and consultants and to give such employees
and consultants a continued proprietary interest in the success of the Company
and its subsidiaries. Pursuant to this Plan, eligible employees and consultants
will be provided the opportunity to participate in the enhancement of
shareholder value through the grants of options, stock appreciation rights,
awards of restricted stock, bonuses and/or fees payable in stock, or any
combination thereof. Employees and consultants who participate or become
eligible to participate in this Plan from time to time are referred to
collectively herein as "Participants". The term "subsidiary" as used in this
Plan shall mean any present or future corporation which is or would be a
"subsidiary corporation" of the Company as the term is defined in Section 424(f)
of the Internal Revenue Code of 1986, as amended from time to time (the "Code").
3. Administrator of this Plan.
(1) Subject to the provisions of Section 5, this Plan shall be administered by
the Board or by a Administrator of the Board (in either case, hereinafter
referred to as the "Administrator"). The Administrator, if so appointed, may
adopt such rules and regulations as he or she shall deem appropriate concerning
this Plan, the Options and the stock awards, and make all other determinations
necessary or advisable for administering this Plan, including, but not limited
to, the persons to whom, and the time or times at which, grants shall be made,
the number of Options to be included in the grants, the length of time the
Options are exercisable, the number of Options which shall be treated as
incentive stock options, the Option exercise price, and any vesting schedule
with respect to the Options. All determinations and interpretations by the
Administrator shall be binding and conclusive upon all parties.
(2) Each grant or award made pursuant to this Plan shall be evidenced by an
Option Agreement or Award Agreement (the "Agreement"). No person shall
have any rights under any option, restricted stock or other award granted under
this Plan unless and until the person to whom such option, restricted stock or
other award shall be granted shall have executed and delivered an Agreement
to the Company. The Administrator shall prescribe the form of all Agreements.
A fully executed counterpart of the Agreement shall be provided to both the
Company and the recipient of the grant or award.
(3) The Company shall indemnify and hold harmless the Board of Directors and
the Administrator from and against any and all liabilities, costs and expenses
incurred by such persons as a result of any act, or omission to act, in
connection with the performance of such persons' duties, responsibilities, and
obligations under this Plan, other than such liabilities, costs and expenses as
may result from the gross negligence, bad faith, willful misconduct, and/or
criminal acts of such persons.
4. Shares of Stock Subject to this Plan.
The maximum number of shares of the voting common stock of the Company, no par
value (the "Common Stock"), that may be optioned or awarded under this Plan is
500,000 shares, subject to adjustment as provided in Section 15 hereof. No
Participant shall receive, over the term of this Plan, awards of restricted
stock, awards in the form of stock appreciation rights or options, whether
incentive stock options or options other than incentive stock options, to
purchase more than 20 percent of the total shares of Common Stock authorized for
issuance under this Plan. Any shares subject to an Option which for any reason
expires or is terminated unexercised and any restricted stock which is forfeited
may again be optioned or awarded under this Plan; provided, however, that
forfeited shares shall not be available for further awards if the Participant
has realized the benefits of ownership from such shares. Shares subject to this
Plan may be either authorized and unissued shares or issued shares repurchased
or otherwise acquired by the Company or its subsidiaries.
5. Grant of Options.
(1) The Administrator shall have the authority and responsibility, within the
limitations of this Plan, to determine the employees and consultants to whom
and the times at which Options are to be granted, the number of shares of
Common Stock which may be purchased under each Option, the provisions of
the respective Option Agreements (which need not be identical) including
provisions concerning the time or times when, and the extent to which, the
Options may be exercised, and the Option exercise price. All Options pursuant
to this Plan shall be granted on or before the Plan Termination Date.
(2) In determining the employees and consultants to whom Options shall be
granted, the number of shares of Common Stock to be covered by each such
Option, and the provisions of the respective Option Agreements, the
Administrator shall take into consideration the director's, employee's or
consultant's present and potential contribution to the success of the Company
and such other factors as the Administrator may deem proper and relevant.
(3) The aggregate fair market value (determined as of the date upon which an
Option is granted) of the Common Stock for which any Optionee may exercise
incentive stock options for the first time in any calendar year (under all plans
of the Company and any parent or subsidiary of the Company which plans provide
for granting of incentive stock options within the meaning of Section 422(b) of
the Code) shall not exceed $100,000.
6. Eligibility.
Employees, including officers, of the Company and its divisions and
subsidiaries, and consultants who provide bonafide services to the Company are
eligible to be granted options, restricted stock and other awards under
this Plan and to have their bonuses and/or consulting fees payable in restricted
stock and other awards. The employees and consultants who shall receive awards
or options under this Plan, and the criteria to be used in determining the award
to be made, shall be determined from time to time by the Administrator, in its
sole discretion, from among those eligible, which may be based upon information
furnished to the Administrator by the Company's management; and the
Administrator shall determine, in its sole discretion, the number of shares to
be covered by each award and option granted to each director, employee, or
consultant selected.
7. Duration of this Plan.
No award or option may be granted under this Plan after more than ten (10) years
from the earlier of the date this Plan is adopted by the Board.
8. Terms and Conditions of Stock Options.
Options granted under this Plan may be either incentive stock options, as
defined in Section 422 of the Code, or Options other than incentive stock
options. Each Option shall be subject to all the applicable provisions of
this Plan, including the following terms and conditions, and to such other
terms and conditions not inconsistent therewith as the Administrator shall
determine:
(1) The option price per share is $1.00, which has been approved by the
Company's Board of Directors on March 1, 2000.
(2) The exercise of certain options granted under this Plan shall be subject
to the attainment of such performance goals, and/or during such period ending
not later than ten years from the date it was granted, as may be determined by
the Administrator and stated in the Agreement. In no event may an option be
exercised more than 10 years from the date the Option was granted.
(3) An Option shall not be exercisable with respect to a fractional share of
Common Stock or with respect to the lesser of fifty (50) shares or the full
number of shares then subject to the Option. No fractional shares of Common
Stock shall be issued upon the exercise of an Option. If a fractional share of
Common Stock shall become subject to an Option by reason of a stock dividend or
otherwise, the Optionee shall not be entitled to exercise the Option with
respect to such fractional share.
(4) Each Option shall state whether it will or will not be treated as an
incentive stock option.
(5) Each Option will be deemed exercised on the day written notice specifying
the number of shares to be purchased, accompanied by payment in full including,
if required by law, applicable taxes, is received by the Company. Payment,
except as provided in the Agreement shall be:
(1) in United States dollars by check or bank draft, or
(2) by tendering to the Company shares of Common Stock already owned for at
least six months by the person exercising the Option, which may include shares
received as the result of a prior exercise of an Option, and having a fair
market value, on the date on which the Option is exercised equal to the cash
exercise price applicable to such Option, or
(3) by a combination of United States dollars and shares of Common Stock valued
as aforesaid.
For purposes of this Plan, fair market value shall be the mean between the
highest and lowest prices at which the Common Stock is traded on a national
securities exchange or an automated securities quotation exchange on the
relevant date, provided however, if there is no sale of the Common Stock on such
exchange on such date, fair market value shall be the mean between the bid and
asked prices on such exchange at the close of the market on such date. No
Optionee shall have any rights to dividends or other right of a shareholder with
respect to shares of Common Stock subject to his or her option until he or she
has given written notice of exercise of such Option and paid in full for such
shares.
(6) Notwithstanding the foregoing, the Administrator may, in its sole
discretion, include in the grant of an Option the right of a grantee
(hereinafter referred to as a "stock appreciation right") to elect, in the
manner described below, in lieu of exercising his or her Option for all or a
portion of the shares of Common Stock covered by such Option, to relinquish his
or her Option with respect to any or all of such shares and to receive from the
Company a payment equal in value to (x) the fair market value, as determined in
accordance with Section 8(e), of a share of Common Stock on the date of such
election, multiplied by the number of shares as to which the grantee shall have
made such election, less (y) the exercise price for that number of shares of
Common Stock for which the grantee shall have made such election under the terms
of such Option. A stock appreciation right shall be exercisable at the time the
tandem option is exercisable, and the "expiration date" for the stock
appreciation right shall be the expiration date for the tandem option. A grantee
who makes such an election shall receive payment in the nearest whole number of
shares of Common Stock having an aggregate fair market value, as determined in
accordance with Section 8(e) as of the date of election, which is not greater
than the cash amount calculated in (ii) above. A stock appreciation right may
be exercised only when the amount described in (x) above exceeds the amount
described in (y) above. An election to exercise stock appreciation rights shall
be deemed to have been made on the day written notice of such election,
addressed to the Administrator, is received by the Company. An Option or any
portion thereof with respect to which a grantee has elected to exercise a stock
appreciation right shall be surrendered to the Company and such Option shall
thereafter remain exercisable according to its terms only with respect to the
number of shares as to which it would otherwise be exercisable, less the number
of shares with respect to which stock appreciation rights have been exercised.
The grant of a stock appreciation right shall be evidenced by an Agreement. The
Agreement evidencing stock appreciation rights shall be personal and will
provide that the stock appreciation rights will not be transferable by the
grantee otherwise than by will or the laws of descent and distribution and that
they will be exercisable, during the lifetime of the grantee, only by him or
her.
(7) Except as provided in the applicable Agreement, an Option may be exercised
only if at all times during the period beginning with the date of the granting
of the Option and ending on the date of such exercise, the grantee was a
director, consultant or employee of either the Company (or of a division) or
subsidiary of the Company or of another corporation referred to in Section
421(a)(2) of the Code. The Agreement shall provide whether, and to what extent,
an Option may be exercised after termination of continuous employment, but any
such exercise shall in no event be later than the termination date of the
Option. If the grantee should die, or become permanently disabled as determined
by the Administrator at any time when the Option, or any portion thereof,
shall be exercisable, the Option will be exercisable within a period provided
for in the Agreement, by the Optionee or person or persons to whom his or her
rights under the Option shall have passed by will or by the laws of descent and
distribution, but in no event at a date later than the termination of the
Option. The Administrator may require medical evidence of permanent disability,
including medical examinations by physicians selected by it.
(8) Each Option by its terms shall be personal and shall not be transferable by
the Optionee otherwise than by will or by the laws of descent and distribution
as provided in Section 8(g) above. During the lifetime of an Optionee, the
Option shall be exercisable only by the Optionee. In the event any Option is
exercised by the executors, administrators, heirs or distributees of the estate
of a deceased Optionee as provided in Section 8(g) above, the Company shall be
under no obligation to issue Common Stock thereunder unless and until the
Company is satisfied that the person or persons exercising the Option are the
duly appointed legal representatives of the deceased Optionee's estate or the
proper legatees or distributees thereof.
(9) No incentive stock Option shall be granted to an employee who owns or would
be treated as owning by attribution under Code Section 424(d) immediately before
the grant of such Option, directly or indirectly, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company. This
restriction shall not apply if, (i) at the time such incentive stock Option is
granted, the Option price is at least 110% of the fair market value of the
shares of Common Stock subject to the Option, as determined in accordance with
Section 8(a) on the date of grant, and (ii) the incentive stock Option by its
terms is not exercisable after the expiration of five years from the date of its
grant.
(10) An Option and any Common Stock received upon the exercise of an Option
shall be subject to such other transfer restriction and/or legending
requirements as are specified in the applicable Agreement.
9. Terms and Conditions of Restricted Stock Awards.
Awards of restricted stock under this Plan shall be subject to all the
applicable provisions of this Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent therewith,
as the Administrator shall determine:
(1) Awards of restricted stock may be in addition to or in lieu of Option
grants.
(2) Awards may be conditioned on the attainment of particular performance goals
based on criteria established by the Administrator at the time of each award of
restricted stock. During a period set forth in the Agreement (the "Restriction
Period"), the recipient shall not be permitted to sell, transfer, pledge, or
otherwise encumber the shares of restricted stock; except that such shares may
be used, if the Agreement permits, to pay the Option price pursuant to any
Option granted under this Plan, provided an equal number of shares delivered to
the Optionee shall carry the same restrictions as the shares so used.
(3) Shares of restricted stock shall become free of all restrictions if during
the Restriction Period, (i) the recipient dies, (ii) the recipient's employment,
or consultancy terminates by reason of permanent disability, as determined by
the Administrator, (iii) the recipient retires after attaining both 59 1/2 years
of age and five years of continuous service with the Company and/or a division
or subsidiary, or (iv) if provided in the Agreement, there is a "change in
control" of the Company (as defined in such Agreement). The Administrator may
require medical evidence of permanent disability, including medical examinations
by physicians selected by it.
(4) Unless and to the extent otherwise provided in the Agreement, shares of
restricted stock shall be forfeited and revert to the Company upon the
recipient's termination of employment or consultancy during the Restriction
Period for any reason other than death, permanent disability, as determined by
the Administrator, retirement after attaining both 59 1/2 years of age and five
years of continuous service with the Company and/or a subsidiary or division,
or, to the extent provided in the Agreement, a "change in control" of the
Company (as defined in such Agreement), except to the extent the Administrator,
in its sole discretion, finds that such forfeiture might not be in the best
interests of the Company and, therefore, waives all or part of the application
of this provision to the restricted stock held by such recipient.
(5) Stock certificates for restricted stock shall be registered in the name of
the recipient but shall be appropriately legended and returned to the Company by
the recipient, together with a stock power endorsed in blank by the recipient.
The recipient shall be entitled to vote shares of restricted stock and shall be
entitled to all dividends paid thereon, except that dividends paid in Common
Stock or other property shall also be subject to the same restrictions.
(6) Restricted Stock shall become free of the foregoing restrictions upon
expiration of the applicable Restriction Period and the Company shall then
deliver to the recipient Common Stock certificates evidencing such stock.
(7) Restricted stock and any Common Stock received upon the expiration of the
restriction period shall be subject to such other transfer restrictions and/or
legending requirements as are specified in the applicable Agreement.
10. Bonuses and Past Salaries and Fees Payable in Stock.
(1) In lieu of cash bonuses otherwise payable under the Company's or applicable
division's or subsidiary's compensation practices to employees and consultants
eligible to participate in this Plan, the Administrator, in its sole discretion,
may determine that such bonuses shall be payable in Common Stock or partly in
Common Stock and partly in cash. Such bonuses shall be in consideration of
services previously performed and as an incentive toward future services and
shall consist of shares of Common Stock subject to such terms as the
Administrator may determine in its sole discretion. The number of shares of
Common Stock payable in lieu of a bonus otherwise payable shall be determined by
dividing such bonus amount by the fair market value of one share of Common Stock
on the date the bonus is payable, with fair market value determined as of such
date in accordance with Section 8(e).
(2) In lieu of salaries and fees otherwise payable by the Company's to employees
and consultants eligible to participate in this Plan that were incurred for
services rendered during the years of 1997 and/or, the Administrator, in its
sole discretion, may determine that such unpaid salaries and fees shall be
payable in Common Stock or partly in Common Stock and partly in cash. Such
awards shall be in consideration of services previously performed and as an
incentive toward future services and shall consist of shares of Common Stock
subject to such terms as the Administrator may determine in its sole discretion.
The number of shares of Common Stock payable in lieu of a salaries and fees
otherwise payable shall be determined by dividing each calendar month's of
unpaid salary or fee amount by the average trading value of the Common
Stock for the calendar month during which the subject services were provided.
11. Change in Control.
Each Agreement may, in the sole discretion of the Administrator, provide that
any or all of the following actions may be taken upon the occurrence of a
change in control (as defined in the Agreement) with respect to the Company:
(1) acceleration of time periods for purposes of vesting in, or realizing gain
from, or exercise of any outstanding Option or stock appreciation right or
shares of restricted stock awarded pursuant to this Plan;
(2) offering to purchase any outstanding option or stock appreciation right or
shares of restricted stock made pursuant to this Plan from the holder for its
equivalent cash value, as determined by the Administrator, as of the date of
the change in control; or
(3) making adjustments or modifications to outstanding options or stock
appreciation rights or with respect to restricted stock as the Administrator
deems appropriate to maintain and protect the rights and interests of the
Participants following such change in control, provided, however, that the
exercise period of any option may not be extended beyond 10 years from the date
of grant.
12. Transfer, Leave of Absence.
For purposes of this Plan:
(1) transfer of an employee from the Company the division or subsidiary of the
Company, whether or not incorporated, or vice versa, or from one division or
subsidiary of the Company to another, and
(2) a leave of absence, duly authorized in writing by the Company or a
subsidiary or division of the Company, shall not be deemed a termination of
employment.
13. Rights of Employees and Consultants.
(1) No person shall have any rights or claims under this Plan except in
accordance with the provisions of this Plan and each Agreement.
(2) Nothing contained in this Plan and Agreement shall be deemed to give any
employee or consultant the right to continued employment by the Company or its
divisions or subsidiaries.
14. Withholding Taxes.
The Company shall require a payment from a Participant to cover applicable
withholding for income and employment taxes upon the happening of any event
pursuant to this Plan which requires such withholding. The Company reserves the
right to offset such tax payment from any funds which may be due the Participant
from the Company or its subsidiaries or divisions or, in its discretion, to the
extent permitted by applicable law, to accept such tax payment through the
delivery of shares of Common Stock owned by the Participant or by utilizing
shares of the Common Stock which were to be delivered to the Participant
pursuant to this Plan, having an aggregate fair market value, determined as of
the date of payment, equal to the amount of the payment due.
15. Adjustments.
In the event of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations, exchanges of shares, spin-offs, liquidations,
reclassifications or other similar changes in the capitalization of the Company,
the number of shares of Common Stock available for grant under this Plan shall
be adjusted appropriately by the Board, and, where deemed appropriate, the
number of shares covered by outstanding stock options and stock appreciation
rights outstanding and the number of shares of restricted stock outstanding, and
the option price of outstanding stock options, shall be similarly adjusted. If
another corporation or other business entity is acquired by the Company, and the
Company has assumed outstanding employee option grants under a prior existing
plan of the acquired entity, similar adjustments are permitted at the discretion
of the Administrator. In the event of any other change affecting the shares of
Common Stock available for awards under this Plan, such adjustment, if any, as
may be deemed equitable by the Administrator, shall be made to preserve the
intended benefits of this Plan giving proper effect to such event.
16. Miscellaneous Provisions.
(1) This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the issuance of shares or the payment of cash upon exercise of any option
or stock appreciation right under this Plan. The expenses of this Plan shall be
borne by the Company.
(2) The Administrator may, at any time and from time to time after the granting
of an option or the award of restricted stock or bonuses payable in Common Stock
hereunder, specify such additional terms, conditions and restrictions with
respect to such option or stock as may be deemed necessary or appropriate to
ensure compliance with any and all applicable laws, including, but not limited
to, the Code, federal and state securities laws and methods of withholding or
providing for the payment of required taxes.
(3) If at any time the Administrator shall determine in its discretion that the
listing, registration or qualification of shares of Common Stock upon any
national securities exchange or under any state or federal law, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares of Common
Stock hereunder, no option or stock appreciation right may be exercised or
restricted stock or stock bonus may be transferred in whole or in part unless
and until such listing registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Administrator.
(4) By accepting any benefit under this Plan, each Participant and each person
claiming under or through such Participant shall be conclusively deemed to have
indicated his acceptance and ratification, and consent to, any action taken
under this Plan by the Administrator, the Company or the Board.
(5) This Plan shall be governed by and construed in accordance with the laws of
the State of Colorado.
(6) Administrator members exercising their functions under this Plan are serving
as directors of the Company and they shall therefore be entitled to all rights
of indemnification and advancement of expenses accorded directors of the
Company.
17. Limits of Liability.
(1) Any liability of the Company or a subsidiary of the Company to any
Participant with respect to any option or award shall be based solely upon
contractual obligations created by this Plan and Agreement.
(2) Neither the Company nor a division or subsidiary of the Company, nor any
member of the Administrator or the Board, nor any other person participating in
any determination of any question under this Plan, or in the interpretation,
administration or application of this Plan, shall have any liability to any
party for any action taken or not taken in connection with this Plan, except
as may expressly be provided by statute.
18. Amendments and Termination.
The Board may, at any time, amend, alter or discontinue this Plan; provided,
however, no amendment, alteration or discontinuation shall be made which would
impair the rights of any holder of an award of restricted stock, option, stock
appreciation rights or stock bonus theretofore granted, without his or her
written consent, or which, without the approval of the shareholders would:
(1) except as provided in Section 15, increase the maximum number of shares of
Common Stock which may be issued under this Plan;
(2) except as provided in Section 15, decrease the option price of an Option
(and related stock appreciation rights, if any) to less than 100% of the fair
market value (as determined in accordance with Section 8(e)) of a share of
Common Stock on the date of the granting of the Option (and related stock
appreciation rights, if any);
(3) materially change the class of persons eligible to receive an award of
restricted stock or options or stock appreciation rights under this Plan;
(4) extend the duration of this Plan; or
(5) materially increase in any other way the benefits accruing to Participants.
19. Duration.
This Plan shall be adopted by the Board and approved by the Company's
shareholders and such regulatory bodies as may be necessary, which approvals
must occur within the period ending twelve months after the date this Plan is
adopted. Subject to such approvals, grants and awards may be made under this
Plan between the date of its adoption and receipt of such approvals. This Plan
shall terminate upon the earlier of the following dates or events to occur:
(1) upon the adoption of a resolution of the Board terminating this Plan;
(2) the date all shares of Common Stock subject to this Plan are purchased
according to this Plan's provisions; or
(3) ten years from the date of adoption of this Plan by the Board.
No such termination of this Plan shall adversely affect the rights of any
Participant hereunder and all options or stock appreciation rights previously
granted and restricted stock and stock bonuses awarded hereunder shall continue
in force and in operation after the termination of this Plan, except as they may
be otherwise terminated in accordance with the terms of this Plan.
20. Other Compensation Plans.
This Plan shall not be deemed to preclude the implementation by the Company or
its divisions or subsidiaries of other compensation plans which may be in effect
from time to time, nor adversely affect any rights of Participants under any
other compensation plans of the Company or its divisions or subsidiaries.
21. Non-Transferability.
No right or interest in any award granted under this Plan shall be assignable or
transferable, except as set forth in this Plan and required by law, and no right
or interest of any participant in any award shall be liable for, or subject to,
any lien, obligation or liability except as set forth in this Plan or as
required by law.
