As filed with the Securities and Exchange Commission on November 12, 1999.
Registration No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
LONGPORT, INC.
----------------------------------------------------
(Exact name of Registrant as specified in its charter)
-----------
Delaware 23-2715528
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
-----------
791 South Chester Road, Swarthmore, Pennsylvania 19081
------------------------------------------------------
(Address of principal executive offices) (Zip Code)
1999 Stock Option Plan
(Full title of the plan)
James R. McGonigle, Chairman
791 S. Chester Road
Swarthmore, Pennsylvania 19081
(800) 289-6863
---------------------------------
(Name, address, including zip code,
and telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to public: From time to
time after the Registration Statement becomes effective.
--------------------------------
Exhibit Index Begins at Page II-6
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
CALCULATION OF REGISTRATION FEE
====================================================================================================
Title of Amount to be Proposed Proposed Amount of
Securities Registered(1) Maximum Maximum Registration
to be Offering Aggregate Fee
Registered Price Per Offering
Security(2) Price(2)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,000,000 Shares $2.75 $2,750,000 $812
$.001 par value
====================================================================================================
</TABLE>
(1) This Registration Statement, pursuant to Rule 416, covers any additional
shares of $.001 par value Common Stock ("shares") which become issuable
under the 1999 Stock Option Plan ("Plan") set forth herein by reason of any
stock dividend, stock split, recapitalization or any other similar
transaction without receipt of consideration which results in an increase
in the number of shares outstanding.
(2) Estimated solely for the purpose of computing the amount of the
Registration fee under Rule 457 of the Securities Act of 1933, as amended.
A total of 1,000,000 shares are issuable under the Plan at an offering
price per share based upon the closing price of the Common Stock on the
Electronic Bulletin Board on November 11, 1999 of $2.75 per share.
ii
<PAGE>
<TABLE>
<CAPTION>
LONGPORT, INC.
PART I
Cross Reference Sheet Required by Item 501
Item in Form S-8 Caption In Prospectus
---------------- ---------------------
<S> <C> <C>
1. General Plan Information.................... Cover Page; Selling Stockholders; Description of the Plan;
Tax Consequences
2. Registrant Information and
Employee Plan Annual
Information................................. Available Information
3. Incorporation of Documents
by Reference................................ Incorporation by Reference
4. Description of Securities................... Description of the Plan; Applicable Securities Laws
Restrictions
5. Interests of Named Experts
and Counsel................................. Legal Matters
6. Indemnification of
Directors and Officers...................... SEC Position Regarding Indemnification
7. Exemption from Registration
Claimed..................................... Not Applicable
8. Exhibits.................................... Not Applicable (See Part II, Item 8)
9. Undertakings................................ Not Applicable (See Part II, Item 9)
</TABLE>
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to the requirements of the Note to Part I of Form S-8 and Rule
428(b)(1) of the Rules under the Securities Act of 1933, as amended, the
information required by Part I of Form S-8 is included in the Reoffer Prospectus
which follows. The Reoffer Prospectus together with the documents incorporated
by reference pursuant to Item 3 of Part II of this Registration Statement
constitute the Section 10(a) Prospectus.
iii
<PAGE>
REOFFER PROSPECTUS
The material which follows, up to but not including the page beginning Part
II of this Registration Statement, constitutes a prospectus, prepared on Form
S-3, in accordance with General Instruction C to Form S-8, to be used in
connection with resales of securities acquired under the Registrant's Stock
Option Plan by officers or directors of the Registrant, as defined in Rule 405
under the Securities Act of 1933, as amended.
iv
<PAGE>
1,000,000 SHARES OF
COMMON STOCK
LONGPORT, INC.
---------------
1999 STOCK OPTION PLAN
---------------
We are offering on behalf of certain of our employees, officers, directors
and consultants up to 1,000,000 shares of our $.001 par value common stock
purchasable by such employees, officers, directors and consultants pursuant to
common stock options under our 1999 Stock Option Plan. As of this date
600,000 options issued under the Plan are outstanding.
---------------
This prospectus will be used by our non-affiliates as well as persons who
are "affiliates" to resell the shares. We will not receive any part of the
proceeds of such sales although we will receive the exercise price for the stock
options.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------
No person is authorized to give any information or to make any
representation regarding the securities we are offering and investors should not
rely on any such information. The information provided in the prospectus is as
of this date only.
----------------
The date of this Prospectus is ____________ , 1999.
1
<PAGE>
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, including Sections 14(a) and 14(c) relating to proxy
and information statements, and in accordance therewith we file reports and
other information with the Securities and Exchange Commission. Reports and other
information which we file can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street N.W., Washington,
D.C. 20549; 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; 7
World Trade Center, New York, New York 10048; and 5670 Wilshire Boulevard, Los
Angeles, California 90036. Copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street N.W., Washington,
D.C. 20549 at prescribed rates. Our Common Stock is traded on the Electronic
Bulletin Board under the symbol "LPTI." Reports, proxy and information
statements may also be inspected at the Commission's Web site at www.sec.gov
We furnish annual reports to our shareholders which include audited
financial statements. We may furnish such other reports as may be authorized,
from time to time, by our Board of Directors.
INCORPORATION BY REFERENCE
Certain documents have been incorporated by reference into this prospectus,
either in whole or in part. We will provide without charge (1) to each person to
whom a prospectus is delivered, upon written or oral request, a copy of any and
all of the information that has been incorporated by reference (not including
exhibits to the information unless such exhibits are specifically incorporated
by reference into the information), and (2) documents and information required
to be delivered to directors pursuant to Rule 428(b). Requests for any
information shall be addressed to us at 791 South Chester Road, Swarthmore, PA
19081 (800) 289-6863.
2
<PAGE>
TABLE OF CONTENTS
-----------------
INTRODUCTION................................................................ 4
SELLING STOCKHOLDERS........................................................ 5
METHOD OF SALE.............................................................. 6
SEC POSITION REGARDING INDEMNIFICATION....................................... 6
DESCRIPTION OF THE PLAN...................................................... 6
APPLICABLE SECURITIES LAW RESTRICTIONS....................................... 8
TAX CONSEQUENCES............................................................. 8
LEGAL MATTERS................................................................ 9
EXPERTS ..................................................................... 9
3
<PAGE>
INTRODUCTION
We have been assigned the patent and intellectual property right to a soft
tissue ultrasound scanner developed at the United Medical and Dental Schools of
Guy's and St. Thomas's Hospitals located in London, England. The Scanner
produces a high resolution image of the skin and the tissue up to two
centimeters below the skin allowing clinicians to check the status of a wound,
and the surrounding tissue, without having to incise the patient or put a
probing device into the fragile wound bed. When used with a coupling gel, the
Scanner can penetrate certain types of wound dressings and produce an image,
thus avoiding risks of infection and protecting the wound surface during the
scanning process. The Scanner has been approved for marketing by the Food and
Drug Administration.
Our address is 791 South Chester Road, Swarthmore, Pennsylvania 19081 and
our telephone number is (800) 289-6863.
4
<PAGE>
SELLING STOCKHOLDERS
This Prospectus covers possible sales by our officers, directors and
affiliates of shares they acquire through exercise of stock options ("options")
granted under the 1999 Stock Option Plan ("Plan"). The names of such individuals
who may be Selling Stockholders from time to time are listed below, along with
the number of shares of common stock currently owned by them and the number of
shares offered for sale. The number of shares offered for sale may be updated in
supplements to this prospectus, which will be filed with the Securities and
Exchange Commission in accordance with Rule 424(b) under the Securities Act of
1933, as amended. The address of each individual is in care of us at 791 South
Chester Road, Swarthmore, Pa 19081.
Number of
Name of Selling Shareholdings Shares Offered
Stockholder Number(1) Percent(1) For Sale
----------- --------- ---------- --------
William Mullen 200,000 1.1% 100,000
5
<PAGE>
(1) Includes all stock options exercisable within 60 days from the date hereof,
including stock options issued under the Plan.
METHOD OF SALE
Sales of the shares offered by this prospectus will be made on the
Electronic Bulletin Board, where our common stock is listed for trading, in
other markets where our common stock may be traded or in negotiated
transactions. Sales will be at prices current when the sales take place and will
generally involve payment of customary brokers' commissions. There is no present
plan of distribution.
SEC POSITION REGARDING INDEMNIFICATION
Our Articles of Incorporation and Bylaws provide for indemnification of
officers and directors, among other things, in instances in which they acted in
good faith and in a manner they reasonably believed to be in, or not opposed to,
our best interests and in which, with respect to criminal proceedings, they had
no reasonable cause to believe their conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to our directors, officers or persons
controlling us under the provisions described above, we have been informed that
in the opinion of the Securities and Exchange Commission, indemnification is
against public policy as expressed in that Act and is therefore unenforceable.
DESCRIPTION OF THE PLAN
In November 1999 our Board of Directors approved the Plan for the benefit
of our employees, officers, directors and consultants. We believe that the Plan
provides an incentive to individuals to act as employees, officers, directors
and consultants and to maintain a continued interest in our operations. All
options were issued under Section 422A of the Internal Revenue Code and are
non-qualified stock options.
The terms of the Plan provide that we are authorized to grant options to
purchase shares of common stock to our employees, officers, directors and
consultants upon the majority consent of our Compensation Committee. Any
6
<PAGE>
employee, officer, director or consultant is eligible to receive options under
the Plan. The option price must not be less than 100% of fair market value.
Options must be exercised within 10 years following the date of grant (or sooner
at the discretion of the Compensation Committee), and the optionee must exercise
options during service to us or within three months of termination of such
service (12 months in the event of death on disability). The Compensation
Committee may extend the termination date of an option granted under the Plan.
A total of 1,000,000 shares of our authorized but unissued common stock
have been reserved for issuance pursuant to the Plan of which 600,000 options
are currently outstanding at an exercise price of $3.00 per share. In the event
of a change in control of our company (as defined in the Plan), all outstanding
options become immediately exercisable.
Options under the Plan may not be transferred, except by will or by the
laws of intestate succession. The number of shares and price per share of the
options under the Plan will be proportionately adjusted to reflect forward and
reverse stock splits. The holder of an option under the Plan has none of the
rights of a shareholder until shares are issued.
The Plan is administered by the Compensation Committee (consisting of not
less than two disinterested directors) which has the power to interpret the
Plan, determine which persons are to be granted options and the amount of such
options. The provisions of the Federal Employee Retirement Income Security Act
of 1974 do not apply to the Plan. Shares issuable upon exercise of options will
not be purchased in open market transactions but will be issued by us from
authorized shares. Payment for shares must be made by optionees in cash from
their own funds. No payroll deductions or other installment plans have been
established. No reports will be made to optionees under the Plan except in the
form of updated information for the prospectus. There are no assets administered
under the Plan, and, accordingly, no investment information is furnished
herewith.
Shares issuable under the Plan may be sold in the open market, without
restrictions, as free trading securities. No options may be assigned,
transferred, hypothecated or pledged by the option holder. No person may create
a lien on any securities under the Plan, except by operation of law. However,
there are no restrictions on the resale of the shares underlying the options.
The Plan will remain in effect until December, 2009 but may be terminated
or extended by our Board of Directors. Additional information concerning the
Plan and its administrators may be obtained from us at the address and telephone
number indicated under "Incorporation by Reference" above.
7
<PAGE>
APPLICABLE SECURITIES LAW RESTRICTIONS
If the optionee is deemed to be an "affiliate" (as that term is defined
under the Securities Act of 1933, as amended), the resale of the shares
purchased upon exercise of options covered hereby will be subject to certain
restrictions and requirements. Our legal counsel may be called upon to discuss
these applicable restrictions and requirements with any optionee who may be
deemed to be an affiliate, prior to exercising an option.
In addition to the requirements imposed by the Securities Act of 1933, the
antifraud provisions of the Securities Exchange Act of 1934 and the rules
thereunder (including Rule 10b-5) are applicable to any sale of shares acquired
pursuant to options.
Up to 1,000,000 shares may be issued under the Plan. We have authorized
25,000,000 shares of common stock, of which 18,120,449 shares were outstanding
as of September 30, 1999. Common shares outstanding and those to be issued upon
exercise of options are fully paid and nonassessable, and each share of stock is
entitled to one vote at all shareholders' meetings. All shares are equal to each
other with respect to lien rights, liquidation rights and dividend rights. There
are no preemptive rights to purchase additional shares by virtue of the fact
that a person is a shareholder of the Company. Shareholders do not have the
right to cumulate their votes for the election of directors.
Our directors must comply with certain reporting requirements and resale
restrictions pursuant to Sections 16(a) and 16(b) of the Securities Exchange Act
of 1934 and the rules thereunder upon the receipt or disposition of any options.
TAX CONSEQUENCES
Upon exercise of the option, the optionee will be taxed, as ordinary
income, on the difference between the exercise price of the option and the fair
market value of the underlying shares on the date of exercise. The fair market
value then becomes the optionee's basis in the underlying shares.
The provision of Section 401(a) of the Code, relating to "qualified"
pension, profit sharing and stock bonus plans, do not apply to the options or
underlying shares covered hereby.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed on
for us by Gary A. Agron, 5445 DTC Parkway, Suite 520, Englewood, Colorado 80111.
EXPERTS
Our financial statements incorporated by reference to our Annual Report on
Form 10-KSB covering the years ended December 31, 1997 and 1998, were audited by
Angell & Deering, certified public accountants, as indicated in their report
with respect thereto, and are incorporated herein by reference.
8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference
The Registrant hereby incorporates by reference in this Registration
Statement the following documents previously filed with the Securities and
Exchange Commission:
(a) The Registrant's definitive Prospectus dated May 15, 1998, included in
the Registrant's Registration Statement on Form SB-2, file no. 333-75236
under the Securities Act of 1033 (the "Act"), which includes the
Registrant's audited financial statements for the year ended December 31,
1997.
(b) The Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1998.
(c) The Registrant's quarterly reports on Form 10-QSB for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999, filed pursuant
to Section 13(a) of the Securities Exchange Act of 1934.
(d) The description of the Registrant's common stock contained in the
Registrant's Registration Statement on Form SB-2 under the Act, file no.
333-75236, including any amendments or reports filed for the purpose of
updating such description.
(e) All other reports and subsequent reports filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934.
All reports and definitive proxy or information statements filed by the
Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold at the time of such amendment will be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
II-1
<PAGE>
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation provide that liability of
directors to the Registrant for monetary damages is eliminated to the full
extent provided by Delaware law. Under Delaware law, a director is not
personally liable to the Registrant or its shareholders for monetary damages for
breach of fiduciary duty as a director except for liability (i) for any breach
of the director's duty of loyalty to the Registrant or its shareholders ; (ii)
for acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law; (iii) for authorizing the unlawful payment of a
dividend or other distribution on the Registrant=s capital stock or the unlawful
purchases of its capital stock; or (iv) for any transaction from which the
director derived any improper personal benefit.
The effect of this provision in the Articles of Incorporation is to
eliminate the rights of the Registrant and its shareholders (through
shareholders' derivative suits on behalf of the Registrant) to recover monetary
damages from a director for breach of the fiduciary duty of care as a director
(including any breach resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (i) through (iv) above. This
provision does not limit or eliminate the rights of any securityholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's duty of care or any liability for violation of the
federal securities laws.
Insofar as indemnification for liabilities arising under the 1993 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 1933 Act and is, therefore, unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following is a list of Exhibits filed as part of the Registration
Statement:
II-2
<PAGE>
4.01 1999 Stock Option Plan.
4.02 Form of Stock Option Agreement under the 1999 Stock Option Plan.
5.01 Opinion of Gary A. Agron
23.01 Consent of Angell & Deering, certified public accountants
Item 9. Undertakings
The Registrant hereby undertakes (1) to file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration
Statement; to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (2) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
Registration Statement; (3) that, for the purpose of determining any liability
under the Securities Act of 1933, each 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; and (4) 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 Plan.
The Registrant hereby undertakes to deliver or cause to be delivered with
the prospectus to each person to whom the prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the Registrant of expenses incurred or
II-3
<PAGE>
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted against the
Registrant by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Swarthmore, Pennsylvania, on November ___, 1999.
LONGPORT, INC.
By: /s/ James R. McGonigle
------------------------------
James R. McGonigle
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James R. McGonigle Chairman, Chief Executive Officer, November __, 1999
- ------------------------------------ Chief Financial Officer,
James R. McGonigle (Principal Accounting Officer)
and Director
/s/ William Mullen President and Director November __, 1999
- ------------------------------------
William Mullen
/s/ Peter E. Cavanaugh Director November __, 1999
- ------------------------------------
Peter E. Cavanaugh
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
----------- ------- --------
4.01 1999 Stock Option Plan
4.02 Form of Stock Option Agreement under the
1999 Stock Option Plan
5.01 Opinion of Gary A. Agron
23.01 Consent of Angell & Deering,
certified public accountants
II-6
Exhibit 4.01
LONGPORT, INC.
1999 STOCK OPTION PLAN
Article I. Establishment and Purpose
------------------------------------
1.1 Establishment. Longport, Inc., a Delaware corporation (the "Company"),
hereby establishes a stock option plan for officers, directors, employees and
consultants who provide services to the Company, as described herein, which
shall be known as the 1999 Stock Option Plan (the "Plan"). It is intended that
options issued under the Plan shall constitute "Nonstatutory Options" within the
meaning of section 422A of the Internal Revenue Code ("Code").
1.2 Purpose. The purpose of this Plan is to enhance the Company's
stockholder value and financial performance by attracting, retaining and
motivating the Company's officers, directors, employees and consultants and to
encourage stock ownership by such individuals by providing them with a means to
acquire a proprietary interest in the Company's success through stock ownership.
Article II. Definitions
-----------------------
2.1 Definitions. Whenever used herein, the following capitalized terms
shall have the meanings set forth below, unless the context clearly requires
otherwise.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee provided for by Article IV hereof.
(d) "Company" means Longport, Inc., a Delaware corporation.
(e) "Consultant" means any person or entity, including an officer or
director of the Company who provides services to the Company and shall
include a Nonemployee Director, as defined below.
(f) "Date of Exercise" means the date the Company receives notice, by an
Optionee, of the exercise of an Option pursuant to section 8.1 of the Plan.
Such notice shall indicate the number of shares of Stock the Optionee
intends to exercise.
(g) "Employee" means any person, including an officer or director of the
Company who is employed by the Company.
(h) "Fair Market Value" means the fair market value of Stock upon which an
Option is granted under this Plan.
1
<PAGE>
(i) "Nonemployee Director" means a member of the Board who is not an
employee of the Company at the time an Option is granted hereunder.
(j) "Nonstatutory Option" means an Option granted under the Plan which is
not intended to qualify as an Incentive Stock Option within the meaning of
section 422A of the Code. Nonstatutory Options may be granted at such times
and subject to such restrictions as the Board shall determine without
conforming to the statutory rules of section 422A of the Code applicable to
Incentive Stock Options.
(k) "Option" means the right, granted under the Plan, to purchase Stock of
the Company at the option price for a specified period of time.
(l) "Optionee" means an officer, director, employee or consultant holding
an Option under the Plan.
(m) "Parent Corporation" shall have the meaning set forth in section 425(e)
of the Code with the Company being treated as the employer corporation for
purposes of this definition.
(n) "Significant Shareholder" means an individual who, within the meaning
of section 422A(b)(6) of the Code, owns securities possessing more than ten
percent of the total combined voting power of all classes of securities of
the Company. In determining whether an individual is a Significant
Shareholder, an individual shall be treated as owning securities owned by
certain relatives of the individual and certain securities owned by
corporations in which the individual is a shareholder; partnerships in
which the individual is a partner; and estates or trusts of which the
individual is a beneficiary, all as provided in section 425(d) of the Code.
(o) "Stock" means the $.001 par value common stock of the Company.
2.2 Gender and Number. Except when otherwise indicated by the context, any
masculine terminology when used in this Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.
Article III. Eligibility and Participation
------------------------------------------
3.1 Eligibility and Participation. All officers, directors, employees and
consultants are eligible to participate in this Plan and receive Nonstatutory
Options hereunder. Optionees in the Plan shall be selected by the Board from
among those officers, directors, employees and consultants who, in the opinion
of the Board, are in a position to contribute materially to the Company's
continued growth and development and to its long-term financial success.
2
<PAGE>
Article IV. Administration
--------------------------
4.1 Administration. The Board shall be responsible for administering the
Plan.
The Board is authorized to interpret the Plan; to prescribe, amend, and
rescind rules and regulations relating to the Plan; to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company; and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations or other actions made or
taken by the Board, pursuant to the provisions of this Plan, shall be final and
binding and conclusive for all purposes and upon all persons.
The Plan shall be administered by the standing Compensation Committee of
the Board (the "Committee") which is an executive committee of the Board, and
consists of not less than three (3) members of the Board, at least one of whom
is not an executive officer or salaried employee of the Company. The members of
the Committee may be directors who are eligible to receive Options under the
Plan, but Options may be granted to such persons only by action of the full
Board and not by action of the Committee. The Committee shall have full power
and authority, subject to the limitations of the Plan and any limitations
imposed by the Board, to construe, interpret and administer the Plan and to make
determinations which shall be final, conclusive and binding upon all persons,
including, without limitation, the Company, the stockholders, the directors and
any persons having any interests in any Options which may be granted under the
Plan, and, by resolution or resolution providing for the creation and issuance
of any such Option, to fix the terms upon which, the time or times at or within
which, and the price or prices at which any Stock may be purchased from the
Company upon the exercise of Options, which terms, time or times and price or
prices shall, in every case, be set forth or incorporated by reference in the
instrument or instruments evidencing such Option, and shall be consistent with
the provisions of the Plan.
The Board may from time to time remove members from or add members to, the
Committee. The Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The Committee shall
select one of its members as Chairman, and shall hold meetings at such times and
places as the Chairman may determine. A majority of the Committee at which a
quorum is present, or acts reduced to or approved in writing by all of the
members of the Committee, shall be the valid acts of the Committee. A quorum
shall consist of two-thirds (2/3) of the members of the Committee.
Where the Committee has been created by the Board, references herein to
actions to be taken by the Board shall be deemed to refer to the Committee as
well, except where limited by the Plan or the Board.
The Board shall have all of the enumerated powers of the Committee but
shall not be limited to such powers. No member of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under it.
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<PAGE>
4.2 Special Provisions for Grants to Officers or Directors. Rule 16b-3 of
the Securities and Exchange Act of 1934 (the "Act") provides that the grant of a
stock option to a director or officer of a company subject to the Act will be
exempt from the provisions of section 16(b) of the Act if the conditions set
forth in said Rule are satisfied. Unless otherwise specified by the Board,
grants of Options hereunder to individuals who are officers or directors of the
Company shall be made in a manner that satisfies the conditions of said Rule.
Article V. Stock Subject to the Plan
------------------------------------
5.1 Number. The total number of shares of Stock hereby made available and
reserved for issuance under the Plan shall be 1,000,000. The aggregate number of
shares of Stock available under this Plan shall be subject to adjustment as
provided in section 5.3. The total number of shares of Stock may be authorized
but unissued shares of Stock, or shares acquired by purchase as directed by the
Board from time to time in its discretion, to be used for issuance upon exercise
of Options granted hereunder.
5.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.
5.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend or split,
recapitalization, reclassification or other similar corporate change, the
aggregate number of shares of Stock set forth in section 5.1 shall be
appropriately adjusted by the Board to reflect such change. The Board's
determination shall be conclusive; provided, however, that fractional shares
shall be rounded to the nearest whole share. In any such case, the number and
kind of shares of Stock that are subject to any Option (including any Option
outstanding after termination of employment) and the Option price per share
shall be proportionately and appropriately adjusted without any change in the
aggregate Option price to be paid therefor upon exercise of the Option.
Article VI. Duration of the Plan
--------------------------------
6.1 Duration of the Plan. The Plan shall be in effect until December 31,
2009 unless extended by the Company's shareholders. Any Options outstanding at
the end of said period shall remain in effect in accordance with their terms.
The Plan shall terminate before the end of said period, if all Stock subject to
it has been purchased pursuant to the exercise of Options granted under the
Plan.
Article VII. Terms of Stock Options
-----------------------------------
7.1 Grant of Options. Subject to section 5.1, Options may be granted to
officers, directors, employees and consultants at any time and from time to time
as determined by the Board. The Board shall have complete discretion in
determining the number of Options granted to each Optionee. In making such
determinations, the Board may take into account the nature of services rendered
4
<PAGE>
by such officers, directors, employees or consultants, their present and
potential contributions to the Company, and such other factors as the Board in
its discretion shall deem relevant.
The Board is expressly authorized to issue amended or replacement Options
with respect to shares of Stock subject to an Option previously granted
hereunder. An amended Option amends the terms of an Option previously granted
(including an extension of the terms of such Option) and thereby supersedes the
previous Option. A replacement Option is similar to a new Option granted
hereunder except that it provides that it shall be forfeited to the extent that
a previously granted Option is exercised, or except that its issuance is
conditioned upon the termination of a previously granted Option.
7.2 No Tandem Options. Options shall not contain terms pursuant to which
the exercise of the Option would affect the Optionee's right to exercise another
Option, or vice versa.
7.3 Option Agreement; Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an Option agreement (the "Option Agreement") that includes the
nontransferability provisions required by section 10.2 hereof and specifies: the
Option price; the term (duration) of the Option; the number of shares of Stock
to which the Option applies; any vesting or exercisability restrictions which
the Board may impose; and any other terms or conditions which the Board may
impose. All such terms and conditions shall be determined by the Board at the
time of grant of the Option.
If not otherwise specified by the Board or by a written agreement between
the Company and the Optionee, the following terms and conditions shall apply to
Options granted under the Plan:
(a) Term. The Option shall be exercisable to purchase Stock for a period of
ten years from the date of grant, as evidenced by the execution date of the
Option Agreement.
(b) Exercise of Option. Unless an Option is terminated as provided
hereunder, an Optionee may exercise his Option for up to, but not in excess
of, the number of shares of Stock subject to the Option specified below,
based on the Optionee's number of years of continuous service with the
Company from the date on which the Option is granted. In the case of an
Optionee who is an officer or employee, continuous service shall mean
continuous employment; in the case of an Optionee who is a director or
consultant, continuous service shall mean the continuous provision of
directorial or consulting services. In applying said limitations, the
amount of shares, if any, previously purchased by the Optionee under the
Option shall be counted in determining the amount of shares the Optionee
can purchase at any time. The Optionee may exercise his Option in the
following amounts:
(i) After one (1) year of continuous services to the Company, the
Optionee may purchase up to 50% of the shares of Stock subject to
the Option;
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<PAGE>
(ii) After two (2) years of continuous services to the Company, the
Optionee may purchase the remaining 50% of the shares of Stock subject
to the Option.
The Board may specify terms and conditions other than those set forth
above, in its discretion.
All Option Agreements shall incorporate the provisions of the Plan by
reference.
7.4 Option Price. No Option granted pursuant to this Plan shall have an
Option price that is less than the Fair Market Value of the Stock on the date
the Option is granted.
7.5 Term of Options. Each Option shall expire at such time as the Board
shall determine, provided, however, that no Option shall be exercisable later
than ten years from the date of its grant.
7.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Board shall in each instance approve, which need not be the same for all
Optionees.
7.7 Payment. Payment for all shares of Stock shall be made at the time that
an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash or
certified funds, or (ii) if acceptable to the Board, in Stock or in some other
form.
Article VIII. Written Notice, Issuance of
Stock Certificates, Stockholder Privileges
------------------------------------------
8.1 Written Notice. An Optionee wishing to exercise an Option shall give
written notice to the Company, in the form and manner prescribed by the Board.
Full payment for the shares exercised pursuant to the Option must accompany the
written notice.
8.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
or to a nominee of the Optionee a certificate or certificates for the requisite
number of shares of Stock.
8.3 Privileges of a Stockholder. An Optionee or any other person entitled
to exercise an Option under this Plan shall not have stockholder privileges with
respect to any Stock covered by the Option until the date of issuance of a stock
certificate for such stock.
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Article IX. Termination of Employment or Services
-------------------------------------------------
Except as otherwise expressly specified by the Board for Nonstatutory
Options, all Options granted under this Plan shall be subject to the following
termination provisions:
9.1 Death. If an Optionee's employment in the case of an Officer, or
provision of services as a Director or Consultant, terminates by reason of
death, the Option may thereafter be exercised at any time prior to the
expiration date of the Option or within 12 months after the date of such death,
whichever period is the shorter, by the person or persons entitled to do so
under the Optionee's will or, if the Optionee shall fail to make a testamentary
disposition of an Option or shall die intestate, the Optionee's legal
representative or representatives. The Option shall be exercisable only to the
extent that such Option was exercisable as of the date of Optionee's death.
9.2 Termination Other Than For Cause or Due to Death. In the event of an
Optionee's termination of employment, in the case of an officer or employee, or
termination of services as a director or consultant, other than by reason of
death, the Optionee may exercise such portion of his Option as was exercisable
by him at the date of such termination (the "Termination Date") at any time
within three (3) months of the Termination Date; provided, however, that where
the Optionee is terminated due to disability within the meaning of Code section
422A, he may exercise such portion of his Option as was exercisable by him on
his Termination Date within one year of his Termination Date. In any event, the
Option cannot be exercised after the expiration of the term of the Option.
Options not exercised within the applicable period specified above shall
terminate.
In the case of an officer, a change of duties or position within the
Company, shall not be considered a termination of employment for purposes of
this Plan. The Option Agreements may contain such provisions as the Board shall
approve with reference to the effect of approved leaves of absence upon
termination of employment.
9.3 Termination for Cause. In the event of an Optionee's termination of
employment, in the case of an officer or employee or termination of services as
a director or consultant, which termination is by the Company for cause, any
Options held by him under the Plan, to the extent not exercised before such
termination, shall forthwith terminate.
Article X. Rights of Optionees
------------------------------
10.1 Service. Nothing in this Plan shall interfere with or limit in any way
the right of the Company to terminate any employee's employment, or any
consultant's services, at any time, nor confer upon any officer, director,
employee or consultant any right to continue in the employ of the Company or to
provide services to the Company.
7
<PAGE>
10.2 Nontransferability. Options granted under this Plan shall be
nontransferable by the Optionee, other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only by
the Optionee.
Article XI. Optionee-Officer's
Transfer or Leave of Absence
----------------------------
11.1 Optionee's Transfer or Leave of Absence. For Plan purposes:
(a) A transfer of an Optionee who is an officer or employee within the
Company, or
(b) a leave of absence for such an Optionee which is duly authorized
in writing by the Company,
shall not be deemed a termination of employment. However, an Optionee may not
exercise an Option during any leave of absence, unless authorized by the Board.
Article XII. Amendment, Modification
and Termination of the Plan
---------------------------
12.1 Amendment, Modification, and Termination of the Plan. The Board may at
any time terminate, and from time to time may amend or modify the Plan. No
amendment, modification or termination of the Plan shall in any manner adversely
affect any outstanding Option under the Plan without the consent of the Optionee
holding the Option.
Article XIII. Acquisition, Merger and Liquidation
-------------------------------------------------
13.1 Acquisition. In the event that an Acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation, to
cancel Options outstanding as of the effective date of Acquisition, whether or
not such Options are then exercisable, in return for payment to the Optionees of
an amount equal to a reasonable estimate of an amount (hereinafter the "Spread")
equal to the difference between the net amount per share of Stock payable in the
Acquisition, or as a result of the Acquisition, less the exercise price of the
Option. In estimating the Spread, appropriate adjustments to give effect to the
existence of the Options shall be made, such as deeming the Options to have been
exercised, with the Company receiving the exercise price payable thereunder, and
treating the shares receivable upon exercise of the Options as being outstanding
in determining the net amount per share. For purposes of this section, an
"Acquisition" shall mean any transaction in which substantially all of the
Company's assets are acquired or in which a controlling amount of the Company's
outstanding shares are acquired, in each case by a single person or entity or an
affiliated group of persons and/or entities. For purposes of this section a
controlling amount shall mean more than 50% of the issued and outstanding shares
of stock of the Company. The Company shall have
8
<PAGE>
such an option regardless of how the Acquisition is effectuated, whether by
direct purchase, through a merger or similar corporate transaction, or
otherwise. In cases where the acquisition consists of the acquisition of assets
of the Company, the net amount per share shall be calculated on the basis of the
net amount receivable with respect to shares upon a distribution and liquidation
by the Company after giving effect to expenses and charges, including but not
limited to taxes, payable by the Company before the liquidation can be
completed.
Where the Company does not exercise its option under this section 13.1, the
remaining provisions of this Article XIII shall apply, to the extent applicable.
13.2 Merger or Consolidation. Subject to any required action by the
stockholders, if the Company shall be the surviving corporation in any merger or
consolidation, any Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.
13.3 Other Transactions. A dissolution or a liquidation of the Company or a
merger and consolidation in which the Company is not the surviving corporation
shall cause every Option outstanding hereunder to terminate as of the effective
date of such dissolution, liquidation, merger or consolidation. However, the
Optionee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Optionee
an option (the "Substitute Option") to purchase its shares on terms and
conditions both as to number of shares and otherwise, which will substantially
preserve to the Optionee the rights and benefits of the Option outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then exercisable, subject to the provisions
of this Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Optionee has been offered a firm commitment and whether
the tendered Substitute Option will substantially preserve to the Optionee the
rights and benefits of the Option outstanding hereunder. In any event, any
Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code section 425(a).
Article XIV. Securities Registration
------------------------------------
14.1 Securities Registration. In the event that the Company shall deem it
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Options or any Stock with respect to which
an Option may be or shall have been granted or exercised, or to qualify any such
Options or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Options or
Stock.
Unless the Company has determined that the following representation is
unnecessary, each person exercising an Option under the Plan may be required by
the Company, as a condition to the issuance of the shares pursuant to exercise
of the Option, to make a representation in writing (a) that the Optionee is
acquiring such shares for his own account for investment and not with a view to,
9
<PAGE>
or for sale in connection with, the distribution of any part thereof, (b) that
before any transfer in connection with the resale of such shares, the Optionee
will obtain the written opinion of counsel for the Company, or other counsel
acceptable to the Company, that such shares may be transferred. The Company may
also require that the certificates representing such shares contain legends
reflecting the foregoing.
Article XV. Tax Withholding
---------------------------
15.1 Tax Withholding. Whenever shares of Stock are to be issued in
satisfaction of Options exercised under this Plan, the Company shall have the
power to require the recipient of the Stock to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements.
Article XVI. Indemnification
----------------------------
16.1 Indemnification. To the extent permitted by law, each person who is or
shall have been a member of the Board shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of judgment in any such
action, suit or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's articles of incorporation
or bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
Article XVII. Requirements of Law
---------------------------------
17.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
17.2 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Delaware.
Article XVIII. Effective Date of Plan
-------------------------------------
18.1 Effective Date. The Plan shall be effective on November 15, 1999.
10
<PAGE>
Article XIX. No Obligation to Exercise Option
---------------------------------------------
20.1 No Obligation to Exercise. The granting of an Option shall impose no
obligation upon the holder thereof to exercise such Option.
Dated at Swarthmore, Pennsylvania, November 15, 1999.
LONGPORT, INC.
By________________________________
James R. McGonigle, Chairman
11
<PAGE>
LONGPORT, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
UNDER THE 1999 STOCK OPTION PLAN
Between:
LONGPORT, INC. (the "Company") and _______________________________________
(the "Optionee") dated _______________.
The Company hereby grants to the Optionee an option (the "Option") to
purchase __________ shares of the Company's common stock ("Stock") under the
Longport, Inc. 1999 Stock Option Plan (the "Plan") upon the following terms and
conditions:
1. Purchase Price. The purchase price of the Stock shall be __________ per
share, which is not less than the fair market value of the Stock on the date of
this Agreement.
2. Non-Statutory Option. The Option shall be a Non-Statutory Option, as
defined in the Plan.
3. Period of Exercise. Unless otherwise agreed to in writing, the Option
will expire ten years from the date of this Agreement. The Option may be
exercised only while the Optionee is actively providing services to the Company
and as provided in Section 5, dealing with termination of services.
4. Unless otherwise agreed to in writing, the Option may be exercised for
up to, but not in excess of, the amounts of shares subject to the Option
specified below, based on the Optionee's number of years of continuous services
with the Company from the date hereof. In applying the following limitations,
the amount of shares, if any, previously purchased by Optionee shall be counted
in determining the amount of shares the Optionee can purchase at any time in
accordance with said limitations. The Optionee may exercise the Option in the
following amounts and in accordance with the conditions set forth in paragraph
7.3 of the Plan:
(1) After one (1) year of continuous services to the Company, the Optionee
may purchase up to 50% of the shares of Stock subject to the Option;
(2) After two (2) years of continuous services to the Company, the Optionee
may purchase the remaining 50% of the shares of Stock subject to the
Option.
In the event the Optionee's services with the Company are terminated due to
Optionee's disability or death as described in paragraphs 5(a) and 5(b), the
foregoing vesting schedule shall be accelerated and the Option shall upon such
disability or death become exercisable in whole or in part.
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<PAGE>
This Option may not be exercised for less than fifty shares at any time unless
the number of shares purchased is the total number purchasable at the time under
the Option.
5. Transferability. This Option is not transferable except by will or the
laws of descent and distribution and may be exercised during the lifetime of the
Optionee only by him.
6. Termination of Services. In the event of a termination in the providing
of services by Optionee, including serving as a Non-employee Director as defined
in the Plan, to the Company, the Option may be exercised (to the extent
exercisable at the date of his termination) by the Optionee within three months
after the date of such termination; provided, however, that:
(a) If the Optionee's consulting relationship is terminated because he is
disabled within the meaning of Internal Revenue Code section 422A, the
Optionee shall have one year rather than three months to exercise the
Option (to the extent exercisable at the date of his termination).
(b) If the Optionee dies, the Option may be exercised (to the extent
exercisable by the Optionee at the date of his death) by his legal
representative or by a person who acquired the right to exercise such
option by bequest or inheritance or by reason of the death of the Optionee,
but the Option must be exercised within one year after the date of the
Optionee's death.
(c) If the Optionee's relationship is terminated for cause, this Option
shall terminate immediately.
(d) In no event (including death of the Optionee) may this Option be
exercised more than ten years from the date hereof.
7. No Guarantee of Services. This Agreement shall in no way restrict the
right of the Company to terminate Optionee's relationship at any time.
8. Investment Representation; Legend. The Optionee (and any other purchaser
under paragraphs 5(a) or 5(b) hereof) represents and agrees that all shares of
Stock purchased by him under this Agreement will be purchased for investment
purposes only and not with a view to distribution or resale. The Company may
require that an appropriate legend be inscribed on the face of any certificate
issued under this Agreement, indicating that transfer of the Stock is
restricted, and may place an appropriate stop transfer order with the Company's
transfer agent with respect to the Stock.
9. Method of Exercise. The Option may be exercised, subject to the terms
and conditions of this Agreement, by written notice to the Company. The notice
shall be in the form attached to this Agreement and will be accompanied by
payment (in such form as the Company may specify) of the full purchase price of
the Stock to be issued, and in the event of an exercise under the terms of
paragraphs 5(a) or 5(b) hereof, appropriate proof of the right to exercise the
Option. The Company will issue and deliver certificates representing the number
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<PAGE>
of shares purchased under the Option, registered in the name of the Optionee (or
other purchaser under paragraph 5 hereof) as soon as practicable after receipt
of the notice.
10. Incorporation of Plan. This Agreement is made pursuant to the
provisions of the Plan, which Plan is incorporated by reference herein. Terms
used herein shall have the meaning employed in the Plan, unless the context
clearly requires otherwise. In the event of a conflict between the provisions of
the Plan and the provisions of this Agreement, the provisions of the Plan shall
govern.
LONGPORT, INC.
By
-------------------------
James R. McGonigle, Chairman
ACCEPTED:
- ----------------------------
Optionee
3
Exhibit 4.02
LONGPORT, INC.
NOTICE OF EXERCISE OF STOCK OPTION ISSUED
UNDER THE 1999 STOCK OPTION PLAN
To: Compensation Committee
Longport, Inc.
791 South Chester Road
Swarthmore, PA 19081
I hereby exercise my Option dated __________ to purchase __________ shares
of no par value common stock of the Company at the option exercise price of
$__________ per share. Enclosed is a certified or cashier's check in the total
amount of $__________, or payment in such other form as the Company has
specified.
I represent to you that I am acquiring said shares for investment purposes
and not with a view to any distribution thereof. I understand that my stock
certificate may bear an appropriate legend restricting the transfer of my shares
and that a stock transfer order may be placed with the Company's transfer agent
with respect to such shares.
I request that my shares be issued in my name as follows:
- --------------------------------------------------------------------------------
(Print your name in the form in which you
wish to have the shares registered)
- --------------------------------------------------------------------------------
(Social Security Number)
- --------------------------------------------------------------------------------
(Street and Number)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Dated: , 19 .
Signature:
-------------------------------
November 15, 1999
Longport, Inc.
791 South Chester Road
Swarthmore, Pa 19081
Gentlemen:
We have assisted in the preparation and filing of Longport, Inc. (the
"Company") of a Registration Statement on Form S-8 (the "Registration
Statement") with the Securities and Exchange Commission relating to 1,000,000
shares of $.001 par value Common Stock (the "Option Shares") of the Company
issuable upon exercise of options granted under the Company's 1999 Stock Option
Plan (the "Option").
We have examined such records and documents and have made such examination
of laws as we considered necessary to form a basis for the opinions set forth
herein. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies
thereof.
Based upon and subject to the foregoing, we are of the opinion that the
Option Shares have been duly authorized and reserved for issuance and such
Option Shares, when issued in accordance with the terms of the Option against
payment therefor, will be duly and validly issued, fully paid and nonassessable.
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Securities Act of 1933, as amended, and applicable state
laws relating to the offer and sales of securities.
We consent to the filing of a copy of this opinion in the Registration
Statement and the use of our opinion in connection herewith.
Very truly yours,
/s/ Gary A. Agron
---------------------------
Gary A. Agron
GAA/bmj
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in the Registration Statement on Form S-8 for the
1999 Stock Option Plan of Longport, Inc. ("Registration Statement") of our
report dated January 19, 1999, except for the second caption in Note 6 as to
which the date is February 18, 1999, which appears on page F-2 of Longport,
Inc.'s Annual Report on Form 10-KSB for the year ended December 31, 1998, and of
our report dated February 24, 1998 which appears on page F-2 of Longport, Inc.'s
definitive prospectus dated May 15, 1998 and to the reference made to our firm
under the caption "Experts" included in or made part of this Registration
Statement.
ANGELL & DEERING
CERTIFIED PUBLIC ACCOUNTANTS
Denver, Colorado
November 12, 1999
