<PAGE>
As Filed with the Securities and Exchange Commission on October 2, 1996
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
______________________
IAS COMMUNICATIONS, INC.
(Exact name of issuer as specified on its charter)
OREGON 91-1063549
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
#185-10751 SHELLBRIDGE WAY
RICHMOND, BRITISH COLUMBIA V6X 2W8, CANADA
(Address of principal executive offices)
STOCK OPTION PLAN
(Full title of the plan)
Please send copies of all communications to:
JOHN G. ROBERTSON JAMES L. VANDEBERG, ESQ.
President, IAS Communications, Inc. Graham & Dunn, P.C.
#185-10751 Shellbridge Way 1420 Fifth Avenue, 33rd Floor
Richmond, British Columbia V6X 2W8 Seattle, Washington 98101
(604) 278-5996 (206) 624-8300
(Name, address including zip code, telephone number, including area code, of
agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
Being Being Price Offering Registration
Registered Registered(1) Per Share(2) Price(2) Fee
<S> <C> <C> <C> <C>
=========================================================================================
Class A Voting Stock,
No par value 1,000,000 $2.00 $2,000,000 $690.00
=========================================================================================
</TABLE>
(1) This number represents shares of the Registrant's Class A voting common
stock, no par value per share ("Common Stock") being registered for issuance
under the Stock Option Plan (the "Plan"); together with an indeterminate
number of additional shares which may be necessary to adjust the number of
shares reserved for issuance pursuant to the Plan as a result of any future
stock split, stock dividend or similar adjustment of the outstanding Common
Stock.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rule 457(h)(1) under the Securities Act of
1933, as amended (the "Securities Act"), the price per share is estimated
based on the per share exercise price of the stock options as set forth in
the Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in the Registration
Statement:
(a) The Registrant's annual report on Form 10-KSB.
(b) All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act).
(c) The description of the Common Stock contained in the Registrant's
Registration Statement on Form 10-SB, including any amendments or reports filed
for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, after the date hereof 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 covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Articles of Incorporation provide that the Registrant must
indemnify each of its (i) fiduciaries within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, with respect to any employee
benefit plan, and (ii) directors and officers, to the fullest extent permitted
under the Oregon Business Corporation Act, against all liabilities incurred by
reason of the fact that the person is or was a director or officer of the
Registrant or a fiduciary of an employee benefit plan, or is or was serving at
the request of the Registrant as a director or officer, or fiduciary of an
employee benefit plan, of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.
The effect of these provisions is potentially to indemnify the Registrant's
directors and officers from all costs and expenses of liability incurred by them
in connection with any action, suit or proceeding in which they are involved by
reason of their affiliation with the Registrant.
<PAGE>
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
5.1 Opinion of Graham & Dunn, P.C. regarding the legality of the
Common Stock being registered
23.1 Consent of Elliott Tulk Pryce Anderson, Chartered Accountants
23.2 Consent of Graham & Dunn, P.C. (Included in Opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page and resolutions of the
Registrant's Board of Directors)
99.1 Copy of The Stock Option Plan
</TABLE>
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
- -------- -------
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) 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 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.
<PAGE>
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vancouver, Province of British Columbia, on the 12th
day of September, 1996.
IAS COMMUNICATIONS, INC.
By:/s/ John G. Robertson
---------------------
John G. Robertson
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
Each person whose individual signature appears below hereby authorizes and
appoints John G. Robertson as his true and lawful attorney-in-fact and agent to
act in his name, place and stead and to execute in the name and on behalf of
each person, individually and in each capacity stated below, and to file any and
all amendments to this Registration Statement, including any and all post-
effective amendments.
Pursuant to the requirements of the Securities Act, this Power of Attorney
has been signed by the following persons in the capacities indicated, as of the
____ day of September, 1996. This Power of Attorney may be executed in
counterpart original, which may be transmitted via facsimile.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ James Earl Smith Chairman of the Board of Directors
- --------------------
James Earl Smith
/s/ John G. Robertson President and Chief Executive Officer
- --------------------- and Director
John G. Robertson
/s/ Jennifer Lorette Secretary/Treasurer, Principal
- -------------------- Financial Officer and
Jennifer Lorette Principal Accounting Officer
/s/ Patrick Badgley Director
- -------------------
Patrick Badgley
/s/ Paul E. Lamarche Director
- --------------------
Paul E. Lamarche
</TABLE>
<PAGE>
LIST OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
- -------
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Graham & Dunn, P.C. regarding the legality of the
Common Stock being registered
23.1 Consent of Elliott Tulk Pryce Anderson, Chartered Accountants
23.2 Consent of Graham & Dunn, P.C. (Included in Opinion filed as
Exhibit 5.1)
24.1 Power of Attorney (see Signature Page and resolutions of the
Registrant's Board of Directors)
99.1 Copy of Stock Option Plan
</TABLE>
<PAGE>
[LETTERHEAD OF GRAHAM & DUNN]
EXHIBIT 5.1
September 30, 1996
Board of Directors
IAS Communications, Inc.
10751 Shellbridge Way Ste 185
Richmond, B.C. V6X 2W8
CANADA
Re: 1,000,000 SHARES OF CLASS A VOTING STOCK -- LEGAL OPINION
CONCERNING THE VALIDITY OF SECURITIES OFFERED
Ladies and Gentlemen:
We have acted as counsel to you in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of 1,000,000 shares of Class
A Voting Common Stock, no par value per share (the "Shares") of IAS
Communications, Inc., an Oregon corporation (the "Company"), authorized for
issuance pursuant to the Company's Stock Option Plan. A Registration Statement
on Form S-8 (the "Registration Statement") is being filed under the Act with
respect to the offering of the Shares.
In connection with the offering of the Shares, we have examined: (i) the
Stock Option Plan, which is filed as Exhibit 99.1 to the Registration Statement;
(ii) the Registration Statement, including the remainder of the exhibits; and
(iii) such other documents as we have deemed necessary to form the opinions
hereinafter expressed. As to various questions of fact material to such
opinions, where relevant facts were not independently established, we have
relied upon statements of officers of the Company.
Our opinion assumes that (i) the Shares are issued in accordance with the
terms of the Stock Option Plan and the Company's Bylaws and (ii) the Company
continues to have sufficient shares of Class A voting Common Stock, no par
value, available for issuance upon exercise of the options.
<PAGE>
Graham & Dunn
Board of Directors
September 30, 1996
Page 2
Based and relying solely upon the foregoing, we are of the opinion that (i)
the Shares that will be issued upon the exercise of stock options granted
pursuant to the Stock Option Plan have been duly authorized and (ii) upon
issuance of the Shares by the Company and receipt of the consideration therefor
in accordance with the terms of the Stock Option Plan after the Registration
Statement has become effective under the Act, the Shares will be validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. This consent shall not be construed to cause us to be in
the category of persons whose consent is required to be filed pursuant to
Section 7 of the Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
GRAHAM & DUNN
/s/ James L. Vandenberg
James L. Vandeberg
<PAGE>
[LETTERHEAD OF ELLIOTT TULK PRYCE ANDERSON
CHARTERED ACCOUNTANTS]
EXHIBIT 23.1
CONSENT OF CHARTERED ACCOUNTANTS
--------------------------------
Board of Directors
IAS Communications, Inc.
By reference in the form S-8 registration to the Form 10-KSB we consent to the
use of our report dated June 4, 1996 on the financial statements of IAS
Communications, Inc. as of April 30, 1996 and 1995 that are included in the Form
10-KSB.
Dated this 27th day of September, 1996
ELLIOTT, TULK, PRYCE, ANDERSON
/s/ Don Prest
Don M. Prest, C.A.
Partner
<PAGE>
EXHIBIT 99.1
IAS COMMUNICATIONS, INC.
STOCK OPTION PLAN
1. Purpose of the Plan. The purpose of this Plan is to provide additional
-------------------
incentives to key employees, officers, Directors and consultants of IAS
Communications, Inc., and any of its future Subsidiaries, thereby helping to
attract and retain the best available personnel for positions of responsibility
with those corporations and otherwise promoting the success of the business
activities of such corporations. It is intended that Options issued pursuant to
this Plan constitute either "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code or nonqualified stock options.
2. Definitions. As used herein, the following definitions apply:
-----------
(a) "Board" means the Board of Directors of the Employer.
(b) "Common Stock" means the Employer's Class A common stock.
(c) "Committee" means the Board or the Committee appointed by the
Board in accordance with Section 4(a) of the Plan.
(d) "Continuous Status as an Employee" means the absence of any
interruption or termination of service as an Employee. Continuous Status
as an Employee will not be considered interrupted in the case of sick
leave, military leave, or any other approved leave of absence.
(e) "Employee" means any person employed by or serving as an
employee, consultant, officer or Director of the Employer or any Parent or
Subsidiary of the Employer which is hereafter organized or is acquired by
the Employer.
(f) "Employer" means IAS Communications, Inc., an Oregon corporation.
(g) "Option" means a stock option granted pursuant to the Plan.
Options include both Incentive Stock Options under Section 422 of the
Internal Revenue Code and Nonqualified Stock Options.
(h) "Optioned Stock" means the Common Stock subject to an Option.
(i) "Optionee" means an Employee who receives an Option.
(j) "Plan" means this Employee Stock Option Plan.
(k) "Parent" means any corporation having a relationship with the
Employer as described in Section 424 of the Internal Revenue Code.
(l) "Shareholder-Employee" means an Employee who owns stock
representing more than ten percent (10%) of the total combined voting power
of all classes of stock
1
<PAGE>
of the Employer or of any Parent or Subsidiary. For this purpose, the
attribution of stock ownership rules provided in Section 424 of the
Internal Revenue Code apply.
(m) "Subsidiary" means any bank or other corporation of which not
less than 50% of the voting shares are held by the Employer or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Employer or a Subsidiary.
3. Stock Subject to Options.
------------------------
(a) Number of Shares Reserved. The maximum number of shares which
-------------------------
may be optioned and sold pursuant to the Plan is one million shares of the
Common Stock of the Employer (subject to adjustment as provided in
subparagraph 6(i) of the Plan). During the term of this Plan, the Employer
will at all times reserve and keep available a sufficient number of shares
of its Common Stock to satisfy the requirements of the Plan.
(b) Expired Options. If any outstanding Option expires or becomes
---------------
unexercisable for any reason without having been exercised in full, the
shares of Common Stock allocable to the unexercised portion of such Option
will again become available for other Options.
4. Administration of the Plan.
--------------------------
(a) The Committee. The Plan is administered by the Board directly,
-------------
acting as a Committee of the whole, or if the Board elects, by a separate
Committee appointed by the Board for that purpose and consisting of at
least three Board members. All references in the Plan to the "Committee"
are to such separate Committee, if any is established, or if none is then
in existence, then to the Board as a whole. Once appointed, any such
Committee must continue to serve until otherwise directed by the Board.
From time to time the Board may increase the size of the Committee and
appoint additional members thereof, remove members (with or without cause),
appoint new members in substitution therefor, and fill vacancies however
caused. The Committee must select one of its members as chairman, and shall
hold meetings at such times and places as the chairman or a majority of the
Committee may determine.
At least annually, the Committee must present a written report to the
Board indicating the Employees to whom Options have been granted since the
date of the last such report, and in each case the date or dates of Options
granted, the number of shares optioned, and the Option price per share.
At all times, the Board has the power to remove all members of the
Committee and thereafter to directly administer the Plan as a Committee of
the whole.
(b) Powers of the Committee. Subject to all provisions and
-----------------------
limitations of the Plan, the Committee has the authority and discretion:
2
<PAGE>
(1) to determine the Employees to whom Options are to be
granted, the times of grant, and the number of shares to be
represented by each Option;
(2) to determine the Option price for the shares of Common Stock
to be issued pursuant to each Option, subject to the provisions of
subparagraph 6(b) of the Plan in the case of Incentive Stock Options;
(3) to determine all other terms and conditions of each Option
granted under the Plan (including specifying the dates upon which
Options become exercisable), which need not be identical;
(4) to modify or amend the terms of any Option previously
granted, or to grant substitute Options, subject to the provisions of
subparagraphs 6(l) and 6(m) of the Plan;
(5) to interpret the Plan;
(6) to authorize any person or persons to execute and deliver
Option agreements or to take any other actions deemed by the Committee
to be necessary or appropriate to effectuate the grant of Options by
the Committee;
(7) to make all other determinations and take all other actions
which the Committee deems necessary or appropriate to administer the
Plan in accordance with its terms and conditions.
All actions of the Committee must be either by (i) a majority vote of the
members of the full Committee at a meeting of the Committee, or (ii) by
unanimous written consent of all members of the full Committee without a meeting
thereof.
All decisions, determinations and interpretations of the Committee are
final and binding upon all persons, including all Optionees and any other
holders or persons interested in any Options, unless otherwise expressly
determined by a vote of the majority of the entire Board. No member of the
Committee or of the Board may be held liable for any action or determination
made in good faith with respect to the Plan or any Option.
5. Eligibility. Options may be granted only to Employees whom the
-----------
Committee, in its discretion, determines to be key Employees.
Granting of Options pursuant to the Plan is entirely discretionary with the
Committee, and the adoption of this Plan does not confer upon any Employee any
right to receive any Option or Options pursuant to the Plan unless and until
said Options are granted by the Committee, in its sole discretion. Neither the
adoption of the Plan nor the granting of any Options pursuant to the Plan
confers on any Employee or Optionee any right with respect to continuation of
employment, nor shall the same interfere in any way with his right or with the
right of the Employer or any Subsidiary to terminate his employment at any time.
3
<PAGE>
6. Terms and Conditions of Options. All Options granted pursuant to the
-------------------------------
Plan must be authorized by the Committee, and must be documented in written
agreements in such form as the Committee approves from time to time, which
agreements must comply with and be subject to all of the following terms and
conditions:
(a) Number of Shares; Annual Limitation. Each Option agreement must
-----------------------------------
state whether the Option is an Incentive Stock Option or a Nonqualified
Stock Option and the number of shares subject to Option. Any number of
Options may be granted to a single eligible Employee at any time and from
time to time, except that, in the case of Incentive Stock Options, the
aggregate fair market value (determined as of the time each Option is
granted) of all shares of Common Stock with respect to which Incentive
Stock Options become exercisable for the first time by such Employee in any
one calendar year (under all incentive stock option plans of the Employer,
its Parent and all of its Subsidiaries taken together) may not exceed
$100,000.
(b) Option Price and Consideration. The Option price for the shares
------------------------------
of Common Stock to be issued pursuant to the Option will be the price
determined by the Committee, except that, in the case of Incentive Stock
Options, the price may not be less than the fair market value of the Common
Stock on the date of grant of the Incentive Stock Option.
In the case of an Incentive Stock Option granted to an Employee who,
immediately before the grant of such Incentive Stock Option, is a
Shareholder-Employee, the Incentive Stock Option price must be at least
110% of the fair market value of the Common Stock on the date of grant of
the Incentive Stock Option.
The fair market value is determined by the Committee in its
discretion; provided, however, that in the event that there is a public
-------- -------
market for the Common Stock, the fair market value is the closing price of
the Common Stock as of the date of grant as reported on the National
Association of Securities Dealers Automatic Quotation System (NASDAQ), or,
in the event the Common Stock is listed on a stock exchange, the fair
market value is the closing price on the exchange as of the date of grant
of the Option.
The Option price is payable either (i) in United States dollars upon
exercise of the Option, or (ii) if approved by the Board, other
consideration including without limitation Common Stock of the Employer,
services, or other property.
(c) Term of Option. Under no circumstances may an Option granted
--------------
under the Plan be exercisable after the expiration of ten (10) years from
the date such Option is granted. Further, the term of an Incentive Stock
Option granted to an Employee who, immediately before such Incentive Stock
Option is granted, is a Shareholder-Employee may not exceed five (5) years
from the date of grant of such Option. Subject to the foregoing and other
applicable provisions of the Plan including but not limited to Section 6(e)
herein, the term of each Option must be determined by the Committee in its
discretion.
(d) Manner of Exercise; Rights as Shareholder. An Option is deemed
-----------------------------------------
to be exercised when written notice of exercise has been given to the
Employer in accordance
4
<PAGE>
with the terms of the Option by the person entitled to exercise the Option,
together with full payment for the shares of Common Stock subject to said
notice.
(e) Death of Optionee. In the event of the death of an Optionee who at
-----------------
the time of his death was an Employee and who had been in Continuous Status
as an Employee since the date of grant of the Option, the Option terminates
on the earlier of (i) one year after the date of death of the Optionee, or
(ii) the expiration date otherwise provided in the Option agreement except
that if the expiration date of a Nonqualified Stock Option should occur
during the 90-day period immediately following the Optionee's death, such
Option terminates at the end of such 90-day period. Under these
circumstances, the Option will be exercisable at any time prior to such
termination by the Optionee's estate, or by such person or persons who have
acquired the right to exercise the Option by bequest or by inheritance or
by reason of the death of the Optionee.
(f) Disability of Optionee. If an Optionee's status as an Employee
----------------------
is terminated at any time during the Option period by reason of a
disability (within the meaning of Section 22(e)(3) of the Internal Revenue
Code) and if said Optionee had been in Continuous Status as an Employee at
all times between the date of grant of the Option and the termination of
his status as an Employee, his Incentive Stock Option terminates on the
earlier of (i) one year after the date of termination of his status as an
Employee, or (ii) the expiration date otherwise provided in his Option
agreement.
(g) Termination of Status as an Employee.
------------------------------------
(1) If an Optionee's status as an Employee is terminated at any
time after the grant of his Option for any reason other than death or
disability, as provided in subparagraphs (e) and (f) above, and not by
reason of fraud or willful misconduct, as provided in (2) below, his
Option terminates on the earlier of (i) the same day of the third
month after the date of termination of his status as an Employee, or
(ii) the expiration date otherwise provided in his Option agreement.
(2) If an Optionee's status as an Employee is terminated at any
time after the grant of his Option by reason of fraud or willful
misconduct, then his Option terminates on the date of termination of
his status as an Employee.
(h) Non-transferability of Options. No Option granted pursuant to
------------------------------
the Plan may be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee,
only by the Optionee.
(i) Adjustments Upon Changes in Capitalization. Subject to any
------------------------------------------
required action by the shareholders of the Employer, the number of shares
of Common Stock covered by each outstanding Option, the number of shares of
Common Stock available for grant of additional Options, and the price per
share of Common Stock specified in each outstanding Option, must be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from any stock split or other
5
<PAGE>
subdivision or consolidation of shares, the payment of any stock dividend
(but only on the Common Stock) or any other increase or decrease in the
number of such shares of Common Stock effected without receipt of
consideration by the Employer; provided, however, that conversion of any
-------- -------
convertible securities of the Employer shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made
by the Committee, whose determination in that respect shall be final,
binding and conclusive.
No Incentive Stock Option shall be adjusted by the Committee pursuant
to this subparagraph 6(i) in a manner which causes the Option to fail to
continue to qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code.
Except as otherwise expressly provided in this subparagraph 6(i), no
Optionee shall have any rights by reason of any stock split or the payment
of any stock dividend or any other increase or decrease in the number of
shares of Common Stock. Except as otherwise expressly provided in this
subparagraph 6(i), any issue by the Employer of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
not affect the number of shares or price of Common Stock subject to any
Options, and no adjustments in Options shall be made by reason thereof. The
grant of an Option pursuant to the Plan shall not affect in any way the
right or power of the Employer to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure.
(j) Date of Grant of Option. The date of grant of an Option must,
-----------------------
for all purposes, be the date on which the Committee makes the
determination granting such Option. Said date of grant must be specified
in the Option agreement.
(k) Conditions Upon Issuance of Shares. Shares of Common Stock may
----------------------------------
not be issued with respect to an Option granted under the Plan unless the
exercise of such Option and the issuance and delivery of such shares
pursuant thereto complies with all applicable provisions of law, including,
applicable federal and state securities laws.
As a condition to the exercise of an Option, the Employer may require
the person exercising such Option to represent and warrant at the time of
exercise that the shares of Common Stock are being purchased only for
investment and without any present intention to sell or distribute such
Common Stock if, in the opinion of counsel for the Employer, such a
representation is required by any of the aforementioned relevant provisions
of law.
(l) Merger, Sale of Assets, Etc. In the event of the merger or
---------------------------
reorganization of the Employer with or into any other corporation, or in
the event of a proposed sale of substantially all of the assets of the
Employer, or in the event of a proposed dissolution or liquidation of the
Employer (collectively, "sale transaction"): (1) all outstanding Options
that are not then fully exercisable becomes exercisable immediately before
the date of closing of any sale transaction or such earlier date as the
Committee may fix; and (2) the Committee may, in the exercise of its sole
discretion, terminate all outstanding Options as of a date fixed by the
Committee. In the event of such termination, however,
6
<PAGE>
the Committee must notify each Optionee of such action in writing not less
than sixty (60) days prior to the termination date fixed by the Committee,
and each Optionee has the right to exercise his Option prior to said
termination date.
(m) Substitute Stock Options. In connection with the acquisition or
------------------------
proposed acquisition by the Employer or any Subsidiary, whether by merger,
acquisition of stock or assets, or other reorganization transaction, of a
business any employees of which have been granted incentive stock options,
the Committee is authorized to issue, in substitution of any such
unexercised stock option, a new Option under this Plan which confers upon
the Optionee substantially the same benefits as the old option; provided,
however, that the issuance of any new Option for an old incentive stock
option must satisfy the requirements of Section 424(a) of the Internal
Revenue Code.
(n) Tax Compliance. The Employer, in its sole discretion, may take
--------------
any actions reasonably believed by it to be required to comply with any
local, state, or federal tax laws relating to the reporting or withholding
of taxes attributable to the grant or exercise of any Option or the
disposition of any shares of Common Stock issued upon exercise of an
Option, including, but not limited to, (i) withholding from any Optionee
exercising an Option a number of shares of Common Stock having a fair
market value equal to the amount required to be withheld by Employer under
applicable tax laws, and (ii) withholding from any form of compensation or
other amount due an Optionee or holder of shares of Common Stock issued
upon exercise of an Option any amount required to be withheld by Employer
under applicable tax laws. Withholding or reporting is considered required
for purposes of this subparagraph if any tax deduction or other favorable
tax treatment available to Employer is conditioned upon such reporting or
withholding.
(o) Other Provisions. Option agreements executed pursuant to the
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Plan may contain such other provisions as the Committee deems advisable,
provided in the case of Incentive Stock Options that the provisions are not
inconsistent with the provisions of Section 422 of the Internal Revenue
Code or with any of the other terms and conditions of this Plan.
7. Term of the Plan. The Plan is effective on the earlier of (a) the date
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of adoption of the Plan by the Board; or (b) the date of shareholder approval of
the Plan as provided in paragraph 9 of the Plan. Unless sooner terminated as
provided in subparagraph 8(a) of the Plan, the Plan shall terminate on the tenth
(10th) anniversary of its effective date. Options may be granted at any time
after the effective date and prior to the date of termination of the Plan.
7
<PAGE>
8. Amendment or Early Termination of the Plan.
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(a) Amendment or Early Termination. The Board may terminate the Plan
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at any time. The Board may amend the Plan at any time and from time to
time in such respects as the Board may deem advisable, except that, without
approval of the holders of a majority of the outstanding shares of the
Common Stock, no such revision or amendment may:
(1) increase the number of shares of Common Stock subject to the
Plan other than in connection with an adjustment under subparagraph
6(i) of the Plan; or
(2) change the designation of the class of Employees eligible to
be granted Options, as provided in paragraph 5 of the Plan.
(b) Effect of Amendment or Termination. No amendment or termination
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of the Plan shall affect Options granted prior to such amendment or
termination, and all such Options remain in full force and effect
notwithstanding such amendment or termination.
9. Shareholder Approval. Continuance of the Plan is subject to approval
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of the Plan by affirmative vote of the holders of a majority of the outstanding
shares of Common Stock of the Employer at a duly convened meeting of the
shareholders of the Employer, which approval must occur within twelve (12)
months before or after the date of adoption of the Plan by the Board.
8
