As filed with the Securities and Exchange Commission on August 22, 1997
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
Registration Statement Under the Securities Act of 1933
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MILLENNIUM ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Nevada 33-0750730
- ------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31462 South Coast Highway, Suite 100, Laguna Beach, California 92677
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(Address of Principal Executive Offices) (Zip Code)
MILLENNIUM MEMORY, INC. 1996-1997 STOCK INCENTIVE PLAN and
MILLENNIUM ELECTRONICS, INC. 1997 INCENTIVE STOCK OPTION PLAN
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(Full title of the plans)
Troy D. Barnes
President and Chairman of the Board
Millennium Electronics, Inc.
31462 South Coast Highway, Suite 100
Laguna Beach, California 92677
(714) 499-0877
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(Name, address and telephone number of agent for service)
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Calculation of Registration Fee
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Proposed Proposed
Title of maximum maximum
securities Amount to offering aggregate Amount of
to be be price per offering registra-
registered registered share price tion fee
- --------------------------------------------------------------------------------
Common
Stock,
$0.01 par 1,195,144 $2.00(2) $3,390,288(2) $1,030(3)
value Shares (1) $3.00(2)
- --------------------------------------------------------------------------------
(1) Pursuant to Rule 416, this Registration Statement also covers such
additional securities as may become issuable pursuant to the
adjustment provisions of the Millennium Electronics, Inc. 1997
Incentive Stock Option Plan.
(2) Estimated solely for purposes of calculating the registration fee;
195,144 shares at $2.00 per share and 1,000,000 shares at $3.00 per
share.
(3) The registration fee has been calculated pursuant to Rule 457(h)
based on the price at which the options may be exercised.
Exhibit Index on Page 9
Page 2 of 26
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information*
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* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this registration statement in accordance
with the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Millennium
Electronics, Inc. or its predecessor, Beacon Capital Investment, Inc.
(together, the "Company" or the "Registrant"), are hereby incorporated by
reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal
year ended September 30, 1996.
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the fiscal year covered by the document referred to in
(a) above.
(c) The description of the Company's Common Stock which is
contained in the Company's registration statement on Form 8-A dated
May 2, 1997 and filed May 5, 1997 under the Exchange Act.
(d) All documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of
such documents. Copies of these documents will not be filed with this
registration statement. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this registration
statement to the extent that such statement is modified or superseded by
a subsequently filed document which also is or is deemed to be incor
porated by reference herein. Any such statement so modified or
superseded shall not be deemed to constitute a part of this registration
statement except as so modified or superseded.
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Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 78.751 of the Nevada General Corporation Law (the
"Act"), Article XI of the Company's Articles of Incorporation and
Article V of the Company's Bylaws relate to the indemnification of the
Company's directors and officers, among others, in a variety of
circumstances against liabilities arising in connection with the
performance of their duties.
The Act permits indemnification of directors and officers
acting in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the Company (and, with respect to a
criminal proceeding, if they have no reasonable cause to believe their
conduct to be unlawful) against (i) expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any threatened, pending or completed action,
suit, or proceeding (other than an action by or in the right of the
Company) arising out of a position with the Company (or with some other
entity at the Company's request) and (ii) amounts paid in settlement and
expenses (including attorneys' fees) actually and reasonably incurred in
connection with a threatened, pending, or completed action or suit by or
in the right of the Company, unless the director or officer is found
liable to the Company and an appropriate court does not determine that he
or she is nevertheless fairly and reasonably entitled to indemnification.
The Act requires indemnification for expenses to the extent
that a director or officer is successful on the merits in defending
against any such action, suit or proceeding. The Act requires in general
that the indemnification provided for in (i) and (ii) above be made only
upon a determination that indemnification is proper in the circumstances
by the shareholders or by a majority vote of a quorum of the Board of
Directors who were not parties or threatened to be made parties to the
action, suit or proceeding, or, if a quorum or a majority thereof cannot
be obtained, by independent legal counsel. In certain circumstances, the
Act further permits advances to cover such expenses before a final
determination that indemnification is permissible, upon receipt of an
undertaking by or on behalf of the director or officer to repay such
amounts if it is ultimately determined by a court that they are not
entitled to indemnification.
Indemnification under the Act is not exclusive of other rights
in indemnification to which a person may be entitled under the Company's
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Articles of Incorporation, Bylaws, contractual agreement, or vote of the
shareholders or disinterested directors or otherwise unless his acts or
omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material. The Act permits the Company to purchase
insurance on behalf of its directors and officers against liabilities
arising out of their positions with the Company whether or not such
liabilities would be within the foregoing indemnification provisions.
Article XI of the Company's Articles of Incorporation requires
the Company, to the fullest extent permitted by the provisions of
Section 78.751 of the Act, as the same may be amended and supplemented,
to indemnify any and all persons whom it shall have the power to
indemnify under the Act from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by Section 78.751
of the Act. The indemnification provided for in that Section XI is not
exclusive of any other rights to which those indemnified may be entitled
under the Bylaws, agreement, vote of stockholders or disinterested
directors, or otherwise, both as to action in an official capacity and as
to action in another capacity while holding an office with the Company,
and continues as to a person who has ceased to be a director, officer,
employee, or agent and inures to the benefit of the heirs, executors, and
administrators of such a person.
Section 5.1 of the Company's Bylaws requires the Company to
indemnify any individual made a party to a proceeding because he is or
was a director of the Company, against liability incurred in the
proceeding, but only if the Company has authorized the payment in
accordance with Section 78.751 of the Act and a determination has been
made in accordance with the procedures set forth in that section that the
director has demonstrated that he conducted himself in good faith; he
reasonably believed that his conduct was in, or not opposed to, the
Company's best interests; and in the case of any criminal proceeding, he
had no reasonable cause to believe his conduct was unlawful. The
Company, however, may not indemnify a director in connection with a
proceeding by or in the right of the Company in which the director is
adjudged liable to the Company; or in connection with any other
proceeding charging improper personal benefit to the director, whether or
not involving action in his official capacity, in which he is adjudged
liable on the basis that personal benefit was improperly received by him.
The indemnification permitted under Section 5.1 of the
Company's Bylaws in connection with a proceeding by or in the right of
the Company is limited to reasonable expenses incurred in connection with
the proceeding.
Under Section 5.2 of the Company's Bylaws, if a determination
is made, following the procedures of Section 78.751 of the Act, that a
director has met the following requirements, and if properly authorized,
then unless otherwise provided in the Articles of Incorporation, the
Company shall pay for or reimburse the reasonable expenses incurred by a
Page 5 of 26
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director who is a party to a proceeding in advance of final disposition
of the proceeding if:
l. The director furnishes the Company a
written affirmation of his good faith belief that he has
met the standard of conduct described in Section 5.1 of
the Bylaws;
2. The director furnishes the Company a
written undertaking, executed personally or on his belief,
to repay the advance if it is ultimately determined that
he did not meet the standard of conduct (which undertaking
must be an unlimited general obligation of the director
but need not be secured and may be accepted without
reference to financial ability to make repayment); and
3. A determination is made that the facts then
known to those making the determination would not preclude
indemnification under Section 5.1 of the Bylaws or under
the Act.
Under Section 5.3 of the Bylaws, unless otherwise provided in
the Articles of Incorporation, the Board of Directors may indemnify and
advance expenses to any officer, employee, or agent of the Company, who
is not a director of the Company, to any extent consistent with public
policy, as determined by the general or specific action of the Board of
Directors.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits are filed herewith:
4.1 Millennium Memory, Inc. 1996-7 Stock Incentive Plan
4.2 Millennium Electronics, Inc. 1997 Incentive Stock Option
Plan.
5.1 Opinion regarding legality.
23.1 Consent of accountants
23.2 Consent of counsel (included in Exhibit 5.1).
Page 6 of 26
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Item 9. Undertakings.
(1) The undersigned Company hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement 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.
(b) 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.
(c) 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.
(2) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended,
each filing of the Company's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the
opinion of the 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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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 Company 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, as
amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by
the undersigned, in the capacities indicated, thereunto duly authorized,
in the City of Laguna Beach, State of California, on this 29th day of
July, 1997.
Millennium Electronics, Inc.
By /s/Troy D. Barnes
------------------------
Troy D. Barnes
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed below by the
following persons in the capacities and on the 29th day of July 1997.
Signature Title
- --------- -----
/s/ Troy D. Barnes Chairman of the Board,
- ----------------------- President and Secretary
Troy D. Barnes and Director (Principal
Executive Officer)
/s/ Daniel H. Glick Director
- -----------------------
Daniel H. Glick
/s/ Celeste Barnes Chief Financial Officer
- ----------------------- (Principal Financial and
Celeste Barnes Accounting Officer)
Page 8 of 26
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EXHIBIT INDEX
Exhibit
Number Description Page
- ------ ----------- ----
4.1 Millennium Memory, Inc. 1996-7
Stock Incentive Plan 10
4.2 Millennium Electronics, Inc.
1997 Incentive Stock Option
Plan. 13
5.1 Opinion regarding legality. 24
23.1 Consent of accountants. 26
23.2 Consent of counsel (included in
Exhibit 5.1).
Page 9 of 26
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EXHIBIT 4.1
MILLENNIUM MEMORY, INC
1996-1997 STOCK INCENTIVE PLAN
ELIGIBILITY: All employees (except Troy, Celeste and Brad
Barnes) in the employ of the Company on
September 30, 1997 who have been employed for
more than 90 days as of that date, Gail
Campbell and Mike Ellzey.
SHARES SUBJECT 65,048 of shares of the common stock of
TO PLAN: Beacon Capital Investment, Inc. will be
reserved for issuance to participating
employees and consultants each time the
Company, in 1996, and Beacon, in 1997,
achieves one of the pre-tax earning levels
for the periods indicated below, provided the
Merger with Beacon becomes effective:
Pre-Tax
Earnings Level Target Date
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$700,000 For the year ending 12/31/96
$200,000 For the 3 months ending 3/31/97
$220,000 For the 3 months ending 6/30/97
$250,000 For the 3 months ending 9/30/97
For purposes of determining pre-tax earnings
under the Stock Plan, shares to be issued
pursuant to the Company's Stock Plan will not
be included as an expense.
DIVISION OF 40% of all shares subject to the Plan will be
SHARES BETWEEN reserved for issuance to sales employees,
SALES AND while the balance will be reserved for
OTHERS: issuance to the Company's other employees and
participating consultants.
Page 10 of 26
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LONGEVITY If the following individuals remain in the
BONUS: employ of the Company or on September 30,
1997, 1,000 shares of common stock will be
issued to them in the fourth quarter of 1997:
Tim Anderson, Dustin Mudd, Roy Rodman, Sharry
Reineck, Stuart Jeffries, Mike Edman, Mike
Kelly, Mark Pftuzenreuter, Dan Rickabus, and
Don Ruiz. 1,000 shares of common stock will
also be issued to Gail Campbell if she is
either employed by the Company or remains
under contract as a consultant on
September 30, 1997.
PERFORMANCE Sales Employees: Each sales employee in the
BONUS: employ of the Company on September 30, 1997
who has been employed by the Company for more
than 90 days on that date shall receive that
number of shares of common stock equal to
(1) the total number of shares reserved under
the plan for sales employees (40% of the
total) less the Longevity Bonus shares issued
to Messrs. Edman, Kelly, Pftuzenreuter,
Rickabus, and Ruiz multiplied by (2) a
fraction the numerator of which is the amount
of all commissions earned by that employee
for the period from October 1, 1996 through
September 30, 1997 (excluding draws) and the
denominator of which is all commissions
earned by all sales employees (excluding that
earned by Troy or Brad Barnes) for the period
from October 1, 1996 through September 30,
1997 (excluding draws), in each case
excluding all commissions earned with respect
to the first 90 days of an employee's
employment with the Company.
Page 11 of 26
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All Other Employees: Each employee not in
sales who is in the employ of the Company on
September 30, 1997 and who has been employed
by the Company for more than 90 days on that
date, Gail Campbell and Mike Ellzey shall
each receive that number of shares of common
stock equal to (1) the total number of shares
reserved under the plan for other than sales
employees (60% of the total) less the
Longevity Bonus shares issued to Tim
Anderson, Dustin Mudd, Roy Rodman, Sherry
Reineck, Stuart Jeffries and Gail Campbell
multiplied by (2) a fraction the numerator of
which is the amount of all compensation paid
to that employee or consultant for the period
from October 1, 1996 through September 30,
1997 (including salary, hourly compensation,
overtime and bonuses paid during the period)
and the denominator of which is all
compensation paid to all employees not in
sales (excluding that earned by Troy or
Celeste Barnes) and that paid to Gail
Campbell and Mike Ellzey for the period from
October 1, 1996 through September 30, 1997,
in each case excluding all compensation
earned with respect to the first 90 days of
an employee's employment with the Company.
Page 12 of 26
<PAGE>
EXHIBIT 4.2
MILLENNIUM ELECTRONICS, INC.
1997 INCENTIVE STOCK OPTION PLAN
1. THE PLAN.
1.1 Purpose.
The purpose of this 1997 Stock Option Plan (the "Plan") is to
promote the success of the Corporation by providing equity incentives to
attract, motivate and retain key personnel. Capitalized terms are
defined in Article 4.
1.2 Administration.
1.2.1 Board. This Plan shall be administered by the
Board, acting by at least a majority vote of the authorized number of
directors unless otherwise explicitly provided herein. The Board may
delegate administrative functions to third parties, including employees
of the Corporation. All actions of the Board are subject to this Plan.
1.2.2 Powers of Board. The Board has authority to
(a) construe and interpret this Plan and any related agreements,
(b) further define the terms used in this Plan, (c) prescribe, amend and
rescind rules and regulations relating to the administration of this
Plan, (d) establish and modify the terms of Option Agreements including,
but not limited to, restrictions on transfer and repurchase rights,
(e) determine events of termination of employment and the effect, if any,
on a Participant's rights from leaves of absence and (f) make all other
determinations necessary or advisable for the administration of this
Plan. The determination of the Board on any of the foregoing matters
shall be conclusive.
1.2.3 Binding Determinations. Any action taken by, or
inaction of, the Corporation or the Board relating to this Plan is within
the absolute discretion of that group or entity. No member of the Board,
or officer or employee of the Corporation or any Affiliate, will be
liable for any such action or inaction. In determining whether to take
any action permitted under the Plan, the Corporation or the Board may
rely upon the advice of counsel, accountants, appraisers and other
experts, and its determination shall be conclusive.
1.3 Participation.
Options may be granted only to Eligible Persons. An Eligible
Person who has been granted an Option may, if otherwise eligible, be
granted additional Options.
Page 13 of 26
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1.4 Shares Subject to the Plan.
1.4.1 Number of Shares. The aggregate number of Shares
that may be issued pursuant to all Options may not exceed 1,000,000
Shares. The foregoing limit is subject to adjustment under Section 3.2.
Shares may be issued for any lawful consideration.
1.4.2 Calculation of Available Shares and Replenishment.
If any Option lapses or terminates without having been exercised in full,
the unpurchased, unvested or undelivered Shares will again be available
for purposes of this Plan. The foregoing sentence does not apply to
Shares withheld under Section 3.5.
1.5 Grant of Options.
The Board will determine the Eligible Persons to whom Options
will be granted, the terms and conditions of Options (which need not be
identical) and the number of Shares subject to each Option. Each Option
will be evidenced by an Option Agreement the form of which must be
approved by the Board. The grant of an Option is made on the Grant Date,
unless the Board specifies a later date.
1.6 Exercise of Options.
An exercisable Option will be deemed to be exercised when the
President of the Corporation receives an executed Exercise Agreement from
the Participant, together with payment of any required Purchase Price in
accordance with Section 1.7. Options are exercisable only for whole
shares. Fractional shares will be disregarded for all purposes under
this Plan.
1.7 Payment Forms.
The Purchase Price of each Option must be paid in full at the
time of each purchase in one or a combination of the following methods,
to the extent authorized by the Board or set forth in the Option
Agreement: (a) wire transfer or cashier's check payable to the
Corporation, or (b) if the Board then approves, by shares of Common Stock
of the Corporation already owned by the Participant. Shares used to
satisfy the Purchase Price will be valued at their Fair Market Value on
the exercise date.
2. OPTIONS.
2.1 Incentive Stock Options Only.
Each Option granted under this Plan shall be an ISO and will be
so designated in the Option Agreement, which shall include the provisions
of Appendix A, incorporated herein by this reference.
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2.2 Option Price.
The Purchase Price per Share covered by each Option will not be
less than 100% (110% in the case of a Participant described in
Section 2.8) of the Fair Market Value of the Common Stock determined by
the Board at the time of the grant of the Option.
2.3 Option Period.
Each Option will expire on a date determined by the Board, but
not later than 10 years after the Grant Date, and will be subject to
earlier termination as set forth in this Plan or the Option Agreement.
2.4 Vesting.
Each Option shall become vested in whole or in part, on the
date or dates specified in the Option Agreement.
2.5 Time of Exercise.
Each Option may become exercisable in whole or in part, to the
extent then vested, on the date or dates specified in the Option
Agreement and thereafter will remain exercisable until the earlier of the
expiration or termination of the Option, or as otherwise set forth in the
Option Agreement or this Plan.
2.6 Other Limitations on Options.
At least 10 Shares must be purchased at any one time unless the
number purchased is the total number at the time available for purchase
under the Option.
2.7 Limitations on Grant and Terms of Incentive Stock Options.
2.7.1 $100,000 Limit. To the extent that the aggregate
"Fair Market Value" of stock with respect to which ISOs first become
exercisable by a Participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to ISOs under this Plan and
stock subject to ISOs under all other plans of the Corporation or any
Parent, such options shall be treated as NQSOs. For this purpose, the
"Fair Market Value" of the stock subject to options shall be determined
as of the date the options were awarded. In reducing the number of
options treated as incentive stock options to meet the $100,000 limit,
the most recently granted options shall be reduced first. To the extent
a reduction of simultaneously granted options is necessary to meet the
$100,000 limit, the Board may, in the manner and to the extent permitted
by law, designate which shares of Common Stock are to be treated as
shares acquired pursuant to the exercise of an ISO.
Page 15 of 26
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2.7.2 Other Code Limits. ISOs may only be granted to
Eligible Persons of the Corporation or an Affiliate that satisfies the
other eligibility requirements of the Code. There shall be imposed in
any Option Agreement relating to ISOs such other terms and conditions as
from time to time are required in order that the Option be an "incentive
stock option" as that term is defined in Section 422 of the Code.
2.8 Limits on 10% Holders.
No ISO may be granted to any person who, at the time the Option
is granted, owns (or is deemed to own under Section 424(d) of the Code)
shares of outstanding Common Stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation, unless
the exercise price of 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.
3. OTHER PROVISIONS.
3.1 Rights of Eligible Persons, Participants and
Beneficiaries.
3.1.1 Limitations on Transferability. Amounts payable or
Shares deliverable pursuant to an Option will be paid or delivered only
to a Participant or, if a Participant dies, to the Participant's
Beneficiary. If a Personal Representative has been appointed for a
Participant, payment or delivery will be made to the Personal
Representative. Other than by will or the laws of descent and
distribution or other exception to transfer restrictions expressly
authorized by the Board in the Option Agreement, no Option, benefit
payable or Shares deliverable under, or interest in, this Plan or in any
Option shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge; and any attempted
action or transfer to that end shall be void. No such benefit or
interest shall be, in any manner, liable for, or subject to, debts,
contracts, liabilities, engagements or torts of any Eligible Person,
Participant or Beneficiary. The Board shall disregard any attempted
transfer, assignment or other alienation prohibited by the preceding
sentence or other applicable law and shall pay or deliver any cash or
Shares only in accordance with this Plan.
3.1.2 No Trust or Fund. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund or in
any specific asset (including Shares) of the Corporation by reason of any
Option. Neither the provisions of this Plan (or of any documents related
hereto), nor the creation or adoption of this Plan, nor any action taken
pursuant to this Plan, shall create a trust of any kind or a fiduciary
relationship between the Corporation and any Participant, Beneficiary or
other person. If a Participant, Beneficiary or other person acquires a
Page 16 of 26
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right to receive anything other than Shares upon exercise of an Option,
such right will be no greater than the right of any unsecured general
creditor of the Corporation
3.2 Adjustments Upon Changes in Capitalization; Acceleration;
Possible Early Termination of Options.
3.2.1 Adjustments. If the outstanding Shares are changed
into or exchanged for cash or a different number or kind of shares or
securities of the Corporation or of another issuer, or if additional
Shares or new or different securities are distributed with respect to the
outstanding Shares, through a reorganization or merger to which the
Corporation is a party, or through a combination, consolidation,
recapitalization, reclassification, stock split, stock dividend, reverse
stock split, stock consolidation or other capital change or adjustment,
the Board shall provide (but only to the extent it deems equitable and
appropriate or otherwise necessary to qualify the Options granted
hereunder as ISO's) for an adjustment in the number and kind of Shares or
other consideration that is subject to or may be delivered under this
Plan and pursuant to outstanding Options and in the exercise price (and
other terms, in the discretion of the Board, necessarily affected by such
change) of outstanding Options.
3.2.2 Acceleration. Upon the occurrence of an Event,
each Option shall become immediately vested and exercisable unless the
Option provides otherwise by its terms. The Board may accord any
Participant a right to refuse any acceleration, whether pursuant to the
Option Agreement or otherwise.
3.2.3 Possible Early Termination of Options. If any
Option has been fully accelerated as permitted by Section 3.2.2, and if
such Option is not exercised prior to (a) a dissolution of the
Corporation, or (b) a reorganization event described in Section 3.2.1
that the Corporation does not survive, or (c) the consummation of
reorganization event described in Section 3.2.1 that results in an Event
approved by the Board, and no provision has been made for the
substitution, exchange or other settlement of such Option, such Option
shall thereupon terminate.
3.3 Termination of Employment.
3.3.1 Options. The Board shall establish in respect of
each Option granted to an Eligible Person the effect of a Termination of
Employment on the rights and benefits thereunder and in so doing may make
distinctions based upon the cause of termination. All Options, whether
vested or not, shall be subject to earlier termination under Section 3.2
and the specific terms of the Option Agreement.
3.3.2 Adjustments to Exercisable Portion. Upon a
Participant's Termination of Employment for any reason other than for
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Cause, the Board, by unanimous vote, may increase the portion of a
Participant's Option that is then vested and/or exercisable to the
Participant, or Participant's Beneficiary or Personal Representative, as
the case may be, or extend exercisability provisions, upon such terms as
the Board unanimously determines.
3.4 Government Regulations.
This Plan, the granting, vesting and exercisability of Options,
the issuance or transfer of Shares, and the payment of money pursuant
thereto are subject to all applicable federal and state laws, rules and
regulations and to such approvals by any regulatory or governmental
agency that may, in the judgment of the Board, be necessary or advisable.
Without limiting the generality of the foregoing, no Options may be
granted, and no Shares will be issued pursuant to any such Option, unless
and until, in each such case, all legal requirements applicable to the
grant or issuance have been complied with. In connection with any stock
issuance or transfer, the person acquiring the Shares must, if requested,
give assurances satisfactory to the Board in respect of such matters as
the Board deems desirable to assure compliance with all applicable legal
requirements (including but not limited to federal and state securities
law matters). A Participant will not be entitled to the privilege of
stock ownership as to any Shares not actually issued to such Participant.
3.5 Tax Withholding.
3.5.1 Withholding Obligation. Upon and as a condition
precedent to any exercise, vesting, or payment of any Option, the
Corporation may to the extent required under the Code or other applicable
law require payment through cash withholding or (if withholding would not
timely discharge the obligation) by cashier's check payable to the
Corporation of the amount of any taxes that the Corporation may be
required to withhold with respect to such transaction. If a tax is
required to be withheld in connection with the issuance or transfer of
Shares, the Participant may elect, subject to prior Board approval, to
have the Corporation reduce the number of such Shares issued or
transferred by the number of Shares (valued at Fair Market Value)
necessary to accomplish such withholding.
3.6 Amendment, Termination and Suspension.
3.6.1 Amendment, Termination and Suspension. The Board
may, at any time, terminate or, from time to time, amend, modify or
suspend this Plan, in whole or in part. No Options may be granted during
the suspension of this Plan or after termination of this Plan. The Board
may make other changes to the terms and conditions of Options, subject to
Section 3.6.3.
3.6.2 Shareholder Approval. If an amendment to this Plan
would (a) materially increase the benefits accruing to any Participant,
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(b) increase the aggregate number of Shares that may be issued under this
Plan, (c) modify the requirements of eligibility for participation in
this Plan, or (d) otherwise constitute a modification, extension or
renewal of the Plan or an Option under Section 424(b) of the Code, the
amendment shall be approved by the holders of not less than 3/4 of the
outstanding voting shares of the Corporation.
3.6.3 Effect on Outstanding Options. Notwithstanding
Section 3.6.1, no amendment, suspension or termination of this Plan, or
change of or affecting any outstanding Option shall affect, in any
materially adverse manner, the rights or benefits of any Participant or
the obligations of the Corporation under any Option granted under this
Plan prior to the effective date of such change without the consent of
such Participant. Changes under Section 3.2 shall not be deemed to be
amendments requiring a Participant's consent.
3.7 Effective Date of the Plan.
This Plan will be effective upon its approval by the Board,
subject to approval by holders of at least 3/4 of the voting shares of
the Corporation within twelve months after the date of such Board
approval.
3.8 Term of the Plan.
Unless previously terminated by the Board, this Plan will
terminate at the close of business on the date which is the day before
the 10th anniversary of the adoption of the Plan by the Board, and no
Option may be granted under this Plan after that date. Unless otherwise
expressly provided in this Plan or in an applicable Option Agreement, any
Option theretofore granted may extend beyond such date, and all authority
of the Board with respect to Options hereunder, including its authority
to amend an Option, shall continue during any suspension of this Plan and
in respect of outstanding Options on that date.
3.9 Governing Law.
This Plan and all documents related hereto shall be governed
by, and construed in accordance with, the laws of the State of
California. If any provision is held by a court of competent
jurisdiction to be invalid and unenforceable, the remaining provisions of
this Plan will continue to be fully effective. If any provision of this
Plan or any related document would otherwise frustrate or conflict with
the intent expressed above, that provision to the extent possible shall
be interpreted and deemed amended to avoid such conflict.
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4. DEFINITIONS.
4.1 Definitions.
"Affiliate" means any parent corporation or subsidiary
corporation, whether now or hereafter existing, as those terms are
defined in Sections 424(e) and (f) respectively, of the Code.
"Beneficiary" means the person(s) or trust(s) entitled by will
or the laws of descent and distribution to receive the benefits specified
under this Plan if a Participant dies.
"Board" means the Board of Directors of the Corporation.
"Cause" means that the Board, acting in good faith, determines
that the Participant has: (1) continued in a breach of his duties and
responsibilities to the Corporation (other than as a result of incapacity
due to the Employee's disability) after having been provided with written
notice of such breach and a reasonable opportunity to cure such breach;
(2) habitually neglected his duties and responsibilities to the
Corporation (other than as a result of incapacity due to the Employee's
disability) after having been provided with written notice of such
neglect, (3) become disabled, or (4) been convicted of a felony crime
involving moral turpitude.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Corporation.
"Corporation" means Millennium Electronics, Inc., a Nevada
corporation, and its successors, and any Affiliate.
"Eligible Person" means an Employee.
"Employee" means any person, including Officers and Directors,
employed by the Corporation or any Affiliate. Neither service as a
Director nor payment of a director's fee by the Corporation shall be
sufficient to constitute "employment" by the Corporation.
"Event" means any of the following:
(a) Approval by the shareholders of the Corporation of
the dissolution or liquidation of the Corporation; or
(b) Approval by the shareholders of the Corporation of an
agreement to merge or consolidate, or otherwise reorganize, with or
into one or more entities that are not Subsidiaries or Parents, as a
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result of which less than 50% of the outstanding voting securities
of the surviving or resulting entity immediately after the
reorganization are, or will be, owned, directly or indirectly, by
shareholders of the Corporation immediately prior to such
reorganization; or
(c) Approval by the shareholders of the Corporation of
the sale of substantially all of the Corporation's business and/or
assets to a person or entity which is not an Affiliate; or
(d) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act but excluding any person described in
and satisfying the conditions of Rule 13d-1(b)(1) thereunder), other
than a person who is the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of more than 50% of the outstanding shares
of Common Stock at the time of the adoption of the Plan (or a
successor, heir, descendant or related party of or to any such
person), becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Corporation representing more than 50% of the combined voting
power of the Corporation's then outstanding securities entitled to
then vote generally in the election of directors of the Corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exercise Agreement" means a written agreement, approved by the
Board, setting forth the terms and conditions of the exercise of an
Option.
"Fair Market Value" on any specified date shall mean the fair
value of such Shares on such date calculated in the following manner:
(a) if the Corporation does not have a class of equity
securities which is registered under Section 12 of the Exchange Act,
or the NASD or a similar organization does not furnish the mean
between the bid and asked prices for the Common Stock on such date,
the fair value of the Common Stock as of the date of determination,
on a consolidated, fully diluted basis assuming the exercise of all
outstanding options and rights (whether or not vested), in good
faith by an independent third party mutually agreed to by the
Eligible Person and the Corporation, based on the most recent
available quarterly financial statements of the Corporation and such
other factors (including but not limited to the liquidity of the
Common Stock (and recent trading if any therein), material
developments subsequent to the end of the period covered by such
financial statements, developments in the Corporation's business,
and general or specific industry and economic developments) as the
determining body may deem relevant for such purposes; or
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<PAGE>
(b) if the Corporation has a class of equity securities
which is registered under Section 12 of the Exchange Act: (A) if
the stock is listed or admitted to trade on a national securities
exchange, the closing price of the stock on the Composite Tape, as
published in the Western Edition of the Wall Street Journal, of the
principal national securities exchange on which the stock is so
listed or admitted to trade, on such date, or, if there is no
trading of the stock on such date, then the closing price of the
stock as quoted on such Composite Tape on the next preceding date on
which there was trading in such shares; (B) if the stock is not
listed or admitted to trade on a national securities exchange, the
last price for the stock on such date, as furnished by the National
Association of Securities Dealers, Inc. ("NASD") through the NASDAQ
National Market Reporting System or a similar organization if the
NASD is no longer reporting such information; (C) if the stock is
not listed or admitted to trade on a national securities exchange
and is not reported on the National Market Reporting System, the
mean between the bid and asked price for the stock on such date, as
furnished by the NASD or a similar organization.
"Grant Date" means the date upon which the Board took the
action granting an Option or such later date as may be set by the Board.
"ISO" means an incentive stock option within the meaning of
Section 422 of the Code.
"NQSO" means an option that is not an ISO.
"Option" means an option to purchase Shares under this Plan.
"Option Agreement" means a written agreement, approved by the
Board, setting forth the terms of an Option.
"Participant" means an Eligible Person who has been granted an
Option.
"Personal Representative" means the person or persons who, upon
the Total Disability or incompetence of a Participant, has lawfully
acquired on behalf of the Participant the power to exercise the rights
and receive the benefits specified in this Plan.
"Purchase Price" means the exercise price, if any, payable by
the Participant to the Corporation upon exercise of an Option in
accordance with the applicable Option Agreement and Exercise Agreement;
provided, however, that such exercise price shall not be less than the
minimum lawful consideration required under Nevada law.
"Shares" means shares of the Corporation's Common Stock.
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"Subsidiary" means any corporation or other entity a majority
or more of the outstanding voting stock or voting power of which is
beneficially owned directly or indirectly by the Corporation.
"Termination of Employment" means any termination (by reason of
death, Total Disability, or any other reason whatsoever, either with or
without cause, unless otherwise specified) of a Participant's employment
with the Corporation or an Affiliate where the Participant no longer
performs services for the Corporation or an Affiliate as an employee,
officer, director. Termination of Employment is not deemed to occur if
the Participant, after terminating service in one capacity, continues to
provide service to the Corporation or an Affiliate in another authorized
capacity. If an entity ceases to be an Affiliate, such action will be
deemed for purposes of this Plan to be a Termination of Employment of
each Eligible Person of that entity who does not continue as an Eligible
Person of the Corporation or another Affiliate.
"Total Disability" means a "permanent and total disability"
within the meaning of Section 22(e)(3) of the Code and such other
disabilities, infirmities, afflictions, or conditions as the Board may
include.
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EXHIBIT 5.1
Opinion regarding legality
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
A Limited Liability Partnership
Including Professional Corporations
Attorneys at Law
333 South Hope Street, Forty-Eighth Floor
Los Angeles, California 90071
Telephone (213) 620-1780
-----
Facsimile (213) 620-1398
-----
August 18, 1997
Millennium Electronics, Inc.
31642 South Coast Highway, Suite 100
Laguna Beach, CA 92699
Ladies and Gentlemen:
This opinion is rendered in connection with the filing of
a registration statement on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, relating to the offer
of up to 1,195,144 shares of Common Stock of the Company which are
being registered for issuance in connection with the Millennium
Memory, Inc. 1996-1997 Stock Incentive Plan and the Millennium
Electronics, Inc. 1997 Incentive Stock Option Plan (the "Plans").
In the preparation of this opinion, we have examined or
caused to be examined originals or copies of such documents as we
have deemed necessary or advisable in order to render the opinion
set forth below. In rendering the opinion set forth below, we have
assumed:
a. The genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to the
originals of all documents submitted to us as copies, and the
authenticity of all such originals.
b. The due authorization, execution and delivery of the
Registration Statement and the documents and instruments referred to
therein by and on behalf of all parties thereto.
c. The issuance of Common Stock in accordance with the
terms of the Plans.
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Millennium Electronics, Inc.
August 18, 1997
Page 2
On the basis of the foregoing and subject to the
qualifications and limitations set forth below, it is our opinion
that the Common Stock covered by the Registration Statement, when
issued and paid for in accordance with the Plans, will be legally
issued, fully paid and non-assessable.
This opinion speaks only as of the date hereof and is
based solely upon the existing laws of the United States, and the
general corporation laws of the State of California and the State of
Nevada, and we express no opinion, and none should be inferred, as
to any other laws.
This opinion may not be relied upon by any other person or
for any other purpose, nor may it be quoted from or referred to, or
copies delivered to any other person, without our prior written
consent. We hereby consent to the inclusion of this opinion as an
exhibit in the Registration Statement.
Respectfully submitted,
/s/ SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
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EXHIBIT 23.1
TANNER+Co.
Certified Public Accountants
675 East 500 South, Suite 640
Salt Lake City, Utah 84102
Telephone (801) 532-7444
Fax (801) 532-4911
A Professional Corporation
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We consent to the incorporation by reference in this Registration
Statement of Millennium Electronics, Inc. on Form S-8 of our report dated
October 7, 1996, appearing in the Annual Report on Form 10-KSB of Beacon
Capital Investment, Inc. for the period ended September 30, 1996.
/s/ Tanner & Co.
Salt Lake City, Utah
August 15, 1997
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