<PAGE>
As filed with the Securities and Exchange Commission on October 15, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
SAF T LOK INCORPORATED
(Exact name of Registrant as specified in its charter)
Florida 65-0142837
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
18245 S.E. Federal Highway
Tequesta, FL 33469
(Address of Principal Executive Offices)
RGB SALES AND MARKETING, INC. 1993 STOCK PLAN/1/
and certain STOCK OPTION AGREEMENTS
(Full title of the Plan)
Mr. John L. Gardner
President and Chief Executive Officer
18245 S.E. Federal Highway
Tequesta, FL 33469
(561) 743-5625
(Name, Address and Telephone Number, including area code of Agent for Service)
With a Copy to:
William A. Grimm, Esq.
Gray, Harris & Robinson, P.A.
201 East Pine Street, Suite 1200
Orlando, FL 32801
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Amount to Proposed Maximum Proposed Maximum Amount of
be Offering Price per Aggregate Offering Registration Fee
Title of Securities to be Registered Registered Share Price
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value 1,574,000 $1.43(1) $2,250,820(1) $682.07
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The aggregate offering price and registration fee are
based on the product that results from multiplying 1,574,000 shares by 1.43 per
share, which is the weighted average exercise price of such options.
/1/ The Company was formerly known as RGB Sales and Marketing, Inc.,
Subsequently known as RGB Computer and Video, Inc., and changed its name to
Saf T Lok Incorporated on July 18, 1996.
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I is included in documents sent or given
to participants in the RGB Sales and Marketing, Inc. 1993 Stock Plan/1/ (the
"Plan") and to those individuals receiving stock option agreements included as
exhibits herein, pursuant to Rule 428(b)(1) under the Securities Act of 1933, as
amended (the "Securities Act").
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
-----------------------------------------------
SAF T LOK INCORPORATED (the "Company") is subject to the informational and
reporting requirements of Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The following documents,
which are filed with the Commission, are incorporated in this Registration
Statement by reference:
The Company's latest annual report filed pursuant to Section 13(a) or 15(d)
of the Exchange Act, or the latest prospectus filed pursuant to Rule 424(b)
under the Securities Act that contains audited financial statements for the
Company's latest fiscal year for which such statements have been filed.
All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange
Act since the end of the fiscal year covered by the document referred to in the
preceding paragraph.
The description of the Company's common stock, par value $0.01 per share
("Common Stock"), contained in a registration statement filed on Form S-3 under
the Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all shares of Common Stock offered hereby have
been sold or which deregisters all shares of Common Stock then remaining unsold,
shall be deemed to be incorporated by reference herein and to be part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
-------------------------
Not applicable.
- -------------------
/1/ The Company was formerly know as RGB Sales and Marketing, Inc., subsequently
known as RGB Computer and Video, Inc., and changed its name to Saf T Lok
Incorporated on July 18, 1996.
2
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
--------------------------------------
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
Section 607.0850 of the Florida Business Corporation Act, provides that a
corporation may indemnify any person who was or is a party (other than an action
by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against liability incurred in connection with such proceeding, including any
appeal thereof, if he acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. Section 607.0850 further provides that a corporation
similarly may indemnify any such person serving in any such capacity who was or
is a party in the right of the corporation to procure a judgment in its favor,
against the estimated expense of litigating the proceeding to conclusion
actually and reasonably incurred in connection with the defense or settlement of
such proceeding if he acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interests of the corporation and except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable unless, and only
to the extent that the court in which such proceeding was brought, or any other
court of competent jurisdiction, shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such other court shall deem proper.
Section 607.0831 of the Florida Business Corporation Act provides that a
director is not personally liable for monetary damages to the corporation or any
other person for any statement, vote, decision, or failure to act, regarding
corporate management or policy, by a director, unless (i) the director breached
or failed to perform his duties as a director, (ii) the director's breach or
failure to perform constitutes a violation of criminal law unless the director
had no reasonable cause to believe his conduct was unlawful, the director
derived an improper personal benefit directly or indirectly, (iii) the directors
conduct triggers the liability provisions of Section 607.0834 (relating to
unlawful distributions), (iv) the director's conduct constitutes a conscious
disregard for the best interest of the corporation, or willful misconduct in a
proceeding by or in the right of the corporation or a shareholder, or (v) the
director's conduct constitutes recklessness or an act or omission committed in
bad faith or with malicious purpose or in a manner exhibiting wanton and willful
disregard of human rights, safety, or property in a proceeding by or in the
right of someone other than the corporation or a shareholder.
The Company's Articles of Incorporation provide that no director shall be
personally liable for monetary damages for any statement, vote, decision, or
failure to act regarding corporate management or policy, unless the director
breached or failed to perform his duties as a director, and the director's
3
<PAGE>
breach of, or failure to perform, those duties constitutes a violation of the
criminal law (unless the director had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful), was
a transaction from which the director derived an improper personal benefit, was
a circumstance under which the liability provisions of Section 607.0834 of the
Florida Business Corporation Act are applicable, was in a proceeding by or in
the right of the Company to procure a judgment in its favor or by or in the
right of a shareholder, was in conscious disregard for the best interest of the
Company, or willful misconduct, or in a proceeding by or in the right of someone
other than the Company or a shareholder, was recklessness, in bad faith, with
malicious purpose, or in a manner exhibiting wanton and willful disregard of
human rights, safety or property.
The Company's Articles of Incorporation further provide for the
nonexclusive indemnification for each person who is or was a director, officer,
agent, or employee of the Company or who is or was serving at the request of the
Company as its representative in the position of a director, officer, agent or
employee of another corporation, partnership, joint venture, trust or other
enterprise and as to whom the Company has agreed to grant such indemnity, to the
fullest extent permitted or authorized by current or future legislation,
judicial, or administrative decision, against any fine, liability, cost or
expense, including attorneys' fees, asserted against him or incurred by him in
his capacity as such director, officer, agent, employee or representative, or
arising out of his status as such director. The Company may maintain insurance,
to protect itself and any such person against any such fine, liability, cost or
expense. Costs, charges and expenses incurred by officers or directors in
defending a civil or criminal suit, action, or proceeding shall be paid by the
Company in advance of the final disposition upon receipt of an undertaking to
repay all amounts so advanced in the event it shall ultimately be determined
that such person is not entitled to be indemnified by the Company, and upon
satisfaction of any other conditions as are required by law. Such costs,
charges and expenses incurred by employees and agents may be so paid as the
Board of Directors may deem appropriate.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
-----------------------------------
Not applicable.
4
<PAGE>
ITEM 8. EXHIBITS.
---------
The exhibits filed as part of this Registration Statement are as follows:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------------------------------------------------------------
<S> <C>
5.1 -- Opinion of Gray, Harris & Robinson, P.A.
23.1 -- Consent of Gray, Harris & Robinson, P.A. included in Exhibit 5.1.
23.2 -- Letter of Consent from Weinberg & Company, P.A.
24.1 -- Power of Attorney included in the signature page hereto.
99.1 -- RGB Sales and Marketing, Inc. 1993 Stock Plan.
99.2 -- Stock Option Agreement for John L. Gardner.
99.3 -- Stock Option Agreement for John L. Gardner.
99.4 -- Stock Option Agreement for Eugene V. Horanoff.
99.5 -- Stock Option Agreement for Jeffrey W. Brooks.
99.6 -- Stock Option Agreement for William M. Schmidt.
99.7 -- Stock Option Agreement for David P. Chapman.
</TABLE>
ITEM 9. UNDERTAKINGS.
------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) a post-effective amendment to this registration statement contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
which are incorporated by reference in the registration statement.
(ii) 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;
5
<PAGE>
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section l 5(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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred by a director, officer or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy and as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Tequesta, State of Florida on the 14th day of
October, 1997.
SAF T LOK INCORPORATED
By: /s/ John L. Gardner
________________________________________
John L. Gardner
President and Chief Executive Officer
By: /s/ David P. Chapman
________________________________________
David P. Chapman
Chief Financial Officer and
Chief Accounting Officer
6
<PAGE>
POWER OF ATTORNEY
We, the undersigned, officers and directors of SAF T LOK INCORPORATED,
hereby severally constitute FRANKLIN W. BROOKS and JOHN L. GARDNER, and each of
them singly, our true and lawful attorneys with full power to any of them, and
to each of them singly, to sign for us and in our names in the capacities
indicated below the Registration Statement on Form S-8 filed herewith and any
and all amendments to said Registration Statement and generally to do all such
things in our name and behalf in our capacities as officers and directors to
enable SAF T LOK INCORPORATED to comply with the provisions of the Securities
Act and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and any and all
amendments thereto.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on the 14th day of October, 1997.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Franklin W. Brooks Chairman of the Board of Directors October 14, 1997
- ----------------------------
Franklin W. Brooks
/s/ John L. Gardner Director, President and Chief October 14, 1997
- ---------------------------- Executive Officer
John L. Gardner
/s/ Jeffrey W. Brooks Director, Vice President, Secretary October 14, 1997
- ---------------------------- and Treasurer
Jeffrey W. Brooks
Vice Chairman of the Board of October __, 1997
- ---------------------------- Directors
Robert L. Gilbert, III
/s/ William M. Schmidt Director and employee October 14, 1997
- ----------------------------
William M. Schmidt
/s/ Eugene V. Horanoff Director, Chief Engineer October 14, 1997
- ----------------------------
Eugene V. Horanoff
/s/ David P. Chapman Chief Financial Officer October 15, 1997
- ----------------------------
David P. Chapman
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- --------- ------------
<S> <C>
5.1 - Opinion of Gray, Harris & Robinson, P.A.
23.1 - Consent of Gray, Harris & Robinson, P.A. included in Exhibit 5.1.
23.2 - Letter of Consent from Weinberg & Company, P.A.
24.1 - Power of Attorney included in the signature page hereto.
99.1 - RGB Sales and Marketing, Inc. 1993 Stock Plan.
99.2 - Stock Option Agreement for John L. Gardner.
99.3 - Stock Option Agreement for John L. Gardner.
99.4 - Stock Option Agreement for Eugene V. Horanoff.
99.5 - Stock Option Agreement for Jeffrey W. Brooks.
99.6 - Stock Option Agreement for William M. Schmidt.
99.7 - Stock Option Agreement for David P. Chapman.
</TABLE>
8
<PAGE>
[LETTERHEAD OF GRAY, HARRIS & ROBINSON APPEARS HERE]
October 14, 1997
Saf T Lok Incorporated
18245 S.E. Federal Highway
Tequesta, Florida 33469
Re: RGB Sales and Marketing, Inc. 1993 Stock Option Plan (the "Plan")
and certain Stock Option Agreements (the "Agreements)--Registration
Statement on Form S-8 for Saf T Lok Incorporated
Dear Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 filed by you
with the Securities and Exchange Commission on October 14, 1997 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of 1,574,000 shares of Common Stock of Saf T
Lok Incorporated (the "Shares") to be distributed pursuant to the referenced
Plan and Agreements. As your counsel in connection with this registration
process, we have examined the proceedings proposed to be taken in connection
with said sale and issuance of the Shares.
It is our opinion that, upon completion of the proceedings being taken
or contemplated by us, as your counsel, to be taken prior to the issuance of the
Shares, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states, where required, the Shares, when issued and sold in the
manner referred to in the Registration Statement, will be legally issued and
sold in the manner referred to in the Registration Statement, will be legally
issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including the prospectus constituting part thereof, and
any amendment thereto and any
<PAGE>
Saf T Lok Incorporated
Page 2
October 14, 1997
registration statement for the same offering covered by the Registration
Statement that is to be effective upon filing pursuant to Rule 462(b) and all
post-effective amendments thereto.
Sincerely,
Gray, Harris & Robinson, P.A.
By: /s/ William A. Grimm, Esq.
------------------------------
William A. Grimm, Esq.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Form S-8 of our
report for the year ended December 31, 1996 dated April 10, 1997 relating to the
audit of Saf T Lok, Incorporated and to the reference to our Firm under the
caption "Experts", to be filed with the Washington, D.C. Office of the U.S.
Securities and Exchange Commission on October 14, 1997 or as soon thereafter as
is reasonably practicable.
/s/ Weinberg & Company, P.A.
---------------------------------------
WEINBERG & COMPANY, P.A.
F/K/A WEINBERG, PERSHES & COMPANY, P.A.
Boca Raton, Florida
October 13, 1997
<PAGE>
RGB SALES AND MARKETING, INC.
1993 STOCK PLAN
---------------
1. PURPOSE AND ELIGIBILITY. This 1993 Stock Plan (the"Plan") is intended to
-----------------------
advance the interests of RGB Sales and Marketing, Inc. (The "Company") and its
Related Corporations as defined below by enhancing the ability of the Company to
attract and retain qualified employees, consultants, officers and directors by
creating incentives and rewards for their contributions to the success of the
Company. This Plan will provide to: (a) officers and other employees of the
Company and its Related Corporations opportunities to purchase stock in the
Company pursuant to options granted hereunder which qualify as incentive stock
options ("ISOs") under Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"); (b) directors, officers, employees and consultants of the
Company and Related Corporations opportunities to purchase stock in the Company
pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Options"); (c) directors, officers, employees and consultants of
the Company and Related Corporations awards of stock in the Company ("Awards");
(d) directors, officers, employees and consultants of the Company and Related
Corporations opportunities to make direct purchases of stock in the Company
("Purchases"); and (e) directors of the Company and Related Corporations who are
not officers or employees of the Company or Related Corporations with the
opportunities to purchase stock in the Company pursuant to Options granted
hereunder ("Non-Discretionary Options"). ISOs, Non-Discretionary Options and
Non-Qualified Options are referred to hereafter as "Options". Options, Awards
and authorizations to make Purchases are referred to hereafter collectively as
"Stock Rights".
For purposes of the Plan, the term "Related Corporations" shall mean a
corporation which is a subsidiary corporation with respect to the Company within
the meaning of Section 425(f) of the Code.
2. Administration of the Plan.
--------------------------
a. The Plan shall be administered by the board of directors of
the Company (the "Board"). The Board may, in its discretion, delegate its
powers with respect to the Plan to an employee benefit plan committee or any
other committee (the "Committee"). The Committee shall consist of not fewer
than two members. Each of the members must be a "disinterested person" as that
term is defined in Rule 16b-3 adopted pursuant to the Securities Exchange Act of
1934 (the "Exchange Act"). A majority of the members of any such Committee shall
constitute a quorum, and all determinations of the Committee shall be made by
the majority of its members present at a meeting. Any determination of the
Committee under the Plan may be made without notice or meeting of the Committee
by a writing signed by all of the Committee members. Subject to ratification of
the grant or authorization of each Stock Right by the Board (but only if so
required by applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine the employees of the Company
and Related Corporations (from among the class of employees eligible under
Paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine (from
among the class of individuals and entities eligible under Paragraph 3 to
receive Non-Qualified Options and Awards and to make Purchases) to whom
Non-Qualified Options, Awards and authorizations to make Purchase may be
granted; (ii) to determine the time or
<PAGE>
times at which Options or Awards may be granted or Purchases made; (iii)
determine the exercise price of shares subject to each Option which price for
any ISO shall not be less than the minimum price specified in Paragraph 7, and
the purchase price of shares subject to each Purchase; (iv) determine whether
each Option granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to Paragraph 3) the time or times when each Option, except for
non-discretionary Options, shall be exercisable, the duration of the exercise
period and when each Option shall vest; (vi) determine whether restrictions such
as repurchase options are to be imposed on shares subject to Options, Awards and
Purchases and the nature of such restrictions, if any, and (vii) interpret the
Plan and promulgate and rescind rules and regulations relating to it. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Stock Right granted under it shall be final, binding and conclusive
unless otherwise determined by the Board. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem best.
No members of the Committee or the Board shall be liable for any action
or determination made in good faith with respect to the Plan or any stock right
granted under it. No member of the Committee or the Board shall be liable for
any act or omission of any other member of the Committee or the Board or for any
act or omission on his own part, including but not limited to the exercise of
any power and discretion given to him under the Plan, except those resulting
from his own gross negligence or willful misconduct.
b. The Committee may select one of its members as its chairman and shall
hold meetings at such time and places as it may determine. All references in
this Plan to the Committee shall mean the Board if no Committee has been
appointed. From time to time, the Board may increase the size of the Committee
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies however caused,
or remove all members of the Committee and thereafter directly administer the
Plan.
c. Stock Rights may be granted to members of the Board, whether such
grants are in their capacity as directors, officers or consultants, but no
discretionary Stock Rights shall be granted to any person who is, at the time of
the proposed grant, a member of the Board unless such grant has been approved as
provided in paragraph 2d. All grants of Stock Rights to members of the Board
shall in all other respects be made in accordance with the provisions of this
Plan applicable to other eligible persons. Members of the Board who are either
(i) eligible for Stock Rights pursuant to the Plan or (ii) have been granted
Stock Rights may vote on any matters affecting the administration of the Plan or
the grant of any Stock Rights pursuant to the Plan, except that no such member
may be counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to the granting to him of Stock
Rights.
d. Notwithstanding any other provision of Paragraph 2, any
discretionary grants to a person who is a member of the Board shall be made only
by the Board provided, however, that is a majority of the Board is eligible to
participate in the Plan or in any other stock option or other stock plan of the
Company or any of its Related Corporations, or has been so eligible at any time
within the preceding year, any grant to directors of Stock Rights must be made
by, or only in accordance with the recommendation of, a Committee consisting of
two or more persons, who shall be directors of the Company, appointed by the
Board but having full authority to act in the matter, none of whom is eligible
to participate in this Plan or any other stock
<PAGE>
option or other stock plan of the Company or any of its affiliates, or has been
eligible at any time within the preceding year. The requirements imposed by
this subparagraph 2d shall also apply with respect to grants to officers who are
also directors. Once appointed, such Committee shall continue to serve until
otherwise directed by the Board.
e. In addition to such other rights of indemnification as he may have
as a member of the Board, and with respect to administration of the Plan and the
granting of Options under it, each member of the Board and of the Committee
shall be entitled without further act on his part to indemnification from the
Company pursuant to Florida law. Section 607.0850 of the Florida Business
Corporation Act (the "FBCA"), grants to a corporation the power to indemnify its
officers and directors for all reasonable expenses incurred by such individuals
in connection with the defense or settlement of an action. Even if there is a
finding of liability the Court can award indemnification if it finds that the
officer and/or director acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. Unless ordered by the Court, this
determination shall be made (1) by the board of directors by a majority vote of
a quorum consisting of directors who were not parties to such proceeding; (2) if
such quorum is not obtainable, or, even if obtainable, by a majority vote of a
committee duly designated by the board of directors (in which directors who are
parties may participate) consisting solely of two or more directors not at the
time parties to the proceeding; (3) by independent legal counsel selected by the
board of directors described in (1) above or the committee described in (2)
above or if a quorum of directors for (1) above cannot be obtained and the
committee in (2) above cannot be designated, selected by a majority vote of the
full board of directors (in which directors who are parties may participate); or
by a majority vote of the shareholders of a quorum consisting of shareholders
who were not parties to such proceeding, or if such quorum is not obtainable, by
a majority vote of shareholders who were not parties to such proceeding.
However, if such individual has been adjudged liable to the corporation,
he will not be entitled to indemnification without court approval. The FBCA
also contains provisions allowing the advancement of expenses under certain
circumstances.
The foregoing right of indemnification shall inure to the benefit of the
heirs, executors or administrators of each such member of the Board or the
Committee and shall be in addition to all other rights to which such member of
the Board or the Committee would be entitled to as a matter of law, contract or
otherwise. The indemnification provided by this Section 2e shall only be made
after the requirements of Section 607.0850 of the FBCA has been complied with or
as required by the Company's bylaws as amended except that the Company may pay
for or reimburse reasonable expenses incurred by a director who is a party to a
proceeding in advance of the final disposition of the proceeding in accordance
with the provisions of Section 607.0805 (6)(7) of the FBCA.
3. Eligible Employees and Others.
-----------------------------
a. ISOs may be granted to any employee of the Company or any
Related Corporation. Those officers and directors of the Company who are not
employees may not be granted ISOs under the Plan. Subject to compliance with
Rule 16b-3 and other applicable securities laws, Non-Qualified Options, Awards
and authorizations to make Purchases may be granted to any director (whether or
not an employee), officer, employee or consultant of the Company or any Related
Corporation. The Committee may take into consideration a recipient's
<PAGE>
individual circumstances in determining whether to grant an ISO, a Non-Qualified
Option or an authorization to make a Purchase. Granting of any Stock Right to
any individual or entity shall neither entitle that individual or entity to, nor
disqualify him from participation in any other grant of Stock Rights.
b. All directors of the Company who are not employees of the
Company or Related Corporations shall automatically receive grants of 5,000
Non-Qualified Options (i) at the time this Plan is adopted by the Board; (ii)
upon election or appointment to the Board if not a member of the Board at the
time this Plan is adopted by the Board; and (iii) upon election to the Board
after all Options previously granted have been vested.
(1) The exercise price of the Options shall be fair
market value on the date of grant as defined by Paragraph 7.
(2) The Options shall vest in equal increments of 2,500
Options per director on June 1 and December 1 of each year, provided that the
director is still serving as a director of the Company. To the extent that any
Options which have not been exercised do not vest, the Options shall lapse and
no longer be exercisable.
c. The Options shall be exercisable for a period of 10 years
from the date of grant, except where a shorter period is required by the Code
for certain ISOs.
4. Stock. The stock subject to Options, Awards and Purchases shall be
-----
authorized but unissued shares of Common Stock or shares of Common Stock
reacquired by the Company in any manner. The aggregate number of shares of
Common Stock which may be issued pursuant to the Plan is 500,000 subject to
adjustment as provided in Paragraph 14. Any such shares may be issued as ISOs,
Non-Qualified Options or Awards, or to persons or entities making Purchases, so
long as the number of shares so issued does exceed such number, as adjusted. If
any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, or if the Company shall reacquire any unvested
shares issued pursuant to Awards or Purchases, the unpurchased shares subject to
such Options and any unvested shares so reacquired by the Company shall be
available for grants of Stock Rights under the Plan.
5. Granting of Stock Rights. Stock Rights may be granted under the
------------------------
Plan at any time on and after March 18, 1993, provided however that no ISO shall
be granted more than 10 years after the effective date of this Plan. The date
of grant of a Stock Right under the Plan will be the date of grant by the
Committee unless otherwise specified at the time it grants the Stock Right;
provided, however, that such date shall not be prior to the date on which the
Committee acts to approve the grant. The Committee shall have the right, with
the consent of the optionee, to convert an ISO granted under the Plan to a
Non-Qualified Option pursuant to Paragraph 17.
6. Sale of Shares. Any shares of the Company's Stock granted pursuant
--------------
to an Award or acquired pursuant to a Purchase as set forth herein, cannot be
sold for at least six months after acquisition except in case of death or
disability. Nothing in this Paragraph 6 shall be deemed to reduce the holding
period set forth under the applicable securities laws.
<PAGE>
7. ISO Minimum Option Price and Other Limitations.
----------------------------------------------
a. The exercise price per share specified in the stock option
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock which represents more
than 10 percent of the total combined voting power or all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than 110 percent of the fair
market value per share of Common Stock on the date of grant and such ISO shall
not be exercisable after the expiration of five years from the date of grant.
b. In no event shall the aggregate fair market value
(determined at the time an ISO is granted) of Common Stock for which ISOs
granted to any employee are exercisable for the first time by such employee
during any calendar year (under all stock option plants of the Company and any
Related Corporation) exceed $100,000.
c. If, at the time an Option is granted under the Plan, the
Company's Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices or quotes discussed
in this sentence are available prior to the date such Option is granted and
shall mean:
(1) the closing price of the Company's shares appearing
on a national securities exchange if such shares are listed on such an exchange
or if not listed, appearing on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ")
(2) if the Company's shares are not listed on NASDAQ,
then the average bid and asked price for its shares as listed on the National
Association of Securities Dealers, Inc.'s Bulletin Board; or
(3) if the Company's shares are not listed on the
National Association of Securities Dealers, Inc.'s Bulletin Board, then the
average bid and asked price for the Company's shares as listed in the National
Quotation Bureau's "pink sheets", or
(4) if there are no listed bid and asked prices
published in the pink sheets, then the fair market value shall be based upon the
average closing bid and asked price as determined following a polling of all
dealers making a market in the Company's shares.
d. Until closing of the Company's initial public offering or
the amendment of the Plan, as the case may be, no Options shall be granted or
Purchases issued at exercise or purchase prices, respectively, less than the
initial public offering price.
8. Duration of Stock Rights. Subject to earlier termination as
------------------------
provided in Paragraphs 10 and 11, each Stock Right shall expire on the date
specified in the original instrument granting such Stock Right, (except with
respect to any part of an ISO that is converted into a Non-Qualified Option
pursuant to Paragraph 17) provided, however, that such instrument must comply
with Section 422 of the Code with regard to ISOs granted to all employees and
Rule 16b-3 of the Exchange Act with regard to all Stock Rights granted to
executive officers, directors and 10% shareholders of the Company.
<PAGE>
9. Exercise of Options. Subject to the provisions of Paragraphs 3b and
-------------------
10 through 14, each Option granted under the Plan shall be exercisable as
follows:
a. The Options shall either be fully exercisable from the date
of grant or shall become exercisable thereafter in such installments as the
Committee may specify.
b. Once an installment becomes exercisable it shall remain
exercisable until expiration or termination of the Option, unless otherwise
specified by the Committee.
c. Each Option or installment, once it becomes exercisable, may
be exercised at any time or from time to time, in whole or in part, for up to
the total number of shares with respect to which it is then exercisable.
d. The Committee shall have the right to accelerate the date of
exercise of any installment of any Option, provided that the Committee shall not
accelerate the exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 17) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code as described in Paragraph
7(b). The date of exercise of all Options shall accelerate in the event of any
of the following: (i) the Company is to merge or consolidate with or into any
other corporation or entity except a transaction where the Company is the
surviving corporation or a change of domicile merger or similar transaction
exempt from registration under the Securities Act of 1933 (the "Act"), (ii) the
sale of all or substantially all of the Company's assets, (ii) the sale of at
least 90% of the outstanding Common Stock of the Company to a third party
(subparagraphs (i), (ii) and (iii) collectively referred to as an
"Acquisition"); or (iv) the Company is dissolved. Upon a minimum of 20 days
prior written notice to the optionees, the exercisability of such Options shall
commence two business days prior to the earlier of the scheduled closing of an
Acquisition or proposed dissolution or the actual closing of an Acquisition or
proposed dissolution.
e. All Options and stock grants shall be subject to any vesting
requirements imposed by the Committee. In the event of an Acquisition or
dissolution of the Company, all unvested Options and stock grants shall
immediately vest two business days prior to the earlier of the scheduled closing
of the Acquisition or proposed dissolution or the actual closing of the
Acquisition or proposed dissolution and a minimum of 20 days notice of such
vesting shall be given to the holders of such Options and unvested shares of
Common Stock.
10. Termination of Employment. Subject to any greater restrictions or
-------------------------
limitations as may be imposed by the Committee upon the granting of any ISO, if
an ISO optionee ceases to be employed by the Company and all Related
Corporations other than by reason of death or disability as defined in Paragraph
11, no further installments of his ISOs shall become exercisable or vest, and
his ISOs shall terminate on the day three months after the day of the
termination of his employment, but in no event later than on their specified
expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
Paragraph 17. Employment shall be considered as continuing uninterrupted during
any bona fide lease of absence (such as those attributable to illness, military
obligations or governmental service) provided that the period of such leave does
not exceed 90 days or, if longer, any period during which such optionee's right
to re-employment is guaranteed by statute. A leave of absence with the written
approval of the Company's Board shall not be considered an interruption of
employment under the Plan, provided that such written approval contractually
<PAGE>
obligates the Company or any Related Corporation to continue the employment of
the optionee after the approved period of absence. ISOs granted under the Plan
shall not be affected by any change of employment within or among the Company
and Related Corporations so long as the optionee continues to be an employee of
the Company or any Related Corporation.
11. Death or Disability. Subject to any greater restrictions for
-------------------
limitations as may be imposed by the Committee upon the granting of any ISO:
a. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his death, any ISO of his may be exercised
to the extent of the number of shares with respect to which he could have
exercised it on the date of his death, by his estate, personal representative or
beneficiary who has acquired the ISO by Will or by the laws of descent and
distribution, at any time prior to the earlier of the ISO's specified expiration
date or three months from the date of the optionee's death.
b. If an ISO optionee ceases to be employed by the Company and
all Related Corporations by reason of his disability, he shall have the right to
exercise any ISO held by him on the date of termination of employment to the
extent of the number of shares with respect to which he could on the earlier of
the ISO's specified expiration date or one year from the date of the termination
of the optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or successor statute.
12. Assignability. No Option granted to an executive officer or
-------------
director of the Company or beneficial owner of 10% or more of the Company's
equity securities registered pursuant to Section 12 of the Exchange Act and no
ISO shall be assignable or transferable by the grantee except by Will or by the
laws of descent and distribution and during the lifetime of the grantee each
Option shall be exercisable only by him, his guardian or legal representative.
13. Terms and Conditions of Options. Options shall be evidenced by
-------------------------------
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in Paragraphs 7 through 12 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.
14. Adjustments. Upon the occurrence of any of the following events,
-----------
an optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:
a. If the shares of Common Stock shall be subdivided or
combined into a greater or smaller number of shares or if the Company shall
issue any shares of Common Stock as a stock
<PAGE>
dividend on its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of Options shall be appropriately increased or
decreased proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination or stock
dividend.
b. If the Company is to be consolidated with or acquired by another
entity pursuant to an Acquisition, the Committee or the board of directors of
any entity assuming the obligations of the Company hereunder (the "Successor
Board") shall, as to outstanding Options not exercised pursuant to Paragraph 9,
either (i) make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to such Options
the consideration payable with respect to the outstanding shares of Common
Stock in connection with the Acquisition, or (ii) terminate all Options in
exchange for a cash payment equal to the excess of the fair market value of the
shares subject to such Options over the exercise price thereof.
c. In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subparagraph b above) pursuant to
which securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon exercising
on Option shall be entitled to receive for the purchase price paid upon such
exercise the securities he would have received if he had exercised his Option
prior to such recapitalization or reorganization.
d. Notwithstanding the foregoing, any adjustments made pursuant to
subparagraphs a, b or c with respect to ISOs shall be made only after the
Committee, after consulting with counsel for the Company, determines whether
such adjustments would constitute a "modification" of such ISOs (as that term is
defined in Section 425(h) of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee determines that such
adjustments made with respect to ISOs would constitute a modification of such
ISOs may refrain from making such adjustments.
e. Except as expressly provided herein, no issuance by the Company of
shares of Common Stock of any class or securities convertible into shares of
Common Stock of any class shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares subject to Options.
No adjustments shall be made for dividends or other distributions paid in cash
or in property other than securities of the Company.
f. No fractional share shall be issued under the Plan and the
optionee shall receive from the Company cash in lieu of such fractional shares.
g. Upon the happening of any of the foregoing events described in
subparagraphs a, b or c above, the class and aggregate number of shares set
forth in Paragraph 14 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
made under this Paragraph 14 and, subject to Paragraph 2, its determination
shall be conclusive. If any person or entity owning restricted Common Stock
obtained by exercise of a Stock Right made hereunder receives shares or
securities or cash in connection with a corporate transaction described in
subparagraphs a, b or c above as a result of owning such restricted Common
Stock, such shares or securities or cash shall be subject to all of the
conditions and restrictions applicable to the
<PAGE>
restricted Common Stock with respect to which such shares or securities or cash
were issued, unless otherwise determined by the Committee or the Successor
Board.
15. Means of Exercising Stock Rights.
--------------------------------
a. A Stock Right (or any part or installment thereof) shall be
exercised by giving written notice to the Company at its principal office
address. Such notice shall identify the Stock Right being exercised and specify
the number of shares as to which such Stock Right is being exercised,
accompanied by full payment of the purchase or exercise price therefor either
(i) in United States dollars in cash or by check; (ii) at the discretion of the
Committee, through delivery of shares of Common Stock having a fair market value
equal as of the date of the exercise to the cash exercise price of the Stock
Right; (iii) at the discretion of the Committee, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable federal rate, as defined in Section
1274(d) of the Code, or (iv) at the discretion of the Committee, by any
combination of (i), (ii) and (iii) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (ii), (iii) or (iv) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant of the ISO in
question. The holder of a Stock Right shall not have the rights of a
shareholder with respect to the shares covered by his Stock Right until the date
of issuance of a stock certificate to him for such shares. Except as expressly
provided above in Paragraph 14 with respect to changes in capitalization and
stock dividends, no adjustment shall be made for dividends or similar rights for
which the record date is before the date such stock certificate is issued.
b. Each notice of exercise shall, unless the Option shares are
covered by a then current registration statement under the Act, contain the
optionee's acknowledgment in form and substance satisfactory to the Company that
(i) such Option shares are being purchased for investment and not for
distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to the Company, may be made without violating
the registration provisions of the Act), (ii) the Optionee has been advised and
understands that (1) the Option shares have not been registered under the Act
and are "restricted securities" within the meaning of Rule 144 under the Act and
are subject to restrictions on transfer and (2) the Company is under no
obligation to register the Option shares under the Act or to take any action
which would make available to the Optionee any exemption from such registration,
and (iii) such Option shares may not be transferred without compliance with all
applicable federal and state securities laws. Notwithstanding the above, should
the Company be advised by counsel that issuance of shares should be delayed
pending registration under federal or state securities laws or the receipt of an
opinion that an appropriate exemption therefrom is available, the Company may
defer exercise of any Option granted hereunder until either such event has
occurred.
16. Term and Amendment of Plan. This Plan was adopted by the Board on
--------------------------
March 22, 1993, and if not approved by the holders of at least a majority of all
shares present in person and by proxy and entitled to vote therein at a meeting
of the shareholders of the Company within 12 months from the date of the Plan's
adoption by the Board, no ISOs may be granted pursuant to the Plan. Nor shall
the Plan in such event conform to Rule 16b-3 promulgated under the Securities
Exchange Act of 1934. This Plan shall have no expiration date, provided however
that no ISOs shall be granted more than 10 years after the Plan's effective
date. The Board may terminate or amend the Plan in any respect at any time.
However, if approved by the shareholders on or before March 18, 1994, approval
of the shareholders must be obtained within 12 months before or after
<PAGE>
the Board adopts a resolution authorizing any of the following actions: (a)
increase of the total number of shares that may be issued under the Plan (except
by adjustment pursuant to Paragraph 14); (b) modification of the provisions of
Paragraph 3 regarding eligibility for grants of ISOs; and (c) any other act
requiring shareholder approval under Rule 16b-3 (or successor rule) promulgated
under the Exchange Act. Except as provided herein or as specified in the
original instrument granting such Stock Right, no action of the Board or
shareholders may alter or impair the rights of a grantee, without his consent,
under any Stock Right previously granted to him.
17. Conversion of ISOs into non-Qualified Options; Termination of ISOs.
------------------------------------------------------------------
The Committee, at the written request of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
18. Application of Funds. The proceeds received by the Company from the
--------------------
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
19. Governmental regulations. The Company's obligation to sell and
------------------------
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.
20. Withholding of Additional Income Taxes. Upon the exercise of a
--------------------------------------
Non-Qualified Option, the granting or vesting of an Award, the purchase of
common stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in Paragraph 21) the Company, in accordance with Section
3402(a) of the Code may require the optionee, award recipient or purchaser to
pay additional withholding taxes in respect of the amount that is considered
compensation includable in such person's gross income. The Committee in its
discretion may condition (i) the exercise of an Option; (ii) the granting or
vesting of an award; or (iii) the making of a purchase of Common Stock for less
than its fair market value on the payment of such withholding taxes.
To the extent that the Company is required to withhold taxes for federal
income tax purposes in connection with the exercise of any Option, the optionee
shall have the right to elect to satisfy such withholding requirement by (i)
paying the amount of the required withholding tax to the Company; (ii)
delivering to the Company shares of its Common Stock previously owned by the
optionee; or (iii) having the Company retain a portion of the shares covered by
the Option exercise. The number of shares to be delivered to or withheld by the
Company times the fair market value of such shares shall equal the cash required
to be withheld. To the extent that the
<PAGE>
Participant elects to either deliver or have withheld shares of the Company's
Common Stock, the Board, or the Committee, may require him to make such election
only during certain period of time as may be necessary to comply with
appropriate exemptive procedures regarding the "short-swing" profit provisions
of Section 16(b) of the Exchange Act or to meet certain Code requirements.
21. Notice to Company of Disqualifying Disposition. Each employee who
----------------------------------------------
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the later of (i)
two years after the date of employee was granted the ISO or (ii) one year after
the date the employee acquired Common Stock by exercising the ISO. If the
employee has died before such stock is sold, these holding period requirements
do not apply and no Disqualifying Disposition can occur thereafter.
22. Continued Employment. The grant of an Option pursuant to the Plan
--------------------
shall not be construed to imply or to constitute evidence of any agreement,
express implied, on the part of the Company or any Related Corporation to retain
the optionee in the employ of the Company or a Related Corporation, as a member
of the Company's board of directors or in any other capacity, whichever the case
may be.
23. Bonuses or Loans to Exercise Options. If requested by any person to
------------------------------------
whom a grant of a Stock Right has been made, the Company or any Related
Corporation may loan such person or guarantee a bank loan to such person for the
purpose of paying for the shares of the Common Stock. If requested by any person
to whom a grant of a Stock Right has been made, the Company or any Related
Corporation may loan such person, guarantee a bank loan to such person, or pay
such person additional compensation equal to the amount of money necessary to
pay the federal income taxes incurred as a result of the grant of the Stock
Rights or the exercise of any options, assuming that such person is in the
maximum federal income tax bracket six months from the time of grant or
exercise and assuming that such person has no deductions which would reduce the
amount of such tax owed. The tax loan shall be made or tax offset bonus paid on
or after April 15th of the year following the year in which the amount of tax is
determined, and any loan shall be made on such terms as the Company or lending
bank determines.
24. Governing Law; Construction. The validity and construction of the
---------------------------
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Florida. In construing this Plan, the singular shall include the
plural and the masculine gender shall include the feminine and neuter, unless
the context otherwise requires.
<PAGE>
STOCK OPTION AGREEMENT
-----------------------
THIS STOCK OPTION AGREEMENT is effective as of the 19th day of September,
1997, between SAF T LOK, INCORPORATED, a Florida corporation (the "Company"),
and JOHN L. GARDNER (the "Optionee").
BACKGROUND
----------
A. This Agreement, dated September 19, 1997, cancels and superceeds the
stock option agreement previously issued to John L. Gardner for 600,000 shares
of common stock for the exercise price of $2.50.
B. Optionee is currently an employee of the Company.
C. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase common stock of the Company.
D. This Agreement shall be considered an individual employee benefit plan
for the Optionee.
AGREEMENT
---------
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
---------------
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 600,000 shares of the Company's common stock (the "Stock") at an exercise
price equal to $0.50 per share (the "Exercise Price"), on the terms and
conditions herein set forth. The date of grant of the Option is the date set
forth on Exhibit "A" attached hereto.
2. Period of Option. The term of the Option shall be for a period of
----------------
seven years from the date hereof, subject to earlier termination as provided
herein. Prior to the expiration of the Option, Optionee may exercise the Option
for portions of the total option stock granted only in accordance with the
vesting schedule set forth on Exhibit "A" attached hereto.
3. Exercise of Option. The Option shall be exercisable only during the
------------------
term of the Option as long as the Optionee is in "Continuous Employment" with
the Company, or any successor thereof. Notwithstanding the preceding sentence,
as long as the Option's term has not expired, the Option which is otherwise
exercisable in accordance with the provisions of this Agreement shall be
exercisable.
<PAGE>
(a) for a period ending 90 days after the removal or resignation of
the Optionee from the Board of Directors, on which such Optionee has served; or
(b) by the estate of the Optionee, within one year after the date of
the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or while serving on the Board of Directors of the
Company or any Subsidiary, or any successor thereof; or
(c) within one year after the Optionee's employment with the Company
terminates, if the Optionee becomes disabled (as defined in Section 22(e) of the
Code) during Continuous Employment with the Company and such disability is the
cause of termination.
For purposes of this Agreement, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by the Company. Continuous
Employment with the Company shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence approved by the
Company or in the case of transfers between locations of the Company or between
any Parent or Subsidiary, or successor thereof. Service as a member of the
board of directors or as a consultant of the Company shall be treated as
Continuous Employment. The term "cause" as used in this subparagraph 3 shall
mean: (i) commission of a felony or a charge of theft, dishonesty, fraud or
embezzlement; (ii) failure to adhere to Company's reasonable directives and
policies, willful disobedience or insubordination; (iii) disclosing to a
competitor or other unauthorized person, proprietary information, confidences or
trade secrets of the Company or any Parent or Subsidiary; (iv) recruitment of
Company or any Parent or Subsidiary personnel on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof; or (v) solicitation of business on behalf of a competitor or potential
competitor of the Company, any Parent or Subsidiary, or any successor thereof.
4. Investment Representation and Agreement. Optionee represents that
---------------------------------------
this Option and any shares purchased pursuant to this Option are purchased for
investment purposes only and for Optionee's own account. Optionee acknowledges
that this Option and the shares pertaining to this Option are not registered
under the Securities Act of 1933, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
2
<PAGE>
5. Restrictive Legend. Optionee hereby agrees that certificates
------------------
evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act or any
other state securities laws, and, therefore, cannot be sold unless they are
subsequently registered under the Act and any applicable state securities
laws, or unless an exemption from registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
---------------------------------
Optionee, except in the case of Optionee's death while in Continuous Employment
of the Company, in which case the Option is exercisable by Optionee's estate's
personal representative pursuant to paragraph 3(c), and except in the case of
Optionee's termination due to disability occurring during Continuous Employment
with Saf T Lok, in which case the Option is exercisable, if necessary, by
Optionee's legal representative pursuant to paragraph 3(d). The Option may not
be sold, exchanged, assigned, pledged, encumbered, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution. The
Option shall not be subject to execution, attachment, or similar process. Upon
any attempt to sell, exchange, assign, pledge, encumber, hypothecate, or
otherwise transfer the Option or any right thereunder, the Option and all rights
thereunder shall immediately become null and void.
7. Method of Exercise. Optionee may exercise the Option, in whole or in
------------------
part, by written notice to the Company stating in such written notice the number
of shares of Stock such Optionee elects to purchase under the Option, and the
time of the delivery thereof, which time shall be at least 15 days after the
giving of such notice, unless an earlier date shall have been mutually agreed
upon. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by the applicable state and federal
securities laws. If, after receipt of such information, Optionee desires to
withdraw such notice of exercise, Optionee may withdraw such notice of exercise
by notifying the Company, in writing, prior to the time set forth for delivery
of the shares of Stock. In no event may the Option be exercised after the
expiration of its term. Optionee is under no obligation to exercise an Option or
any part thereof.
(a) Payment for Option Stock. The exercise of this Option shall be
------------------------
contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock or cancellation of a vested portion
of the Stock Option, or any combination of the foregoing in an amount equal to
the full option price of the shares of Stock being purchased. The optionee
shall have no rights as a shareholder with respect to any shares covered by his
Option until the exercise of the Option and the date of issuance of a
certificate to him for such shares. No adjustment
3
<PAGE>
shall be made for dividends or other rights for which the record date is prior
to the date such certificate is issued.
(b) Delivery of Stock to Optionee. Provided the optionee has
-----------------------------
delivered proper notice of exercise and full payment of the option price, the
Company shall undertake and follow all necessary procedures to make prompt
delivery of the number of shares of Stock which the Optionee elects to purchase
at the time specified in such notice. Such delivery, however, may be postponed
at the sole discretion of the Company to enable the Company to comply with any
applicable procedures, regulations or listing requirements of any governmental
agency, stock exchange or regulatory authority. As a condition to the issuance
of shares of Stock, the Company may require such additional payments from the
Optionee as may be required to allow the Company to withhold any income taxes
which Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
8. Changes in Capital Structure of Company. In the event of a change in
---------------------------------------
capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. The Company shall give notice of any adjustment to Optionee.
9. Governing Law. This Agreement shall be governed by, interpreted
-------------
under, and construed in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement will inure to the benefit of and be
--------------
binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
11. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter. This Agreement, dated September
19, 1997, cancels and superceeds the stock option agreement previously issued to
John L. Gardner for 600,000 shares of common stock for the exercise price of
$2.50.
12. Waiver of Modification. No waiver or modification of this Agreement
----------------------
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding,
4
<PAGE>
arbitration, or litigation between the parties arising out of or affecting this
Agreement or the rights or obligations of any party hereunder, unless such
wavier or modification is in writing and duly executed as aforesaid. The
provisions of this paragraph may not be waived except as herein set forth.
13. Number and Gender. Whenever used herein, singular numbers shall
-----------------
include the plural, the singular, and the use of any gender shall include all
genders.
14. Invalid Provision. The invalidity or unenforceability of any term or
-----------------
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
15. Nonqualified Stock Option. This Agreement shall be considered an
-------------------------
individual employee benefit plan for the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "OPTIONEE"
SAF T LOK, INCORPORATED
By:________________________ ___________________________
Name:___________________ Name: John L. Gardner
Title:__________________
5
<PAGE>
EXHIBIT "A" TO STOCK OPTION AGREEMENT
NOTICE OF GRANT OF STOCK OPTION
This Stock Option Agreement, dated September 19, 1997, cancels and superceeds
the stock option agreement previously issued to John L. Gardner for 600,000
shares of common stock for the exercise price of $2.50.
This Agreement shall be considered an individual employee benefit plan for the
Optionee.
<TABLE>
<CAPTION>
Name: John L. Gardner
Address: _______________
---------------
<S> <C>
</TABLE>
Social Security Number: ______________________
You have been granted a stock option to buy Saf T Lok Incorporated common stock
as follows:
<TABLE>
<CAPTION>
<S> <C>
Stock Option Grant Number.................. _____________
Grant Date............................ September 19, 1997
Type of Grant*...................................... NQSO
Exercise Price per Share........................ $ 0.50
Total Shares Granted............................. 600,000
Total Amount to Fully Exercise.................. $300,000
Expiration Date of the Grant........... September 19,2004
</TABLE>
The vesting schedule for this grant is as follows: This option is fully vested.
By Order of the Board of Directors of Saf T Lok Incorporated
Validated by _________________________________________
Corporate Secretary
*ISO = Qualified Stock Option
NQSO = Nonqualified Stock Option
6
<PAGE>
STOCK OPTION AGREEMENT
-----------------------
THIS STOCK OPTION AGREEMENT is effective as of the 15th day of August,
1997, between SAF T LOK, INCORPORATED, a Florida corporation (the "Company"),
and JOHN L. GARDNER (the "Optionee").
BACKGROUND
----------
A. Optionee is currently an employee of the Company.
B. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase common stock of the Company.
C. This Agreement shall be considered an individual employee benefit plan
for the Optionee.
AGREEMENT
---------
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
---------------
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 72,000 shares of the Company's common stock (the "Stock") at an exercise
price equal to $0.10 per share (the "Exercise Price"), on the terms and
conditions herein set forth. The date of grant of the Option is the date set
forth on Exhibit "A" attached hereto.
2. Period of Option. The term of the Option shall be for a period of
----------------
seven years from the date hereof, subject to earlier termination as provided
herein. Prior to the expiration of the Option, Optionee may exercise the Option
for portions of the total option stock granted only in accordance with the
vesting schedule set forth on Exhibit "A" attached hereto.
3. Exercise of Option. The Option shall be exercisable only during the
------------------
term of the Option as long as the Optionee is in "Continuous Employment" with
the Company, or any successor thereof. Notwithstanding the preceding sentence,
as long as the Option's term has not expired, the Option which is otherwise
exercisable in accordance with the provisions of this Agreement shall be
exercisable.
<PAGE>
(a) for a period ending 90 days after the removal or resignation of
the Optionee from the Board of Directors, on which such Optionee has served; or
(b) by the estate of the Optionee, within one year after the date of
the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or while serving on the Board of Directors of the
Company or any Subsidiary, or any successor thereof; or
(c) within one year after the Optionee's employment with the Company
terminates, if the Optionee becomes disabled (as defined in Section 22(e) of the
Code) during Continuous Employment with the Company and such disability is the
cause of termination.
For purposes of this Agreement, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by the Company. Continuous
Employment with the Company shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence approved by the
Company or in the case of transfers between locations of the Company or between
any Parent or Subsidiary, or successor thereof. Service as a member of the
board of directors or as a consultant of the Company shall be treated as
Continuous Employment. The term "cause" as used in this subparagraph 3 shall
mean: (i) commission of a felony or a charge of theft, dishonesty, fraud or
embezzlement; (ii) failure to adhere to Company's reasonable directives and
policies, willful disobedience or insubordination; (iii) disclosing to a
competitor or other unauthorized person, proprietary information, confidences or
trade secrets of the Company or any Parent or Subsidiary; (iv) recruitment of
Company or any Parent or Subsidiary personnel on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof; or (v) solicitation of business on behalf of a competitor or potential
competitor of the Company, any Parent or Subsidiary, or any successor thereof.
4. Investment Representation and Agreement. Optionee represents that
---------------------------------------
this Option and any shares purchased pursuant to this Option are purchased for
investment purposes only and for Optionee's own account. Optionee acknowledges
that this Option and the shares pertaining to this Option are not registered
under the Securities Act of 1933, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
5. Restrictive Legend. Optionee hereby agrees that certificates
------------------
evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
2
<PAGE>
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act or any
other state securities laws, and, therefore, cannot be sold unless they are
subsequently registered under the Act and any applicable state securities
laws, or unless an exemption from registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
---------------------------------
Optionee, except in the case of Optionee's death while in Continuous Employment
of the Company, in which case the Option is exercisable by Optionee's estate's
personal representative pursuant to paragraph 3(c), and except in the case of
Optionee's termination due to disability occurring during Continuous Employment
with Saf T Lok, in which case the Option is exercisable, if necessary, by
Optionee's legal representative pursuant to paragraph 3(d). The Option may not
be sold, exchanged, assigned, pledged, encumbered, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution. The
Option shall not be subject to execution, attachment, or similar process. Upon
any attempt to sell, exchange, assign, pledge, encumber, hypothecate, or
otherwise transfer the Option or any right thereunder, the Option and all rights
thereunder shall immediately become null and void.
7. Method of Exercise. Optionee may exercise the Option, in whole or in
------------------
part, by written notice to the Company stating in such written notice the number
of shares of Stock such Optionee elects to purchase under the Option, and the
time of the delivery thereof, which time shall be at least 15 days after the
giving of such notice, unless an earlier date shall have been mutually agreed
upon. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by the applicable state and federal
securities laws. If, after receipt of such information, Optionee desires to
withdraw such notice of exercise, Optionee may withdraw such notice of exercise
by notifying the Company, in writing, prior to the time set forth for delivery
of the shares of Stock. In no event may the Option be exercised after the
expiration of its term. Optionee is under no obligation to exercise an Option or
any part thereof.
(a) Payment for Option Stock. The exercise of this Option shall be
------------------------
contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock or cancellation of a vested portion
of the Stock Option, or any combination of the foregoing in an amount equal to
the full option price of the shares of Stock being purchased. The optionee
shall have no rights as a shareholder with respect to any shares covered by his
Option until the exercise of the Option and the date of issuance of a
certificate to him for such shares. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such certificate
is issued.
(b) Delivery of Stock to Optionee. Provided the optionee has
-----------------------------
delivered proper notice of exercise and full payment of the option price, the
Company shall
3
<PAGE>
undertake and follow all necessary procedures to make prompt delivery of the
number of shares of Stock which the Optionee elects to purchase at the time
specified in such notice. Such delivery, however, may be postponed at the sole
discretion of the Company to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any governmental agency,
stock exchange or regulatory authority. As a condition to the issuance of
shares of Stock, the Company may require such additional payments from the
Optionee as may be required to allow the Company to withhold any income taxes
which Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
8. Changes in Capital Structure of Company. In the event of a change in
---------------------------------------
capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. The Company shall give notice of any adjustment to Optionee.
9. Governing Law. This Agreement shall be governed by, interpreted
-------------
under, and construed in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement will inure to the benefit of and be
--------------
binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
11. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
12. Waiver of Modification. No waiver or modification of this Agreement
----------------------
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such wavier or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
13. Number and Gender. Whenever used herein, singular numbers shall
-----------------
include the plural, the singular, and the use of any gender shall include all
genders.
4
<PAGE>
14. Invalid Provision. The invalidity or unenforceability of any term or
-----------------
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
15. Nonqualified Stock Option. This Agreement shall be considered an
-------------------------
individual employee benefit plan for the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "OPTIONEE"
SAF T LOK, INCORPORATED
By:________________________ ___________________________
Name:___________________ Name: John L. Gardner
Title:__________________
5
<PAGE>
EXHIBIT "A" TO STOCK OPTION AGREEMENT
NOTICE OF GRANT OF STOCK OPTION
This Agreement shall be considered an individual employee benefit plan for the
Optionee.
<TABLE>
<CAPTION>
Name: John L. Gardner
Address: ______________
---------------
<S> <C>
</TABLE>
Social Security Number: ______________________
You have been granted a stock option to buy Saf T Lok Incorporated common stock
as follows:
<TABLE>
<CAPTION>
<S> <C>
Stock Option Grant Number.............. _____________
Grant Date............................ August __, 1997
Type of Grant*................................... NQSO
Exercise Price per Share...................... $ 0.10
Total Shares Granted........................... 72,000
Total Amount to Fully Exercise................ $ 7,200
Expiration Date of the Grant.......... August __, 2004
</TABLE>
The vesting schedule for this grant is as follows: This option is fully vested.
By Order of the Board of Directors of Saf T Lok Incorporated
Validated by _________________________________________
Corporate Secretary
*ISO = Qualified Stock Option
NQSO = Nonqualified Stock Option
6
<PAGE>
STOCK OPTION AGREEMENT
-----------------------
THIS STOCK OPTION AGREEMENT is effective as of the 15th day of August,
1997, between SAF T LOK, INCORPORATED, a Florida corporation (the "Company"),
and EUGENE V. HORANOFF (the "Optionee").
BACKGROUND
----------
A. Optionee is currently an employee of the Company.
B. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase common stock of the Company.
C. This Agreement shall be considered an individual employee benefit plan
for the Optionee.
AGREEMENT
---------
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
---------------
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 58,000 shares of the Company's common stock (the "Stock") at an exercise
price equal to $0.10 per share (the "Exercise Price"), on the terms and
conditions herein set forth. The date of grant of the Option is the date set
forth on Exhibit "A" attached hereto.
2. Period of Option. The term of the Option shall be for a period of
----------------
seven years from the date hereof, subject to earlier termination as provided
herein. Prior to the expiration of the Option, Optionee may exercise the Option
for portions of the total option stock granted only in accordance with the
vesting schedule set forth on Exhibit "A" attached hereto.
3. Exercise of Option. The Option shall be exercisable only during the
------------------
term of the Option as long as the Optionee is in "Continuous Employment" with
the Company, or any successor thereof. Notwithstanding the preceding sentence,
as long as the Option's term has not expired, the Option which is otherwise
exercisable in accordance with the provisions of this Agreement shall be
exercisable.
<PAGE>
(a) for a period ending 90 days after the removal or resignation of
the Optionee from the Board of Directors, on which such Optionee has served; or
(b) by the estate of the Optionee, within one year after the date of
the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or while serving on the Board of Directors of the
Company or any Subsidiary, or any successor thereof; or
(c) within one year after the Optionee's employment with the Company
terminates, if the Optionee becomes disabled (as defined in Section 22(e) of the
Code) during Continuous Employment with the Company and such disability is the
cause of termination.
For purposes of this Agreement, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by the Company. Continuous
Employment with the Company shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence approved by the
Company or in the case of transfers between locations of the Company or between
any Parent or Subsidiary, or successor thereof. Service as a member of the
board of directors or as a consultant of the Company shall be treated as
Continuous Employment. The term "cause" as used in this subparagraph 3 shall
mean: (i) commission of a felony or a charge of theft, dishonesty, fraud or
embezzlement; (ii) failure to adhere to Company's reasonable directives and
policies, willful disobedience or insubordination; (iii) disclosing to a
competitor or other unauthorized person, proprietary information, confidences or
trade secrets of the Company or any Parent or Subsidiary; (iv) recruitment of
Company or any Parent or Subsidiary personnel on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof; or (v) solicitation of business on behalf of a competitor or potential
competitor of the Company, any Parent or Subsidiary, or any successor thereof.
4. Investment Representation and Agreement. Optionee represents that
---------------------------------------
this Option and any shares purchased pursuant to this Option are purchased for
investment purposes only and for Optionee's own account. Optionee acknowledges
that this Option and the shares pertaining to this Option are not registered
under the Securities Act of 1933, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
5. Restrictive Legend. Optionee hereby agrees that certificates
------------------
evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
2
<PAGE>
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act or any
other state securities laws, and, therefore, cannot be sold unless they are
subsequently registered under the Act and any applicable state securities
laws, or unless an exemption from registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
---------------------------------
Optionee, except in the case of Optionee's death while in Continuous Employment
of the Company, in which case the Option is exercisable by Optionee's estate's
personal representative pursuant to paragraph 3(c), and except in the case of
Optionee's termination due to disability occurring during Continuous Employment
with Saf T Lok, in which case the Option is exercisable, if necessary, by
Optionee's legal representative pursuant to paragraph 3(d). The Option may not
be sold, exchanged, assigned, pledged, encumbered, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution. The
Option shall not be subject to execution, attachment, or similar process. Upon
any attempt to sell, exchange, assign, pledge, encumber, hypothecate, or
otherwise transfer the Option or any right thereunder, the Option and all rights
thereunder shall immediately become null and void.
7. Method of Exercise. Optionee may exercise the Option, in whole or in
------------------
part, by written notice to the Company stating in such written notice the number
of shares of Stock such Optionee elects to purchase under the Option, and the
time of the delivery thereof, which time shall be at least 15 days after the
giving of such notice, unless an earlier date shall have been mutually agreed
upon. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by the applicable state and federal
securities laws. If, after receipt of such information, Optionee desires to
withdraw such notice of exercise, Optionee may withdraw such notice of exercise
by notifying the Company, in writing, prior to the time set forth for delivery
of the shares of Stock. In no event may the Option be exercised after the
expiration of its term. Optionee is under no obligation to exercise an Option or
any part thereof.
(a) Payment for Option Stock. The exercise of this Option shall be
------------------------
contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock or cancellation of a vested portion
of the Stock Option, or any combination of the foregoing in an amount equal to
the full option price of the shares of Stock being purchased. The optionee
shall have no rights as a shareholder with respect to any shares covered by his
Option until the exercise of the Option and the date of issuance of a
certificate to him for such shares. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such certificate
is issued.
(b) Delivery of Stock to Optionee. Provided the optionee has
-----------------------------
delivered proper notice of exercise and full payment of the option price, the
Company shall
3
<PAGE>
undertake and follow all necessary procedures to make prompt delivery of the
number of shares of Stock which the Optionee elects to purchase at the time
specified in such notice. Such delivery, however, may be postponed at the sole
discretion of the Company to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any governmental agency,
stock exchange or regulatory authority. As a condition to the issuance of
shares of Stock, the Company may require such additional payments from the
Optionee as may be required to allow the Company to withhold any income taxes
which Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
8. Changes in Capital Structure of Company. In the event of a change in
---------------------------------------
capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. The Company shall give notice of any adjustment to Optionee.
9. Governing Law. This Agreement shall be governed by, interpreted
-------------
under, and construed in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement will inure to the benefit of and be
--------------
binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
11. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
12. Waiver of Modification. No waiver or modification of this Agreement
----------------------
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such wavier or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
13. Number and Gender. Whenever used herein, singular numbers shall
-----------------
include the plural, the singular, and the use of any gender shall include all
genders.
4
<PAGE>
14. Invalid Provision. The invalidity or unenforceability of any term or
-----------------
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
15. Nonqualified Stock Option. This Agreement shall be considered an
-------------------------
individual employee benefit plan for the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "OPTIONEE"
SAF T LOK, INCORPORATED
By:________________________ _______________________________
Name:___________________ Name: Eugene V. Horanoff
Title:__________________
5
<PAGE>
EXHIBIT "A" TO STOCK OPTION AGREEMENT
NOTICE OF GRANT OF STOCK OPTION
This Agreement shall be considered an individual employee benefit plan for the
Optionee.
<TABLE>
<CAPTION>
<S> <C>
Name: Eugene V. Horanoff
Address: _________________
_________________
</TABLE>
Social Security Number: ______________________
You have been granted a stock option to buy Saf T Lok Incorporated common stock
as follows:
<TABLE>
<CAPTION>
<S> <C>
Stock Option Grant NumbeR............... _____________
Grant Date............................ August __, 1997
Type of Grant*................................... NQSO
Exercise Price per Share...................... $ 0.10
Total Shares Granted........................... 58,000
Total Amount to Fully Exercise................ $ 5,800
Expiration Date of the Grant........... August __,2004
</TABLE>
The vesting schedule for this grant is as follows: This option is fully vested.
By Order of the Board of Directors of Saf T Lok Incorporated
Validated by _________________________________________
Corporate Secretary
*ISO = Qualified Stock Option
NQSO = Nonqualified Stock Option
6
<PAGE>
STOCK OPTION AGREEMENT
-----------------------
THIS STOCK OPTION AGREEMENT is effective as of the 15th day of August,
1997, between SAF T LOK, INCORPORATED, a Florida corporation (the "Company"),
and JEFFREY W. BROOKS (the "Optionee").
BACKGROUND
----------
A. Optionee is currently an employee of the Company.
B. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase common stock of the Company.
C. This Agreement shall be considered an individual employee benefit plan
for the Optionee.
AGREEMENT
---------
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
---------------
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 86,000 shares of the Company's common stock (the "Stock") at an exercise
price equal to $0.10 per share (the "Exercise Price"), on the terms and
conditions herein set forth. The date of grant of the Option is the date set
forth on Exhibit "A" attached hereto.
2. Period of Option. The term of the Option shall be for a period of
----------------
seven years from the date hereof, subject to earlier termination as provided
herein. Prior to the expiration of the Option, Optionee may exercise the Option
for portions of the total option stock granted only in accordance with the
vesting schedule set forth on Exhibit "A" attached hereto.
3. Exercise of Option. The Option shall be exercisable only during the
------------------
term of the Option as long as the Optionee is in "Continuous Employment" with
the Company, or any successor thereof. Notwithstanding the preceding sentence,
as long as the Option's term has not expired, the Option which is otherwise
exercisable in accordance with the provisions of this Agreement shall be
exercisable.
<PAGE>
(a) for a period ending 90 days after the removal or resignation of
the Optionee from the Board of Directors, on which such Optionee has served; or
(b) by the estate of the Optionee, within one year after the date of
the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or while serving on the Board of Directors of the
Company or any Subsidiary, or any successor thereof; or
(c) within one year after the Optionee's employment with the Company
terminates, if the Optionee becomes disabled (as defined in Section 22(e) of the
Code) during Continuous Employment with the Company and such disability is the
cause of termination.
For purposes of this Agreement, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by the Company. Continuous
Employment with the Company shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence approved by the
Company or in the case of transfers between locations of the Company or between
any Parent or Subsidiary, or successor thereof. Service as a member of the
board of directors or as a consultant of the Company shall be treated as
Continuous Employment. The term "cause" as used in this subparagraph 3 shall
mean: (i) commission of a felony or a charge of theft, dishonesty, fraud or
embezzlement; (ii) failure to adhere to Company's reasonable directives and
policies, willful disobedience or insubordination; (iii) disclosing to a
competitor or other unauthorized person, proprietary information, confidences or
trade secrets of the Company or any Parent or Subsidiary; (iv) recruitment of
Company or any Parent or Subsidiary personnel on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof; or (v) solicitation of business on behalf of a competitor or potential
competitor of the Company, any Parent or Subsidiary, or any successor thereof.
4. Investment Representation and Agreement. Optionee represents that
---------------------------------------
this Option and any shares purchased pursuant to this Option are purchased for
investment purposes only and for Optionee's own account. Optionee acknowledges
that this Option and the shares pertaining to this Option are not registered
under the Securities Act of 1933, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
5. Restrictive Legend. Optionee hereby agrees that certificates
------------------
evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
2
<PAGE>
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act or any
other state securities laws, and, therefore, cannot be sold unless they are
subsequently registered under the Act and any applicable state securities
laws, or unless an exemption from registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
---------------------------------
Optionee, except in the case of Optionee's death while in Continuous Employment
of the Company, in which case the Option is exercisable by Optionee's estate's
personal representative pursuant to paragraph 3(c), and except in the case of
Optionee's termination due to disability occurring during Continuous Employment
with Saf T Lok, in which case the Option is exercisable, if necessary, by
Optionee's legal representative pursuant to paragraph 3(d). The Option may not
be sold, exchanged, assigned, pledged, encumbered, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution. The
Option shall not be subject to execution, attachment, or similar process. Upon
any attempt to sell, exchange, assign, pledge, encumber, hypothecate, or
otherwise transfer the Option or any right thereunder, the Option and all rights
thereunder shall immediately become null and void.
7. Method of Exercise. Optionee may exercise the Option, in whole or in
------------------
part, by written notice to the Company stating in such written notice the number
of shares of Stock such Optionee elects to purchase under the Option, and the
time of the delivery thereof, which time shall be at least 15 days after the
giving of such notice, unless an earlier date shall have been mutually agreed
upon. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by the applicable state and federal
securities laws. If, after receipt of such information, Optionee desires to
withdraw such notice of exercise, Optionee may withdraw such notice of exercise
by notifying the Company, in writing, prior to the time set forth for delivery
of the shares of Stock. In no event may the Option be exercised after the
expiration of its term. Optionee is under no obligation to exercise an Option or
any part thereof.
(a) Payment for Option Stock. The exercise of this Option shall be
------------------------
contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock or cancellation of a vested portion
of the Stock Option, or any combination of the foregoing in an amount equal to
the full option price of the shares of Stock being purchased. The optionee
shall have no rights as a shareholder with respect to any shares covered by his
Option until the exercise of the Option and the date of issuance of a
certificate to him for such shares. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such certificate
is issued.
(b) Delivery of Stock to Optionee. Provided the optionee has
-----------------------------
delivered proper notice of exercise and full payment of the option price, the
Company shall
3
<PAGE>
undertake and follow all necessary procedures to make prompt delivery of the
number of shares of Stock which the Optionee elects to purchase at the time
specified in such notice. Such delivery, however, may be postponed at the sole
discretion of the Company to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any governmental agency,
stock exchange or regulatory authority. As a condition to the issuance of
shares of Stock, the Company may require such additional payments from the
Optionee as may be required to allow the Company to withhold any income taxes
which Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
8. Changes in Capital Structure of Company. In the event of a change in
---------------------------------------
capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. The Company shall give notice of any adjustment to Optionee.
9. Governing Law. This Agreement shall be governed by, interpreted
-------------
under, and construed in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement will inure to the benefit of and be
--------------
binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
11. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
12. Waiver of Modification. No waiver or modification of this Agreement
----------------------
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such wavier or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
13. Number and Gender. Whenever used herein, singular numbers shall
-----------------
include the plural, the singular, and the use of any gender shall include all
genders.
4
<PAGE>
14. Invalid Provision. The invalidity or unenforceability of any term or
-----------------
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
15. Nonqualified Stock Option. This Agreement shall be considered an
-------------------------
individual employee benefit plan for the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "OPTIONEE"
SAF T LOK, INCORPORATED
By:________________________ _______________________________
Name:___________________ Name: Jeffrey W. Brooks
Title:__________________
5
<PAGE>
EXHIBIT "A" TO STOCK OPTION AGREEMENT
NOTICE OF GRANT OF STOCK OPTION
This Agreement shall be considered an individual employee benefit plan for the
Optionee.
<TABLE>
<CAPTION>
<S> <C>
Name: Jeffrey W. Brooks
Address: ________________
________________
</TABLE>
Social Security Number: ______________________
You have been granted a stock option to buy Saf T Lok Incorporated common stock
as follows:
<TABLE>
<CAPTION>
<S> <C>
Stock Option Grant Number............... _____________
Grant Date............................ August __, 1997
Type of Grant*................................... NQSO
Exercise Price per Share...................... $ 0.10
Total Shares Granted........................... 86,000
Total Amount to Fully Exercise................ $ 8,600
Expiration Date of the Grant........... August __,2004
</TABLE>
The vesting schedule for this grant is as follows: This option is fully vested.
By Order of the Board of Directors of Saf T Lok Incorporated
Validated by _________________________________________
Corporate Secretary
*ISO = Qualified Stock Option
NQSO = Nonqualified Stock Option
6
<PAGE>
STOCK OPTION AGREEMENT
-----------------------
THIS STOCK OPTION AGREEMENT is effective as of the 15th day of August,
1997, between SAF T LOK, INCORPORATED, a Florida corporation (the "Company"),
and WILLIAM M. SCHMIDT (the "Optionee").
BACKGROUND
----------
A. Optionee is currently an employee of the Company.
B. The Company considers it desirable and in the Company's best interest
that Optionee be given an inducement to acquire a proprietary or equity interest
in the Company as an added incentive to advance the interests of the Company in
the form of an option to purchase common stock of the Company.
C. This Agreement shall be considered an individual employee benefit plan
for the Optionee.
AGREEMENT
---------
In consideration of the mutual covenants and agreements contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee the right and
---------------
option (hereinafter referred to as the "Option") to purchase up to an aggregate
of 108,000 shares of the Company's common stock (the "Stock") at an exercise
price equal to $0.10 per share (the "Exercise Price"), on the terms and
conditions herein set forth. The date of grant of the Option is the date set
forth on Exhibit "A" attached hereto.
2. Period of Option. The term of the Option shall be for a period of
----------------
seven years from the date hereof, subject to earlier termination as provided
herein. Prior to the expiration of the Option, Optionee may exercise the Option
for portions of the total option stock granted only in accordance with the
vesting schedule set forth on Exhibit "A" attached hereto.
3. Exercise of Option. The Option shall be exercisable only during the
------------------
term of the Option as long as the Optionee is in "Continuous Employment" with
the Company, or any successor thereof. Notwithstanding the preceding sentence,
as long as the Option's term has not expired, the Option which is otherwise
exercisable in accordance with the provisions of this Agreement shall be
exercisable.
<PAGE>
(a) for a period ending 90 days after the removal or resignation of
the Optionee from the Board of Directors, on which such Optionee has served; or
(b) by the estate of the Optionee, within one year after the date of
the Optionee's death, if the Optionee should die while in the Continuous
Employment of the Company or while serving on the Board of Directors of the
Company or any Subsidiary, or any successor thereof; or
(c) within one year after the Optionee's employment with the Company
terminates, if the Optionee becomes disabled (as defined in Section 22(e) of the
Code) during Continuous Employment with the Company and such disability is the
cause of termination.
For purposes of this Agreement, the term "Continuous Employment" shall mean
the absence of any interruption or termination of employment (or termination of
a consulting contract) by the Company or any Parent or Subsidiary which now
exists or hereafter is organized or acquired by the Company. Continuous
Employment with the Company shall not be considered interrupted in the case of
sick leave, military leave, or any other leave of absence approved by the
Company or in the case of transfers between locations of the Company or between
any Parent or Subsidiary, or successor thereof. Service as a member of the
board of directors or as a consultant of the Company shall be treated as
Continuous Employment. The term "cause" as used in this subparagraph 3 shall
mean: (i) commission of a felony or a charge of theft, dishonesty, fraud or
embezzlement; (ii) failure to adhere to Company's reasonable directives and
policies, willful disobedience or insubordination; (iii) disclosing to a
competitor or other unauthorized person, proprietary information, confidences or
trade secrets of the Company or any Parent or Subsidiary; (iv) recruitment of
Company or any Parent or Subsidiary personnel on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof; or (v) solicitation of business on behalf of a competitor or potential
competitor of the Company, any Parent or Subsidiary, or any successor thereof.
4. Investment Representation and Agreement. Optionee represents that
---------------------------------------
this Option and any shares purchased pursuant to this Option are purchased for
investment purposes only and for Optionee's own account. Optionee acknowledges
that this Option and the shares pertaining to this Option are not registered
under the Securities Act of 1933, as amended, the Florida Securities and
Investor Protection Act, or the securities laws of any other state.
5. Restrictive Legend. Optionee hereby agrees that certificates
------------------
evidencing the shares of stock purchased by Optionee pursuant to this Agreement
shall be stamped or otherwise imprinted with a conspicuous legend in
substantially the following form:
2
<PAGE>
These shares have not been registered under the Securities Act of
1933, as amended, the Florida Securities and Investor Protection Act or any
other state securities laws, and, therefore, cannot be sold unless they are
subsequently registered under the Act and any applicable state securities
laws, or unless an exemption from registration is available.
6. Nonassignability of Option Rights. The Option is exercisable only by
---------------------------------
Optionee, except in the case of Optionee's death while in Continuous Employment
of the Company, in which case the Option is exercisable by Optionee's estate's
personal representative pursuant to paragraph 3(c), and except in the case of
Optionee's termination due to disability occurring during Continuous Employment
with Saf T Lok, in which case the Option is exercisable, if necessary, by
Optionee's legal representative pursuant to paragraph 3(d). The Option may not
be sold, exchanged, assigned, pledged, encumbered, hypothecated, or otherwise
transferred except by will or by the laws of descent and distribution. The
Option shall not be subject to execution, attachment, or similar process. Upon
any attempt to sell, exchange, assign, pledge, encumber, hypothecate, or
otherwise transfer the Option or any right thereunder, the Option and all rights
thereunder shall immediately become null and void.
7. Method of Exercise. Optionee may exercise the Option, in whole or in
------------------
part, by written notice to the Company stating in such written notice the number
of shares of Stock such Optionee elects to purchase under the Option, and the
time of the delivery thereof, which time shall be at least 15 days after the
giving of such notice, unless an earlier date shall have been mutually agreed
upon. Upon receipt of such written notice, the Company shall provide the
Optionee with that information required by the applicable state and federal
securities laws. If, after receipt of such information, Optionee desires to
withdraw such notice of exercise, Optionee may withdraw such notice of exercise
by notifying the Company, in writing, prior to the time set forth for delivery
of the shares of Stock. In no event may the Option be exercised after the
expiration of its term. Optionee is under no obligation to exercise an Option or
any part thereof.
(a) Payment for Option Stock. The exercise of this Option shall be
------------------------
contingent upon receipt by the Company of cash or certified bank check to its
order, shares of the Company's Common Stock or cancellation of a vested portion
of the Stock Option, or any combination of the foregoing in an amount equal to
the full option price of the shares of Stock being purchased. The optionee
shall have no rights as a shareholder with respect to any shares covered by his
Option until the exercise of the Option and the date of issuance of a
certificate to him for such shares. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date such certificate
is issued.
(b) Delivery of Stock to Optionee. Provided the optionee has
-----------------------------
delivered proper notice of exercise and full payment of the option price, the
Company shall
3
<PAGE>
undertake and follow all necessary procedures to make prompt delivery of the
number of shares of Stock which the Optionee elects to purchase at the time
specified in such notice. Such delivery, however, may be postponed at the sole
discretion of the Company to enable the Company to comply with any applicable
procedures, regulations or listing requirements of any governmental agency,
stock exchange or regulatory authority. As a condition to the issuance of
shares of Stock, the Company may require such additional payments from the
Optionee as may be required to allow the Company to withhold any income taxes
which Company deems necessary to insure the Company that it can comply with any
federal or state income tax withholding requirements.
8. Changes in Capital Structure of Company. In the event of a change in
---------------------------------------
capital structure of the Company, the number of shares covered by the Options
and the price per share shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Stock resulting from the splitting or
consolidation of shares, or the payment of a stock dividend, or effected in any
other manner without receipt of additional or further consideration by the
Company. The Company shall give notice of any adjustment to Optionee.
9. Governing Law. This Agreement shall be governed by, interpreted
-------------
under, and construed in accordance with the laws of the State of Florida.
10. Binding Effect. This Agreement will inure to the benefit of and be
--------------
binding on the Company, its successors and assigns, including, but not limited
to, any company or entity that may acquire all or substantially all of the
company's assets and business or into which the Company may be consolidated or
merged, and on Optionee and except as set forth in paragraph 6 above, their
heirs, legal representatives, and successors, as the case may be.
11. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter of this Agreement and
supersedes any and all previous agreements between the parties, whether written
or oral, with respect to such subject matter.
12. Waiver of Modification. No waiver or modification of this Agreement
----------------------
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any waiver or modification shall be offered or
received in evidence in any proceeding, arbitration, or litigation between the
parties arising out of or affecting this Agreement or the rights or obligations
of any party hereunder, unless such wavier or modification is in writing and
duly executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
13. Number and Gender. Whenever used herein, singular numbers shall
-----------------
include the plural, the singular, and the use of any gender shall include all
genders.
4
<PAGE>
14. Invalid Provision. The invalidity or unenforceability of any term or
-----------------
provision of this Agreement or the nonapplication of any such term or provision
to any person or circumstance shall not impair or affect the remainder of this
Agreement, and the remaining terms and provisions hereof shall not be
invalidated but shall remain in full force and effect and shall be construed as
if such invalid, unenforceable, or nonapplicable provision were omitted.
15. Nonqualified Stock Option. This Agreement shall be considered an
-------------------------
individual employee benefit plan for the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
"COMPANY" "OPTIONEE"
SAF T LOK, INCORPORATED
By:________________________ _______________________________
Name:___________________ Name: William M. Schmidt
Title:__________________
5
<PAGE>
EXHIBIT "A" TO STOCK OPTION AGREEMENT
NOTICE OF GRANT OF STOCK OPTION
This Agreement shall be considered an individual employee benefit plan for the
Optionee.
<TABLE>
<CAPTION>
<S> <C>
Name: William M. Schmidt
Address: _________________
_________________
</TABLE>
Social Security Number: ______________________
You have been granted a stock option to buy Saf T Lok Incorporated common stock
as follows:
<TABLE>
<CAPTION>
<S> <C>
Stock Option Grant Number............... _____________
Grant Date............................ August __, 1997
Type of Grant*................................... NQSO
Exercise Price per Share..................... $ 0.10
Total Shares Granted.......................... 108,000
Total Amount to Fully Exercise............... $ 10,800
Expiration Date of the Grant........... August __,2004
</TABLE>
The vesting schedule for this grant is as follows: This option is fully vested.
By Order of the Board of Directors of Saf T Lok Incorporated
Validated by _________________________________________
Corporate Secretary
*ISO = Qualified Stock Option
NQSO = Nonqualified Stock Option
6
<PAGE>
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT made this day of May, 1997 by SAF T LOK INCORPORATED,
a Florida corporation (the "Company"), in favor of DAVID P. CHAPMAN (the
"Holder").
Recital:
The Company and the Holder are simultaneously herewith entering into a
Consulting Agreement pursuant to which the Company shall engage the Holder as
its part time chief financial officer (the "Consulting Agreement"). As partial
compensation thereunder the Company agreed to grant the Holder an option to
purchase restricted shares of the Company's common stock.
NOW THEREFORE for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company has agreed, among other things, to
grant to the Holder the Option (as herein defined).
1. Grant. The Company hereby grants to the Holder the right to purchase one
-----
hundred fifty thousand (150,000) newly-issued shares (the "Shares") of the
Company's common stock, $0.01 par value (the "Common Stock"), exercisable at any
time and from time to time through April 30, 2002 (the "Option").
2. Exercise Price. The exercise price per Share for which all or any of the
--------------
Shares may be purchased pursuant to the terms of the Option is two dollars and
fifty cents ($2.50) (the "Exercise Price").
3. Exercise The Option may be exercised by the Holder so long as he is engaged
--------
by the Company pursuant to the Consulting Agreement, or within 90 days of
termination if termination occurred without cause. The term "Cause" as used in
this paragraph shall mean: (1) commission of a felony or a charge of theft,
dishonesty, fraud or embezzlement; (2) failure to adhere to Company's reasonable
directives and policies, willful disobedience or insubordination; (3) disclosing
to a competitor or other unauthorized person, proprietary information,
confidences or trade secrets of the Company or any Parent or Subsidiary; (4)
recruitment of Company or any Parent or Subsidiary personnel on behalf of a
competitor or potential competitor of the Company, any Parent or Subsidiary, or
any successor thereof; (5) solicitation of business on behalf of a competitor or
potential competitor of the Company, any Parent or Subsidiary, or any successor
thereof. The option may be exercised as to all or in increments of ten thousand
(10,000) Shares upon delivery of written notice of intent to exercise in the
form attached hereto as Exhibit "A" to the Company at the following address:
18245 S.E. Federal Highway, Tequesta, Florida 33469, or such other address as
the Company shall designate in a written notice to the Holder, together with (1)
a check payable to the Company for the aggregate Exercise Price of the shares so
purchased, or (2) shares of the Company's common stock or cancellation of a
vested portion of the Stock Option, or any combination of the foregoing in an
amount determined by the Company to be equal to the full option price of the
shares of stock being purchased. Upon exercise of the Option as aforesaid, the
Company shall, as promptly as practicable,and in any event within thirty (30)
days thereafter, execute and deliver to the Holder a certificate or certificates
for the total number of whole Shares for which the Option is being exercised.
The Company covenants and agrees that it shall pay when due any and all state
and federal issue taxes which may be payable in respect of the issuance of any
Shares upon exercise of the Option.
4. Repurchase. If the Consulting Agreement is terminated for cause, the
----------
Company may repurchase the Shares acquired by the Holder hereunder within
ninety (90) days of such termination at a price equal to the average daily
trading price (bid price) of the stock for the five trading days preceding the
date of termination. To exercise its repurchase right, the Company must notify
<PAGE>
the Holder in writing of its intent to repurchase, specifying the date and time
at which payment for the Shares of the Holder to be repurchased is to occur and
the number of Shares to be repurchased. The date specified shall be no later
than thirty (30) days after the notification date. Settlement shall take place
on the repurchase at the Company's headquarters. The Holder shall deliver to the
Company at settlement the certificate or certificates, duly endorsed, evidencing
the Shares being repurchased and the Company shall deliver to the Holder a good
check in payment therefor. In the event the Holder does not perform in
accordance with the preceding sentence, the Company may deposit its check into
escrow for the benefit of the Holder, to be held by the escrow agreement until
withdrawn by the Holder upon compliance with the preceding sentence. Upon such
deposit into escrow, the Holder's Shares being repurchased shall be deemed to
have been transferred from the Holder to the Company upon compliance with the
preceding sentence. Upon such deposit into escrow, the Holder's Shares being
repurchased shall be deemed to have been transferred from the Holder to the
Company and the Holder shall have no further rights therein.
5. Covenants and Conditions. The above provisions are subject to the
------------------------
following:
(a) Neither the Option nor the Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act") or any state
securities laws (the "Blue Sky Laws"). The Option has been acquired for
investment purposes and not with a view to distribution or resale and may not be
pledged, hypothecated, sold, made subject to a security interest, or otherwise
transferred without (i) an effective registration statement under the Securities
Act and applicable Blue Sky Laws, or (ii) an opinion of counsel, which opinion
and counsel shall be reasonably satisfactory to the Company and its counsel and
which will not be unreasonably withheld from the Holder. Transfer of the Shares
issued upon the exercise of the Option shall be restricted in the same manner
and to the same extent as the Option and the certificates representing such
Shares shall bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED UNTIL (I) A
REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAW
SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) IN THE OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED IN CONNECTION WITH THE
PROPOSED TRANSFER.
TRANSFERABILITY IS FURTHER RESTRICTED UNDER THE TERMS OF A STOCK OPTION
AGREEMENT BETWEEN THE COMPANY AND THE OPTIONEE NAMED THEREIN.
-2-
<PAGE>
The Holder agrees to execute such other documents and instruments as counsel for
the Company reasonably deems necessary to effect the compliance of the issuance
of the Option and any Shares issued upon exercise of the Option with applicable
federal and state securities laws.
(b) The Company covenants and agrees that all Shares which may be issued
upon exercise of the Option shall, upon issuance and payment therefor, be
legally and validly issued and outstanding, fully paid and nonassessable, free
from all taxes, liens, charges and preemptive rights, if any, with respect
thereto or to the issuance thereof. The Company shall at all times reserve and
keep available for issuance upon the exercise of the Option such number of
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of the Option.
6. Transfer of Option. The option is exercisable only by the Holder, except
------------------
in the case of Holder's death while under contract to the Company, in which
case, the option is exercisable by Holder's estate's personal representative any
time within six (6) months of Holder's death.
7. Adjustment Upon Changes In Capitalization.
-----------------------------------------
(a) If all or any portion of the Option shall be exercised subsequent to
any stock split, stock dividend, recapitalization, combination of shares of the
Company, or other similar event occurring after the date hereof, then the Holder
exercising the Option shall receive, for the aggregate price paid upon the
exercise, the aggregate number and class of shares which the Holder would have
received if the Option had been exercised immediately prior to such stock split,
stock dividend, recapitalization, combination of shares, or other similar event.
If any adjustment under this Section 7(a) would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of shares subject to the
Option shall be the next higher number of shares, rounding all fractions upward.
Whenever there shall be an adjustment pursuant to this Section 7(a), the Company
shall forthwith notify the Holder of such adjustment, setting forth in
reasonable detail the event requiring the adjustment and the method by which
such adjustment was calculated.
(b) If all or any portion of the Option shall be exercised subsequent to
any merger, consolidation, exchange of shares, separation, reorganization or
liquidation of the Company or other similar event occurring after the date
hereof, as a result of which shares of Common Stock shall be changed into the
same or a different number of shares of the same or another class or classes of
securities of the Company or another entity, then the Holder exercising the
Option shall receive, for the aggregate price paid upon such exercise, the
aggregate number and class of shares which the Holder would have received if the
Option had been exercised immediately prior to such merger, consolidation,
exchange of shares, separation, reorganization or liquidation, or other
-3-
<PAGE>
similar event. If any adjustment under this Section 7(b) would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares subject to this Option shall be the next higher number of shares,
rounding all fractions upward. Whenever there shall be an adjustment pursuant to
this Section 7(b), the Company shall forthwith notify the Holder of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
8. Registration Rights.
-------------------
(a) In the event the Company proposes to file a registration statement
under the Securities Act which relates to a current offering of securities of
the Company (except in connection with an offering on Form S-8 or S-4 or any
other inappropriate form), such registration statement (and the prospectus
included therein) shall also, at the written request to the Company by Holder,
relate to and meet the requirements of the Securities Act with respect to any
public offering of the Shares so as to permit the public sale of all or some
portion of the Shares. The Company shall give written notice to the Holder of
its intention to file a registration statement under the Securities Act relating
to a current offering of securities of the Company not less than fifteen (15)
days prior to the filing of such registration statement. Any written request of
the Holder to include the Shares held by the Holder shall be given to the
Company not less than five (5) days prior to the date specified in the notice as
the date on which such registration statement is intended to be filed with the
Securities and Exchange Commission. Neither the delivery or such notice by the
Company nor of such request by the Holder shall obligate the Company to file
such registration statement and notwithstanding the filing of such registration
statement, the Company may, at any time prior to the effective date thereof,
determine to withdraw such registration statement and not offer the securities
intended to be offered by the Company to which the registration statement
relate, without liability to the Holder on account thereof.
(b) In the event the Holder elects to include the Shares in a registration
statement in accordance with subsection (a) of this Section 8, the Company
shall:
(i) Supply to the Holder a reasonable number of copies of the
preliminary, final and other prospectus in conformity with the requirements of
the Securities Act and the rules and regulations promulgated thereunder and such
other documents as the Holder shall reasonable request;
(ii) Use its best efforts to cause the Shares to be registered,
qualified or exempted under the securities laws of
-4-
<PAGE>
such reasonable number and selection of states selected by the Holder and do any
and all other acts and things which may be necessary or advisable to enable the
Holder to consummate the proposed sale or other disposition of the Shares in
such states; provided, however, that in no event shall the Company be obligated,
----------------
in connection therewith, to qualify to do business or to file a general consent
to service of process in any jurisdiction where it shall not then be qualified;
(iii) Keep effective for a period of ninety (90) days after the initial
effectiveness thereof all such registration statements, and cooperate in taking
such action as may be necessary to keep effective such other registrations,
qualifications or exemptions, and do any and all other acts and things for such
period, not to exceed such ninety (90) days, as may be necessary to permit the
public sale or other disposition of such Shares by the Holder; and
(iv) Pay all costs of the registration statement and the public
offering and such other registrations, qualifications or exemptions, exclusive
of (A) brokers or sales commissions on the sale of the Shares; and (B) any legal
fees incurred by the Holder in connection with the registration statement or
public offering.
9. Notices. The Company shall provide the Holder with a copy of any notice
-------
that the Company is required to provide those persons holding shares of the
Common Stock on the same date such persons receive such notice.
10. Loss, Destruction, Etc. of Agreement. Upon receipt of evidence
------------------------------------
satisfactory to the Company of the loss, theft, mutilation or destruction of
this Agreement, and in the case of any such loss, theft or destruction, upon
delivery of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation, upon surrender
and cancellation of the Agreement, the Company shall make and deliver a new
Agreement of like tenor in lieu of such lost, stolen, destroyed or mutilated
Agreement. Any Agreement executed and delivered under the provisions of this
Section 10 in lieu of any Agreement alleged to be lost, destroyed or stolen, or
in lieu of any mutilated Agreement, shall constitute an original contractual
obligation on the part of the Company.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
-5-
<PAGE>
IN WITNESS WHEREOF, the Company and the Holder have executed this Stock Option
Agreement as of the date first above written.
SAF T LOK INCORPORATED
By:
----------------------------------
John L. Gardner, President
-------------------------------------
DAVID P. CHAPMAN
-6-
<PAGE>
Exhibit "A" to
Stock Option Agreement dated May , 1997
NOTICE OF EXERCISE OF OPTION TO PURCHASE
SHARES OF COMMON STOCK
OF SAF T LOK INCORPORATED
The undersigned does by this notice request that Saf T Lok Incorporated, a
Florida corporation (the "Company"), issue to the undersigned that number of
shares of Common Stock specified below (the "Shares") at the price per Share
specified below pursuant to the exercise of the undersigned's option under the
Stock Option Agreement (the "Agreement") dated May , 1997 between the
undersigned and the Company.
Simultaneously herewith, the undersigned delivers to the Company the purchase
price for the Shares (i.e., that amount which is obtained by multiplying
the number of Shares for which the Option is being exercised by the price
specified), by good check.
The undersigned hereby represents and warrants that the undersigned is acquiring
the Shares for the undersigned's own account and not on behalf of any other
person and without any present view to making a public offering or distribution
of same and without any present intention of selling game at any particular time
or at any particular price or upon the occurrence of any particular event or
circumstance.
The undersigned acknowledges and understands that in connection with the
acquisition of the Shares by the undersigned:
1. The Company has informed the undersigned that the Shares are not registered
under the Securities Act of 1933, as amended (the "Act"), or applicable state
securities or Blue Sky law or laws, and thus the Shares may not be transferred
or otherwise disposed of until the Shares are subsequently registered under the
Act and the applicable state securities or Blue Sky law or laws or an exemption
from such registration requirements is available.
2. The undersigned has been informed that a legend referring to the
restrictions indicated herein on transferability and sale will be placed upon
the certificate(s) evidencing the Shares.
3. If the undersigned is required to file a Form 144 with the Securities and
Exchange Commission in connection with sales of the Shares pursuant to Rule 144
under the Act, the undersigned shall mail a copy of such Form to the Company at
the same time and each time the undersigned mails a copy to the Securities and
Exchange Commission.
A-1
<PAGE>
A. Date of Stock Option Agreement: May , 1997
B. Number of Shares covered by Agreement: 150,000
C. Number of Shares of Common Stock actually to be purchased at this time (must
be 10,000 Shares or whole multiples thereof):
---------------
D. Exercise price per Share: $2.50
E. Aggregate price to be paid for Shares actually purchased (D multiplied by
C): $
--------------
Dated:
--------------------------------
Very truly yours,
--------------------------------
DAVID P. CHAPMAN
Residence:
--------------------------------
--------------------------------
--------------------------------
ACCEPTED:
SAF T LOK INCORPORATED
By:
-----------------------------------
Title:
-----------------------------
Dated:
--------------------------------
A-2
