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As filed with the Securities and Exchange Commission on September 23, 1999
Registration No. ________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
TELVUE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 51-0299879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16000 Horizon Way, Suite 500 08054
Mt. Laurel, NJ (Zip Code)
(Address of principal executive offices)
TELVUE CORPORATION
1999 STOCK OPTION PLAN
(Full title of the plan)
Irene A. DeZwaan
Corporate Secretary
TelVue Corporation
16000 Horizon Way, Suite 500
Mt. Laurel, NJ 08054
(609) 273-8888
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
THOMAS K. PASCH, ESQUIRE
Saul, Ewing, Remick & Saul LLP
3800 Centre Square West
Philadelphia, Pennsylvania 19102
(215) 972-7188
CALCULATION OF REGISTRATION FEE
Title of Amount Proposed Max. Proposed Max. Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Share(2) Offering Fee(2)
(1) Price(2)
- ------------- ---------- -------------- ------------- ------------
Common Stock, 10,000,000 $0.06 $600,000.00 $166.80
Par Value
$.01 Per Share
(1) Represents shares issuable to employees pursuant to the 1999 Stock
Option Plan.
(2) The registration fee with respect to these shares has been computed
in accordance with paragraphs (c) and (h) of Rule 457, based upon the
average of the bid and asked price of shares of the Common Stock on
September 20, 1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.(1)
Item 2. Registrant Information and Employee Plan Annual Information.(1)
(1) The information called for by Part I of Form S-8 is currently included in
the description of the Registrant's 1999 Stock Option Plan (the "Plan")
delivered to eligible persons under the Plan. Pursuant to the Note to Part I
of Form S-8, this information is not being filed with or included in this Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in clauses (a), (b) and (c) below are
incorporated herein by this reference thereto, and all documents
subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, 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 this reference in this registration
statement and to be a part hereof from the date of filing of such documents:
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1998, as amended by Form 10-KSB/A filed on May 20,
1999.
(b) The Registrant's Quarterly Reports on Form 10-QSB for the
quarters ended March 31, 1999 and June 30, 1999, as amended by Form 10-QSB/A
filed on August 20, 1999.
(c) The description of the class of securities offered contained
in the registration statement filed by the Registrant to register such
securities under Section 12 of the Securities Exchange Act of 1934,
including any amendment or report filed for the purpose of updating such
description.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Pursuant to Sections 102 and 145 of the Delaware General Corporation
Law, the Corporation adopted as Article Twelve of its Articles of
Incorporation, the following provision:
"No person shall be personally liable
to the corporation or its stockholders for
any form of monetary damages for any breach
of a director's fiduciary duty, except (1)
for breach of the director's duty of loyalty
to the corporation or stockholders, (2) for
acts or omissions not in good faith or which
involve intentional misconduct or knowing
violation of law, (3) pursuant to Section 174
of the Delaware Corporation Law or (4) for
any transaction from which the director
derived an improper personal benefit. No
amendment or repeal of this article shall
apply or have any effect on the alleged
liability of any director with respect to any
acts or omissions occurring prior to the
effective date of this section."
Such article was adopted by the Corporation on April 22, 1987,
and at that time there was no known basis for any liability on the part of
any person for any act or omission occurring prior to that date.
Subsequent to that time, the Registrant remains unaware of any
facts of information which would give rise to any form of latent or future
liability of any nature.
In addition, Section 6.4 of the By-Laws of the Company
provides that the Company may indemnify any officer or director made or
threatened to be made a party to any suit or other proceeding, including
criminal actions, by reason of the fact that he was acting as or was an
officer or director at the time of the acts complained of, for all expenses
including legal fees, judgments, costs and related amounts if it shall be
determined: that he was acting in good faith; and, in a manner reasonably
believed to be in or not opposed to the best interest of the corporation
(or in a criminal proceeding, if he had no reasonable basis to believe that
the conduct in question was unlawful). The By-Laws further provide that the
termination of any proceedings by settlement or by a plea in the nature of
nolo contendere will not create a presumption that a person did not act
with requisite good faith, but that no indemnification shall be made to any
individual adjudged liable to the Company unless a Court of Competent
Jurisdiction finds the person nonetheless entitled to indemnity. The By-
Laws also permit the advancement of funds and expenses and provide in turn
for repayment of any sums advanced if it later be determined by a majority
of independent directors or in certain circumstances, by an independent
counsel, or, by the shareholders, that the advance of expenses was
improper. In addition, the Corporation presently maintains a standard form
of agreement with certain officers and directors carrying into effect each
and all of the terms and provisions of such By-Law which define and provide
for the means of implementation of the provisions above noted and contained
therein.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following is a list of exhibits filed as part of the
Registration Statement:
5 Opinion of Saul, Ewing, Remick & Saul LLP
23.1 Consent of Pressman Ciocca Smith LLP, Certified Public
Accountants
23.2 Consent of Saul, Ewing, Remick & Saul LLP (contained in
Exhibit No. 5)
24 Power of Attorney (included on signature page of this
registration statement)
99 1999 Stock Option Plan
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
which, individually or together, represent a fundamental change in the
information in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b), if in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act, to
treat each such post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at that time to be
to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liability (other than payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunder duly authorized, in the City of Mt. Laurel, State of New Jersey,
on September 23, 1999.
TELVUE CORPORATION
By: /s/ Frank J. Carcione
Frank J. Carcione
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby makes, constitutes and appoints Frank J. Carcione and
Irene A. DeZwaan, and each of them, with full power to act without the
other, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities to sign any and all amendments to this
Registration Statement, including post-effective amendments, and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be
done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or any substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/Frank J. Carcione Director, President and Chief September 23, 1999
Frank J. Carcione Executive Officer
(Principal Executive Officer)
/s/Irene A. DeZwaan Treasurer September 23, 1999
Irene A. DeZwaan (Principal Financial Officer
and Principal Accounting Officer)
/s/ Joseph M. Murphy Director and Executive Vice September 23, 1999
Joseph M. Murphy President of Sales and Operations
/s/H. F. Lenfest Director September 23, 1999
H. F. Lenfest
H. Chase Lenfest Director September 23, 1999
Brook J. Lenfest Director September 23, 1999
EXHIBIT INDEX
Exhibit No. Exhibit
5 Opinion of Saul, Ewing, Remick & Saul LLP
23.1 Consent of Pressman Ciocca Smith LLP, Certified
Public Accountants
23.2 Consent of Saul, Ewing, Remick & Saul LLP
(Contained in Exhibit No. 5)
24 Power of Attorney (included in signature page of
this registration statement)
99 1999 Stock Option Plan
EXHIBIT 5
LAW OFFICES OF
SAUL, EWING, REMICK & SAUL LLP
BALTIMORE, MARYLAND CENTRE SQUARE WEST NEW YORK, NEW YORK
BERWYN, PENNSYLVANIA 1500 MARKET STREET, 38th FLR PRINCETON, NEW JERSEY
HARRISBURG, PENNSYLVANIA PHILADELPHIA, PA 19102-2186 WILMINGTON, DELAWARE
(215) 972-7777
Fax: (215) 972-7725
Internet Email: [email protected]
World Wide Web: http://www.saul.com
September 23, 1999
TelVue Corporation
16000 Horizon Way, Suite 500
Mt. Laurel, NJ 08054
Gentlemen:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") of TelVue Corporation, a Delaware
corporation (the "Company"), to be filed with the Securities and
Exchange Commission covering the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of
10,000,000 shares of common stock, par value $.01 per share, of
the Company (the "Shares").
We have reviewed the Registration Statement, the
Certificate of Incorporation and By-laws of the Company and such
records, certificates and other documents that we have considered
necessary or appropriate for the purposes of this Opinion.
Based on the foregoing, it is our opinion that:
1. The Company is duly organized, validly existing
and in good standing under the laws of the State of Delaware; and
2. The Shares to be issued in accordance with the
terms described in the Registration Statement have been duly
authorized and, when issued in accordance with the terms
described in the Registration Statement, will be validly issued,
fully paid and non-assessable.
We hereby consent to the use of our name in the
Registration Statement as counsel who will pass upon the legality
of the Shares for the Company and as having prepared this Opinion
as an exhibit to the Registration Statement. In giving the
foregoing consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations of the Securities
and Exchange Commission thereunder.
Very truly yours,
/s/ SAUL, EWING, REMICK & SAUL LLP
SAUL, EWING, REMICK & SAUL LLP
TKP/DSA/SWF/FVM/TMD/cp
EXHIBIT 23.1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
TelVue Corporation:
We consent to incorporation by reference in the registration
statement dated September 23, 1999 on Form S-8 of TelVue Corporation of
our report dated February 2, 1999, relating to the balance sheets of TelVue
Corporation as of December 31, 1998 and 1997, and the related statements of
operations, stockholders' deficit and cash flows, for the years then ended,
which report appears in the December 31, 1998 annual report on Form 10-KSB,
as amended on Form 10K-KSB/A filed on May 20, 1999 of TelVue Corporation.
/s/ PRESSMAN CIOCCA SMITH LLP
PRESSMAN CIOCCA SMITH LLP
HATBORO, PENNSYLVANIA
September 23, 1999
EXHIBIT 99
TELVUE CORPORATION
1999 STOCK OPTION PLAN
ARTICLE I
ESTABLISHMENT
1.1 Purpose. The TelVue Corporation 1999 Stock Option Plan (the
"Plan") is hereby established by TelVue Corporation (the "Company"). The
purpose of the Plan is to promote the overall financial objectives of the
Company and its stockholders by motivating those persons selected to
participate in the Plan to achieve long-term growth of the Company and by
retaining the association of those individuals who are instrumental in
achieving this growth. The Plan provides additional incentives to officers
and other employees of the Company or its Affiliates, as defined herein, to
enter into or remain in the service or employ of the Company or its
Affiliates and to devote themselves to the Company's success by granting
such individuals an opportunity to acquire or increase their proprietary
interest in the Company through receipt of rights (the "Options") to acquire
the Company's Common Stock, par value $.01 per share (the "Common Stock").
ARTICLE II
STOCK SUBJECT TO PLAN
2.1 Aggregate Maximum Number. The aggregate maximum number of
shares of the Common Stock for which Options may be granted under the Plan
is 10,000,000 shares (the "Option Shares"), which number is subject to
adjustment as provided in Section 6.6. Option Shares shall be issued from
authorized and unissued Common Stock or Common Stock held in or hereafter
acquired for the treasury of the Company. If any outstanding Option granted
under the Plan expires, lapses or is terminated for any reason, the Option
Shares allocable to the unexercised portion of such Option may again be the
subject of an Option granted pursuant to the Plan.
ARTICLE III
TERM OF PLAN
3.1 Term of Plan. The Plan shall commence on May 10, 1999, the
date of approval of the Plan by the Board of Directors of the Company
("Effective Date"), but shall terminate unless the Plan is approved by the
stockholders of the Company within twelve months of such date, as set forth
in Section 422(b)(1) of the Internal Revenue Code of 1986, as amended
(the "Code"). Any Options granted pursuant to the Plan prior to approval of
the Plan by the stockholders of the Company shall be subject to such approval
and, notwithstanding anything to the contrary herein or in any Option Document
(as defined below), shall not be exercisable until such approval is
obtained. No Option may be granted under the Plan on or after the date
which is ten years after the Effective Date.
ARTICLE IV
ELIGIBILITY
4.1 Eligibility. Except as herein provided, the persons who shall
be eligible to participate in the Plan and be granted awards of Options
shall be those officers and other employees who shall be in a position, in
the opinion of the Committee, as defined herein, to make contributions to
the growth, management, protection and success of the Company and its
Affiliates. Of those persons described in the preceding sentence, the
Committee, may, from time to time, select persons to be granted Options and
shall determine the terms and conditions with respect thereto. In making
any such selection and in determining the terms and conditions of the
Option, the Committee may give consideration to the person's functions and
responsibilities, the person's contributions to the Company and its
Affiliates, the value of the individual's service to the Company and its
Affiliates and such other factors deemed relevant by the Committee. The term
"Affiliates" shall mean a corporation which is a parent corporation or a
subsidiary corporation with respect to the Company within the meaning of
section 424(e) or (f) of the Code.
ARTICLE V
STOCK OPTIONS
5.1 Stock Options. Options granted under the Plan may be either
ISOs, as defined herein, or NQSOs, as defined herein. Each Option granted
under the Plan is intended to be an incentive stock option ("ISO") within
the meaning of Section 422(b) of the Code for federal income tax purposes,
except to the extent (i) such ISO grant would fail to meet the limitations
and restrictions on ISOs set forth in Subsections 5.2(a) and 5.2(b) below,
or (iii) any Option is specifically designated at the time of grant (the
"Grant Date") as not being an ISO (an Option which is not an ISO, and
therefore is a non-qualified option, is referred to herein as an "NQSO").
Under the Plan, Options may be granted to Optionees at such times, in such
amounts, and on such terms and conditions as determined by the Committee, in
accordance with the terms of the Plan.
5.2 Terms and Conditions of Options. Options granted pursuant to
the Plan shall be evidenced by written documents ("Option Documents") in
such form as the Committee shall from time to time approve, subject to the
following terms and conditions. Option Documents may also contain such
other terms and conditions (including vesting schedules for the
exercisability of Options) which the Committee shall from time to time
provide which are not inconsistent with the terms of the Plan. Persons to
whom Options are granted are hereinafter referred to as "Optionees."
(a) Number of Option Shares. Each Option Document shall
state the number of Option Shares to which it pertains. To the extent that
the aggregate fair market value of Option Shares (determined as of the date
each applicable ISO is granted) with respect to which ISOs are exercisable for
the first time by an Optionee during any calendar year (under all incentive
stock option plans of the Company or its Affiliates) exceeds $100,000, the
portion of such options in excess of $100,000 shall be treated as NQSOs in
accordance with Section 422(d) of the Code.
(b) Option Price. Each Option Document shall state the price
at which an Option Share may be purchased (the "Option Price"), which, in
the case of an ISO shall be not less than 100% of the "Fair Market Value" of
a share of the Common Stock on the Grant Date. In the case of a NQSO, the
Option Price shall be not less than 50% of the Fair Market Value of a share
of the Common Stock on the Grant Date. If the Common Stock is listed on a
national securities exchange or quoted on The Nasdaq Stock Market
("NASDAQ"), the Fair Market Value is the closing price of the Common Stock
on the relevant date (or, if such date is not a business day or a day on
which quotations are reported, then on the immediately preceding date on
which quotations were reported), as reported by the principal national
exchange on which such shares are traded (in the case of an exchange) or by
NASDAQ, as the case may be. If the Common Stock is not listed on a national
securities exchange or quoted on NASDAQ, the Fair Market Value will be as
determined by the Committee in good faith. If an ISO is granted to an
Optionee who then owns, directly or by attribution under Section 424(d) of
the Code, shares possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, then the
Option Price shall be not less than One Hundred and Ten Percent (110%) of
the Fair Market Value of an Option Share on the Grant Date.
(c) Medium of Payment. An Optionee shall pay for Options
Shares (i) in cash, (ii) by bank check payable to the order of the Company
or (iii) by such other mode of payment as the Committee may approve,
including payment through a broker in accordance with procedures permitted
by Regulation T of the Federal Reserve Board.
(d) Initial Exercise. The Committee shall determine the time
at which an Option may first be exercised.
(e) Termination of Options. All Options shall expire at such
time as the Committee may determine and set forth in the Option Document,
which date shall not be later than the last business date immediately
preceding the tenth anniversary of the Grant Date of such Option (the
"Expiration Date"). No Option may be exercised later than the Expiration
Date. Notwithstanding the foregoing, no Option shall be exercisable after
the first to occur of the following:
(i) In the case of an ISO, five years from the Grant
Date if, on the Grant Date the Optionee owns, directly or by attribution
under Section 424(d) of the Code, shares possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company;
(ii) The date set by the Committee to be an accelerated
Expiration Date after a finding by the Committee that a change in the
financial accounting treatment for Options from that in effect on the date
the Plan was adopted materially adversely affects or, in the determination
of the Committee, may materially adversely affect in the foreseeable future,
the Company, provided the Committee may take whatever other action,
including acceleration of any exercise provisions, it deems necessary should
it make the determination referred to hereinabove;
(iii) Expiration of three months (or such shorter period
as the Committee may select and set forth in the Option Document) from the
date the Optionee's employment or service with the Company or its Affiliates
terminates for any reason other than (a) disability (within the meaning of
section 22(e)(3) of the Code) or death, or (b) circumstances described by
Subsection (e)(v), below;
(iv) In the event of a "Change in Control" (as defined
in Subsection (f) below), the Committee can (A) accelerate the Expiration Date
of any Option which has vested provided an Optionee who holds an Option is
given written notice at least thirty (30) days before the date so fixed, (B)
terminate any Option which has not then vested or (C) accelerate the vesting
schedule of any Option;
(v) In the case of an Option granted under the Plan, a
finding by the Committee, after full consideration of the facts presented on
behalf of both the Company and the Optionee, that the Optionee has been
discharged from employment with the Company or its Affiliates for Cause.
For purposes of this Section, "Cause" shall mean: (A) a breach by Optionee
of his employment agreement with the Company, (B) a breach of Optionee's
duty of loyalty to the Company, including without limitation any act of
dishonesty, embezzlement or fraud with respect to the Company, (C) the
commission by Optionee of a felony, a crime involving moral turpitude or
other act causing material harm to the Company's standing and reputation,
(D) Optionee's continued failure to perform his duties to the Company or (E)
unauthorized disclosure by Optionee of trade secrets or other confidential
information belonging to the Company. In the event of a finding that the
Optionee has been discharged for Cause, in addition to immediate termination
of the Option, the Optionee shall automatically forfeit all Option Shares
for which the Company has not yet delivered the share certificates upon
refund of the Option Price; or
(vi) Expiration of one year from the date the Optionee's
employment with the Company or its Affiliates terminates by reason of the
Optionee's disability (within the meaning of section 22(e)(3) of the Code)
or death.
(f) Change of Control. In the event of a Change in Control
(as defined below), the Committee may take whatever action with respect to
the Options outstanding under the Plan it deems necessary or desirable,
including, without limitation, accelerating the Expiration Date in the
respective Option Documents to a date no earlier than thirty (30) days after
notice of such acceleration is given to the Optionee or terminate any Option
which has not then vested. A "Change of Control" shall be deemed to have
occurred upon the earliest to occur of the following events:
(i) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or
liquidated;
(ii) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a
definitive agreement to sell or otherwise dispose of all or substantially
all of the assets of the Company;
(iii) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) and the
stockholders of the other constituent corporation (or its board of directors
if stockholder action is not required) have approved a definitive agreement
to merge or consolidate the Company with or into such other corporation,
other than, in either case, a merger or consolidation of the Company in
which holders of shares of the Common Stock immediately prior to the merger
or consolidation will hold at least a majority of the ownership of common
stock of the surviving corporation (and, if one class of common stock is not
the only class of voting securities entitled to vote on the election of
directors of the surviving corporation, a majority of the voting power of
the surviving corporation's voting securities) immediately after the merger
or consolidation, which common stock (and, if applicable, voting securities)
is to be held in substantially the same proportion as such holders'
ownership of Common Stock immediately before the merger or consolidation; or
(iv) the date any entity, person or group, (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act")), other than (A) the
Company or any of its Affiliates or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its Affiliates or
(B) any person who, on the date the Plan is approved by the stockholders,
shall have been the beneficial owner of at least twenty percent (20%) of the
outstanding Common Stock, shall have become the beneficial owner of, or
shall have obtained voting control over, more than fifty percent (50%) of
the outstanding shares of the Common Stock.
(g) Transfers. No ISO granted under the Plan may be
transferred, except by will or by the laws of descent and distribution.
During the lifetime of the person to whom an ISO is granted, such Option may
be exercised only by such person. No NQSO under the Plan may be
transferred, except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules
thereunder.
(h) Other Provisions. The Option Documents shall contain
such other provisions including, without limitation, additional restrictions
upon the exercise of the Option or additional limitations upon the term of
the Option, as the Committee shall deem advisable.
(i) Amendment. The Committee shall have the right to amend
Option Documents issued to such Optionee, subject to the Optionee's consent
if such amendment is not favorable to the Optionee, except that the consent
of the Optionee shall not be required for any amendment made under
Subsection (f) above.
5.3 Exercise.
(a) Notice. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and
of payment in full of the Option Price for the Option Shares to be
purchased. Each such notice shall (i) specify the number of Option Shares
to be purchased, and (ii) satisfy the securities law requirements set forth
in this Section 5.3.
(b) Restricted Stock. Each exercise notice shall (unless the
Option Shares are covered by a then current registration statement or a
Notification under Regulation A under the Securities Act of 1933, as amended
(the "Securities Act")), contain the Optionee's acknowledgment in form and
substance satisfactory to the Company that (i) such Option Shares are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Company, may be made without violating the registration provisions of the
Securities Act); (ii) the Optionee has been advised and understands that (A)
the Option Shares have not been registered under the Securities Act and are
"restricted securities" within the meaning of Rule 144 under the Securities
Act and are subject to restrictions on transfer and (B) the Company is under
no obligation to register the Option Shares under the Securities Act or to
take any action which would make available to the Optionee any exemption
from such registration, (iii) such Option Shares may not be transferred
without compliance with all applicable federal and state securities laws,
and (iv) an appropriate legend referring to the foregoing restrictions on
transfer and any other restrictions imposed under the Option Documents may
be endorsed on the certificates. Notwithstanding the above, should the
Company be advised by counsel that the issuance of Option Shares upon the
exercise of an Option should be delayed pending (A) registration under
federal or state securities laws, (B) the receipt of an opinion that an
appropriate exemption therefrom is available, (C) the listing or inclusion
of the Option Shares on any securities exchange or in an automated quotation
system or (D) the consent or approval of any governmental regulatory body
whose consent or approval is necessary in connection with the issuance of
such Option Shares, the Company may defer the exercise of any Option granted
hereunder until either such event in A, B, C or D has occurred.
(c) Notice of Disqualifying Disposition. An Optionee shall
notify the Committee if any Option Shares received upon the exercise of an
ISO are sold within one year of exercise or two years from the Grant Date.
ARTICLE VI
ADMINISTRATION
6.1 Stock Option Committee. The Plan shall be administered by the
Board of Directors of the Company, without participation by any director on
any matter pertaining to him. The Board of Directors may appoint a Stock
Option Committee composed of two or more non-employee directors (as the term
"non-employee directors" is defined under Rule 16b-3(b)(3) of the Exchange
Act) to operate and administer the Plan in its stead. The Stock Option
Committee or the Board of Directors in its administrative capacity with
respect to the Plan is referred to herein as the "Committee".
6.2 Meetings. The Committee shall hold meetings at such times and
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous
consent of the members of the Committee shall be the valid acts of the
Committee.
6.3 Discretion of Committee and the Board of Directors. The
Committee shall from time to time at its discretion grant Options pursuant
to the terms of the Plan. The Committee shall have plenary authority to
determine the Optionees to whom and the times at which Options shall be
granted, the number of Option Shares to be covered by such grants and the
price and other terms and conditions thereof, including a specification with
respect to whether an Option is intended to be an ISO, subject, however, to
the express provisions of the Plan and compliance with Rule 16b-3(d) under
the Exchange Act. In making such determinations the Committee may take into
account the nature of the Optionee's services and responsibilities, the
Optionee's present and potential contribution to the Company's or its
Affiliates success and such other factors as it may deem relevant. The
interpretation and construction by the Committee of any provision of the
Plan or of any benefit granted under it shall be final, binding and
conclusive.
6.4 No Liability. No member of the Board of Directors or the
Committee shall be personally liable for any action or determination with
respect to the Plan or any benefit thereunder, or for any act or omission of
any other member of the Board of Directors or the Committee, including but
not limited to the exercise of any power and discretion given to him under
the Plan, except those resulting from (i) any breach of such person's duty
of loyalty to the Company or its stockholders, (ii) acts or omissions not in
good faith or involving intentional misconduct or a knowing violation of law
or (iii) any transaction from which such person derived an improper personal
benefit.
6.5 Indemnification. In addition to such other rights of
indemnification as he may have as a member of the Board of Directors or the
Committee, and with respect to the administration of the Plan and the
granting of Options hereunder, each member of the Board of Directors and of
the Committee shall be entitled to be indemnified by the Company to the
fullest extent permitted by applicable law, for all expenses (including but
not limited to reasonable attorneys' fees and expenses), judgments, fines
and amounts paid in settlement reasonably incurred by him in connection with
or arising out of any action, suit or proceeding with respect to the
administration of the Plan or the granting of Benefits hereunder (each a
"Proceeding") in which he may be involved by reason of his being or having
been a member of the Board of Directors or the Committee, whether or not he
continues to be such member of the Board of Directors or the Committee at
the time of the incurring of such expenses; provided however, that such
indemnity shall not include any expenses incurred by such member of the
Board of Directors or Committee in respect of any matter in which any
settlement is effected in an amount in excess of the amount approved by the
Company on the advice of its legal counsel; and provided further that no
right of indemnification under the provisions set forth herein shall be
available to or accessible by any such member of the Committee unless within
ten (10) days after institution of any such action, suit or proceeding he
shall have offered the Company in writing the opportunity to handle and
defend such action, suit or proceeding at its own expense. The foregoing
right of indemnification shall inure to the benefit of the heirs, executors
or administrators of each such member of the Board of Directors or the
Committee and shall be in addition to all other rights to which such member
of the Board of Directors or the Committee would be entitled to as a matter
of law, contract or otherwise. Expenses (including attorneys' fees) incurred
by a member of the Board of Directors or the Committee in defending any
Proceeding may be paid by the Company in advance of the final disposition of
such Proceeding upon receipt of an undertaking by or such person to repay
all amounts advanced if it should be ultimately be determined that such
person is not entitled to be indemnified under this Article or otherwise,
except that no such advance payment will be required if it is determined by
the Board of Directors that there is a substantial probability that such
person will not be able to repay the advance payments.
6.6 Adjustments on Changes in Common Stock. The aggregate number of
shares of Common Stock as to which Options may be granted under the Plan,
the number of Option Shares covered by each outstanding Option and the
Option Price per Option Share specified in each outstanding Option shall be
appropriately adjusted in the event of a stock dividend, stock split or
other increase or decrease in the number of issued and outstanding shares of
Common Stock resulting from a subdivision or consolidation of the Common
Stock or other capital adjustment (not including the issuance of Common
Stock on the conversion of other securities of the Company which are
convertible into Common Stock) effected without receipt of consideration by
the Company. The Committee shall have the authority to determine the
adjustments to be made under this Section and any such determination by the
Committee shall be final, binding and conclusive, provided that no
adjustment shall be made which will cause an ISO to lose its status as such.
ARTICLE VII
MISCELLANEOUS
7.1 Amendment of the Plan. The Committee may terminate, suspend,
amend or otherwise modify the Plan from time to time in such manner as it
may deem advisable. Notwithstanding the foregoing, any amendment to the Plan
which would change the eligibility of employees or the class of employees
eligible to receive an Option or increase the maximum number of Option
Shares as to which Options may be granted, will only be effective if such
action is approved by the holders of common stock of the Company having a
majority of the vote.
7.2 Continued Employment. The grant of an Option pursuant to the
Plan shall not be construed to imply or to constitute evidence of any
agreement, express or implied, on the part of the Company to continue the
employment of the Optionee with the Company or any of its Affiliates.
7.3 Withholding of Taxes. Whenever the Company proposes or is
required to issue or transfer Option Shares, the Company shall have the
right to (a) require the recipient or transferee to remit to the Company an
amount sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery or transfer of any certificate or
certificates for such Option Shares, or (b) take whatever action it deems
necessary to protect its interests, including withholding a portion of such
Option Shares.
