As filed with the Securities and Exchange Commission on February 18, 2000
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
VALUESTAR CORPORATION
(Exact name of registrant as specified in its charter)
Colorado 84-1202005
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
360 - 22nd Street, Suite 210
Oakland, California 94612
(Address of Principal Executive Offices) (Zip Code)
ValueStar Corporation 1997 Stock Option Plan, as amended
Non-Qualified Stock Option Agreement with James Stein
Non-Qualified Stock Option Agreement with Joshua M. Felser
Two Non-Qualified Stock Option Agreements with Robert Sick
(Full title of the Plans)
James Stein
President and Chief Executive Officer
VALUESTAR CORPORATION
360 - 22nd Street, Suite 210, Oakland, California 94612
(Name and address of agent for service)
Telephone Number (510) 808-1300
(Telephone number, including area code, of agent for service)
Copy to:
Donald Reinke, Esq.
Bay Venture Counsel, LLP
1999 Harrison Street, Suite 1300
Oakland, California 94612
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Securities to Amount to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered Offering Price Aggregate Offering Registration Fee
per Share Price
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares subject to
outstanding stock options 474,423 $4.11(1) $1,949,897 $517.77
under the 1997 Plan not
previously registered
Shares issuable under 275,577 $6.50(2) $1,791,251 $472.89
1997 Plan options
available for grant
Issued to three persons as 671,600 $4.79(1) $3,216,964 $849.28
compensation
=================================================================================================================================
<FN>
(1) Weighted average exercise price based on stock option exercise prices ranging from $2.00 to $7.00 per share.
(2) Estimated in accordance with Rule 457(h) of the Securities Act of 1933, as amended, solely for the purpose of calculating the
registration fee on the basis of $6.50 per share (which is the average of the high and low prices of Registrant's Common
Stock as reported on the OTC Bulletin Board on February15, 2000.
=================================================================================================================================
</FN>
</TABLE>
<PAGE>
EXPLANATORY NOTE
This Registration Statement is being filed to register an
additional 750,000 shares of the common stock par value $.00025 per
share of ValueStar Corporation which have been reserved for issuance
under the Company's 1997 Stock Option Plan, as amended; and four stock
option agreements between the registrant and one director and two
executive officers, under which 671,600 shares of Common Stock are
available. A total of 500,000 shares of the Common Stock reserved under
the Plan have previously been registered on a Registration Statement on
Form S-8 (Registration No. 333-66191, filed on October 27, 1998).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed by Valuestar
Corporation (the "Registrant") with the Securities and Exchange Commission (the
"Commission"):
(a) The Registrant's Form 10-KSB for the fiscal year ended June 30,
1999 as filed on September 23, 1999 pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Registrant's Form 10-QSB for the quarterly period ended
December 31, 1999 as filed on February 9, 2000 pursuant to Section 13 of the
Exchange Act.
(c) The Registrant's Form 10-QSB for the quarterly period ended
September 30, 1999 as filed on November 12, 1999 pursuant to Section 13 of the
Exchange Act.
(d) The Registrant's Form 8-K for the quarterly period ended as filed
on December 13, 1999 pursuant to Section 13 of the Exchange Act.
(e) The description of Registrant's Common Stock contained in Item 8 of
Part I of the Registrant's Registration Statement on Form 10-SB filed with the
Commission under the Exchange Act on May 29, 1997, including any amendment or
report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13 (a), 13
(c), 14 and 15 (d) of the Exchange Act after the date hereof and prior to the
filing of a post-effective amendment which indicates that the securities offered
hereby have been sold or which deregisters the securities covered hereby then
remaining unsold shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
<PAGE>
As permitted by Colorado law, the registrant's Articles of
Incorporation provide that no director of the registrant shall be personally
liable to the registrant or any shareholder thereof for monetary damages for
breach of his fiduciary duty as a director, except liability (i) for any breach
of a Director's duty of loyalty to the registrant or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for acts in violation of Section 7-108-403 of
the Colorado Business Corporation Act, as it now exists or may be amended, or
(iv) for any transaction from which the Director derives an improper personal
benefit.
As permitted by Colorado law, the registrant's Articles of
Incorporation also provide that the registrant will indemnify its officers,
directors, employees and agents against attorneys' fees and other expenses and
liabilities they incur to defend, settle or satisfy any civil or criminal action
brought against them arising out of their association with or activities on
behalf of the registrant as long as, in any such action, they acted in good
faith and in his or her official capacity acted in a manner reasonably believed
to be in the best interests of the registrant or in all other cases his or her
conduct was not opposed to the registrant's best interests. However no
indemnification shall be made if a person is adjudged to be liable for
negligence or misconduct in the performance of his duty to the registrant. The
registrant may also bear the expenses of such litigation for any such persons
upon their promise to repay such sums if it is ultimately determined that they
are not entitled to indemnification. Such expenditures could be substantial and
may not be recouped, even if the registrant is so entitled.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this Registration
Statement:
Exhibit Number Description
-------------- -----------
5.* Opinion of Bay Venture Counsel LLP.
10.1 Second Amendment to 1997 Stock Option Plan dated
August 31, 1999 and approved by the registrant's
shareholders on November 19, 1999 (filed as Exhibit
10.8.3 to the registrant's quarterly report on Form
10QSB as filed on February 9, 2000, and incorporated
by reference herein).
10.2 Non-Qualified Stock Option Agreement dated as of
September 29, 1999 between the registrant and James
Stein (filed as Exhibit 10.16 to the registrant's
quarterly report on Form 10QSB as filed on February
9, 2000, and incorporated by reference herein).
10.3 Non-Qualified Stock Option Agreement dated as of
November 6, 1999 between the registrant and Joshua
M. Felser (filed as Exhibit 10.17 to the
registrant's quarterly report on Form 10QSB as filed
on February 9, 2000, and incorporated by reference
herein).
10.4* Non-Qualified Stock Option Agreement dated as of
January 28, 2000 between the registrant and Robert
Sick.
10.5* Non-Qualified Stock Option Agreement dated as of
January 28, 2000 between the registrant and Robert
Sick.
23.1 Consent of Bay Venture Counsel LLP (contained in
opinion filed as Exhibit 5).
23.2* Consent of Moss Adams LLP.
24 Power of Attorney (set forth on the signature page
of this Registration Statement).
------------------
*filed herewith.
<PAGE>
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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, as amended (the "Act"), 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 in 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.
(b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant'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.
(c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oakland, State of California, on February 18, 2000.
VALUESTAR CORPORATION,
a Colorado corporation
By: /s/ James Stein
James Stein
President and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
<TABLE>
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints James Stein as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in his
name, place and stead, and in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission hereby
ratifying and confirming all that said attorney-in-fact, or his substitutes, may
do or cause to be done by virtue hereof.
Further, 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.
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James Stein President, Chief Executive Officer February 18, 2000
James Stein and Director (Principal Executive Officer)
/s/ Michael J. Kelly Controller February 18, 2000
Michael J. Kelly (Principal Accounting Officer)
/s/ James A. Barnes Treasurer, Secretary and Director February 18, 2000
James A. Barnes (Principal Financial Officer)
/s/ Jerry E. Polis Director February 18, 2000
Jerry E. Polis
/s/ Fritz T. Beesemyer Director February 18, 2000
Fritz T. Beesemyer
/s/ Joshua M. Felser Director February 18, 2000
Joshua M. Felser
/s/ Steve Ledger Director February 18, 2000
Steve Ledger
</TABLE>
<PAGE>
II-3
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
5* Opinion of Bay Venture Counsel LLP.
10.1 Second Amendment to 1997 Stock Option Plan dated
August 31, 1999 and approved by the registrant's
shareholders on November 19, 1999 (filed as Exhibit
10.8.3 to the registrant's quarterly report on Form
10QSB as filed on February 9, 2000, and incorporated
by reference herein).
10.2 Non-Qualified Stock Option Agreement dated as of
September 29, 1999 between the registrant and James
Stein (filed as Exhibit 10.16 to the registrant's
quarterly report on Form 10QSB as filed on February
9, 2000, and incorporated by reference herein).
10.3 Non-Qualified Stock Option Agreement dated as of
November 6, 1999 between the registrant and Joshua
M. Felser (filed as Exhibit 10.17 to the
registrant's quarterly report on Form 10QSB as filed
on February 9, 2000, and incorporated herein by
reference).
10.4* Non-Qualified Stock Option Agreement dated as of
January 28, 2000 between the registrant and Robert
Sick.
10.5* Non-Qualified Stock Option Agreement dated as of
January 28, 2000 between the registrant and Robert
Sick.
23.1 Consent of Bay Venture Counsel LLP (contained in
opinion filed as Exhibit 5).
23.2* Consent of Moss Adams LLP.
24 Power of Attorney (set forth on the signature page
of this Registration Statement).
------------------
*filed herewith.
EXHIBIT 5
BAY VENTURE COUNSEL, LLP
Attorneys at Law
Lake Merritt Plaza Building
1999 Harrison Street, Suite 1300
Oakland, California 94612
Telephone (510) 273-8750
Facsimile (510) 834-7440
February 15, 2000
ValueStar Corporation
360 - 22nd Street, Suite 210
Oakland, California 94612
Re: Registration Statement on Form S-8
Gentlemen:
As corporate counsel to ValueStar Corporation, a Colorado corporation
(the "Company"), we have been asked by the Company to review the Registration
Statement on Form S-8 to be filed by the Company with the Securities and
Exchange Commission on, or about, February 17, 2000 (the "Registration
Statement"). This is in connection with the registration under the Securities
Act of 1933, as amended, of 1,421,600 shares of the Company's Common Stock,
$0.00025 par value per share (the "Plan Shares"), none of which are presently
issued and outstanding.
As your corporate counsel, we have examined the proceedings and such
other documents as we have deemed necessary relating to the issuance of 750,000
Plan Shares to be issued under the Company's 1997 Stock Option Plan; and an
aggregate of 671,600 shares to be issued under four stock option agreements (the
"Option Agreements"), outside the Plans.
<PAGE>
In rendering this opinion, we have assumed, without investigation, the
genuineness of all signatures; the correctness of all certificates; the
authenticity of all documents submitted to us as originals; the conformity to
original documents of all documents submitted to us as certified, photostatic or
facsimile copies and the authenticity of the originals of such copies; and the
accuracy and completeness of all records made available to us by, or on behalf
of, the Company. In addition, we have assumed, without investigation, the
accuracy of the representations and statements as to factual matters made by the
Company, its officers and employees, and public officials. Nothing has come to
our attention, however, which would lead us to question the accuracy or
completeness of such representations, warranties or statements.
In rendering the opinion hereinafter expressed, we have examined and
relied upon such documents and instruments as we have deemed necessary and
appropriate. It is our opinion that the Plan Shares, when subsequently issued
upon payment therefor in accordance with the terms of the 1997 Stock Option Plan
and the Option Agreements, as applicable, will be validly issued, fully paid and
nonassessable.
We are admitted to practice law only in the State of California, and we
express no opinion concerning any law other than the law of the State of
California. This opinion is intended solely for your benefit and is not to be
relied upon by any other person, firm, or entity without our prior written
consent.
We consent to the use of this opinion as an Exhibit to the Registration
Statement, and further consent to all references to this Firm in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/ Bay Venture Counsel, LLP
BAY VENTURE COUNSEL, LLP
EXHIBIT 10.4
VALUESTAR CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is made and entered into
effective as of the 28th day of January, 2000, by and between VALUESTAR
CORPORATION, a Colorado corporation (the "Company") and Robert Sick (the
"Optionee").
BACKGROUND
A. The Company has determined to reward and to provide incentives to those who
are primarily responsible for the operations of the Company and for shaping and
carrying out the long-range plans of the Company and aiding in its continued
growth and financial success.
B. In furtherance of these purposes, the Board of Directors of the Company has
authorized the grant to Optionee of a stock option to purchase certain shares of
the common stock, par value $.00025 per share, of the Company ("Common Stock")
by resolution dated January 28, 2000.
C. The Company and Optionee wish to confirm the terms, conditions, and
restrictions of this option.
For and in consideration of the premises, the mutual covenants contained herein,
and other good and valuable consideration, the parties hereto agree as follows:
ARTICLE 1
GRANT AND EXERCISE OF OPTION
1.1 GRANT OF OPTION. Subject to the terms, restrictions, limitations, and
conditions stated herein, the Company hereby grants to Optionee an option (the
"Option") to purchase 345,000 shares of Common Stock (the "Option Shares"). The
date first written above shall be the date on which the Option has been granted
(the "Grant Date").
1.2 EXERCISE OF THE OPTION (a) The Option may be exercised with respect to all
or any portion of the vested Option Shares at any time during the Option Period
(as defined below) by the delivery to the Company, at its principal place of
business, of (i) a written notice of exercise which shall be delivered to the
Company no earlier than thirty (30) days and no later than ten (10) days prior
to the date upon which Optionee desires to exercise all or any portion of the
Option (the "Exercise Date"); (ii) a certified check payable to the Company in
the amount of the Exercise Price (as defined below) multiplied by the number of
Option Shares being purchased (the "Purchase Price") OR with the advance
approval of the Company, by delivery of a number of shares of Common Stock,
which have been held by Optionee for at least six months, having a fair market
value, as of the date the Option is exercised, at least equal to the Purchase
Price OR with the advance approval of the Company by a certified check payable
to the Company in an amount less than the Exercise Price and by delivery of a
number of shares of Common Stock, which have been held by Optionee for at least
six months, having a fair market value, as of the date the Option is exercised,
at least equal to the balance of the Purchase Price OR with the advance approval
of the Company by Optionee advising the Company, at the time this Option is
exercised, to withhold from exercise under the Option the appropriate number of
Option Shares, the
<PAGE>
aggregate fair market value of which on the date of exercise of the Option is
equal to the aggregate cash purchase price of the Option Shares being exercised
and purchased under the Option, and such withholding shall constitute full
payment for the non-withheld Option Shares issued upon exercise OR such other
consideration as the Board of Directors may specifically authorize; and (iii)
except as permitted in Paragraph 1.2(b) below, a certified check payable to the
Company in the amount of all withholding tax obligations, if any (whether
federal, state or local), imposed on the Company by reason of the exercise of
the Option, or if applicable the Withholding Election described in Section
1.2(b). Upon acceptance of such notice, receipt of payment in full, the Company
shall cause a certificate representing the shares of Common Stock as to which
the Option has been exercised (less any withheld Option Shares, if applicable)
to be issued and delivered to the Optionee.
(b) In lieu of paying the withholding tax obligation, if any, in cash, as
described in Section 1.2(a) (iii), the Optionee may elect, with the advance
approval of the Company, to have the actual number of shares issuable upon
exercise of the Option reduced by the smallest number of whole shares of Common
Stock which, when multiplied by the fair market value of the Common Stock as of
the date the Option is exercised, is sufficient to satisfy the amount of the
withholding tax obligations imposed on the Company by reason of the exercise
thereof (the "Withholding Election"). The Optionee may take a Withholding
Election only if all of the following conditions are met:
(i) the Withholding Election must be made by electing the Withholding
Election in the written notice of exercise; and by executing and
delivering to the Company a properly completed Notice of Withholding
Election; and
(ii) any Withholding Election made will be irrevocable; however, the
Company may, in its sole discretion, disapprove and not give effect to
any Withholding Election at its discretion or due to its cash position
or based on any other regulatory or statutory factor in its reasonable
judgment.
1.3 EXERCISE PRICE. The exercise price for each share of Common Stock shall be
Seven Dollars ($7.00) (the "Exercise Price").
1.4 TERM AND TERMINATION OF OPTION. Except as otherwise provided herein, the
term of the Option ("Option Period") shall commence on the Grant Date and
terminate on January 27, 2005. Subject to paragraph 1.5 below, this Option shall
become exercisable (vest) based on the passage of services to the Company in
accordance with the following vesting schedule:
20,000 options shares shall vest on June 30, 2000
25,000 options shares shall vest on September 30, 2000
30,000 options shares shall vest on December 31, 2000
22,500 options shares shall vest on March 31, 2001
22,500 options shares shall vest on June 30, 2001
22,500 options shares shall vest on September 30, 2001
22,500 options shares shall vest on December 31, 2001
22,500 options shares shall vest on March 31, 2002
22,500 options shares shall vest on June 30, 2002
22,500 options shares shall vest on September 30, 2002
22,500 options shares shall vest on December 31, 2002
22,500 options shares shall vest on March 31, 2003
22,500 options shares shall vest on June 30, 2003
22,500 options shares shall vest on September 30, 2003
22,500 options shares shall vest on December 31, 2003
2
<PAGE>
Once the right to purchase shares has accrued and vested, such shares may
thereafter be purchased at any time, or in part from time to time, until the
termination date of this Option, subject to the provisions of Paragraph 1.7
below. In no case may this Option be exercised for a fraction of a share. No
shares shall vest after termination of services to the Company unless otherwise
agreed in writing.
Upon the expiration of the Option Period as set forth above, this Option, and
all unexercised rights granted to the Optionee hereunder shall terminate, and
thereafter be null and void.
1.5 ACCELERATION OF VESTING. In the event of a merger, sale or reorganization of
the Company with or into any other corporation or corporations or a sale of all
or substantially all of the assets or outstanding stock of the Company, in which
transaction the Company's stockholders immediately prior to such transaction own
immediately after such transaction less than 50% of the equity securities of the
surviving corporation or its parent, all Option Shares that have not been
terminated in accordance with this agreement, that will become vested within 48
months of the closing date of such merger, sale or reorganization will be
accelerated. In the event of a merger of the Company with or into another
corporation, this outstanding option may be assumed or an equivalent option or
right may be substituted by such successor corporation or a parent or subsidiary
of such successor corporation. For the purposes of this paragraph, this Option
shall be considered assumed if, following the merger, the Option confers the
right to purchase or receive, for each Option Share immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each share held on the
effective date of the transaction (and if the holders are offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares). If such consideration received in the merger is not
solely common stock of the successor corporation or its Parent, the Board of
Directors of the Company may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of this Option,
for each Option Share, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger.
1.6 RIGHTS AS STOCKHOLDER. Optionee, or, if applicable, any Transferee (as
defined in Section 3.12 (c)) shall have no rights as a stockholder with respect
to any shares covered by the Option until a stock certificate for the shares is
issued in Optionee's or Transferee's name. No adjustment to the Option shall be
made pursuant to Section 3.1 hereof for dividends paid or declared on or with
respect to Common Stock in cash, securities other than Common Stock, or other
property, for which the record date is prior to the date of exercise hereof.
1.7 EARLY TERMINATION OF OPTION. The Option Period shall terminate on the date
of the first to occur of the following:
(a) January 27, 2005:
(b) Disability or Death as provided by this subparagraph (b). This
Option shall terminate and no further options shall vest thereafter
upon Optionee's death or disability and any vested options at the time
of such death or disability shall no longer be exercisable after the
expiration of twelve (12) months from the date of death or disability
of the Optionee.
3
<PAGE>
(c) If Optionee's services as an employee is terminated for no reason,
or for any reason (voluntarily or otherwise) other than disability or
death, then no further options shall vest thereafter and this Option
shall terminate and no longer be exercisable six months after such
termination. If Optionee shall die within six months after termination
the remaining vested portion shall terminate on the earlier of the
expiration of the Option Period or twelve months after the date of
death.
(d) the date immediately preceding the consummation of the dissolution
or liquidation of the Company. The Company will use its best efforts to
provide written notice to Optionee of such dissolution or liquidation
or like transaction, at least (30) days prior to the closing of such
transaction to permit Optionee to exercise the Option to the extent
vested. In no event will te option be exercisable beyond expiration of
the Option Period.
ARTICLE 2
RESTRICTION ON OPTION AND OPTION SHARES
2.1 RESTRICTIONS ON TRANSFER OF OPTION. The Option evidenced hereby is
non-transferable other than by will or the laws of descent and distribution, and
shall be exercisable during the lifetime of Optionee only by Optionee (or, in
the event of Optionee's death or disability, by a permitted Transferee).
2.2 LOCK-UP PROVISION. In connection with any public registration of the
Company's securities, the Optionee (and any transferee of Optionee) agrees, upon
the request of the Company or the underwriter(s) managing such underwritten
offering of the Company's securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of this Option, any
of the shares of Common Stock issuable upon exercise of this Option or any other
securities of the Company heretofore or hereafter acquired by Optionee (other
than unrestricted securities acquired in the open market and those included in
the registration) without the prior written consent of the Company and such
underwriter(s), as the case may be, for a period of time not to exceed one
hundred eighty (180) days from the effective date of the registration (the
"Lock-Up Period"). Upon request by the Company, Optionee (and any transferee of
Optionee) agrees to enter into any further reasonable agreement in writing in a
form reasonably satisfactory to the Company and such underwriter(s)in
furtherance of such lock-up. The Company may impose stop-transfer instructions
with respect to the securities subject to the foregoing restrictions until the
end of said 180-day period. Any shares issued upon exercise of this Option shall
bear an appropriate legend referencing this lock-up provision (the "Lock-Up
Legend").
ARTICLE 3
GENERAL PROVISIONS
3.1 CHANGE IN CAPITALIZATION. If the number of outstanding shares of the Common
Stock shall be increased or decreased by a change in par value, split-up, stock
split, reverse stock split, reclassification, distribution of common stock
dividend, or other similar capital adjustment, an appropriate adjustment shall
be made by the Board of Directors in the number and kind of shares as to which
the Option, or the portion thereof then unexercised, shall be or become
exercisable,
4
<PAGE>
such that Optionee's proportionate interest shall be maintained as before the
occurrence of the event. The adjustment shall be made without change in the
total price applicable to the unexercised portion of the Option and with a
corresponding adjustment in the Exercise Price. No fractional shares shall be
issued or made subject to the Option in making such adjustment. All adjustments
made by the Board of Directors under this Section shall be final, binding, and
conclusive.
3.2 LEGENDS. Each certificate representing the Option Shares purchased upon
exercise of the Option shall (unless a registration statement covering the
Option Shares is in effect) be endorsed with the following legend and Optionee
shall not make any transfer of the Option shares without first complying with
the restrictions on transfer described in such legend:
TRANSFER IF RESTRICTED
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT") OR SIMILAR STATE SECURITIES LAWS APPLICABLE
TO SUCH SECURITIES (COLLECTIVELY THE "ACTS") AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE
IS AN EFFECTIVE REGISTRATION UNDER SUCH ACTS COVERING SUCH
SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH RULE
144 PROMULGATED UNDER THE SECURITIES ACT, OR SIMILAR STATE
SECURITIES LAW, OR (3) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE ACTS.
Optionee agrees that the Company may also include any other legends required by
applicable federal or state securities laws.
3.3 GOVERNING LAWS. This Agreement shall be construed, administered and enforced
according to the laws of the State of California, excluding that body of law
dealing with conflicts of law.
3.4 SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of
the heirs, legal representatives, successors, and permitted assigns of the
parties.
3.5 NOTICE. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given if personally delivered or if sent by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
3.6 SEVERABILITY. In the event that any one or more of the provisions or portion
thereof contained in this Agreement shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, the same shall not invalidate or
otherwise affect any other provisions of this Agreement, and this Agreement
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.
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3.7 ENTIRE AGREEMENT. This Agreement expresses the entire understanding and
Agreement of the parties with respect to the subject matter hereof. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
instrument.
3.8 VIOLATION. Any transfer, pledge, sale, assignment, or hypothecation of the
Option or any portion thereof made in violation of the terms of this Agreement
shall be void and without effect.
3.9 HEADINGS. Paragraph headings used herein are for convenience of reference
only and shall not be considered in construing this Agreement.
3.10 SPECIFIC PERFORMANCE. In the event of any actual or threatened default in,
or breach of, any of the terms, conditions and provisions of this Agreement, the
party or parties who are thereby aggrieved shall have the right to specific
performance and injunction in addition to any and all other rights and remedies
at law or in equity, and all such rights and remedies shall be cumulative.
3.11 NO EMPLOYMENT RIGHTS CREATED. The grant of the Option hereunder shall not
be construed as giving Optionee the right to continued employment with the
Company.
3.12 CERTAIN DEFINITIONS. The capitalized terms listed below are used herein
with the meaning thereafter ascribed:
(a) "Disability" means (1) the inability of Optionee to perform the
duties of Optionee's employment with the Company due to physical or
emotional incapacity or illness, where such inability is expected to be
of long-continued and indefinite duration or (2) Optionee shall be
entitled to (i) disability retirement benefits under the federal Social
Security Act or (ii) recover benefits under any long-term disability
plan or policy maintained by the Company. In the event of a dispute,
the determination of Disability shall be made by the Board of Directors
and shall be supported by advice of a physician competent in the area
to which such Disability relates.
(b) "Fair Market Value" means of the applicable prices selected from
the following alternatives for the date as of which Fair Market Value
is to be determined as quoted in the Wall Street Journal (or in such
other reliable publication as the committee, in it's discretion, may
determine to rely upon): (i) if the common stock is listed on the New
York Stock Exchange, the mean of highest and lowest sales prices per
share of the Common Stock as quoted in the NYSE - Composite
transactions listing for such or each date, (ii) if the common Stock is
not listed on such exchange, the mean of the highest and lowest sales
prices per share of Common stock for such or each date on (or on any
composite index including) the principal United States Securities
Exchange registered under the 1934 Act on which the Common Stock is
listed, or (iii) if the Common Stock is not listed on any such
exchange, the mean of the highest and lowest sales prices per share of
the Common Stock for such or each date on the National Associates of
Securities Dealers Automated Quotations Systems or any successor system
then in use ("NASDAQ"). If there are no such sales price quotations for
the date as of which Fair Market Value is to be determined but there
are such sales price quotations within a reasonable period both before
and after such date, then Fair Market Value shall be determined by
taking a weighted average of the means between the highest and lowest
sales prices per share of the Common Stock as so quoted on the nearest
date before, and the
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nearest date after, the date as of which Fair Market Value is to be
determined. The average should be weighted inversely by the respective
numbers of trading days between the selling dates and the date as of
which Fair Market Value is to be determined. If there are no such sales
price quotations on, or within a reasonable period both before and
after, the date as of which Fair Market Value is to be determined, then
Fair Market Value of the Common Stock shall be the mean between the
bonafide bid and asked prices per share of Common Stock as so quoted
for such date on NASDAQ, or if none, the weighted average of the means
between such bonafide bid and asked prices on the nearest trading date
before, and the nearest trading date after, the date as of which Fair
Market Value is to be determined, if both such dates are within a
reasonable period. If the Fair Market Value of the Common Stock cannot
be determined on the basis set forth in this definition for the date as
of which Fair Market Value is to be determined, the Committee shall in
good faith determine the Fair Market Value of the Common Stock on such
date. Fair Market Value shall be determined without regard to any
restriction, other than a restriction which, by its terms, will never
lapse.
(c) "Transferee" means the estate, or the executor or administrator of
the estate, of a deceased Optionee, or the personal representative of
an Optionee suffering a Disability.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first set forth above.
VALUESTAR CORPORATION
BY: /s/ James Stein
ITS: President
ATTESTED:
BY: /s/ Michael Kelly
ITS: Controller
ACCEPTED:
/s/ Robert A. Sick
7
EXHIBIT 10.5
VALUESTAR CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("Agreement") is made and entered into
effective as of the 28th day of January, 2000, by and between VALUESTAR
CORPORATION, a Colorado corporation (the "Company") and Robert Sick (the
"Optionee").
BACKGROUND
A. The Company has determined to reward and to provide incentives to those who
are primarily responsible for the operations of the Company and for shaping and
carrying out the long-range plans of the Company and aiding in its continued
growth and financial success.
B. In furtherance of these purposes, the Board of Directors of the Company has
authorized the grant to Optionee of a stock option to purchase certain shares of
the common stock, par value $.00025 per share, of the Company ("Common Stock")
by resolution dated January 28, 2000.
C. The Company and Optionee wish to confirm the terms, conditions, and
restrictions of this option.
For and in consideration of the premises, the mutual covenants contained herein,
and other good and valuable consideration, the parties hereto agree as follows:
ARTICLE 1
GRANT AND EXERCISE OF OPTION
1.1 GRANT OF OPTION. Subject to the terms, restrictions, limitations, and
conditions stated herein, the Company hereby grants to Optionee an option (the
"Option") to purchase 16,600 shares of Common Stock (the "Option Shares"). The
date first written above shall be the date on which the Option has been granted
(the "Grant Date").
1.2 EXERCISE OF THE OPTION (a) The Option may be exercised with respect to all
or any portion of the vested Option Shares at any time during the Option Period
(as defined below) by the delivery to the Company, at its principal place of
business, of (i) a written notice of exercise which shall be delivered to the
Company no earlier than thirty (30) days and no later than ten (10) days prior
to the date upon which Optionee desires to exercise all or any portion of the
Option (the "Exercise Date"); (ii) a certified check payable to the Company in
the amount of the Exercise Price (as defined below) multiplied by the number of
Option Shares being purchased (the "Purchase Price") OR with the advance
approval of the Company, by delivery of a number of shares of Common Stock,
which have been held by Optionee for at least six months, having a fair market
value, as of the date the Option is exercised, at least equal to the Purchase
Price OR with the advance approval of the Company by a certified check payable
to the Company in an amount less than the Exercise Price and by delivery of a
number of shares of Common Stock, which have been held by Optionee for at least
six months, having a fair market value, as of the date the Option is exercised,
at least equal to the balance of the Purchase Price OR with the advance approval
of the Company by Optionee advising the Company, at the time this Option is
exercised, to withhold from exercise under the Option the appropriate number of
Option Shares, the
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aggregate fair market value of which on the date of exercise of the Option is
equal to the aggregate cash purchase price of the Option Shares being exercised
and purchased under the Option, and such withholding shall constitute full
payment for the non-withheld Option Shares issued upon exercise OR such other
consideration as the Board of Directors may specifically authorize; and (iii)
except as permitted in Paragraph 1.2(b) below, a certified check payable to the
Company in the amount of all withholding tax obligations, if any (whether
federal, state or local), imposed on the Company by reason of the exercise of
the Option, or if applicable the Withholding Election described in Section
1.2(b). Upon acceptance of such notice, receipt of payment in full, the Company
shall cause a certificate representing the shares of Common Stock as to which
the Option has been exercised (less any withheld Option Shares, if applicable)
to be issued and delivered to the Optionee.
(b) In lieu of paying the withholding tax obligation, if any, in cash, as
described in Section 1.2(a) (iii), the Optionee may elect, with the advance
approval of the Company, to have the actual number of shares issuable upon
exercise of the Option reduced by the smallest number of whole shares of Common
Stock which, when multiplied by the fair market value of the Common Stock as of
the date the Option is exercised, is sufficient to satisfy the amount of the
withholding tax obligations imposed on the Company by reason of the exercise
thereof (the "Withholding Election"). The Optionee may take a Withholding
Election only if all of the following conditions are met:
(i) the Withholding Election must be made by electing the Withholding
Election in the written notice of exercise; and by executing and
delivering to the Company a properly completed Notice of Withholding
Election; and
(ii) any Withholding Election made will be irrevocable; however, the
Company may, in its sole discretion, disapprove and not give effect to
any Withholding Election at its discretion or due to its cash position
or based on any other regulatory or statutory factor in its reasonable
judgment.
1.3 EXERCISE PRICE. The exercise price for each share of Common Stock shall be
Seven Dollars ($7.00) (the "Exercise Price").
1.4 TERM AND TERMINATION OF OPTION. Except as otherwise provided herein, the
term of the Option ("Option Period") shall commence on the Grant Date and
terminate on January 27, 2005. Subject to paragraph 1.5 below, this Option shall
become exercisable (vest) based on the passage of services to the Company in
accordance with the following vesting schedule:
4,150 options shares shall vest on March 31, 2000 subject to
written approval of the Compensation Committee of the Company
which approval shall be based on an evaluation of performance
4,150 options shares shall vest on June 30, 2000 subject to
written approval of the Compensation Committee of the Company
which approval shall be based on an evaluation of performance
4,150 options shares shall vest on September 30, 2000 subject
to written approval of the Compensation Committee of the
Company which approval shall be based on an evaluation of
performance
4,150 options shares shall vest on December 31, 2000 subject
to written approval of the Compensation Committee of the
Company which approval shall be based on an evaluation of
performance
Once the right to purchase shares has accrued and vested, such shares may
thereafter be purchased at any time, or in part from time to time, until the
termination date of this Option, subject to the provisions of Paragraph 1.7
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<PAGE>
below. In no case may this Option be exercised for a fraction of a share. No
shares shall vest after termination of services to the Company unless otherwise
agreed in writing.
Upon the expiration of the Option Period as set forth above, this Option, and
all unexercised rights granted to the Optionee hereunder shall terminate, and
thereafter be null and void.
1.5 ACCELERATION OF VESTING. In the event of a merger, sale or reorganization of
the Company with or into any other corporation or corporations or a sale of all
or substantially all of the assets or outstanding stock of the Company, in which
transaction the Company's stockholders immediately prior to such transaction own
immediately after such transaction less than 50% of the equity securities of the
surviving corporation or its parent, all Option Shares that have not been
terminated in accordance with this agreement, that will become vested within 48
months of the closing date of such merger, sale or reorganization will be
accelerated. In the event of a merger of the Company with or into another
corporation, this outstanding option may be assumed or an equivalent option or
right may be substituted by such successor corporation or a parent or subsidiary
of such successor corporation. For the purposes of this paragraph, this Option
shall be considered assumed if, following the merger, the Option confers the
right to purchase or receive, for each Option Share immediately prior to the
merger, the consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each share held on the
effective date of the transaction (and if the holders are offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares). If such consideration received in the merger is not
solely common stock of the successor corporation or its Parent, the Board of
Directors of the Company may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of this Option,
for each Option Share, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger.
1.6 RIGHTS AS STOCKHOLDER. Optionee, or, if applicable, any Transferee (as
defined in Section 3.12 (c)) shall have no rights as a stockholder with respect
to any shares covered by the Option until a stock certificate for the shares is
issued in Optionee's or Transferee's name. No adjustment to the Option shall be
made pursuant to Section 3.1 hereof for dividends paid or declared on or with
respect to Common Stock in cash, securities other than Common Stock, or other
property, for which the record date is prior to the date of exercise hereof.
1.7 EARLY TERMINATION OF OPTION. The Option Period shall terminate on the date
of the first to occur of the following:
(a) January 27, 2005:
(b) Disability or Death as provided by this subparagraph (b). This
Option shall terminate and no further options shall vest thereafter
upon Optionee's death or disability and any vested options at the time
of such death or disability shall no longer be exercisable after the
expiration of twelve (12) months from the date of death or disability
of the Optionee.
(c) If Optionee's services as an employee is terminated for no reason,
or for any reason (voluntarily or otherwise) other than disability or
death, then no further options shall vest thereafter and this Option
shall
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<PAGE>
terminate and no longer be exercisable six months after such
termination. If Optionee shall die within six months after termination
the remaining vested portion shall terminate on the earlier of the
expiration of the Option Period or twelve months after the date of
death.
(d) the date immediately preceding the consummation of the dissolution
or liquidation of the Company. The Company will use its best efforts to
provide written notice to Optionee of such dissolution or liquidation
or like transaction, at least (30) days prior to the closing of such
transaction to permit Optionee to exercise the Option to the extent
vested. In no event will te option be exercisable beyond expiration of
the Option Period.
ARTICLE 2
RESTRICTION ON OPTION AND OPTION SHARES
2.1 RESTRICTIONS ON TRANSFER OF OPTION. The Option evidenced hereby is
non-transferable other than by will or the laws of descent and distribution, and
shall be exercisable during the lifetime of Optionee only by Optionee (or, in
the event of Optionee's death or disability, by a permitted Transferee).
2.2 LOCK-UP PROVISION. In connection with any public registration of the
Company's securities, the Optionee (and any transferee of Optionee) agrees, upon
the request of the Company or the underwriter(s) managing such underwritten
offering of the Company's securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of this Option, any
of the shares of Common Stock issuable upon exercise of this Option or any other
securities of the Company heretofore or hereafter acquired by Optionee (other
than unrestricted securities acquired in the open market and those included in
the registration) without the prior written consent of the Company and such
underwriter(s), as the case may be, for a period of time not to exceed one
hundred eighty (180) days from the effective date of the registration (the
"Lock-Up Period"). Upon request by the Company, Optionee (and any transferee of
Optionee) agrees to enter into any further reasonable agreement in writing in a
form reasonably satisfactory to the Company and such underwriter(s)in
furtherance of such lock-up. The Company may impose stop-transfer instructions
with respect to the securities subject to the foregoing restrictions until the
end of said 180-day period. Any shares issued upon exercise of this Option shall
bear an appropriate legend referencing this lock-up provision (the "Lock-Up
Legend").
ARTICLE 3
GENERAL PROVISIONS
3.1 CHANGE IN CAPITALIZATION. If the number of outstanding shares of the Common
Stock shall be increased or decreased by a change in par value, split-up, stock
split, reverse stock split, reclassification, distribution of common stock
dividend, or other similar capital adjustment, an appropriate adjustment shall
be made by the Board of Directors in the number and kind of shares as to which
the Option, or the portion thereof then unexercised, shall be or become
exercisable, such that Optionee's proportionate interest shall be maintained as
before the occurrence of the event. The adjustment shall be made without change
in the total price applicable to the unexercised portion of the Option and with
a
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<PAGE>
corresponding adjustment in the Exercise Price. No fractional shares shall be
issued or made subject to the Option in making such adjustment. All adjustments
made by the Board of Directors under this Section shall be final, binding, and
conclusive.
3.2 LEGENDS. Each certificate representing the Option Shares purchased upon
exercise of the Option shall (unless a registration statement covering the
Option Shares is in effect) be endorsed with the following legend and Optionee
shall not make any transfer of the Option shares without first complying with
the restrictions on transfer described in such legend:
TRANSFER IF RESTRICTED
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT") OR SIMILAR STATE SECURITIES LAWS APPLICABLE
TO SUCH SECURITIES (COLLECTIVELY THE "ACTS") AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED UNLESS (1) THERE
IS AN EFFECTIVE REGISTRATION UNDER SUCH ACTS COVERING SUCH
SECURITIES, (2) THE TRANSFER IS MADE IN COMPLIANCE WITH RULE
144 PROMULGATED UNDER THE SECURITIES ACT, OR SIMILAR STATE
SECURITIES LAW, OR (3) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE ACTS.
Optionee agrees that the Company may also include any other legends required by
applicable federal or state securities laws.
3.3 GOVERNING LAWS. This Agreement shall be construed, administered and enforced
according to the laws of the State of California, excluding that body of law
dealing with conflicts of law.
3.4 SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of
the heirs, legal representatives, successors, and permitted assigns of the
parties.
3.5 NOTICE. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given if personally delivered or if sent by registered or certified
United States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.
3.6 SEVERABILITY. In the event that any one or more of the provisions or portion
thereof contained in this Agreement shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, the same shall not invalidate or
otherwise affect any other provisions of this Agreement, and this Agreement
shall be construed as if the invalid, illegal or unenforceable provision or
portion thereof had never been contained herein.
3.7 ENTIRE AGREEMENT. This Agreement expresses the entire understanding and
Agreement of the parties with respect to the subject matter hereof. This
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<PAGE>
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
instrument.
3.8 VIOLATION. Any transfer, pledge, sale, assignment, or hypothecation of the
Option or any portion thereof made in violation of the terms of this Agreement
shall be void and without effect.
3.9 HEADINGS. Paragraph headings used herein are for convenience of reference
only and shall not be considered in construing this Agreement.
3.10 SPECIFIC PERFORMANCE. In the event of any actual or threatened default in,
or breach of, any of the terms, conditions and provisions of this Agreement, the
party or parties who are thereby aggrieved shall have the right to specific
performance and injunction in addition to any and all other rights and remedies
at law or in equity, and all such rights and remedies shall be cumulative.
3.11 NO EMPLOYMENT RIGHTS CREATED. The grant of the Option hereunder shall not
be construed as giving Optionee the right to continued employment with the
Company.
3.12 CERTAIN DEFINITIONS. The capitalized terms listed below are used herein
with the meaning thereafter ascribed:
(a) "Disability" means (1) the inability of Optionee to perform the
duties of Optionee's employment with the Company due to physical or
emotional incapacity or illness, where such inability is expected to be
of long-continued and indefinite duration or (2) Optionee shall be
entitled to (i) disability retirement benefits under the federal Social
Security Act or (ii) recover benefits under any long-term disability
plan or policy maintained by the Company. In the event of a dispute,
the determination of Disability shall be made by the Board of Directors
and shall be supported by advice of a physician competent in the area
to which such Disability relates.
(b) "Fair Market Value" means of the applicable prices selected from
the following alternatives for the date as of which Fair Market Value
is to be determined as quoted in the Wall Street Journal (or in such
other reliable publication as the committee, in it's discretion, may
determine to rely upon): (i) if the common stock is listed on the New
York Stock Exchange, the mean of highest and lowest sales prices per
share of the Common Stock as quoted in the NYSE - Composite
transactions listing for such or each date, (ii) if the common Stock is
not listed on such exchange, the mean of the highest and lowest sales
prices per share of Common stock for such or each date on (or on any
composite index including) the principal United States Securities
Exchange registered under the 1934 Act on which the Common Stock is
listed, or (iii) if the Common Stock is not listed on any such
exchange, the mean of the highest and lowest sales prices per share of
the Common Stock for such or each date on the National Associates of
Securities Dealers Automated Quotations Systems or any successor system
then in use ("NASDAQ"). If there are no such sales price quotations for
the date as of which Fair Market Value is to be determined but there
are such sales price quotations within a reasonable period both before
and after such date, then Fair Market Value shall be determined by
taking a weighted average of the means between the highest and lowest
sales prices per share of the Common Stock as so quoted on the nearest
date before, and the nearest date after, the date as of which Fair
Market Value is to be determined. The average should be weighted
inversely by the respective
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<PAGE>
numbers of trading days between the selling dates and the date as of
which Fair Market Value is to be determined. If there are no such sales
price quotations on, or within a reasonable period both before and
after, the date as of which Fair Market Value is to be determined, then
Fair Market Value of the Common Stock shall be the mean between the
bonafide bid and asked prices per share of Common Stock as so quoted
for such date on NASDAQ, or if none, the weighted average of the means
between such bonafide bid and asked prices on the nearest trading date
before, and the nearest trading date after, the date as of which Fair
Market Value is to be determined, if both such dates are within a
reasonable period. If the Fair Market Value of the Common Stock cannot
be determined on the basis set forth in this definition for the date as
of which Fair Market Value is to be determined, the Committee shall in
good faith determine the Fair Market Value of the Common Stock on such
date. Fair Market Value shall be determined without regard to any
restriction, other than a restriction which, by its terms, will never
lapse.
(c) "Transferee" means the estate, or the executor or administrator of
the estate, of a deceased Optionee, or the personal representative of
an Optionee suffering a Disability.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first set forth above.
VALUESTAR CORPORATION
BY: /s/ James Stein
ITS: President
ATTESTED:
BY: /s/ Michael Kelly
ITS: Controller
ACCEPTED:
/s/ Robert A. Sick
7
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration Statement on
Form S-8 on our report, dated August 9, 1999, on our audits of the consolidated
financial statements of ValueStar Corporation as of June 30, 1999, and for each
of the two years then ended, which report is included in the Company's Annual
Report on Form 10-KSB for the year ended June 30, 1999.
/s/ Moss Adams LLP
Santa Rosa, California
February 17, 2000
