<PAGE> 1
As filed with the Securities and Exchange Commission on September 8, 1998
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CITADEL TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2432011
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3811 Turtle Creek Blvd., Suite 600
Dallas, Texas 75219
(Address of principal executive offices) (Zip Code)
NONQUALIFIED STOCK OPTION AGREEMENTS
(Full title of the plans)
Steven B. Solomon,
Chief Executive Officer
Citadel Technology, Inc.
3811 Turtle Creek Blvd, Suite 600
Dallas, Texas 75219
(214) 520-9292
(Name, address and telephone number
including area code of agent for service)
Copy to:
David A. Wood, Esq.
Wood, Exall & Bonnet, L.L.P.
12222 Merit Drive, Suite 880
Dallas, Texas 75251
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Title of Proposed Proposed Maximum Amount of
Class of Amount to Maximum Aggregate Registration Fee
Securities be Offering Offering Price
to be Registered Price Per
Registered Share
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 5,280,338 $0.31 $1,646,785 $485.80
par value
$.01 per
share
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE> 2
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, this
Registration Statement also covers an indeterminate number of shares of Common
Stock that may be issued if certain anti-dilution provisions of the option
agreements become operative.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provisions of Rule 457(c) and (h) under the
Securities Act of 1933, as amended. Accordingly, the fee with respect to shares
of common stock, $.01 par value per share ("Common Stock"), which may be
purchased upon exercise of outstanding options to purchase the shares is
calculated upon the basis of the actual per share exercise price of the stock
options awarded.
2
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form S-8 is
omitted from this filing in accordance with provisions of Rule 428 under the
Securities Act of 1933, as amended, and the introductory Note to Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Citadel Technology, Inc., a Delaware corporation (the "Company" or the
"Registrant"), hereby incorporates by reference in this Registration Statement
the following documents previously filed by the Registrant with the Securities
and Exchange Commission (the "Commission"):
(1) the Registrant's Annual Report on Form 10-KSB filed with the
Commission for the fiscal year ended February 28, 1998;
(2) the Registrant's Quarterly Report on Form 10-QSB filed with the
Commission for the fiscal quarter ended May 31, 1998;
(3) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end
of the fiscal year covered by the annual report referred to in (1) above; and
(4) the description of the common stock, par value $0.01 per share, of
the Registrant (the "Common Stock") set forth in the Registration Statement on
Form S-1 for the Registrant's predecessor, Apollo Resources, Inc., filed with
the Commission on November 1, 1988, and declared effective January 4, 1989,
including any amendment or report filed for the purpose of updating such
description.
In addition, all documents subsequently filed by the registrant with
the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act prior to the filing of a post-effective amendment hereto that indicates that
all securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such documents. Any
statement contained herein or in any document incorporated or deemed to be
incorporated by reference herein 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 other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this registration statement, except as so modified or
superseded.
3
<PAGE> 4
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Legal matters in connection with the Common Stock being offered
hereunder have been passed upon for the registrant by Wood, Exall & Bonnet,
L.L.P. David A. Wood, an officer of David Allen Wood, P.C., a partner in such
law firm, holds exercisable options to acquire 200,000 shares of the Common
Stock of the registrant, which shares are among those covered by this
registration statement.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation, as amended, and Bylaws
provide that no director of the Registrant will be personally liable to the
Registrant or any of its stockholders for monetary damages arising from the
director's breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for unlawful payments of
dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law, as amended (the "DGCL"), or (iv)
for any transaction from which the director derived an improper personal
benefit. The Certificate of Incorporation also provides that if the DGCL is
amended to authorize corporate action further eliminating or limiting the
personal liability of the directors, then the liability of a director of the
Company will be eliminated or limited to the fullest extent permitted by the
DGCL, as so amended.
In addition, the Registrant's Certificate of Incorporation and Bylaws
provide for indemnification of officers and directors to the fullest extent
permitted by the DGCL. Pursuant to the provisions of Section 145 of the DGCL,
the Registrant has the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that he or she is or was a director, officer, employee or
agent of any corporation, partnership, joint venture, trust or other enterprise,
against any and all expenses, judgments, fines and amounts paid in settlement
and reasonably incurred in connection with such action, suit or proceeding. The
power to indemnify applies only if such person acted in good faith and in a
manner he or she reasonably believed to be in the best interest, or not opposed
to the best interest, of the corporation and with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
The power to indemnify applies to actions brought by or in the right of
the corporation, but only to the extent of defense and settlement expenses and
not to any satisfaction of a judgment or settlement of the claim itself, and
with the further limitation that in such actions no indemnification shall be
made in the event of any adjudication unless the court, in its discretion,
believes that in the light of all the circumstances indemnification should
apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled, pursuant to Section 145, to indemnification as
described above.
4
<PAGE> 5
In addition, the Certificate of Incorporation provides that the Company
may purchase and maintain insurance on behalf of any director, officer, employee
or agent of the Company who is or was serving, at the request of the
Corporation, as a director, officer, employer or agent for another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in such capacity or arising out of his
status as such, whether or not the Company would have the power to indemnify
such person for such liability under the DGCL.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Unless otherwise indicated below as being incorporated by reference to
another filing of the Company, each of the following documents is filed as a
part of this registration statement.
Exhibit Description of Exhibit
5* Opinion of Wood, Exall & Bonnet, L.L.P., counsel to registrant.
10.1* Form of Settlement Stock Option Agreements
10.2* Form of Stock Option Agreements
23.1* Consent of Grant Thornton LLP, independent certified public
accountants.
23.2* Consent of Wood, Exall & Bonnet, L.L.P. (included as part of
Exhibit 5).
24* Power of Attorney (included on the signature pages of this
registration statement).
- --------------------
* Filed herewith.
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 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; or (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 registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
5
<PAGE> 6
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) 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; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. 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 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to 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.
C. 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 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 of 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.
6
<PAGE> 7
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
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 Dallas, State of Texas, on September 8, 1998:
CITADEL TECHNOLOGY, INC.
By: /s/ STEVEN B. SOLOMON
-------------------------------------------
Steven B. Solomon,
Chief Executive Officer and President
(Principal Executive Officer)
By: /s/ RICHARD L. TRAVIS, JR.
-------------------------------------------
Richard L. Travis, Jr.,
Chief Financial and Operating Officer
(Principal Financial and Accounting Officer)
7
<PAGE> 8
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Steven B. Solomon and Richard L. Travis,
Jr., or either of them, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same
with all exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, 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 he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or either of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE CAPACITY DATE
- -------------------------- Chairman of the Board September __, 1998
Victor K. Kiam, II of Directors
/s/ STEVEN B. SOLOMON
- -------------------------- Chief Executive Officer, September 8, 1998
Steven B. Solomon President & Director
(Principal Executive
Officer)
/s/ RICHARD L. TRAVIS, JR.
- -------------------------- Chief Financial and September 8, 1998
Richard L. Travis, Jr. Operating Officer, Secretary
Principal Financial and
Accounting Officer)
/s/ KENNETH JOHNSEN
- --------------------------
Kenneth Johnsen Director September 3, 1998
/s/ MARK ROGERS
- --------------------------
Mark Rogers Director September 8, 1998
/s/ CHRIS ECONOMOU
- --------------------------
Chris Economou Director September 8, 1998
/s/ AXEL SAWALLICH
- --------------------------
Axel Sawallich Director September 8, 1998
- --------------------------
Gilbert Gertner Director September __, 1998
8
<PAGE> 9
/s/ MICHAEL RUFF
- --------------------------
Michael Ruff Director September 4, 1998
9
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
<S> <C>
5* Opinion of Wood, Exall & Bonnet, L.L.P., counsel to registrant.
10.1* Form of Settlement Stock Option Agreements.
10.2* Form of Stock Option Agreements.
23.1* Consent of Grant Thornton LLP, independent certified public
accountants.
23.2* Consent of Wood, Exall & Bonnet, L.L.P. (included as part of
Exhibit 5).
24* Power of Attorney (included on the signature pages of this
registration statement).
</TABLE>
- --------------------
* Filed herewith.
<PAGE> 1
EXHIBIT 5
[WOOD, EXALL & BONNET, L.L.P. LETTERHEAD]
September 8, 1998
The Board of Directors
Citadel Technology, Inc.
3811 Turtle Creek Boulevard, Suite 600
Dallas, Texas 75219
Re: Registration Statement on Form S-8
Gentlemen:
The undersigned has acted as special counsel to Citadel Technology,
Inc., a Delaware corporation (the "Company"), in connection with the preparation
of the Registration Statement on Form S-8 (the "Registration Statement") to be
filed with the Securities and Exchange Commission on or about September 8,
1998, under the Securities Act of 1933, as amended (the "Securities Act"),
relating to 5,280,338 shares of the $.01 par value common stock (the "Common
Stock") of the Company that may be issued upon exercise of stock options granted
to employees, former employees, directors or consultants of the Company.
You have requested the opinion of the undersigned with respect to
certain legal aspects of the proposed offering. In connection therewith, the
undersigned has examined and relied upon the original, or copies identified to
our satisfaction, of (1) the Certificate of Incorporation and the Bylaws of the
Company, each as amended; (2) the Registration Statement and exhibits thereto;
and (3) such other documents, records, certificates, memoranda and instruments
as we have deemed necessary for the expression of the opinions herein contained.
In making the foregoing examinations, we have assumed the genuineness of all
signatures and the authenticity of all documents submitted as originals, and the
conformity to original documents of all documents submitted as certified or
photostatic copies, as well as the due execution and delivery of all documents
where the due execution and delivery are a prerequisite to the effectiveness
thereof. As to various questions of fact material to this opinion, and as to the
content and form of the Certificate of Incorporation, the Bylaws, minutes,
records, resolutions and other documents or writings of the Company, the
undersigned has relied, to the extent deemed reasonably appropriate, upon
representations or certificates of officers or directors of the Company and upon
documents, records and instruments furnished to the undersigned by the Company,
without independent confirmation or verification of their accuracy.
We have also assumed that (i) the shares of Common Stock when issued in
exchange for the purchase price pursuant to the exercise of options will be duly
issued in accordance with the terms of the applicable agreement, (ii) the
Company will maintain an adequate number of authorized but unissued shares
and/or treasury shares of Common Stock available for issuance to those persons
who exercise options, (iii) the consideration for shares of Common Stock issued
pursuant to the exercise of options will be actually received by the Company in
accordance with the terms of the applicable Agreement and will exceed the par
value of such shares, and (iv) the options were duly granted.
<PAGE> 2
Based upon the foregoing, the undersigned is of the opinion that the
shares of Common Stock to be issued pursuant to the exercise of options and in
accordance with the terms of the applicable agreement, will be duly and validly
issued, fully paid and nonassessable.
The undersigned hereby consents to the filing of this opinion as an
exhibit to the Registration Statement and to references to the undersigned
included in or made a part of the Registration Statement. In giving this
consent, the undersigned does not admit that the undersigned comes within the
category of person whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
WOOD, EXALL & BONNET, L.L.P.
By: David Allen Wood, P.C.
By: /s/ DAVID A. WOOD
-----------------------------------
David A. Wood, President
<PAGE> 1
EXHIBIT 10.1
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement"), effective as of January
1, 1996 as amended March 26, 1998, is made and entered into by and between
Citadel Technology, Inc., a Delaware corporation (the "Company"), and ________
(the "Optionee").
WHEREAS, the Company has awarded the stock options described in this
Agreement (the "Options") to the Optionee;
WHEREAS, the parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, the parties hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee, upon the
terms and subject to the conditions, limitations and restrictions set forth in
this Agreement, Options to acquire _______ shares of Common Stock at an exercise
price per share of $_____, effective in each case as of the date of this
Agreement. Such number of shares and exercise price take into account all stock
splits, reverse stock splits, repricings, and other transactions involving the
capital stock of the Company or its predecessors. The Optionee hereby accepts
the Options from the Company.
2. Vesting. The shares of Common Stock subject to the Option shall vest
effective immediately.
3. Exercise. To exercise the Option, the Optionee shall provide written
notice to the Company at its principal executive office. At the time of
exercise, the Optionee shall pay to the Company the exercise price per share
times the number of shares as to which the Option is being exercised. The
Optionee shall make such payment in cash, check or at the Company's option, by
delivery of shares of Common Stock having a fair market value on the date
immediately preceding exercise equal to the aggregate exercise price. If the
Option is exercised in full, the Optionee shall surrender this Agreement to the
Company for cancellation. If the Option is exercised in part, the Optionee shall
surrender this Agreement to the Company so that the Company may make appropriate
notation hereon or cancel this Agreement and issue a new agreement representing
the unexercised portion of the Option.
4. Who May Exercise. The Option shall be exercisable only by the
Optionee except in the case of death or disability (determined by the Company).
To the extent exercisable after the Optionee's death or disability, the Option
shall be exercised only by the Optionee's representatives, executors, successors
or beneficiaries.
5. Expiration of Option. The Option shall expire, and shall not be
exercisable, after March 26, 2003.
-1-
<PAGE> 2
6. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto.
7. Transfer of Option. The Optionee shall not, directly or indirectly,
sell, transfer, pledge, encumber or hypothecate ("Transfer") any unvested
portion of the Option or the rights and privileges pertaining thereto. In
addition, the Optionee shall not, directly or indirectly, Transfer any vested
portion of the Option other than by will or the laws of descent and
distribution. Any permitted transferee to whom the Optionee shall Transfer the
Option shall agree to be bound by this Agreement. Neither the Option nor the
underlying shares of Common Stock is liable for or subject to, in whole or in
part, the debts, contracts, liabilities or torts of the Optionee, nor shall they
be subject to garnishment, attachment, execution, levy or other legal or
equitable process.
8. Certain Legal Restrictions. The Company shall not be obligated to
sell or issue any shares of Common Stock upon the exercise of the Option or
otherwise unless the issuance and delivery of such shares shall comply with all
relevant provisions of law and other legal requirements including, without
limitation, any applicable federal or state securities laws and the requirements
of any stock exchange upon which shares of the Common Stock may then be listed.
As a condition to the exercise of the Option or the sale by the Company of any
additional shares of Common Stock to the Optionee, the Company may require the
Optionee to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable federal or state securities laws. The Company shall not be liable for
refusing to sell or issue any shares if the Company cannot obtain authority from
the appropriate regulatory bodies deemed by the Company to be necessary to
lawfully sell or issue such shares. In addition, the Company shall have no
obligation to the Optionee, express or implied, to list, register or otherwise
qualify any of the Optionee's shares of Common Stock. The shares of Common Stock
issued upon the exercise of the Option may not be transferred except in
accordance with applicable federal or state securities laws. The certificate
evidencing shares of Common Stock issued to the Optionee may be legended as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR
PLEDGED EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT AND THE
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
Any Common Stock issued pursuant to the exercise of Options granted
pursuant to this Agreement to a person who would be deemed an officer or
director of the Company under Rule 16b-3 shall not be transferred until at least
six months have elapsed from the date of grant of such Option to the date of
disposition of the Common Stock underlying such Option.
-2-
<PAGE> 3
9. Miscellaneous.
(a) The granting of the Option shall impose no obligation upon the
Optionee to exercise the Option or any part thereof. Nothing contained in this
Agreement shall affect the right of the Company to terminate the Optionee at any
time, with or without cause, or shall be deemed to create any rights to
employment on the part of the Optionee.
(b) Neither the Optionee nor any person claiming under or through the
Optionee shall be or shall have any of the rights or privileges of a shareholder
of the Company in respect of any of the shares issuable upon the exercise of the
Option herein unless and until certificates representing such shares shall have
been issued and delivered to the Optionee or such Optionee's agent.
(c) Any notice to be given to the Company under the terms of this
Agreement or any delivery of the Option to the Company shall be addressed to the
Company at its principal executive offices, and any notice to be given to the
Optionee shall be addressed to the Optionee at the address set forth beneath his
signature hereto, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given if mailed, postage prepaid, addressed as aforesaid.
(d) Subject to the limitations in this Agreement on the transferability
by the Optionee of the Option and any shares of Common Stock, this Agreement
shall be binding upon and inure to the benefit of the representatives,
executors, successors or beneficiaries of the parties hereto.
(e) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
(f) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(g) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions of
this Agreement.
(h) The parties shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to achieve the purposes of this Agreement.
-3-
<PAGE> 4
(i) This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
(j) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition. This Agreement
may be executed in counterparts, all of which together shall constitute one
agreement binding on all the parties hereto, notwithstanding that all such
parties are not signatories to the original or the same counterpart.
(k) At any time and from time to time the Company may execute an
instrument providing for modification, extension, or renewal of any outstanding
option, provided that no such modification, extension or renewal shall impair
the Option in any respect without the consent of the holder of the Option.
Except as provided in the preceding sentence, no supplement, modification or
amendment of this Agreement or waiver of any provision of this Agreement shall
be binding unless executed in writing by all parties to this Agreement. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
(l) In addition to all other rights or remedies available at law or in
equity, the Company shall be entitled to injunctive and other equitable relief
to prevent or enjoin any violation of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CITADEL TECHNOLOGY, INC.
- --------------------------------
Steven B. Solomon
Chief Executive Officer
OPTIONEE
- --------------------------------
-4-
<PAGE> 1
EXHIBIT 10.2
STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), effective as of _______, 199__, is made
and entered into by and between Citadel Technology, Inc., a Delaware corporation
(the "Company"), and ________________ (the "Optionee").
WHEREAS, the Company has awarded the stock option described in this
Agreement (the "Option") to the Optionee;
WHEREAS, the parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to the Optionee
to continue as an employee of the Company or its subsidiaries and to promote the
success of the business of the Company and its subsidiaries, the parties hereby
agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee, upon the
terms and subject to the conditions, limitations and restrictions set forth in
this Agreement, the Option to acquire _______ shares of Common Stock, at an
exercise price per share of $.___, effective as of the date of this Agreement
(the "Date of Grant"). The Optionee hereby accepts the Option from the Company.
2. Vesting. The shares of Common Stock subject to the Option shall vest in
two increments, with options to purchase _______ shares vested immediately and
options to purchase _______ shares vesting on each of the first ___
anniversaries of the date hereof.
3. Exercise. In order to exercise the Option with respect to any vested
portion, the Optionee shall provide written notice to the Company at its
principal executive office. At the time of exercise, the Optionee shall pay to
the Company the exercise price per share set forth in Section 1 times the number
of vested shares as to which the Option is being exercised. The Optionee shall
make such payment in cash, check or at the Company's option, by the delivery of
shares of Common Stock having a fair market value on the date immediately
preceding the exercise date equal to the aggregate exercise price. If the Option
is exercised in full, the Optionee shall surrender this Agreement to the Company
for cancellation. If the Option is exercised in part, the Optionee shall
surrender this Agreement to the Company so that the Company may make appropriate
notation hereon or cancel this Agreement and issue a new agreement representing
the unexercised portion of the Option.
4. Who May Exercise. The Option shall be exercisable only by the Optionee
except in the case of death or disability (determined by the Company). To the
extent exercisable after the Optionee's death or disability, the Option shall be
exercised only by the Optionee's representatives, executors, successors or
beneficiaries.
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5. Expiration of Option. The Option shall expire, and shall not be
exercisable with respect to any vested portion as to which the Option has not
been exercised, on the first to occur of: (a) the _____ anniversary of the Date
of Grant; (b) thirty days after the date of termination of the Optionee's
employment with the Company for any reason other than death or disability; or
(c) one year after any termination of the Optionee's employment with the Company
if such termination is due to the death or disability of the Optionee. The
Option shall expire, and shall not be exercisable, with respect to any unvested
portion, immediately upon the termination of the Optionee's employment with the
Company for any reason, including death or disability. The right of the Optionee
to receive any benefits from the Company after termination of employment with
the Company by reason of employment contract, severance arrangement or otherwise
shall not affect the determination that the Optionee's employment has been
terminated with the Company for purposes of this Agreement.
6. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto.
7. Transfer of Option. The Optionee shall not, directly or indirectly,
sell, transfer, pledge, encumber or hypothecate ("Transfer") any unvested
portion of the Option or the rights and privileges pertaining thereto. In
addition, the Optionee shall not, directly or indirectly, Transfer any vested
portion of the Option other than by will or the laws of descent and
distribution. Any permitted transferee to whom the Optionee shall Transfer the
Option shall agree to be bound by this Agreement. Neither the Option nor the
underlying shares of Common Stock is liable for or subject to, in whole or in
part, the debts, contracts, liabilities or torts of the Optionee, nor shall they
be subject to garnishment, attachment, execution, levy or other legal or
equitable process.
8. Certain Legal Restrictions. The Company shall not be obligated to sell
or issue any shares of Common Stock upon the exercise of the Option or otherwise
unless the issuance and delivery of such shares shall comply with all relevant
provisions of law and other legal requirements including, without limitation,
any applicable federal or state securities laws and the requirements of any
stock exchange upon which shares of the Common Stock may then be listed. As a
condition to the exercise of the Option or the sale by the Company of any
additional shares of Common Stock to the Optionee, the Company may require the
Optionee to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable federal or state securities laws. The Company shall not be liable for
refusing to sell or issue any shares if the Company cannot obtain authority from
the appropriate regulatory bodies deemed by the Company to be necessary to
lawfully sell or issue such shares. In addition, the Company shall have no
obligation to the Optionee, express or implied, to list, register or otherwise
qualify any of the Optionee's shares of Common Stock. The shares of Common Stock
issued upon the exercise of the Option may not be transferred except in
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accordance with applicable federal or state securities laws. At the Company's
option, the certificate evidencing shares of Common Stock issued to the Optionee
may be legended as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED OR PLEDGED EXCEPT IN COMPLIANCE
WITH THE REQUIREMENTS OF SUCH ACT AND THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
Any Common Stock issued pursuant to the exercise of Options granted
pursuant to this Agreement to a person who would be deemed an officer or
director of the Company under Rule 16b-3 shall not be transferred until at least
six months have elapsed from the date of grant of such Option to the date of
disposition of the Common Stock underlying such Option.
9. Miscellaneous.
(a) The granting of the Option shall impose no obligation
upon the Optionee to exercise the Option or any part thereof. Nothing
contained in this Agreement shall affect the right of the Company to
terminate the Optionee at any time, with or without cause, or shall be
deemed to create any rights to employment on the part of the Optionee.
(b) The rights and obligations arising under this Agreement
are not intended to and do not affect the employment relationship that
otherwise exists between the Company and the Optionee, whether such
employment relationship is at will or defined by an employment
contract. Moreover, this Agreement is not intended to and does not
amend any existing employment contract between the Company and the
Optionee.
(c) Neither the Optionee nor any person claiming under or
through the Optionee shall be or shall have any of the rights or
privileges of a shareholder of the Company in respect of any of the
shares issuable upon the exercise of the Option herein unless and until
certificates representing such shares shall have been issued and
delivered to the Optionee or such Optionee's agent.
(d) Any notice to be given to the Company under the terms of
this Agreement or any delivery of the Option to the Company shall be
addressed to the Company at its principal executive offices, and any
notice to be given to the Optionee shall be addressed to the Optionee
at the address set forth in the Company's records, or at such other
address for a party as such party may hereafter
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designate in writing to the other. Any such notice shall be deemed to
have been duly given if mailed, postage prepaid, addressed as
aforesaid.
(e) Subject to the limitations in this Agreement on the
transferability by the Optionee of the Option and any shares of Common
Stock, this Agreement shall be binding upon and inure to the benefit of
the representatives, executors, successors or beneficiaries of the
parties hereto.
(f) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES, AS APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
(g) If any provision of this Agreement is declared or found to
be illegal, unenforceable or void, in whole or in part, then the
parties shall be relieved of all obligations arising under such
provision, but only to the extent that it is illegal, unenforceable or
void, it being the intent and agreement of the parties that this
Agreement shall be deemed amended by modifying such provision to the
extent necessary to make it legal and enforceable while preserving its
intent or, if that is not possible, by substituting therefor another
provision that is legal and enforceable and achieves the same
objectives.
(h) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no
way shall define, limit, extend or describe the scope or intent of any
provisions of this Agreement.
(i) The parties shall execute all documents, provide all
information, and take or refrain from taking all actions as may be
necessary or appropriate to achieve the purposes of this Agreement.
(j) This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto.
(k) No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute waiver of any such breach or any other
covenant, duty, agreement or condition.
(l) This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all the
parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.
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(m) At any time and from time to time the Company may execute
an instrument providing for modification, extension, or renewal of any
outstanding option, provided that no such modification, extension or
renewal shall impair the Option in any respect without the consent of
the holder of the Option. Except as provided in the preceding sentence,
no supplement, modification or amendment of this Agreement or waiver of
any provision of this Agreement shall be binding unless executed in
writing by all parties to this Agreement. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision of this Agreement (regardless of whether
similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
(n) In addition to all other rights or remedies available at
law or in equity, the Company shall be entitled to injunctive and other
equitable relief to prevent or enjoin any violation of the provisions
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY:
Citadel Technology, Inc.
By:
---------------------------------
Steven B. Solomon
Chief Executive Officer
OPTIONEE:
------------------------------------
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EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated June 17, 1998 accompanying the
consolidated financial statements of Citadel Technology, Inc. (formerly Citadel
Computer Systems Incorporated) and Subsidiary appearing in the annual report on
Form 10-KSB for the year ended February 28, 1998, which is incorporated by
reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report.
/s/ GRANT THORNTON LLP
GRANT THORNTON LLP
Dallas, Texas
September 8, 1998
