<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1996
REGISTRATION NO. 33-
-------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
SUNBASE ASIA, INC.
------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 94-1612110
---------------------------- ---------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYEE I.D. NUMBER)
OF INCORPORATION OR ORGANIZATION)
19/F., FIRST PACIFIC BANK CENTRE
51-57 GLOUCESTER ROAD
WANCHAI, HONG KONG
------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE)
1995 SUNBASE ASIA, INC. STOCK OPTION PLAN
----------------------------------------------
(FULL TITLE OF THE AGREEMENT)
WILLIAM MCKAY
2240 BUENA VISTA
IRWINDALE, CALIFORNIA 91706
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(818) 358-0181
---------------------------------------------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
DAVID L. FICKSMAN, ESQ.
LOEB & LOEB LLP
1000 WILSHIRE BOULEVARD, SUITE 1800
LOS ANGELES, CALIFORNIA 90017
(213) 688-3400
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM Amount of
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING registration
TO BE REGISTERED REGISTERED/(1)/ PER UNIT/(2)/ PRICE/(2)/ fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 2,500,000 $7 3/4 $19,375,000 $6,681
===============================================================================================
</TABLE>
/(1)/ DETERMINED PURSUANT TO RULE 457(h).
/(2)/ ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE
PURSUANT TO RULES 457(c) AND (h), BASED ON THE AVERAGE OF THE HIGH AND LOW
PRICES OF THE REGISTRANT'S COMMON STOCK ON OCTOBER 17, 1996, AS QUOTED ON
THE NASDAQ NATIONAL MARKET.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
---------------------------------------
The following documents filed with the Commission by the Registrant
are incorporated into this Registration Statement by this reference:
(a) The Registrant's Annual Report for the fiscal year ended December
31, 1995, filed pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(b) The Quarterly Reports on Form 10-Q for the quarterly periods
ending March 31, 1996 and June 30, 1996, filed pursuant to Section 13(a) or
15(d) of the Exchange Act.
(c) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual reports or
the prospectus referred to in (a) above.
(d) The description of the Registrant's common stock contained in the
Registrant's registration statement filed with the Commission under Section 12
of the Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all shares offered hereunder have
been sold or deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
-------------------------
No description of the class of securities to be offered is required
under this item because the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
--------------------------------------
No such interests.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
-----------------------------------------
The only statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or officer of the
Registrant is insured or indemnified in any manner against any liability which
he may incur in his capacity as such, is as follows:
(a) The Registrant has the power under the Nevada Revised Statutes
(the "Statute") to provide indemnification for expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement that are actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit or proceeding other than an action by or in the right of the
Registrant. The person seeking indemnification must have acted in good faith
and in a manner which such person reasonably believed to be in or not opposed to
the best interests of the Registrant. In the case of a criminal action or
proceeding, the person must also have had no reasonable cause to believe such
person's conduct was unlawful. The Statute also authorizes indemnification by
the Registrant in the case of actions or suits by or in the name of the
Registrant. However, such indemnification is limited to expenses actually and
reasonably incurred by the person indemnified in connection with the defense or
settlement of the action or suit. Expenses include attorneys' fees and amounts
paid in settlement. The person indemnified must have acted in good faith and in
a manner which such person reasonably believed to be in, or not opposed to, the
best interests of the Registrant. The Registrant may not indemnify a person for
any claim, issue or matter as to which the person has been adjudged to be liable
to the Registrant or for amounts paid in settlement unless a court determines
that in view of all the circumstances, the person is fairly and reasonably
entitled to indemnification.
The Registrant is authorized to indemnify, subject to the respective
conditions described above, past or present directors, officers, employees or
agents of the Registrant. The Statute also authorizes indemnification of
persons who are or were serving at the request of the Registrant as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
Pursuant to the Statute, the Registrant must indemnify a director,
officer, employee or agent to the extent such individual is successful on the
merits "or otherwise" in the defense of any action, suit or proceeding or in the
defense of any claim, issue or matter therein. This mandatory indemnification
is against expenses actually and reasonably incurred by the indemnitee in
connection with a defense. Such indemnification is required even if the
indemnitee is successful by reason of a defense that is not based on the merits,
such as the statute of limitations. In addition, an indemnitee would be
considered successful in the defense of an action, suit or proceeding if it is
dismissed with prejudice pursuant to a negotiated settlement agreement which
does not provide for any payment or assumption of liability.
Indemnification is authorized only upon a determination that
indemnification is proper under the circumstances. Unless ordered by a court,
the determination must be made
3
<PAGE>
by the shareholders, the board of directors (by a majority vote of a quorum
consisting of directors who are not parties to the action), or by independent
legal counsel.
The Statute provides that the Articles of Incorporation, Bylaws or an
agreement may provide that the expenses incurred by an officer or director must
be paid by the Registrant as they are incurred and in advance upon receipt of an
undertaking to repay if it is ultimately determined by a court of competent
jurisdiction that such person is not entitled to be indemnified by the
corporation.
(b) The Articles of Incorporation and Bylaws of Registrant generally
require indemnification of officers and directors to the fullest extent allowed
by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
-----------------------------------
Not Applicable.
ITEM 8. EXHIBITS.
--------
The following is a complete list of exhibits filed as a part of this
Registration Statement, which Exhibits are incorporated herein.
4.1 1995 Sunbase Asia, Inc. Stock Option Plan
5.1 Opinion of Loeb & Loeb LLP
23.1 Consent of Ernst & Young
ITEM 9. UNDERTAKINGS.
------------
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (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;
4
<PAGE>
(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;
(2) That, for the purpose of determining any liability under the
Securities Act, such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold by the
termination of the offering.
(b) For 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 Securities Exchange Act of 1934, that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(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
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by 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.
5
<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 Los Angeles, California, on October 21, 1996.
SUNBASE ASIA, INC.
By: /s/ William McKay
------------------------------
Name: William McKay
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Gunter Gao Chairman and Director October 21, 1996
- --------------------------------
Gunter Gao
/s/ Billy Kan Vice Chairman and Director October 21, 1996
- --------------------------------
Billy Kan
/s/ William McKay Chief Executive Officer, October 21, 1996
- -------------------------------- President and Director
William McKay
/s/ (Roger) Li Yuen Fai Vice President and Chief October 21, 1996
- -------------------------------- Financial Officer and
(Roger) Li Yuen Fai Director
/s/ (Franco) Ho Cho Hing Director October 21, 1996
- --------------------------------
(Franco) Ho Cho Hing
/s/ (Dickens) Chang Shing Yam Chief Accounting Officer October 21, 1996
- --------------------------------
(Dickens) Chang Shing Yam
/s/ Philip P.Y. Yuen Director October 21, 1996
- --------------------------------
Philip P.Y. Yuen
/s/ George Raffini Director October 21, 1996
- --------------------------------
George Raffini
</TABLE>
6
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ---------- ----------- ----
<S> <C> <C>
4.1 1995 Sunbase Asia, Inc. Stock Option Plan 8
5.1 Opinion of Loeb & Loeb LLP 18
23.1 Consent of Ernst & Young 20
</TABLE>
7
<PAGE>
EXHIBIT 4.1
SUNBASE ASIA, INC.
------------------
1995 STOCK OPTION PLAN
----------------------
1. ESTABLISHMENT, PURPOSE AND DEFINITIONS.
---------------------------------------
(a) The 1995 Stock Option Plan (the "1995 Option Plan") of Sunbase
Asia, Inc., a Nevada corporation (the "Company"), is hereby adopted. The 1995
Option Plan shall provide for the issuance of incentive stock options ("ISOs")
and nonqualified stock options ("NSOs").
(b) The purpose of this 1995 Option Plan is to promote the long-
term success of the Company by attracting, motivating and retaining key
executives, consultants and directors (the "Participants") through the use of
competitive long-term incentives which are tied to stockholder value. The 1995
Option Plan seeks to balance Participants' and stockholder interests by
providing incentives to the Participants in the form of stock options which
offer rewards for achieving the long-term strategic and financial objectives of
the Company.
(c) The 1995 Option Plan is intended to provide a means whereby
Participants may be given an opportunity to purchase shares of Stock of the
Company pursuant to (i) options which may qualify as ISOs under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), or
(ii) NSOs which may not so qualify.
(d) The term "Affiliates" as used in this 1995 Option Plan means
parent or subsidiary corporations, as defined in Section 424(e) and (f) of the
Code (but substituting "the Company" for "employer corporation"), including
parents or subsidiaries which become such after adoption of the 1995 Option
Plan.
2. ADMINISTRATION OF THE PLAN.
---------------------------
(a) The 1995 Option Plan shall be administered by the Compensation
Committee (the "Committee") appointed by the Board of Directors of the Company
from time to time (the "Board").
(b) The Committee shall consist entirely of directors qualifying as
"disinterested persons" as such term is defined in Rule 16b-3 promulgated by the
Securities and Exchange Commission (the "Committee"). The Committee shall
consist of at least two Disinterested Directors. Members of the Committee shall
serve at the pleasure of the Board. None of the members of the Committee shall
receive, while serving on the Committee, a grant or award of equity securities
under (i) the 1995 Option Plan or (ii) any other plan of the Company or its
Affiliates under which the participants are entitled to acquire Stock (including
restricted Stock), stock options, stock bonuses, related rights or stock
appreciation rights of the Company or any of its Affiliates, other than pursuant
to transactions in any such other plan which do not disqualify a director from
being a disinterested person under Rule 16b-3.
<PAGE>
(c) The Committee may from time to time determine which employees
of the Company or its Affiliates or other individuals or entities (each an
"option holder") shall be granted options under the 1995 Option Plan, the terms
thereof (including without limitation determining whether the option is an
incentive stock option and the times at which the options shall become
exercisable), and the number of shares of Stock for which an option or options
may be granted.
(d) If rights of the Company to repurchase Stock are imposed, the
Board or the Committee may, in its sole discretion, accelerate, in whole or in
part, the time for lapsing of any rights of the Company to repurchase shares of
such Stock or forfeiture restrictions.
(e) If rights of the Company to repurchase Stock are imposed, the
certificates evidencing such shares of Stock awarded hereunder, although issued
in the name of the option holder concerned, shall be held by the Company or a
third party designated by the Committee in escrow subject to delivery to the
option holder or to the Company at such times and in such amounts as shall be
directed by the Board under the terms of this 1995 Option Plan. Share
certificates representing Stock which is subject to repurchase rights shall have
imprinted or typed thereon a legend or legends summarizing or referring to the
repurchase rights.
(f) The Board or the Committee shall have the sole authority, in
its absolute discretion, to adopt, amend and rescind such rules and regulations,
consistent with the provisions of the 1995 Option Plan, as, in its opinion, may
be advisable in the administration of the 1995 Option Plan, to construe and
interpret the 1995 Option Plan, the rules and regulations, and the instruments
evidencing options granted under the 1995 Option Plan and to make all other
determinations deemed necessary or advisable for the administration of the 1995
Option Plan. All decisions, determinations and interpretations of the Committee
shall be binding on all option holders under the 1995 Option Plan.
3. STOCK SUBJECT TO THE PLAN.
--------------------------
(a) "Stock" shall mean Common Stock of the Company or such stock as
may be changed as contemplated by Section 3(c) below. Stock shall include
shares drawn from either the Company's authorized but unissued shares of Common
Stock or from reacquired shares of Common Stock, including without limitation
shares repurchased by the Company in the open market.
(b) Options may be granted under the 1995 Option Plan from time to
time to eligible persons to purchase an aggregate of up to 2.5 million shares of
Stock. Stock options awarded pursuant to the 1995 Option Plan which are
forfeited, terminated, surrendered or cancelled for any reason prior to exercise
shall again become available for grants under the 1995 Option Plan (including
any option cancelled in accordance with the cancellation regrant provisions of
Section 6(f) herein).
(c) If there shall be any change in the Stock subject to the 1995
Option Plan, including Stock subject to any option granted hereunder, through
merger, consolidation,
2
<PAGE>
recapitalization, reorganization, reincorporation, stock split, reverse stock
split, stock dividend, combination or reclassification of the Company's Stock or
other similar events, an appropriate adjustment shall be made by the Committee
in the number of shares and/or the option price with respect to any unexercised
shares of Stock. Consistent with the foregoing, in the event that the
outstanding Stock is changed into another class or series of capital stock of
the Company, outstanding options to purchase Stock granted under the 1995 Option
Plan shall become options to purchase such other class or series and the
provisions of this Section 3(c) shall apply to such new class or series.
(d) The Company may grant options under the 1995 Option Plan in
substitution for options held by employees of another company who become
employees of the Company as a result of merger or consolidation. The Company
may direct that substitute options be granted on such terms and conditions as
deemed appropriate by the Board or the Committee.
(e) The aggregate number of shares of Stock approved by the 1995
Option Plan may not be exceeded without amending the 1995 Option Plan and
obtaining stockholder approval within twelve months of such amendment.
4. ELIGIBILITY.
------------
Persons who shall be eligible to receive stock options granted under
the 1995 Option Plan shall be those individuals and entities as the Committee in
its discretion determines should be awarded such incentives given the best
interests of the Company; provided, however, that (i) ISOs may only be granted
to employees of the Company and its Affiliates and (ii) any person holding
capital stock possessing more than 10% of the total combined voting power of all
classes of Stock of the Company or any Affiliate shall not be eligible to
receive ISOs unless the exercise price per share of Stock is at least 110% of
the fair market value of the Stock on the date the option is granted.
5. EXERCISE PRICE FOR OPTIONS GRANTED UNDER THE PLAN.
--------------------------------------------------
(a) All ISOs will have option exercise prices per option share not
less than the fair market value of a share of the Stock on the date the option
is granted, except that in the case of ISOs granted to any person possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or any Affiliate the price shall be not less than 110% of such fair
market value. The price of ISOs or NSOs granted under the 1995 Option Plan
shall be subject to adjustment to the extent provided in Section 3(c) above.
(b) The fair market value on the date of grant shall be determined
based upon the closing price on an exchange on that day or, if the Stock is not
listed on an exchange, on the average of the closing bid and asked prices in the
Over the Counter Market on that day.
3
<PAGE>
6. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
(a) Each option granted pursuant to the 1995 Option Plan shall be
evidenced by a written stock option agreement (the "Option Agreement") executed
by the Company and the person to whom such option is granted. The Option
Agreement shall designate whether the option is an ISO or an NSO.
(b) The term of each ISO and NSO shall be no more than 10 years,
except that the term of each ISO issued to any person possessing more than 10%
of the voting power of all classes of stock of the Company or any Affiliate
shall be no more than 5 years. Subsequently issued options, if Stock becomes
available because of further allocations or the lapse of previously outstanding
options, will extend for terms determined by the Board or the Committee but in
no event shall an ISO be exercised after the expiration of 10 years from the
date of its grant.
(c) In the case of ISOs, the aggregate fair market value
(determined as of the time such option is granted) of the Stock to which ISOs
are exercisable for the first time by such individual during any calendar year
(under this 1995 Option Plan and any other plans of the Company or its
Affiliates if any) shall not exceed the amount specified in Section 422(d) of
the Internal Revenue Code, or any successor provision in effect at the time an
ISO becomes exercisable.
(d) The Option Agreement may contain such other terms, provisions
and conditions regarding vesting, repurchase or other provisions as may be
determined by the Committee. To the extent such terms, provisions and
conditions are inconsistent with this 1995 Option Plan, the specific provisions
of the Option Agreement shall prevail. If an option, or any part thereof, is
intended to qualify as an ISO, the Option Agreement shall contain those terms
and conditions which the Committee determine are necessary to so qualify under
Section 422 of the Internal Revenue Code.
(e) The Committee shall have full power and authority to extend the
period of time for which any option granted under the 1995 Option Plan is to
remain exercisable following the option holder's cessation of service as an
employee, director or consultant, including without limitation cessation as a
result of death or disability; provided, however, that in no event shall such
option be exercisable after the specified expiration date of the option term.
(f) The Committee shall have full power and authority to effect at
any time and from time to time, with the consent of the affected option holders,
the cancellation of any or all outstanding options under the 1995 Option Plan
and to grant in substitution new options under the 1995 Option Plan covering the
same or different numbers of shares of Stock with the same or different exercise
prices.
(g) As a condition to option grants under the 1995 Option Plan, the
option holder agrees to grant the Company the repurchase rights as Company may
at its option require and as may be set forth in a separate repurchase
agreement.
4
<PAGE>
(h) Any option granted under the 1995 Option Plan may be subject to
a vesting schedule as provided in the Option Agreement and, except as provided
in this Section 6 herein, only the vested portion of such option may be
exercised at any time during the Option Period. All rights to exercise any
option shall lapse and be of no further effect whatsoever immediately if the
option holder's service as an employee is terminated for "Cause" (as hereinafter
defined) or if the option holder voluntarily terminates the option holder's
service as an employee. The unvested portion of the option will lapse and be of
no further effect immediately upon any termination of employment of the option
holder for any reason. In the remaining cases where the option holder's service
as an employee is terminated by the employee voluntarily or due to death,
permanent disability, or is terminated by the Company (or its affiliates)
without Cause at any time, the vested portion of the option will extend for a
period of three (3) months following the termination of employment and shall
lapse and be of no further force or effect whatsoever only if it is not
exercised before the end of such three (3) month period. "Cause" shall be
defined in an Employment Agreement between Company and option holder and if none
there shall be "Cause" for termination if (i) the option holder is convicted of
a felony, (ii) the option holder engages in any fraudulent or other dishonest
act to the detriment of the Company, (iii) the option holder fails to report for
work on a regular basis, except for periods of authorized absence or bona fide
illness, (iv) the option holder misappropriates trade secrets, customer lists or
other proprietary information belonging to the Company for the option holder's
own benefit or for the benefit of a competitor, (v) the option holder engages in
any willful misconduct designed to harm the Company or its stockholders, or (vi)
the option holder fails to perform properly assigned duties.
(i) No fractional shares of Stock shall be issued under the 1995
Option Plan, whether by initial grants or any adjustments to the 1995 Option
Plan.
7. USE OF PROCEEDS.
----------------
Cash proceeds realized from the sale of Stock under the 1995 Option
Plan shall constitute general funds of the Company.
8. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
-------------------------------------------------
(a) The Board may at any time suspend or terminate the 1995 Option
Plan, and may amend it from time to time in such respects as the Board may deem
advisable provided that (i) such amendment, suspension or termination complies
with all applicable state and federal requirements and requirements of any stock
exchange on which the Stock is then listed, including any applicable requirement
that the 1995 Option Plan or an amendment to the 1995 Option Plan be approved by
the stockholders, and (ii) the Board shall not amend the 1995 Option Plan to
increase the maximum number of shares of Stock subject to ISOs under the 1995
Option Plan or to change the description or class of persons eligible to receive
ISOs under the 1995 Option Plan without the consent of the stockholders of the
Company sufficient to approve the 1995 Option Plan in the first instance. The
1995 Option Plan shall terminate
5
<PAGE>
on the earlier of (i) January 2, 2006 or (ii) the date on which no additional
shares of Stock are available for issuance under the 1995 Option Plan.
(b) No option may be granted during any suspension or after the
termination of the 1995 Option Plan, and no amendment, suspension or termination
of the 1995 Option Plan shall, without the option holder's consent, alter or
impair any rights or obligations under any option granted under the 1995 Option
Plan.
(c) The Committee, with the consent of affected option holders,
shall have the authority to cancel any or all outstanding options under the 1995
Option Plan and grant new options having an exercise price which may be higher
or lower than the exercise price of cancelled options.
(d) Nothing contained herein shall be construed to permit a
termination, modification or amendment adversely affecting the rights of any
option holder under an existing option theretofore granted without the consent
of the option holder.
9. ASSIGNABILITY OF OPTIONS AND RIGHTS.
------------------------------------
Each option granted pursuant to this 1995 Option Plan shall, during
the option holder's lifetime, be exercisable only by the option holder, and
neither the option nor any right to purchase Stock shall be transferred,
assigned or pledged by the option holder, by operation of law or otherwise,
other than by will upon a beneficiary designation executed by the option holder
and delivered to the Company or the laws of descent and distribution.
10. PAYMENT UPON EXERCISE.
----------------------
Payment of the purchase price upon exercise of any option or right to
purchase Stock granted under this 1995 Option Plan shall be made by giving the
Company written notice of such exercise, specifying the number of such shares of
Stock as to which the option is exercised. Such notice shall be accompanied by
payment of an amount equal to the Option Price of such shares of Stock. Such
payment may be (i) cash, (ii) by check drawn against sufficient funds, (iii) by
delivery to the Company of the option holder's promissory note, (iv) such other
consideration as the Committee, in its sole discretion, determines and is
consistent with the 1995 Option Plan's purpose and applicable law, or (v) any
combination of the foregoing. Any Stock used to exercise options to purchase
Stock (including Stock withheld upon the exercise of an option to pay the
purchase price of the shares of Stock as to which the option is exercised) shall
be valued in accordance with procedures established by the Committee. Any
promissory note used to exercise options to purchase Stock shall be a full
recourse, interest-bearing obligation secured by Stock in the Company being
purchased and containing such terms as the Committee shall determine. If a
promissory note is used to exercise options the option holder agrees to execute
such further documents as the Company may deem necessary or appropriate in
connection with issuing the promissory note, perfecting a security interest in
the stock purchased with the promissory note and any related terms the Company
may propose. Such further documents may include, without limitation, a security
6
<PAGE>
agreement and an assignment separate from certificate. If accepted by the
Committee in its discretion, such consideration also may be paid through a
broker-dealer sale and remittance procedure pursuant to which the option holder
(I) shall provide irrevocable written instructions to a designated brokerage
firm to effect the immediate sale of the purchased Stock and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate option price payable for the purchased Stock plus
all applicable Federal and State income and employment taxes required to be
withheld by the Company in connection with such purchase and (II) shall provide
written directives to the Company to deliver the certificates for the purchased
Stock directly to such brokerage firm in order to complete the sale transaction.
11. WITHHOLDING TAXES.
------------------
(a) Shares of Stock issued hereunder shall be delivered to an
option holder only upon payment by such person to the Company of the amount of
any withholding tax required by applicable federal, state, local or foreign law.
The Company shall not be required to issue any Stock to an option holder until
such obligations are satisfied.
(b) The Committee may, under such terms and conditions as it deems
appropriate, authorize an option holder to satisfy withholding tax obligations
under this Section 11 by surrendering a portion of any Stock previously issued
to the option holder or by electing to have the Company withhold shares of Stock
from the Stock to be issued to the option holder, in each case having a fair
market value equal to the amount of the withholding tax required to be withheld.
12. RATIFICATION.
-------------
This 1995 Option Plan and all options issued under this 1995 Option
Plan shall be void unless this 1995 Option Plan is or was approved or ratified
by (i) the Board; and (ii) a majority of the votes cast at a stockholder meeting
at which a quorum representing at least a majority of the outstanding shares of
Stock is (either in person or by proxy) present and voting on the 1995 Option
Plan within twelve months of the date this 1995 Option Plan is adopted by the
Board. No ISOs shall be exercisable prior to the date such stockholder approval
is obtaine d.
13. CORPORATE TRANSACTIONS.
-----------------------
(a) For the purpose of this Section 13, a "Corporate Transaction"
shall include any of the following stockholder-approved transactions to which
the Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Company's incorporation;
7
<PAGE>
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company in liquidation or dissolution of
the Company; or
(iii) any reverse merger in which the Company is the surviving
entity but in which beneficial ownership of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to holders different from those who held
such securities immediately prior to such merger.
(b) Upon the occurrence of a Corporate Transaction, if the
surviving corporation or the purchaser, as the case may be, does not assume the
obligations of the Company under the 1995 Option Plan, then irrespective of the
vesting provisions contained in individual option agreements, all outstanding
options shall become immediately exercisable in full and each option holder will
be afforded an opportunity to exercise their options prior to the consummation
of the merger or sale transaction so that they can participate on a pro rata
basis in the transaction based upon the number of shares of Stock purchased by
them on exercise of options if they so desire. To the extent that the 1995
Option Plan is unaffected and assumed by the successor corporation or its parent
company a Corporate Transaction will have no effect on outstanding options and
the options shall continue in effect according to their terms.
(c) Each outstanding option under this 1995 Option Plan which is
assumed in connection with the Corporate Transaction or is otherwise to continue
in effect shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply and pertain to the number and class of securities which
would have been issued to the option holder in connection with the consummation
of such Corporate Transaction had such person exercised the option immediately
prior to such Corporate Transaction. Appropriate adjustments shall also be made
to the option price payable per share, provided the aggregate option price
payable for such securities shall remain the same. In addition, the class and
number of securities available for issuance under this 1995 Option Plan
following the consummation of the Corporate Transaction shall be appropriately
adjusted.
(d) The grant of options under this 1995 Option Plan shall in no
way affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
14. LOANS OR GUARANTEE OF LOANS.
----------------------------
(a) The Committee may, in its discretion, assist any option holder
in the exercise of options granted under this 1995 Option Plan, including the
satisfaction of any Federal and State income and employment tax obligations
arising therefrom by (i) authorizing the extension of a loan from the Company to
such option holder, (ii) permitting the option holder to pay the exercise price
for the Stock in installments over a period of years or (iii) authorizing a
guarantee by the Company of a third party loan to the option holder. The terms
of any loan, installment method of payment or guarantee (including the interest
rate and terms of repayment) will be upon such terms as the Committee specifies
in the applicable
8
<PAGE>
option or issuance agreement or otherwise deems appropriate under the
circumstances. Loans, installment payments and guarantees may be granted with
or without security or collateral (other than to option holders who are not
employees, in which event the loan must be adequately secured by collateral
other than the purchased Stock). However, the maximum credit available to the
option holder may not exceed the exercise or purchase price of the acquired
shares of Stock plus any Federal and State income and employment tax liability
incurred by the option holder in connection with the acquisition of such shares
of Stock.
(b) The Committee may, in its absolute discretion, determine that
one or more loans extended under this financial assistance program shall be
subject to forgiveness by the Company in whole or in part upon such terms and
conditions as the Committee may deem appropriate.
15. REGULATORY APPROVALS.
---------------------
The obligation of the Company with respect to Stock issued under the Plan
shall be subject to all applicable laws, rules and regulations and such
approvals by any governmental agencies or stock exchanges as may be required.
The Company reserves the right to restrict, in whole or in part, the delivery of
Stock under the Plan until such time as any legal requirements or regulations
have been met relating to the issuance of Stock, to their registration or
qualification under the Securities Exchange Act of 1934, if applicable, or any
applicable state securities laws, or to their listing on any stock exchange at
which time such listing may be applicable.
16. NO EMPLOYMENT/SERVICE RIGHTS.
-----------------------------
Neither the action of the Company in establishing this 1995 Option Plan,
nor any action taken by the Board or the Committee hereunder, nor any provision
of this 1995 Option Plan shall be construed so as to grant any individual the
right to remain in the employ or service of the Company (or any parent,
subsidiary or affiliated corporation) for any period of specific duration, and
the Company (or any parent, subsidiary or affiliated corporation retaining the
services of such individual) may terminate or change the terms of such
individual's employment or service at any time and for any reason, with or
without cause.
17. MISCELLANEOUS PROVISIONS.
-------------------------
(a) The provisions of this 1995 Option Plan shall be governed by
the laws of the State of Nevada, as such laws are applied to contracts entered
into and performed in such State, without regard to its rules concerning
conflicts of law.
(b) The provisions of this 1995 Option Plan shall inure to the
benefit of, and be binding upon, the Company and its successors or assigns,
whether by Corporate Transaction or otherwise, and the option holders, the legal
representatives of their respective estates, their respective heirs or legatees
and their permitted assignees.
9
<PAGE>
(c) The option holders shall have no divided rights, voting rights
or any other rights as a stockholder with respect to any options under the 1995
Option Plan prior to the issuance of a stock certificate for such Stock.
(d) If there is a conflict between the terms of any employment
agreement pursuant to which options under this Plan are to be granted and the
provisions of this Plan, the terms of the employment agreement shall prevail.
10
<PAGE>
213-688-3698
October 21, 1996
Board of Directors
Sunbase Asia, Inc.
19/F., First Pacific Bank Centre
51-57 Gloucester Road
Wanchai, Hong Kong
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
We have acted as counsel to Sunbase Asia, Inc., a Nevada corporation
("Company"), in connection with the preparation and filing with the U.S.
Securities and Exchange Commission ("Commission") under the Securities Act of
1933, as amended ("Act"), of the Company's registration statement on Form S-8
(together with all amendments, the "Registration Statement"). This
Registration Statement relates to the registration under the Act of 2,500,000
shares of the Company's common stock, $.001 par value ("Common Stock"), which
may be issued pursuant to the Company's 1995 Sunbase Asia, Inc. Stock Option
Plan ("Plan").
In rendering this opinion, we have reviewed the registration
statement, as well as a copy of the Company's articles of incorporation and
bylaws, each as amended to date, and the Plan. we have also reviewed such
documents and such statutes, rules and judicial precedents as we have deemed
necessary for the opinions expressed herein.
In rendering this opinion, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of
documents submitted to us as originals, the conformity to original documents
of documents submitted to us as certified or photostatic copies, and the
authenticity of originals of such photostatic copies. This opinion
Exhibit 5.1
<PAGE>
Board of Directors
Sunbase Asia, Inc.
October 21. 1996
Page 2
further expressly assumes that shares covered by the Registration Statement
will be issued in conformity with the provisions of the Plan.
Based upon and in reliance upon the foregoing, and subject to the
qualifications and limitations herein set forth, we are of the opinion that
the shares of Common Stock have been duly and validly authorized and, when
issued in the manner contemplated in the Plan and by the Registration
Statement, will be validly issued, fully paid and nonassessable.
This opinion is limited to the corporate law of Nevada, and we
express no opinion with respect to the laws of any other jurisdiction.
We consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement.
This opinion may not be used, circulated, quoted or otherwise
referred to for any purpose without our prior written consent and may not be
relied upon by any person or entity other than the Company and its successors
and assigns. This opinion is based upon our knowledge of law and facts as of
its date. We assume no duty to communicate to you with respect to any matter
which comes to our attention hereafter.
Sincerely,
LOEB & LOEB LLP
By /s/ David L. Ficksman
--------------------------
A Partner of the Firm
DLF:yf1
822540030
FID16259.L01
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) for the registration of 1995 Sunbase Asia, Inc. stock option plan
of our report dated April 5, 1996, on the consolidated financial statements of
Sunbase Asia, Inc. appearing on page F-2 of the Annual Report of Sunbase Asia,
Inc. on Form 10-K for the year ended December 31, 1995.
Ernst & Young
Hong Kong
October 22, 1996
Exhibit 23.1
