<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INTERNATIONAL HERITAGE, INCORPORATED
(Exact name of Registrant as Specified in its Charter)
Nevada 002-97690-D 87-0421191
(State or other jurisdiction (Commission Field No.) (I.R.S. Employer
of incorporation) Identification No.)
Carolina Place
2626 Glenwood Avenue, Suite 200
Raleigh, North Carolina 27608
(Address of Principal Executive Offices)
International Heritage, Incorporated 1996 Stock Option Plan
(Full title of the plan)
Georgina Marie Mollick
Carolina Place
2626 Glenwood Avenue, Suite 200
Raleigh, North Carolina 27608
(Name and address of agent for service)
(919) 571-4646
Telephone number, including area code, of agent for service
CALCULATION OF REGISTRATION FEE
_____________________________________________________________________________
Proposed Proposed
Title of maximum maximum
Securities Amount offering aggregate Amount of
To be To be price offering registration
Registered registered per share price fee
_____________________________________________________________________________
$0.001 par
Common Stock 5,000,000 $2.00 $10,000,000 $2,950.00
_____________________________________________________________________________
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference into this
Registration Statement:
(a) The Registrant's latest Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1997, (the "1997 Annual Report").
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") since the end of the fiscal year covered by the annual report referred
to in (a) above.
(c) Not applicable.
All documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Securities and Exchange Act of 1934
("Exchange Act"), after the date of this Registration Statement and prior to
the filing of a post-effective amendment to this Registration Statement which
indicates that all securities offered by this Registration Statement have been
sold or which deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superceded 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 herein by reference modifies or supersedes such
statement. Any such statement so modified or superceded shall not be deemed,
except as so modified or superceded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
The Registrant is authorized to issue one class of securities,
being comprised of $0.001 par value common stock.
The holders of the $0.001 par value common stock of the Registrant
have traditional rights as to voting, dividends and liquidation. All shares
of common stock are entitled to one vote on all matters; there are no pre-
emptive rights and cumulative voting is not allowed. The common stock is not
subject to redemption and carries no subscription or conversion rights. In
the event of liquidation of the Registrant, the holders of the common stock
are entitled to share equally in corporate assets after satisfaction of all
liabilities.
Item 5. Interests of Named Experts and Counsel.
None; not applicable.
Item 6. Indemnification of Directors and Executive Officers.
Under the Nevada Revised Statutes, a corporation has the power to
indemnify any person who is made a party to any civil, criminal,
administrative or investigative proceeding, other than an action by or in the
right of the corporation, by reason of the fact that such person was a
director, officer, employee or agent of the corporation, against expenses,
including reasonable attorneys' fees, judgments, fines and amounts paid in
settlement of any such actions; provided, however, in any criminal proceeding,
the indemnified person shall have had no reason to believe the conduct
committed was unlawful.
It is the position of the Securities and Exchange Commission (the
"Commission") that indemnification against liabilities for violations under
the federal securities laws, rules and regulations is against public policy.
See subparagraph "c" of Item 9 below.
Item 7. Exemption from Registration Claimed.
None; not applicable.
Item 8. Exhibits.
The following is a complete list of exhibits filed as part of this
Registration Statement and which are incorporated herein.
Description of Exhibits Exhibit No.
International Heritage, Incorporated 1996 Employee Stock Option Plan 4.1
International Heritage, Incorporated 1996 Employee Stock Option Plan 4.2
Agreement
Opinion of Leonard W. Burningham, Esq. regarding legality of the 5.1
securities covered by this Registration Statement
The consent of Leonard W. Burningham, Esq. to the use of his 23.1
Opinion with respect to the legality of the securities covered by this
Registration Statement and to the references to his firm in this
Registration Statement as contained in such Opinion filed as Exhibit
5.1 to this Registration Statement.
The consent of Eilers, Jones & McLeod, CPAs, PA, Certified Public 23.2
Accountants.
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(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; and
(iii) To include any additional or changed material
information with respect to the Plan not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, only to the extent required by the
general rules and regulations of the Commission.
(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 the 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.
(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 (and, where applicable, each
filing of an Employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in
this Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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 out of
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 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 to question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant. 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 a 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 Raleigh, State of North
Carolina, on the date or dates appearing opposite the respective signatures
hereto.
Date: July 28, 1998 International Heritage, Incorporated
By: /s/ Stanley H. Van Etten
President, CEO and Chairman of the Board
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons (who
constitute a majority of the members of the Board of Directors of the
Registrant) in the capacities and on the date indicated.
Date: July 20, 1998 By:/s/ Barry Ackel
-------------------------
Director
Date: July 20, 1998 By:/s/ John D. Brothers
-------------------------
COO and Director
Date: July 20, 1998 By:/s/ Robert L. Chalmers
-------------------------
Director
Date: July 20, 1998 By:/s/ Evonne B. Eckenroth
-------------------------
Director
Date: July 20, 1998 By:/s/ Jack W. Hemmer
-------------------------
Director
Date: July 20, 1998 By:/s/ Harry B. Mains
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Director
Date: July 20, 1998 By:/s/ O. Kenneth Rudd, III
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Director
Date: July 20, 1998 By:/s/ Claude W. Savage
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Director
Date: July 20, 1998 By:/s/ Larry G. Smith
-------------------------
Director
<PAGE>
EXHIBIT INDEX
Description of Exhibit Exhibit No.
International Heritage, Incorporated 1996 Employee Stock Option Plan 4.1
International Heritage, Incorporated 1996 Employee Stock Option Plan 4.2
Agreement
Opinion of Leonard W. Burningham, Esq. regarding legality of the 5.1
securities covered by this Registration Statement
The consent of Leonard W. Burningham, Esq. to the use of their 23.1
Opinion with respect to the legality of the securities covered by this
Registration Statement and to the references to his firm in this
Registration Statement as contained in such Opinion filed as Exhibit
5.1 to this Registration Statement.
The consent of Eilers, Jones & McLeod, CPAs, PA, Certified Public 23.2
Accountants.
<PAGE>
INTERNATIONAL HERITAGE, INCORPORATED
1996 EMPLOYEE STOCK OPTION PLAN
1. Purpose of the Plan. The purposes of this International Heritage,
Incorporated 1996 Employee Stock Option Plan ("Plan") are to attract and
retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants
of the Company and its Subsidiaries (as defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended ("Code")) and to promote the success
of the Company's business. Options granted under the Plan may be incentive
stock options (as defined under Section 422 of the Code) or nonstatutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as
amended, and the regulations promulgated thereunder.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its Committees
appointed pursuant to Section 4 of the Plan.
(b) "Affiliate" means: (i) an entity that directly or through
one or more intermediaries is controlled by the Company, and (ii) any entity
in which the Company has a significant equity interest, as determined by the
Company.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means International Heritage, Incorporated, a
Nevada corporation and its wholly-owned subsidiaries, International Heritage,
Inc., a North Carolina corporation and International Heritage of Canada,
Inc., an Ontario, Canada corporation.
(h) "Consultant" means any person, including an advisor, who is
engaged by the Company or any Subsidiary to render services and is compensated
for such services, and any director of the Company whether compensated for
such services or not, provided that if and in the event the Company registers
any class of any equity security pursuant to the Exchange Act, the term
Consultant shall thereafter not include directors who are not compensated for
their services or are paid only a director's fee by the Company.
(i) "Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship by the Company or
any Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) sick leave; (ii) military leave; or (iii) any
other leave of absence approved by the Board, provided that such leave is for
a period of not more than (90) days, unless reemployment upon the expiration
of such leave is guaranteed by contract or statute, or unless provided
otherwise pursuant to Company policy adopted from time to time.
(j) "Disability" has the same meaning as provided in the long-
term disability plan or policy maintained or, if applicable, most recently
maintained, by the Company or, if applicable, any Affiliate of the Company for
the Employee. If no long-term disability plan or policy was ever maintained
on behalf of the Employee, or if the determination of Disability related to an
Incentive Stock Option, Disability means that condition described in Code
Section 22(e)(3), as amended from time to time. In the event of a dispute,
the determination of Disability will be made by the Committee and will be
supported by advice of a physician competent in the area to which the
Disability relates.
(k) "Employee" means any person, including officers and
directors, employed by the Company or any Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the National
Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported, as quoted on such system or exchange, or the exchange with the
greatest volume of trading in Common Stock, for the last market trading day
prior to the time of determination) as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or
(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for
the Common Stock; or
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith
by the Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
(o) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Optioned Stock" means the Common Stock subject to an
Option.
(r) "Optionee" means an Employee or Consultant who receives an
Option under the Plan.
(s) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(t) "Plan" means this International Heritage, Incorporated 1996
Employee Stock Option Plan.
(u) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
(v) "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section
12 of the Plan, the maximum aggregate number of Shares which may be optioned
and sold under the Plan is up to ten percent (10%) of the authorized Shares
of common stock as of the date of Plan adoption.
If an Option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.
Administration of the Plan.
(a) Procedure.
(i) Administration With Respect to Directors and Officers.
With respect to grants of Options to Employees who are also officers or
directors of the Company, the Plan shall be administered by (A) the Board if
the Board may administer the Plan in compliance with Rule 16b-3 promulgated
under the Exchange Act or any successor thereto ("Rule 16b-3") with respect to
a plan intended to qualify thereunder as a discretionary plan, or (B) a
Committee designated by the Board to administer the Plan, which Committee
shall be constituted in such a manner as to permit the Plan to comply with
Rule 16b-3 with respect to a plan intended to qualify thereunder as a
discretionary plan (the "Committee"). Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by Rule 16b-3 with respect to a plan
intended to qualify thereunder as a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule
16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors nor
officers.
(iii) Administration With Respect to Consultants and Other
Employees. With respect to grants of Options to Employees or Consultants who
are neither directors nor officers of the Company, the Plan shall be
administered by (A) the Board or (B) a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of incentive stock options plans,
if any, of Nevada corporate and securities laws and of the Code (the
"Applicable Laws")(the "Committee"). Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however caused,
and remove all members of the Committee and thereafter directly administer the
Plan, all to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan and in the case of a Committee, the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(m) of the Plan;
(ii) to select the Employees and Consultants to whom
Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common Stock;
(viii) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted; and
(ix) to designate persons to administer the Plan with
respect to processing documentation associated with the Plan, grant and notice
thereunder, exercise and other general administrative functions associated
with the Plan.
(c) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
Eligibility.
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he or she is
otherwise eligible, be granted an additional Option or Options (Nonstatutory
Stock Options and/or Incentive Stock Options).
(b) Each Option shall be designated in the written option
agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value of the Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Optionee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary) exceeds $100,000 such excess Options shall be treated as
Nonstatutory Stock Options. At the time any Incentive Stock Option granted
under the Plan is exercised, the Company will be entitled to legend the
certificates representing the shares of Stock purchased pursuant to the Option
to clearly identify them as representing the shares purchased upon the
exercise of an Incentive Stock Option.
(c) For purposes of Section 5(b), Incentive Stock Options shall
be taken into account in the order in which they were granted, and the Fair
Market Value of the Shares shall be determined as of the time the Option with
respect to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to the continuation of employment or consulting or independent
contractor relationship with the Company, nor shall it interfere in any way
with his or her right or the Company's right to terminate his or her
employment or consulting or independent contractor relationship at any time,
with or without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 17 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated
in the Option Agreement; provided, however, that the term shall be no more
than five (5) years from the date of grant thereof for an incentive stock
option and no more than ten (10) years from the date of grant thereof for a
nonstatutory option. However, in the case of an Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or
any Subsidiary, the term of the Option shall be five (5) years from the date
of grant thereof or such shorter term as may be provided in the Option
Agreement.
Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the
Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or
any Subsidiary, the per share exercise price shall be no less than 110% of the
Fair Market Value per share on the date of grant.
(B) granted to any other Employee, the per share
exercise price shall be no less than 100% of the Fair Market Value per share
on the date of grant.
(ii) In the case of a Nonstatutory Stock Option:
(A) granted to a person who, at the time of the
grant of such Option, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Subsidiary, the
per share exercise price shall be no less than 110% of the Fair Market Value
per share on the date of the grant.
(B) granted to any other person, the per share
exercise price shall be no less than 85% of the Fair Market Value per share on
the date of the grant.
(b) The Exercise Price of an Option may not be amended or
modified after the grant of the Option, and an Option may not be surrendered
in consideration of or exchanged for the grant of a new Option having an
Exercise Price below that of the Option which was surrendered or exchanged.
(c) The consideration to be paid for the Shares to be issued
upon exercise of any Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of:
cash;
check;
promissory note;
other Shares which (x) in the case of Shares acquired upon
exercise of an Option have been owned by the Optionee for more than six (6)
months on the date of surrender, and (y), have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
said Option shall be exercised;
authorization from the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised;
delivery of a properly executed Exercise Notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sales or loan proceeds required to pay the exercise price;
by delivering an irrevocable subscription agreement for the
Shares which irrevocably obligates the option holder to take and pay for the
Shares not more than twelve (12) months after the date of delivery of the
subscription agreement;
(8) Employee payroll deduction which will require the
Employee to execute an agreement authorizing withholding from income for a
minimum six (6) month period. Amounts accrued will be used to cover the cost
of exercise and any taxes or fees associated with the exercise. Options must
be exercised in 250 share minimum increments under the Employee Stock Option
Payroll Deduction Plan;
(9) any combination of the foregoing methods of payment;
or
(10) such other consideration and method of payment of the
issuance of Shares to the extent permitted under Applicable Laws. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected
to benefit the Company.
Exercise of Option.
(a) Procedure for Exercise.
Rights as a Shareholder. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Administrator, including performance criteria with respect to the Company
and/or the Optionee, and as shall be permissible under the terms of the Plan.
The holder of an Option, as such, has none of the rights of a Shareholder
until exercise and issuance of the stock certificate evidencing such Shares.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of
the Option by the person entitled to exercise the Option and full payment for
the Shares with respect to which the Option is exercised has been received by
the Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(c) of the Plan.
Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option
is exercised. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is issued,
except as provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(b) Termination of Employment. In the event of termination of
an Optionee's consulting or Continuous Status as an Employee with the Company
voluntarily or without cause (as the case may be), such Optionee may, but only
within a period of at least thirty (30) days (or such other period of time as
is determined by the Board, which, in the case of an Incentive Stock Option
shall not exceed three (3) months) after the date of such termination (but in
no event later than the expiration date of the term of such Option as set
forth in the Option Agreement), exercise his Option to the extent that
Optionee was entitled to exercise the Option at the date of such termination,
or if Optionee does not exercise such Option to the extent so entitled within
the time specified herein, the Option shall terminate. In the event of
termination of an Optionee's consulting or Continuous Status as an Employee
with or for cause, the Option shall terminate simultaneous with the
individual's termination from the Company.
(c) Disability of Optionee. Notwithstanding the provisions of
Section 9(b) above, in the event of termination of Continuous Status as an
Employee as a result of his or her disability (as defined in Section 22(c)(3)
of the Code), Optionee may, but only within twelve (12) months from the date
of such termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise the Option
to the extent otherwise entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise the
Option at the date of termination, or if Optionee does not exercise such
Option to the extent so entitled with the time specified herein, the Option
shall terminate.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised, at any time within twelve (12) months
following the date of death (but in no event later than the expiration date of
the term of such Option as set forth in the Option Agreement), by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent the Optionee was entitled to
exercise the Option at the date of death. To the extent that Optionee was not
entitled to exercise the Option at the date of death, or if Optionee does not
exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section
16(b) of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously granted,
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee. Any disposition of the Shares
issued under the Plan by the Optionee not made in accordance with the Plan or
the Agreement will be void. The Company will not recognize, or have a duty to
recognize, any disposition not made in accordance with the Plan and the
Agreement, and the Shares transferred will continue to be bound by the Plan
and the Agreement.
11. Stock Withholding to Satisfy Withholding Tax Obligations. At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following methods: (i) by cash payment, or (ii) out of Optionee's current
compensation, or (iii) if permitted by the Administrator, in its discretion,
by surrendering the Company Shares which (a) in the case of Shares previously
acquired by the Company, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (b) have a Fair Market Value on the date
of surrender equal to or less than Optionee's marginal tax rate times the
ordinary income recognized, or (iv) by electing to have the Company withhold
from the Shares to be issued upon exercise of the Option that number of Shares
having a Fair Market Value equal to the amount required to be withheld. For
this purpose, the Fair Market Value of the Shares to be withheld shall be
determined on the date that the amount of tax to be withheld is to be
determined (the "Tax Date").
If the Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax
withholding obligations arising upon exercise of this Option must comply with
the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
All elections by an Optionee to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable to
the Administrator and shall be subject to the following restrictions:
the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or disapproval
of the Administrator; and
(d) if the Optionee is an Insider, the election must comply with
the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions. In the event the election to have Shares withheld is made
by an Optionee and the Tax Date is deferred under Section 83 of the Code
because no election is filed under Section 83(b) of the Code, the Optionee
shall receive the full number of Shares with respect to which the Option is
exercised but such Optionee shall be unconditionally obligated to tender back
to the Company the proper number of Shares on the Tax Date.
12. Adjustments Upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of Shares of Common Stock
covered by each outstanding Option, and the number of Shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan under
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall
be made by the Board whose determination in that respect shall be final,
binding and conclusive. Except as provided herein, no issuance by the Company
of Shares of stock of any class, or securities convertible into Shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares of Common Stock subject to
an Option.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the Optionee
at least fifteen (15) days prior to such proposed action. To the extent it
has not been previously exercised, the Option will terminate immediately prior
to the consummation of such proposed action.
Merger. In the event of a merger of the Company with or into
another corporation, the Option shall be assumed or an equivalent option shall
be substituted by such successor corporation or a parent or subsidiary of such
successor corporation. If, in such event, the Option is not assumed or
substituted, the Option shall terminate as of the date of the closing of the
merger. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger, the option confers the right to purchase,
for each Share of Optioned Stock subject to the Option immediately prior to
the merger, the consideration (whether stock, cash, or other securities or
property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if holder were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger was not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation or its Parent and the participant, provide for
the consideration to be received upon the exercise of the Option, for each
Share of Optioned Stock subject to the Option, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the merger.
13. Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Board. Notice of the determination shall be given to each Employee or
Consultant to whom an Option is so granted within a reasonable time after the
date of such grant.
Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would impair the rights of
any Optionee under any grant theretofore made, without his or her consent. In
addition, to the extent necessary and desirable to comply with Rule 16b-3
under the Exchange Act or within Section 422 of the Code (or any other
applicable law or regulation, including the requirements of the NASD or an
established stock exchange), the Company shall obtain shareholder approval of
any Plan amendment in such a manner and to such a degree as required.
(b) Effect of Amendment and Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee
and the Board, which agreement must be in writing and signed by the Optionee
and the Company.
(c) Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to the exercise of an Option unless the exercise of such
Option and the Issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time
of any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is necessary or
required by any of the aforementioned relevant provisions of law.
The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
15. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. Agreements. Options shall be evidenced by written agreements in
such form, as the Board shall approve from time to time.
17. Shareholder Approval. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such shareholder approval shall be
obtained in the degree and manner required under applicable state and federal
law.
18. Information to Optionees. The Company shall provide to each
Optionee, during the period such Optionee has one or more Options outstanding,
and to each individual who acquired Shares pursuant to the exercise of any
option, with annual financial statements. The Company shall not be required
to provide such information to key Employees whose duties in connection with
the Company assure their access to equivalent information.
INTERNATIONAL HERITAGE, INCORPORATED
1996 EMPLOYEE STOCK OPTION PLAN STOCK AGREEMENT
1. Grant of Option. International Heritage, Incorporated, a Nevada
corporation (the "Company"), hereby grants to the Optionee named in the Notice
of Grant (the "Optionee"), an option (the "Option") to purchase a total number
of shares of Common Stock (the "Shares") set forth in the Notice of Grant, at
the exercise price per share set forth in the Notice of Grant (the "Exercise
Price") subject to the terms, definitions and provisions of the International
Heritage, Incorporated 1996 Stock Option Plan (the "Plan") adopted by the
Company, which is incorporated herein by reference. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Agreement.
If designated an Incentive Stock Option, this Option is intended
to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise of Option. This Option shall be exercisable during its
term in accordance with the Exercise Schedule set out in the Notice of Grant
and with the provisions of Section 4 hereof and Section 9 of the Plan as
follows:
(i) Right to Exercise.
This Option may not be exercised for a fraction of a share.
(b) In the event of Optionee's death, Disability or other
termination of relationship, the exercisability of the Option is governed by
Sections 5, 6 and 7 below, subject to the limitation contained in subsection
(2)(i)(c).
(c) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in the Notice of
Grant.
(ii) Method of Exercise. This Option shall be exercisable by
written notice (in the form attached as Exhibit A) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and agreements as to
the holder's investment intent with respect to such shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The written
notice shall be accompanied by payment of the Exercise Price. This Option
shall be deemed to be exercised upon receipt by the Company of such written
notice accompanied by the Exercise Price.
No shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Optionee on the date on
which the Option is exercised with respect to the Shares.
3. Method of Payment. Payment of the Exercise Price shall be by any
of the following, or a combination thereof, at the election of the Optionee
and upon the acceptance by the Administrator:
cash;
check;
promissory note;
surrender of other shares of Common Stock of the Company which (A)
in the case of Shares acquired pursuant to the exercise of a Company option,
have been owned by the Optionee for more than six (6) months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised;
(v) authorization from the Company to retain from the total
number of shares as to which the Option is exercised that number of shares
having a Fair Market Value on the date of said exercise equal to the exercise
price for the total number of shares as to which the option is exercised;
(vi) delivery of a properly executed Exercise Notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the Exercise Price;
(vii) by delivering an irrevocable subscription agreement for
the shares which irrevocably obligates the optionholder to take and pay for
the shares not more than twelve (12) months after the date of delivery of the
subscription agreement;
(viii) Employee Payroll Deduction Plan which will require the
Employee to execute an agreement authorizing withholding from income for a
minimum six (6) month period. Amounts accrued will be used to cover the cost
of exercise and any taxes or fees associated with the cost of exercise.
Options must be exercised in 250 share minimum increments under the Employee
Payroll Deduction Plan;
(ix) any combination of the foregoing methods of payment; or
(x) such other consideration and method of payment of the
issuance of shares the extent permitted under applicable laws. In making its
determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may reasonably be expected
to benefit the Company.
4. Restrictions on Exercise. This Option may not be exercised until
such time as the Plan has been approved by the shareholders of the Company, or
if the issuance of such Shares upon exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule
under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G")
as promulgated by the Federal Reserve Board. As a condition to the exercise
of this Option, the Company may require Optionee to make any representation
and warranty to the Company as may be required by any applicable law or
regulation.
5. Termination of Relationship. In the event of termination of
Optionee's consulting relationship or Continuous Status as an Employee,
Optionee may, to the extent otherwise so entitled at the date of such
termination (the "Termination Date"), exercise this Option during the
Termination Period set out in the Notice of Grant. To the extent that
Optionee was not entitled to exercise this Option at the Termination Date, or
if Optionee does not exercise this Option within the time specified herein,
the Option shall terminate.
6. Disability of Optionee. Notwithstanding the provisions of Section
5 above, in the event of termination of Optionee's Continuous Status as an
Employee as a result of his or her Disability (as defined in Section 22(e)(3)
of the Code), Optionee may, but only within twelve (12) months from the date
of termination of employment (but in no event later than the date of
expiration of the term of this Option as set forth in Section 9 below),
exercise the Option to the extent otherwise so entitled at the date of such
termination. To the extent that Optionee was not entitled to exercise the
Option as of the date of termination, or if Optionee does not exercise such
option (to the extent otherwise so entitled) within the time specified herein,
the Option shall terminate.
7. Death of Optionee. In the event of the death of Optionee, the
Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the date of expiration of the term
of this Option as set forth in Section 9 below), by Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance
but only to the extent the Optionee could exercise the Option at the date of
death.
8. Non-Transferability of Option. This Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of Optionee only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee. Any disposition of the shares issued
under the Plan by the Optionee not made in accordance with the Plan or the
Agreement will be void. The Company will not recognize, or have a duty to
recognize, any disposition not made in accordance with the Plan and the
Agreement, and the shares transferred will continue to be bound by the Plan
and the Agreement.
9. Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Agreement. The limitations set
out in Section 7 of the Plan regarding Options designated as Incentive Stock
Options and Options granted to more than ten percent (10%) shareholders shall
apply to this Option.
10. Taxation Upon Exercise of Option. Optionee understands that, upon
exercising a Nonstatutory Stock Option, he or she will recognize income for
tax purposes in an amount equal to the excess of the then Fair Market Value of
the Shares over the exercise price. However, the timing of this income
recognition may be deferred for up to six (6) months if Optionee is subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). If the Optionee is an Employee, the Company will be required to
withhold from Optionee's compensation, or collect from Optionee and pay to the
applicable taxing authorities an amount equal to a percentage of this
compensation income. Additionally, the Optionee may at some point be required
to satisfy tax withholding obligations with respect to the disqualifying
disposition of an Incentive Stock Option. The Optionee shall satisfy his or
her tax withholding obligation arising upon the exercise of this Option by one
or some combination of the following methods: (i) by cash payment, or (ii) out
of Optionee's current compensation, or (iii) if permitted by the
Administrator, in his or her discretion, by surrendering to the Company Shares
which (a) in the case of Shares previously acquired from the Company, have
been owned by the Optionee for more than six (6) months on the date of
surrender and (b) have a Fair Market Value on the date of surrender equal to
or less than Optionee's marginal tax rate times the ordinary income
recognized, or (iv) by electing to have the Company withhold from the Shares
to be issued upon exercise of the Option that number of shares having a Fair
Market Value equal to the amount required to be withheld. For this purpose,
the Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined (the "Tax
Date").
If the Optionee is subject to Section 16 of the Exchange Act (an
"Insider"), any surrender of previously owned Shares to satisfy tax
withholding obligations arising upon exercise of this Option must comply with
the applicable provisions of Rule 16b-3 promulgated under the Exchange Act
("Rule 16b-3") and shall be subject to such additional conditions or
restrictions as may be required thereunder to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
All elections by an Optionee to have Shares withheld to satisfy
tax withholding obligations shall be made in writing in a form acceptable to
the Administrator and shall be subject to the following restrictions:
the election must be made on or prior to the applicable Tax Date;
(ii) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made;
(iii) all elections shall be subject to the consent or
disapproval of the Administrator; and
(iv) if the Optionee is an Insider, the election must comply with
the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
11. Tax Consequences. Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(i) Exercise of Incentive Stock Option. If this Option
qualifies as an Incentive Stock Option, there will be no regular federal
income tax liability upon the exercise of the Option, although the excess, if
any, of the Fair Market Value of the Shares on the Date of Exercise over the
Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject the Optionee to the alternative
minimum tax in the year of exercise.
(ii) Exercise of Nonstatutory Stock Option. If this Option does
not qualify as an Incentive Stock Option, there may be a regular federal
income tax liability upon the exercise of the Option. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Shares on
the Date of Exercise over the Exercise Price. If Optionee is an Employee, the
Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount equal to
a percentage of this compensation income at the time of exercise.
(iii) Disposition of Shares. In the case of a Nonstatutory Stock
Option, if Shares are held for at least one (1) year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes. In the case of an Incentive Stock Option, if
Shares transferred pursuant to the Option are held for at least one (1) year
after exercise and are disposed of at least two (2) years after the Date of
Grant, any gain realized on disposition of the Shares will also be treated as
long-term capital gain for federal income tax purposes. If Shares purchased
under an Incentive Stock Option are disposed of within such one-year period or
within two (2) years after the Date of Grant, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extend of the excess, if any, of the Fair Market Value of the
Shares on the Date of Exercise over the Exercise Price.
(iv) Notice of Disqualifying Disposition of Incentive Stock
Option Shares. If the Option granted to Optionee herein is an Incentive Stock
Option, and if Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to the Incentive Stock option on or before the later of (a)
the date two (2) years after the Date of Grant, or (b) the date one (1) year
after Date of Exercise, the Optionee shall immediately notify the Company in
writing of such disposition. Optionee agrees that the Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee from the early disposition by payment in cash or
out of the compensation paid to the Optionee.<PAGE>
INTERNATIONAL HERITAGE, INCORPORATED
a Nevada corporation
By: /S/ Stanley H. Van Etten
Stanley H. Van Etten
President and CEO
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE
WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY
RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS OR HER RIGHT OR THE
COMPANY'S RIGHT TO TERMINATE HIS OR HER EMPLOYMENT, INDEPENDENT CONTRACTORSHIP
OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he or she is familiar with the
terms and provisions thereof and hereby accepts this Option subject to all of
the terms and provisions thereof, Optionee has reviewed the Plan and this
Option in their entirety, has had an opportunity to obtain advice of counsel
prior to executing this Option and fully understands all provisions of the
Option. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under the Plan.
Dated:_________________________ _________________________________(SEAL)
Optionee
Printed Name: __________________________
<PAGE>
EXHIBIT A
INTERNATIONAL HERITAGE, INCORPORATED
1996 EMPLOYEE STOCK OPTION PLAN
EXERCISE NOTICE
Attention: Corporate Secretary
International Heritage, Incorporated
2626 Glenwood Avenue, Suite 200
Raleigh, North Carolina 27608
1. Exercise of Option. Effective as of today, ___________ 19___, the
undersigned ("Optionee") hereby elects Optionee's option to purchase
_____________ shares of the Common Stock (the "Shares") of International
Heritage, Incorporated (the "Company") under and pursuant to the Company's
1996 Employee Stock Option Plan, as amended (the "Plan") and the [ ]
Incentive [ ] Nonstatutory Stock Option Agreement dated ________________
(the "Option Agreement").
2. Representations of Optionee. Optionee acknowledges that Optionee
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
3. Rights as Shareholder. Until the stock certificate evidencing
such Shares is issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock
certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except, as provided in Section 12 of the
Plan.
Optionee shall enjoy rights as a shareholder until such time as Optionee
disposes of the Shares or the Company and/or its assignee(s) exercises the
right of First Refusal hereunder. Under such exercise, Optionee shall have no
further rights of the Shares so purchased except the right to receive payment
for the Shares so purchased in accordance with the provisions of the
Agreement, and Optionee shall forthwith cause the certificate(s) evidencing
the Shares so purchased to be surrendered to the Company for transfer or
cancellation.
4. Tax Consultation. Optionee understands that Optionee may suffer
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.
5. Stock-Transfer Orders; Refusal to Transfer.
(a) Stop-Transfer Notices. Optionee agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate stop-transfer instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(b) Refusal to Transfer. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of the Plan or this
Agreement or (ii) to treat as owner of such Shares or to accord the right to
vote or pay dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.
6. Market Standoff Agreement. Optionee hereby agrees that if so
requested by the Company or any representative of the underwriters in
connection with any registration of the offering of any securities of the
Company under the Securities Act of 1933, as amended ("1933 Act"), Optionee
shall not sell or otherwise transfer any shares or other securities of the
Company during the 180-day period following the effective date of a
registration statement of the Company filed under the 1933 Act; provided,
however, that such restriction shall only apply to the first two registration
statements of the Company to become effective under the 1933 Act which include
securities to be sold on behalf of the Company to the public in an
underwritten public offering under the 1933 Act. The Company may impose stop
transfer instructions with respect to securities subject to the foregoing
restrictions until the end of such 180-day period.
7. Successors and Assigns. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.
8. Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by Optionee or by the Company forthwith to the
Company's Board of Directors or Administrator of the Plan, which shall review
such dispute. Any such review by the Board or Administrator shall be final
and binding on the Company and on Optionee.
9. Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada excluding
that body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
10. Notices. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States mail by certified mail, with postage and
fees prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may designate in
writing from time to time to the other party.
11. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
12. Delivery of Payment. Optionee herewith delivers to the Company
the full Exercise Price for the Shares.
13. Entire Agreement. The Plan and Notice of Stock Option Grant are
incorporated herein by reference. This Agreement, the Plan and the Notice of
Stock Option Grant constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter.
Submitted by: Accepted by:
OPTIONEE: INTERNATIONAL HERITAGE, INCORPORATED
a Nevada Corporation
_____________________________(SEAL) By:
Signature
__________________________________ Its:
Printed Name<PAGE>
Address: Address:
__________________________________ 2626 Glenwood Avenue, Suite 200
__________________________________ Raleigh, North Carolina 27608
__________________________________
<PAGE>
NOTICE OF SHARE WITHHOLDING ELECTION
INTERNATIONAL HERITAGE, INCORPORATED
1996 EMPLOYEE STOCK OPTION PLAN
International Heritage, Incorporated
Attn: Stock Option Plan Administrator
2626 Glenwood Avenue, Suite 200
Raleigh, North Carolina 27608
This election relates to the Option identified in Paragraph 3 below. I
hereby certify that:
(1) My correct name and social security number and my current address
are set forth at the end of this document.
(2) I am (check one, whichever is applicable).
Q the original recipient of the Option.
Q the legal representative of the estate of the original
recipient of the Option.
Q a legatee of the original recipient of the Option.
Q the legal guardian of the original recipient of the Option.
(3) The Option pursuant to which this election relates was issued
under the International Heritage, Incorporated 1996 Employee Stock
Option Plan (the "Plan") in the name of __________________
[Optionee Name] for the purchase of a total of __________ [total
number of Shares subject to Option] Shares of Common Stock. This
election relates to __________ [number] Shares of Common Stock
issuable upon exercise of the Option (the "Common Stock"),
provided that the numbers set forth above shall be deemed changed
as appropriate to reflect the applicable Plan provisions.
(4) In connection with any exercise of the Option with respect to the
Common Stock, I hereby elect to have certain of the Shares
issuable pursuant to the exercise withheld by the Company for the
purpose of having the value of the Shares applied to pay federal,
state and local, if any, taxes arising from the exercise.
The Shares to be withheld shall have, as of the Tax Date
applicable to the exercise, a Fair Market Value equal to the
minimum statutory tax withholding requirement under federal, state
and local law in connection with the exercise.
(5) This Withholding Election is made on or prior to the applicable
Tax Date and is otherwise timely made pursuant to the Plan.
(6) I understand that this Withholding Election may not be revised,
amended or revoked by me (except in a manner that satisfies the
requirements of the exemption provided under Rule 16b-3
promulgated under the Securities Exchange Act of 1934).
(7) I further understand that the Company shall withhold from the
Common Stock a whole number of Shares of Common Stock having the
value specified in Paragraph 4 above.
(8) The Plan has been made available to me by the Company, I have read
and understand the Plan and I have no reason to believe that any
of the conditions therein to the making of this Withholding
Election have not been met. Capitalized terms used in this Notice
of Withholding Election is made to without definition shall have
the meanings given to them in the Plan.
Date:___________________________
Signature
___________________________________
Name (Printed)
___________________________________
Street Address
City, State, Zip Code
Social Security Number
cc: Payroll Department
<PAGE>
INTERNATIONAL HERITAGE, INCORPORATED
1996 EMPLOYEE STOCK OPTION PLAN
EMPLOYEE STOCK OPTION PAYROLL DEDUCTION PLAN
AUTHORIZATION
International Heritage, Incorporated
Attn: Stock Option Plan Administrator
2626 Glenwood Avenue, Suite 200
Raleigh, North Carolina 27608
The undersigned Employee of International Heritage, Inc., a wholly owned
subsidiary of International Heritage, Incorporated, and an Optionee under the
International Heritage, Incorporated 1996 Employee Stock Option Plan (the
"Plan"), hereby:
1. Certifies that my correct name and social security number and my
current address are set forth below.
2. Agrees to the withholding of $______________ [amount] from each
paycheck, to be accrued toward the exercise of my Options granted
under the Plan.
3. Understands and agrees to the withholding of such funds for a
minimum of six (6) months. I may not adjust the withholding
amount until six (6) months from the date of this enrollment in
this Employee Stock Option Payroll Deduction Plan; however, there
is no limitation to the additional amounts I may contribute toward
the Exercise Price during any period.
4. Acknowledges that all applicable fees and taxes shall be applied
to the Exercise Price.
5. Agrees to execute any other documents the Administrator may
require for the exercise of my Options pursuant to this Employee
Stock Option Payroll Deduction Plan.
6. Understands and agrees to the exercise of my Options in minimum
increments of 250 shares, automatically upon the accrual of the
Exercise Price therefore.*
7. Requests that my certificates be prepared in the name of:
and be delivered to:
(please specify account number; if any):
**
Date:_______________________________________________________
Signature
Name (Printed)
Street Address
City, State, Zip Code
Social Security Number
* Automatic exercise shall occur on or about the first day not subject to
restriction on trading by Employees pursuant to the Company Insider Trading
Policy, after the pay period in which funds sufficient to cover the Exercise
Price are accrued.
** Pursuant to Paragraph 10 of the Plan and Paragraph 8 of the Agreement, the
Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee. Any
disposition of the shares issued under the Plan by the Optionee not made in
accordance with the Plan or the Agreement will be void. The Company will not
recognize, or have a duty to recognize, any disposition not made in accordance
with the Plan and the Agreement, and the shares transferred will continue to
be bound by the Plan and the Agreement.
[Letterhead of Leonard W. Burningham, Esq.}
July 30, 1998
International Heritage, Incorporated
Carolina Place
2626 Glenwood Avenue, Suite 200
Raleigh, NC 27608
Re: Opinion concerning the legality under the Nevada
Revised Statutes ("NRS") of the securities to be
issued pursuant to the Registration Statement on Form
S-8 to be filed by International Heritage,
Incorporated, a Nevada corporation (the "Company")
Board of Directors:
I have been asked to render an opinion as to the legality under
the NRS of certain securities, which are to be covered by a Registration
Statement to be filed by the Company on Form S-8 of the Securities and
Exchange Commission (the "Commission"), and as to which this opinion is to be
filed as an exhibit (the "Securities").
As you are also aware, no services to be performed and billed to
you which are in any way related to a "capital raising" transaction may be
paid by the issuance of Securities pursuant to the Plan.
In connection with rendering my opinion, which is set forth below,
I have reviewed and examined originals or copies of the following documents,
to-wit:
1. Articles of Incorporation and all amendments thereto;
2. By-laws;
3. Annual Report on Form 10-KSB for the year ended December
31, 1997;
4. Quarterly Reports on Form 10-QSB and Current Reports on
Form 8-K for the past twelve months;
5. A copy of the Plan; and
6. The Unanimous Consent of the Board of Directors adopting
the Plan, designating the name of the Plan and the name, address and telephone
number of the Plan's Agent.
I have also examined various other documents, books, records,
instruments and certificates of public officials, directors, executive
officers and agents of the Company, and have made such investigations as I
have deemed reasonable, necessary or prudent under the circumstances. Also,
in rendering this opinion, I have reviewed various NRS statutes and judicial
precedence as I have deemed relevant or necessary.
Further, I have discussed the items relied upon in rendering this
opinion and the documents I have examined with other counsel for the Company
and one or more directors and executive officers of the Company, and in all
instances, I have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to me
as originals, the conformity with the original documents of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. I have further assumed that the recipients of these
Securities under the Plan will have paid the consideration required under the
terms of the Plan prior to the issuance of the Securities; that none of the
services performed by the recipients shall be related to "capital raising"
transactions; and that all persons who are or may be deemed to be "affiliates"
of the Company and who are receiving a portion of the Securities, will have
their Securities represented by one or more stock certificates bearing an
appropriate "control" legend, and that any resales of these Securities shall
be made in accordance with applicable federal and state securities laws, rules
and regulations.
Based upon the foregoing and in reliance thereon, it is my opinion
that, subject to the limitations set forth in the Plan, the Securities to be
issued pursuant to the Plan will, upon their issuance and delivery, and after
receipt of full payment therefor, be deemed duly and validly authorized under
the NRS, legally issued under the NRS and fully paid and non-assessable under
the NRS. This opinion is expressly limited in scope to the Securities
described herein and which are to be expressly covered by the above referenced
Registration Statement and does not cover any subsequent issuances of any
securities to be made in the future pursuant to any other plans, if any,
pertaining to services performed in the future. Any such transactions are
required to be included in a new Registration Statement or a post-effective
amendment to the above referenced Registration Statement, which will be
required to include a revised or a new opinion concerning the legality of the
Securities to be issued.
Further, this opinion is expressly limited to the corporate laws
of the State of Nevada, and I express no opinion with respect to the laws of
any other jurisdiction.
No opinion is given with respect to the application or
availability of Form S-8 to register these Securities.
I consent to the filing of this opinion with the Commission as an
exhibit to the above referenced Registration Statement; however, this opinion
is not to be used, circulated, quoted or otherwise referred to for any other
purpose without my prior written consent.
This opinion is based upon my knowledge of the law and facts as of
the date hereof, and I assume no duty to communicate with you with respect to
any matter which may hereafter come to my attention.
Yours very sincerely,
/s/Leonard W. Burningham
Leonard W. Burningham
LWB
[Letterhead of Leonard W. Burningham, Esq.]
July 30, 1998
U.S. Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Re: Consent to be named in the S-8 Registration Statement
of International Heritage, Incorporated, a Nevada
corporation (the "Registrant"), SEC File No. 002-
97690-D, to be filed on or about July 30, 1998,
covering the registration 5,000,000 shares of common
stock of the Company
Ladies and Gentlemen:
I hereby consent to be named in the above referenced Registration
Statement, and to have my opinion appended as an exhibit thereto.
Sincerely yours,
/s/Leonard W. Burningham
Leonard W. Burningham
cc: International Heritage, Incorporated
[Letterhead of Eilers, Jones, Brown & McLeod]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
International Heritage, Incorporated
2626 Glenwood Avenue, Suite 200
Raleigh, NC 27608
Re: Consent to be named in the S-8 Registration Statement
of International Heritage, Incorporated, a Nevada
corporation (the "Registrant"), SEC File No. 002-97690-D,
to be filed on or about July 20, 1998, covering the registration
and issuance of common stock underlying the International
Heritage, Incorporated 1996 Employee Stock Option Plan.
Gentlemen:
We hereby consent to the use of our report dated February 13, 1998,
Except for Note 11, as to which the date is May 1, 1998, in the above
referenced Registration Statement. We also consent to the use of our name as
experts in such Registration Statement.
EILERS, JONES, BROWN & McLEOD, CPAs, PA
July 16, 1998
