===============================================================================
As filed with the Securities and Exchange Commission on March 7, 2000
SEC File No. 0-22720
Registration No. 333-
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------------------
CYCLO3PSS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 87-0455642
- -------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3646 West 2100 South
Salt Lake City, Utah 84120
(Address of principal executive offices)
------------------------
Grant of Shares to Johanna McCann in Lieu of Cash Consulting fees
Grant of Shares to Richards, Layton & Finger in Lieu of Fees
Employee Stock Option Agreements with William R. Stoddard, Mondis Nkoy
and Durand Smith
Grant of Shares to Board of Directors in Lieu of Cash Fees
(Full title of plans)
William R. Stoddard
Cyclo3pss Corporation
3646 West 2100 South
Salt Lake City, UT 84120
(Name and address of agent for service)
(801) 972-9090
(Telephone number of agent for service)
------------------------
with copies to:
A.O. Headman, Jr., Esq.
Cohne, Rappaport & Segal, P.C.
525 East First South, Fifth Floor
Salt Lake City, UT 84102
(801) 532-2666
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered(1) Offering Price Per Unit Aggregate Offering Price Price Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 211,530(2) $.065 $ 13,750.00 $ 3.63
Common Stock 200,000 (3) $.3828 $ 76,560.00 $20.22
Common Stock 150,000 (4) $.67 $100,500.00 $26.53
Common Stock 4,202,727 (5) $.065 $273,177.25 $72.12
===========================================================================================================================
TOTAL $463,987.25 $122.50
===========================================================================================================================
</TABLE>
1
<PAGE>
(1) Pursuant to Rule 416, this Registration Statement also covers such
indeterminable number of additional shares as may become issuable
pursuant to terms designed to prevent dilution resulting from stock
splits, stock dividends or similar events.
(2) Represents shares issued to non-employee members of the Registrant's
Board of Directors in lieu of cash director fees.
(3) Represents 100,000 shares issued to Johanna McCann and up to 100,000
additional shares issuable to Johanna McCann for consulting fees in lieu
of cash . Estimated solely for the purpose of calculating the
registration fee in accordance with Rule 457(c) under the Securities Act
and based on the average of the high and low price per share of Cyclo3pss
Corporation Common Stock as quoted on the OTC Bulletin Board on February
4, 2000.
(4) Represents 150,000 shares issued to be issued to Richards, Layton &
Finger for fees in lieu of cash at an agreed upon price of $.67 per
share.
(5) Represents shares underlying Employee Stock Option Agreements granted to
William R. Stoddard, Durand Smith and Mondis Nkoy.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to recipients of shares and options referred to above
by Cyclo3pss Corporation (the "Registrant") as specified by Rule 428(b)(1) of
the Securities Act of 1933, as amended (the "Securities Act"). Those documents
and the documents incorporated herein by reference to Item 3 of Part II of this
registration statement, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents By Reference
The following documents filed by the Registrant with the Securities and
Exchange Commission as of their respective dates are incorporated by reference
in this registration statement:
(a) Registrant's Annual Report on Form 10-KSB for the fiscal year
ending February 28, 1999, filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended.
(b) Registrant's quarterly report on Form 10-QSB for the fiscal
quarters ended November 30, 1999, August 31, 1999 and May 31, 1999 and
all other reports, if any, filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 since the end of
the fiscal year ended February 28, 1998.
(c) The description of Registrant's common stock contained in the
Registration Statement on Form 10-SB filed with the Commission on October
26, 1993, including any amendments or reports 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 Securities Exchange Act of 1934 after the date of the
Prospectus which is a part of this Registration Statement and prior to the
termination of the offering of these shares of common stock offered thereby,
shall be deemed to be incorporated by reference and to be a part of the
Prospectus from the date of filing of such document. Any statement contained in
a document incorporated by reference herein or contained herein shall be deemed
to be modified or superseded to the extent that a statement herein, or in a
document subsequently incorporated by reference herein, shall modify or
supersede such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of the
Prospectus.
ITEM 4. Description of Securities
Not applicable; the class of securities to be offered is registered under
Section 12 of the Securities Exchange Act of 1934, as amended.
3
<PAGE>
ITEM 5. Interests of Named Experts and Counsel
Not applicable.
ITEM 6. Indemnification of Directors and Officers
As permitted by sections 102 and 145 of the Delaware General Corporation
Law, the Registrant's Certificate of Incorporation eliminates a director's
personal liability for monetary damages to the Registrant and its stockholders
arising from a breach of alleged breach of a director's fiduciary duty except
for liability under section 174 of the Delaware General Corporation Law or
liability for any breach of the director's duty of loyalty to the Registrant or
its stockholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law or for any transaction from
which the director derived an improper personal benefit. The effect of this
provision in the Certificate of Incorporation is to eliminate the rights of the
Registrant and its stockholders (through stockholders' derivative suits on
behalf of the Registrant) to recover monetary damages against a director for
breach of fiduciary duty as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situation described
above.
The Registrant's Certificate of Incorporation and Bylaws provide for
indemnification of officers, directors and employees, and the Registrant has
entered into an indemnification agreement with each officer and director of the
Registrant (an "Indemnitee"). Under the Bylaws and such indemnification
agreements, the Registrant must indemnify an Indemnitee to the fullest extent
permitted by Delaware law for losses and expenses incurred in connection with
actions in which the Indemnitee is involved by reason of having been a director
or employee of the Registrant. The Registrant is also obligated to advance
expenses an Indemnitee may incur in connection with such actions before any
resolution of the action, and the Indemnitee may sue to enforce his or her right
to indemnification or advancement of expenses.
There is no litigation pending, and neither the Registrant nor any of its
directors know of any threatened litigation, which might result in a claim for
indemnification by any director or officer.
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
- ------- --------------
4.1 Employee Stock Option Agreement- William R. Stoddard -November 24, 1999
4.2 Employee Stock Option Agreement- Durand Smith -November 24, 1999
4.3. Employee Stock Option Agreement- Mondis Nkoy -November 24, 1999
4.4. Letter Agreement with Johanna McCann dated February 4, 2000
4
<PAGE>
Exhibit
Number Description
- ------- --------------
4.5. Grant of Shares (Regarding Shares in Lieu of Cash Directors Fees)-
Non-Employee Directors November 24, 1999
4.6 Letter Agreement with Richards, Layton & Finger dated February 7, 2000
5.1 Opinion Regarding Legality and Consent
23.1 Consent of Ernst & Young, LLP, independent auditors
ITEM 9. Undertakings
(a) Rule 415.The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934, as amended (and, where applicable
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
5
<PAGE>
(c) 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 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 a 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 of whether such
indemnification by it is against public policy as expressed in the Act and shall
be governed by the final adjudication of such issue.
6
<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 Salt Lake, State of Utah, on the 1st day of March,
2000.
CYCLO3PSS CORPORATION
By /s/ William R. Stoddard By /s/ Mondis Nkoy
------------------------- -----------------------------
William R. Stoddard Mondis Nkoy
Chief Executive Officer Principal Financial Officer
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.
Date Title Signature
March 1, 2000 Chief Executive /s/ William R. Stoddard
Officer/Director William R. Stoddard
March 1, 2000 Director /s/ Michael Lakis
Michael Lakis
March 1, 2000 Director /s/ Durand Smith
Durand Smith
March 1, 2000 Director /s/ Steve Sarich, Jr.
Steve Sarich, Jr.
March 1, 2000 Director /s/ Richard C. Nelson
Richard C. Nelson
7
STOCK OPTION AGREEMENT
BETWEEN
WlLLIAM R. STODDARD AND CYCLOPSS CORPORATION
THIS AGREEMENT is effective as of the 6th day of December , 1999 (the
"Grant Date"), by and between CYCLOPSS CORPORATION (the "Company") and William
R. Stoddard (the "Optionee");
WITNESSETH:
WHEREAS, Optionee is the President and CEO of the Company, and the Company
and its board of directors consider it desirable and in its best interests that
Optionee be given an inducement to remain in the Company's employ and to acquire
a proprietary interest in the Company, and an added incentive to advance the
interests of the Company by possessing an option to purchase shares of the
Company's common stock (the "Stock"), and
WHEREAS, the compensation committee of the Board of Directors of the
Company (the "Committee") and the Board of Directors of the Company has
authorized the grant to Optionee of a stock option authorizing Optionee to
purchase shares of common stock of the Company (the "Common Stock"); and
WHEREAS, the Company and Optionee wish to further confirm and outline the
terms and conditions of the option;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is hereby agreed between the parties hereto as follows:
l. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein and in the prospectus and the registration statement to
be filed registering the shares underlying this option, the Company hereby
grants to the Optionee an option (the "Option") to purchase all or any part of
2,654,354 shares of common stock of the Company. The number of shares underlying
the Option will remain fixed.
2. Term and Exercise of Option. Subject to the provisions of this Agreement:
(a) This option may be exercised by the optionee at any time during the
Option Period, as defined in Section 4 hereof which provides that all of the
Options granted herein will be exercisable until December 6, 2004. At that date,
any options granted herein that have not yet been exercised will be canceled by
the Company.
8
<PAGE>
(b) Subject to Section 7 hereof, the Option may be exercised with respect
the exercisable portion thereof at any time after December 7, 1999 and prior to
the expiration date by the delivery to the Company, at its principal place of
business, of:
(I) a written notice of exercise in substantially the form attached hereto
as Exhibit l, which shall be actually delivered to the Company no earlier than
thirty (30) days prior to the date upon which Optionee desires to exercise all
or a portion of Option;
(ii) payment to the Company of the Exercise Price, defined in Section 3
below, multiplied by the number of shares being purchased (the "Purchase Price")
in the manner provided in Subsection (c) hereof; and
(iii) payment of all withholding tax obligations, if any, (whether
federal, state or local) imposed by reason of the exercise of the Option.
Upon receipt of such notice, receipt of payment in full of the Purchase Price,
and receipt of payment of any withholding tax obligations due, the Company shall
cause to be issued an unrestricted certificate representing the Shares
purchased.
(c) The Purchase Price and withholding tax obligations, if any, shall be
paid in full upon the exercise of an Option and no Shares shall be issued or
delivered until full payment therefor has been made. Payment of the Purchase
Price for Shares purchased pursuant to the exercise of an Option and any tax
withholding obligations shall be made:
(i) in cash or by certified check;or
(ii) by delivery to the Company of a number of shares of common stock of the
Company which have been owned by the optionee for at least six months prior to
the date of the Option's exercise and which have a fair market value on the date
of exercise, as determined by the Compensation Committee in its sole discretion,
which is either equal to or which in combination with cash is equal to the
purchase price; or
(iii) by receipt of the purchase price in cash from a broker, dealer or other
"creditor" as defined by Regulation "T" issued by the Board of Governors of the
Federal Reserve System following delivery by the optionee to the committee of
instructions regarding delivery to such broker, dealer or other "creditor"of
that number of shares of common stock with respect to which the Option is
exercised.
3. Exercise Price. The exercise price for each share of Common Stock for
which the Option is exercised shall be $.065 per share subject to adjustment as
set forth in Section 7 hereof (the "Exercise Price"). Said Exercise Price is not
less than 100% of the fair market value of such stock as of the date of action
by the Compensation Committee.
9
<PAGE>
4. Term and Termination of Option. Except as otherwise provided herein,
the term of the option (the "Option Period") shall commence upon the Grant Date,
and shall terminate on the fifth anniversary of the Grant Date. Upon expiration
of the Option Period this Option, and all unexercised rights granted to Optionee
hereunder, shall terminate and thereafter be null and void.
5. Rights as Shareholders. Until the stock certificates reflecting the
Shares accruing to the Optionee upon exercise of the Option are issued to the
Optionee, the Optionee shall have no rights as a shareholder with respect to
such Shares. The Company shall make no adjustment for any dividends,
distributions or other rights on or with respect to Shares purchased pursuant to
the Option for which the record date is prior to the issuance of that stock
certificate.
6. Restriction on Transfer of Option. The Option evidenced hereby is fully
transferable and assignable including by last will and testament or the laws of
descent and distribution, and, shall be exercisable by the Optionee, or his
transferee or assigns (or in the event of his disability, by his personal
representative) and after his death, only by his personal representative.
7. Change in Capitalizantion, Change in Control, etc. If the number of
shares of the Common Stock of the Company shall be increased or reduced by a
stock split, payment of a stock dividend, a subdivision or combination of
shares, reclassification, merger or consolidation, or- similar capital
adjustment, an appropriate adjustment shall be made by the Committee in the
number and kind of shares as to which the Option, or the portion thereof then
unexercised, shall be or become exercisable, to the end that the Optionee's
proportionate interest shall be maintained as before the change in the total
price applicable to the unexercised portion of the Option and with a
corresponding adjustment in the Exercise Price. All adjustments made by the
Committee under this Section shall be conclusive.
If the Company shall be the surviving corporation in any merger or
consolidation, recapitalization, reclassification of shares or similar
reorganization, an appropriate adjustment shall be made with respect to the
Shares so that the Optionee shall be entitled to purchase at the same times and
upon the same terms and conditions as are then provided by this Agreement, the
number and class of securities to which a holder of the number of Shares subject
to the Agreement at the time of the transaction would have been entitled to
receive as a result of such transaction, with any corresponding adjustment made
to the Exercise Price.
In the event of (a) a dissolution or liquidation of the Company; (b) a
merger of the Company into another corporation, or any consolidation, share
exchange, combination, reorganization, or like transaction in which the Company
is not the survivor; (c) a sale or transfer (other than as security for the
Company's obligations) of at least a majority if the assets of the Company; or
(d) a sale or transfer of 50% or more of the issued and outstanding shares of
Common Stock by the holders thereof in a single transaction or in a series of
related transactions, the Option shall become immediately exercisable as to all
Shares subject thereto to the extent it has not already become so.
10
<PAGE>
The Company shall) use its best efforts to provide Optionee with written notice
of such transaction at least thirty (30) days prior to the date of its
consummation.
8. Legend on Stock Certificates. Until and unless the S-8 registration
statement to be filed which is intended to register the shares to be issued
pursuant to the exercise of the options granted herein is eff'ective,
Certificates evidencing Common Stock to be distributed pursuant to the Agreement
and the Plan shall, to the extent appropriate at the time, have noted
conspicuously on the certificates an appropriate restrictive legend which is
intended to give all persons full notice of the existence of any conditions,
restrictions, rights and obligations related to the free transferability of the
shares issued.
9. Governing Laws. This Agreement shall be construed, administered and
enforced according to the laws of the State of Utah; provided, however, no
option may be exercised except, in the reasonable judgment of the Board of
Directors, in compliance with exemptions under applicable state securities laws
of the state in which the Optionee resides, and/or any other applicable
securities laws.
10. Successors. This Agreement shall be binding upon and insure to the
benefits of the heirs, legal representatives, successors and permitted assigns
of the parties.
1l. Notice. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall 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.
12.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.
13. Entire Agreement. Subject to the terms and conditions of the Plan,
this Agreernent expresses the entire understanding and agreement of the parties.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
instruments.
14. Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
11
<PAGE>
15. 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.
16. No Employment Rights Created. Neither the establishment of the Plan
nor the grant of the Option hereunder shall be construed as giving the Optionee
the right to continued employment with the Company or a subsidiary.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on
the day and year first set forth above.
CYCLOPSS CORPORATION
By: /s/ Steve Sarich, Jr.
-----------------------------------------
Steve Sarich Jr.
And By:/s/ Michael J. Lakis
-----------------------------------------
Michael J. Lakis
Title: Compensation Committee
Board of Directors
OPTIONEE:
/s/ William R. Stoddard
----------------------------------------
William R. Stoddard
12
STOCK OPTION AGREEMENT
BETWEEN
DURAND M. SMITH AND CYCLOPSS CORPORATION
THIS AGREEMENT is effective as of the 6th day of December, 1999 (the "Grant
Date"), by and between CYCLOPSS CORPORATION (the "Company") and Durand M. Smith
(the "Optionee");
WITNESSETH:
WHEREAS, Optionee is the Vice President and Director of Research and
Development of the Company, and the Company and its board of directors consider
it desirable and in its best interests that Optionee be given an inducement to
remain in the Company's employ and to acquire a proprietary interest in the
Company, and an added incentive to advance the interests of the Company by
possessing an option to purchase shares of the Company's common stock (the
"Stock"), and
WHEREAS, the compensation committee of the Board of Directors of the
Company (the "Committee") and the Board of Directors of the Company has
authorized the grant to Optionee of a stock option authorizing Optionee to
purchase shares of common stock of the Company (the "Common Stock"); and
WHEREAS, the Company and Optionee wish to further confirm and outline the
terms and conditions of the option;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is hereby agreed between the parties hereto as follows:
l. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein and in the prospectus and the registration statement to
be filed registering the shares underlying this option, the Company hereby
grants to the Optionee an option (the "Option") to purchase all or any part of
1,105,981 shares of common stock of the Company. The number of shares underlying
the Option will remain fixed.
2. Term and Exercise of Option. Subject to the provisions of this Agreement:
(a) This option may be exercised by the optionee at any time during the
Option Period, as defined in Section 4 hereof which provides that all of the
Options granted herein will be exercisable until December 6th, 2004. At that
date, any options granted herein that have not yet been exercised will be
canceled by the Company.
13
<PAGE>
(b) Subject to Section 7 hereof, the Option may be exercised with respect
the exercisable portion thereof at any time after December 7, 1999 and prior to
the expiration date by the delivery to the Company, at its principal place of
business, of:
(I) a written notice of exercise in substantially the form attached hereto
as Exhibit l, which shall be actually delivered to the Company no earlier than
thirty (30) days prior to the date upon which Optionee desires to exercise all
or a portion of Option;
(ii) payment to the Company of the Exercise Price, defined in Section 3
below, multiplied by the number of shares being purchased (the "Purchase Price")
in the manner provided in Subsection (c) hereof; and
(iii) payment of all withholding tax obligations, if any, (whether
federal, state or local) imposed by reason of the exercise of the Option.
Upon receipt of such notice, receipt of payment in full of the Purchase Price,
and receipt of payment of any withholding tax obligations due, the Company shall
cause to be issued an unrestricted certificate representing the Shares
purchased.
(c) The Purchase Price and withholding tax obligations, if any, shall be
paid in full upon the exercise of an Option and no Shares shall be issued or
delivered until full payment therefor has been made. Payment of the Purchase
Price for Shares purchased pursuant to the exercise of an Option and any tax
withholding obligations shall be made:
(i) in cash or by certified check;or
(ii) by delivery to the Company of a number of shares of common stock of the
Company which have been owned by the optionee for at least six months prior to
the date of the Option's exercise and which have a fair market value on the date
of exercise, as determined by the Compensation Committee in its sole discretion,
which is either equal to or which in combination with cash is equal to the
purchase price; or
(iii) by receipt of the purchase price in cash from a broker, dealer or other
"creditor" as defined by Regulation "T" issued by the Board of Governors of the
Federal Reserve System following delivery by the optionee to the committee of
instructions regarding delivery to such broker, dealer or other "creditor"of
that number of shares of common stock with respect to which the Option is
exercised.
3. Exercise Price. The exercise price for each share of Common Stock for
which the Option is exercised shall be $.065 per share subject to adjustment as
set forth in Section 7 hereof (the "Exercise Price"). Said Exercise Price is not
less than 100% of the fair market value of such stock as of the date of action
by the Compensation Committee.
14
<PAGE>
4. Term and Termination of Option. Except as otherwise provided herein,
the term of the option (the "Option Period") shall commence upon the Grant Date,
and shall terminate on the fifth anniversary of the Grant Date. Upon expiration
of the Option Period this Option, and all unexercised rights granted to Optionee
hereunder, shall terminate and thereafter be null and void.
5. Rights as Shareholders. Until the stock certificates reflecting the
Shares accruing to the Optionee upon exercise of the Option are issued to the
Optionee, the Optionee shall have no rights as a shareholder with respect to
such Shares. The Company shall make no adjustment for any dividends,
distributions or other rights on or with respect to Shares purchased pursuant to
the Option for which the record date is prior to the issuance of that stock
certificate.
6. Restriction on Transfer of Option. The Option evidenced hereby is fully
transferable and assignable including by last will and testament or the laws of
descent and distribution, and, shall be exercisable by the Optionee, or his
transferee or assigns (or in the event of his disability, by his personal
representative) and after his death, only by his personal representative.
7. Change in Capitalizantion, Change in Control, etc. If the number of
shares of the Common Stock of the Company shall be increased or reduced by a
stock split, payment of a stock dividend, a subdivision or combination of
shares, reclassification, merger or consolidation, or- similar capital
adjustment, an appropriate adjustment shall be made by the Committee in the
number and kind of shares as to which the Option, or the portion thereof then
unexercised, shall be or become exercisable, to the end that the Optionee's
proportionate interest shall be maintained as before the change in the total
price applicable to the unexercisable portion of the Option and with a
corresponding adjustment in the Exercise Price. All adjustments made by the
Committee under this Section shall be conclusive.
If the Company shall be the surviving corporation in any merger or
consolidation, recapitalization, reclassification of shares or similar
reorganization, an appropriate adjustment shall be made with respect to the
Shares so that the Optionee shall be entitled to purchase at the same times and
upon the same terms and conditions as are then provided by this Agreement, the
number and class of securities to which a holder of the number of Shares subject
to the Agreement at the time of the transaction would have been entitled to
receive as a result of such transaction, with any corresponding adjustment made
to the Exercise Price.
In the event of (a) a dissolution or liquidation of the Company; (b) a
merger of the Company into another corporation, or any consolidation, share
exchange, combination, reorganization, or like transaction in which the Company
is not the survivor; (c) a sale or transfer (other than as security for the
Company's obligations) of at least a majority if the assets of the Company; or
(d) a sale or transfer of 50% or more of the issued and outstanding shares of
Common Stock by the holders
15
<PAGE>
thereof in a single transaction or in a series of related transactions, the
Option shall become immediately exercisable as to all Shares subject thereto to
the extent it has not already become so. The Company shal) use its best efforts
to provide Optionee with written notice of such transaction at least thirty (30)
days prior to the date of its consummation.
8. Legend on Stock Certificates. Until and unless the S-8 registration
statement to be filed which is intended to register the shares to be issued
pursuant to the exercise of the options granted herein is eff'ective,
Certificates evidencing Common Stock to be distributed pursuant to the Agreement
and the Plan shall, to the extent appropriate at the time, have noted
conspicuously on the certificates an appropriate restrictive legend which is
intended to give all persons full notice of the existence of any conditions,
restrictions, rights and obligations related to the free transferability of the
shares issued.
9. Governing Laws. This Agreement shall be construed, administered and
enforced according to the laws of the State of Utah; provided, however, no
option may be exercised except, in the reasonable judgment of the Board of
Directors, in compliance with exemptions under applicable state securities laws
of the state in which the Optionee resides, and/or any other applicable
securities laws.
10. Successors. This Agreement shall be binding upon and insure to the
benefits of the heirs, legal representatives, successors and permitted assigns
of the parties.
1l. Notice. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall 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.
12.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.
13. Entire Agreement. Subject to the terms and conditions of the Plan,
this Agreernent expresses the entire understanding and agreement of the parties.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
instruments.
16
<PAGE>
14. Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
15. 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.
16. No Employment Rights Created. Neither the establishment of the Plan
nor the grant of the Option hereunder shall be construed as giving the Optionee
the right to continued employment with the Company or a subsidiary.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on
the day and year first set forth above.
CYCLOPSS CORPORATION
By: /s/ Steve Sarich, Jr.
--------------------------------------
Steve Sarich Jr.
And By: /s/ Michael J. Lakis
--------------------------------------
Michael J. Lakis
Title: Compensation Committee
Board of Directors
OPTIONEE:
/s/ Durand M. Smith
--------------------------------------
Durand M. Smith
17
STOCK OPTION AGREEMENT
BETWEEN
MONDIS B. NKOY AND CYCLOPSS CORPORATION
THIS AGREEMENT is effective as of the 6th day of December, 1999 (the "Grant
Date"), by and between CYCLOPSS CORPORATION (the "Company") and Mondis B. Nkoy
(the "Optionee");
WITNESSETH:
WHEREAS, Optionee is the Secretary Treasurer and Controller of the
Company, and the Company and its board of directors consider it desirable and in
its best interests that Optionee be given an inducement to remain in the
Company's employ and to acquire a proprietary interest in the Company, and an
added incentive to advance the interests of the Company by possessing an option
to purchase shares of the Company's common stock (the "Stock"), and
WHEREAS, the compensation committee of the Board of Directors of the
Company (the "Committee") and the Board of Directors of the Company has
authorized the grant to Optionee of a stock option authorizing Optionee to
purchase shares of common stock of the Company (the "Common Stock"); and
WHEREAS, the Company and Optionee wish to further confirm and outline the
terms and conditions of the option;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
it is hereby agreed between the parties hereto as follows:
l. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein and in the prospectus and the registration statement to
be filed registering the shares underlying this option, the Company hereby
grants to the Optionee an option (the "Option") to purchase all or any part of a
number of 442,392 shares of common stock of the Company. The number of shares
underlying the Option will remain fixed.
2. Term and Exercise of Option. Subject to the provisions of this Agreement:
(a) This option may be exercised by the optionee at any time during the
Option Period, as defined in Section 4 hereof which provides that all of the
Options granted herein will be exercisable until December6, 2004. At that date,
any options granted herein that have not yet been exercised will be canceled by
the Company.
18
<PAGE>
(b) Subject to Section 7 hereof, the Option may be exercised with respect
the exercisable portion thereof at any time after December 6th, 1999 and prior
to the expiration date by the delivery to the Company, at its principal place of
business, of:
(I) a written notice of exercise in substantially the form attached hereto
as Exhibit l, which shall be actually delivered to the Company no earlier than
thirty (30) days prior to the date upon which Optionee desires to exercise all
or a portion of Option;
(ii) payment to the Company of the Exercise Price, defined in Section 3
below, multiplied by the number of shares being purchased (the "Purchase Price")
in the manner provided in Subsection (c) hereof; and
(iii) payment of all withholding tax obligations, if any, (whether
federal, state or local) imposed by reason of the exercise of the Option.
Upon receipt of such notice, receipt of payment in full of the Purchase Price,
and receipt of payment of any withholding tax obligations due, the Company shall
cause to be issued an unrestricted certificate representing the Shares
purchased.
(c) The Purchase Price and withholding tax obligations, if any, shall be
paid in full upon the exercise of an Option and no Shares shall be issued or
delivered until full payment therefor has been made. Payment of the Purchase
Price for Shares purchased pursuant to the exercise of an Option and any tax
withholding obligations shall be made:
(i) in cash or by certified check;or
(ii) by delivery to the Company of a number of shares of common stock of the
Company which have been owned by the optionee for at least six months prior to
the date of the Option's exercise and which have a fair market value on the date
of exercise, as determined by the Compensation Committee in its sole discretion,
which is either equal to or which in combination with cash is equal to the
purchase price; or
(iii) by receipt of the purchase price in cash from a broker, dealer or other
"creditor" as defined by Regulation "T" issued by the Board of Governors of the
Federal Reserve System following delivery by the optionee to the committee of
instructions regarding delivery to such broker, dealer or other "creditor"of
that number of shares of common stock with respect to which the Option is
exercised.
3. Exercise Price. The exercise price for each share of Common Stock for
which the Option is exercised shall be $.065 per share subject to adjustment as
set forth in Section 7 hereof (the "Exercise Price"). Said Exercise Price is not
less than 100% of the fair market value of such stock as of the date of action
by the Compensation Committee.
19
<PAGE>
4. Term and Termination of Option. Except as otherwise provided herein,
the term of the option (the "Option Period") shall commence upon the Grant Date,
and shall terminate on the fifth anniversary of the Grant Date. Upon expiration
of the Option Period this Option, and all unexercised rights granted to Optionee
hereunder, shall terminate and thereafter be null and void.
5. Rights as Shareholders. Until the stock certificates reflecting the
Shares accruing to the Optionee upon exercise of the Option are issued to the
Optionee, the Optionee shall have no rights as a shareholder with respect to
such Shares. The Company shall make no adjustment for any dividends,
distributions or other rights on or with respect to Shares purchased pursuant to
the Option for which the record date is prior to the issuance of that stock
certificate.
6. Restriction on Transfer of Option. The Option evidenced hereby is fully
transferable and assignable including by last will and testament or the laws of
descent and distribution, and, shall be exercisable by the Optionee, or his
transferee or assigns (or in the event of his disability, by his personal
representative) and after his death, only by his personal representative.
7. Change in Capitalizantion, Change in Control, etc. If the number of
shares of the Common Stock of the Company shall be increased or reduced by a
stock split, payment of a stock dividend, a subdivision or combination of
shares, reclassification, merger or consolidation, orsimilar capital adjustment,
an appropriate adjustment shall be made by the Committee in the number and kind
of shares as to which the Option, or the portion thereof then unexercised, shall
be or become exercisable, to the end that the Optionee's proportionate interest
shall be maintained as before the change in the total price applicable to the
unexercisable portion of the Option and with a corresponding adjustment in the
Exercise Price. All adjustments made by the Committee under this Section shall
be conclusive.
If the Company shall be the surviving corporation in any merger or
consolidation, recapitalization, reclassification of shares or similar
reorganization, an appropriate adjustment shall be made with respect to the
Shares so that the Optionee shall be entitled to purchase at the same times and
upon the same terms and conditions as are then provided by this Agreement, the
number and class of securities to which a holder of the number of Shares subject
to the Agreement at the time of the transaction would have been entitled to
receive as a result of such transaction, with any corresponding adjustment made
to the Exercise Price.
In the event of (a) a dissolution or liquidation of the Company; (b) a
merger of the Company into another corporation, or any consolidation, share
exchange, combination, reorganization, or like transaction in which the Company
is not the survivor; (c) a sale or transfer (other than as security for the
Company's obligations) of at least a majority if the assets of the Company; or
(d) a sale or transfer of 50% or more of the issued and outstanding shares of
Common Stock by the holders thereof in a single transaction or in a series of
related transactions, the Option shall become immediately exercisable as to all
Shares subject thereto to the extent it has not already become so.
20
<PAGE>
The Company shal) use its best efforts to provide Optionee with written notice
of such transaction at least thirty (30) days prior to the date of its
consummation.
8. Legend on Stock Certificates. Until and unless the S-8 registration
statement to be filed which is intended to register the shares to be issued
pursuant to the exercise of the options granted herein is eff'ective,
Certificates evidencing Common Stock to be distributed pursuant to the Agreement
and the Plan shall, to the extent appropriate at the time, have noted
conspicuously on the certificates an appropriate restrictive legend which is
intended to give all persons full notice of the existence of any conditions,
restrictions, rights and obligations related to the free transferability of the
shares issued.
9. Governing Laws. This Agreement shall be construed, administered and
enforced according to the laws of the State of Utah; provided, however, no
option may be exercised except, in the reasonable judgment of the Board of
Directors, in compliance with exemptions under applicable state securities laws
of the state in which the Optionee resides, and/or any other applicable
securities laws.
10. Successors. This Agreement shall be binding upon and insure to the
benefits of the heirs, legal representatives, successors and permitted assigns
of the parties.
1l. Notice. Except as otherwise specified herein, all notices and other
communications under this Agreement shall be in writing and shall 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.
12.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.
13. Entire Agreement. Subject to the terms and conditions of the Plan,
this Agreernent expresses the entire understanding and agreement of the parties.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
instruments.
14. Headings. Paragraph headings used herein are for convenience of
reference only and shall not be considered in construing this Agreement.
21
<PAGE>
15. 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.
16. No Employment Rights Created. Neither the establishment of the Plan
nor the grant of the Option hereunder shall be construed as giving the Optionee
the right to continued employment with the Company or a subsidiary.
IN WITNESS WHEREOF, the parties have executed and sealed this Agreement on
the day and year first set forth above.
CYCLOPSS CORPORATION
By: /s/ Steve Sarich Jr.
------------------------------------------
Steve Sarich Jr.
And By: /s/ Michael J. Lakis
------------------------------------------
Michael J. Lakis
Title: Compensation Commitee
Board of Directors
OPTIONEE:
/s/ Mondis B. Nkoy
-----------------------------------------
Mondis B. Nkoy
22
CYCLO3PSS
The Ozone Company
Cyclo3pss Corporation
3646 West 2100 South
Salt Lake City, Utah 84120
Phone: (801)972-9090
Fax: (801) 972-9092
http://www.cyclopss.com
Dear Johanna McCann;
This letter is written confirmation of the verbal agreement entered into
between CYCLOPSS and yourself on February 4th, 2000.
Under the terms negotiated you have agreed to receive 100,000 shares
CYCLOPSS restricted common stock, in lieu of cash for the payment of services
rendered in assisting the Company by increasing it's utilization and corporate
presence on the Internet and Company Website.
The Company has further agreed to pay up to an additional 100,000 shares
of stock, at it's discretion, based upon additional performance by you in the
above related areas.
The Company additionally agrees that as soon as is practical it file the
necessary documents with the SEC required to register the shares subject to this
agreement.
This constitutes the total agreement between the parties. If you are in
agreement please indicate by affixing your signature below.
Sincerely,
/s/ William R. Stoddard
- -----------------------
William R. Stoddard
President & CEO
/s/ Johanna McCann
- ----------------------------------------------------
Johanna McCann
23
GRANT OF SHARES
Cyclo3pss Corporation (the "Company") hereby agrees to grant and issue to
the undersigned, shares of the Company's common stock in lieu of cash payment of
director fees to the undersigned Non-Employee Directors of the Company. The
undersigned agree to accept such shares as payment in full of directors fees
owed as described below.
The shares issued to the undersigned under this Grant of Shares, have been
valued, with the consent of the Company and the undersigned at the price of
$.0001 per share. As a result of the adverse financial condition of the Company,
the Company and the undersigned believe this per share value is a fair amount
and is fair market value of the Company's common stock.
Dated: November 24, 1999
Cyclo3pss Corporation, a Delaware
Corporation
By: /s/ William R. Stoddard
----------------------------------
William R. Stoddard
Chief Executive Officer
Non-Employee Directors
/s/ Steve Sarich, Jr.
Shares Issued:61,536 ----------------------------------
Fees Paid: $4,000 Steve Sarich, Jr.
/s/ Richard Nelson
Shares Issued:61,536 ---------------------------------
Fees Paid: $4,000 Richard Nelson
/s/ Michael J. Lakis
Shares Issued: 61,536 ---------------------------------
Fees Paid: $4,000 Michael J. Lakis
/s/ Robert Dunn
Shares Issued: 26,922 ---------------------------------
Fees Paid: $1,750 Robert Dunn
24
RICHARDS, LAYTON & FINGER
A Professional Association
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Telephone: (302) 658-6541
Telecopier: (302) 658-6548
Website: www.rlf.com
Mr. William Stoddard
Cyclo3pss Corporation
3646 West 2100 South
Salt Lake City, Utah 84120
RE: Mifal Klita v. Cyclo3pss Corporation
Dear Bill:
This will confirm that my firm is willing to take free-trading Cyclo3pss
stock as against our outstanding statements due from the Company. My
understanding is that the Company is currently structuring a public offering,
from which stock may be directed to this use.
My firm's policy is to liquidate securities received in payment of
outstanding statements immediately upon receipt. My firm has asked that we
establish an account with the Company's market maker in order to accomplish
this. We would agree that the market maker could handle the sales.
The current balance due to my firm is $99,939.03. My firm will agree to
receive and liquidate stock until the balance due has been satisfied, net of
brokerage commissions and sales expenses. We wish to resolve this account over
the shortest time possible. Once the balance due has been satisfied, we will
return any unliquidated stock to the Company.
Please be advised that Cyclo3pss remains responsible for the balance owed
to my firm if events preclude satisfaction of this debt through the sale of
equity securities. In such case, my firm reserves the right to request cash in
satisfaction of any remaining balance due.
We appreciate your suggestion of this method of satisfying our statements.
As I have mentioned, the receipt and liquidation of stock will be handled by
staff from my firm, and will be supervised by a member of our fee committee. I
will not be involved in these transactions.
25
<PAGE>
I would appreciate it if you would have someone contact us with the name
of, and contact information for, your market maker so that we might secure
appropriate documentation to establish an account and begin the transactions.
Again, many thanks, Bill.
Yours very truly,
/s/ C. Malcolm Cochran, IV
----------------------------------------
C. Malcolm Cochran, IV
cc: Mark J. Gentile, Esquire
Mr. Edmund G. Pierce
26
Exhibit 5.1
March 7, 2000
Cyclo3pss Corporation
3646 West 2100 South
Salt Lake City, Utah 84120
Re: Opinion Letter
Gentlemen:
You have requested our opinion as counsel for Cyclo3pss Corporation, a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended, and the Rules and Regulations
promulgated thereunder, and the public offering by the Company of the following
described shares: (1) up to 4,202,727 shares issuable at $.065 per share under
the terms of three Employee Stock Option Agreements; (ii) 211,530 shares issued
as compensation to non-employee directors of the Company in lieu of cash
directors fees; (iii) 200,000 shares issued as compensation in lieu of cash
consulting fees; and (iv) 150,000 shares issued as compensation in lieu of cash
fees.
You have informed us that such shares were not and will not be issued for
capital raising services and under the terms of Form S-8, the Company is
entitled to register such shares on such Form.
We have examined the Company's Registration Statement on Form S-8 in the
form to be filed with the Securities and Exchange Commission or about March 7,
2000 (the "Registration Statement"). We further have examined the Amended and
Restated Certificate of Incorporation of the Company as certified by the
Secretary of State of the State of Delaware, the Bylaws and the minute books of
the Company as a basis for the opinion hereafter expressed. We have also
examined and have relied upon a Certificate of the President and Secretary of
the Company as to certain matters relating to the valuation of the Company's
shares.
Based on the foregoing examination, we are of the opinion that, upon
issuance and sale in the manner described in the Registration Statement, the
shares of Common Stock covered by the Registration Statement will be legally
issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
COHNE, RAPPAPORT & SEGAL, P.C.
/s/ Cohne, Rappaport & Segal
27
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
of Cyclo3pss Corporation (Form S-8) for the registration of 4,764,257 common
shares, of our report dated May 11, 1999 with respect to the consolidated
financial statements of Cyclo3pss Corporation included in its Annual Report
(Form 10-KSB) for the year ended February 28, 1999, filed with the Securities
and Exchange Commission.
ERNST & YOUNG, LLP
Salt Lake City, UT
March 3, 2000
28
