Exhibit 99
PROSPECTUS
BioShield Technologies, Inc.
4405 International Blvd. - Suite B109
Norcross, Georgia 30093
Telephone: (770) 925-3653
2002 "Broadly Based" Non-Statutory Stock Option Plan, dated
December 21, 2001 SHARES OF COMMON STOCK, NO PAR VALUE
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This Prospectus relates to the BioShield Technologies, Inc. 2002 Non-Statutory
Stock Option Plan, dated December 21, 2001 (the "Stock Option Plan"), pursuant
to which officers, directors, attorneys, consultants, other advisors and other
employees of BioShield Technologies, Inc. (the "Company") and its Affiliates are
eligible to receive shares of Common Stock of the Company (the "Stock Option
Shares") in consideration for their past services. Participants in the Stock
Option Plan may make payment for the Stock Option Shares either (i) in cash,
represented by bank or cashier's check, certified check or money order (ii) in
lieu of payment for bona fide services rendered, and such services were not in
connection with the offer or sale of securities in a capital-raising
transaction, (iii) by delivering shares of the Company's Common Stock which have
been beneficially owned by the optionee, the optionee's spouse, or both of them
for a period of at least six (6) months prior to the time of exercise (the
"Delivered Stock") in a number equal to the number of Stock Option Shares being
purchased upon exercise of the Option or (iv) by delivery of shares of corporate
stock which are freely tradeable without restriction and which are part of a
class of securities which has been listed for trading on the NASDAQ system or a
national securities exchange, with an aggregate fair market value equal to or
greater than the exercise price of the Stock Option Shares being purchased under
the Option, or (v) a combination of cash, services, Delivered Stock or other
corporate shares.
Since the sale of any securities of the Company by "affiliates" of the Company
may not be made without compliance with the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or an exemption therefrom (such as that provided by Rule 144 thereunder), the
Company plans to advise those participants in the Stock Option Plan who may be
"affiliates" of the Company, as such term is defined in Rule 144, (the Company
and such participants not so conceding) that any such sales by participants who
are not "affiliates" of the Company may be effected without compliance with the
registration and prospectus delivery requirements of the Act.
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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.
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The date of this Prospectus is December 21, 2001
A copy of any document or part thereof incorporated by reference in the
Registration Statement or any other documents required to be delivered to
participants pursuant to Rule 428(b) of the Securities Act but not delivered
with this Prospectus will be furnished without
charge upon written request. Requests should be addressed to: 2001 Non-
Statutory Stock Option Plan, BioShield Technologies, Inc., 4405 International
Blvd., Suite B109, Norcross, Georgia 30093, telephone (770) 925-3653.
The Company is subject to the informational requirements of the Exchange Act and
in accordance therewith files reports and other information with the Securities
and Exchange Commission. The reports and other information filed by the Company
can be inspected and copied at the public reference facilities maintained by the
Commission in Washington, D.C. and at the Midwest Regional Office, Citicorp
Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies
of such material can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549 at prescribed rates.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer or solicitation by anyone in any state in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such
offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
The Company 4
General Information Regarding the 2002 Non-Statutory
Stock Option Plan 4
The Employers
Purposes
Period of Stock Option Plan
Administration
Reorganizations and Recapitalizations of the Company
Securities to be Offered 6
Eligible Participants 6
Purchase of Securities Pursuant to the Stock Option Plan
and Payment for Securities Offered 6
Consideration for Shares Issued under the Stock
Option Plan
Exercise Period and Termination
Option Price
Transferability
Assignability 8
Amendments 8
Tax Effects of Stock Option Plan Participation 9
Tax Treatment to the Participants
Federal Income Tax Treatment of Nonqualified Stock
Options
Restrictions on Resale of Common Stock 9
Legal Matters 10
Indemnification of Officers and Directors 10
Incorporation of Certain Documents by Reference 10
Further Information 10
Exhibit A - 2002 "Broadly Based" Non-Statutory Stock Option Plan dated
December 21, 2001
THE COMPANY
BioShield Technologies, Inc. is a Georgia corporation incorporated on
June 1, 1995. The Company is currently authorized to issue Sixty Million
(60,000,000) Shares of which 50,000,000 shares shall be Common Stock, no par
value without cumulative voting rights and without any preemptive rights and
10,000,000 shares shall be Preferred Stock, no par value per share. The Company
develops and markets surface modifying antimicrobials and biostatic products.
The Company's products are used in customer, industrial and institutional
markets, environmental services, and medical device markets. The Company's
products are a reactive coating that modifies surfaces of all types by creating
a covalent bond between surfaces and chemical agents. For further and more
specific information regarding the Company's business activities, reference is
herewith made to (a) the Company's Form 10-KSB, as amended to date (as filed
with the Securities and Exchange Commission on October 16, 2001) and in
particular (but not limited to) Item 1 "Business" and (b) all other reports
filed by the Company pursuant to sections 13(a) or 15(d) of the Securities
Exchange Act of 1934 since the end of the year covered by the Form 10-KSB
referred to in (a) above. The full contents of such filings as indicated in (a)
and (b) above, as amended to date (including financial statements and exhibits
thereto) are herewith incorporated by reference as if fully set forth and
repeated herein.
GENERAL INFORMATION REGARDING THE
2002 NON-STATUTORY STOCK OPTION PLAN
The Employers. The Company has its executive offices in Georgia at
4405 International Blvd., Suite B109, Norcross, Georgia 30093 - telephone:
770-925-3653.
Purposes. The Stock Option Plan was adopted by the Board of Directors
of the Company on October 16, 2001 and is intended as an employment incentive,
to aid in attracting and retaining in the employ or service of the Company and
any Affiliated Corporation, persons of experience and ability and whose services
are considered valuable, to encourage the sense of proprietorship in such
persons, and to stimulate the active interest of such persons in the development
and success of the Company.
Period of Stock Option Plan. The Stock Option Plan shall expire on
December , 2011 except as to Nonqualified Stock Options then outstanding, which
shall remain in effect until they have expired or been exercised.
Administration. The Company's Board of Directors ("Board") may appoint
and maintain as administrator of the Stock Option Plan, the Compensation
Committee (the "Committee") of the Board which shall consist of at least three
members of the Board. Until such time as the Committee is duly constituted, the
Board itself shall have and fulfill the duties herein allocated to the
Committee. The Committee shall have full power and authority to designate Stock
Option Plan participants, to determine the provisions and terms of respective
Options (which need not be identical as to number of shares covered by any
Option, the method of exercise as related to exercise in whole or in
installments, or otherwise, including the Option price) and to interpret the
provisions and supervise the administration of the Stock Option Plan. The
Committee may, in its discretion, provide that certain Options not vest (that
is, become exercisable) until expiration of a certain period after issuance or
until other conditions are satisfied, so long as not contrary to the Stock
Option Plan.
A majority of the members of the Committee shall constitute a quorum.
All decisions and selections made by the Committee pursuant to the Stock Option
Plan's provisions shall be made by a majority of its members. Any decision
reduced to writing and signed by all of the members shall be fully effective as
if it had been made by a majority at a meeting duly held. The Committee shall
select one of its members as its chairman and shall hold its meetings at such
times and places as it deems advisable. If at any time the Board shall
consist of seven or more members, then the Board may amend the Stock Option Plan
to provide that the Committee shall consist only of Board members who shall not
have been eligible to participate in the Stock Option Plan (or similar stock or
stock option plan) of the Company or its affiliates at any time within one year
prior to appointment to the Committee.
Reorganizations and Recapitalizations of the Company.
(a) The existence of the Stock Option Plan and Options granted thereunder shall
not affect in any way the right or power of the Company or its shareholders to
make or authorize any and all adjustments, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business, or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Company's Common Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale,
exchange or transfer of all or any part of its assets or business, or any other
corporation act or proceeding, whether of a similar character or otherwise.
(b) The Stock Option Shares are shares of the Common Stock of the Company as
currently constituted. If, and whenever, prior to delivery by the Company of all
of the Stock Option Shares which are subject to Options granted thereunder, the
Company shall effect a subdivision or consolidation of shares or other capital
readjustment, the payment of a Stock dividend, a stock split, combination of
shares (reverse stock split) or recapitalization or other increase or reduction
of the number of shares of the Common Stock outstanding without receiving
compensation therefor in money, services or property, then the number of Stock
Option Shares available under the Stock Option Plan and the number of Stock
Option Shares with respect to which Options granted thereunder may thereafter be
exercised shall (i) in the event of an increase in the number of outstanding
shares, be proportionately increased, and the cash consideration payable per
share shall be proportionately reduced; and (ii) in the event of a reduction in
the number of outstanding shares, be proportionately reduced, and the cash
consideration payable per share shall be proportionately increased.
(c) If the Company is reorganized, merged, consolidated or party to a plan of
exchange with another corporation pursuant to which shareholders of the Company
receive any shares of stock or other securities, there shall be substituted for
the Stock Option Shares subject to the unexercised portions of outstanding
Options an appropriate number of shares of each class of stock or other
securities which were distributed to the shareholders of the Company in respect
of such Stock Option Shares in the case of a reorganization, merger,
consolidation or plan of exchange; provided, however, that all such Options may
be canceled by the Company as of the effective date of a reorganization, merger,
consolidation, plan of exchange, or any dissolution or liquidation of the
Company, by giving notice to each optionee or his personal representative of its
intention to do so and by permitting the purchase of all the shares subject to
such outstanding Options for a period of not less than thirty (30) days during
the sixty (60) days next preceding such effective date.
(d) Except as expressly provided above, the Company's issuance of Stock Option
Shares of any class, or securities convertible into Stock Option Shares of any
class, for cash or property, or for labor or services, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into Stock Option
Shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Stock Option Shares subject
to Options granted thereunder or the purchase price of such shares.
A copy of the Stock Option Plan is attached hereto as Exhibit A.
SECURITIES TO BE OFFERED
Subject to adjustment, a total of 7,000,000 shares of Common Stock
("Stock"), of the Company shall be subject to the Stock Option Plan. The Common
Stock subject to the Stock Option Plan shall consist of unissued shares or
previously issued shares reacquired and held by the Company or any Affiliated
Corporation, and such amount of shares shall be and is hereby reserved for sale
for such purpose. Any of such shares which may remain unsold and which are not
subject to outstanding Options at the termination of the Stock Option Plan shall
cease to be reserved for the purpose of the Stock Option Plan, but until
termination of the Stock Option Plan, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of the Stock Option Plan.
Should any Option expire or be canceled prior to its exercise in full, the
unexercised shares theretofore subject to such Option may again be subjected to
an Option under the Stock Option Plan.
On October 16, 2001, the Board of Directors approved the Stock Option
Plan and authorized the issuance of 7,000,000 Common Shares to be subject to the
Stock Option Plan subject to stockholder approval and adoption of the Plan.
ELIGIBLE PARTICIPANTS
The persons eligible for participation in the Stock Option Plan as
recipients of Options shall include all full-time and part-time employees (as
determined by the Committee) and officers of the Company or of an Affiliated
Corporation. In addition, directors of the Company or any Affiliated Corporation
who are not employees of the Company or an Affiliated Corporation and any
attorney, consultant or other adviser to the Company or any Affiliated
Corporation shall be eligible to participate in the Stock Option Plan. For all
purposes of the Stock Option Plan, any director who is not also a common law
employee and is granted an option under the Stock Option Plan shall be
considered an "employee" until the effective date of the director's resignation
or removal from the Board of Directors, including removal due to death or
disability. The Committee shall have full power to designate, from among
eligible individuals, the persons to whom Options may be granted. A person who
has been granted an Option thereunder may be granted an additional Option or
Options, if the Committee shall so determine. The granting of an Option shall
not be construed as a contract of employment or as entitling the recipient
thereof to any rights of continued employment. See, however, "No Shareholder
Approval Required for Establishment of Plan".
PURCHASE OF SECURITIES PURSUANT TO THE STOCK OPTION PLAN
AND PAYMENT FOR SECURITIES OFFERED
Consideration for Shares Issued Under the Stock Option Plan. The
purchase price of the Stock Option Shares as to which an Option is exercised
shall be paid in full at the time of exercise and no Stock Option Shares shall
be issued until full payment is made therefor. Payment shall be made either (i)
in cash, represented by bank or cashier's check, certified check or money order
(ii) in lieu of payment for bona fide services rendered, and such services were
not in connection with the offer or sale of securities in a capital-raising
transaction, (iii) by delivering shares of the Company's Common Stock which have
been beneficially owned by the optionee, the optionee's spouse, or both of them
for a period of at least six (6) months prior to the time of exercise (the
"Delivered Stock") in a number equal to the number of Stock Option Shares being
purchased upon exercise of the Option or (iv) by delivery of shares of corporate
stock which are freely tradeable without restriction and which are part of a
class of securities which has been listed for trading on the NASDAQ system or a
national securities exchange, with an aggregate fair market value equal to or
greater than the exercise price of the Stock Option Shares being purchased under
the Option, or (v) a combination of cash, services, Delivered Stock or other
corporate shares.
An Option shall be deemed exercised when written notice thereof, accompanied by
the appropriate payment in full, is received by the Company. No holder of an
Option shall be, or have any of the rights and privileges of, a shareholder of
the Company in respect of any Stock Option Shares purchasable upon exercise of
any part of an Option unless and until certificates representing such shares
shall have been issued by the Company to him or her.
Exercise Period and Termination. The nonqualified stock options
exercise period shall be a term of not more than ten (10) years from the date of
granting of each nonqualified stock option and shall automatically terminate:
(i) Upon termination of the optionee's employment with the Company for cause;
(ii) At the expiration of twelve (12) months from the date of termination of the
optionee's employment with the Company for any reason other than death, without
cause; provided, that if the optionee dies within such twelve-month period,
subclause (iii) below shall apply; or
(iii) At the expiration of fifteen (15) months after the date of death of the
optionee.
Employment with the Company as used in the Stock Option Plan shall
include employment with any Affiliated Corporation and nonqualified stock
options granted under the Stock Option Plan shall not be affected by an
employee's transfer of employment among the Company and any Parent or Subsidiary
thereof. An optionee's employment with the Company shall not be deemed
interrupted or terminated by a bona fide leave of absence (such as sabbatical
leave or employment by the Government) duly approved, military leave, maternity
leave or sick leave.
Option Price. The Stock Option Plan provides that the option price with
respect to each option will not be less than ten percent (10%) of the fair
market value of such share on the date the option is granted. The fair market
value of a share on a particular date shall be deemed to be the average of
either (i) the highest and lowest prices at which shares were sold on the date
of grant, if traded on a national securities exchange, (ii) the high and low
prices reported in the consolidated reporting system, if traded on a "last sale
reported" system, such as NASDAQ, or (iii) the high bid and high asked price for
over-the-counter securities. If no transactions in the stock occur on the date
of grant, the fair market value shall be determined as of the next earliest day
for which reports or quotations are available. If the common shares are not then
quoted on any exchange or in any quotation medium at the time the option is
granted, then the Board of Directors or Committee will use its discretion in
selecting a good faith value believed to represent fair market value based on
factors then known to them.
Transferability.
(a) Options granted under the Stock Option Plan are transferable by the holder
(a) by will or the laws of descent and distribution and (b) to the extent
permitted by Form S-8 as amended April 7, 1999. If a participant dies during
employment or within three months thereafter, the option granted to him may be
exercised by his legal representative to the extent set forth therein until
either the expiration of the option or within one year after the date of death,
whichever comes first.
(b) Notwithstanding anything to the contrary as may be contained in this Plan
regarding rights as to transferability or lack thereof, all options granted
hereunder may and shall be transferable to the extent permitted in accordance
with SEC Release No. 33-7646 entitled "Registration of Securities on Form S-8"
as effective April 7, 1999 and in particular in accordance with that portion of
such Release which expands Form S-8 to include stock
option exercsie by family members so that the rules governing the use of Form
S-8 (a) do not impede legitimate intra family transfer of options and (b) may
facilitate transfer for estate planing purposes - all as more specifically
defined in Article III, Sections A and B thereto, the contents of which are
herewith incorporated by reference.
NO STOCKHOLDER APPROVAL REQUIRED FOR ESTABLISHMENT OF PLAN
Notwithstanding anything to the contrary contained in this Prospectus
it is the intention of the Company that the Plan comply, in all respects, with
what is referred to as a "Broadly Based Plan" in Nasdaq Marketplace Rule
4350(i)(1)(A) and such other sections in the Nasdaq Marketplace Rules as may be
applicable to "Broadly Based Plans". In that respect it is understood and agreed
as follows:
4. No stockholder approval will be sought for establishment of the Plan or
any amendments thereto and approval of the majority of the Company's
Board of Directors shall suffice.
5. Less than fifty percent (50%) of all options issued under the Plan
shall be issued to officers and directors of the Company; "officers"
and "directors" being defined herein in the same manner as defined in
Section 16 of the Securities Exchange Act of 1934 and
6. "Broadly Based" as defined herein shall mean that at the end of three
(3) years from the date of the Plan as amended at least fifty one
percent (51%) of all options granted thereunder shall have been granted
to "rank and file" personnel of the Company (i.e., persons who are not
officers and directors as defined in "2" above) and that at the
anniversary date of each succeeding year no less than 51% of all
options granted shall have been granted to the aforesaid "rank and
file".
ASSIGNABILITY
No Option shall be assignable or otherwise transferable (by the
optionee or otherwise) except by will or the laws of descent and distribution or
except as permitted in accordance with SEC Release No.33-7646 as effective April
7, 1999 and in particular that portion thereof which expands upon
transferability as is contained in Article III entitled "Transferable Options
and Proxy Reporting" as indicated in Section A 1 through 4 inclusive and Section
B thereof. No Option shall be pledged or hypothecated in any manner, whether by
operation of law or otherwise, nor be subject to execution, attachment or
similar process.
AMENDMENTS
The Board may amend, alter or discontinue the Stock Option Plan at any
time in such respects as it shall deem advisable in order to conform to any
change in any other applicable law, or in order to comply with the provisions of
any rule or regulation of the Securities and Exchange Commission required to
exempt the Stock Option Plan or any Options granted thereunder from the
operation of Section 16(b) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), or in any other respect not inconsistent with Section 16(b) of
the Exchange Act; provided, that no amendment or alteration shall be made which
would impair the rights of any participant under any Option theretofore granted,
without his consent (unless made solely to conform such Option to, and necessary
because of, changes in the foregoing laws, rules or regulations), and the Board
may further amend or alter this Plan in order to increase the total number of
shares reserved for the purposes of the Stock Option Plan except that no
amendment or alteration to the Plan shall be made without the approval of
stockholders which would:
(a) Decrease the Option price provided for in Paragraph 5 (except as provided in
Paragraph 9), or change the classes of persons eligible to participate in the
Stock Option Plan as provided in Paragraph 3; or
(b) Extend the Option period provided for in Paragraph 6; or
(c) Materially increase the benefits accruing to participants under the Stock
Option Plan; or
(d) Materially modify the requirements as to eligibility for participation in
the Stock Option Plan; or
(e) Extend the expiration date of the Stock Option Plan as set forth in
Paragraph 11 of the Stock Option Plan.
TAX EFFECTS OF STOCK OPTION PLAN PARTICIPATION
Tax Treatment to the Participants. The Stock Option Plan provides for
the grant of nonqualified stock options. A description of these options and
certain federal income tax aspects associated therewith is set forth below.
Because tax results may vary due to individual circumstances, each participant
in the Stock Option Plan is urged to consult his personal tax adviser with
respect to the tax consequences of the exercise of an option or the sale of
stock received upon the exercise thereof, especially with respect to the effect
of state tax laws.
Federal Income Tax Treatment of Nonqualified Stock Options. No income
is recognized by an optionee when a non-qualified stock option is granted.
Except as described below, upon exercise of a nonqualified stock option, an
optionee is treated as having received ordinary income at the time of exercise
in an amount equal to the difference between the option price paid and the then
fair market value of the Common Stock acquired. The Company is entitled to a
deduction at the same time and in a corresponding amount. The optionee's basis
in the Common Stock acquired upon exercise of a nonqualified stock option is
equal to the option price plus the amount of ordinary income recognized, and any
gain or loss thereafter recognized upon disposition of the Common Stock is
treated as capital gain or loss.
Stock acquired by "insiders' (i.e., officers, directors or persons
holding 10% or more of the stock of the Company who are subject to the
restrictions on short-swing trading imposed by Section 16(b) of the Securities
Exchange Act of 1934) upon exercise of nonqualified stock options constitutes
"restricted property" and, unless the optionee elects otherwise, the recognition
of income upon exercise is deferred to the date upon which the stock acquired
upon exercise may first be sold without incurring Section 16(b) liability
(generally six months after exercise). If such an optionee does not elect to
recognize income upon exercise, the insider will realize ordinary income in an
amount equal to the difference between the option price and the fair market
value on the date the stock may first be sold without incurring Section 16(b)
liability.
RESTRICTIONS ON RESALE OF COMMON STOCK
While the Stock Option Plan does not place restrictions on resales of
Common Stock acquired thereunder, shares acquired under the Stock Option Plan by
an "affiliate," as that term is defined in Rule 405, under the Securities Act of
1933, may only be resold pursuant to the registration requirements of the Act,
Rule 144 or another applicable exemption therefrom. Generally, sales of
securities, including Common Stock of the Company, are subject to antifraud
provisions contained in federal and state securities laws. Acquisitions
(including acquisitions under the Stock Option Plan) and dispositions of Common
Stock of the Company by an officer, director or affiliate of the Company within
any six month period may give rise to the right of the Company to recapture any
profit from such transactions pursuant to Section 16(b) of the Securities
Exchange Act of 1934.
It is advisable for a participant to consult with legal counsel
concerning the securities law implications of his exercise of options and his
acquisition or disposition of shares of Common Stock under the Stock Option
Plan.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Company by Gary B. Wolff, P.C., 747 Third
Avenue, New York, New York 10017.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Bylaws provide for the Company to indemnify each director
and officer of the Company against liabilities imposed upon him (including
reasonable amounts paid in settlement) and expenses incurred by him in
connection with any claim made against him or any action, suit or proceeding to
which he may be a party by reason of his being or having been a director or
officer of the Company. The Company has also entered into Indemnification
Agreements with each officer and director pursuant to which the Company will, in
general, indemnify such persons to the maximum extent permitted by the Company's
Bylaws and the laws of the State of Georgia against any expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement incurred in
connection with any actual or threatened action or proceeding to which such
director or officer is made or threatened to be made a party by reason of the
fact that such person is or was a director or officer of the Company. The
foregoing provisions may reduce the likelihood of derivative litigation against
directors and may discourage or deter shareholders or management from suing
directors for breaches of their duty of care, even though such an action, if
successful, might otherwise benefit the Company and its shareholders.
Section 14-2-202(b)(4) of the Georgia Business Corporation Code
provides that a corporation's articles of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its shareholders for monetary damages for breach of duty of care or other
duty as a director. This Section also provides, however, that such a provision
shall not eliminate or limit the liability of a director (i) for any
appropriation, in violation of his duties, of any business opportunities of the
corporation, (ii) for acts or omissions involving intentional misconduct or a
knowing violation of law, (iii) for certain other types of liabilities set forth
in the Code and (iv) for transactions from which the director derived an
improper personal benefit. Article VI of the Company's Articles of Incorporation
contains a provision eliminating or limiting the personal liability of a
director of the Company to the fullest extent authorized by the Georgia Business
Corporation Code.
In addition, Sections 14-2-851 and 14-2-857 of the Georgia Business
Corporation Code, provides for indemnification of directors and officers of the
Company for liability and expenses reasonably incurred by them in connection
with any civil, criminal, administrative or investigative action, suit or
proceeding in which they may become involved by reason of being a director or
officer of the Company. Indemnification is permitted if the director or officer
acted in a manner which he believed in good faith to be in or not opposed to the
best interests of the Company, and with respect to any criminal action or
proceeding, if he had no reasonable cause to believe his conduct to be unlawful;
provided that the Company may not indemnify any director or officer (i) in
connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation or
(ii) in connection with any other proceeding in which he was adjudged liable on
the basis that personal profit was improperly received by him, except as
determined by a court of competent jurisdiction. Article 9 of the Company's
Bylaws contains a provision providing for the indemnification of officers and
directors and advancement of expenses to the fullest extent authorized by the
Georgia Business Corporation Code.
The Company also maintains directors and officers liability insurance
which insures against liabilities that directors and officers of the Company may
incur in such capacities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in the
registration statement:
(a) The registrant's latest annual report on Form 10-KSB.
(b) All other reports filed by the registrant pursuant to sections
13(a) or 15(d) of the Securities Exchange Act of 1934 since
the end of the year covered by the Form 10-KSB referred to in
(a) above and
(c) Not Applicable.
All documents subsequently filed by the registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment to the registration statement which
indicates that all of the shares of common stock offered have been sold or which
deregisters all of such shares then remaining unsold, shall be deemed to be
incorporated by reference in the registration statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this registration statement.
FURTHER INFORMATION
A Registration Statement on Form S-8 was filed by the Company with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933. This Prospectus omits certain of the information contained in the
Registration Statement and reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities to which this Prospectus relates.
Statements herein contained concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.