As filed with the Securities and Exchange Commission on March 16, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NAVTECH, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
11-2883366
(I.R.S. Employer Identification No.)
2400 Garden Road, Monterey, CA 93940
(Address of Principal Executive Offices)
1999 STOCK OPTION PLAN
(Full Title of Plan)
Duncan Macdonald
Chief Executive Officer
Navtech, Inc.
c/o Navtech Systems Support Inc.
Suite 102
175 Columbia Street West
Waterloo, Ontario Canada N2L-5Z5
Telephone: (519) 747-9883
Telecopier: (519) 747-1003
(Name, Address and Telephone Number of Agent For Service)
Copies of all communications and notices to:
Fred Skolnik, Esq.
Certilman Balin Adler & Hyman, LLP
90 Merrick Avenue
East Meadow, New York 11554
Telephone: (516) 296-7000
Telecopier: (516) 296-7111
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Maximum Maximum
of Securities Amount Offering Aggregate Amount of
To Be To Be Price Offering Registration
Registered Registered Per Share Price Fee
<S> <C> <C> <C> <C>
Common Shares
(par value
$.001 per
share) 29,015(1) $.375(1) $10,880.63 $2.87
- --------------------------- --------------------- --------------------- ---------------------- ------------------------
Common Shares
(par value
$.001 per
share) 250,000(1) $.625(1) $156,250.00 $41.25
- --------------------------- --------------------- --------------------- ---------------------- ------------------------
Common Shares
(par value
$.001 per
share) 591,500(1) $.28125(1) $166,359.37 $43.92
- --------------------------- --------------------- --------------------- ---------------------- ------------------------
Common Shares
(par value
$.001 per
share) 629,485(2) $1.8125(3) $1,140,941.50 $301.21
- --------------------------- --------------------- --------------------- ---------------------- ------------------------
Total $389.25
=========================== ===================== ===================== ====================== ========================
</TABLE>
(1) Represents Common Shares reserved for issuance under the Registrant's 1999
Stock Option Plan (the "Plan") pursuant to outstanding options at the
exercise prices noted.
(2) Represents Common Shares reserved for issuance under the Plan otherwise
than pursuant to outstanding options.
(3) Represents the average of the high and low prices of the Registrant's
Common Shares on March 14, 2000.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Incorporated herein by reference are the following documents filed by the
Registrant with the Securities and Exchange Commission (the "Commission") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"):
(a) Annual Report on Form 10-KSB for the year ended October 31, 1999.
(b) Quarterly Report on Form 10-QSB for the period ended January 31, 2000.
(c) The description of the Registrant's Common Shares contained in the
Registrant's Registration Statement on Form 8-A (File No. 0-15362).
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment
to this Registration Statement which 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 their respective dates of filing.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Certain legal matters in connection with the offering of securities
registered hereunder are being passed upon for the Registrant by Certilman Balin
Adler & Hyman, LLP, 90 Merrick Avenue, East Meadow, New York 11554.
Item 6. Indemnification of Directors and Officers
Article Ninth of the Registrant's Certificate of Incorporation eliminates
the personal liability of directors to the Registrant and its stockholders to
the fullest extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law.
Additionally, the Registrant has included in its Certificate of
Incorporation and its By- laws provisions to indemnify its directors, officers,
employees and agents and to purchase insurance with respect to liability arising
out of the performance of their duties as directors, officers, employees and
agents as permitted by Section 145 of the Delaware General Corporation law. The
Certificate of Incorporation provides further that the indemnification permitted
thereunder shall not be deemed exclusive of any other rights to which the
directors, officers, employees and agents may be entitled
II-1
<PAGE>
under the Registrant's By-laws, any agreement, vote of stockholders or
disinterested directors or otherwise.
The effect of the foregoing is to require the Registrant, to the extent
permitted by law, to indemnify the officers, directors, employees and agents of
the Registrant for any claim arising against such persons in their official
capacities if such person acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the Registrant, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
5 Opinion of Certilman Balin Adler & Hyman, LLP as to the legality
of the Common Shares reserved for issuance under the Registrant's
1999 Stock Option Plan
23.1 Consent of Grant Thornton LLP
23.2 Consent of Certilman Balin Adler & Hyman, LLP (included in the
opinion filed as Exhibit 5 hereto)
24 Powers of Attorney (included in signature page forming a part
hereof)
99 1999 Stock Option Plan
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post- effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
II-2
<PAGE>
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 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 of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) 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 15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Waterloo, Province of Ontario, on the 15th day
of March, 2000.
NAVTECH, INC.
By: /s/ Duncan Macdonald
Duncan Macdonald
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears below
constitutes and appoints Duncan Macdonald with full power to act as 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 other documents in connection therewith with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, and each of his
substitutes, full power and authority to do and perform each and every act and
thing requisite or 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 attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Capacity Date
/s/ Duncan Macdonald Chairman of the Board, Chief March 15, 2000
- ------------------------ Executive Officer and
Duncan Macdonald Director (Principal Executive
Officer)
/s/ David Strucke Chief Financial Officer March 15, 2000
- ------------------------ (Principal Financial and
David Strucke Accounting Officer)
/s/ Dorothy A. English Executive Vice President and March 15, 2000
- ------------------------ Director
Dorothy A. English
/s/ Denis L. Metherell Secretary and Director March 15, 2000
- ------------------------
Denis L. Metherell
/s/ Kenneth Snyder Director March 15, 2000
- ------------------------
Kenneth Snyder
/s/ Russell K. Thal Director March 15, 2000
- ------------------------
Russell K. Thal
EXHIBIT 5
OPINION OF CERTILMAN BALIN ADLER & HYMAN, LLP
March 15, 2000
Navtech, Inc.
2400 Garden Road
Monterey, California 93940
Re: Registration of 1,500,000 Common Shares, par value $.001 per
share, under the Securities Act of 1933, as amended
Gentlemen:
In our capacity as counsel to Navtech, Inc., a Delaware corporation (the
"Company"), we have been asked to render this opinion in connection with a
Registration Statement on Form S-8 being filed contemporaneously herewith by the
Company with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Registration Statement"), covering the issuance of up to
an aggregate of 1,500,000 Common Shares, par value $.001 per share, of the
Company (the "Common Shares") under the Company's 1999 Stock Option Plan (the
"Plan").
In that connection, we have examined the Certificate of Incorporation and
the By- Laws of the Company, each as amended, the Registration Statement and the
Plan and are familiar with corporate proceedings of the Company relating to the
adoption of the Plan. We have also examined such other instruments and documents
as we deemed relevant under the circumstances.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as original, (ii) the conformity
to the originals of all documents submitted as certified, photostatic or
facsimile copies and the authenticity of the originals, (iii) the legal capacity
of natural persons, (iv) the due authorization, execution and delivery of all
documents by all parties and the validity and binding effect thereof and (v) the
conformity to the proceedings of the Board of Directors of all minutes of such
proceedings. We have also assumed that the corporate records furnished to us by
the Company include all corporate proceedings taken by the Company to date.
<PAGE>
Navtech, Inc.
March 15, 2000
Page 2
Based upon and subject to the foregoing, we are of the opinion that the
Common Shares have been duly and validly authorized and, when issued pursuant to
the terms of the Plan, will be duly and validly issued, fully paid and
nonassessable.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement.
This opinion is as of the date hereof, and we do not undertake, and hereby
disclaim, any obligation to advise you of any changes in any of the matters set
forth herein.
We are rendering this opinion only as to the matters expressly set forth
herein, and no opinion should be inferred as to any other matters.
This opinion is for your exclusive use only and is to be utilized and
relied upon only in connection with the matters expressly set forth herein.
Very truly yours,
CERTILMAN BALIN ADLER & HYMAN, LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated December 10, 1999 (except for Note 4, as to
which the date is January 14, 2000) accompanying the consolidated financial
statements included in the Annual Report of Navtech, Inc. (formerly Compuflight,
Inc.) on Form 10-KSB for the year ended October 31, 1999. We hereby consent to
the incorporation by reference of our report in the Registration Statement of
Navtech, Inc on Form S-8 with respect to its 1999 Stock Option Plan.
GRANT THORNTON LLP
Melville, New York
March 13, 2000
<PAGE>
NAVTECH, INC.
1999 Stock Option Plan
1. Purpose of the Plan. The 1999 Stock Option Plan (the "Plan") is intended
to advance the interests of Navtech, Inc. (the "Company") (a) by inducing
individuals or entities of outstanding ability and potential to join and/or
remain with, or provide consulting or advisory services to, the Company, (b) by
encouraging and enabling eligible employees, non-employee Directors, consultants
and advisors to acquire proprietary interests in the Company, and (c) by
providing the participating employees, non-employee Directors, consultants and
advisors with an additional incentive to promote the success of the Company.
This is accomplished by providing for the granting of "Options," which term as
used herein includes both "Incentive Stock Options" and "Nonstatutory Stock
Options," as later defined, to employees, non-employee Directors, consultants
and advisors.
2. Administration. The Plan shall be administered by the Board of Directors
of the Company (the "Board of Directors") or by a committee (the "Committee")
consisting of at least one (1) person chosen by the Board of Directors. Except
as herein specifically provided, the interpretation and construction by the
Board of Directors or the Committee of any provision of the Plan or of any
Option granted under it shall be final and conclusive. The receipt of Options by
Directors, or any members of the Committee, shall not preclude their vote on any
matters in connection with the administration or interpretation of the Plan.
3. Shares Subject to the Plan. The stock subject to Options granted under
the Plan shall be shares of the Company's common stock, par value $.001 per
share (the "Common Stock"), whether authorized but unissued or held in the
Company's treasury, or shares purchased from stockholders expressly for use
under the Plan. The maximum number of shares of Common Stock which may be issued
pursuant to Options granted under the Plan shall not exceed in the aggregate One
Million Five Hundred Thousand shares (1,500,000), subject to adjustment in
accordance with the provisions of Section 12 hereof. The Company shall at all
times while the Plan is in force reserve such number of shares of Common Stock
as will be sufficient to satisfy the requirements of all outstanding Options
granted under the Plan. In the event any Option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, the
unpurchased shares subject thereto shall again be available for Options under
the Plan.
4. Participation. The class of individuals that shall be eligible to
receive Options under the Plan shall be (a) with respect to Incentive Stock
Options described in Section 6 hereof, all employees (including officers) of
either the Company or any subsidiary corporation of the Company, and (b) with
respect to Nonstatutory Stock Options described in Section 7 hereof, all
employees (including officers) and non-employee Directors of, or consultants and
advisors to, either the Company or any subsidiary corporation of the Company;
provided, however, that Nonstatutory Stock Options shall not be granted to any
such consultants and advisors unless (i) bona fide services have been or are to
be rendered by such consultant or advisor and (ii) such services are not in
connection with the offer or sale of securities in a capital raising
transaction. The Board of Directors or the Committee, in its sole discretion,
but subject to the provisions of the Plan, shall determine the employees and
non-employee Directors of, and the consultants and advisors to, the Company and
its subsidiary corporations to whom Options shall be granted, and the number of
shares to be covered by each Option, taking into account the nature of the
employment or services rendered by the individuals being considered, their
annual compensation, their present and potential contributions to the success of
the Company, and such other factors as the Board of Directors or the Committee
may deem relevant.
Page 1
<PAGE>
5. Stock Option Agreement. Each Option granted under the Plan shall be
authorized by the Board of Directors or the Committee, and shall be evidenced by
a Stock Option Agreement which shall be executed by the Company and by the
individual to whom such Option is granted. The Stock Option Agreement shall
specify the number of shares of Common Stock as to which any Option is granted,
the period during which the Option is exercisable, and the option price per
share thereof.
6. Incentive Stock Options. The Board of Directors or the Committee may
grant Options under the Plan, which Options are intended to meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), and which are subject to the following terms and conditions and
any other terms and conditions as may at any time be required by Section 422 of
the Code (referred to herein as an "Incentive Stock Option"):
(a) No Incentive Stock Option shall be granted to individuals other than
employees of the Company or of a subsidiary corporation of the Company.
(b) Each Incentive Stock Option under the Plan must be granted prior to
November 17, 2009, which is within ten (10) years from the date the Plan was
adopted by the Board of Directors.
(c) The option price of the shares subject to any Incentive Stock Option
shall not be less than the fair market value of the Common Stock at the time
such Incentive Stock Option is granted; provided, however, if an Incentive Stock
Option is granted to an individual who owns, at the time the Incentive Stock
Option is granted, more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of a parent or subsidiary
corporation of the Company, the option price of the shares subject to the
Incentive Stock Option shall be at least one hundred ten percent (110%) of the
fair market value of the Common Stock at the time the Incentive Stock Option is
granted.
(d) No Incentive Stock Option granted under the Plan shall be exercisable
after the expiration of ten (10) years from the date of its grant. However, if
an Incentive Stock Option is granted to an individual who owns, at the time the
Incentive Stock Option is granted, more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of a parent or
subsidiary corporation of the Company, such Incentive Stock Option shall not be
exercisable after the expiration of five (5) years from the date of its grant.
Every Incentive Stock Option granted under the Plan shall be subject to earlier
termination as expressly provided in Section 10 hereof.
(e) For purposes of determining stock ownership under this Section 6, the
attribution rules of Section 425(d) of the Code shall apply.
(f) For purposes of the Plan, fair market value shall be determined by the
Board of Directors or the Committee. If the Common Stock is listed on a national
securities exchange or traded on the Over-the-Counter market, fair market value
shall be the closing selling price or, if not available, the closing bid price
or, if not available, the high bid price of the Common Stock quoted on such
exchange, or on the Over-the-Counter market as reported by the National
Association of Securities Dealers Automated Quotation (NASDAQ) system or if the
Common Stock is not listed on NASDAQ, then by the National Quotation Bureau,
Incorporated, as the case may be, on the day immediately preceding the day on
which the Option is granted, or, if there is no trading or bid price on that
day, the closing selling price, closing bid price or high bid price on the most
recent day which precedes that day and for which such prices are available.
7. Nonstatutory Stock Options. The Board of Directors or the Committee may
grant Options under the Plan which are not intended to meet the requirements of
Section 422 of the Code, as well as Options which are intended to meet the
requirements of Section 422 of the Code but the terms of which provide that they
will not be treated as Incentive Stock Options (referred to herein as a
"Nonstatutory Stock Option"). Nonstatutory Stock Options which are not intended
to meet those requirements shall be subject to the following terms and
conditions:
(a) A Nonstatutory Stock Option may be granted to any individual or entity
eligible to receive an Option under the Plan pursuant to Section 4(b) hereof.
(b) The option price of the shares subject to a Nonstatutory Stock Option
shall be determined by the Board of Directors or the Committee, in its sole
discretion, at the time of the grant of the Nonstatutory Stock Option; provided,
however, that the option price of the shares subject to any Nonstatutory Stock
Option shall not be less than the fair market value of the Common Stock at the
time such Nonstatutory Stock Option is granted.
(c) A Nonstatutory Stock Option granted under the Plan may be of such
duration as shall be determined by the Board of Directors or the Committee
(subject to earlier termination as expressly provided in Section 10 hereof);
provided, however, that no Nonstatutory Stock Option granted under the Plan
shall be exercisable after the expiration of ten (10) years from the date of its
grant.
8. Rights of Option Holders. The holder of any Option granted under the
Plan shall have none of the rights of a stockholder with respect to the stock
covered by his Option until such stock shall be transferred to him upon the
exercise of his Option.
9. Transferability. No Option granted under the Plan shall be transferable
by the individual or entity to whom it was granted otherwise than by Will or the
laws of descent and distribution, and, during the lifetime of such individual,
shall not be exercisable by any other person, but only by him.
10. Termination of Employment or Death.
(a) Subject to the terms of the Stock Option Agreement, if the employment
of an employee by, or the services of a non-employee Director for, or consultant
or advisor to, the Company or a subsidiary corporation of the Company shall be
terminated for cause or voluntarily by the employee, non-employee Director,
consultant or advisor, then his or its Option shall expire forthwith. Subject to
the terms of the Stock Option Agreement, and except as provided in subsections
(b) and (c) of this Section 10, if such employment or services shall terminate
for any other reason, then such Option may be exercised at any time within three
(3) months after such termination, subject to the provisions of subsection (d)
of this Section 10. For purposes of the Plan, the retirement of an individual
either pursuant to a pension or retirement plan adopted by the Company or at the
normal retirement date prescribed from time to time by the Company shall be
deemed to be termination of such individual's employment other than voluntarily
or for cause. For purposes of this subsection (a), an employee, non-employee
Director, consultant or advisor who leaves the employ or services of the Company
to become an employee or non-employee Director of, or a consultant or advisor
to, the Company, a subsidiary corporation of the Company or a corporation (or
subsidiary or parent corporation of the corporation) which has assumed the
Option of the Company as a result of a corporate reorganization, etc., shall not
be considered to have terminated his employment or services.
(b) Subject to the terms of the Stock Option Agreement, if the holder of an
Option under the Plan dies (i) while employed by, or while serving as a
non-employee Director for or a consultant or advisor to, the Company or a
subsidiary corporation of the Company, or (ii) within three (3) months after the
termination of his employment or services other than voluntarily by the employee
or non-employee Director, consultant or advisor, or for cause, then such Option
may, subject to the provisions of subsection (d) of this Section 10, be
exercised by the estate of the employee or non-employee Director, consultant or
advisor, or by a person who acquired the right to exercise such Option by
bequest or inheritance or by reason of the death of such employee or
non-employee Director, consultant or advisor, at any time within one (1) year
after such death.
(c) Subject to the terms of the Stock Option Agreement, if the holder of an
Option under the Plan ceases employment or services because of permanent and
total disability (within the meaning of Section 22(e)(3) of the Code) while
employed by, or while serving as a non-employee Director for or consultant or
advisor to, the Company or a subsidiary corporation of the Company, then such
Option may, subject to the provisions of subsection (d) of this Section 10, be
exercised at any time within one (1) year after his termination of employment,
termination of Directorship or termination of consulting or advisory services,
as the case may be, due to the disability.
(d) An Option may not be exercised pursuant to this Section 10 except to
the extent that the holder was entitled to exercise the Option at the time of
termination of employment, termination of Directorship, termination of
consulting or advisory services, or death, and in any event may not be exercised
after the expiration of the Option.
(e) For purposes of this Section 10, the employment relationship of an
employee of the Company or of a subsidiary corporation of the Company will be
treated as continuing intact while he is on military or sick leave or other bona
fide leave of absence (such as temporary employment by the Government) if such
leave does not exceed ninety (90) days, or, if longer, so long as his right to
reemployment is guaranteed either by statute or by contract.
11. Exercise of Options.
(a) Unless otherwise provided in the Stock Option Agreement, any Option
granted under the Plan shall be exercisable in whole at any time, or in part
from time to time, prior to expiration. The Board of Directors or the Committee,
in its absolute discretion, may provide in any Stock Option Agreement that the
exercise of any Options granted under the Plan shall be subject (i) to such
condition or conditions as it may impose, including, but not limited to, a
condition that the holder thereof remain in the employ or service of, or
continue to provide consulting or advisory services to, the Company or a
subsidiary corporation of the Company for such period or periods from the date
of grant of the Option as the Board of Directors or the Committee, in its
absolute discretion, shall determine; and (ii) to such limitations as it may
impose, including, but not limited to, a limitation that the aggregate fair
market value of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by any employee during any calendar year
(under all plans of the Company and its parent and subsidiary corporations)
shall not exceed one hundred thousand dollars ($100,000). In addition, in the
event that under any Stock Option Agreement the aggregate fair market value of
the Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by any employee during any calendar year (under all plans of
the Company and its parent and subsidiary corporations) exceeds one hundred
thousand dollars ($100,000), the Board of Directors or the Committee may, when
shares are transferred upon exercise of such Options, designate those shares
which shall be treated as transferred upon exercise of an Incentive Stock Option
and those shares which shall be treated as transferred upon exercise of a
Nonstatutory Stock Option.
(b) An Option granted under the Plan shall be exercised by the delivery by
the holder thereof to the Company at its principal office (attention of the
Secretary) of written notice of the number of shares with respect to which the
Option is being exercised. Such notice shall be accompanied or followed within
ten (10) days of delivery thereof by payment of the full option price of such
shares, and payment of such option price shall be made by the holder's delivery
of (i) his check payable to the order of the Company, or (ii) previously
acquired Common Stock, the fair market value of which shall be determined as of
the date of exercise, or by the holder's delivery of any combination of the
foregoing (i) and (ii).
12. Adjustment Upon Change in Capitalization.
(a) In the event that the outstanding Common Stock is hereafter changed by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, reverse split, stock
dividend or the like, an appropriate adjustment shall be made by the Board of
Directors or the Committee in the aggregate number of shares available under the
Plan, in the number of shares and option price per share subject to outstanding
Options, and in any limitation on exerciseability referred to in Section
11(a)(ii) hereof which is set forth in outstanding Incentive Stock Options. If
the Company shall be reorganized, consolidated, or merged with another
corporation, the holder of an Option shall be entitled to receive upon the
exercise of his Option the same number and kind of shares of stock or the same
amount of property, cash or securities as he would have been entitled to receive
upon the happening of any such corporate event as if he had been, immediately
prior to such event, the holder of the number of shares covered by his Option;
provided, however, that in such event the Board of Directors or the Committee
shall have the discretionary power to take any action necessary or appropriate
to prevent any Incentive Stock Option granted hereunder which is intended to be
an "incentive stock option" from being disqualified as such under the then
existing provisions of the Code or any law amendatory thereof or supplemental
thereto.
(b) Any adjustment in the number of shares shall apply proportionately to
only the unexercised portion of the Option granted hereunder. If fractions of a
share would result from any such adjustment, the adjustment shall be revised to
the next lower whole number of shares.
13. Further Conditions of Exercise.
(a) Unless prior to the exercise of the Option the shares issuable upon
such exercise have been registered with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, the notice of exercise shall
be accompanied by a representation or agreement of the person or estate
exercising the Option to the Company to the effect that such shares are being
acquired for investment purposes and not with a view to the distribution
thereof, or such other documentation as may be required by the Company, unless
in the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with such Act.
(b) The Company shall not be obligated to deliver any Common Stock until it
has been listed on each securities exchange on which the Common Stock may then
be listed or NASDAQ, as the case may be, or until there has been qualification
under or compliance with such federal or state laws, rules or regulations as the
Company may deem applicable. The Company shall use reasonable efforts to obtain
such listing, qualification and compliance.
14. Effectiveness of the Plan. The Plan was adopted by the Board of
Directors on November 18, 1999. The Plan shall be subject to approval on or
before November 17, 2000, which is within one (1) year of adoption of the Plan
by the Board of Directors, by the affirmative vote of the holders of a majority
of the securities of the Company present, or represented, and entitled to vote
thereon at a meeting duly held in accordance with the laws of the State of
Delaware or by the written consent of the holders of a majority of the
securities of the Company entitled to vote thereon (in either case, "Majority
Vote"). The Plan shall also be subject to stockholder approval of a Certificate
of Amendment to the Company's Certificate of Incorporation pursuant to which the
number of shares of Common Stock of the Company authorized to be issued shall be
increased at least by the maximum number of shares which may be issued pursuant
to Options granted under the Plan. In the event either such stockholder approval
is withheld or otherwise not received on or before November 17, 2000, the Plan
and all Options that may have been granted hereunder shall become null and void.
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15. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate on November 17, 2009, which is within ten (10) years from the date of
its adoption by the Board of Directors, or sooner as hereinafter provided, and
no Option shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified, or amended by
the affirmative Majority Vote of the holders of the securities of the Company
entitled to vote thereon.
(c) The Board of Directors may at any time, on or before the termination
date referred to in Section 15(a) hereof, terminate the Plan, or from time to
time make such modifications or amendments to the Plan as it may deem advisable;
provided, however, that the Board of Directors shall not, without approval by
the affirmative Majority Vote of the holders of the securities of the Company
entitled to vote thereon, increase (except as otherwise provided by Section 12
hereof) the maximum number of shares as to which Options may be granted
hereunder, change the designation of the employees or class of employees
eligible to receive Options, or make any other change which would prevent any
Incentive Stock Option granted hereunder which is intended to be an "incentive
stock option" from qualifying as such under the then existing provisions of the
Code or any law amendatory thereof or supplemental thereto.
(d) No termination, modification, or amendment of the Plan may, without the
consent of the individual or entity to whom any Option shall have been granted,
adversely affect the rights conferred by such Option.
16. Not a Contract of Employment. Nothing contained in the Plan or in any
Stock Option Agreement executed pursuant hereto shall be deemed to confer upon
any individual or entity to whom an Option is or may be granted hereunder any
right to remain in the employ or service of the Company or a subsidiary
corporation of the Company or any entitlement to any remuneration or other
benefit pursuant to any consulting or advisory arrangement.
17. Use of Proceeds. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.
18. Indemnification of Board of Directors or Committee. In addition to such
other rights of indemnification as they may have, the members of the Board of
Directors or the Committee, as the case may be, shall be indemnified by the
Company to the extent permitted under applicable law against all costs and
expenses reasonably incurred by them in connection with any action, suit, or
proceeding to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any rights
granted thereunder and against all amounts paid by them in settlement thereof or
paid by them in satisfaction of a judgment of any such action, suit or
proceeding, except a judgment based upon a finding of bad faith. Upon the
institution of any such action, suit, or proceeding, the member or members of
the Board of Directors or the Committee, as the case may be, shall notify the
Company in writing, giving the Company an opportunity at its own cost to defend
the same before such member or members undertake to defend the same on his or
their own behalf.
19. Definitions. For purposes of the Plan, the terms "parent corporation"
and "subsidiary corporation" shall have the meanings set forth in Sections
425(e) and 425(f) of the Code, respectively, and the masculine shall include the
feminine and the neuter as the context requires.
20. Governing Law. The Plan shall be governed by, and all questions arising
hereunder shall be determined in accordance with, the laws of the State of
Delaware, excluding choice of law principles thereof.
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