FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CBQ, Inc.
Exact name of registrant as specified in its charter)
Colorado 84-0356301
(State or other jurisdiction of (IRS employer identification no.)
incorporation or organization)
4851 Keller Springs, Ste. 228, Addison, TX 75248
(Address of Principal Executive Offices, including ZIP Code)
1999 Stock Option Plan
(Full title of the plan)
Mark S. Pierce, 1999 Broadway, Ste. 3235, Denver, Colorado 80202
(Name and address of agent for service)
(303) 292-2992
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
===============================================================================================================
CALCULATION OF REGISTRATION FEE
===============================================================================================================
Title of Securities Amount Proposed Maximum Offering Proposed Maximum Aggregate Amount of
to be Registered to be Registered Price per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
$.0001 par Value
Common Stock 2,600,000 shares $2.125 per share $5,525,000 $1,584
- ---------------------------------------------------------------------------------------------------------------
TOTALS 2,600,000 shares $5,525,000 $1,584
===============================================================================================================
</TABLE>
<PAGE>
Total No. of Pages: 37; Exhibit Index on Page No.: 10
PROSPECTUS
CBQ, INC.
4851 Keller Springs, Ste. 228, Addison, Texas 75248
(2,600,000 SHARES of Common Stock)
This Prospectus relates to the CBQ, Inc., 1999 Stock Option Plan dated August
30, 1999 ("Plan"). Under the Plan, officers, directors, agents, consultants,
advisors and employees of and to CBQ, Inc., a Colorado corporation ("Company"),
and its subsidiaries are eligible to receive options to acquire shares of the
$.0001 par value per share common stock of the Company ("Options" and "Common
Stock," respectively). The Company is registering hereunder and then
subsequently issuing up to 2,600,000 post-split shares of Common Stock to cover
the Options granted over the term of the Plan. Options issued under the Plan
and/or the underlying Common Stock may be or become subject to restrictions on
transfer, and until any imposed restrictions lapse, are subject to forfeiture by
the holder upon the occurrence of certain events. Options and Common Stock which
are subject to forfeiture will be held in escrow by the Company until such time
as the imposed restrictions lapse. (See "General Information Regarding the Plan
- - Restrictions on Transfer; Voting and Dividend Rights" and "General Information
Regarding the Plan - Forfeiture.") Sales of Options and the underlying Common
Stock by "affiliates," as defined in ARules 405 and 144" under the Securities
Act of 1933, as amended ("Securities Act"), may not be made without compliance
with the registration and prospectus delivery requirements of the Securities
Act, or an exemption therefrom, such as that provided by Rule 144. The sale of
shares by participants who are not affiliates may be effected without complying
with these requirements. Affiliates may also be subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"). If so, such
participants must comply with the provisions of that section of the Exchange Act
as well. (See "General Information Regarding the Plan - Restrictions on Resales
by Affiliates.")
This Prospectus is part of a Registration Statement which was filed and became
effective under the Securities Act, and does not contain all of the information
set forth in the Registration Statement, certain portions of which have been
omitted pursuant to the rules and regulations promulgated by the U.S. Securities
and Exchange Commission (the "Commission") under the Securities Act. The
statements in this Prospectus as to the contents of any contracts or other
documents filed as an exhibit to either the Registration Statement or any other
filings by the Company with the Commission which are incorporated herein are
qualified in their entirety by reference thereto. A copy of any document or part
thereof incorporated by reference in this Prospectus but not delivered herewith
will be furnished without charge upon written or oral request. Requests should
be addressed to: Management Compensation Committee, c/o CBQ, Inc., 4851 Keller
Springs, Ste. 228, Addison, TX 75248, (972) 732-1100. The Company is subject to
the reporting requirements of the Exchange Act and in accordance therewith files
reports and other information with the Commission. These reports, as well as the
proxy statements, information statements and other information filed by the
Company under the Exchange Act, if any, may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies may be obtained at the prescribed rates. In
addition, copies of these reports, proxy statements, information statements and
other information may also be examined at the offices of the National
Association of Securities Dealers, Inc. ("NASD"), at 1735 K St., N.W.,
Washington, D.C. 20549.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representation must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer or
a solicitation by anyone in any state in which such is not authorized or in
which the person making such is not qualified or to any person to whom it is
unlawful to make an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstance, create an
implication that there has not been a change in the affairs of the Company since
the date hereof.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 11, 2000
<PAGE>
TABLE OF CONTENTS
GENERAL INFORMATION REGARDING THE PLAN.......................................1
Issuer..................................................................1
Purposes................................................................1
Term; Shares of Common Stock Subject to Plan............................1
Administration..........................................................1
Eligible Participants; Non-Qualified Options; Exercise Price;
Term of Options; Tax Effects............................................1
Consideration for Options...............................................1
Restrictions on Transfer; Voting and Dividend Rights....................1
Forfeiture..............................................................2
Recapitalizations; Reorganizations and the Like.........................2
Exercise of Stock Options...............................................2
Restrictions on Resales by Affiliates...................................2
DOCUMENTS INCORPORATED BY REFERENCE AND ADDITIONAL INFORMATION...............2
Indemnification.........................................................3
INFORMATION NOT REQUIRED IN PROSPECTUS.......................................3
Item 3. Incorporation of Documents by Reference........................3
Item 4. Description of Securities......................................3
Item 5. Interests of Named Experts and Counsel.........................3
Item 6. Indemnification of Directors and Officers......................3
Item 7. Exemption from Registration Claimed............................4
Item 8. Exhibits.......................................................4
Item 9. Undertakings...................................................5
<PAGE>
GENERAL INFORMATION REGARDING THE PLAN
Issuer. The Company will be the issuer of the Options and the underlying Common
Stock on exercise. The Company maintains its principal executive offices at 4851
Keller Springs, Ste. 228, Addison, TX 75248, (303) 732-1100.
Purposes. The Plan was adopted on August 30, 1999, by the "Board of Directors,"
and is intended to provide a method whereby persons who are interested in the
well being of the Company may be stimulated by personal involvement in the
future prosperity of the Company, thereby advancing the interests of the Company
and its shareholders.
Term; Shares of Common Stock Subject to Plan. The Plan has a ten year term which
began on August 30, 1999. The Plan authorizes the issuance and delivery of up to
2,600,000 shares of Common Stock. No shares had been issued under the Plan as of
the date of this Prospectus.
Administration. The Plan is initially being administered by the Board of
Directors, which may subsequently appoint a committee for this purpose. (For
purposes of this paragraph only, any reference to the Board of Directors also
includes such committee.) The Board of Directors has full authority to determine
the recipients and the Options awarded under the Plan, and may impose
restrictions on the transfer of Options and/or the underlying Common Stock. The
Board of Directors interprets and constructs the provisions of the Plan, is
authorized to adopt rules and regulations for administering the Plan and may
amend the Plan in any respect at any time. The date upon which Options become
exercisable, their exercise price, the basis for determining the price, whether
and under what circumstances the price may be modified, the maximum amount which
may be exercised in any year, whether such amount is cumulative and the period
during which all Options must be exercised will be determined in the sole
discretion of the Board of Directors in accordance with the terms and conditions
of the Plan. The Board of Directors may also amend the Plan from time to time in
their sole discretion, but such amendments will only apply prospectively.
Eligible Participants; Non-Qualified Options; Exercise Price; Term of Options;
Tax Effects. All full-time employees of the Company and/or of its subsidiaries
are eligible as participants in the Plan. Also eligible under the Plan are any
other persons specified under the General Instructions to Form S-8 under the
Securities Act. Awards under the Plan will be based upon the contributions made
by each eligible person to the Company and/or its subsidiaries. Options granted
under this Plan will not be qualified under the Employee Retirement Income
Security Act of 1974, as set forth in the Internal Revenue Code. There is no
limitation to the aggregate fair market value of the Common Stock underlying
Options granted to any individual in a single calendar year under the Plan.
Options will have no more than a ten-year term.
A recipient of Options and the underlying Common Stock on exercise may incur
income tax on the difference between the fair market value of the security
received on the date of receipt and the cost to the recipient of the security;
provided, however, that no tax will be incurred until any and all provisions on
forfeiture, if significant, have lapsed. Each recipient of Options should
consult his or her tax advisor as to the consequences of grant and exercise, as
such consequences depend entirely upon the terms and conditions of the grant and
the circumstances of the recipient at the date of grant and exercise.
Consideration for Options. Options awarded under the Plan will be issued in
consideration of cash, securities, instruments and/or services rendered by the
participant for and on behalf of the Company and/or its subsidiaries.
Restrictions on Transfer; Voting and Dividend Rights. Each participant
immediately becomes the record and beneficial owner of the Options awarded to
him or her under the Plan on the date of award, although the Board of Directors
may impose forfeiture provisions to take effect after the date of grant. Options
are not transferable, other than by will or the laws of descent and
distribution. The Board of Directors will maintain possession of the certificate
representing the Option until exercised. On exercise of an Option, the holder of
the Common Stock received immediately becomes the record owner of the shares and
acquires all beneficial rights of ownership, although the Board of Directors may
impose forfeiture provisions to take effect after the date of exercise. If
forfeiture provisions are imposed, the Board of Directors will maintain
possession of the certificate representing the shares until the provisions on
forfeiture lapse. After exercise, the holder is entitled to all of the rights of
ownership, including the right to vote any shares of Common Stock awarded and to
receive ordinary cash dividends, subject to any restrictions on forfeiture
imposed.
1
<PAGE>
The Board of Directors may impose a vesting schedule as to any Option upon award
and as to any shares of underlying Common Stock upon exercise, and may at any
time modify the schedule as to which restrictions upon transfer have not yet
lapsed. Any restriction or forfeiture provisions which may be imposed may lapse
earlier under certain circumstances. (See "Recapitalizations, Reorganizations
and the Like.")
Forfeiture. In the event that an employee ceases to be employed by the Company
or any of its subsidiaries for any reason whatsoever, except termination for
death or permanent or total disability, while holding one or more Options or
non-vested shares of Common Stock, the employee will have the right to exercise
the Option on the termination date only to the extent then exercisable and only
with respect to the unexercised portion thereof and all rights to non-vested
shares of Common Stock on the termination date will lapse.
If the employee dies or becomes permanently or totally disabled while employed
by the Company or any of its subsidiaries, the guardian, legal administrator,
personal representative or administrator of the estate for the person will have
the right to exercise any outstanding Option in full regardless of any other
terms or conditions and any non-vested shares of Common Stock will vest in full.
No transfer of an Option or non-vested Common Stock by will or by the laws of
descent and distribution will be effective to bind the Company unless the
Company has been furnished with written notice and an authenticated copy of the
will and/or such other evidence as the Board of Directors may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of such Option and/or non-vested Common
Stock.
Recapitalizations; Reorganizations and the Like. In the event the outstanding
Common Stock is subsequently changed into or exchanged for a different number or
kind of shares or other securities, a prompt and equitable adjustment will be
made in the aggregate number and kind of shares of non-vested Common Stock and
shares subject to unexercised Options. Further, upon dissolution or liquidation
of the Company, each outstanding and unexercised Option and non-vested share of
Common Stock will immediately become exercisable or vest, as the case may be.
The foregoing adjustments will be determined solely by the Board of Directors,
whose determination will be final, binding and conclusive.
Exercise of Stock Options. Exercise of an Option may be had, either in whole or
in part, through the payment of the exercise price applicable to the number of
shares of Common Stock to be acquired, either in cash or by cashier's check,
certified check, bank draft or money order made payable to the order of the
Company or by the delivery of instruments or securities.
Restrictions on Resales by Affiliates. In the event that an affiliate of the
Company acquires Common Stock, whether by direct grant or the exercise of an
Option, the affiliate will be subject to Section 16(b) of the Exchange Act. This
means that the affiliate could not sell any shares acquired under the Option for
a period of six months thereafter. Further, in the event that the optionee had
sold any shares of Common Stock in the previous six months preceding the receipt
or exercise of the Option, any so called "profit," as computed under Section
16(b) of the Exchange Act, would be required to be disgorged from the optionee
by the Company or the Commission. Common Stock acquired on exercise of an Option
by other than affiliates are not subject to Section 16(b) of the Exchange Act.
Participants should consult their counsel as to the effects and application of
Section 16(b) of the Exchange Act on them.
DOCUMENTS INCORPORATED BY REFERENCE
AND
ADDITIONAL INFORMATION
The Company incorporates by reference (i) its annual report on Form 10-KSB for
the year ended December 31, 1998, filed pursuant to Section 13 of the Exchange
Act, (ii) any and all Forms 10-QSB under the Exchange Act subsequent to any
filed Form 10-KSB, as well as all other reports filed under Section 13 of the
Exchange Act, and (iii) its annual report, if any, to shareholders delivered
pursuant to Rule 14a-3 of the Exchange Act. In addition, all further documents
filed by the Company pursuant to Sections 13, 14, or 15(d) of the Exchange Act
prior to the termination of this offering are deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing.
2
<PAGE>
A copy of any document or part thereof incorporated by reference in the
Registration Statement but not delivered with this Prospectus will be furnished
without charge upon written or oral request. Requests should be addressed to:
Management Compensation Committee, CBQ, Inc., 4851 Keller Springs, Ste. 228,
Addison TX 75248, (972) 732-1100.
A copy of the Company's most recent Forms 10-KSB and 10-QSB accompanies the copy
of this Prospectus when furnished to those Plan participants not otherwise
receiving a copy thereof. The Company will promptly furnish, without charge, an
additional copy to any participant who requests it.
Indemnification. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, or persons controlling
the Company, the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference.
Registrant hereby states that (i) all documents and statements set forth in (a)
through (b), below, are incorporated by reference in this registration
statement, and (ii) all documents subsequently filed by registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, 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. (a) Registrant's latest annual report, whether of nor filed pursuant
to Sections 13(a) or 15(d) of the Exchange; (b) All other reports filed pursuant
to Sections 13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by the registrant documents referred to in (a), above.
Each common share currently outstanding is fully paid for and nonassessable, and
is entitled to one vote per share on all matters submitted for action by
shareholders. All common shares are equal to each other with respect to the
election of directors and cumulative voting is not permitted; therefore, the
holders of more than 50% of the outstanding common shares can, if they choose to
do so, elect all directors. The terms of directors are not staggered. Directors
are elected annually to serve until the next annual meeting of shareholders and
until their successors are elected and qualified. There are no preemptive rights
to purchase any additional shares of common or other securities of registrant.
In the event of liquidation or dissolution, holders of common shares are
entitled to receive, pro rata, the remaining assets after creditors and holders
of any class of stock having liquidation rights senior to holders of common have
been paid in full. Reference is made to the description of the common shares
prepared in compliance with Item 202 of Regulation S-K in the Form 10 filed with
the U.S. Securities and Exchange Commission to register such shares under
Section 12 of the Exchange Act.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Counsel has been granted an option to acquire 11,765 shares of common stock at
the offering price set forth on the cover sheet of this registration statement.
These options were acquired in lieu of compensation for services rendered the
Company for the purposes allowed under the provision of this form. Counsel has
informed the Company of his intention to exercise these options, providing as
payment the satisfaction of funds previously advanced the Comany.
Item 6. Indemnification of Directors and Officers.
The only statute, charter provision, bylaw, contract, or other arrangement under
which any controlling person, director or officer of registrant is insured or
indemnified in any manner against any liability which they may incur in their
capacity as such is set forth under the Delaware Corporation Code, as enacted
3
<PAGE>
and in effect upon adoption of the registrant's articles of incorporation and
bylaws, both of which mirror this statute. The statute and said articles in
substance provide, in part and summary, as follows; however, this summary is
qualified in its entirety by reference to the specific statutory provision:
The provisions of this code generally provide that registrant may, but is not
obligated to, indemnify against liability an individual made a party to a
lawsuit because they were previously or are currently a director or officer of
registrant, if such person acted in good faith and reasonably believed their
actions were in the best interests of registrant. Registrant may not indemnify
such persons if they are found liable to registrant in a shareholders'
derivative suit or are found liable for receiving an improper personal benefit.
Registrant is required to indemnify such persons if they are ultimately
successful in the suit. Pending a final determination, registrant may advance
funds to these persons, but only if provision is made for return of the funds
advanced in the event such persons are subsequently found to not be entitled to
indemnification as set forth above. The general effect of this statute is to
make indemnification available to the officers and directors of registrant
regarding actions taken in their official capacity, unless they are found liable
to registrant for their actions, they received an improper benefit therefrom, or
they did not act in good faith while reasonably believing their actions were in
the best interests of registrant. Indemnification under this section would
include actions of the officers and directors of registrant taken in connection
with this offering.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this registration statement pursuant
to Item 601 of Regulation S-KSB and are specifically incorporated herein by this
reference:
Exhibit No.
1. Not Required.
2. Not Required.
3. Not Required.
4. Not Applicable.
5. Opinion of special counsel to the registrant regarding the legality of the
securities registered.
6. Not Required.
7. Not Required.
8. Not Required.
9. Not Required.
10.1 1999 Stock Option Plan.
10.2 Employment Agreement with John C. Harris
10.3 Employment Agreement with Greg Allen
11. Not Required.
12. Not Required.
13. Not Required.
14. Not Required.
15. Not Applicable.
16. Not Required.
17. Not Required.
18. Not Required.
19. Not Required.
20. Not Required.
21. Not Required.
22. Not Required.
23. Not Required.
24.1 Consent of special counsel to registrant to the use of his opinion with
respect to the legality of the securities being registered hereby and to
the references to him in the Prospectus, if any, filed as a part hereof.
(See Exhibit 5.)
4
<PAGE>
24.2 Consent of Halliburton, Hunter & Associates, auditors to registrant, to the
incorporation by reference of their audit opinion from the Form 10-KSB for
the period ended December 31, 1998.
25. Not Applicable.
26. Not Required.
27. Not Applicable.
28. Not Applicable.
29. Not Applicable.
Item 9. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of registrant
pursuant to the foregoing provisions, or otherwise, 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 that the payment by registrant of expenses
incurred or paid by a director, officer or controlling person of 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, 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 is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
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
to: (i) include any prospectus required by Section 10(a)(3) of the Securities
Act; (ii) 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, represents a
fundamental change in the information set forth in the registration statement;
and (iii) 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, including,
but not limited to, any addition or deletion of a managing underwriter. (2)
that, for the purpose of determining any liability under the Securities Act,
each post-effective amendment to 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. (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) to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of registrant's annual report
pursuant to section 13(a) 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 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.
5
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned in Dallas, Texas, on the 10th day of January, 2000.
CBQ, INC.
(Registrant)
By: /s/ John Harris
- -------------------
John Harris, Chief Executive Officer
By: /s/ John Harris
- -------------------
John Harris, Chief Financial
and Accounting Officer and Treasurer
Pursuant to the requirements of the 1933 Act, this Registration Statement or
amendment has been signed by the following persons in the capacities and on the
dates indicated.
/s/ John Harris
- ---------------
John Harris, Director Date: January 10, 2000
/s/ Greg Allen
- --------------
Greg Allen, Director Date: January 10, 2000
6
<PAGE>
FORM S-8 REGISTRATION STATEMENT
EXHIBIT INDEX
The following Exhibits are filed as part of this registration statement pursuant
to Item 601 of Regulation S-K and are specifically incorporated herein by this
reference:
Exhibit Number
in Registration Statement Description
- ------------------------- -----------
5 Opinion of Counsel
10.1 1999 Stock Option Plan
10.2 Employment Agreement with John C. Harris
10.3 Employment Agreement with Greg Allen
24 Consent to Use of Opinion
7
EXHIBIT 5
Opinion of Counsel
January 10, 2000 HAND DELIVERED
Board of Directors, CBQ, Inc.
4851 Keller Springs, Ste. 228
Addison TX 75248
Re: CBQ, Inc. (Company)/Registration Statement on Form S-8
Ladies and Gentlemen:
As counsel for the Company, I am furnishing this opinion to you in compliance
with the referenced matter. I am familiar with the articles of incorporation of
the Company and its corporate powers, franchises and other rights under which it
carries on its business, as well as its Bylaws, minute book and other corporate
records of the Company. For the purpose of the opinions expressed below, I have
examined, among other things, the registration statement on Form S-8 to be filed
in regards of the above offering (Registration Statement), and have supervised
proceedings taken in connection with the authorization, execution and delivery
by the Company of the Registration Statement and, as contemplated thereby, the
authorization and issuance of the shares of common stock to be issued
thereunder. In arriving at the opinions set forth below, I have examined and
relied upon originals or copies, certified or otherwise identified to my
satisfaction, of all such corporate records and all such other instruments,
documents and certificates of public officials, officers and representatives of
the Company and of other persons and have made such investigations of law as I
have considered necessary or appropriate as a basis for my opinions. Moreover, I
have with your approval relied as to factual matters stated therein on the
certificates of public officials, and I have assumed, but not independently
verified, that the signatures on all documents which I have examined are genuine
and that the persons signing such had the capacity to do so. This opinion
further expressly assumes that the shares covered by the Registration Statement
will be issued in conformity with the terms and conditions applicable thereto.
Based upon and subject to the forgoing, I am of the opinion that the issuance
and sale of the stock in this offering have been duly and validly authorized and
upon delivery to the shareholders in accordance with the terms and conditions of
the exhibits to the Form S-8 will have been duly authorized, validly issued,
fully paid for and not assessable.
I am admitted to practice before the Bar of the State of Colorado only. I am not
admitted to practice in any other jurisdiction in which the Company may own
property or transact business. My opinions are with respect to federal law only
and, to the extent my opinions are derived from laws of other jurisdictions, are
based on an examination of relevant authorities and are believed to be correct,
but I have not directly obtained legal opinions as to such matters from
attorneys licensed in such other jurisdictions. My opinions are qualified to the
extent that the enforcement of rights and remedies are subject to bankruptcy,
insolvency and other laws of general application affecting the rights and
remedies of creditors and security holders and to the extent that the
availability of the remedy of specific enforcement or of injunctive relieve is
subject to the discretion of the court before which any proceeding thereof may
be brought.
This opinion is furnished by me to you as counsel for the Company and it is
solely for your benefit. This opinion is not to be used, circulated, quoted or
otherwise referred to for any other purpose, other than as set forth in my
consent to the use of the same in the Form S-8.
I hereby consent to the filing of this letter with the Commission as Exhibit 5.1
to the Registration Statement. In giving this consent, I do not admit that I am
included in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Commission.
Very truly yours,
/s/ Mark S. Pierce
- ------------------
Mark S. Pierce
EXHIBIT 10.1
1999 Stock Option Plan
CBQ, INC.
1999 STOCK OPTION PLAN
(August 30, 1999)
1. Purpose of the Plan. The purpose of the CBQ, Inc., 1999 Stock Option Plan
("Plan") is to advance the interests of CBQ, Inc., a Colorado corporation
("Company"), by providing an opportunity for ownership of the stock of the
Company by employees, agents and directors of, and consultants to, the Company
and its subsidiaries. By providing an opportunity for such stock ownership, the
Company seeks to attract and retain qualified personnel, and otherwise to
provide additional incentive to promote the success of its business.
2. Stock Subject to the Plan. (a) The total number of shares of the authorized
but unissued or treasury shares of the common stock of the Company ("Common
Stock") for which options may be granted under the Plan (individually, an
"Option" and, collectively, "Options") shall be 2,600,000 shares, subject to
adjustment as provided in Section 13 hereof. (b) If an Option expires or
terminates for any reason without having been exercised in full, the unpurchased
shares shall again be available for subsequent Option grants under the Plan. (c)
Common Stock issuable on exercise of an Option may be subject to such
restrictions on transfer, repurchase rights or other restrictions as shall be
determined by the Board of Directors of the Company ("Board").
3. Administration of the Plan. The Plan shall be administered by the Board,
unless it expressly establishes a committee for this purpose. No member of the
Board shall act on any matter exclusively affecting any Option granted or to be
granted to himself or herself under the Plan. A majority of the members of the
Board shall constitute a quorum, and any action may be taken by a majority of
those present and voting at any meeting. The decision of the Board as to all
questions of interpretation and application of the Plan shall be final, binding
and conclusive on all persons. The Board, in its sole discretion, may grant
Options to purchase shares of Common Stock, and the Board shall issue shares
upon exercise of Options as provided in the Plan. The Board shall have the
authority, subject to the express provisions of the Plan, to construe Option
agreements and the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of Option
agreements, which may but need not be identical, and to make all other
determinations in the judgment of the Board necessary or desirable for the
administration of the Plan. The Board may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Option agreement
in the manner and to the extent it shall deem expedient to implement the Plan,
and the Board shall be the sole and final judge of such expediency. No director
shall be liable for any action or determination made in good faith. The Board,
in its discretion, may delegate its powers, duties and responsibilities to a
committee, consisting of two or more members of the Board, all of whom shall be
"disinterested persons" (as hereinafter defined). If a committee is so
appointed, all references to the Board shall mean and relate to such committee,
unless the context otherwise requires. For the purposes of the Plan, a director
or member of this committee shall be deemed to be "disinterested" only if such
person qualified as a "disinterested person" within the meaning of paragraph (c)
(2) of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as such term is interpreted from time to time.
4. Type of Options. Options granted pursuant to the Plan shall be authorized by
action of the Board, and will be non-qualified options which do not meet the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code").
5. Eligibility. Options may be granted to (i) directors, officers and key
employees of the Company or any of its subsidiaries, or (ii) agents, directors
of and consultants or advisors to the Company or any of its subsidiaries,
whether or not otherwise employees of the Company or its subsidiaries. In
determining the eligibility of an individual to be granted an Option, as well as
in determining the number of shares to be optioned to any individual, the Board
shall take into account the position and responsibilities of the individual
being considered, the nature and value to the Company or its subsidiaries of his
or her service and accomplishments, his or her present and potential
contribution to the success of the Company or its subsidiaries, and such other
factors as the Board may deem relevant.
6. Restrictions on Options. The Board may implement such restrictions on Options
and the Common Stock underlying such as it deems reasonable and necessary under
the circumstances then prevailing.
7. Option Agreement. Each Option shall be evidenced by an Option agreement
("Option Agreement") duly executed on behalf of the Company and by the optionee
to whom such Option is granted, which Option Agreement shall comply with and be
<PAGE>
subject to the terms and conditions of the Plan. The Option Agreement may
contain such other terms, provisions and conditions which are not inconsistent
with the Plan as may be determined by the Board. No Option shall be granted
within the meaning of the Plan and no purported grant of any Option shall be
effective until the Option Agreement shall have been duly executed on behalf of
the Company and the optionee. More than one Option may be granted to an
individual.
8. Option Price. (a) The Option price or price of shares of Common Stock shall
be as determined by the Board. (b) The Option price or prices for shares of
Common Stock shall be at least the fair market value of the Common Stock at the
time the Option is granted as determined by the Board in accordance with the
Regulations promulgated under Section 422 of the Code. (c) If such shares are
then listed on any national securities exchange, the fair market value shall be
the mean between the high and low sales prices, if any, on the largest such
exchange on the date of the grant of the Option or, if none, shall be determined
by taking a weighted average of the means between the highest and lowest sales
price on the nearest date before and the nearest date after the date of grant in
accordance with Section 25.2512-2 of the Regulations. If the shares are not then
listed on any such exchange, the fair market value of such shares shall be the
mean between the closing "Bid" and the closing "Ask" prices, if any, as reported
on the National Association of Securities Dealer Automated Quotation System
("NASDAQ") on the date of the grant of the Option, or, if none, shall be
determined by the Board after weighing the various criteria then thought
relevant for the purpose of providing a fair value therefor.
9. Manner of Payment; Manner of Exercise. (a) Options granted under the Plan may
provide for the payment of the exercise price by delivery of (i) cash or a check
payable to the order of the Company in an amount equal to the exercise price of
such Options, (ii) shares of Common Stock owned by the optionee having a fair
market value equal in amount to the exercise price of the Options being
exercised, (iii) services invoiced to the Company or any of its subsidiaries or
(iv) any combination of (i), (ii) and (iii); provided; however, that payment of
the exercise price by delivery of shares of Common Stock owned by such optionee
may be made only upon the condition that such payment does not result in a
charge to earnings for financial accounting purposes as determined by the Board,
unless such condition is waived by the Board. The fair market value of any
shares of Common Stock which may be delivered upon exercise of an Option shall
be determined by the Board in accordance with Section 8 hereof. (b) To the
extent that the right to purchase shares under an Option has accrued and is in
effect, Options may be exercised in full at one time or in part from time to
time by giving written notice, signed by the person or persons exercising the
Option, to the Company and stating the number of shares with respect to which
the Option is being exercised, accompanied by payment in full for such shares as
provided in subparagraph (a) above. Upon such exercise, delivery of a
certificate for paid-up non-assessable shares shall be made at the principal
office of the Company to the person or persons exercising the Option at such
time, during ordinary business hours, after five (5) but not more than ten (10)
days from the date of receipt of the notice by the Company, as shall be
designated in such notice, or at such time, place and manner as may be agreed
upon by the Company and the person or person exercising the Option.
10. Exercise of Options. Each Option granted under the Plan shall, subject to
Section 11(b) and Section 13 hereof, be exercisable at such time or times and
during such period as shall be set forth in the Agreement; provided, however,
that no Option granted under the Plan shall have a term in excess of ten (10)
years form the date of grant. To the extent that an Option to purchase shares is
not exercised by an optionee when it becomes initially exercisable, it shall not
expire but shall be carried forward and shall be exercisable, on a cumulative
basis, until the expiration of the exercise period.
11. Term of Options; Exercisability. (a) Term. (i) Each Option shall expire on a
date determined by the Board which is not more than ten (10) years from the date
of the granting thereof; provided, however, except as otherwise provided in this
Section 11, an Option granted to any optionee whose employment with the Company
or any of its subsidiaries is terminated shall terminate on the earlier of (1)
ninety days after the date such optionee's employment by the Company or by any
such subsidiary is terminated, or (2) the date on which the Option expires by
its terms. (ii) If the employment of an optionee is terminated by the Company or
any of its subsidiaries for cause or because the optionee is in breach of any
employment agreement, such Option will terminate on the date the optionee's
employment is terminated by the Company or any such subsidiary. (iii) If the
employment of an optionee is terminated by the Company or any of its
subsidiaries because the optionee has become permanently disabled (within the
meaning of Section 22(e)(3) of the Code), such Option shall terminate on the
earlier of (1) one year after the date such optionee's employment by the Company
or by any such subsidiary is terminated, or (2) the date on which the Option
expires by its terms. (iv) In the event of the death of any optionee, any Option
granted to such optionee shall terminate one year after the date of death, or on
<PAGE>
the date on which the Option expires by its terms, whichever occurs first. (b)
Exercisability. (i) Except as provided below, an Option granted to an optionee
whose employment with the Company or by any of its subsidiaries is terminated
shall be exercisable only to the extent that the right to purchase shares under
such Option has accrued and is in effect on the date such optionee's employment
with the Company or by any such subsidiary is terminated. (ii) An Option granted
to an optionee whose employment is terminated by the Company or by any of its
subsidiaries because he or she has become permanently disabled, as defined
above, shall be immediately exercisable as to the full number of shares covered
by such Option, whether or not under the provisions of Section 10 hereof such
Option was otherwise exercisable as of the date of disability. (iii) In the
event of the death of an optionee, the Option granted to such optionee may be
exercised as to the full number of shares covered thereby, whether or not under
the provisions of Section 10 hereof the optionee was entitled to do so at the
date of his or her death, by the executor, administrator or personal
representative of such optionee, or by any person or persons who acquired the
right to exercise such Option by bequest or inheritance or by reason of the
death of such optionee.
12. Options Not Transferable. The right of any optionee to exercise any Option
granted to him or her shall not be assignable or transferrable by such optionee
other than by will or the laws of descent and distribution, and any such Option
shall be exercisable during the lifetime of such optionee only by him or her.
Any Option granted under the Plan shall be null and void and without effect upon
the bankruptcy of the optionee to whom the Option is granted, or upon any
attempted assignment or transfer, except as herein provided, including without
limitation, any purported assignment, whether voluntary or by operation of law,
pledge, hypothecation or other disposition, attachment, trustee process or
similar process, whether legal or equitable, upon such Option.
13. Recapitalization, Reorganizations and the Like. In the event that the
outstanding shares of Common Stock are changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares, or
dividends payable in capital stock, appropriate adjustment shall be made in the
number and kind of shares as to which Options may be granted under the Plan and
as to which outstanding Options or portions thereof then unexercised shall be
exercisable, to the end that the proportionate interest of the optionee shall be
maintained as before the occurrence of such event; such adjustment in
outstanding Options shall be made without change in the total price applicable
to the unexercised portion of such Options and with a corresponding adjustment
in the Option price per share.
In addition, unless otherwise determined by the Board in its sole discretion, in
the case of any (i) sale or conveyance to another entity of all or substantially
all of the property and assets of the Company or (ii) Change in Control (as
hereinafter defined) of the Company, the purchaser(s) of the Company's assets or
stock, in his, her or its sole discretion, may deliver to the optionee the same
kind of consideration that is delivered to the shareholders of the Company as a
result of such sale, conveyance or Change in Control, or the Board may cancel
all outstanding Options in exchange for consideration in cash or in kind, which
consideration in both cases shall be equal in value to the value of those shares
of stock or other securities the optionee would have received had the Option
been exercised (but only to the extent then exercisable) and had no disposition
of the shares acquired upon such exercise been made prior to such sale,
conveyance or Change in Control, less the Option price therefor. Upon receipt of
such consideration, all Options (whether or not then exercisable) shall
immediately terminate and be of no further force or effect. The value of the
stock or other securities the optionee would have received if the Option had
been exercised shall be determined in good faith by the Board, and in the case
of shares of Common Stock, in accordance with the provisions of Section 8
hereof. The Board shall also has the power and right to accelerate the
exercisability of any Options, notwithstanding any limitations in this Plan or
in the Agreement upon such a sale, conveyance or Change in Control.
A "Change in Control" shall be deemed to have occurred if any person, or any two
or more persons acting as a group, and all affiliates of such person or persons,
who prior to such time owned less than fifty percent (50%) of the then
outstanding Common Stock, shall acquire such additional shares of Common Stock
in one or more transactions, or series of transactions, such that following such
transaction or transactions, such person or group and affiliates beneficially
own fifty percent (50%) or more of the Common Stock outstanding.
<PAGE>
Upon dissolution or liquidation of the Company, all Options granted under this
Plan shall terminate, but each optionee (if at such time in the employ of or
otherwise associated with the Company or any of its subsidiaries as a director,
agent or consultant) shall have the right, immediately prior to such dissolution
or liquidation, to exercise his or her Option to the extent then exercisable.
If by reason of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Board shall authorize the
issuance or assumption of a stock option or stock options in a transaction to
which Section 424(a) of the Code applies, then, notwithstanding any other
provision of the Plan, the Board may grant an option or options upon such terms
and conditions as it may deem appropriate for the purpose of assuming the old
Option, or substituting a new option for the old Option, in conformity with the
provisions of such Section 424(a) of the Code and the Regulations thereunder,
and any such option shall not reduce the number of shares otherwise available
for issuance under the Plan.
No fraction of a share shall be purchasable or deliverable upon the exercise of
any Option, but in the event any adjustment hereunder in the number of shares
covered by the Option shall cause such number to include a fraction of a share,
such fraction shall be adjusted to the nearest smaller whole number of shares.
14. No Special Employment Rights. Nothing contained in the Plan or in any Option
granted under the Plan shall confer upon any Option holder any right with
respect to the continuation of his or her employment by the Company or by any
subsidiary or interfere in any way with the right of the Company or any
subsidiary, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or decrease
the compensation of the Option holder from the rate in existence at the time of
the grant of an Option. Whether an authorized leave of absence, or absence in
military or government service, shall constitute termination of employment shall
be determined by the Board at the time of such occurrence.
15. Withholding. The Company's obligation to deliver shares upon the exercise of
an Option shall be subject to the Option holder's satisfaction of all applicable
Federal, state and local income and employment tax withholding requirements. The
Company and optionee may agree to withhold shares of Common Stock purchased upon
exercise of an Option to satisfy the above-mentioned withholding requirements;
provided, however, no such agreement may be made by an optionee who is an
"officer" or "director" within the meaning of Section 16 of the Exchange Act,
except pursuant to a standing election to so withhold shares of Common Stock
purchased upon exercise of an Option, such election to be made not less than six
months prior to such exercise and which election may be revoked only upon six
months prior written notice.
16. Restrictions on Issuance of Shares. (a) Notwithstanding the provisions of
Section 9, the Company may delay the issuance of shares covered by the exercise
of an Option and the delivery of a certificate for such shares until one of the
following conditions shall be satisfied: (i) The shares with respect to which
such Option has been exercised are at the time of the issue of such shares
effectively registered or qualified under applicable Federal and state
securities acts now in force or as hereafter amended; or (ii) Counsel for the
Company shall have given an opinion, which opinion shall not be unreasonably
conditioned or withheld, that such shares are exempt from registration and
qualification under applicable Federal and state securities acts now in force or
as hereafter amended. (b) It is intended that all exercises of Options shall be
effective, and the Company shall use its best efforts to bring about compliance
with the above conditions within a reasonable time, except that the Company
shall be under no obligation to qualify shares or to cause a registration
statement or a post-effective amendment to any registration statement to be
prepared for the purpose of covering the issue of shares in respect of which any
Option may be exercised, except as otherwise agreed to by the Company in writing
in its sole discretion.
17. Purchase for Investment; Rights of Holder on Subsequent Registration. Unless
and until the shares to be issued upon exercise of an Option granted under the
Plan have been effectively registered under the 1933 Act, as now in force or
hereafter amended, the Company shall be under no obligation to issue any shares
covered by any Option unless the person who exercises such Option, in whole or
in part, shall give a written representation and undertaking to the Company
which is satisfactory in form and scope to counsel for the Company and upon
which, in the opinion of such counsel, the Company may reasonably rely, that he
or she is acquiring the shares issued pursuant to such exercise of the Option
for his or her own account as an investment and not with a view to, or for sale
in connection with, the distribution of any such shares, and that he or she will
make no transfer of the same except in compliance with any rules and regulations
<PAGE>
in force at the time of such transfer under the 1933 Act, or any other
applicable law, and that if shares are issued without such registration, a
legend to this effect may be endorsed upon the securities so issued.
In the event that the Company shall, nevertheless, deem it necessary or
desirable to register under the 1933 Act or other applicable statutes any shares
with respect to which an Option shall have been exercised, or to qualify any
such shares for exemption from the 1933 Act or other applicable statues, then
the Company may take such action and may require from each Optionee such
information in writing for use in any registration statement, supplementary
registration statement, prospectus, preliminary prospectus or offering circular
as is reasonably necessary for such purpose and may require reasonable indemnity
to the Company and its officers and directors from such holder against all
losses, claims, damages and liabilities arising from such use of the information
so furnished and caused by any untrue statement of any material fact therein or
caused by the omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made.
18. Loans. At the discretion of the Board, the Company may loan to the optionee
some or all of the purchase price of the shares acquired upon exercise of an
Option.
19. Modification of Outstanding Options. The Board may authorize the amendment
of any outstanding Option with the consent of the optionee when and subject to
such conditions as are deemed to be in the best interests of the Company and in
accordance with the purposes of the Plan.
20. Approval of Stockholders. The Plan shall not require presentation to or the
approval of the stockholders of the Company.
21. Termination and Amendment of Plan. Unless sooner terminated as herein
provided, the Plan shall terminate ten (10) years from the date upon which the
Plan was duly adopted by the Board of the Company. The Board may at any time
terminate the Plan or make such modification or amendment thereof as it deems
advisable.
22. Limitation of Rights in the Option Shares. An optionee shall not be deemed
for any purpose to be a stockholder of the Company with respect to any of the
Options except to the extent that the Option shall have been exercised with
respect thereto, and in addition, a certificate shall have been issued
theretofore and delivered to the optionee.
23. Notices. Any communication or notice required or permitted to be given under
the Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to the attention of the President at the
Company's principal place of business; and, if to an optionee, to his or her
address as it appears on the records of the Company.
<PAGE>
EXHIBIT A TO CBQ, INC.
1999 STOCK OPTION PLAN
(August 30, 1999)
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT has been made this ______ day of ______________________, 19__,
between ___________________________________ ("Employee"), and CBQ, Inc., a
Colorado corporation ("Company").
1. Grant of Option. The Company, pursuant to the provisions of the CBQ, Inc.
1999 Incentive Stock Option Plan ("Plan"), a copy of which was previously
received by the Employee, hereby grants to the Employee, subject to the terms
and conditions set forth or incorporated herein, an option to purchase from the
Company all or any part of an aggregate of ______________ common shares, as such
are now constituted, at the purchase price of $_____ per share. The provisions
of the Plan governing the terms and conditions of the Option granted hereby are
incorporated in full herein and made a part hereof by this reference. The
Employee, by his or her signature below, agrees to be bound by the terms and
conditions of the Plan.
2. Exercise. This Option shall be exercisable in whole or in part on or after
__________________ and on or before ____________________; provided, however,
that the cumulative number of common shares as to which this Option may be
exercised (except in the event of death, retirement, or disability, as provided
in paragraph 11(a) of the Plan) shall not exceed the following amounts:
Cumulative Number of Shares Prior To Date (Not Inclusive of)
This Option shall be exercisable by the delivery to and receipt by the Company
of (i) a written notice of election to exercise, in the form set forth in
Exhibit A hereto, specifying the number of Common Shares to be purchased; (ii)
accompanied by payment of the full purchase price thereof in cash or certified
check payable to the order of the Company, or by fully-paid and nonassessable
common shares of the Company properly endorsed over to the Company, or by a
combination thereof, and (iii) by return of this Agreement for endorsement of
exercise by the Company. In the event fully-paid and nonassessable common shares
are submitted as whole or partial payment for shares to be purchased hereunder,
such common shares will be valued at their Fair Market Value (as defined in the
Plan) on the date such shares received by the Company are applied to payment of
the exercise price.
3. Transferability. This Option is not assignable or transferable by the
Employee other than by the Employee's will or by the laws of descent and
distribution, as provided in paragraph 12 of the Plan. The Option shall be
exercisable only by the Employee during the Employee's lifetime.
CBQ, INC. ATTEST:
By: _____________________________ By: ______________________________
President Secretary
Employee hereby acknowledges receipt of the copy of the Plan, and accepts this
Option subject to each and every term and provision of the Plan. Employee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Compensation Committee of the Board of Directors
administering the Plan on any questions arising under the Plan. Employee
recognizes that if his or her employment with the Company or any subsidiary
thereof shall be terminated for any reason whatsoever, all of Employee's rights
hereunder shall thereupon terminate as provided in the Plan.
Date: _____________________________
Employee: _________________________
Print Name: _______________________
Address: __________________________
Social Security No.: ______________
<PAGE>
EXHIBIT A TO OPTION AGREEMENT
(Suggested form of letter to be used for notification of election to exercise.
Please do not use this page, but follow this form in a separately typed letter.)
Date:
Treasurer
CBQ, Inc.
4851 Keller Springs, Ste. 228
Addison TX
Dear Sir:
In accordance with paragraph 8 of the Stock Option Agreement evidencing the
Option granted to me on _____________ under the CBQ, Inc. 1999 Incentive Stock
Option Plan, I hereby elect to exercise this Option to the extent of
_____________ Common Shares.
Enclosed are (i) Certificate(s) No.(s) ________________________ representing
fully-paid common shares of CBQ, Inc. endorsed to the Company with signature
guaranteed; (ii) and/or a certified check payable to the order of "CBQ, Inc." in
the amount of $ ___________ as the balance of the purchase price of $
________________ for the shares which I have elected to purchase; and (iii) the
original Incentive Stock Option Agreement for endorsement by the Company as to
exercise. I acknowledge that the common shares (if any) submitted as part
payment of the exercise price due hereunder will be valued by the Company at
their Fair Market Value (as defined in the Plan) on the date this exercise is
effected by the Company. In the event I hereafter sell any common shares issued
pursuant to this option within two years from the date of exercise or within
five years after the date of grant of this Option, I agree to notify the Company
promptly of the amount of taxable compensation realized by me by reason of such
for federal income tax purposes.
When the certificate for common shares which I have elected to purchase has been
issued, please deliver it to me, along with my endorsed Incentive Stock Option
Agreement in the event there remains an unexercised balance of shares under the
Option, at the following address:
_____________________________
_____________________________
Very Truly Yours,
_____________________________
Signature of Employee
_____________________________
Print Name
<PAGE>
EXHIBIT B TO OPTION AGREEMENT
VESTING OPTION GRANT
THIS AGREEMENT has been made this _________________ day of __________________,
19__, between ("Employee"), and CBQ, Inc., a Colorado corporation ("Company").
1. Grant of Option. The Company, pursuant to the provisions of the CBQ, Inc.,
1999 Stock Option Plan ("Plan"), a copy of which was previously received by
Employee, hereby grants to Employee, subject to the terms and conditions set
forth or incorporated herein, an option to acquire ______________ common shares.
The provisions of the Plan governing the terms and conditions of the Stock
granted hereby are incorporated in full herein and made a part hereof by this
reference.
2. Vesting. This Option shall be issuable as follows:
Cumulative Number of Shares Issuance Date
3. Transferability. This Option grant is not assignable or transferable by
Employee other than by Employee's will or by the laws of descent and
distribution, as provided in paragraph 12 of the Plan. The shares shall be
issuable only to the Employee during the Employee's lifetime.
CBQ, INC. ATTEST:
By: ____________________________ By: _____________________________
President Secretary
Employee hereby acknowledges receipt of the copy of the Plan, and accepts this
grant subject to each and every term and provision of the Plan. Employee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Compensation Committee of the Board of Directors
administering the Plan on any questions arising under the Plan. Employee
recognizes that if Employee's employment with the Company or any subsidiary
thereof shall be terminated for any reason whatsoever (except as otherwise
provided in paragraph 11(a) of the Plan), all of the Employee's rights hereunder
shall thereupon terminate as provided in the Plan.
Date: _____________________________
Employee: _________________________
Print Name: _______________________
Address: __________________________
Social Security No.: ______________
EXHIBIT 10.2
Employment Agreement with John C. Harris
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of October
1, 1999, by and between CBQ, Inc., a Colorado corporation (the "Company"), and
John C. Harris (the "Employee").
The parties agree as follows:
1. Engagement and Term of Employment. The Company employs Employee and Employee
accepts employment for an initial term of six (6) months beginning the date
first set forth above, unless sooner terminated as provided subsequently in this
Agreement. This Agreement will be extended for additional six (6) month terms
unless either the Company or the Employee elect to terminate this Agreement by
giving 30 day's written notice prior to lapse of the initial or any subsequent
six (6) month term.
2. Title, Responsibility and Location. Employee shall serve as Chief Executive
Officer and Chairman of the Board of Directors of the Company ("Board") and of
certain of its subsidiaries, those being, at present, CBQ, Inc., a Texas
corporation, Priority One Electronics Corporation, a Pennsylvania corporation,
JAB Consulting, and Cyberquest, Inc., Texas and Colorado corporations, and shall
report directly to the Board. Subject to applicable law and the overall policy
directives of the Board, the Employee shall have complete autonomy with respect
to the day-to-day management of the business and affairs of the Company and
shall have all executive powers and authority which are necessary to enable him
to discharge his duties as an officer of the Company.
3. Compensation and Benefits. The Company shall pay and/or provide the following
compensation and benefits to the Employee during the term hereof, and the
Employee shall accept the same as payment in full for all services rendered by
the Employee to or for the benefit of the Company:
3.1 Base Salary. A salary of $85,000 per annum during the initial term, and
any subsequent six (6) month extension, of this Agreement shall be paid to
the Employee by or on behalf of the Company (the "Base Salary"). The Base
Salary shall be subject to review from time to time (not less frequently
than at the end of each fiscal year of the Company) and, as a result, may
be decreased or increased at the discretion of the Board in agreement with
the Employee. The Base Salary shall accrue in equal monthly installments in
arrears and shall be payable in accordance with the payroll practices of
the Company in effect from time to time.
3.2 Bonus. In addition to the Base Salary, the Company shall pay to
Employee a bonus in accordance with the sole and unconditioned discretion
of the Board.
3.3 Stock Option and Stock Award Plan. The Employee shall be entitled to
participate in the 1999 Stock Option and Stock Award Plan of the Company
dated August 30, 1999, attached hereto as Exhibit A (the "Stock Option and
Stock Award Plan"). The Employee shall receive, effective on execution of
this Agreement, an option to acquire 25,000 shares of the Company's common
stock. This option shall be automatically exercised by the Employee
effective January 1, 2000, in lieu of a bonus under Section 3.2 of this
Agreement for the year ended December 31, 1999. The option price shall be
$2.125 per share, the market price for the common stock on the date of this
Agreement. The price shall be paid through the delivery of services by the
Employee to the Company for the period beginning October 1, 1999, and
ending December 31, 1999. This option shall best on the Employee completing
the initial three (3) month term of this Agreement without being terminated
for cause, as set forth below. The Employee shall also receive, effective
on execution of this Agreement, an option to acquire 500,000 shares of the
Company's common stock during a five year period beginning April 1, 2000,
and ending March 31, 2005, at a price of $2.125 per share, that being the
"market price" for such stock on the effective date of this Agreement. This
option shall vest on the Employee completing the initial six (6) month term
of this Agreement without being terminated for cause, as set forth below.
The shares to be issued under these two options shall be registered with
the Securities and Exchange Commission under the Stock Option and Award
Plan.
3.4 Other Benefit Plans. In addition to the Stock Option and Stock Award
Plan, the Employee shall be entitled to participate in all of the Company's
incentive and benefit plans and arrangements, including, without
limitation, all such plans or arrangements made available in the future by
the Company to its senior executives, subject to and an a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements, but on a basis no less favorable than that afforded to any
other director, officer or employee of the Company.
<PAGE>
3.5 Life and Disability Insurance. The Company shall provide to Employee
such life and disability insurance as may be subsequently negotiated and
agreed between the Company and the Employee.
3.6 Health Insurance and Medical Reimbursement Plan. The Company shall
provide to Employee at the Company's expense complete health insurance
(including, without limitation, medical, dental, hospital and optical) for
Employee and Employee's spouse and dependents. The Company shall also
provide to Employee at the Company's expense a medical reimbursement plan
for Employee and Employee's spouse and dependents covering all medical,
dental, hospital, optical and other costs not covered by the aforementioned
health insurance.
3.7 Vacation. Employee shall be entitled to the number of paid vacation
days in each calendar year determined by the Board from time to time for
the Company's senior executive officers, but not less than fifteen (15)
business days in any calendar year. Employee shall also be entitled to all
paid holidays given to the Company's senior executive officers.
3.8 Automobile. During the term hereof the Company shall give Employee an
allowance of $500 per month for the purpose of purchasing or leasing an
automobile and the Company shall reimburse Employee for all charges
incurred by him in connection with the use thereof, including, without
limitation, insurance premiums and the costs of gasoline, oil and
maintenance.
3.9 Reimbursement of Expenses. The Company shall reimburse Employee for all
expenses (including, without limitation, travel, meals, lodging and
entertainment) incurred by Employee in connection with his performance of
his duties hereunder. All such reimbursements shall be made by the Company
immediately following presentation by Employee to the Company of
appropriate documentation evidencing such expenses.
3.10 Withholding and Other Deductions. All compensation payable to Employee
hereunder shall be subject to such deductions as the Company is from time
to time required to make pursuant to all applicable laws, rules,
regulations and orders of any federal, state or local governmental
authority.
4. Representations and Warranties. Employee represents and warrants to the
Company that he is under no contractual or other restriction or obligation which
is inconsistent with his execution, delivery and performance of this Agreement.
The Company represents and warrants to Employee that the execution, delivery and
performance of this Agreement by the Company have been duly authorized by the
Board and no further corporate action on the part of the Company is necessary
and that this Agreement constitutes the valid and binding obligation of the
Company, enforceable by Employee against the company strictly in accordance with
its terms (subject to laws in affect with respect to creditors, rights generally
and applicable principles relating to equitable remedies).
5. Insurance and Indemnification. Employee shall be entitled to the following
additional benefits:
5.1 "Key-Man" Insurance. The Company shall have the right to purchase
"key-man" life insurance covering employee, in the name and for the benefit
of the Company and at the Company's expense, in any amount then obtainable.
The Employee shall cooperate in all reasonable respects with the Company's
efforts to obtain such insurance and shall submit to any required medical
or other examination; provided; however, that if such medical or other
examination cannot be conducted by the Employee's personal physician, then
the Employee shall have the right to have his personal physician attend the
examination.
5.2 Insurance Covering Employee. The Company shall at the Company's expense
provide insurance coverage to Employee to the same extent as other senior
executives and directors of the Company with respect to (i) director's and
officer's liability, (ii) errors and omissions and (iii) general liability.
5.3 Indemnification. The Company shall indemnify the Employee and hold him
harmless from and against any and all costs, expenses, losses, claims,
damages, obligations and liabilities (including, without limitation, actual
attorneys fees) arising out of or relating to any acts or omissions to act
by Employee on behalf of or in the course of performing services for the
Company and its subsidiaries, to the full extent permitted by any charter
documents or bylaws of the Company or its subsidiaries as in effect on the
date of this Agreement, or, if greater, as permitted by applicable law,
provided that the indemnity afforded by any charter documents or bylaws of
the Company or its subsidiaries shall never be greater than that permitted
by applicable law. To the extent a change in applicable law permits greater
indemnification than is now afforded by any charter documents or bylaws of
<PAGE>
the Company or its subsidiaries and a corresponding amendment shall not be
made in said charter documents or bylaws, it is the intent of the parties
hereto that the Employee shall enjoy the greater benefits so afforded by
such change. If any claim, action, suit or proceeding is brought, or claim
relating thereto is made, against the Employee with respect to which
indemnity may be sought against the Company pursuant to the foregoing the
Employee shall notify the Company in writing, and the Company shall have
the right to participate in, and to the extent that it shall desire, in its
discretion, assume and control the defense thereof, with counsel
satisfactory to the Employee.
5.4 Rights Not Exclusive. The foregoing rights conferred on the Employee
shall not be exclusive of any other right which the Employee may have or
hereafter acquire under any statute, provision of the Articles of
Incorporation or Bylaws, agreement, vote of shareholders or disinterested
directors or otherwise, and such provisions shall survive the termination
or expiration of this Agreement for any reason whatsoever.
6. Termination. This Agreement may be terminated as follows:
6.1 Death or Total Disability of Employee. If the Employee dies, the
Employee's employment shall automatically terminate. If the Employee
becomes "totally disabled" during the term hereof, this Agreement may be
terminated at the option of the Company. For purposes of this Agreement,
the Employee shall be deemed "totally disabled" if the Employee becomes
physically or mentally incapacitated or disabled or otherwise unable to
discharge the Employee's duties for a period of one hundred twenty (120)
consecutive calendar days or for one hundred fifty (150) calendar days
(whether or not consecutive) in any one hundred eighty (180) calendar day
period. Prior to termination of this Agreement as a result of disability,
and notwithstanding any failure or inability of Employee to render services
hereunder, the Company shall continue to pay and/or provide to the Employee
all of the compensation and benefits provided for in this Agreement.
6.2 Termination by the Company for Just Cause. (a) The Company may
terminate the employment of the Employee for "Just Cause" on written notice
by the Company to the Employee to such affect. For purposes of this
Agreement, "Just Cause" means a determination by the Board in the exercise
of its reasonable judgment that any of the following has occurred: (i) the
willful and continued failure by the Employee to perform his duties and
responsibilities for the Company and its subsidiaries under this Agreement
(other than any such failure resulting from his incapacity due to physical
or mental illness or disability); (ii) the engaging by the Employee in any
act which is intended to be, and is, materially injurious to the Company,
financially or otherwise; (iii) the conviction of the Employee of a
criminal offense involving fraud, dishonesty or other moral turpitude; or
(iv) the engaging by the Employee in any intentional act of dishonesty
resulting or intending to result, directly or indirectly, in personal gain
to Employee at the Company's expense. (b) On termination of the Employee's
employment for Just Cause, the Employee shall not be entitled to any
severance, termination or other compensation payment other than
compensation and other benefits to which the Employee is entitled to the
date of termination of employment.
6.3 Termination Without Just Cause for Good Reason. (a) The Company may
terminate the employment of the Employee at any time without Just Cause on
written notice by the Company to Employee. In addition, the Employee may
terminate his employment for "Good Reason" on written notice by the
Employee to the Company to such effect. For purposes of this Agreement,
"Good Reason" shall mean (i) a substantial adverse alteration in the nature
or status of the Employee's responsibilities with the Company; (ii) any
transfer of 25% or more of the voting stock of the Company, any merger or
consolidation of the Company into or with another entity or any sale of all
or substantially all of the assets of the Company; or (iii) any purported
termination of the Employee's employment which is not affected in
accordance with this Agreement (which purported termination shall not be
effective). Employee's right to terminate his employment for Good Reason
shall not be affected by his incapacity due to physical or mental illness
or disability. Employee's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder. (b) On termination of the Employee's employment
without Just Cause or for Good Reason, the Company shall have the following
obligations: (i) if not theretofore paid, the Company shall pay to or to
the order of Employee within ten (10) days after the date of termination of
Employee's employment an amount equal to the product of $42,500 times a
fraction, the numerator of which is equal to the number of months remaining
in the term hereof beginning from the date the Employee receives written
notice from the Company or gives written notice to the Company, as the case
may be, and counting any fraction of a month as a whole month, and the
<PAGE>
denominator of which is six; (ii) the Company shall pay to the Employee all
outstanding and accrued vacation pay and other benefits to the date of
termination; and (iii) all outstanding options which are not then vested
shall immediately vest and become exerciseable.
6.4 No Mitigation. The Employee shall have no duty or obligation to
mitigate damages, and if the Employee does choose to accept employment
elsewhere after any breach or improper termination of this Agreement by the
Company, then any income and other employment benefits received by the
Employee by virtue of his employment by, or rendition of services for or on
behalf of, any individual or entity other than the Company after such
breach or improper termination shall not reduce the Company's obligation to
make payments and afford benefits hereunder.
6.5 No Offset. The Company shall have no right to offset against any
payments or other benefits due to the Employee under this Agreement the
amount of any claims it may have against Employee by reason of any breach
or alleged breach of this Agreement by the Employee; provided, however,
that the Company shall have the right to offset any amounts due the Company
from Employee pursuant to any judgment (after exhaustion of all appeals)
rendered by a court of competent jurisdiction in connection with any breach
or alleged breach of this Agreement by the Employee.
7. SEC Filings. The Company or its counsel engaged to advise the Company with
respect to filings with the United States Securities and Exchange Commission
(the "SEC") shall give timely notice and advice to the Employee to the extent
the Company has or is given information that should indicate to the Company or
its counsel of any requirement that the Employee make filings with the SEC.
8. General Relationship. The Employee shall be considered an employee of the
Company within the meaning of all federal, state and local laws, rules and
regulations including, without limitation, laws, rules and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.
9. Miscellaneous:
9.1 Entire Agreement. This Agreement (including Exhibit A, which is
incorporated by this reference) sets forth the entire understanding of the
parties with respect to the subject matter of this Agreement, supersedes
all existing agreements between them concerning that subject matter, and
may be modified only by a written instrument duly executed by each party.
9.2 No Assignment. This Agreement may not be assigned by any party without
the prior written consent of the other party (which consent may be granted
or withheld by such other party in the exercise of his or its sole and
absolute discretion) , and any attempt to assign rights and duties without
such written consent shall be null and void and of no force and effect.
Subject to the preceding sentence, this Agreement shall inure to the
benefit of and be binding on the parties and their respective permitted
successors and assigns.
9.3 Survival. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive the
termination of this Agreement for any reason or no reason whatsoever for a
period of three (3) years.
9.4 Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any rights enforceable by any individual or entity
not a party to this Agreement.
9.5 Waiver. The failure of a party at any time to enforce performance by
the other party of any provision of this Agreement shall in no way affect
that party's rights to subsequently enforce the same or any other
provision, nor shall the waiver by any party of any breach of any provision
of this Agreement be deemed to be a waiver by that party of any other
breach of the same or any other provision of this Agreement.
9.6 Headings. Headings contained in this Agreement are inserted solely for
the convenience of the parties and are not a part, and are not intended to
govern, limit or aid in the construction, of any term or provision in this
Agreement.
<PAGE>
9.7 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing, served personally on, telecopier,
sent by courier or other express private mail service, or mailed by
certified, registered or express United States mail postage prepaid, and
shall be deemed given upon receipt if delivered personally, telecopier, or
sent by courier or other express private mail service, or if mailed when
actually received as shown on the return receipt. Notices shall be
addressed as set forth below or to such other address of which notice is so
given.
If to the Company, to: CBQ, Inc
4851 Keller Springs, Ste. 228
Addison TX 75001
With a copy to: William J. Flannery III
2095 E. Quail Run Rd.
Rockwall TX 75087
If to Employee, to: John C. Harris
P.O. Box 940547
Plano TX 75095
9.8 Severability. All provisions contained in this Agreement are severable,
and in the event any one or more of them are held to be invalid by any
court of competent jurisdiction, this Agreement shall be interpreted as if
such invalid provision or provisions were not contained in this Agreement.
9.9 Applicable Law and Jurisdiction. This Agreement is made with reference
to the laws of the State of Texas, is governed by and construed in
accordance with those laws, and any action brought under or arising out of
this Agreement must be brought in any competent court within the State of
Texas, County of Dallas.
9.10 Attorneys' Fees. If any legal action or other proceeding is brought
for the enforcement of this Agreement, or because of any alleged dispute,
breach, default or misrepresentation in connection with this Agreement, the
successful or prevailing party shall be entitled to recover from the other
party all costs and expenses (including, without limitation, attorneys'
fees) incurred by the successful or prevailing party in that action or
proceeding, in addition to any other relief to which the successful or
prevailing party may be entitled.
9.11 Gender. Where the context so requires, the use of the masculine gender
shall include the feminine and/or neuter genders and the singular shall
include the plural, and vice versa
9.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
The parties have caused this Agreement to be duly executed and delivered as of
the date first set forth above.
CBQ, Inc.
By: /s/ Greg Allen
- ------------------
Greg Allen, President
/s/ John C. Harris
- ------------------
John C. Harris
<PAGE>
EXHIBIT A TO EMPLOYMENT AGREEMENT
See attached 1999 Incentive Stock Option Plan (the "ISOP")
EXHIBIT 10.3
Employment Agreement with Greg Allen
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of October
1, 1999, by and between CBQ, Inc., a Colorado corporation (the "Company"), and
Greg Allen (the "Employee").
The parties agree as follows:
1. Engagement and Term of Employment. The Company employs Employee and Employee
accepts employment for an initial term of six (6) months beginning the date
first set forth above, unless sooner terminated as provided subsequently in this
Agreement. This Agreement will be extended for additional six (6) month terms
unless either the Company or the Employee elect to terminate this Agreement by
giving 30 day's written notice prior to lapse of the initial or any subsequent
six (6) month term.
2. Title, Responsibility and Location. Employee shall serve as President and a
member of the Board of Directors of the Company ("Board") and of certain of its
subsidiaries, those being, at present, Reliance Technologies, Inc. (for which he
shall also serve as Chief Executive Officer), CBQ, Inc., a Texas corporation,
Priority One Electronics Corporation, a Pennsylvania corporation, Tophernet,
Inc., a Texas corporation, JAB Consulting, a Texas corporation, and Cyberquest,
Inc., a Colorado corporation, and shall report directly to the Board. Subject to
applicable law and the overall policy directives of the Board, the Employee
shall have complete autonomy with respect to the day-to-day management of the
business and affairs of the Company and shall have all executive powers and
authority which are necessary to enable him to discharge his duties as an
officer of the Company.
3. Compensation and Benefits. The Company shall pay and/or provide the following
compensation and benefits to the Employee during the term hereof, and the
Employee shall accept the same as payment in full for all services rendered by
the Employee to or for the benefit of the Company:
3.1 Base Salary. A salary of $85,000 per annum during the initial term, and
any subsequent six (6) month extension, of this Agreement shall be paid to
the Employee by or on behalf of the Company (the "Base Salary"). The Base
Salary shall be subject to review from time to time (not less frequently
than at the end of each fiscal year of the Company) and, as a result, may
be decreased or increased at the discretion of the Board in agreement with
the Employee. The Base Salary shall accrue in equal monthly installments in
arrears and shall be payable in accordance with the payroll practices of
the Company in effect from time to time.
3.2 Bonus. In addition to the Base Salary, the Company shall pay to
Employee a bonus in accordance with the sole and unconditioned discretion
of the Board.
3.3 Stock Option and Stock Award Plan. The Employee shall be entitled to
participate in the 1999 Stock Option and Stock Award Plan of the Company
dated August 30, 1999, attached hereto as Exhibit A (the "Stock Option and
Stock Award Plan"). The Employee shall receive, effective on execution and
delivery of this Agreement, an option to acquire 25,000 shares of the
Company's common stock. This option has vested on execution and delivery of
this Agreement and shall be automatically exercised by the Employee
effective January 1, 2000, in lieu of a bonus under Section 3.2 of this
Agreement for the year ended December 31, 1999. The option price shall be
$2.125 per share, the market price for the common stock on the date of this
Agreement. The price shall be paid through the delivery of services by the
Employee to the Company for the period beginning October 1, 1999, and
ending December 31, 1999. The Employee shall also be deemed to have
received on August 30, 1999, an option to acquire 200,000 shares of the
Company's common stock during a five year period beginning August 30, 1999,
and ending August 29, 2004, at a price of $2.125 per share, that being the
"market price" for such stock on the date of grant. This option vested on
August 30, 1999, and was acknowledged by consents of the board dated that
date. The Employee shall also receive, effective on execution and delivery
of this Agreement, an option to acquire 275,000 shares of common stock
during a five year period beginning April 1, 2000, and ending March 31,
2005. This option shall vest on Employee completing the initial six (6)
month term of this Agreement without being terminated for cause, as set
forth below. The shares to be issued under these options shall be
registered with the Securities and Exchange Commission under the Stock
Option and Award Plan.
<PAGE>
3.4 Other Benefit Plans. In addition to the Stock Option and Stock Award
Plan, the Employee shall be entitled to participate in all of the Company's
incentive and benefit plans and arrangements, including, without
limitation, all such plans or arrangements made available in the future by
the Company to its senior executives, subject to and an a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements, but on a basis no less favorable than that afforded to any
other director, officer or employee of the Company.
3.5 Life and Disability Insurance. The Company shall provide to Employee
such life and disability insurance as may be subsequently negotiated and
agreed between the Company and the Employee.
3.6 Health Insurance and Medical Reimbursement Plan. The Company shall
provide to Employee at the Company's expense complete health insurance
(including, without limitation, medical, dental, hospital and optical) for
Employee and Employee's spouse and dependents. The Company shall also
provide to Employee at the Company's expense a medical reimbursement plan
for Employee and Employee's spouse and dependents covering all medical,
dental, hospital, optical and other costs not covered by the aforementioned
health insurance.
3.7 Vacation. Employee shall be entitled to the number of paid vacation
days in each calendar year determined by the Board from time to time for
the Company's senior executive officers, but not less than fifteen (15)
business days in any calendar year. Employee shall also be entitled to all
paid holidays given to the Company's senior executive officers.
3.8 Automobile. During the term hereof the Company shall give Employee an
allowance of $500 per month for the purpose of purchasing or leasing an
automobile and the Company shall reimburse Employee for all charges
incurred by him in connection with the use thereof, including, without
limitation, insurance premiums and the costs of gasoline, oil and
maintenance.
3.9 Reimbursement of Expenses. The Company shall reimburse Employee for all
expenses (including, without limitation, travel, meals, lodging and
entertainment) incurred by Employee in connection with his performance of
his duties hereunder. All such reimbursements shall be made by the Company
immediately following presentation by Employee to the Company of
appropriate documentation evidencing such expenses.
3.10 Withholding and Other Deductions. All compensation payable to Employee
hereunder shall be subject to such deductions as the Company is from time
to time required to make pursuant to all applicable laws, rules,
regulations and orders of any federal, state or local governmental
authority.
4. Representations and Warranties. Employee represents and warrants to the
Company that he is under no contractual or other restriction or obligation which
is inconsistent with his execution, delivery and performance of this Agreement.
The Company represents and warrants to Employee that the execution, delivery and
performance of this Agreement by the Company have been duly authorized by the
Board and no further corporate action on the part of the Company is necessary
and that this Agreement constitutes the valid and binding obligation of the
Company, enforceable by Employee against the company strictly in accordance with
its terms (subject to laws in affect with respect to creditors, rights generally
and applicable principles relating to equitable remedies).
5. Insurance and Indemnification. Employee shall be entitled to the following
additional benefits:
5.1 "Key-Man" Insurance. The Company shall have the right to purchase
"key-man" life insurance covering employee, in the name and for the benefit
of the Company and at the Company's expense, in any amount then obtainable.
The Employee shall cooperate in all reasonable respects with the Company's
efforts to obtain such insurance and shall submit to any required medical
or other examination; provided; however, that if such medical or other
examination cannot be conducted by the Employee's personal physician, then
the Employee shall have the right to have his personal physician attend the
examination.
5.2 Insurance Covering Employee. The Company shall at the Company's expense
provide insurance coverage to Employee to the same extent as other senior
executives and directors of the Company with respect to (i) director's and
officer's liability, (ii) errors and omissions and (iii) general liability.
<PAGE>
5.3 Indemnification. The Company shall indemnify the Employee and hold him
harmless from and against any and all costs, expenses, losses, claims,
damages, obligations and liabilities (including, without limitation, actual
attorneys fees) arising out of or relating to any acts or omissions to act
by Employee on behalf of or in the course of performing services for the
Company and its subsidiaries, to the full extent permitted by any charter
documents or bylaws of the Company or its subsidiaries as in effect on the
date of this Agreement, or, if greater, as permitted by applicable law,
provided that the indemnity afforded by any charter documents or bylaws of
the Company or its subsidiaries shall never be greater than that permitted
by applicable law. To the extent a change in applicable law permits greater
indemnification than is now afforded by any charter documents or bylaws of
the Company or its subsidiaries and a corresponding amendment shall not be
made in said charter documents or bylaws, it is the intent of the parties
hereto that the Employee shall enjoy the greater benefits so afforded by
such change. If any claim, action, suit or proceeding is brought, or claim
relating thereto is made, against the Employee with respect to which
indemnity may be sought against the Company pursuant to the foregoing the
Employee shall notify the Company in writing, and the Company shall have
the right to participate in, and to the extent that it shall desire, in its
discretion, assume and control the defense thereof, with counsel
satisfactory to the Employee.
5.4 Rights Not Exclusive. The foregoing rights conferred on the Employee
shall not be exclusive of any other right which the Employee may have or
hereafter acquire under any statute, provision of the Articles of
Incorporation or Bylaws, agreement, vote of shareholders or disinterested
directors or otherwise, and such provisions shall survive the termination
or expiration of this Agreement for any reason whatsoever.
6. Termination. This Agreement may be terminated as follows:
6.1 Death or Total Disability of Employee. If the Employee dies, the
Employee's employment shall automatically terminate. If the Employee
becomes "totally disabled" during the term hereof, this Agreement may be
terminated at the option of the Company. For purposes of this Agreement,
the Employee shall be deemed "totally disabled" if the Employee becomes
physically or mentally incapacitated or disabled or otherwise unable to
discharge the Employee's duties for a period of one hundred twenty (120)
consecutive calendar days or for one hundred fifty (150) calendar days
(whether or not consecutive) in any one hundred eighty (180) calendar day
period. Prior to termination of this Agreement as a result of disability,
and notwithstanding any failure or inability of Employee to render services
hereunder, the Company shall continue to pay and/or provide to the Employee
all of the compensation and benefits provided for in this Agreement.
6.2 Termination by the Company for Just Cause. (a) The Company may
terminate the employment of the Employee for "Just Cause" on written notice
by the Company to the Employee to such affect. For purposes of this
Agreement, "Just Cause" means a determination by the Board in the exercise
of its reasonable judgment that any of the following has occurred: (i) the
willful and continued failure by the Employee to perform his duties and
responsibilities for the Company and its subsidiaries under this Agreement
(other than any such failure resulting from his incapacity due to physical
or mental illness or disability); (ii) the engaging by the Employee in any
act which is intended to be, and is, materially injurious to the Company,
financially or otherwise; (iii) the conviction of the Employee of a
criminal offense involving fraud, dishonesty or other moral turpitude; or
(iv) the engaging by the Employee in any intentional act of dishonesty
resulting or intending to result, directly or indirectly, in personal gain
to Employee at the Company's expense. (b) On termination of the Employee's
employment for Just Cause, the Employee shall not be entitled to any
severance, termination or other compensation payment other than
compensation and other benefits to which the Employee is entitled to the
date of termination of employment.
6.3 Termination Without Just Cause for Good Reason. (a) The Company may
terminate the employment of the Employee at any time without Just Cause on
written notice by the Company to Employee. In addition, the Employee may
terminate his employment for "Good Reason" on written notice by the
Employee to the Company to such effect. For purposes of this Agreement,
"Good Reason" shall mean (i) a substantial adverse alteration in the nature
or status of the Employee's responsibilities with the Company; (ii) any
transfer of 25% or more of the voting stock of the Company, any merger or
consolidation of the Company into or with another entity or any sale of all
or substantially all of the assets of the Company; or (iii) any purported
termination of the Employee's employment which is not affected in
accordance with this Agreement (which purported termination shall not be
<PAGE>
effective). Employee's right to terminate his employment for Good Reason
shall not be affected by his incapacity due to physical or mental illness
or disability. Employee's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder. (b) On termination of the Employee's employment
without Just Cause or for Good Reason, the Company shall have the following
obligations: (i) if not theretofore paid, the Company shall pay to or to
the order of Employee within ten (10) days after the date of termination of
Employee's employment an amount equal to the product of $42,500 times a
fraction, the numerator of which is equal to the number of months remaining
in the term hereof beginning from the date the Employee receives written
notice from the Company or gives written notice to the Company, as the case
may be, and counting any fraction of a month as a whole month, and the
denominator of which is six; (ii) the Company shall pay to the Employee all
outstanding and accrued vacation pay and other benefits to the date of
termination; and (iii) all outstanding options which are not then vested
shall immediately vest and become exerciseable.
6.4 No Mitigation. The Employee shall have no duty or obligation to
mitigate damages, and if the Employee does choose to accept employment
elsewhere after any breach or improper termination of this Agreement by the
Company, then any income and other employment benefits received by the
Employee by virtue of his employment by, or rendition of services for or on
behalf of, any individual or entity other than the Company after such
breach or improper termination shall not reduce the Company's obligation to
make payments and afford benefits hereunder.
6.5 No Offset. The Company shall have no right to offset against any
payments or other benefits due to the Employee under this Agreement the
amount of any claims it may have against Employee by reason of any breach
or alleged breach of this Agreement by the Employee; provided, however,
that the Company shall have the right to offset any amounts due the Company
from Employee pursuant to any judgment (after exhaustion of all appeals)
rendered by a court of competent jurisdiction in connection with any breach
or alleged breach of this Agreement by the Employee.
7. SEC Filings. The Company or its counsel engaged to advise the Company with
respect to filings with the United States Securities and Exchange Commission
(the "SEC") shall give timely notice and advice to the Employee to the extent
the Company has or is given information that should indicate to the Company or
its counsel of any requirement that the Employee make filings with the SEC.
8. General Relationship. The Employee shall be considered an employee of the
Company within the meaning of all federal, state and local laws, rules and
regulations including, without limitation, laws, rules and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.
9. Miscellaneous:
9.1 Entire Agreement. This Agreement (including Exhibit A, which is
incorporated by this reference) sets forth the entire understanding of the
parties with respect to the subject matter of this Agreement, supersedes
all existing agreements between them concerning that subject matter, and
may be modified only by a written instrument duly executed by each party.
9.2 No Assignment. This Agreement may not be assigned by any party without
the prior written consent of the other party (which consent may be granted
or withheld by such other party in the exercise of his or its sole and
absolute discretion) , and any attempt to assign rights and duties without
such written consent shall be null and void and of no force and effect.
Subject to the preceding sentence, this Agreement shall inure to the
benefit of and be binding on the parties and their respective permitted
successors and assigns.
9.3 Survival. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive the
termination of this Agreement for any reason or no reason whatsoever for a
period of three (3) years.
9.4 Party Beneficiaries. This Agreement does not create, and shall not be
construed as creating, any rights enforceable by any individual or entity
not a party to this Agreement.
<PAGE>
9.5 Waiver. The failure of a party at any time to enforce performance by
the other party of any provision of this Agreement shall in no way affect
that party's rights to subsequently enforce the same or any other
provision, nor shall the waiver by any party of any breach of any provision
of this Agreement be deemed to be a waiver by that party of any other
breach of the same or any other provision of this Agreement.
9.6 Headings. Headings contained in this Agreement are inserted solely for
the convenience of the parties and are not a part, and are not intended to
govern, limit or aid in the construction, of any term or provision in this
Agreement.
9.7 Notices. All notices and other communications required or permitted
under this Agreement shall be in writing, served personally on, telecopier,
sent by courier or other express private mail service, or mailed by
certified, registered or express United States mail postage prepaid, and
shall be deemed given upon receipt if delivered personally, telecopier, or
sent by courier or other express private mail service, or if mailed when
actually received as shown on the return receipt. Notices shall be
addressed as set forth below or to such other address of which notice is so
given.
If to the Company, to: CBQ, Inc
4851 Keller Springs, Ste. 228
Addison TX 75001
With a copy to: William J. Flannery III
2095 E. Quail Run Rd.
Rockwall TX 75087
If to Employee, to: Greg Allen
4851 Keller Springs, Ste. 228
Addison TX 75001
9.8 Severability. All provisions contained in this Agreement are severable,
and in the event any one or more of them are held to be invalid by any
court of competent jurisdiction, this Agreement shall be interpreted as if
such invalid provision or provisions were not contained in this Agreement.
9.9 Applicable Law and Jurisdiction. This Agreement is made with reference
to the laws of the State of Texas, is governed by and construed in
accordance with those laws, and any action brought under or arising out of
this Agreement must be brought in any competent court within the State of
Texas, County of Dallas.
9.10 Attorneys' Fees. If any legal action or other proceeding is brought
for the enforcement of this Agreement, or because of any alleged dispute,
breach, default or misrepresentation in connection with this Agreement, the
successful or prevailing party shall be entitled to recover from the other
party all costs and expenses (including, without limitation, attorneys'
fees) incurred by the successful or prevailing party in that action or
proceeding, in addition to any other relief to which the successful or
prevailing party may be entitled.
9.11 Gender. Where the context so requires, the use of the masculine gender
shall include the feminine and/or neuter genders and the singular shall
include the plural, and vice versa
9.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
The parties have caused this Agreement to be duly executed and effective as of
the date first set forth above.
CBQ, Inc.
By: /s/ John Harris
- -------------------
John Harris, CEO
/s/ Greg Allen
- --------------
Greg Allen
<PAGE>
EXHIBIT A TO EMPLOYMENT AGREEMENT
See attached 1999 Incentive Stock Option Plan (the "ISOP")
EXHIBIT 24
Consent to Use of Opinion
January 10, 2000 REGULAR MAIL
Board of Directors, CBQ, Inc.
4851 Keller Springs, Ste. 228
Addison TX 75248
Re: Consent to Reference in Form S-8 Registration Statement
Gentlemen:
As independent certified public accountants, we hereby consent to the
incorporation by reference in the above Form S-8 Registration Statement of our
report on the financial statements included in the CBQ, Inc., Annual Report on
Form 10-KSB for the year ended December 31, 1998, and to all references to our
firm included in said registration statement.
HALLIBURTON, HUNTER & ASSOCIATES, PC
Littleton, Colorado
