As filed with the Securities and Exchange Commission on August 13, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Saratoga Brands Inc.
(exact name of issuer as specified in its charter)
New York 13-3413467
(State of incorporation) (federal ID number)
1835 Swarthmore Avenue
Lakewood, New Jersey 08701
(Address of Principal (Zip Code)
Executive Offices)
Saratoga Brands Inc.
1998 Incentive and Non-qualified Stock Option Plan
and
1998 Director Stock Option Plan
(Full Title of the Plan)
With copy to:
Mr. Bernard F. Lillis, Jr. W. Raymond Felton, Esq.
Saratoga Brands Inc. Greenbaum, Rowe, Smith, Ravin,
1835 Swarthmore Avenue Davis & Himmel
Lakewood, New Jersey 08701 Metro Corporate Campus I
(732)363-3800 P.O. Box 5600
(Name, address and telephone Woodbridge, New Jersey 07095
number of agent for service) (732)549-5600
Appropriate Date of Commencement of Proposed Offer to Public: From time to time
after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
| | Proposed | Proposed |
| | maximum | maximum |
Title of Proposed | Amount | offering | aggregate| Amount of
securities to | to be | price per| offering | registration
be registered | Registered(1)| share (2)| price(2) | fee
-----------------------------------------------------------------------
| | | |
Common Stock; | | | |
$.001 par value | 1,000,000 | | |
per share | shares | $1.25 | $727,916 | $203.82
-----------------------------------------------------------------------
1) An undetermined number of additional shares may be issued as a result of
stock dividends, stock splits or other recapitalizations.
2) These shares of Common Stock represent the shares of Common Stock with
respect to which options may have been granted under the 1998 Incentive and
Non-Qualified Stock Option Plan or the 1998 Director Stock Option Plan. Under
the 1998 Incentive and Non-Qualified Stock Option Plan 25,000 options have been
granted at $0.50, 25,000 options have been granted at $0.625, 25,000 options
have been granted at $0.75, 389,445 options have been granted at $0.875, and
25,000 options have been granted at $1.00. Under the 1998 Director Stock Option
Plan 120,000 options have been granted at $0.875. All other shares are to be
offered at prices not presently determinable. Pursuant to Rule 457(h), the
option price for these shares is estimated solely for the purpose of determining
the registration fee and is based upon the closing price of the Common Stock on
August 2, 1999 which was $0.50 as reported by the NASDAQ.
Page 1 of 13
Exhibit Index on Page II-2
Cross reference sheet showing the location in the Prospectus of information
required to be included in the Prospectus in response to Items of Form S-8.
Item Caption or Sub-Caption in Prospectus Page
1. Plan Information . . . . . . . . . . . . . . . . . 6
2. Registrant Information and Employee Plan
Annual Information . . . . . . . . . . . . . . . 6
3. Incorporation of Documents by Reference . . . . . . 12
4. Description of Securities . . . . . . . . . . . . . 10
5. Interests of Named Experts and Counsel . . . . . . N/A
6. Indemnification of Officers and Directors . . . . . 10
7. Exemption From Registration Claimed . . . . . . . . N/A
8. Exhibits . . . . . . . . . . . . . . . . . . . . . 13
9. Undertakings . . . . . . . . . . . . . . . . . . . 13
2
<PAGE>
PROSPECTUS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Saratoga Brands Inc.
1998 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
and
1998 DIRECTOR STOCK OPTION PLAN
---------------------------------------------
1,000,000 SHARES OF COMMON STOCK
($.001 PAR VALUE PER SHARE)
---------------------------------------------
Options for shares (the "Shares") of the common stock, $.001 par value
per share (the "Common Stock") of Saratoga Brands Inc.(the "Company") covered by
this Prospectus have been, and may in the future be, granted by the Company to
employees (including officers and directors) of the Company under the 1998
Incentive and Non-qualified Stock Option Plan (the "Plan") or the 1998 Director
Stock Option Plan the ("DirectorPlan"). Each employee receiving an option is
offered the opportunity to purchase the number of Shares specified in such
option at a price and on the terms set forth therein.
The net proceeds of the offering covered hereby are not now
determinable as such proceeds will depend upon the number of shares offered, the
number of shares purchased, prevailing market prices and expenses incurred.
However, the maximum gross proceeds will be $727,916.
It is advisable for an optionee to consult with legal counsel
concerning the securities and tax law implications of his acquisition or
disposition of shares under the Plan.
Any officer, director or beneficial owner of more than 10% of our
common stock who holds an option under the Plan should consider the
applicability of Section 16 of the Securities Exchange Act of 1934, as amended,
in connection with the exercise of any such option and the disposition of any of
the Company's common stock acquired thereby.
Our principal executive office is located at 1835 Swarthmore Avenue,
Lakewood, New Jersey 08701 and the telephone number of such office is
(732)363-3800.
The date of this Prospectus is August 12, 1999.
3
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TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION.......................................... 5
INTRODUCTION .................................................. 6
PURPOSE AND ADMINISTRATION OF THE PLAN ........................ 6
DESCRIPTION OF OPTIONS AND TAX STATUS.......................... 7
Award of options ...................................... 7
Eligibility............................................ 7
Termination and Amendment.............................. 7
Option Price........................................... 8
Nontransferability .................................... 8
Federal Income Tax Treatment of Incentive and
Non-Qualified Stock Options ..................... 8
RESTRICTIONS ON RESALE OF COMMON STOCK ........................ 9
DESCRIPTION OF CAPITAL STOCK .................................. 10
General ............................................... 10
Common Stock .......................................... 10
Registrar and Transfer Agent .......................... 10
LEGAL MATTERS ................................................. 10
INDEMNIFICATION OF OFFICERS AND DIRECTORS ..................... 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ............... 12
ADDITIONAL INFORMATION ........................................ 11
4
<PAGE>
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by us can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, Washington, D.C. 20049 and at the following regional
offices of the Commission: New York Regional Office, Room 1400, 75 Park Place,
New York, New York 10007; and Chicago Regional Office, Room 3190, Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60611.
Copies of such material can also be obtained from the Public Reference Section
of the Commission in Washington, D.C. (at the address above) at prescribed
rates.
Our Common Stock is traded on the NASDAQ Small Cap Market System
(symbol "STGA").
This Prospectus omits certain information contained in the Registration
Statement on file with the Commission with respect to the Shares offered hereby.
The information omitted may be obtained from the Commission's office in
Washington, D.C. (at the address above) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there without charge.
We will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated by reference in the
Registration Statement of which this Prospectus forms a part (excluding exhibits
to such documents unless specifically incorporated by reference). Requests for
such copies should be directed to the Corporate Secretary, Saratoga Brands Inc.,
1835 Swarthmore Avenue, Lakewood, New Jersey 08701, (732) 363-3800.
We furnish our shareholders with annual reports containing audited
financial statements.
5
<PAGE>
INTRODUCTION
We have adopted both the Plan and the DirectorPlan (collectively the
"Plans") pursuant to shareholder approval on June 9, 1998. Under the Plan,
Shares may be offered to employees of the Company in accordance with the Plan as
described herein. Under the DirectorPlan options may only be granted to outside
(non-employee) directors. These offers are, or will be, made at the prices and
on the terms and conditions contained in the respective stock option agreements
between us and the recipients of stock option grants.
Our principal executive offices and telephone number are set forth on
the Cover Page of this Prospectus.
Following is a summary of the Plans, which is qualified in its entirety
by reference to the Plans and certain other agreements which have been filed
previously with the Securities and Exchange Commission and are incorporated by
reference to the Registration Statement on Form S-8 relating to this Prospectus.
PURPOSE AND ADMINISTRATION OF PLAN
We believes that the Plans provide valuable incentives for our
employees and directors by providing an opportunity for investment in our Common
Stock, as an inducement for such individuals to remain with us, and thereby
encouraging them to increase their efforts to make the our business more
successful.
Pursuant to the terms of the Plans, 800,000 Shares are reserved for
issuance under the Plan and 200,000 shares are reserved for issuance under the
DirectorPlan. In the event there is any change in the number of our issued
shares without new consideration to the us (such as by stock dividends or stock
splits) or in the event that the number of our outstanding shares is changed
into or exchanged for a different number of shares of Common Stock or other
securities of our or of another corporation, whether through reorganization,
recapitalization, split-up, combination of shares, merger or consolidation, the
number of Shares reserved for issuance under the Plans, the number of Shares
subject to any outstanding option and the option price per Share of each
outstanding stock option shall be appropriately adjusted. In the event there is
any change in the number or kind of outstanding shares of Common Stock or of any
shares or other securities into which such shares of Common Stock have been
changed or exchanged, other than the transactions specified in this paragraph,
equitable adjustment in the options may be made in the sole discretion of our
Board of Directors.
We will provide reports to participants as to the amount and status of
their accounts upon request.
The Plans are administered by our Board of Directors or by the
Compensation Committee (the "Committee") of the Board of Directors which is
composed of not less than two members of the Board, each of whom must be a
"disinterested person" as used in Rule 16b-3 under the Securities Exchange Act
of 1934. We currently have two disinterested directors and the Plans are
therefore administered by them.
6
<PAGE>
DESCRIPTION OF OPTIONS AND TAX STATUS
The Plan provides for the grant of incentive and non-qualified stock
options, while the DirectorPlan provides that no person shall have any
discretion to select which outside directors shall be granted options or to
determine the number of shares to be covered by options granted to outside
directors. A description of these options and certain federal income tax aspects
associated therewith is set forth below. Because tax results may vary due to
individual circumstances, each participant in the Plan is urged to consult his
or her personal tax advisor with respect to the federal and state tax
consequences of the exercise of an option or the sale of stock received upon the
exercise thereof.
Award of Options
Options may be granted under the Plan to all of our employees
(including employees who are officers and/or directors). There is no specific
limitation on the number of Shares with respect to which options may be granted
to any individual under the Plan.
Under the DirectorPlan each outside director shall be automatically
granted an option to purchase forty thousand shares on the date which such
person first becomes an outside director. Additionally, each outside director
shall also automatically be granted and option to purchase twenty thousand
shares on the date following the date of our annual stockholder's meeting each
year, provided he or she is then an outside director.
Eligibility
Under the Plan options to purchase shares shall be granted only to
employees (the term "employee" shall include officers as well as other key
employees, and shall include directors who are also employees) of and
consultants it being our intention that awards shall be made only to persons who
satisfy the definition of "employee" contained in Rule 405 under the Act.
Termination and Amendment
The Board may amend, suspend, or terminate either or both of the Plans
at any time provided that no such modification shall impair the rights of any
recipient under any award.
7
<PAGE>
Option Price
The Plan provides that the option price with respect to each option
will be determined by the Plan's administrators, but, in the case of incentive
stock options, shall not be less than 100% (110%, in the case of incentive stock
options granted to 10% Shareholders) of the fair market value of the Common
Stock on the date the option is granted. Payment of the option price shall be
made in cash or certified check.
Under the DirectorPlan the exercise price shall be the fair market
value of the shares on the date of grant of the option.
Nontransferability
Each option granted under the Plans is not transferable by the holder
except by will or the laws of descent and distribution of the State wherein the
holder is domiciled at the time of his death.
Federal Income Tax Treatment of Incentive and Non-Qualified Stock Options
Currently, an employee will not be deemed to have realized income
upon the grant of a non-qualified stock option unless the option has a readily
ascertainable fair market value at the time it is granted. Generally, an
employee will recognize ordinary income upon the exercise of a non-qualified
stock option (or, if the stock subject to the option is restricted within the
meaning of Code Section 83 and the employee does not otherwise elect to
recognize income upon the exercise of the stock option, at such time as the
Shares become transferable or are no longer subject to a substantial risk of
forfeiture) in an amount equal to the excess (if any) of the fair market value
of the Shares purchased, at the time of exercise, over the exercise price. We
will be entitled to deduct an amount equal to the amount included as income by
the employee for the our taxable year which includes the close of the employee's
taxable year in which the income is included by the employee.
An employee will also not be deemed to have received income upon the
grant of an incentive stock option or, except as noted below, upon the exercise
of such option. Unless shares acquired upon exercise are disposed of within two
years of the date of grant or within one year of exercise, upon the sale of such
shares, the optionee will generally recognize capital gain or loss measured by
the difference between the amount realized on the sale and the price paid for
the shares. If a sale is made prior to either of such dates, an optionee's gain
on the sale of the shares will be treated as ordinary income to the extent of
the lesser of the excess of the fair market value of the shares at the time of
exercise over the option price and the excess of the amount realized on the sale
of stock over the option price. We will be allowed a deduction at the time of
sale in the amount of the ordinary income recognized by the optionee. The
balance of any gain realized will be treated as long-term or short-term capital
gain, depending upon the length of time the shares were held by the optionee.
Generally, the excess of the fair market value of an incentive stock
option at the time of exercise (or, if the stock subject to the option is
restricted within the meaning of Code Section 83, at such time as the shares
become transferable or are not longer subject to a substantial risk of
forfeiture), over the option price constitutes an item of tax preference for
purposes of the alternative minimum tax. Thus, under certain circumstances, the
exercise of an incentive stock option will result in a tax at the time of
exercise.
There can be no assurance that the Code or the Regulations promulgated
thereunder will not be amended to change these tax consequences.
Reference should be made to the applicable provisions of the Code and
to the Regulations promulgated thereunder for more detailed information as to
the tax treatment of options granted pursuant to the Plan. Optionees should
consult their tax advisors with specific reference to their own tax situations
and with regard to potential changes in the applicable laws.
8
<PAGE>
RESTRICTIONS ON RESALE OF COMMON STOCK
While the Plans do not place restrictions on the resale of Shares
acquired thereunder, Shares acquired under the Plan by an "affiliate" as that
term is defined in Rule 405 under the Securities Act of 1933, as amended (the
"Act"), may only be resold pursuant to the registration requirements of the Act,
Rule 144, or another applicable exemption therefrom. Generally, sales of
securities, including Shares, are subject to the antifraud provisions contained
in federal and state securities laws. Acquisitions (including acquisitions under
the Plans) and dispositions of Shares by an officer, director or certain of our
affiliates within any six-month period may give rise to our right bto recapture
any profit from such transactions pursuant to Section 16(b) of the Securities
Exchange Act of 1934.
It is advisable for a participant to consult with legal counsel
concerning the securities law implications of his exercise of options and his
acquisition or disposition of Shares under the Plan.
9
<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
Our authorized common stock consists of 25,000,000 shares, par value
$.001 per share. On August 1, 1999, 5,046,661 shares of Common Stock were
outstanding.
Common Stock
Each share of Common Stock has one vote on all matters presented to the
shareholders.
Since the Common Stock does not have cumulative voting rights, the holders of
more than 50% of the shares may, if they choose to do so, elect all the
directors and, in that event, the holders of the remaining shares will not be
able to elect any of the our directors. The holders of Common Stock are entitled
to dividends when and as declared by the Board of Directors and are entitled on
liquidation to all assets remaining after payment of or provision for claims
against us. The Common Stock has no preemptive or other subscription rights.
There are no conversion rights or sinking fund provisions with respect to the
Common Stock.
Registrar and Transfer Agent
The registrar and transfer agent for our Common Stock is Signature
Stock Transfer, Inc., 14675 Midway Road, Suite 221, Dallas Texas 75244.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for us by Greenbaum, Rowe, Smith, Ravin, Davis &
Himmel, Woodbridge, New Jersey.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrants pursuant to the provisions referenced in
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other that 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 hereunder, 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 expresses in the securities Act and will be governed by
the final adjudication of such issue.
10
<PAGE>
ADDITIONAL INFORMATION
This Prospectus constitutes a part of a Registration Statement filed by
us with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933. This Prospectus omits certain of the information
contained in the Registration Statement and reference is hereby made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to us and the securities to which this Prospectus
relates. Statements herein contained concerning the provisions of any document
are not necessarily complete, and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement. Each
such statement is qualified in its entirety by such reference.
11
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by us with the Securities and Exchange
Commission are incorporated herein by reference:
(a) Our Annual Report of Small Business Issuers on Form 10-K filed on
April 15, 1999.
(b) All other reports, if any, filed by us pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 for periods since April 15, 1999.
All documents subsequently filed by us pursuant to Section 13(a), 13(c)
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 herein by reference and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities
Information regarding our securities is included on Page 8 of the
Prospectus comprising part of this Registration Statement.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Information regarding indemnification of directors and officers is
included on page 9 of the Prospectus comprising a part of this Registration
Statement.
Item 7. Exemption from Registration Claimed
Not Applicable.
12
<PAGE>
Item 8. Exhibits
The following are filed as exhibits to this Registration Statement:
Exhibits
5 Opinion of Greenbaum, Rowe, Smith, Ravin, Davis & Himmel
as to the shares of Common Stock being registered.
10(ai) 1998 Incentive and Non-qualified Stock Option Plan.
10(aj) 1998 Director and Stock Option Plan
24.1 Consent of Deloitte & Touche LLP, Certified Public
Accountants
24.2 Consent of Broza, Block & Rubino, Certified Public Accountants
24.3 Consent of Greenbaum, Rowe, Smith, Ravin, Davis & Himmel
(contained in its opinion filed as Exhibit 5).
25 Power of Attorney Regarding Registration Statement.
Item 9. Undertakings
The registrant of the securities being registered hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by section 10(a)() 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.
(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 offering of such
securities at that time shall 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; provided, however, that the undertakings set forth in paragraphs
(1) and (2) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's Annual Report pursuant to Section
13(a) or 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) To deliver or cause to be delivered with the prospectus, to each
employee to whom the prospectus is sent or given, a copy of the Registrant's
Annual Report to stockholders for its last fiscal year, unless such employee
otherwise has received a copy of such report, in which case the registrant shall
state in the prospectus that it will promptly furnish, without charge, a copy of
such report, on written request of the employees. If the last fiscal year of the
registrant has ended within 120 days prior to the use of the prospectus, the
Annual Report of the registrant for the preceding fiscal year may be so
delivered, but within such 120-day period the Annual Report for the last fiscal
year will be furnished to each employee.
(6) To transmit or cause to be transmitted to all employees participating
in the Plan who do not otherwise receive such material as stockholders of the
registrant, at the time and in the manner such material is sent to its
stockholders, copies of all reports, proxy statements and other communications
distributed to its stockholders generally.
13
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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 Township of Lakewood, State of New Jersey, on the 13th day of
August, 1999
Saratoga Brands Inc.
By:/s/ Scott G. Halperin
Scott G. Halperin
Chairman of the Board
Chief Executive Officer
By:/s/ Bernard F. Lillis, Jr.
Bernard F. Lillis, Jr.
Chief Financial Officer
Chief Operating Officer
Director
By:/s/ Joseph Greene
Joseph Greene
Director
14
Exhibit 5
Greenbaum, Rowe, Smith, Ravin, Davis & Himmel, LLP
Metro Corporate Campus One
P.O. Box 5600
Woodbridge, NJ 07095-0988
August 12, 1999
Saratoga Brands Inc.
1835 Swarthmore Avenue
Lakewood, New Jersey 08701
Re: Saratoga Brands Inc.
Gentlemen:
We have acted as counsel to Saratoga Brands Inc., a New York
corporation (the Company"), in connection with the filing by the Company of a
Registration Statement on Form S-8 (Registration No. 333- ), covering the
registration of 1,000,000 shares of common stock, par value $.001 per share
("Common Stock"). We have been asked to issue an opinion as to whether the
Common Stock being registered will, when sold, be legally issued, fully paid,
non-assessable, and binding obligations of the Company.
As counsel to the Company, we have examined the Certificate of
Incorporation and By-Laws, as amended to date, and other corporate records of
the Company and have made such other investigations as we have deemed necessary
in connection with the opinion hereinafter set forth. We have relied, to the
extent we deem such reliance proper, upon certain factual representations of
officers and directors of the Company given in certificates, in answer to our
written inquiries and otherwise, and, although we have not independently
verified all of the facts contained therein, nothing has come to our attention
that would cause us to believe that any of the statements contained therein are
untrue or misleading.
In making the aforesaid examinations, we have assumed the genuineness
of all signatures and the conformity to original documents of all copies
furnished to us. We have assumed that the corporate records of the Company
furnished to us constitute all of the existing corporate records of the Company
and include all corporate proceedings taken by it.
Based solely upon and subject to the foregoing, we are of the opinion
that the shares of Common Stock are duly authorized, issued and fully paid and
non-assessable, and the issuance of such shares by the Company is not subject to
any preemptive or similar rights.
We hereby consent to the filing of this opinion as an Exhibit to the
aforesaid Registration Statement and to the reference to our firm under the
caption "Legal Matters" in the Prospectus.
Very truly yours,
Greenbaum, Rowe, Smith, Ravin,
Davis & Himmel, LLP
EXHIBIT 10(ai)
SARATOGA BRANDS INC.
1998 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN
1. Purposes of Plan. The purposes of the Saratoga Brands Inc. 1998
Incentive and Non-Qualified Stock Option Plan (hereinafter referred to as the
"Plan") are to provide to employees of Saratoga Brands Inc. (hereinafter
referred to as the "Corporation"), as well as employees of subsidiary or parent
corporations which may currently exist or be formed or acquired in the future,
an opportunity for investment in the Corporation's common stock (hereinafter
referred to as the "Shares"), as an inducement for such individuals to remain
with the Corporation, and to encourage them to increase their efforts to make
the Corporation's business more successful.
2. Effective Date and Termination of Plan. The effective date of the
Plan is April 1, 1998, the date on which the Plan was adopted by the Board of
Directors of the Corporation. The Plan shall terminate on, and no option shall
be granted hereunder, after April 1, 2008; provided, however, that the Board of
Directors may at any time prior to that date terminate the Plan; and provided
further that any option granted hereunder prior to the termination of the Plan
shall remain exercisable in accordance with its terms as then in effect.
3. Administration of Plan. The Plan shall be administered by the Board
of Directors of the Corporation. The Board of Directors may, however, to the
extent permissible under the Corporation" Articles of Organization, By-laws and
applicable law, delegate any of its functions under this Plan to a committee of
the Board of Directors or any other committee. Wherever in this Plan the term
""oard of Directors""is used it shall be construed to mean such committee to the
extent that the Board of Directors may have delegated any of its functions to
said committee and only to the extent of any such delegation. The acts of a
majority of the members present at any meeting of the Board of Directors at
which a quorum is present, or acts approved in writing by a majority of the
entire Board, shall be the acts of the Board of Directors for purposes of the
Plan.
4. Eligibility and Grant of Options. Subject to the provisions of the
Plan, the Board of Directors shall (i) authorize the granting of incentive stock
options, non-qualified stock options or a combination of incentive stock options
and non-qualified stock options (hereinafter collectively referred to as
"options" unless otherwise stated); (ii) determine and designate from time to
time those employees (from the group consisting of all employees of the Company)
to whom options are to be granted and the number of Shares to be optioned to
each employee; (iii) determine the number of Shares subject to each option; and
(iv) determine the time or times when and the manner in which each option shall
be exercisable and the duration of the exercise period. In determining the
eligibility of an individual to receive an option, as well as in determining the
number of Shares to be optioned to any individual, the Board of Directors shall
consider the position and responsibilities of the employee, the nature and value
to the Corporation, parent or subsidiary of his services and accomplishments,
his present and potential contribution to the success of the Corporation, parent
or subsidiary, and such other factors as the Board may deem relevant. To be
eligible to receive an incentive stock option or non-qualified stock option an
individual must be an employee of the Corporation, parent or subsidiary. A
Director shall abstain from voting on the grant of any options to himself, his
spouse, his children, grandchildren and parents. The grant of each option shall
be confirmed by a Stock Option Agreement (in the form prescribed by the Board of
Directors) which shall be executed by the Corporation and the optionee as
promptly as practicable after such grant. More than one option may be granted to
an individual.
Incentive stock options shall be those options which satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended and
which the Board of Directors has specifically identified as incentive stock
options in the Stock Option Agreement executed by the Corporation and the
optionee. In the case of incentive stock options, the aggregate fair market
value, determined at the time incentive stock options are granted, of the stock
with respect to which the incentive stock options are exercisable for the first
time by such individual during any calendar year (under all such plans the
Corporation may adopt) shall not exceed one hundred thousand dollars
($100,000.00). In the event that an incentive stock option granted pursuant to
the terms of this Plan is granted to an employee who, prior to the grant, holds
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation, its parent or a subsidiary ("10% Shareholder") the
option price under such grant shall be at least one hundred ten percent (110%)
of the fair market value, and such option, by its terms, shall not be
exercisable more than five (5) years from the date of grant.
Nothing in the Plan or in any option granted pursuant to the Plan shall
confer on any individual any right to continue in the employ of the Corporation
or any parent or subsidiary or interfere in any way with the right of the
Corporation to terminate his employment at any time.
5. Number of Shares Subject to Options. The Board of Directors, prior
to the time options under the Plan become exercisable, shall reserve for the
purposes of the Plan a total of Eight Hundred Thousand (800,000) Shares, which
Shares may be either authorized and unissued Shares, or previously issued Shares
held in the treasury of the Corporation, or both. Shares as to which an option
granted under the Plan shall remain unexercised at the expiration or termination
thereof, and Shares subject to options which are cancelled, may be the subject
of the grant of further options. Shares reserved pursuant to this paragraph may
be adjusted to reflect changes in the Corporation's capital structure as
discussed in paragraph 19 hereof.
6. Option Price. The option price per Share shall be determined in each
case by the Board of Directors and shall not be less than one hundred percent
(100%) (one hundred ten percent (110%) in the case of an incentive stock option
granted to a 10% Shareholder) of the fair market value thereof as determined by
the Board by any reasonable method using market quotations on the date the
option is granted.
7. Period of Option and When Exercisable. No option may be granted
under this Plan whose exercise date is later than ten (10) years after the date
of the grant or five (5) years after the date of grant in the case of an
incentive stock option granted to a 10% Shareholder. Generally, an option may be
exercised only by the optionee and subject to the rules set forth below only if,
at all times during the period beginning on the date of the granting of such
option and ending with the date of exercise of such option, the optionee is an
employee of the Corporation, its parent or a subsidiary.
(i) Except as otherwise provided herein, in the case of
an employee who terminates employment, options which
are vested but unexercised as of the date of
termination of employment must be exercised within
three (3) months of termination. In the case of an
employee who is discharged for cause, as determined
in the sole discretion of the Board of Directors, all
previously vested but unexercised options shall be
forfeited immediately.
(ii) In the case of an employee who dies during the three
(3) month period discussed in (i) above, options
which are vested but unexercised as of the date of
termination of employment must be exercised within
twelve (12) months of death.
(iii) Options which are vested but unexercised as of the
date of termination of employment due to death, must
be exercised within twelve (12) months after the
death of an optionee.
(iv) In the event that the employee becomes disabled as
defined in Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended, options which are vested
but unexercised as of the date of termination of
employment due to disability must be exercised within
twelve (12) months following the date of termination
of the optionee" said employment.
(v) In the event an optionee's employment is terminated
for any reason (including but not limited to,
voluntary or involuntary termination or termination
resulting from the death or disability of the
optionee), all unvested options shall be immediately
forfeited.
Notwithstanding the foregoing, options may not be exercised after the
original five (5) or ten (10) year term. Options may be exercised on behalf of
the estate of a former employee by the person or persons entitled to do so under
the optionee's will or, if the optionee shall have failed to make testamentary
disposition of such option or shall have died intestate, by the optionee's legal
representative or representatives. Such person, persons, representative, or
representatives are hereinafter referred to as the "Successors of an Optionee."
8. Vesting. Options granted to a participant shall be exercisable
pursuant to vesting schedules established for individual grants by the Board of
Directors or a committee thereof.
9. Exercise of Options. Subject to Plan restrictions and vesting, an
option may be exercised, and payment in full of the option price made, by an
optionee only by written notice (in the form prescribed by the Board of
Directors) to the Corporation specifying the number of Shares to be so
purchased. Such notice shall state that the option price will be paid in full in
cash (which in the discretion of the Board of Directors may be obtained through
a loan from the Corporation or from a third party and guaranteed by the
Corporation) or other property, in the discretion of the Corporation. If the
Corporation accepts a request to pay in stock of the Corporation in satisfaction
of the exercise price, the fair market value of said stock shall at least equal
the option price, and, in the case of incentive stock options, prior to such
acceptance the Corporation must be furnished with evidence that the acquisition
of said stock and its transfer in payment of the option price satisfies the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended and
other applicable law. As soon as practicable after receipt by the Corporation of
such notice and of payment in full of the option price of all the Shares with
respect to which an option has been exercised, a certificate or certificates
representing such Shares shall be registered (subject to the provisions of
paragraph 16 hereof) in the name of the optionee or the Successors of an
Optionee as defined under this Plan and delivered to the optionee or to the
Successors of an Optionee.
10. Sale of the Corporation. In the case of a Sale of the Corporation
as herein defined, in the discretion of the Board of Directors options granted
but unexercised shall become fully vested (100%) and exercisable for a period of
twenty (20) days from the date notice of such Sale is given to the optionees.
Upon the expiration of the twenty (20) day period, all then unexercised options
shall be permanently cancelled. For purposes of this paragraph, a Sale or Public
Offering shall be deemed to occur upon the happening of any one of the
following:
(i) A sale of all or substantially all of the Corporation's
assets outside the ordinary course of business;
(ii) An offer to purchase at least a majority of the
Corporation's issued and outstanding common stock or
an offer to the Corporation's shareholders to tender
for sale at least a majority of the Corporation's
issued and outstanding common stock, which offer is
accepted or tender made with respect to at least a
majority of the Corporation's issued and outstanding
shares of common stock;
(iii) The merger or consolidation of the Corporation with
another corporation or entity; or
(iv) A dissolution or liquidation of the Corporation.
11. Employer Withholding. In the case of non-qualified stock options,
the Corporation shall be required to withhold additional income taxes
attributable to that amount which is considered compensation includible in the
optionee's gross income by reason of the exercise of such options. The
Corporation in its discretion shall determine the method and amount of
withholding.
12. Exercise by Successors and Payment in Full. An option may be
exercised, and payment in full of the option price made, by the Successors of an
Optionee only by written notice (in the form prescribed by the Board of
Directors) to the Corporation specifying the number of Shares to be purchased.
Such notice shall state that the option price will be paid in full in cash
(which in the discretion of the Board of Directors may be obtained through a
loan from the Corporation or from a third party and guaranteed by the
Corporation), property or stock of the Corporation in conformance with paragraph
9 hereof. As soon as practicable after receipt by the Corporation of such notice
and of payment in full of the option price of all the Shares with respect to
which an option has been exercised, a certificate or certificates representing
such Shares shall be registered (subject to the provisions of paragraph 16
hereof) in the name or names of such Successors of an Optionee and shall be
delivered to him.
13. Non-Transferability of Option. Each option granted under the Plan
shall by its terms be nontransferable by the optionee except by will or the laws
of descent and distribution of the state wherein the optionee is domiciled at
the time of his death.
14. Other Terms of Options. Options granted pursuant to the Plan shall
contain such terms, provisions, and conditions not inconsistent herewith as
shall be determined by the Board of Directors.
15. Registration of Certificates. Certificates representing Shares may
be registered either in the name of the Optionee or in the name or names of the
Successors of an Optionee. Designation of the appropriate form of registration
of certificates shall be made in the written notice given to the Corporation
upon exercise of an option.
16. Listing and Registration of Shares. If at any time the Board of
Directors of the Corporation shall determine, in its discretion, that the
listing, registration, or qualification of any of the Shares subject to options
under the Plan upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of or in connection with the granting of options or the
purchase or issue of Shares thereunder, no further options may be granted and
outstanding options may not be exercised in whole or in part unless and until
such listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors. The Board of Directors shall have the authority to cause the
Corporation at its expense to take any action related to the Plan which may be
required in connection with such listing, registration, qualification, consent,
or approval. The Board of Directors may require that any person exercising an
option hereunder shall make such representations and agreements and furnish such
information as it deems appropriate to assure compliance with the foregoing or
any other applicable legal requirement.
17. Interpretation and Amendments. The Board of Directors may make such
rules and regulations and establish such procedures for the administration of
the Plan as it deems appropriate. In the event of any dispute or disagreements
as to the interpretation of this Plan or of any rule, regulation, or procedure,
or as to any question, right or obligation arising from or related to the Plan,
the decision of the Board of Directors shall be final and binding upon all
persons. The Board of Directors may amend this Plan as it shall deem advisable.
However, in no event shall any such amendment adversely affect the rights of an
optionee under any existing stock option agreement without the consent of such
optionee.
18. Indemnification and Exculpation.
(a) Each person who is or shall have been a member of the Board
of Directors shall be indemnified and held harmless by the Corporation against
and from any and all loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be or become a party or in which he
may be or become involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof (with the Corporation's written approval) or paid by him in
satisfaction of a judgment in any such action, suit, or proceeding, except a
judgment in favor of the Corporation based upon a finding of his lack of good
faith; subject, however, to the condition that upon the institution of any
claim, action, suit, or proceeding against him, he shall in writing give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other right to which
such person may be entitled as a matter of law or otherwise, or any power that
the Corporation may have to indemnify him or hold him harmless.
(b) Each member of the Board of Directors, and each officer and
employee of the Corporation shall be fully justified in relying or acting in
good faith upon any information furnished in connection with the administration
of the Plan by any appropriate person or persons other than himself. In no event
shall any person who is or shall have been a member of the Board of Directors,
or an officer or employee of the Corporation be held liable for any
determination made or other action taken or any omission to act in reliance upon
any such information, or for any action (including the furnishing of
information) taken or any failure to act, if in good faith.
<PAGE>
19. Changes in Capital Structure. In the event that a dividend shall be
declared upon the Shares payable in Shares, the number of Shares then subject to
any option outstanding under the Plan and the number of Shares reserved for the
grant of options pursuant to the Plan but not yet subject to option shall be
adjusted by adding to each such Share the number of Shares which would be
distributable in respect thereof if such Shares had been outstanding on the date
fixed for determining the shareholders of the Corporation entitled to receive
such Share dividend. In the event that the outstanding Shares shall be changed
into or exchanged for a different number of Shares or other securities of the
Corporation or of another corporation, whether through reorganization,
recapitalization, split-up, combination of shares, merger, or consolidation,
then there shall be substituted for each Share subject to any such option and
for each Share reserved for the grant of options pursuant to the Plan but not
yet subject to option the number and kind of Shares or other securities into
which each outstanding Share shall have been so changed or for which each such
Share shall have been exchanged. In the event there shall be any change, other
than as specified above in this paragraph, in the number or kind of outstanding
Shares or of any shares or other securities into which such Shares shall have
been changed or for which they shall have been exchanged, then if the Board of
Directors shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of Shares theretofore reserved for
the grant of options pursuant to the Plan but not yet subject to option and of
the Shares then subject to an option or options, such adjustments shall be made
by the Board of Directors and shall be effective and binding for all purposes of
the Plan and of each option outstanding thereunder. In the case of any such
substitution or adjustment as provided for in this paragraph, the aggregate
option exercise price set forth for all outstanding options for all Shares
covered thereby prior to such substitution or adjustment will be the option
exercise price for all shares or other securities which shall have been adjusted
pursuant to this paragraph. No adjustment or substitution provided for in this
paragraph shall require the Corporation to sell a fractional Share, and the
total substitution or adjustment with respect to each outstanding option shall
be limited accordingly. Upon any adjustment made pursuant to this paragraph, the
Corporation will, upon request, deliver to the optionee or to his successors a
certificate setting forth the option price thereafter in effect and the number
and kind of shares or other securities thereafter purchasable on the exercise of
the option.
20. Notices. All notices under the Plan shall be in writing, and if to
the Corporation, shall be delivered to the Treasurer of the Corporation or
mailed to its principal office, addressed to the attention of the Treasurer; and
if to the optionee, shall be delivered personally or mailed to the optionee at
the address appearing in the payroll records of the Corporation. Such addresses
may be changed at any time by written notice to the other party.
EXHIBIT 10(aj)
SARATOGA BRANDS INC.
1998 DIRECTOR STOCK OPTION PLAN
1. Purposes of Plan. The purposes of the Saratoga Brands Inc. 1998
Director Stock Option Plan (hereinafter referred to as the "Plan") are to
provide non-employee directors of Saratoga Brands Inc. (hereinafter referred to
as the "Corporation"), as well as an opportunity for investment in the
Corporation's common stock (hereinafter referred to as the "Shares"), as an
inducement for such individuals to remain with the Corporation, and to encourage
them to increase their efforts to make the Corporation's business more
successful.
2. Effective Date and Termination of Plan. The effective date of the
Plan is April 1, 1998, the date on which the Plan was adopted by the Board of
Directors of the Corporation. The Plan shall terminate on, and no option shall
be granted hereunder, after April 1, 2008; provided, however, that the Board of
Directors may at any time prior to that date terminate the Plan; and provided
further that any option granted hereunder prior to the termination of the Plan
shall remain exercisable in accordance with its terms as then in effect.
3. Administration of Plan. The Plan shall be administered by the Board
of Directors of the Corporation. The Board of Directors may, however, to the
extent permissible under the Corporation" Articles of Organization, By-laws and
applicable law, delegate any of its functions under this Plan to a committee of
the Board of Directors or any other committee. Wherever in this Plan the term
""oard of Directors""is used it shall be construed to mean such committee to the
extent that the Board of Directors may have delegated any of its functions to
said committee and only to the extent of any such delegation. The acts of a
majority of the members present at any meeting of the Board of Directors at
which a quorum is present, or acts approved in writing by a majority of the
entire Board, shall be the acts of the Board of Directors for purposes of the
Plan.
4. Eligibility and Grant of Options. Subject to the provisions of the
Plan, incentive stock options to the extent permissible, and the balance in the
form of non-qualified stock options (collectively, the "options") shall be
granted to each non-employee director of the Corporation at the rate of 40,000
shares on the date on which each such person first becomes a director; provided,
however, that a director who is an employee and who then ceases to be an
employee but remains a director shall not receive any such options; and each
such non-employee director shall also be granted an option to purchase 20,000
shares on the date following the date of the Corporation's annual stockholders
meeting each year.
Incentive stock options shall be those options which satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended and
which the Board of Directors has specifically identified as incentive stock
options in the Stock Option Agreement executed by the Corporation and the
optionee. In the case of incentive stock options, the aggregate fair market
value, determined at the time incentive stock options are granted, of the stock
with respect to which the incentive stock options are exercisable for the first
time by such individual during any calendar year (under all such plans the
Corporation may adopt) shall not exceed one hundred thousand dollars
($100,000.00). In the event that an incentive stock option granted pursuant to
the terms of this Plan is granted to an employee who, prior to the grant, holds
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation, its parent or a subsidiary ("10% Shareholder") the
option price under such grant shall be at least one hundred ten percent (110%)
of the fair market value, and such option, by its terms, shall not be
exercisable more than five (5) years from the date of grant.
Nothing in the Plan or in any option granted pursuant to the Plan shall
confer on any individual any right to continue as a director of the Corporation.
5. Number of Shares Subject to Options. The Board of Directors, prior
to the time options under the Plan become exercisable, shall reserve for the
purposes of the Plan a total of Two Hundred Thousand (200,000) Shares, which
Shares may be either authorized and unissued Shares, or previously issued Shares
held in the treasury of the Corporation, or both. Shares as to which an option
granted under the Plan shall remain unexercised at the expiration or termination
thereof, and Shares subject to options which are cancelled, may be the subject
of the grant of further options. Shares reserved pursuant to this paragraph may
be adjusted to reflect changes in the Corporation's capital structure as
discussed in paragraph 19 hereof.
6. Option Price. The option price per Share shall be determined in
each case by the Board of Directors and shall not be less than one hundred
percent (100%) (one hundred ten percent (110%) in the case of an incentive stock
option granted to a 10% Shareholder) of the fair market value thereof as
determined by the Board by any reasonable method using market quotations on the
date the option is granted.
7. Period of Option and When Exercisable. No option may be granted
under this Plan whose exercise date is later than ten (10) years after the date
of the grant or five (5) years after the date of grant in the case of an
incentive stock option granted to a 10% Shareholder. Generally, an option may be
exercised only by the optionee and subject to the rules set forth below only if,
at all times during the period beginning on the date of the granting of such
option and ending with the date of exercise of such option, the optionee is a
non-employee director of the Corporation.
(i) Except as otherwise provided herein, in the case of a
director who terminates his directorship, options
which are vested but unexercised as of the date of
termination as a director must be exercised within
three (3) months of termination. In the case of a
director who is discharged for cause, as determined
in the sole discretion of the Board of Directors, all
previously vested but unexercised options shall be
forfeited immediately.
(ii) In the case of a director who dies during the three
(3) month period discussed in (i) above, options
which are vested but unexercised as of the date of
termination as a director must be exercised within
twelve (12) months of death.
(iii) Options which are vested but unexercised as of the
date of termination as a director due to death, must
be exercised within twelve (12) months after the
death of an optionee.
(iv) In the event that a director becomes disabled as
defined in Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended, options which are vested
but unexercised as of the date of termination as a
director due to disability must be exercised within
twelve (12) months following the date of termination
of the optionee" said employment.
(v) In the event an optionee's directorship is terminated
for any reason (including but not limited to,
voluntary or involuntary termination or termination
resulting from the death or disability of the
optionee), all unvested options shall be immediately
forfeited.
Notwithstanding the foregoing, options may not be exercised after the
original five (5) or ten (10) year term. Options may be exercised on behalf of
the estate of a former employee by the person or persons entitled to do so under
the optionee's will or, if the optionee shall have failed to make testamentary
disposition of such option or shall have died intestate, by the optionee's legal
representative or representatives. Such person, persons, representative, or
representatives are hereinafter referred to as the "Successors of an Optionee."
8. Vesting. Options granted to a participant shall be exercisable at
the rate of one-twelfth (1/12) of the shares subject thereto per month after
granting, in order that such options be fully granted after one year; provided
however, that all options shall terminate upon termination of the grantee as a
non-employee director of the Corporation.
9. Exercise of Options. Subject to Plan restrictions and vesting, an
option may be exercised, and payment in full of the option price made, by an
optionee only by written notice (in the form prescribed by the Board of
Directors) to the Corporation specifying the number of Shares to be so
purchased. Such notice shall state that the option price will be paid in full in
cash (which in the discretion of the Board of Directors may be obtained through
a loan from the Corporation or from a third party and guaranteed by the
Corporation) or other property, in the discretion of the Corporation. If the
Corporation accepts a request to pay in stock of the Corporation in satisfaction
of the exercise price, the fair market value of said stock shall at least equal
the option price, and, in the case of incentive stock options, prior to such
acceptance the Corporation must be furnished with evidence that the acquisition
of said stock and its transfer in payment of the option price satisfies the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended and
other applicable law. As soon as practicable after receipt by the Corporation of
such notice and of payment in full of the option price of all the Shares with
respect to which an option has been exercised, a certificate or certificates
representing such Shares shall be registered (subject to the provisions of
paragraph 16 hereof) in the name of the optionee or the Successors of an
Optionee as defined under this Plan and delivered to the optionee or to the
Successors of an Optionee.
10. Sale of the Corporation. In the case of a Sale of the Corporation
as herein defined, in the discretion of the Board of Directors options granted
but unexercised shall become fully vested (100%) and exercisable for a period of
twenty (20) days from the date notice of such Sale is given to the optionees.
Upon the expiration of the twenty (20) day period, all then unexercised options
shall be permanently cancelled. For purposes of this paragraph, a Sale or Public
Offering shall be deemed to occur upon the happening of any one of the
following:
(i) A sale of all or substantially all of the Corporation's
assets outside the ordinary course of business;
(ii) An offer to purchase at least a majority of the
Corporation's issued and outstanding common stock or
an offer to the Corporation's shareholders to tender
for sale at least a majority of the Corporation's
issued and outstanding common stock, which offer is
accepted or tender made with respect to at least a
majority of the Corporation's issued and outstanding
shares of common stock;
(iii) The merger or consolidation of the Corporation with
another corporation or entity; or
(iv) A dissolution or liquidation of the Corporation.
11. Employer Withholding. In the case of non-qualified stock options,
the Corporation shall be required to withhold additional income taxes
attributable to that amount which is considered compensation includible in the
optionee's gross income by reason of the exercise of such options. The
Corporation in its discretion shall determine the method and amount of
withholding.
12. Exercise by Successors and Payment in Full. An option may be
exercised, and payment in full of the option price made, by the Successors of an
Optionee only by written notice (in the form prescribed by the Board of
Directors) to the Corporation specifying the number of Shares to be purchased.
Such notice shall state that the option price will be paid in full in cash
(which in the discretion of the Board of Directors may be obtained through a
loan from the Corporation or from a third party and guaranteed by the
Corporation), property or stock of the Corporation in conformance with paragraph
9 hereof. As soon as practicable after receipt by the Corporation of such notice
and of payment in full of the option price of all the Shares with respect to
which an option has been exercised, a certificate or certificates representing
such Shares shall be registered (subject to the provisions of paragraph 16
hereof) in the name or names of such Successors of an Optionee and shall be
delivered to him.
13. Non-Transferability of Option. Each option granted under the Plan
shall by its terms be nontransferable by the optionee except by will or the laws
of descent and distribution of the state wherein the optionee is domiciled at
the time of his death.
14. Other Terms of Options. Options granted pursuant to the Plan shall
contain such terms, provisions, and conditions not inconsistent herewith as
shall be determined by the Board of Directors.
15. Registration of Certificates. Certificates representing Shares may
be registered either in the name of the Optionee or in the name or names of the
Successors of an Optionee. Designation of the appropriate form of registration
of certificates shall be made in the written notice given to the Corporation
upon exercise of an option.
16. Listing and Registration of Shares. If at any time the Board of
Directors of the Corporation shall determine, in its discretion, that the
listing, registration, or qualification of any of the Shares subject to options
under the Plan upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of or in connection with the granting of options or the
purchase or issue of Shares thereunder, no further options may be granted and
outstanding options may not be exercised in whole or in part unless and until
such listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors. The Board of Directors shall have the authority to cause the
Corporation at its expense to take any action related to the Plan which may be
required in connection with such listing, registration, qualification, consent,
or approval. The Board of Directors may require that any person exercising an
option hereunder shall make such representations and agreements and furnish such
information as it deems appropriate to assure compliance with the foregoing or
any other applicable legal requirement.
17. Interpretation and Amendments. The Board of Directors may make such
rules and regulations and establish such procedures for the administration of
the Plan as it deems appropriate. In the event of any dispute or disagreements
as to the interpretation of this Plan or of any rule, regulation, or procedure,
or as to any question, right or obligation arising from or related to the Plan,
the decision of the Board of Directors shall be final and binding upon all
persons. The Board of Directors may amend this Plan as it shall deem advisable.
However, in no event shall any such amendment adversely affect the rights of an
optionee under any existing stock option agreement without the consent of such
optionee.
18. Indemnification and Exculpation.
(a) Each person who is or shall have been a member of the Board
of Directors shall be indemnified and held harmless by the Corporation against
and from any and all loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be or become a party or in which he
may be or become involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid by him in
settlement thereof (with the Corporation's written approval) or paid by him in
satisfaction of a judgment in any such action, suit, or proceeding, except a
judgment in favor of the Corporation based upon a finding of his lack of good
faith; subject, however, to the condition that upon the institution of any
claim, action, suit, or proceeding against him, he shall in writing give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other right to which
such person may be entitled as a matter of law or otherwise, or any power that
the Corporation may have to indemnify him or hold him harmless.
(b) Each member of the Board of Directors, and each officer and
employee of the Corporation shall be fully justified in relying or acting in
good faith upon any information furnished in connection with the administration
of the Plan by any appropriate person or persons other than himself. In no event
shall any person who is or shall have been a member of the Board of Directors,
or an officer or employee of the Corporation be held liable for any
determination made or other action taken or any omission to act in reliance upon
any such information, or for any action (including the furnishing of
information) taken or any failure to act, if in good faith.
<PAGE>
19. Changes in Capital Structure. In the event that a dividend shall be
declared upon the Shares payable in Shares, the number of Shares then subject to
any option outstanding under the Plan and the number of Shares reserved for the
grant of options pursuant to the Plan but not yet subject to option shall be
adjusted by adding to each such Share the number of Shares which would be
distributable in respect thereof if such Shares had been outstanding on the date
fixed for determining the shareholders of the Corporation entitled to receive
such Share dividend. In the event that the outstanding Shares shall be changed
into or exchanged for a different number of Shares or other securities of the
Corporation or of another corporation, whether through reorganization,
recapitalization, split-up, combination of shares, merger, or consolidation,
then there shall be substituted for each Share subject to any such option and
for each Share reserved for the grant of options pursuant to the Plan but not
yet subject to option the number and kind of Shares or other securities into
which each outstanding Share shall have been so changed or for which each such
Share shall have been exchanged. In the event there shall be any change, other
than as specified above in this paragraph, in the number or kind of outstanding
Shares or of any shares or other securities into which such Shares shall have
been changed or for which they shall have been exchanged, then if the Board of
Directors shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of Shares theretofore reserved for
the grant of options pursuant to the Plan but not yet subject to option and of
the Shares then subject to an option or options, such adjustments shall be made
by the Board of Directors and shall be effective and binding for all purposes of
the Plan and of each option outstanding thereunder. In the case of any such
substitution or adjustment as provided for in this paragraph, the aggregate
option exercise price set forth for all outstanding options for all Shares
covered thereby prior to such substitution or adjustment will be the option
exercise price for all shares or other securities which shall have been adjusted
pursuant to this paragraph. No adjustment or substitution provided for in this
paragraph shall require the Corporation to sell a fractional Share, and the
total substitution or adjustment with respect to each outstanding option shall
be limited accordingly. Upon any adjustment made pursuant to this paragraph, the
Corporation will, upon request, deliver to the optionee or to his successors a
certificate setting forth the option price thereafter in effect and the number
and kind of shares or other securities thereafter purchasable on the exercise of
the option.
20. Notices. All notices under the Plan shall be in writing, and if to
the Corporation, shall be delivered to the Treasurer of the Corporation or
mailed to its principal office, addressed to the attention of the Treasurer; and
if to the optionee, shall be delivered personally or mailed to the optionee at
the address appearing in the payroll records of the Corporation. Such addresses
may be changed at any time by written notice to the other party.
EXHIBIT 24.1
Independent Auditors Consent
We consent to the incorporation by reference in this Registration Statement of
Saratoga Brands Inc. on Form S-8 of our report dated April 6, 1999, appearing in
the Annual Report on Form 10-KSB of Saratoga Brands Inc. for the year ended
December 31, 1998.
Deloitte & Touche LLP
Parsippany, New Jersey
August 11, 1999
EXHIBIT 24.2
CONSENT
We hereby consent to the inclusion of our report dated February 28, 1998 with
respect to the financial statements of Saratoga Brands Inc. for the year ended
December 31, 1997 which are included in the Form 10-KSB of Saratoga Brands Inc.
in Form S-8 to which this is an exhibit.
BROZA, BLOCK & RUBINO
Certified Public Accountants and Consultants
Asbury Park, New Jersey
August 12, 1999
Exhibit 25
POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Scott G.
Halperin and Bernard F. Lillis, Jr., or any of them, his
attorney-in-fact, each with the power of substitution, for him 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 and about the premises, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them or
their or his substitute or substitutes may lawfully do or cause to be
done by virtue hereof. Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signatures
By:/s/ Scott G. Halperin
Scott Halperin
Chairman of the Board
Chief Executive Officer
By:/s/ Bernard F. Lillis, Jr.
Bernard F. Lillis, Jr.
Chief Financial Officer
Chief Operating Officer
Director
By:/s/ Joseph Greene
Joseph Greene
Director
