SECURITIES AND EXCHANGE COMMISSION
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Material Technologies, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 95-4622822
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11661 San Vicente Boulevard, Suite 707
Los Angeles, CA 90049
(Address of Principal Executive Offices including Zip Code)
MATERIAL TECHNOLOGIES, INC.
2002 STOCK ISSUANCE / STOCK OPTION PLAN
(Full Title of the Plan)
Robert M. Bernstein, President COPY TO:
MATERIAL TECHNOLOGIES, INC. Gary C. Wykidal
11661 San Vicente Boulevard, Suite 707 GARY C. WYKIDAL & ASSOCIATES
Los Angeles, California 92618 245 Fischer Ave., Suite A-1
(310) 208-5589 Costa Mesa, California 92626
(714) 751-8505
(Name, Address, including Zip Code. and Telephone Number, including area code,
of Agent for Service)
CALCULATION OF REGISTRATION FEE
Proposed
maximum
offering price Amount of
Title of securities to be Amount to be per Proposed maximum registration
registered registered (1) share (2) aggregate offering price fee
--------------------------- ------------------ ---------------- ------------------------- -------------
Material Technologies, Inc.
Common Stock 20,000,000 Shares $ .13 $ 2,600,000 $ 239.20
--------------------------- ------------------ ---------------- ------------------------- -------------
(1) In addition, under Rule 416(a) of the Securities Act of 1933, as amended,
this Registration Statement also covers any additional securities issued in
connection with a stock split or stock dividend on the registered
securities.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933, as amended, and
based upon the average of the high and low sales price of the common stock
of Material Technologies, Inc. on the NASDAQ Bulletin Board.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
This Registration Statement relates to the registration of 20,000,000
shares of Material Technologies, Inc. (the "Company" or "Registrant") common
stock, $0.001 par value per share (the "Common Stock") issuable to employees,
officers and directors of the Company as compensation for services in accordance
with the Material Technologies, Inc. 2002 Stock Issuance / Stock Option Plan
(the "2002 Plan"). Documents containing the information required by Part I of
this Registration Statement will be sent or given to participants in the 2002
Plan as specified by Rule 428(b) (1). Such documents are not filed with the
Securities and Exchange Commission either as part of this Registration Statement
or as prospectuses or prospectus supplements pursuant to Rule 424, in reliance
on Rule 428.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are hereby incorporated by reference into this
Registration Statement, and all documents subsequently filed by Material
Technologies, Inc. (the "Company"), with the Securities and Exchange Commission
(the "Commission"), pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which de-registers all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing such documents:
(a) The Company's Form 10K for the year ended December 31, 2000, filed on
March 30, 2001.
(b) The Company's Quarterly Reports on Form 10Q for its quarterly periods
ended March 31, 2001, June 30, 2001 and September 30, 2001.
(c) The description of the Company's common stock and other securities
contained in our Registration Statement Form SB-2 filed with the
Commission on November 30, 2001, pursuant to the Securities Act of
1933, as amended, including any subsequent amendment or report filed
for the purpose of amending such description.
All documents subsequently filed by the Company pursuant to Section 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 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 hereof
from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
20,000,000 Shares of the Company's common stock to be issued under the
Company's 2002 Stock Issuance / Stock Option Plan.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation and the Company's Bylaws permit the
Company to indemnify its directors to the fullest extent of Delaware law or the
law of any other jurisdiction that may be applicable.
Section 14 of the Delaware General Corporation Law permits a corporation,
among other things, to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or he is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
A corporation also may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. However, in such an action by or on behalf of a corporation, no
indemnification may be made in respect of any claims, issue or matter as to
which the person is adjudged liable to the corporation unless and only to the
extent that the court determines that, despite the adjudication of liability but
in view of all the circumstances, the person is fairly and reasonably entitled
to indemnity for such expenses which the court shall deem proper.
In addition, the indemnification and advancement of expenses provided by or
granted pursuant to Section 145 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
ITEM 8. EXHIBITS.
Exhibit No. Description
5.1 Opinion of Counsel
23.1 Consent of Counsel (included in Exhibit 5.1)
99.1 Material Technologies, Inc. 2002 Stock Issuance
/Stock Option Plan
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a)(1)(iii) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement 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;
(a)(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;
(a)(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) 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 Securities 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; and
(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 other-wise, 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 or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or control-ling 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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, hereunto duly
authorized, in the City of Los Angeles, State of California on the 1st day of
February, 2002.
MATERIAL TECHNOLOGIES, INC.
By: /s/ Robert M. Bernstein
Robert M. Bernstein, President
Each person whose signature appears below hereby constitutes and appoints,
Robert M. Bernstein, his or her true and lawful attorneys-in-fact with full
power of substitution, for him or her and in his or her name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to sign a new
registration statement filed to register additional securities pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to cause the same to be
filed, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting to said
attorneys-in-fact and agent, full power and authority to do and perform each and
every act and thing whatsoever requisite or desirable to be done in and about
the premises, as fully to all intents and purposes as the undersigned might or
could do in person, hereby ratifying and confirming all acts and things that
said attorneys-in-fact and agents, or their substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons on this 1st
day of February, 2002, in the capacities indicated.
MATERIAL TECHNOLOGIES, INC.
/s/ Robert M. Bernstein
Robert M. Bernstein, President
Pursuant to the requirements of the Securities Exchanges Act of 1933, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
By: /s/ Robert M. Bernstein
Robert M. Bernstein, President, Director, Chief Executive Officer, and
Chief Financial Officer
(Principal Executive Officer, Principal Financial Officer,
and Principal Accounting Officer)
By: /s/ Joel Freedman
Joel Freedman, Secretary and Director
By: /s/ John Goodman
John Goodman, Director
INDEX TO EXHIBITS
Exhibit No. Description
5.1 Opinion of Counsel
23.1 Consent of Counsel (included in Exhibit 5.1)
99.1 Material Technologies, Inc. 2002 Stock Issuance/ Stock
Option Plan
EXHIBIT 5.1
February 1, 2002
Material Technologies, Inc.
11661 San Vicente Boulevard
Suite 707
Los Angeles, CA 90049
Re: Registration of Common Shares on Form S-8
Gentlemen:
You have requested our opinion in connection with the Registration
Statement on Form S-8 (the "Registration Statement") of Material Technologies,
Inc., a Delaware corporation (the "Company"), relating to the offer and sale of
up to 20,000,000 shares (the "Shares") of the Common Stock, $.001 par value,
under the Company's 2002 Stock Issuance / Stock Option Plan (the "2002 Plan"),
which Shares consist of shares that have been reserved for issuance thereunder.
In connection with your request, we have made such examination of the corporate
records and proceedings of the Company and considered such questions of law and
taken such further action as we deemed necessary or appropriate to enable us to
render this opinion.
Based upon such examination, we are of the opinion that, when the Shares
have been duly issued and the purchase price therefore has been paid as
described in the 2002 Plan, and when the Company has complied with the
Securities Act of 1933, as amended, and all other jurisdictions in which Shares
may be issued, the Shares will be legally issued, fully paid and non-assessable.
This opinion is limited to the current federal laws of the United States
and the current internal laws of the state of Delaware (without giving effect to
any conflict of law principles thereof) and we have not considered, and express
no opinion on, the laws of any other jurisdiction. This opinion is dated and
speaks as to the date of delivery.
We consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
/s/ Gary C. Wykidal
EXHIBIT 99.1
MATERIAL TECHNOLOGIES, INC.
2002 STOCK ISSUANCE / STOCK OPTION PLAN
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1. Purpose of the Plan. The 2002 Stock Issuance / Stock Option Plan
-----------------------
(the "Plan") is intended to attract, retain, motivate and reward officers,
directors, employees of, and subsidiaries of Material Technolgies, Inc. (the
"Company"), who are and will be contributing to the success of the business of
the Company; to provide competitive incentive compensation opportunities; and to
further opportunities for stock ownership by such employees and consultants in
order to increase their proprietary interest in the Company. It is the
intention of the Company that the Plan comply with the definition of an
"employee benefit plan" contained in Rule 405 under the Securities Act of 1933,
as amended, (the "Act"), and that awards be made only to "employees" as defined
in Rule 405. Accordingly, the Company may from time to time, grant to selected
officers, directors, employees and consultants ("participants") awards
("awards") of shares of common stock of the Company, $.001 par value, and
options to purchase shares of the Company subject to the terms and conditions
hereinafter provided.
2. Administration of the Plan. This Plan shall be administered by the
----------------------------
Board of Directors of the Company (the "Board"). The Board is authorized to
interpret the Plan and may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem appropriate, including rules and
regulations to comply with the requirements of Rule 16(b) (3) under the
Securities Exchange Act of 1934. No Director shall be eligible to vote or
decide upon awards to such Director under the Plan. Decisions of the Board in
connection with the administration of the Plan shall be final, conclusive, and
binding upon all parties, including the Company, shareholders, officers,
directors, employees and consultants.
Subject to the terms, provisions, and conditions of this Plan as set forth
herein, the Board shall have sole discretion and authority:
(a) to select the officers, directors, employees and consultants to be
awarded shares / options (it being understood that more than one award
may be granted to the same employee or consultant);
(b) to determine the number of shares / options to be awarded to each
recipient;
(c) to determine the time or times when the awards may be granted;
(d) to prescribe the form of stock legend for the certificates of shares /
options or other instruments, if any, evidencing any awards, granted
under this Plan, and
(e) to cause shares / options to be registered on Form S-8 under the Act
either prior or subsequent to the making of an award.
3. Shares Subject to the Plan. The aggregate number of shares which
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may be awarded under the Plan shall not exceed 20,000,000 shares of common stock
of the Company. Shares to be awarded under the Plan shall be made available, at
the discretion of the Board, either from the authorized but unissued shares of
the Company or from shares of common stock reacquired by the Company, including
shares purchased in the open market.
4. Eligibility. Shares shall be awarded only to employees (the term
------------
"employees" shall include officers as well as other key employees of the
Company, and shall include directors who are also employees of the Company) and
consultants to the Company, it being the intention of the Company that awards
shall be made only to persons who satisfy the of "employee" defined in Rule 405
under the Act.
5. Awards and Certificates. Each recipient shall be issued a
--------------------------
certificate in respect of shares awarded under the Plan. Such certificate shall
be registered in the name of the participant, and shall bear an appropriate
restrictive legend on its face, unless such shares have been registered under
the Act.
6. Grant of Options. Subject to the availability of shares under this
------------------
Plan, the Board may make grants to employees of the Company and/or members of
the Board under this Plan from time to time, including but not limited to, the
Grant Date.
Anything in this Plan to the contrary notwithstanding, the effectiveness of
this Plan and of the grant of all options hereunder is in all respect subject to
this Plan and options granted under it shall be of no force and effect unless
and until the approval of this Plan in accordance with the Company's bylaws by
the vote of the holders of a majority of the Company's shares of Common Stock
present in person or by proxy and entitled to vote at a meeting of shareholders
at which this Plan is presented for approval.
7. Option Price. The purchase price of the stock covered by an
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option granted pursuant to this Plan shall be 100% of the fair market value of
such shares on either (i) the day the option is granted, or (ii) such other day
as the Board shall determine at their sole discretion. The option price will be
subject to adjustment in accordance with the provisions of Paragraph 12 of this
Plan. For purposes of this Plan, "fair market value" shall be determined as of
the last business day for which the prices or quotes discussed in this sentence
are available prior to the date such option is granted and shall mean the
closing bid price (or average of bid prices) last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Common
Stock is not reported on the NASDAQ National Market List.
8. Period of Option. Unless sooner terminated in accordance with
-------------------
the provisions of Paragraph 10 of this Plan, an option granted hereunder shall
expire on the date which is five (5) years after the date of grant of the
option.
9(a). Vesting of Shares and Non-Transferability of Options. Options
-----------------------------------------------------
granted under this Plan shall not be exercisable until they become vested.
Options granted under this Plan shall vest in the optionee and thus become
exercisable in accordance with the schedule as determined by the Board from time
to time, or upon the occurrence of a specified event, provided that the optionee
has continuously served as a member of the Board, as an employee of the Company,
or in another advisory role to the Company, as stated more specifically in the
option grant letter.
The number of shares as to which options may be exercised shall be
cumulative, so that once the option shall become exercisable as to any shares it
shall continue to be exercisable as to said shares, until expiration or
termination of the option as provided in this Plan; provided however, that if
stockholders approval is required under applicable law, any option granted under
this Plan shall in no event be exercised unless and until this Plan has been
approved by the Company's stockholders, but upon such approval the vesting shall
become effective as of the date of the grant.
9(b). Non-Transferability. Any option granted pursuant to this Plan
--------------------
shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee's lifetime only by him or her.
10. Termination of Option Rights. Except as otherwise specified in
------------------------------
the agreement relating to an option, in the event an optionee ceases to be an
employee of Company or a member of the Board, as the case may be, for any reason
other than death or permanent disability, any then unexercised portion of
options granted to such optionee shall, to the extent not then vested,
immediately terminate and become void; any portion of an option which is then
vested but has not been exercised at the time the optionee so ceases to be a
member of the Board or an employee may be exercised, to the extent it is then
vested by the optionee within ninety days after such event.
11. Exercise of Option. Subject to the terms and conditions of this
-------------------
Plan and the option agreement, an option granted hereunder shall, to the extent
then exercisable, be exercisable in whole or in part by giving written notice to
the Company by mail or in person addressed to Material Technologies, Inc., 11661
San Vicente Blvd., Ste. 707, Los Angeles, California 90049, at its principal
executive offices, or other such address as Optionee may be informed from time
to time, stating the number of shares with respect to which the option is being
exercised, accompanied by payment in full for such shares. Payment may be (a)
in United States dollars in cash or by check, (b) in whole or in part in shares
of the Common Stock of the Company already owned by the person or persons
exercising the option or shares subject to the option being exercised
(subject to such restrictions and guidelines as the Board may adopt from time
to time), valued at fair market value determine in accordance with the
provisions of Paragraph 7 or (c) consistent with applicable law, through the
delivery of an assignment to the Company of a sufficient amount of the proceeds
from the sale to the broker or selling agent to pay that amount to the Company,
which sale shall be at the participant's direction at the time of exercise.
There shall be no such exercise at any one time as to fewer than one hundred
(100) shares. The Company's transfer agent shall, on behalf of the Company,
prepare a certificate or certificates representing such shares acquired pursuant
to exercise of the option, shall register the optionee as the owner of such
shares on the books of the Company and shall cause the fully executed
certificate(s) representing such shares to be delivered to the optionee as soon
as practicable after payment of the option price in full. The holder of an
option shall not have any rights of a stockholder with respect to the shares
covered by the option, except to the extent that one or more certificates for
such shares shall be delivered to him or her upon the due exercise of the
option.
12. Adjustments Upon Changes in Capitalization and Other Events. Upon
------------------------------------------------------------
the occurrence of any of the following events, an optionee's rights with respect
to options granted to him or her hereunder shall be adjusted as hereinafter
provided:
(a) Stock Dividends and Stock Splits. If the shares of
---------------------------------
Common Stock shall be subdivided or combined into a greater or smaller number of
shares or if the Company shall issue any shares of Common Stock as a stock
dividend on its outstanding Common Stock, the number of shares of Common Stock
deliverable upon the exercise of options shall be appropriately increased or
decreased proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivisions, combination or stock
dividend.
(b) Recapitalization Adjustments. If (i) the Company is
------------------------------
to be consolidated with or acquired by another entity in a merger, sale of all
or substantially all of the Company's assets or otherwise and (ii) the Board
resolves at its sole discretion to vest options upon the completion of such
merger or sale, then each option granted under this Plan which is outstanding
but unvested as of the effective date of such event shall become exercisable in
full twenty (20) days prior to the effective date of such event. In the event of
a reorganization, re-capitalization, merger, consolidation, or any other change
in the corporate structure or shares of the Company, to the extent permitted by
Rule 16b-3 of the Securities Exchange Act of 1934, adjustments in the number and
kind of shares authorized by this Plan and in the number and kind of shares
covered by, and in the option price of outstanding options under this Plan
necessary to maintain the proportionate interest of the optionees and preserve,
without exceeding, the value of such options, shall be made. Notwithstanding the
foregoing, no such adjustment shall be made which would, within the meaning of
any applicable provisions of the Internal Revenue Code of 1986, as amended,
constitute a modification, extension or renewal of any Option or a grant of
additional benefits to the holder of an Option.
(c) Issuances of Securities. Except as expressly provided
--------------------------
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares subject to options. No adjustments shall be made for dividends paid in
cash or in property other than securities of the Company.
(d) Adjustments. Upon the happening of any of the foregoing
------------
events, the class and aggregate number of shares set forth in Paragraph 3 of
this Plan that are subject to options which previously have been or subsequently
may be granted under this Plan shall also be appropriately adjusted to reflect
such events. The Board shall determine the specific adjustments to be made under
this Paragraph 12, and its determination shall be conclusive.
13. Legend on Certificates. The certificates representing shares
-------------------------
issued pursuant to the exercise of an option granted hereunder shall carry such
appropriate legend, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the requirements of the Act or any state
securities laws.
14. Representations of Optionee. If requested by the Company, the
------------------------------
optionee shall deliver to the Company written representations and warranties
upon exercise of the option that are necessary to show compliance with Federal
and state securities laws, including representations and warranties to the
effect that a purchase of shares under the option is made for investment and not
with a view to their distribution (as that term is used in the Act).
15. Option Agreement. Each option granted under the provisions of
------------------
this Plan shall be evidenced by an option agreement, which agreement shall be
duly executed and delivered on behalf of the Company and by the optionee to whom
such option is granted. The option agreement shall contain such terms,
provisions and conditions not inconsistent with this Plan as may be determined
by the committee and the officer executing it.
16. Termination and Amendment of Plan. Neither shares nor options
------------------------------------
may be granted under this Plan after December 31, 2007, when this Plan shall
terminate. The Board may at any time terminate this Plan or make such
modification or amendment thereof as it deems advisable; provided, however, that
if stockholder approval of the Plan is required by law, the Board may not,
without approval by the affirmative vote of the holders of a majority of the
shares of Common Stock present in person or by proxy and voting on such matter
at a meeting, (a) increase the maximum number of shares for which options may be
granted under this Plan (except by adjustment pursuant to Section 12), (b)
materially modify the requirements as to eligibility to participate in this
Plan, (c) materially increase benefits accruing to option holders under this
Plan or (d) amend this Plan in any manner which would cause Rule 16b-3 under the
Securities Exchange Act (or any successor or amended provision thereof) to
become inapplicable to this Plan; and provided further that the provisions of
this Plan specified in Rule 16b-3(c)(2)(ii)(A) (or any successor or amended
provision thereof) under the Securities Exchange Act of 1934 (including without
limitation, provisions as to eligibility, amount, price and timing of awards)
may not be amended more than once every six months, other than to comport with
changes in the Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder. Termination or any modification or amendment of
this Plan shall not, without consent of a participant, affect his or her rights
under an option previously granted to him or her.
17. Withholding of Income Taxes. Upon the exercise of an option,
-------------------------------
the Company, in accordance with Section 3402(a) of the Internal Revenue Code,
may require the optionee to pay withholding taxes in respect to amounts
considered to be compensation includible in the optionee's gross income.
18. Compliance with Regulations. It is the Company's intent that
------------------------------
the Plan comply in all respects with Rule 16b-3 under the Securities Exchange
Act of 1934 (or any successor or amended provision thereof) and any applicable
Securities and Exchange Commission interpretations thereof. If any provision of
this Plan is deemed not to be in compliance with Rule 16b-3, the provision shall
be null and void.
19. Governing Law. The validity and construction of this Plan and
---------------
the instruments evidencing options shall be governed by the laws of the State
of Delaware, without giving effect to the principles of conflicts of law
thereof.
20. Termination and Amendment. The Board may amend, suspend, or
----------------------------
terminate the Plan at any time provided that no such modification shall impair
the rights of any recipient under any award.
21. Miscellaneous.
--------------
(a) Nothing in the Plan shall require the Company to issue or
transfer any shares or options pursuant to an award if such
issuance or transfer would, in the opinion of the Board,
constitute or result in a violation of any applicable statute or
regulation of any jurisdiction relating to the disposition of
securities.
(b) Notwithstanding any other provision of the Plan, the Board may at
any time make or provide for such adjustment to the Plan, to the
number of shares available thereunder, or to any awards of shares
as it shall deem appropriate, to prevent dilution or enlargement
of rights, including adjustments in the event of changes in the
number of outstanding shares by reason of stock dividends or
distributions, stock splits or other combinations or subdivisions
of stock, recapitalization, issuances by reclassification,
mergers, consolidations, combinations or exchanges of shares,
separations, reorganizations, liquidations, or other similar
corporate changes. Any such determination by the Board shall be
conclusive.
(c) No employee, consultant or other person shall have any claim or
right to be granted shares or options under the Plan, and neither
the Plan nor any action taken thereunder shall be construed as
giving any participant, recipient, employee, consultant or other
person any right to be retained in the employ of or by the
Company.
(d) Income realized as a result of an award of shares or options
shall not be included in the recipients earnings for the purpose
of any benefit plan in which the recipient may become eligible
unless otherwise specifically provided for in such Plan.
(e) If and when a recipient is required to pay the Company an amount
required to be withheld under any federal, state or local income
tax laws in connection with an award under the Plan, the Board
may, in its sole discretion and subject to such rules as it may
adopt, permit the participant to satisfy the obligation, in whole
or in part, by electing to have the Company withhold shares
having a fair market value equal to the amount required to be
withheld. The election to have shares withheld must be made on or
before the date the amount of tax to be withheld is determined.
22. Effective Date and Term of Plan. The effective date of the Plan
-----------------------------------
shall be February 15, 2002, and the Plan shall remain in full force until
December 31, 2007, or until all shares have been awarded, whichever first
occurs.
Approved by Board of Directors of the Company, as amended: February 1, 2002.