As filed with the Securities and Exchange Commission on January 21, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 53-1521616
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(State of other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
22570 Market Court, Dulles Virginia 20166
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(Address of principal executive offices) (Zip Code)
1997 Stock Option Plan of Guardian Technologies International, Inc.
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(Full title of the plan)
Oliver L. North, 22570 Markey Court, Dulles, Virginia, 20166
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(Name, address, including zip code, of agent for service)
Telephone number including area code, of agent of service: (703) 444-7931
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Securities to be Maximum Maximum Registration
be Registered Registered Offering Price Aggregate Fee
Per Share(1) Offering Price
Common Stock, 300,000 $2.00 $600,000 $182
issuable upon
exercise of
Options
(1) Bona Fide estimate of maximum offering price solely for calculating the
registration fee pursuant to Rule 457(h) of the Securities Act of 1933,
based on the average bid and asked price of the registrant's common
stock as of January 21, 1998, a date within five business days prior to
the date of filing of this registration statement.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the Plan described herein.
1997 Stock Option Plan of
Guardian Technologies International , Inc.
Cross-reference Sheet Pursuant to Rule 404(a)
Cross-reference between items of Part I of Form S-8 and the Section
10(a) Prospectus that will be delivered to each employee, consultant, or
director who participates in the Plan.
Registration Statement Item Numbers and Headings Prospectus Heading
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1. Plan Information Section 10(a) Prospectus
2. Registrant Information and Section 10(a) Prospectus
Employee Plan Annual Information
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Guardian Technologies International,
Inc., a Delaware corporation (the "Company"), with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996.
2. All reports filed by the Company with the Commission pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), since the end of the fiscal year ended December 31, 1996.
3. The description and specimen certificate of the Common Stock
contained in the Company's registration statement on Form SB-2 under the
Exchange Act filed with the Commission on March 22, 1996, including any
amendment or report filed for the purpose of updating such description.
Prior to the filing, if any, of a post-effective amendment that
indicates that all securities covered by this registration statement have been
sold or that deregisters all such securities then remaining unsold, all reports
and other documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
Item 4. Description of Securities.
The Company's common stock, par value $.001 ("Common Stock"), being
registered pursuant to this registration statement is part of a class of
securities registered under section 12 of the Securities Act of 1933, as amended
("Securities Act"). A description of such securities is contained in the
Company's registration statement on Form SB-2 under the Exchange Act, filed with
the commission on March 22, 1997, and is incorporated herein by reference. (See
"Item 3. Incorporation of Documents by Reference.")
Item 5. Interests of Named Experts and Counsel.
No expert named as preparing or certifying all or part of the
registration statement to which this prospectus pertains, and no counsel for the
Company named in this prospectus as having given an opinion on the validity of
the securities being offered hereby was hired on a contingent basis or has or is
to receive, in connection with this offering, a substantial interest, direct or
indirect, in the Company.
Item 6. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation provides that the Company
shall, to the fullest extent permitted by the laws of the State of Delaware, as
the same may be amended and supplemented, indemnify its officers and directors
under said section, and the indemnification provided for herein shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any By-Law, agreement, vote of Securityholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall insure to
benefit of the heirs, executors, and administrators of such a person. The
Company will have the power to purchase and maintain officers' and directors'
liability insurance in order to insure against the liabilities for which such
officers and directors are indemnified.
Item 7. Exemption from Registration Claimed.
Although no restricted securities are being reoffered or resold
pursuant to this registration statement, certain control securities are being
reoffered, specifically pursuant to the Reoffer Prospectus attached hereto as
Exhibit A.
Item 8. Exhibits.
The exhibits attached to this registration statement are listed in the
Exhibit Index, which is found on page 7.
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 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) To treat, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment as 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 at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered 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 SEC 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 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 Securities Act and will be governed by the final
adjudication of such issue.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dulles, State of Virginia, on .
Guardian Technologies International, Inc.
By:
Oliver L. North, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Oliver L. North, with power of
substitution, as his attorney-in-fact for him, in all capacities, to sign any
amendments to this registration statement and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
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Chairman of the Board
Oliver L. North President and Secretary
Director, Treasurer and
Joseph F. Fernandez Vice President
Director
Travis Y. Green
Herbert M. Jacobi Director
Hugh G. Sawyer Director
John C. Power Director
Stephen G. Calandrella Director
REOFFER PROSPECTUS
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
300,000 Shares of Common Stock, $0.001 Par Value
The three hundred thousand (300,000) shares of common stock, $.001 par
value (the "Common Stock"), may be acquired from Guardian Technologies
International, Inc., a Delaware corporation (the "Company"), pursuant to
exercise of grants under the 1997 Stock Option Plan (the "Plan"). The Common
Stock will be issued upon the exercise of options granted pursuant to the Plan
to officers, directors and/or key employees. When and if the grantees of the
options exercise such options, officers and directors will be deemed selling
security holders (the "Selling Security Holders"). The Company will be issuing
the Common Stock directly to the grantees of the options and the Company will
receive the option exercise price. Selling Security Holders may offer some or
all of the Common Stock, if issued, for sale from time to time at prices and
terms negotiated in individual transactions, in brokers transactions negotiated
immediately prior to sale, or in a combination of the foregoing. The Selling
Security Holders and any broker-dealers who participate in selling the Common
Stock may be deemed "underwriters" as defined by the Securities Act of 1933, as
amended (the "Securities Act"). Commissions paid or discounts or concessions
allowed such broker-dealers, as well as any profit received on resale of the
Common Stock by broker-dealers, as well as any profit received on resale of the
Common Stock by broker-dealers purchasing for their own accounts may be deemed
to be underwriting discounts and commissions. The Selling Security Holders or
purchasers of the Common Stock will pay all discounts, commissions and fees
related to any sale of the Common Stock.
The Company's executive offices are located at 22570 Markey Court,
Suite 220, Dulles, Virginia 21066, and the telephone number is (703) 444-7931.
The Common Stock is traded on the NASDAQ Smallcap Market under the
symbol "GRDN". On January 6, 1998, the closing high bid price for the Common
Stock as reported on the NASDAQ Smallcap Market was $2.50.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE PURCHASE OF THESE SECURITIES INVOLVES SUBSTANTIAL RISK.
SEE "RISK FACTORS."
No person has been authorized in connection with any offering made
hereby to give any information or to make any representation not contained in
this Reoffer Prospectus. If any such information is given or any such
representation made, the information or representation should not be relied upon
as having been authorization by the Company. This Reoffer Prospectus is not an
offer to sell or a solicitation of an offer to buy any securities other than the
Common Stock offered by this Reoffer Prospectus, nor is it an offer to sell or a
solicitation of an offer to buy any of the Common Stock offered hereby in any
jurisdiction where it is unlawful to make such an offer or solicitation. Neither
the delivery of this Prospectus nor any sale hereunder shall under any
circumstances imply that the information in this Reoffer Prospectus is correct
any time subsequent to January 6, 1998, the date of this Reoffer Prospectus.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "SEC"). The Company has filed all reports required of it for at
least twelve months preceding this filing. Such reports, proxy statements and
other information filed by the Company can be inspected and copied at the public
reference facilities maintained by the SEC in Washington, D.C. at 450 Fifth
Street, N.W., 20549. Copies of these materials can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates.
The Company will provide, without charge, to each person to whom a copy
of this Prospectus is delivered, upon the written request of such person, a copy
of any and all information incorporated by reference into this Prospectus.
Requests for such information may be directed to the Company's President, Oliver
L. North, at 22570 Markey Court, Suite 220, Dulles, Virginia 21066. The Company
intends to furnish its shareholders annual reports which will contain financial
statements audited by independent accountants, and other such reports as it may
determine to furnish or as may be required by law.
THE COMPANY
Guardian Technologies International, Inc. (the "Company") was organized
in the State of Virginia in October 1989 and reincorporated in the State of
Delaware in February, 1996 for the purpose of developing, manufacturing and
marketing ballistic protective body armor and life saving related products. The
principal office of the Company is located at 22570 Markey Court, Suite 220,
Dulles, Virginia 20166 and its telephone number is 703-444-7931. Additional
information regarding the Company is set forth in the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1996.
RISK FACTORS
The Common Stock offered is speculative and involves a high degree of
risk. Any and all of these factors could result in the purchaser of Common Stock
losing some or all of his or here investment. Accordingly, in analyzing this
Prospectus, the purchaser of the Common Stock should carefully consider the
following factors, among others, relating to the Company:
Competition; Technical Obsolescence. The body armor products business
is highly competitive and the Company competes with a number of companies that
are better established than the Company, including Safariland, Protective
Apparel Corporation of America and American Body Armor. Many of the more
established companies have substantially greater financial resources,
facilities, and depth and experience of personnel than the Company. In addition,
the Company's competitors may develop and/or improve their body armor products
in which event the Company's products may be rendered obsolete or less
marketable.
Key Personnel. The Company is dependent on the services of Oliver L.
North and Joseph F. Fernandez. If the Company should lose the services of
Messrs. North or Fernandez or others of its current management, there could be a
material adverse impact on the Company's business, unless a suitable
replacement(s) could be found by the Company on satisfactory terms. There can be
no assurance, however, that the Company could engage suitable replacements on
satisfactory terms. Consequently, the loss of the services of these persons
could impose severe adverse consequences on the Company.
Single Source of Raw Materials. The principal raw materials required
for the Company's product are Spectra(R) 1000 fabric and Spectra Shield(R), both
made from Spectra(R) fiber, a product manufactured exclusively by AlliedSignal,
Inc. If the Company is unable to purchase sufficient quantities of these raw
materials, the Company's ability to pursue its business plan would be impaired
and this would most likely have a substantial adverse impact on the Company's
earnings.
Ability of the Company to Continue as a Going Concern. The Company's
financial statements were prepared assuming that the Company will continue as a
going concern. The Company's independent auditor in its report regarding the
Company's financial statements has noted that the Company's continued losses
from operations raise substantial doubt as to the Company's ability to continue
as a going concern.
Control by Current Management. The Company's officers, directors and
affiliates currently possess voting rights representing approximately 54% of the
Company's outstanding voting securities. Accordingly, the Company's current
management and affiliates may be able to exercise substantial control over the
Company including influencing the election of the Company's directors, and
generally directing the affairs of the Company.
Limited Market for the Company's Securities. The Company's Common Stock
is traded on the NASDAQ Smallcap Market under the Symbol GRDN. However, even
though there is a public market for the Common Stock, the Common Stock has a
very small average daily trading volume. Accordingly, it is possible that a
shareholder will not be able to resell some or all of his or her Common Stock.
The thin trading volume may also make the price of the Common Stock more
volatile than otherwise. Hence, a shareholder may not be able to resell the
Common Stock at a price comparable to that currently quoted on the NASDAQ
Smallcap Market.
SELLING SECURITY HOLDERS
As of the date hereof, the Company has granted options on 255,000
shares of Common Stock, such grants having been made pursuant to the Plan. The
options are exerciseable at 100% of high bid market price on the date of grant,
more specifically, $2.50 per share. Until such time as any of the grantees of
such options exercise their options, no information is available as to Selling
Security Holders. The Company will file an amendment Reoffer Prospectus when and
if appropriate.
PLAN OF DISTRIBUTION
The Selling Security Holders may sell the Common Stock from time to
time in the NASDAQ Smallcap Market, or otherwise, at prices and terms then
prevailing or at prices related to the then current market price, or in
negotiated transactions. The Selling Security Holders expect to employ brokers
or dealers in order to sell the Common Stock. Brokers or dealers engaged by the
Selling Security Holders may arrange for other brokers or dealers to participate
in effecting sales. Brokers or dealers will receive commissions or discounts
from the Selling Security Holders or from purchasers in amounts to be negotiated
immediately prior to the sale, but which are not expected to deviate from usual
and customary brokers' commissions.
No assurances are given that the Selling Security Holders will offer
for sale or sell any or all of the Common stock registered pursuant to this
Prospectus or an amended prospectus. Neither the Company nor Selling Security
Holders expect to compensate any finders to assist in the sales of the Common
Stock.
The Company will receive the exercise price of the options. All
expenses incurred in connection with the registration under the Securities Act
and the offering of the securities hereby will be borne by the Company.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents that the Company filed with the Commission are
hereby incorporated by reference into this Prospectus:
1. The Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 1996, which contains financial statements of the Company for that
fiscal year.
2. The Company's quarterly reports on Form 10-QSB for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997; and
3. The description and specimen certificate of the Common Stock
contained in the Company's registration statement on Form SB-2 under the
Securities Act filed with the Commission on March 22, 1996, including any
amendments or reports filed for the purpose of updating such description.
All documents that the Company subsequently files with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
termination of the offering of the Common Stock, shall be deemed to be
incorporated by reference into this Prospectus.
INDEMNIFICATION
The Company's Certificate of Incorporation provides that the Company
shall, to the fullest extent permitted by the laws of the State of Delaware, as
the same may be amended and supplemented, indemnify its officers and directors
under said section, and the indemnification provided for therein shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any By-Law, agreement, vote of securityholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall insure to
benefit of the heirs, executors, and administrators of such a person. The
Company has the power to purchase and maintain officers' and directors'
liability insurance in order to insure against the liabilities for which such
officers and directors are indemnified.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provision, or otherwise, the Company has been
informed 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 Company for expenses incurred or
paid by a director, officer or controlling person in connection with the Common
Stock being registered, the Company 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 is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
As filed with the Securities and Exchange Commission on January 21, 1998
File No. 333-2712-NY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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EXHIBITS
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
(A Delaware corporation)
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INDEX TO EXHIBITS
Exhibit SEC Ref. Page Description of Exhibit
No. No. No.
A 2 1997 Stock Option Plan of the Company
B 5, 24(a) Opinion and Consent of Counsel
C 24(b) Consent of Certified Public Accountants
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
1. Purpose. This 1997 Stock Option Plan (the "Plan") is intended to
provide incentives: (a) to the officers and other employees of Guardian
Technologies International, Inc., a Delaware corporation (the "Company"), and
any present or future subsidiaries of the Company (individually a "Related
Corporation" and collectively "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder that qualify as "incentive stock options" under Section 422A(b) of the
Internal Revenue Code of 1986, as amended (the "Code") (individually an "ISO"
and collectively "ISOs"); (b) to directors, officers, employees and consultants
of the Company and Related Corporations by providing them with opportunities to
purchase stock in the Company pursuant to options granted hereunder that do not
qualify as ISOs (individually a "Non-Qualified Option" and collectively
"Non-Qualified Options"); (c) to directors, officers, employees and consultants
of the Company and Related Corporations by providing them with awards of stock
in the Company ("Awards"); and (d) to director, officers, employees and
consultants of the Company and Related Corporations by providing them with
opportunities to make direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereinafter individually as
an "Option" and collectively as "Options". Options, Awards and authorizations to
make Purchases are referred to hereinafter collectively as "Stock Rights". As
used herein the terms "parent" and "subsidiary" mean "parent corporation" and
subsidiary corporation, respectively, as those terms are defined in Section 425
of the Code.
2. Administration of Plan.
(a) Board or Committee Administration. This Plan shall be
administered solely by the Company's Board of Directors (the "Board") or by a
Compensation Committee (the "Committee") consisting of not less than two (2)
members of the Board, provided the members of the Board or such Committee
members have not within one year prior to such Committee service received, or
during such service receive, a grant or award of Stock Rights under this Plan or
any other plan of the Company. Hereinafter, all references in this Plan to the
"Committee" shall mean the Board of no Committee has been appointed. Subject to
ratification of the grant or authorization of each Stock Right by the Board (if
so required by applicable state law), and subject to the terms of this Plan, the
Committee shall have the authority to (i) determine the employees of the Company
and Related Corporations (from among the class of employees eligible under
Section 3 below to receive ISOs) to whom ISOs may be granted, and to determine
(from among the class of individuals and entities eligible under Section 3 below
to receive Non-Qualified Options and Awards and to make Purchases) to whom
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted; (ii) determine the time or times at which Options or Awards may be
granted or Purchases made; (iii) determine the option price of shares subject to
each Option, which price shall not be less than the minimum price specified in
Section 6 below, and the purchase price of shares subject to each Purchase; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to Section 7 below) the time or times when each Option
shall become exercisable and the duration of the exercise period; (vi) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any; and (vii) interpret this Plan and prescribe and rescind rules and
regulations relating to this Plan. If the Committee determines to issue a
Non-Qualified Option, the Committee shall take whatever actions it deems
necessary under Section 422A of the Code and the regulations promulgated
thereunder, to ensure that such Option is not treated as an ISO. The
interpretation and construction by the Committee of any provisions of this Plan
or of any Stock Right granted under this Plan shall be final unless otherwise
determined by the Board. The Committee may from time-to-time adopt such rules
and regulations for carrying out this Plan as it may deem appropriate. No member
of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to this Plan or any Stock Right granted under
this Plan.
(b) Committee Actions. The Committee may select one of its
members as its chairman, and shall hold meetings at such times and places as it
may determine. Acts by a majority of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee. From time-to-time the Board may increase the size
of the Committee and appoint additional members thereof, may remove members
(with or without cause) and may appoint new members in substitution therefore,
fill vacancies (however caused) or remove all members of the Committee and
thereafter directly administer this Plan.
(c) Grant of Stock Rights to Board Members. Stock Rights may
be granted to members of the Board, but any such grant shall be made and
approved in accordance with Section 2(d) below, if applicable. All grants of
Stock Rights to members of the Board shall in all other respects be made in
accordance with the provisions of this Plan applicable to other eligible
persons. Members of the Board who are either (i) eligible for Stock Rights
pursuant to this Plan or (ii) have been granted Stock Rights may vote on any
matters affecting the administration of this Plan or the grant of any Stock
Rights pursuant to this Plan, except that no such member shall act upon the
granting to himself or herself of Stock Rights, but any such member may be
counted in determining the existence of a quorum at any meeting of the Board
during which action is taken with respect to the granting to him or her of Stock
Rights.
(d) Compliance with Federal Securities Laws. Various
restrictions apply to officers and directors and others who may be deemed
insiders. Holders of Stock Rights should consult with their legal and tax
advisors regarding the securities law, tax law and other effects of transactions
under this Plan. These restrictions relate to holding periods, alternative
minimum tax calculations and other matters and should be clearly understood by
the holders of Stock Rights.
(e) Intent of Plan. This Plan is intended to be an "employee
benefit plan" under Rule 16b-3 promulgated under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"). This Plan is also intended to
be a "compensatory benefit plan" under Rule 701 promulgated under the Securities
Act of 1933, as amended. Transactions under this Plan are intended to comply
with these Rules. To the extent any provisions of this Plan or any action by the
Committee or of the Board fails to so comply, each provision(s) and action(s)
shall be deemed to be null and void, to the extent permitted by applicable law
and as deemed advisable by the Commission or the Board.
(f) Shareholder Approval. Grants of incentive stock options
hereunder shall be subject to shareholder approval of this Plan within twelve
(12) months following the date this Plan is approved and adopted by the Board.
3. Eligible Employees and Others. ISOs may be granted to any employee
of the Company or any Related Corporation. Any officer or director of the
Company who is not also an employee of the Company may not be granted ISOs under
this Plan. Non-Qualified Options, Awards and authorizations to make Purchases
may be granted to any employee, officer or director (whether or not such person
is also an employee of the Company) or to consultant to the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant an ISO, a Non-Qualified
Option, an Award or an authorization to make a Purchase. The granting of a Stock
Right to any individual or entity shall neither entitle that individual or
entity to, nor disqualify that individual or entity from participation in any
other grant of Stock Rights.
4. Stock. The stock subject to Options, Awards and Purchases shall be
authorized but unissued shares of Common Stock of the Company, $.001 par value
per share (the "Common Stock"), or shares of Common Stock reacquired by the
Company in any manner. The aggregate number of shares that may be issued
pursuant to the Plan is one million (1,000,000), subject to adjustment as
provided in Section 13 below. Any such shares may be issued as ISOs,
Non-Qualified Options or Awards or to individuals or entities making Purchases,
so long as the number of shares so issued does not exceed such number, as
adjusted. If any Option granted under this Plan shall expire or terminate for
any reason without having been exercised in full or shall cease for any reason
to be exercisable in whole or in part, or if the Company shall reacquire any
unvested shares issued pursuant to Awards or Purchases, the unpurchased shares
subject to such Options and any unvested shares so reacquired by the Company
shall again be available for grants of Stock Rights under this Plan.
5. Granting of Stock Rights. Stock Rights may be granted under this
Plan at any time until ten years after the date of the approval and adoption of
this Plan by the Board. The date of grant of a Stock Right under this Plan will
be the date specified by the Committee at the time it grants the Stock Right;
provided, however, that such date shall not be prior to the date on which the
Committee acts to approve the grant. The Committee shall have the right, with
the consent of the optionee, to convert an ISO granted under this Plan into a
Non-Qualified Option pursuant to Section 16 below.
6. Minimum Option Price; ISO Limitations.
(a) Price for Non-Qualified Options. The exercise price per
share specified in the agreement relating to each Non-Qualified Option granted
under this Plan shall in no event be less than the lesser of (i) the book value
per share of the Common Stock as of the end of the fiscal year of the Company
immediately preceding the date of such grant or (ii) fifty percent (50%) of the
fair market value per share of the Common Stock on the date of such grant .
Subject to the foregoing sentence, the exercise price and nature of
consideration for Non-Qualified Options granted hereunder shall be determined by
the Committee or the Board in its sole discretion, taking into account factors
it deems relevant.
(b) Price for ISOs. The exercise price per share specified in
the agreement relating to each ISO granted under this Plan shall not be less
than the fair market value per share of the Common Stock on the date of such
grant. In the case of an ISO to be granted to an employee owning stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Related Corporation, the price per
share specified in the agreement relating to such ISO shall not be less than one
hundred ten percent (110%) of the fair market value per share of the Common
Stock on the date of grant.
(c) $100,000 Annual Limitation on ISOs. Each eligible employee
may be granted ISOs only to the extent that (in the aggregate under this Plan
and all incentive stock options plans of the Company and any Related
Corporation), such ISOs do not become exercisable for the first time by such
employee during any calendar year in a manner that would entitle the employee to
purchase more than $100,000 in fair market value (determined at the time the
ISOs were granted) of the Common Stock in that calendar year. Any options
granted to an employee in excess of that amount will be granted as Non-Qualified
Options.
(d) Awards and Purchases. Awards and Purchases under this Plan
shall be made at prices equal to the fair market value of the Common Stock on
the date of such Award or Purchase. Fair market value shall be determined by the
Committee or the Board in its sole discretion in accordance with Section 6(d)
below. Shares of Common Stock may be issued in Award and Purchase transactions
for any lawful consideration determined by the Committee or the Board in its
sole discretion.
(e) Determination of Fair Market Value. If, at the time an
Option is granted under this Plan, the Company's Common Stock is publicly
traded, "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 (i) the average (on that date) of the
high and low prices of the Common Stock on the principal national securities
exchange on which the Common Stock is traded, if the Common Stock is then-traded
on a national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market List, if the Common
Stock is not then traded on a national securities exchange; or (iii) the closing
bid price (or average of bide 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. However, if the Common
Stock is not publicly traded at the time an Option is granted under this Plan,
"fair market value" shall be deemed to be the fair value of the Common Stock as
determined by the Committee or the Board in its sole discretion, after taking
into consideration all factors that it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
7. Option Duration. Subject to earlier termination as provided in
Sections 9 and 10 below, each Option shall expire on the date specified by the
Committee or the Board, but not more than (i) ten (10) years and one (1) day
from the date of grant in the case of Non-Qualified Options, (ii) ten (10) years
from the date of grant in the case of ISOs generally and (iii) five (5) years
from the date of grant in the case of ISOs granted to an employee owning stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Related Corporation. Subject to
earlier termination as provided in Sections 9 and 10 below, the term of each ISO
shall be the term set forth in the original instrument granting such ISO, except
with respect to any part of such ISO that is converted into a Non-Qualified
Option pursuant to Section 16 below.
8. Exercise of Options. Subject to the provisions of Sections 9 through
12 below, each Option granted under this Plan shall be exercisable as follows:
(a) Vesting. The Option shall either be fully exercisable on
the date of grant or shall become exercisable thereafter in such installments as
the Committee or Board may specify.
(b) Full Vesting of Installments. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of the
Option, unless otherwise specified by the Committee or the Board.
(c) Partial Exercise. Each Option or installment may be
exercised at any time or from time-to-time, in whole or in part, for up to the
total number of shares with respect to which it is then exercisable.
(d) Acceleration of Vesting. The Committee or the Board shall
have the right to accelerate the date of exercise of any installment of any
Option; provided, however, that the Committee or the Board shall not, without
the consent of the optionee, accelerate the exercise date of any installment of
any Option granted to any employee as an ISO (and not previously converted into
a Non-Qualified Option pursuant to Section 16 below) if such acceleration would
violate the annual vesting limitation contained in Section 422A(d) of the Code,
as described in Section 6(c) above.
9. Termination of Employment. If an ISO optionee ceases to be employed
by the Company or any Related Corporation other than by reason of death or
disability as defined in Section 10 below, no further installments of such
optionee's ISOs shall become exercisable, and such optionee's ISOs shall
terminate after the passage of ninety (90) days from the date of termination of
such optionee's employment, but in no event later than on their specified
expiration date(s), except to the extent that such ISOs (or the unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
Section 16 below. Employment shall be considered as continuing uninterrupted
during any bona fide leave of absence (such those attributable to illness,
military obligations, or governmental service), provided that the period of such
leave does not exceed ninety (90) days or, if longer, any period during which
such optionee's right to reemployment is guaranteed by statute. A bona fide
leave of absence with the written approval of the Committee or the Board shall
not be considered an interruption of employment under this Plan, provided that
such written approval contractually obligates the Company or any Related
Corporation to continue the employment of the optionee after the approved period
of absence. ISOs granted under this Plan shall not be affected by any change of
employment within or among the Company and any Related Corporation. Nothing in
this Plan shall be deemed to give any grantee of any Stock Right the right to be
retained in employment or other such service by the Company or any Related
Corporation for any period of time.
10. Death; Disability.
(a) Death. If an ISO optionee ceases to be employed by the
Company or any Related Corporation by reason of such optionee's death, any ISO
of such optionee may be exercised, to the extent of the number of shares with
respect to which the optionee could have exercised on the date of the optionee's
death, by the optionee's estate, personal representative or beneficiary who has
acquired the ISO by will or by the laws of descent and distribution, at any time
prior to the earlier of the specified expiration date of the ISO or one year
from the date of the optionee's death.
(b) Disability. If an ISO optionee ceases to be employed by
the Company or any Related Corporation by reason of disability, such optionee
(or such optionee's custodian) shall have the right to exercise any ISO held by
such optionee on the date of termination of employment, to the extent of the
number of shares with respect to which the optionee could have exercised on that
date, at any time prior to the earlier of the specified expiration date of the
ISO or one year from the date of the termination of the optionee's employment.
For purposes of this Plan, the term "disability" shall mean "permanent and total
disability" as defined in Section 22(d)(3) of the Code or any successor statute.
11. Assignability. No Option or Derivative Security (as that term is
defined in Rule 16b-3 under the 1934 ct) shall be assignable or transferable by
the optionee except as permitted under Rule 16b-3 under the 1934 Act or by will
or by the laws of decent and distribution, and during the lifetime of the
optionee each Option shall be exercisable only by the optionee.
12. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such form as the Committee or the
Board may from time-to-time approve. Such instruments shall conform to the terms
and conditions set forth in Section 6 through 11 above and may contain such
other provisions as the Committee or the Board deems advisable, which are not
inconsistent with this Plan, including, without limitation, restrictions
applicable to shares of the Company's Common Stock issuable upon exercise of
Options. In granting Non-Qualified Options, the Committee or the Board may
specify that Non-Qualified Options shall be subject to the restrictions set
forth herein with respect to ISOs, or to such other termination and cancellation
provisions as the Committee or the Board may determine. The Committee or Board
may from time-to-time confer authority and responsibility on one or more of its
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time-to-time to carry out
the terms of such instruments.
13. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to the optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company regarding
such Option:
(a) Stock Dividends and Stock Splits. If the shares of the
Company's 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 subdivision, combination or stock
dividend.
(b) Assumption of Options by Successors. In the event of a
dissolution or liquidation of the Company, a merger in which the Company is not
the surviving entity, or the sale of all or substantially all of the Company's
assets, the Committee or the Board may in its sole discretion accelerate the
exercisability of any or all outstanding Options so that such Options would be
exercisable in full prior to the consummation of such dissolution, liquidation,
merger or asset sale at such times and on such conditions as the Committee or
the Board shall determine, unless the successor entity, if any, assumes the
outstanding Options or substitutes substantially equivalent options therefore.
(c) Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in Section 13(b) above) pursuant to which securities of the Company or
of another entity are issued with respect to the outstanding shares of Common
Stock, an optionee, upon exercising an Option, shall be entitled to receive for
the purchase price paid upon such exercise the securities the optionee would
have received if the optionee had exercised the Option prior to such
recapitalization or reorganization.
(d) Modification of ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to Sections 13(a), (b) or (c) above with respect to
ISOs shall be made only after the Committee or the Board, after consulting with
counsel for the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 425 of the Code)
or would cause any adverse tax consequences for the holders of such ISOs. If the
Committee or the Board determines that such adjustments made with respect to ISO
would constitute a modification of such ISOs, it may refrain from making such
adjustments.
(e) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, each Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee or the Board.
(f) Issuances of Securities. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or of
securities convertible into shares of stock of any class, shall affect, and no
adjustments 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.
(g) Fractional Shares. No fractional shares shall be issued
under this Plan and each optionee shall receive from the Company cash in lieu of
such fractional shares.
(h) Adjustments. Upon the happening of any of the foregoing
events described in section 13(a), (b) or (c) above, the class and aggregate
number of shares set forth in Section 4 above that are subject to Stock Rights
that previously have been or subsequently may be granted under this Plan shall
also be appropriately adjusted to reflect the events described in such Sections.
The Committee or the successor board shall determine the specific adjustments to
be made under this Sections. The Committee or the successor board shall
determine the specific adjustments to be made under this Section 13 and, subject
to Section 2 above, its determination shall be conclusive.
If any person or entity owning restricted Common Stock obtained by exercise of a
Stock Right made hereunder receives shares or securities or cash in connection
with a corporate transaction described in Section 13(a), (b) or (c) above as a
result of owning such restricted Common Stock, such shares or securities or cash
shall be subject to all of the conditions and restrictions applicable to the
restricted Common Stock with respect to which such shares or securities or cash
were issued, unless otherwise determined by the Committee or the successor
board.
14. Means of Exercising Stock Rights. A Stock Right (or any part of
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being exercised, accompanies by full payment of the purchase price therefore
either (a) in United States dollars in cash or by check, or (b) at the
discretion of the Committee or Board, through delivery of shares of Common Stock
having a fair market value equal (as of the date of the exercise) to the cash
exercise price of the Stock Right, or (c) at the discretion of the Committee or
Board, through delivery of the grantee's personal recourse promissory note
bearing interest payable not less than annually at no less than one hundred
percent (100%) of the lowest applicable Federal rate (as defined in Section
1274(d) of the Code), or (d) at the discretion of the Committee or the Board,
through the use of some of the shares or the rights to purchase some of the
shares for which the Option is being exercised, or (e) at the discretion of the
Committee or the Board exercises its discretion to permit payment of the
exercise price of an ISO by means of the methods set forth in clauses (b), (c),
(d) or (e) of the preceding sentence, such discretion shall be exercised in
writing at the time of the grant of the ISO in questions. The holder of a Stock
Right shall not have the rights of a shareholder with respect to the shares
covered by his, her its Stock Rights until the date of issuance of a stock
certificate for such shares. Except as expressly provided in Section 13 above
with respect to changes in capitalization and stock dividends, no adjustment
shall be made for dividends or similar rights for which the record date is
before the date such stock certificate is issued.
15. Term and Amendment of Plan. This Plan was approved and adopted by
the Board and approved by the Stockholders on December 8, 1997. This Plan shall
expire in 1999 (except as to Options outstanding on that date). Subject to the
provisions of Section 5 above, Stock Rights may be granted under this Plan prior
to the date of stockholder approval of this Plan. The Board may terminate or
amend this Plan in any respect at any time; provided, however, that the Board
may not amend this Plan in any of the following respects without the approval of
the Company's stockholders obtained within twelve (12) months before or after
the Board adopts a resolution authorizing any of the following actions: (a) the
total number of shares that may be issued under this Plan may not be increased
(except by adjustment pursuant to Section 13 above); (b) the provisions of
Section 3 above regarding eligibility for grants of ISOs may not be modified;
(c) the provisions of Section 6(b) above regarding the exercise price at which
shares may be offered pursuant to ISOs may not be modified (except by adjustment
pursuant to Section 13 above); and (d) the expiration date of this Plan may not
be extended. Except as otherwise provided in this Section 15, in no event may
action of the Board or the stockholders alter or impair the rights of a grantee,
without such grantee's consent, under any Stock Right previously granted to such
grantee. The Committee or the Board may amend the terms of any Stock Right
granted if such amendment is agreed to by the recipient of such Stock Rights.
16. Conversion of ISO' Into Non-Qualified Options; Termination of ISOs.
The Committee or the Board, at the written request of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but shall not be limited to, extending the exercise
period of reducing the exercise price of the appropriate installments of such
Options. At that time of such conversion, the Committee or the Board (with the
consent of the Optionee) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Committee or the Board in its discretion
may determine, provided that such conditions shall not be inconsistent with the
Plan. Nothing in this Plan shall be deemed to give any optionee the right to
have such optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee or the Board takes
appropriate action. The Committee or the Board, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
17. Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchasers authorized under this
Plan shall be used for general corporate purposes.
18. Government Regulation. The Company's obligation to sell and deliver
shares of Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
19. Withholding of Additional Income Taxes. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of an Award, the making
of a Purchase of Common Stock for less than its fair market value, the making of
a Disqualifying Disposition (as that term is defined in Section 20 below) or the
vesting of restricted Common Stock acquired upon the exercise of a Stock Right
hereunder, the Company, in accordance with Section 2402(a) of the Code, may
require the optionee, Award recipient or purchaser to pay additional withholding
taxes in respect of the amount that is considered compensation includable in
such individual's gross income. The Committee or the Board in its discretion may
condition (i) the exercise of an Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value or (iv)
the vesting of restricted Common Stock acquired by exercising a Stock Right, on
the grantee's payment of such additional withholding taxes.
20. Notice to Company of Disqualifying Disposition. Each employee who
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition of any shares of the Company's
Common Stock acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such Common Stock before
the later of (a) two (2) years after the date the employee was granted the ISO
or (b) one (1) year after the date the employee acquired the Common Stock by
exercising the ISO. If the employee dies before such shares of Common Stock are
sold, these holding period requirements do not apply and no Disqualifying
Disposition can occur thereafter.
21. Governing Law; Construction. The validity and construction of this
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Utah, or the laws of any jurisdiction in which the Company or
its successors in interest may be organized. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, unless the context otherwise requires.
22. Financial Assistance. The Company is vested with authority under
this Plan to assist any employee to whom an Option is granted hereunder
(including any director or officer of the Company or any Related Corporation) in
the payment of the purchase price payable upon the exercise of an Option, by
lending the amount of such purchase price to such employee on such terms, at
such rates of interest and upon such security (or with no security) as shall
have been authorized by the Committee or the Board.
January 5, 1998
Oliver L. North, President
Guardian Technologies International, Inc.
22570 Markey Court, Suite 220
Dulles, Virginia 21066
Gentlemen:
I am securities counsel for Guardian Technologies International,
Inc. ("Guardian"). You have asked me to render this opinion to Guardian.
You have advised that:
1. Guardian is current in its reporting responsibilities to the
Securities and Exchange Commission as mandated by the Securities Exchange Act of
1934, as amended;
2. The 1997 Stock Option Plan was approved at Guardian's Annual
Shareholders Meeting held December 8, 1997.
I have read such documents as have been made available to me. For
purposes of this opinion, I have assumed the authenticity of such documents.
Based on the accuracy of the information supplied to me, it is my
opinion that Guardian may avail itself of a Registration Statement on Form S-8
and is qualified to do so, and further, it is my opinion that shares issued to
officers, directors and/or key employees pursuant to the 1997 Stock Option Plan
will, when and if exercised by such grantees, are freely tradeable.
I consent to the use of my name in the Registration Statement filed on
Form S-8.
Very truly yours,
Herbert M. Jacobi
To the Board of Directors
Guardian Technologies International, Inc.
Dulles, Virginia
We hereby consent to the use in this Registration Statement (Form S-8) of our
report, dated March 12, 1997, except for Note 15 as to which the date is April
10, 1997, relating to the financial statements of Guardian Technologies
International, Inc.
Thompson, Greenspon & Co., P.C.
Fairfax, Virginia
January 7, 1998