As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SITEK, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 86-0923886
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1817 West Fourth Street, Tempe, Arizona 85281
(Address of principal executive offices) (zip code)
SITEK, INCORPORATED
1999 STOCK INCENTIVE PLAN
DIRECTOR OPTION GRANT
(Full title of the plan)
Don M. Jackson, Jr. COPY TO:
Chief Executive Officer P. Robert Moya, Esq.
SITEK, INCORPORATED QUARLES & BRADY
1817 West Fourth Street One East Camelback Road, Suite 400
Tempe, Arizona 85281 Phoenix, Arizona 85012-1659
(Name and address of agent for service)
(480) 921-8555
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Title of Proposed Proposed maximum Amount of
securities to Amount to be maximum offering aggregate registration
be registered registered price per share offering price fee
- --------------------------------------------------------------------------------
Common Stock,
$.005 par value
per Share 2,750,000(1) (2)(3) $15,153,996(2) $4,001
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(1) The 1999 Stock Incentive Plan provides for the possible adjustment of the
number, price and kind of shares covered by options granted or to be
granted in the event of certain capital or other changes affecting the
Registrant's Common Stock. This Registration Statement therefore covers, in
addition to the above-stated 2,750,000 shares, an indeterminate number of
shares that may become subject to the 1999 Stock Incentive Plan by means of
any such adjustment.
(2) Pursuant to Rule 457(h), estimated solely for the purpose of computing the
registration fee, based upon (i) the aggregate exercise price of $3.042 for
the 1,738,000 shares underlying outstanding options, and (ii) as to the
remaining 1,038,500 shares available, $9.75 per share, which is the average
of the high and low sales prices of the Registrant's Common Stock as
reported in the OTC Bulletin Board on March 7, 2000.
(3) The actual offering price will be determined in accordance with the terms
of the 1999 Stock Incentive Plan, which provides that such price shall not
be less than 100% of the fair market value of the Registrant's Common Stock
on the date on which the option is granted.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1 AND ITEM 2.
Information specified in Part I of Form S-8 (Items 1 and 2) will be sent or
given or has been given or sent to participants of the various employee benefit
plans as specified by Rule 428(b)(1) under the Securities Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3.
The following documents filed by Sitek, Incorporated (the "Registrant" or
"Sitek") with the Securities and Exchange Commission (the "Commission") pursuant
to Section 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") are
incorporated herein by reference:
(a) The Registrant's Annual Report on Form 10-K, and Amendment No. 1
thereto on Form 10-K/A, for the fiscal year ended March 31, 1999;
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal periods
ended June 30, 1999, September 30, 1999 and December 31, 1999.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The class of securities registered is common stock, $.005 par value, of
Sitek, Incorporated. The Registrant's certificate of incorporation authorizes
Sitek to issue 50,000,000 shares of common stock and 5,000,000 shares of
preferred stock, $.01 par value. The preferred stock may be issued in such
series, and with such designations, as the Board of Directors may specify at the
time of issuance. Sitek has designated 500,000 shares of the preferred stock as
"Series A Preferred Stock."
The holders of Sitek common stock are entitled to one vote for each share
held of record on each matter submitted to a vote of shareholders. Shareholders
have no cumulative voting rights, which means that the holders of shares
entitled to exercise more than 50% of the voting rights are able to elect all of
the directors. The certificate of incorporation does not provide for
classification of the Board of Directors.
Subject to any prior rights of holders of preferred stock, dividends may be
paid to holders of common stock when, as and if declared by the Board of
Directors out of funds legally available therefor, subject to any contractual
restrictions on the payment of dividends. If Sitek is liquidated, dissolved or
wound up, the holders of common stock will be entitled to receive their pro rata
share of the assets of Sitek remaining after payment or provision for payment of
its debts and other liabilities and the amount of any preferred stock
liquidation preference.
The Sitek common stock has no preemptive or conversion rights or other
subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and nonassessable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the General Corporation Law of the State of Delaware (the
"General Corporation Law") provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation or enterprise, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no cause to believe his or her conduct was unlawful.
Section 145(b) provides that a Delaware corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted under similar standards as
set forth above, except that no indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine that despite the adjudication of
liability, but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to be indemnified for such expenses which the
court shall deem proper.
Section 145 further provides that to the extent a present or former
director or officer of a corporation has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145 or in the defense of any claim, issue or
matter therein, he or she shall be indemnified against expenses actually and
reasonably incurred by him or her in connection therewith; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and that the corporation may
purchase and maintain insurance on behalf of such person against any liability
asserted against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify him or her against such liabilities under such
Section 145.
Section 102(b)(7) of the General Corporation Law provides that a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders may eliminate or limit personal liability of
members of its board of directors or governing body for monetary damages for
breach of a director's fiduciary duty. However, no such provision may eliminate
or limit the liability of a director for breaching his or her duty of loyalty,
failing to act in good faith, engaging in intentional misconduct or knowingly
violating a law, paying a dividend or approving a stock repurchase or redemption
which was illegal, or obtaining an improper personal benefit. A provision of
this type has no effect on the availability of equitable remedies, such as
injunction or rescission, for breach of fiduciary duty. The Company's
Certificate of Incorporation contains such a provision.
The Company's Bylaws provide that the Company shall indemnify officers and
directors to the full extent permitted by and in the manner permissible under
the law.
The Company has directors and officers' liability insurance coverage.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
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ITEM 8. EXHIBITS.
See Exhibit Index following the signature page of this registration
statement, which is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-ef fective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
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.
Reference is made to the indemnification provisions referred to in Item 6
of this registration statement.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Phoenix, State of Arizona, on March 31, 2000.
SITEK, INCORPORATED
By: /s/ Don M. Jackson, Jr.
------------------------------------
Don M. Jackson, Jr.
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Don M. Jackson, Jr. his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, and any
other regulatory authority, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute, 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 date indicated.
Person Title Date
------ ----- ----
/s/ Don M. Jackson, Jr. Chairman of the Board of Directors, March 31, 2000
- ------------------------ President and Chief Executive Officer
Don M. Jackson, Jr. (Principal Executive Officer)
/s/ Gloria Zemla Chief Financial Officer March 31, 2000
- ------------------------ (Principal Financial Officer)
Gloria Zemla
/s/ Maurice McGill Director March 31, 2000
- ------------------------
Maurice McGill
/s/ Howard Neff Director March 31, 2000
- ------------------------
Howard Neff
/s/ Dan L. Shunk Director March 31, 2000
- ------------------------
Dan L. Shunk
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SITEK, INCORPORATED
(THE "REGISTRANT")
EXHIBIT INDEX
TO
FORM S-8 REGISTRATION STATEMENT
Exhibit Incorporated
Number Description Filed Herewith by Reference
- ------ ----------- -------------- ------------
4.1 Certificate of Incorporation Incorporated
of the Registrant by reference
from Registrant's
Form 10-K filed
on April 17, 1998
4.2 Bylaws of the Registrant Incorporated
by reference
from Registrant's
Form 10-K filed
on April 17, 1998
4.3 Sitek, Incorporated X
1999 Stock Incentive Plan
5.1 Opinion of Counsel X
23.1 Consent of Independent Auditors X
23.2 Consent of Counsel Contained in opinion
filed as Exhibit 5.1
24 Powers of Attorney Signature page to
this registration
statement
SITEK, INCORPORATED
1999 STOCK INCENTIVE PLAN
as amended and restated
I. INTRODUCTION
1.01 PURPOSE. This plan shall be known as the SITEK, Incorporated 1999
Stock Incentive Plan (the "1999 Plan" or the "Plan"). The purpose of the Plan is
to provide incentive for key employees and directors, independent contractors
and consultants of SITEK, Incorporated and its Subsidiaries to improve corporate
performance on a long- term basis, and to attract and retain key employees and
qualified directors.
1.02 EFFECTIVE DATE. The effective date of the 1999 Plan shall be
January 19, 1999, subject to approval of the 1999 Plan by the shareholders of
SITEK, Incorporated at the 1999 annual meeting. Any Awards granted prior to such
shareholder approval shall be expressly conditioned upon such shareholder
approval of the Plan.
II. PLAN DEFINITIONS
2.01 DEFINITIONS. For Plan purposes, except where the context clearly
indicates otherwise, the following terms shall have the meanings set forth
below:
(a) "AWARD" shall mean the grant of any form of stock option,
restricted stock or stock appreciation right.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(d) "COMMITTEE" shall mean the Compensation Committee of the Board,
as described in Section 4.01.
(e) "COMPANY" shall mean SITEK, Incorporated, a Delaware corporation.
(f) "COMPANY STOCK" shall mean Common Stock of the Company and such
other stock and securities as may be substituted therefor
pursuant to Section 3.02.
(g) "ELIGIBLE PARTICIPANT" shall mean any regular salaried employee
of the Company or a Subsidiary who satisfies all of the
requirements of Section 5.01 and any director, independent
contractor or consultant of the Company; provided, however that
any director, independent contractor or consultant of the Company
who is not also an employee of the Company shall not be eligible
to receive an incentive stock option and independent contractors
and consultants shall be eligible only if (i) they are natural
persons, (ii) they provide bona fide services to the Company and
(iii) the services they provide are not in connection with the
offer or sale of the Company's securities in a capitalraising
transaction, and do not directly or indirectly promote or
maintain a market for the Company's securities.
(h) "FAIR MARKET VALUE" on any date shall mean, with respect to
Company Stock, if the stock is then listed and traded on a
registered national securities exchange, or is quoted in the
NASDAQ National Market System, the mean of the high and low sale
prices recorded in composite transactions as reported in the WALL
STREET JOURNAL (Western Edition). In the absence of reported
sales on such date, or if the stock is not so listed or quoted,
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but is traded in the overthecounter market, "Fair Market Value"
shall be the mean of the closing bid and asked prices for such
shares on such date as reported in the WALL STREET JOURNAL
(Western Edition), or, if not so reported as obtained from a bona
fide market maker in such shares. Notwithstanding the foregoing,
at any time when the Company Stock is not traded in the
overthecounter market or there is no bona fide market maker for
the Company Stock or the Board determines that, due to the
limited trading activity in the Company Stock, the reported sales
or bid and ask prices for the Company Stock do not represent
actual fair market value, "Fair Market Value" shall mean the
value of the Company Stock as reasonably determined by the Board
based on the then enterprise value of the Company without any
discount for illiquidity or trading restrictions which may apply
to shares of Company Stock.
(i) "GRANTEE" shall mean any person who has been granted an Award
under the Plan.
(j) "OPTION PERIOD" shall mean the period of time provided pursuant
to Section 6.04 within which a stock option may be exercised.
(k) "SUBSIDIARY" shall mean any corporation now or hereafter in
existence in which the Company owns, directly or indirectly, a
voting stock interest of more than 50%.
III. SHARES SUBJECT TO OPTION
3.01 AVAILABLE SHARES. The total number of shares of Company Stock that
may be issued under the Plan, shall in the aggregate not exceed 2,000,000
shares. Shares subject to and not issued under an Award which expires,
terminates, is canceled or forfeited for any reason shall again become available
for the granting of Awards.
3.02 CHANGES IN THE NUMBER OF AVAILABLE SHARES. If any stock dividend
is declared upon the Company Stock, or if there is any stock split, stock
distribution, dividend in partial liquidation, or other recapitalization of the
Company, the aggregate number and kind of shares which may thereafter be offered
under the Plan shall, in the discretion of the Committee, be proportionately and
appropriately adjusted and the number and kind of shares then subject to options
granted to employees under the Plan and the per share option price therefor
shall be proportionately and appropriately adjusted, without any change in the
aggregate purchase prices to be paid therefor.
IV. ADMINISTRATION
4.01 ADMINISTRATION BY THE COMMITTEE. The Plan shall be administered by
the Compensation Committee of the Board, or such other committee of the Board as
the Board may from time to time determine. The Committee shall be constituted so
as to permit the Plan to comply with the provisions of Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor rule) and Section 162(m) of
the Code.
4.02 COMMITTEE POWERS. The Committee is empowered to adopt such rules,
regulations and procedures and take such other action as it shall deem necessary
or proper for the administration of the Plan and, in its discretion, may modify,
extend or renew any option theretofore granted. The Committee shall also have
authority to interpret the Plan, and the decision of the Committee on any
questions concerning the interpretation of the Plan shall be final and
conclusive. The Committee may consult with counsel, who may be counsel for the
Company, and shall not incur any liability for any action taken in good faith in
reliance upon the advice of counsel. The Committee may adopt such procedures and
subplans as are necessary or appropriate to permit participation in the Plan by
Eligible Participants who are foreign nationals or employed outside of the
United States.
Subject to the provisions of the Plan, the Committee shall have full
and final authority to:
(a) designate the persons to whom Awards shall be granted;
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(b) grant Awards in such form and amount as the Committee shall
determine;
(c) impose such limitations, restrictions and conditions upon any
such Award as the Committee shall deem appropriate, and
(d) waive in whole or in part any limitations, restrictions or
conditions imposed upon any such Award as the Committee shall
deem appropriate.
V. PARTICIPATION
5.01 ELIGIBILITY. Key employees and directors of the Company and its
Subsidiaries (including officers and employees who may be members of the Board)
who, in the sole opinion of the Committee, contribute significantly to the
growth and success of the Company or a Subsidiary shall be eligible for Awards
under the Plan. From among all such Eligible Participants, the Committee shall
determine from time to time those Eligible Participants to whom Awards shall be
granted. No Eligible Participants may be granted an Award or Awards covering
more than 150,000 shares of Company Stock in any calendar year. No Eligible
Participant shall have any right whatsoever to receive an Award unless so
determined by the Committee.
5.02 NO EMPLOYMENT RIGHTS. The Plan shall not be construed as
conferring any rights upon any person for a continuation of employment, nor
shall it interfere with the rights of the Company or any Subsidiary to terminate
the employment of any person or to take any other action affecting such person.
VI. STOCK OPTIONS
6.01 GENERAL. Stock options granted under the Plan may be in the form
of incentive stock options (within the meaning of the Code) or nonqualified
stock options. Each option granted under the Plan shall be evidenced by a stock
option agreement between the Company and the Grantee which shall contain the
terms and conditions required by this Article VI, and such other terms and
conditions, not inconsistent herewith, as the Committee may deem appropriate in
each case. Without limiting the generality of the foregoing, the Committee may
condition the exercise of stock options upon the attainment of specified levels
of revenue, earnings per share, net income, return on equity, return on sales,
stock price, costs, individual performance measures or such other factors or
criteria as the Committee shall determine.
The provisions of option grants need not be the same with respect to each
recipient.
6.02 OPTION PRICE. The price at which each share of Company Stock
covered by an option may be purchased shall be determined in each case by the
Committee and set forth in each stock option agreement. In no event shall such
price be less than 100% of the Fair Market Value of the Company Stock when the
option is granted. Notwithstanding the foregoing, the Committee may grant
nonqualified stock options with an option price of less than 100% of the Fair
Market Value of the Company Stock on the condition that the Grantee make a cash
payment to the Company on the date of grant of at least the difference between
the Fair Market Value of the Company Stock and the option price (i.e., the sum
of the cash payment and the option price must be equal to or in excess of the
Fair Market Value of the Company Stock on the date of grant). Employees who own,
directly or indirectly, within the meaning of Code Section 425(d), more than 10%
of the voting power of all classes of stock of the Company or any parent or
subsidiary corporation shall not be eligible to receive an incentive stock
option hereunder unless the purchase price per share under such option is at
least 110% of the Fair Market Value of the stock subject to the option and such
option by its terms is not exercisable after the expiration of five years from
the date such option is granted.
6.03 DATE OPTION GRANTED. For purposes of the Plan, a stock option
shall be considered as having been granted on the date on which the Committee
authorized the grant of the option, except where the Committee has designated a
later date, in which event the later date shall constitute the date of grant of
the option; provided, however, that in either case notice of the grant of the
option shall be given to the employee within a reasonable time.
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6.04 PERIOD FOR EXERCISE. Each stock option agreement shall state the
period or periods of time within which the option may be exercised by the
Grantee, in whole or in part, which shall be the period or periods of time as
may be determined by the Committee, provided that:
(a) No Option Period for an incentive stock option may exceed 10
years from the date the option is granted, and
(b) Options must be exercised while the Grantee is employed by the
Company or a Subsidiary or within three months after termination
of employment, or if termination is caused by death or
disability, within one year after such termination.
(c) Unless permitted by the Committee, no option may be exercised by
an employee who has been terminated for cause, as determined by
the Committee.
6.05 SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. For so long as Section
422 (or any successor provision) of the Code so provides, the aggregate Fair
Market Value (determined as of the date the incentive stock option is granted)
of the number of shares with respect to which incentive stock options are
exercisable for the first time by a Grantee during any calendar year shall not
exceed $100,000 or such other limit as may be required by the Code.
6.06 METHOD OF EXERCISE. Subject to Section 6.04, each option may be
exercised in whole or in part from time to time as specified in the stock option
agreement. Each Grantee may exercise an option by giving written notice of the
exercise to the Company, specifying the number of shares to be purchased,
accompanied by payment in full of the purchase price therefor. The purchase
price may be paid in cash, by check, or, with the approval of the Committee, by
delivering shares of Company Stock which have been beneficially owned by the
Grantee, the Grantee's spouse, or both of them for a period of at least six
months prior to the time of exercise ("Delivered Stock") or a combination of
cash and Delivered Stock. Delivered Stock shall be valued at its Fair Market
Value determined as of the date of exercise of the option. No Grantee shall be
under any obligation to exercise any option hereunder. The holder of an option
shall not have any rights of a stockholder with respect to the shares subject to
the option until such shares shall have been delivered to him or her.
6.07 MERGER, CONSOLIDATION OR REORGANIZATION. In the event of a merger,
consolidation or reorganization with another corporation in which the Company is
not the surviving corporation, the Committee may, subject to the approval of the
Board of Directors of the Company, or the board of directors of any corporation
assuming the obligations of the Company hereunder, take action regarding each
outstanding and unexercised option pursuant to either clause (a) or (b) below:
(a) Appropriate provision may be made for the protection of such
option by the substitution on an equitable basis of appropriate
shares of the surviving corporation, provided that the excess of
the aggregate Fair Market Value of the shares subject to such
option immediately before such substitution over the exercise
price thereof is not more than the excess of the aggregate fair
market value of the substituted shares made subject to option
immediately after such substitution over the exercise price
thereof; or
(b) The Committee may cancel such option. In such event, the Company,
or the corporation assuming the obligations of the Company
hereunder, shall pay the employee an amount of cash (less normal
withholding taxes) equal to the excess of the highest Fair Market
Value per share of the Company Stock during the 60-day period
immediately preceding the merger, consolidation or reorganization
over the option exercise price, multiplied by the number of
shares subject to such option.
6.08 SUBSTITUTE OPTIONS. Notwithstanding the provisions of Sections
6.02 and 6.03 above, if the Company or a Subsidiary consummates a transaction
described in Section 424(a) of the Code (e.g., the acquisition of property or
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stock from an unrelated corporation), persons who become Eligible Participants
on account of such transaction may be granted options in substitution for
options granted by their former employer. If such substitute options are
granted, the Committee, in its sole discretion and consistent with Section
424(a) of the Code, may determine that such substitute options shall have an
exercise price less than 100% of the Fair Market Value of the shares on the
grant date.
VII. RESTRICTED STOCK
7.01 ADMINISTRATION. Shares of restricted stock may be issued either
alone or in addition to other Awards granted under the Plan; provided that a
maximum of 150,000 shares of restricted stock may be granted in any calendar
year. The Committee shall determine the Eligible Participants to whom and the
time or times at which grants of restricted stock will be made, the number of
shares to be awarded, the time or times within which such Awards may be subject
to forfeiture and any other terms and conditions of the Awards. The Committee
may condition the grant of restricted stock upon the attainment of specified
levels of revenue, earnings per share, net income, return on equity, return on
sales, stock price, costs, individual performance measures or such other factors
or criteria as the Committee shall determine. The provisions of restricted stock
Awards need not be the same with respect to each recipient.
7.02 AWARDS AND CERTIFICATES. Each individual receiving a restricted
stock Award shall be issued a certificate in respect of such shares of
restricted stock. Such certificate shall be registered in the name of such
individual and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award, substantially in the
following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) of the SITEK, Incorporated 1999 Stock Incentive Plan and a
Restricted Stock Agreement. Copies of such Plan and Agreement are on
file at the offices of SITEK, Incorporated."
The Committee may require that the certificates evidencing such shares be held
in custody by the Company until the restrictions thereon shall have lapsed and
that, as a condition of any restricted stock Award, the Grantee shall have
delivered a stock power, endorsed in blank, relating to the Company Stock
covered by such Award.
7.03 TERMS AND CONDITIONS. Shares of restricted stock shall be subject
to the following terms and conditions:
(a) Until the applicable restrictions lapse, the Grantee shall not be
permitted to sell, assign, transfer, pledge or otherwise encumber
shares of restricted stock.
(b) The Grantee shall have, with respect to the shares of restricted
stock, all of the rights of a stockholder of the Company,
including the right to vote the shares and the right to receive
any cash dividends. Unless otherwise determined by the Committee,
cash dividends shall be automatically paid in cash and dividends
payable in Company Stock shall be paid in the form of additional
restricted stock.
(c) Except to the extent otherwise provided in the applicable
Restricted Stock Agreement and (d) below, all shares still
subject to restriction shall be forfeited by the Grantee upon
termination of a Grantee's employment for any reason.
(d) In the event of hardship or other special circumstances of a
Grantee whose employment is involun tarily terminated (other than
for cause), the Committee may waive in whole or in part any or
all remaining restrictions with respect to such Grantee's shares
of restricted stock.
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(e) If and when the applicable restrictions lapse, unlegended
certificates for such shares shall be delivered to the Grantee.
(f) Each Award shall be confirmed by, and be subject to the terms of,
a Restricted Stock Agreement.
VIII. STOCK APPRECIATION RIGHTS
8.01 SAR GRANTS. Stock Appreciation Rights ("SARs") may be granted
alone or in addition to other Awards under the Plan. The Committee shall
determine the Eligible Participants to whom and the time or times at which SAR
grants will be made. The Committee shall have complete discretion to determine
the number of shares to which each SAR applies and the terms and conditions of
the SARs granted under the Plan; provided that the exercise price of an SAR
shall not be less than 100% of the Fair Market Value of Company Stock on the
date the SAR is granted. Without limiting the generality of the foregoing, the
Committee may condition the exercise of stock appreciation rights upon the
attainment of specified levels of revenue, earnings per share, net income,
return on assets, return on sales, customer satisfaction, stock price, costs,
individual performance measures or such other factors or criteria as the
Committee shall determine. Each SAR grant shall be evidenced by an agreement
that shall contain the terms and conditions of the SAR Award. The provisions of
each SAR Award need not be the same with respect to each recipient.
8.02 METHOD OF EXERCISE. An SAR may be exercised in whole or in part
from time to time as specified in the SAR agreement. Each Grantee may exercise
an SAR by giving written notice of the exercise to the Company, specifying the
number of shares with respect to which the SAR is being exercised.
8.03 PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Grantee shall be
entitled to receive from the Company an amount determined by multiplying: (a)
the difference between the Fair Market Value of the Company Stock on the date of
exercise over the exercise price; times (b) the number of shares with respect to
which the SAR is exercised. At the discretion of the Committee, the payment upon
SAR exercise may be in cash, in shares of Company Stock of equivalent value or
in some combination thereof.
IX. WITHHOLDING TAXES.
9.01 GENERAL RULE. Pursuant to applicable federal and state laws, the
Company is or may be required to collect withholding taxes upon the exercise of
an Award or the lapse of stock restrictions. The Company may require, as a
condition to the exercise of an Award or the issuance of a stock certificate,
that the Grantee concurrently pay to the Company (either in cash or, at the
request of Grantee but in the discretion of the Committee and subject to such
rules and regulations as the Committee may adopt from time to time, in shares of
Delivered Stock) the entire amount or a portion of any taxes which the Company
is required to withhold by reason of such exercise or lapse of restrictions, in
such amount as the Committee or the Company in its discretion may determine.
9.02 WITHHOLDING FROM SHARES TO BE ISSUED. In lieu of part or all of
any such payment, the Grantee may elect, subject to such rules and regulations
as the Committee may adopt from time to time, or the Company may require that
the Company withhold from the shares to be issued that number of shares having a
Fair Market Value equal to the amount which the Company is required to withhold.
X. GENERAL
10.01 NONTRANSFERABILITY. No Award shall be transferable by a
Grantee otherwise than by will or the laws of descent and distribution, provided
that in accordance with Internal Revenue Service guidance, the Committee, in its
discretion, may grant nonqualified stock options that are transferable, without
payment of consideration, to family members of the Grantee or to trusts or
partnerships for such family members. The Committee may also amend outstanding
stock options to provide for such transferability.
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10.02 GENERAL RESTRICTION. Each Award shall be subject to the
requirement that if at any time the Board or the Committee shall determine, in
its discretion, that the listing, registration, or qualification of securities
upon any securities exchange or under any state or federal law, or the consent
or approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Award or the issue or
purchase of securities thereunder, such Award may not be exercised in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board or the Committee.
10.03 EXPIRATION AND TERMINATION OF THE PLAN. The Plan will terminate
10 years after the effective date of the Plan, except as to Awards then
outstanding under the Plan, which Awards shall remain in effect until they have
been exercised, the restrictions have lapsed or the Awards have expired or been
forfeited. The Plan may be abandoned or terminated at any time by the Board of
Directors of the Company, except with respect to any Awards then outstanding
under the Plan.
10.04 AMENDMENTS. The Board may from time to time amend, modify,
suspend or terminate the Plan; pro-vided, however, that no such action shall be
made without shareholder approval where such change would be required in order
to comply with Rule 16b-3 under the Securities Exchange Act of 1934 (or any
successor rule) or the Code. Subject to the terms and conditions and within the
limitations of the Plan, the Committee may modify, extend or renew outstanding
Awards granted under the Plan, accept the surrender of outstanding options (to
the extent not theretofore exercised), reduce the exercise price of outstanding
options, or authorize the granting of new options in substitution therefor (to
the extent not theretofore exercised). Notwithstanding the foregoing, no
modification of an Award (either directly or through modification of the Plan)
shall, without the consent of the Grantee, alter or impair any rights of the
Grantee under the Award.
10.05 CONSTRUCTION. Except as otherwise required by applicable federal
laws, or by the General Corporation Law of the State of Delaware, the Plan shall
be governed by, and construed in accordance with, the laws of the State of
Arizona.
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EXHIBIT 5
March 31, 2000
Sitek, Incorporated
1817 West Fourth Street
Phoenix, Arizona 85281
Gentlemen:
We are providing this opinion in connection with the Registration Statement
of Sitek, Incorporated (the "Company") on Form S-8 (the "Registration
Statement"), filed under the Securities Act of 1933, as amended (the "Act"),
with respect to the proposed sale of up to 2,500,000 shares of Common Stock, par
value $.005 per share, of the Company (the "Shares") pursuant to the Sitek,
Incorporated 1999 Stock Incentive Plan, as amended (the "Plan"). We have
examined (i) the Registration Statement; (ii) the Company's Certificate of
Incorporation and Bylaws; (iii) the Plan; (iv) corporate proceedings relating to
the adoption of the Plan and the issuance of the Shares; and (v) such other
documents and records as we have deemed necessary in order to render this
opinion. In rendering this opinion, we have relied as to certain factual matters
on certificates of officers of the Company and of state officials.
Based upon the foregoing, it is our opinion that the Shares, when issued
and paid for as contemplated by the Registration Statement and the Plan, will be
validly issued, fully paid and non-assessable by the Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving our consent, we do not admit that we are "experts" within
the meaning of Section 11 of the Act, or that we come within the category of
persons whose consent is required by Section 7 of the Act.
Very truly yours,
QUARLES & BRADY LLP
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated May 28, 1999, appearing in the Annual
Report on Form 10-K of Sitek, Incorporated for the period ended March 31, 1999.
McGladrey & Pullen, LLP
Phoenix, Arizona
March 31, 2000
