JANEX INTERNATIONAL INC, S-8, 2000-03-24

JANEX INTERNATIONAL INC
S-8, 2000-03-24
GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES)

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 2000
Registration No. 333-

--------------------------

FORM S-8
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

--------------------------

JANEX INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)

COLORADO 84-1034251
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)

2999 N. 44TH ST., SUITE 225, PHOENIX, AZ 85018 (602) 808-8765
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)

--------------------------

JANEX INTERNATIONAL, INC.
2000 COMBINATION STOCK OPTION PLAN
(Full Title of Plan)

--------------------------

VINCENT W. GOETT, PRESIDENT
JANEX INTERNATIONAL, INC.
2999 N. 44TH ST., SUITE 225
PHOENIX, AZ 85018
(602) 808-8765
(Name, Address and Telephone Number,
Including Area Code, of Agent for Service)

WITH A COPY TO:

JOHN G. NOSSIFF, JR., ESQ.
BROWN, RUDNICK, FREED & GESMER
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
(617) 856-8200

--------------------------

CALCULATION OF REGISTRATION FEE

- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to Be Offering Price Aggregate Registration
Securities to Be Registered Registered Per Share(1) Offering Price(1) Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 2,500,000 Shares(2) $1.937 $4,842,500 $1,279
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------

</TABLE>

(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act of 1933, on the basis of the average
of the high and low reported price of the Common Stock as reported on the
National Association of Securities Dealers OTC Bulletin Board on March 20,
2000.

(2) Such presently indeterminable number of additional shares of Common Stock
are also registered hereunder as may be issued in the event of a merger,
consolidation, reorganization, recapitalization, stock dividend, stock
split or other similar change in Common Stock.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.

The following documents are hereby incorporated by reference into this
Registration Statement:

(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act");

(b) The Registrant's quarterly report on Form 10-Q for the
quarters ended March 31, 1999, June 30, 1999 and September 30,
1999 filed pursuant to Section 13(a) or 15(d) of the Exchange
Act; and

(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A, as
amended (Registration No. 0-17929), filed under the Exchange
Act with the Securities and Exchange Commission on August 15,
1989.

All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date hereof and prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.

ITEM 4. DESCRIPTION OF SECURITIES.

Not Applicable.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.

Not Applicable.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Registrant has provisions in its Articles of Incorporation which
limit the liability of its directors. As permitted by the Colorado Corporation
Code, directors will not be liable to the Registrant or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Registrant
or to its shareholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) for acts
specified under Section 7-108-403 (formerly Section 7-5-114) of the Colorado
Corporation Code, or (iv) for any transaction from which the director derived an
improper personal benefit.

The Registrant has also adopted provisions in its Articles of
Incorporation providing that the Registrant has the right and/or duty to
indemnify (i) a director of the Registrant to the extent provided by statute,
and (ii) any officer, employee, or agent of the Registrant who is not a director
to the extent

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provided by law, or to a greater extent if consistent with law and if provided
by resolution of the Registrant's shareholders or directors, or in a contract.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers or controlling persons of the Registrant pursuant to the Registrant's
Articles of Incorporation, By-laws, or otherwise, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.

Not Applicable.

ITEM 8. EXHIBITS.

- -------------------------------------------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
4.1* Specimen Common Stock Certificate, filed as Exhibit 4.1 to the Company's Registration Statement
on Form S-1 (File No. 33-36261).
- -------------------------------------------------------------------------------------------------------------------
4.2* Specimen Warrant Certificate, filed as Exhibit 4.2 to Amendment No. 2 to the Company's
Registration Statement on Form S-1 (File No. 33-26261).
- -------------------------------------------------------------------------------------------------------------------
4.3* Form of Warrant Agreement, filed as Exhibit 4.3 to Amendment No. 2 to the Company's Registration
Statement on Form S-1 (File No. 33-26261).
- -------------------------------------------------------------------------------------------------------------------
4.4* Settlement Warrant Agreement dated March 26, 1996 by and between the Company and Deco Disc
Industries, Inc., filed as Exhibit 4.10 to the Company's Form 10-KSB, for the fiscal year ended
December 31, 1995.
- -------------------------------------------------------------------------------------------------------------------
4.5* Warrant Agreement dated April 19, 1996, by and between the Company and the Moore Trust, filed as
Exhibit 4.10 to Post-Effective Amendment No. 1 to the Company's Registration Statement dated
August 6, 1996 (File No. 33-87622).
- -------------------------------------------------------------------------------------------------------------------
4.6* Warrant Agreement dated June 29, 1996, by and between the Company and Leslie Friedland, filed as
Exhibit 4.11 to Post-Effective Amendment No. 1 to the Company's Registration Statement dated
August 6, 1996 (File No. 33-87622).
- -------------------------------------------------------------------------------------------------------------------
4.7* Warrant Agreement dated June 28, 1996, by and between the Company and Daniel Lesnick, filed as
Exhibit 4.12 to Post-Effective Amendment No. 1 to the Company's Registration Statement dated
August 6, 1996 (File No. 33-87622).
- -------------------------------------------------------------------------------------------------------------------
5** Opinion of Brown, Rudnick, Freed & Gesmer.
- -------------------------------------------------------------------------------------------------------------------
23.1** Consent of Brown, Rudnick, Freed & Gesmer (contained in its opinion filed as Exhibit 5).
- -------------------------------------------------------------------------------------------------------------------
23.2** Consent of Ernst & Young LLP, independent auditors.
- -------------------------------------------------------------------------------------------------------------------
23.3** Consent of BDO Seidman, LLP, independent auditors.
- -------------------------------------------------------------------------------------------------------------------
24** Power of Attorney (included on the Signature Page of this Registration Statement).
- -------------------------------------------------------------------------------------------------------------------
99.1** Janex International Inc. 2000 Combination Stock Option Plan.
- -------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

* Not filed herewith. In accordance with Rule 411 promulgated pursuant to the
Securities Act of 1933, as amended, reference is made to the documents
previously filed with the Commission, which are incorporated by reference
herein.

** Filed herewith.

ITEM 9. UNDERTAKINGS.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;

(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 this Registration Statement;

PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act that are
incorporated by reference in this Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each 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, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Registrant's Certificate of Incorporation, as
amended, By-Laws, 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 Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a

<PAGE>

director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

<PAGE>

SIGNATURES

THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Phoenix, Arizona, on
March 22, 2000.

JANEX INTERNATIONAL, INC.

By: /S/ Vincent W. Goett
----------------------------
Vincent W. Goett, President

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Vincent W. Goett and Charles M. Foley, and each
of them (with full power to each of them to act alone), his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or 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 attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE

/S/ Vincent W. Goett Chairman of the Board, President March 22, 2000
- --------------------- and Chief Executive Officer
Vincent W. Goett (Principal Executive Officer)

/s/ Charles M. Foley Chief Financial Officer, Treasurer, March 22, 2000
- -------------------- Secretary
Charles M. Foley (Principal Financial Officer)

/s/ Daniel Lesnick Director March 22, 2000
- --------------------
Daniel Lesnick

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EXHIBIT INDEX

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** Filed herewith.

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EXHIBIT 5

March 24, 2000

Janex International, Inc.
2999 North 44th Street
Suite 225
Phoenix, AZ 85018

Re: Janex International, Inc., a Colorado corporation
Registration Statement On Form S-8

Gentlemen:

We are counsel for Janex International, Inc., a Colorado corporation
(the "Company"). We have been asked to deliver this opinion in connection with
the preparation and filing with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), of a Registration Statement on
Form S-8 (the "Registration Statement") relating to 2,500,000 shares of the
Company's Common Stock, no par value per share (the "Shares"). This opinion
letter, together with Schedule A attached hereto (this "Opinion Letter"), is
being rendered in connection with the filing of the Registration Statement.

The 2,500,000 shares covered by this Registration Statement are
issuable under the Company's 2000 Combination Stock Option Plan (the "Plan").

In connection with this Opinion Letter, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of the following documents (collectively, the "Documents"):

1. a certificate from the Secretary of State of the State of Colorado
dated February 8, 2000 as to the legal existence and good standing of the
Company;

2. a copy of the Articles of Incorporation of the Company, as amended
to date, and a certificate of the Secretary that there have been no further
amendments thereto;

3. a copy of the By-laws of the Company, certified by the Secretary
of the Company as presently being in effect;

4. certain proceedings of the directors of the Company relative to
the Plan and Options granted under the Plan;

5. the Plan;

6. a letter of recent date from the Company's transfer agent as to
the issued and outstanding shares of the Company's Common Stock, no par value
per share;

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7. a letter from the Company dated March 14, 2000 regarding the
number of issued and outstanding securities of the Company;

8. a waiver dated March 22, 2000 from the holder of the Company's
Class A Convertible Preferred Stock;

9. a representation letter dated March 9, 2000 from the Company and
Howard R. Baer regarding consulting services provided and to be provided to the
Company by Mr. Baer;

10. a letter agreement between Palmilla Ventures Limited
Partnership and the Company dated March 9, 2000 regarding the surrender of
10,000,000 shares of common stock to the Company;

11. a stock assignment (separate from certificate) transferring
10,000,000 shares of common stock from Palmilla Ventures Limited Partnership
to the Company;

12. a letter from American Stock Transfer and Trust Company
concerning Palmilla Ventures Limited Partnership's record ownership of the
Company's common stock; and

13. the Registration Statement.

We have assumed, for the purposes of our opinion herein, that any
conditions to the issuance of the Shares under the Plan have been or will be
satisfied in full. We have also assumed, for purposes of the opinion, that
the transactions contemplated by the letter agreement between the Company and
Palmilla Ventures Limited Partnership will be consummated prior to the
issuance of any Shares.

We have, without independent investigation, relied upon the
representations and warranties of the various parties as to matters of objective
fact contained in the Documents.

In addition, this Firm, in rendering legal opinions, customarily makes
certain assumptions which are described in Schedule A hereto. In the course of
our representation of the Company in connection with the preparation of the
Registration Statement, nothing has come to our attention which causes us to
believe reliance upon any of these assumptions is inappropriate, and, with your
concurrence, the opinion hereafter expressed is based upon those assumptions.
The Enumerated Party referred to in Schedule A is the Company.

We have not made any independent review or investigation of orders,
judgments, rules or other regulations or decrees by which the Company or any of
its property may be bound, nor have we made any independent investigation as to
the existence of actions, suits, investigations or proceedings, if any, pending
or threatened against the Company.

With your concurrence, our opinion hereafter expressed is based solely
upon (1) our review of the Documents, (2) discussions with those of our
attorneys who have devoted substantive attention to the preparation of the
Registration Statement, and (3) such review of published sources of law as we
have deemed necessary.

Our opinion contained herein is limited to the laws of the
Commonwealth of Massachusetts, the laws of the State of Delaware and the
Federal law of the United States of America. To the extent that the Plan or
any agreement issued thereunder provides that it should be governed by the
laws of any jurisdiction other than the Commonwealth of Massachusetts, our
opinion is being rendered as if only the internal laws of the Commonwealth of
Massachusetts and the General Corporation Law of Delaware were applicable
thereto, notwithstanding the governing law provisions of the Plan or any
agreement to the contrary.

We express no legal opinion upon any matter other than that explicitly
addressed below, and our express opinion therein contained shall not be
interpreted to be an implied opinion upon any other matter.

<PAGE>

Based upon and subject to the foregoing, we are of the opinion that the
issuance of the Shares has been duly authorized and, when issued and paid for in
accordance with the terms and conditions of the Plan, the Shares will be validly
issued, fully paid, and non-assessable.

We hereby consent to the reference to this firm in the Registration
Statement and to the filing of this opinion as Exhibit 5 to the Registration
Statement.

Very truly yours,

BROWN, RUDNICK, FREED & GESMER, P.C.

By: /s/ John G. Nossiff, Jr.
------------------------------
John G. Nossiff, Jr., a Member

<PAGE>

SCHEDULE A

BROWN, RUDNICK, FREED & GESMER
STANDARD ASSUMPTIONS

In rendering legal opinions, Brown, Rudnick, Freed & Gesmer makes
certain customary assumptions described below:

1. Each natural person executing any of the Documents has sufficient legal
capacity to enter into such Documents.

2. Each Document is accurate, complete and authentic, each original is
authentic, each copy conforms to an authentic original and all
signatures are genuine.

3. All official public records are accurate, complete and properly indexed
and filed.

4. There has not been any mutual mistake of fact or misunderstanding,
fraud, duress, or undue influence by or among any of the parties to the
Documents.

5. The conduct of the parties to the Documents has complied in the past
and will comply in the future with any requirement of good faith, fair
dealing and conscionability.

6. The Enumerated Party will obtain all permits and governmental approvals
required in the future and take all actions similarly required relevant
to its performance of its obligations under the Documents.

7. All parties to or bound by the Documents will act in accordance with,
and will refrain from taking any action that is forbidden by, the terms
and conditions of the Documents.

8. There are no agreements or understandings among the parties to or bound
by the Documents, and there is no usage of trade or course of prior
dealing among such parties, that would define, modify, waive, or
qualify the terms of any of the Documents.

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EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Registration
Statement on Form S-8 pertaining to the Janex International, Inc. 2000
Combination Stock Option Plan of our report dated April 7, 1999 with respect to
the consolidated financial statements of Janex International, Inc. (a Colorado
corporation) included in its Annual Report on Form 10-K for the year ended
December 31, 1998, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Phoenix, Arizona
March 20, 2000

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EXHIBIT 23.3

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the incorporation by reference in this Registration
Statement on Form S-8 pertaining to the Janex International, Inc. 2000
Combination Stock Option Plan of our report dated March 30, 1998 with respect to
the consolidated financial statements of Janex International, Inc. (a Colorado
corporation) for the two years ended December 31, 1997, included in its Annual
Report on Form 10-K for the year ended December 31, 1998, filed with the
Securities and Exchange Commission.

/s/ BDO Seidman, LLP

Woodbridge, NJ
March 20, 2000

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EXHIBIT 99.1

JANEX INTERNATIONAL, INC.

2000 COMBINATION STOCK OPTION PLAN

SECTION I. PURPOSE OF THE PLAN.

The purposes of this Janex International, Inc. 2000 Combination Stock
Option Plan (the "2000 Plan") are (i) to provide long-term incentives and
rewards to those key employees (the "Employee Participants") of Janex
International, Inc., a Colorado corporation (the "Corporation"), and its
subsidiaries (if any), and any other persons (the "Non-employee Participants")
who are in a position to contribute to the long-term success and growth of the
Corporation and its subsidiaries, (ii) to assist the Corporation in retaining
and attracting executives and key employees with requisite experience and
ability, and (iii) to associate more closely the interests of such executives
and key employees with those of the Corporation's stockholders.

SECTION II. DEFINITIONS.

"CODE" is the Internal Revenue Code of 1986, as it may be amended from
time to time.

"COMMON STOCK" is the common stock, no par value, of the Corporation.

"COMMITTEE" is defined in Section III, paragraph (a).

"CORPORATION" is defined in Section I.

"CORPORATION ISOS" are all stock options (including 2000 Plan ISOs)
which (i) are Incentive Stock Options and (ii) are granted under any plans
(including this 2000 Plan) of the Corporation, a Parent Corporation and/or a
Subsidiary Corporation.

"EMPLOYEE PARTICIPANTS" is defined in Section I.

"FAIR MARKET VALUE" of any property is the value of the property as
reasonably determined by the Committee.

"INCENTIVE STOCK OPTION" is a stock option which is treated as an
incentive stock option under Section 422 of the Code.

"2000 PLAN" is defined in Section I.

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"2000 PLAN ISOS" are Stock Options which are Incentive Stock Options.

"NON-EMPLOYEE PARTICIPANTS" is defined in Section I.

"NON-QUALIFIED OPTION" is a Stock Option which does not qualify as an
Incentive Stock Option or for which the Committee provides, in the terms of such
option and at the time such option is granted, that the option shall not be
treated as an Incentive Stock Option.

"PARENT CORPORATION" has the meaning provided in Section 424(e) of the
Code.

"PARTICIPANTS" are all persons who are either Employee Participants or
Non-employee Participants.

"PERMANENT AND TOTAL DISABILITY" has the meaning provided in Section
22(e)(3) of the Code.

"RULE 16B-3" means Securities and Exchange Commission Rule 16b-3.

"SECTION 16" means Section 16 of the Securities Exchange Act of 1934,
as amended, or any similar or successor statute, and any rules, regulations, or
policies adopted or applied thereunder.

"STOCK OPTIONS" are rights granted pursuant to this 2000 Plan to
purchase shares of Common Stock at a fixed price.

"SUBSIDIARY CORPORATION" has the meaning provided in Section 424(f) of
the Code.

"TEN PERCENT STOCKHOLDER" means, with respect to a 2000 Plan ISO, any
individual who directly or indirectly owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Corporation or any
Parent Corporation or any Subsidiary Corporation at the time such 2000 Plan ISO
is granted.

SECTION III. ADMINISTRATION.

(a) THE COMMITTEE. This 2000 Plan shall be administered by the Board of
Directors or by a compensation committee consisting solely of two or more
"non-employee directors", as defined in Rule 16b-3, who shall be designated by
the Board of Directors of the Corporation (the administering body is hereafter
referred to as the "Committee"). The Committee shall serve at the pleasure of
the Board of Directors, which may from time to time, and in its sole discretion,

<PAGE>

discharge any member, appoint additional new members in substitution for those
previously appointed and/or fill vacancies however caused. A majority of the
Committee shall constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present shall be deemed the action
of the Committee. No person shall be eligible to be a member of the Committee if
that person's membership would prevent the plan from complying with Section 16,
if applicable to the Corporation.

(b) AUTHORITY AND DISCRETION OF THE COMMITTEE. Subject to the express
provisions of this 2000 Plan and provided that all actions taken shall be
consistent with the purposes of this 2000 Plan, and subject to ratification by
the Board of Directors only if required by applicable law, the Committee shall
have full and complete authority and the sole discretion to: (i) determine those
persons who shall constitute key employees eligible to be Employee Participants;
(ii) select the Participants to whom Stock Options shall be granted under this
2000 Plan; (iii) determine the size and the form of the Stock Options, if any,
to be granted to any Participant; (iv) determine the time or times such Stock
Options shall be granted including the grant of Stock Options in connection with
other awards made, or compensation paid, to the Participant; (v) establish the
terms and conditions upon which such Stock Options may be exercised and/or
transferred, including the exercise of Stock Options in connection with other
awards made, or compensation paid, to the Participant; (vi) make or alter any
restrictions and conditions upon such Stock Options and the Stock received on
exercise thereof, including, but not limited to, providing for limitations on
the Participant's right to keep any Stock received on termination of employment;
(vii) determine whether the Participant or the Corporation has achieved any
goals or otherwise satisfied any conditions or requirements that may be imposed
on or related to the exercise of Stock Options; and (viii) adopt such rules and
regulations, establish, define and/or interpret these and any other terms and
conditions, and make all determinations (which may be on a case-by-case basis)
deemed necessary or desirable for the administration of this 2000 Plan.
Notwithstanding any provision of this 2000 Plan to the contrary, only Employee
Participants shall be eligible to receive 2000 Plan ISOs.

(c) APPLICABLE LAW. This 2000 Plan and all Stock Options shall be
governed by the law of the state in which the Corporation is incorporated.

SECTION IV. TERMS OF STOCK OPTIONS.

(a) AGREEMENTS. Stock Options shall be evidenced by a written agreement
between the Corporation and the Participant awarded the Stock Option. This
agreement shall be in such form, and contain such terms and conditions (not
inconsistent with this 2000 Plan) as the Committee may determine. If the Stock
Option described therein is not intended to be an Incentive Stock Option, but
otherwise qualifies as an Incentive Stock Option, the agreement shall include
the following or a similar statement: "This stock option is not intended to be
an Incentive

<PAGE>

Stock Option, as that term is described in Section 422 of the Internal Revenue
Code of 1986, as amended."

(b) TERM. Stock Options shall be for such periods as may be determined
by the Committee, provided that in the case of 2000 Plan ISOs, the term of any
such 2000 Plan ISO shall not extend beyond three months after the time the
Participant ceases to be an employee of the Corporation. Notwithstanding the
foregoing, the Committee may provide in a 2000 Plan ISO that in the event of the
Permanent and Total Disability or death of the Participant, the 2000 Plan ISO
may be exercised by the Participant or his estate (if applicable) for a period
of up to one year after the date of such Permanent and Total Disability or
Death. In no event may a 2000 Plan ISO be exercisable (including provisions, if
any, for exercise in installments) subsequent to ten years after the date of
grant, or, in the case of 2000 Plan ISOs granted to Ten Percent Stockholders,
more than five years after the date of grant.

(c) PURCHASE PRICE. The purchase price of shares purchased pursuant to
any Stock Option shall be determined by the Committee, and shall be paid by the
Participant or other person permitted to exercise the Stock Option in full upon
exercise, (i) in cash, (ii) by delivery of shares of Common Stock (valued at
their Fair Market Value on the date of such exercise), (iii) any other property
(valued at its Fair Market Value on the date of such exercise), or (iv) any
combination of cash, stock and other property, with any payment made pursuant to
subparagraphs (ii), (iii) or (iv) only as permitted by the Committee, in its
sole discretion. In no event will the purchase price of Common Stock be less
than the par value of the Common Stock. Furthermore, the purchase price of
Common Stock subject to a 2000 Plan ISO shall not be less than the Fair Market
Value of the Common Stock on the date of the issuance of the 2000 Plan ISO,
provided that in the case of 2000 Plan ISOs granted to Ten Percent Stockholders,
the purchase price shall not be less than 110% of the Fair Market Value of the
Common Stock on the date of issuance of the 2000 Plan ISO.

(d) FURTHER RESTRICTIONS AS TO INCENTIVE STOCK OPTIONS. To the extent
that the aggregate Fair Market Value of Common Stock with respect to which
Corporation ISOs (determined without regard to this section) are exercisable for
the first time by any Employee Participant during any calendar year exceeds
$100,000, such Corporation ISOs shall be treated as options which are not
Incentive Stock Options. For the purpose of this limitation, options shall be
taken into account in the order granted, and the Committee may designate that
portion of any Corporation ISO that shall be treated as not an Incentive Stock
Option in the event that the provisions of this paragraph apply to a portion of
any option, unless otherwise required by the Code or regulations of the Internal
Revenue Service. The designation described in the preceding sentence may be made
at such time as the Committee considers appropriate, including after the
issuance of the option or at the time of its exercise. For the purpose of this
section, Fair Market Value shall be determined as of the time the option with
respect to such stock is granted.

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(e) RESTRICTIONS. At the discretion of the Committee, the Common Stock
issued pursuant to the Stock Options granted hereunder may be subject to
restrictions on vesting or transferability. For the purposes of this limitation,
options shall be taken into account in the order granted.

(f) WITHHOLDING OF TAXES. Pursuant to applicable federal, state, local
or foreign laws, the Corporation may be required to collect income or other
taxes upon the grant of a Stock Option to, or exercise of a Stock Option by, a
holder. The Corporation may require, as a condition to the exercise of a Stock
Option, or demand, at such other time as it may consider appropriate, that the
Participant pay the Corporation the amount of any taxes which the Corporation
may determine is required to be withheld or collected, and the Participant shall
comply with the requirement or demand of the Corporation. In its discretion, the
Corporation may withhold shares to be received upon exercise of a Stock Option
if it deems this an appropriate method for withholding or collecting taxes.

(g) SECURITIES LAW COMPLIANCE. Upon exercise (or partial exercise) of a
Stock Option, the Participant or other holder of the Stock Option shall make
such representations and furnish such information as may, in the opinion of
counsel for the Corporation, be appropriate to permit the Corporation to issue
or transfer Stock in compliance with the provisions of applicable federal or
state securities laws. The Corporation, in its discretion, may postpone the
issuance and delivery of Stock upon any exercise of this Option until completion
of such registration or other qualification of such shares under any federal or
state laws, or stock exchange listing, as the Corporation may consider
appropriate. Furthermore, the Corporation is not obligated to register or
qualify the shares of Common Stock to be issued upon exercise of a Stock Option
under federal or state securities laws (or to register or qualify them at any
time thereafter), and it may refuse to issue such shares if, in its sole
discretion, registration or exemption from registration is not practical or
available. The Corporation may require that prior to the issuance or transfer of
Stock upon exercise of a Stock Option, the Participant enter into a written
agreement to comply with any restrictions on subsequent disposition that the
Corporation deems necessary or advisable under any applicable federal and state
securities laws. Certificates of Stock issued hereunder shall bear a legend
reflecting such restrictions.

(h) RIGHT TO STOCK OPTION. No employee of the Corporation or any other
person shall have any claim or right to be a participant in this 2000 Plan or to
be granted a Stock Option hereunder. Neither this 2000 Plan nor any action taken
hereunder shall be construed as giving any person any right to be retained in
the employ of the Corporation. Nothing contained hereunder shall be construed as
giving any person any equity or interest of any kind in any assets of the
Corporation or creating a trust of any kind or a fiduciary relationship of any
kind between the Corporation and any such person. As to any claim for any unpaid
amounts under this 2000 Plan, any person having a claim for payments shall be an
unsecured creditor.

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(i) INDEMNITY. Neither the Board of Directors nor the Committee, nor
any members of either, nor any employees of the Corporation or any parent,
subsidiary, or other affiliate, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with their responsibilities with respect to this 2000 Plan, and the Corporation
hereby agrees to indemnify the members of the Board of Directors, the members of
the Committee, and the employees of the Corporation and its parent or
subsidiaries in respect of any claim, loss, damage, or expense (including
reasonable counsel fees) arising from any such act, omission, interpretation,
construction or determination to the full extent permitted by law.

(j) PARTICIPATION BY FOREIGNERS. Without amending this 2000 Plan,
except to the extent required by the Code in the case of Incentive Stock
Options, the Committee may modify grants made to participants who are foreign
nationals or employed outside the United States so as to recognize differences
in local law, tax policy, or custom.

SECTION V. AMENDMENT AND TERMINATION: ADJUSTMENTS UPON CHANGES IN
STOCK.

The Board of Directors of the Corporation may at any time, and from
time to time, amend, suspend or terminate this 2000 Plan or any portion thereof,
provided that no amendment shall be made without approval of the Corporation's
stockholders if such approval is necessary to comply with any applicable tax
requirement, any applicable rules or regulations of the Securities and Exchange
Commission, including Rule 16b-3 (or any successor rule thereunder), or the
rules and regulations of any exchange or stock market on which the Corporation's
securities are listed or quoted. Except as provided herein, no amendment,
suspension or termination of this 2000 Plan may affect the rights of a
Participant to whom a Stock Option has been granted without such Participant's
consent. The Committee is specifically authorized to convert, in its discretion,
the unexercised portion of any 2000 Plan ISO granted to an Employee Participant
to a Non-qualified Option at any time prior to the exercise, in full, of such
2000 Plan ISO. If there shall be any change in the Common Stock or to any Stock
Option granted under this 2000 Plan through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split or other change in
the corporate structure of the Corporation, appropriate adjustments may be made
by the Committee (or if the Corporation is not the surviving corporation in any
such transaction, the Board of Directors of the surviving corporation, or its
designee) in the aggregate number and kind of shares subject to this 2000 Plan,
and the number and kind of shares and the price per share subject to outstanding
options, provided that such adjustment does not affect the qualification of any
2000 Plan ISO as an Incentive Stock Option. In connection with the foregoing,
the Committee may issue new Stock Options in exchange for outstanding Stock
Options.

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SECTION VI. SHARES OF STOCK SUBJECT TO THE PLAN.

The number of shares of Common Stock that may be the subject of awards
under this 2000 Plan shall not exceed an aggregate of 2,500,000 shares. Shares
to be delivered under this 2000 Plan may be either authorized but unissued
shares of Common Stock or treasury shares. Any shares subject to an option
hereunder which for any reason terminates, is canceled or otherwise expires
unexercised, and any shares reacquired by the Corporation due to restrictions
imposed on the shares, shares returned because payment is made hereunder in
stock of equivalent value rather than in cash, and/or shares reacquired from a
recipient for any other reason shall, at such time, no longer count towards the
aggregate number of shares which have been the subject of Stock Options issued
hereunder, and such number of shares shall be subject to further awards under
this 2000 Plan, provided, first, that the total number of shares then eligible
for award under this 2000 Plan may not exceed the total specified in the first
sentence of this Section VI, and second, that the number of shares subject to
further awards shall not be increased in any way that would cause this 2000 Plan
or any Stock Option to not comply with Section 16, if applicable to the
Corporation.

SECTION VII. EFFECTIVE DATE AND TERM OF THIS PLAN.

The effective date of this 2000 Plan is March 9, 2000 (the "Effective
Date") and awards under this 2000 Plan may be made for a period of ten years
commencing on the Effective Date. The period during which a Stock Option may be
exercised may extend beyond that time as provided herein.

DATE OF APPROVAL BY BOARD OF DIRECTORS: As of March 9, 2000