<PAGE> 1
As filed with the Securities and Exchange Commission on June 29, 1998
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INKINE PHARMACEUTICAL COMPANY, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 13-3754005
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SENTRY PARK EAST
1720 WALTON ROAD
BLUE BELL, PA 19422
(Address of Principal Executive Offices) (Zip Code)
STOCK OPTION PLAN
(Full title of the plan)
LEONARD S. JACOB
CHIEF EXECUTIVE OFFICER
INKINE PHARMACEUTICAL COMPANY, INC.
SENTRY PARK EAST
1720 WALTON ROAD
BLUE BELL, PA 19422
(Name and address of agent for service)
(610) 260-9350
(Telephone number, including area code, of agent for service)
Copy to:
CHARLES C. ZALL, ESQUIRE
SAUL, EWING, REMICK & SAUL LLP
CENTRE SQUARE WEST
1500 MARKET STREET, 38TH FLOOR
PHILADELPHIA, PA 19102-2186
(215) 972-8660
See next page for calculation of registration fee.
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Proposed Maximum Maximum
Title of Securities to Amount to be Offering Price Aggregate Amount of Registration Fee (2)
be Registered Registered (1) Per Share(2) Offering Price(2)
- ----------------------- --------------- ------------------ ----------------- ----------------------------------
<S> <C> <C> <C> <C>
Common Stock, Par 3,400,000 $1.3125 $4,462,500 $1,316.44
Value $0.0001 Per
Share
</TABLE>
(1) The Stock Option Plan covers a total of 4,200,000 shares. The
Registrant has previously registered an aggregate of 800,000 of such shares.
(2) The registration fee with respect to these shares has been computed
based on the average of the reported high and low sale prices of shares of
Common Stock on June 25, 1998.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION. (1)
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.(1)
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed in (a) through (c) below are incorporated
by reference in this registration statement; and all documents subsequently
filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be a part
thereof from the date of filing of such documents:
(a) The Registrant's annual report on Form 10-KSB for the
fiscal year ended June 30, 1997, as amended by Form
10-KSB/A, filed on January 14, 1998.
(b) The Registrant's quarterly reports on Form 10-QSB for
the quarter ended September 30, 1997, as amended by
Form 10-QSB/A, filed on November 19, 1997, and for the
quarters ended December 31, 1997 and March 31, 1998.
The Registrant's report on Form 8-K, dated November
21, 1997, as amended by Form 8-K/A, dated December 3,
1997.
(c) The description of the Registrant's Common Stock which
is contained in any Registration Statement or report
of the Registrant filed under the Securities Exchange
Act of 1934, including any amendments or reports filed
for the purposes of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
- --------
(1) The information called for by Part I of Form S-8 is currently included
in the description of the Registrant's Amended and Restated Stock
Option Plan (the "Plan") which is or will be delivered to each employee
selected to participate in the Plan in accordance with Rule 428 under
the Securities Act of 1933, as amended. Pursuant to the Note to Part I
of Form S-8, this information is not being filed with this Form S-8.
1
<PAGE> 4
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 721-726 of the New York General Corporation Law
empower a corporation to indemnify any person made, or threatened to be made, a
party to an action or proceeding, other than one by or in the right of the
corporation, whether civil or criminal, by reason of the fact that he or she was
a director or officer of the corporation or served such corporation in any
capacity. A corporation is empowered to indemnify such director or officer
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorney's fees, if such director or officer acted in good faith, for
a purpose which he or she reasonably believed to be in the best interest of the
corporation and, in criminal actions or proceedings, had no reasonable cause to
believe that his or her conduct was unlawful.
The Registrant's Certificate of Incorporation provides that the
directors of the Registrant shall not be liable for damages for any breach of
duty as directors, except that a director shall be liable if a judgment or other
final adjudication adverse to such director establishes that his acts or
omissions were in bad faith or involved intentional misconduct or knowing
violation of law or that he personally gained in fact a financial profit or
other advantage to which he was not legally entitled or that his acts violated
Section 719 of the New York Business Corporation Law.
The Registrant's Bylaws provide that the directors and officers of the
Registrant shall be indemnified and held harmless by the Corporation to the
fullest extent currently authorized by the New York Business Corporation Law.
These provision indemnify such persons against all expense, liability, and loss
reasonably incurred or suffered by such persons. Further, the Bylaws provide for
the advancement of expenses to persons eligible for indemnification under the
Bylaws. In addition, the Bylaws authorize the Corporation to maintain insurance
to protect itself and any director or officer of the Corporation against any
expense, liability, or loss, whether or not the Corporation would have the power
to indemnify such persons against such expense, liability, or loss under the New
York Business Corporation Law.
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:
5 Opinion of Saul, Ewing, Remick & Saul LLP
23.1 Consent of Richard A. Eisner & Company, LLP, independent
auditors
23.2 Consent of Saul, Ewing, Remick & Saul LLP (contained in
Exhibit No. 5)
24 Power of Attorney (included on signature page of the
Registration Statement)
99 Stock Option Plan, as amended
2
<PAGE> 5
ITEM 9. UNDERTAKINGS
(1) The undersigned Registrant undertakes:
(a) To file, during any period in which offers or
sales are being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933 ("Securities
Act"), unless the information required to be included in such
post-effective amendment is contained in a periodic report
required to be filed by the Registrant or plan pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
("Exchange Act") that is incorporated herein by reference;
(ii) to reflect in the prospectus any facts
or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement, unless the information required to be
included in such post-effective amendment is contained in a
periodic report filed by the Registrant or plan pursuant to
Section 13 or 15(d) of the Exchange Act that is incorporated
herein by reference;
(iii) to include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change
to such information in the registration statement.
(b) That, for the purpose of determining any
liability under the Securities Act, each such post-effective amendment
shall be deemed to be a new Registration Statement related to the
securities offered herein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(d) That, for the purposes of determining any
liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act
that is incorporated by reference in this Registration Statement shall
be deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the provisions described in Item 6 above,
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 Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment of the Registrant of expenses incurred or paid by the director, officer
or controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
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 Blue Bell, Pennsylvania, on June 29, 1998.
InKine Pharmaceutical Company, Inc.
By: /s/ Dr. Leonard S. Jacob
-------------------------------------
Dr. Leonard S. Jacob, M.D., Ph.D.
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Dr. Leonard S. Jacob and Robert
F. Apple, or either of them, his true and lawful attorneys-in-fact, with power
of substitution and resubstitution, to execute in the name of such person, in
his capacity as a director or officer of InKine Pharmaceutical Company, Inc.,
any and all amendments to this Registration Statement on Form S-8 and all
instruments necessary or incidental in connection therewith, and to file the
same with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact, or his substitute, may do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed on June 29, 1998, by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Dr. Leonard S. Jacob Chairman of the Board, and June 29, 1998
- ------------------------------ Chief Executive Officer
Dr. Leonard S. Jacob (Principal Executive Officer)
/s/ Taffy J. Williams, Ph.D. President, Chief Operating June 29, 1998
- ------------------------------ Officer and Director
Taffy J. Williams, Ph.D.
/s/ Robert F. Apple Vice President, Finance and June 29, 1998
- ------------------------------ Administration (Principal
Robert F. Apple Financial Officer)
/s/ J.R. Leshufy Director June 29, 1998
- ------------------------------
J.R. Leshufy
/s/ Steven Ratoff Director June 29, 1998
- ------------------------------
Steven Ratoff
/s/ Thomas P. Stagnaro Director June 29, 1998
- ------------------------------
Thomas P. Stagnaro
/s/ Jerry A. Weisbach, Ph.D. Director June 29, 1998
- ------------------------------
Jerry A. Weisbach, Ph.D.
</TABLE>
4
<PAGE> 7
EXHIBIT INDEX
Exhibit
Number Name of Document
- --------------------------------------------------------------------------------
5 Opinion of Saul, Ewing, Remick & Saul LLP
23.1 Consent of Richard A. Eisner & Company, LLP, independent auditors
23.2 Consent of Saul, Ewing, Remick & Saul LLP (contained in Exhibit No. 5)
24 Power of Attorney (included on signature page of the Registration
Statement)
99 Stock Option Plan, as amended
5
<PAGE> 1
EXHIBIT 5
[Saul, Ewing, Remick & Saul LLP Letterhead]
June 29, 1998
InKine Pharmaceutical Company, Inc.
Sentry Park East
1720 Walton Road
Blue Bell, PA 19422
Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") of InKine Pharmaceutical Company, Inc., a New York corporation (the
"Company"), to be filed with the Securities and Exchange Commission covering the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of 3,400,000 shares of common stock, par value $0.0001 per share, of the
Company (the "Shares"), which Shares are to be issued under the Company's Stock
Option Plan.
We have reviewed the Registration Statement, the Certificate of
Incorporation and By-laws of the Company and such records, certificates and
other documents as we have considered necessary or appropriate for the purposes
of this Opinion.
Based on the foregoing, it is our opinion that:
1. The Company is duly organized, validly existing and in good standing
under the laws of State of New York; and
2. The Shares to be issued in accordance with the terms described in
the Registration Statement have been duly authorized and, when issued in
accordance with the terms described in the Registration Statement, will be
validly issued, fully paid and non-assessable.
We hereby consent to use of our name in the Registration Statement as
counsel who will pass upon the legality of the Shares for the Company and as
having prepared this Opinion as an exhibit to the Registration Statement. In
giving the foregoing consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ SAUL, EWING, REMICK & SAUL LLP
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
InKine Pharmaceutical Company, Inc.:
We consent to the incorporation by reference in the Registration
Statement on Form S-8 (Stock Option Plan) of our report dated July 24, 1997 on
the financial statements of InKine Pharmaceutical Company, Inc. (formerly Panax
Pharmaceutical Company Ltd.) included in the 1997 Annual Report on Form 10-KSB.
/s/ Richard A. Eisner & Company, LLP
New York, New York
June 29, 1998
<PAGE> 1
EXHIBIT 99
INKINE PHARMACEUTICAL COMPANY, INC.(1)
STOCK OPTION PLAN
1. Purpose of Plan. The InKine Pharmaceutical Company, Inc. Stock
Option Plan (the "Plan") is intended as an incentive to attract and retain
persons of training, experience and ability as directors, employees and
non-employee consultants and advisors of InKine Pharmaceutical Company, Inc., a
New York corporation (the "Company") and its subsidiaries, to encourage the
sense of proprietorship of such persons, and to stimulate the active interest of
such persons in the development and financial success of the Company and its
subsidiaries. Stock options ("Options") granted under the Plan may, at the
discretion of the granting authority, but need not, contain such terms as will
qualify the Options as incentive stock options ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor provision thereto.
2. Administration of Plan. The Board of Directors (the "Board") or a
committee appointed and maintained by the Board shall administer the Plan (the
"Plan Administrator"). The Plan Administrator shall consist of at least two(2)
members who shall serve at the pleasure of the Board. The Board or the Plan
Administrator shall have full power and authority: (i) to designate
participants; (ii) to designate Options or any portion thereof as ISOs; (iii) to
determine the terms and provisions of respective Option Agreements (which need
not be identical) including, but not limited to, provisions concerning the time
or times when and the extent to which the Options may be exercised and the
nature and duration of restrictions as to transferability or restrictions
constituting substantial risk of forfeiture; (iv) to accelerate the right of an
optionee to exercise in whole or in part any previously granted Option; and (v)
to interpret the provisions and supervise the administration of the Plan.
The Board or the Plan Administrator shall also have the authority to
grant Options in its discretion to the holder of an outstanding Option, in
addition to or in exchange for the surrender and cancellation of the outstanding
Option, which additional or new Option may have a purchase price lower than
provided in the outstanding Option and containing such other terms and
conditions as the Board or the Plan Administrator may prescribe in accordance
with the provisions of the Plan.
All decisions and selections made by the Board or the Plan
Administrator pursuant to the provisions of the Plan shall be made by a majority
of its members except that no member of the Board or Plan Administrator shall
vote on, or be counted for quorum purposes, with respect to any proposed action
of the Board or Plan Administrator relating to any Option to be granted to that
member. Any decision reduced to writing and signed by a majority of the members
who are authorized to make such decision shall be fully effective as if it had
been made by a majority at a meeting duly held.
Each member of the Board or the Plan Administrator shall be indemnified
and held harmless by the Company against any cost or expense (including counsel
fees) reasonably incurred by him or liability (including any sum paid in
settlement of a claim with the approval of the Company) arising out of any act
or omission to act in connection with the Plan unless arising out of such
member's own fraud
- -----------------------
(1) On November 6, 1997, the Corporation's name was changed from Panax
Pharmaceutical Company Ltd. to InKine Pharmaceutical Company, Inc.
(2) Decreased from three by resolution of the Board of Directors.
<PAGE> 2
or bad faith, to the extent permitted by applicable law. Such indemnification
shall be in addition to any rights of indemnification the member may have as
director or otherwise under the by-laws of the Company, any agreement, vote of
stockholders or disinterested directors, or otherwise.
3. Designation of Participants. The persons eligible for participation
in the Plan as recipients of Options shall include only directors of the Company
and employees and non-employee consultants and advisors of the Company or any of
its subsidiaries; provided that only employees of the Company or of any
subsidiary of the Company shall be eligible to be recipients of ISOs; and
provided further that eligible consultants and advisors shall be only those who
render bona fide services to the Company or any subsidiary, which services may
not be in connection with the offer or sale of securities in a capital-raising
transaction.
4. Stock Reserved for Plan. Subject to adjustment as provided in
paragraph 6 hereof, a total of 4,200,000 (3) shares of the Common Stock, $.0001
par value, of the Company ("Stock") shall be subject to the Plan. The shares
subject to the Plan shall consist of unissued shares, and such number of shares
shall be, and hereby is, reserved for sale for such purpose. Any of such shares
which may remain unsold and which are not subject to outstanding Options at the
termination of the Plan shall cease to be reserved for the purpose of the Plan,
but until termination of the Plan the Company shall at all times reserve a
sufficient number of shares to meet the requirements of the Plan. Should any
Option for any reason expire or be cancelled prior to its exercise or
relinquishment in full, the shares theretofore subject to such Option may again
be subjected to an Option under the Plan.
5. Option Price. (a) The purchase price of each share subject to an ISO
shall not be less than 100% (or 110%, if at the time of grant the optionee owns,
directly or indirectly, more than 10% of the combined voting power of all
classes of stock of the Company or of any subsidiary of the Company) of the Fair
Market Value of such share (as defined in paragraph (b)) on the date the ISO is
granted. The purchase price of each share subject to an Option or any portion
thereof which is not designated by the Board or Committee as an ISO shall not be
less than the Fair Market Value of such share on the date the Option is granted
or the par value of the Company's Stock.
(b) The determination of the Fair Market Value of a share shall be
made by the Board of Directors using such method as it determines to be
reasonable in the circumstances unless the shares of Common Stock are listed or
admitted for trading on a national securities exchange or on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or, if
not so listed or admitted, selling prices are quoted by the National Quotation
Bureau, Inc. If listed or admitted, the Fair Market Value of the shares shall be
the closing sale price on the date of grant or the average of the closing sales
prices for such period (but not longer than thirty days) immediately preceding
the date of grant the Board of Directors or the Plan Administrator deems
reasonable in the circumstances given, consideration the volume of trading in
the shares:
A. On:
(i) the national securities exchange, if listed or
admitted on such exchange; or
(ii)if not so listed or admitted, on NASDAQ, if listed or
admitted on NASDAQ; or
- --------------------------
(3) Increased from 800,000 shares pursuant to shareholder approval on
October 30, 1997.
2
<PAGE> 3
B. If the shares are traded in the over-the-counter market and
not listed or admitted on NASDAQ, the Fair Market Value or the average of the
high bids and low asked prices of a share shall be the mean between the high bid
and low asked prices as quoted for the date of grant or for such period by the
National Quotation Bureau in its "pink sheets" or equivalent record or
publication.
(c) The option price shall be payable upon the exercise of the
Option in cash, by check, or, at the option of the Board or the Committee,
shares of the Company's stock (valued at their Fair Market Value) or other form
satisfactory to the Board or the Committee.
(d) The proceeds of the sale of the Stock subject to an Option are
to be added to the general funds of the Company and used for its corporate
purposes.
6. Adjustments. (a) If the Company is reorganized, or merged or
consolidated with another corporation while unexercised Options remain
outstanding under the Plan, there shall be substituted for the shares subject to
the unexercised portions of such outstanding Options an appropriate number of
shares of each class of stock or other securities of the reorganized, or merged
or consolidated corporation which were distributed to these stockholders of the
Company in respect of such shares; provided, however, that all such Options may
be exercised in full by the optionees as of the effective date of any such
reorganization, merger or consolidation of the Company without regard to the
installment exercise provisions of the Option, by the optionees' giving notice
in writing to the Company of their intention to so exercise.
(b) If the Company is liquidated or dissolved while unexercised
Options remain outstanding under the Plan, then all such outstanding Options may
be exercised in full by the optionees as of the effective date of any such
liquidation or dissolution of the Company without regarding to the installment
exercise provisions of the Option, by the optionees' giving notice in writing to
the Company of their intention to so exercise.
(c) If the outstanding shares of Stock shall at any time be changed
or exchanged by declaration of a stock dividend, stock split, combination or
exchange of shares, recapitalization, extraordinary dividend payable in stock of
a corporation other than the Company, or otherwise in cash, or any other like
event by or of the Company, and as often as the same shall occur, then the
number, class and kind of shares subject to this Plan and subject to any
outstanding Options theretofore granted, and the option prices, shall be
appropriately and equitably adjusted so as to maintain the proportionate number
of shares without changing the aggregate option price; provided, however, that
no adjustment shall be made by reason of the distribution of subscription rights
on outstanding stock.
7. Term and Exercise of Options. (a) The Option Agreement evidencing
the Option shall set forth the terms of the Option, including the period during
which it must be exercised, except that no Option may be exercisable after the
expiration of 10 years from the date of grant or, if granted to a person who
owns more than 10% of the voting stock of the Company at the time of grant,
after the expiration of five years from the date of grant.
(b) Options granted under the Plan shall not be transferable by
optionees other than by will or the laws of descent and distribution, and during
an optionee's lifetime shall be exercisable only by that optionee.
(c) Options granted to the Company's employees or directors may not
be exercised after the termination of the term of employment of the employee or,
if the optionee is a non-employee
3
<PAGE> 4
director, after service as a director, unless (i) prior to the date of
termination of employment or service, the Board or the Plan Administrator shall
authorize, in the relevant Option Agreement or otherwise, an extension of the
term of all or part of the Option beyond the date of such termination for a
period not to exceed the period during which the Option by its terms would
otherwise have been exercisable, (ii) termination of employment is without cause
of the optionee, in which event any Option still in force and unexpired may be
exercised within a period of 90 days from the date of such termination, but only
with respect to the number of shares purchasable at the time of such
termination, or (iii) termination is the result of death or disability, in which
event any Option still in force and unexpired may be exercised in whole or in
part without regard to the installment exercise provisions of the Option, within
a period designated in the Option Agreement, but not less than 60 days from the
date of termination. An Option held by a non-employee consultant or advisor
which is still in force and unexpired on the date of such person's death may be
exercised by such person's legal representative in whole or in part without
regard to the installment exercise provisions of the Option, within a period
designated in the Option Agreement, but not less than 60 days from the date of
death.
(d) The holders of Options shall not be or have any of the rights
or privileges of stockholders of the Company in respect of any shares
purchasable upon the exercise of any part of an Option unless and until,
following exercise, certificates representing such shares shall have been issued
by the Company to such holders.
(e) Any form of Option Agreement authorized by the Plan may contain
such other provisions as the Board or the Plan Administrator may, from time to
time, deem advisable. Without limiting the foregoing, the Board or the Plan
Administrator may, with the consent of the optionee, from time to time cancel
all or any portion of any Option then subject to exercise, and the Company's
obligation in respect of such Option may be discharged by (i) payment to the
optionee of an amount in cash equal to the excess, if any, of the Fair Market
Value of the shares at the date of such cancellation subject to the portion of
the Option so cancelled over the aggregate purchase price of such shares, (ii)
the issuance or transfer to the optionee of shares of Stock with a Fair Market
Value at the date of such transfer equal to any such excess, or (iii) a
combination of cash and shares with a combined value equal to any such excess,
all as determined by the Board or the Plan Administrator in its sole discretion.
(f) Options shall be exercised by the optionee by giving written
notice to the Company, which exercise shall be effective upon receipt of such
notice by the Secretary of the Company at its principal office. The notice shall
specify the number of shares with respect to which the Option is being
exercised.
8. Maximum ISO Award. The aggregate Fair Market Value of Stock
(determined as of the date of the grant of options) with respect to which ISOs
are exercisable for the first time by any optionee during any calendar year
shall not exceed the limitation provided under Section 422 of the Code or any
successor provision thereto.
9. Purchase for Investment. Unless shares of Stock covered by the Plan
have been registered under the Securities Act of 1933, as amended (the "Act"),
or the Company has determined that such registration is unnecessary, each person
exercising an Option under the Plan may be required by the Company to give a
representation in writing that such person is acquiring such shares for his or
her own account, for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof. The Company reserves the
right to appropriately legend certificates evidencing the shares issuable upon
exercise that the shares may not be sold or transferred until they are
registered
4
<PAGE> 5
under the Act or transferred in a transaction exempt from registration
thereunder and to place stop transfer orders on their records as to such shares.
10. Termination of Plan. The Plan shall be effective as of August 1,
1993 and shall terminate on a date 10 years thereafter.
11. Amendments or Termination. The Board may amend, alter, or
discontinue the Plan, except that no amendment or alteration shall be made which
would impair the rights of the holder of any Option theretofore granted without
his consent, and except that no amendment or alteration shall be made which,
without the approval of the stockholders of the Company, would:
(a) Increase the total number of shares reserved for the purposes
of the Plan, except as is provided in Section 6, or decrease the option price
provided in Section 5, or change the class of persons eligible to participate in
the Plan as provided in Section 3; or
(b) Extend the option period provided for in Section 7.
12. Government Regulations. The Plan, and the granting and exercise of
Options hereunder, and the obligation of the Company to sell and deliver shares
or cash under such Options, shall be subject to all applicable laws, rules, and
regulations, including the registration of the shares under to the Securities
Act of 1933, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
13. Governing Law. This Plan shall be deemed made in the State of New
York and shall be governed by and construed and enforced in accordance with the
laws of such State applicable to contracts made and to be performed in such
State, without giving effect to the principles of conflict laws.
5
