As filed with the Securities and Exchange Commission on
September 29, 2003
Registration No. 000-31779
-----------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SECURITY INTELLIGENCE TECHNOLOGIES, INC.
(Exact name of issuer as specified in its charter)
Florida 65-0928369
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
145 Huguenot Street, New Rochelle, New York 10801
(Address of Principal Executive Offices) (Zip Code)
Consulting
Shares Issued For Services
(Full title of the Plan)
Ben Jamil, President
Security Intelligence Technologies, Inc.
145 Huguenot Street
New Rochelle, New York 10801
(Name and address of agent for service)
(914)654-8700
copies to:
Anslow & Jaclin, LLP
4400 Route 9, 2nd Floor
Freehold, NJ 07728
(732) 409-1212
Approximate date of commencement of proposed sale to the public: Upon the
effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount Offering aggregate Amount of
to be to be price per offering regristration
registered registered(3)(4) share(1)(2) price fee
(1)
---------- ---------- ----------- ------- -------
- -
Common Stock, 720,000 $ .73 $525,600 $48.36
$.0001 par value
(1) The fee with respect to these shares has been calculated pursuant to Rules
457(h) and 457(c) under the Securities Act of 1933 and based upon the average of
the last price per share of our Common Stock on September 26, 2003 a date within
five(5) days prior to the date of filing of this registration statement, as
reported by the OTC Electronic Bulletin Board.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Represents the maximum number of shares that may be issued under the
above-named Consulting Agreement and 2003 Stock Incentive Plan.
(4) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable pursuant to this Registration Statement by reason of
any stock dividend, stock split, recapitalization or any other similar
transaction effected without the receipt of consideration which results in an
increase in the number of the Registrant's outstanding shares of Common Stock.
Documents Incorporated by Reference X Yes No
PART II
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this registration
statement and made a part hereof:
(a) Our quarterly reports on Form 10Q-SB filed on May 20, 2003, February 19,
2003 and November 19, 2002.
(b) Our annual report on Form 10-KSB for the year ended June 30, 2002 filed on
November 6, 2002 pursuant to Section 15(d) of the Exchange Act of 1934, as
amended or the 1934 Act.
(c) All other documents filed by us after the date of this registration
statement under Section 13(a), 13(c), 14 and 15(d) of the 1934 Act, after
today's date and prior to the filing of a post-effective amendment to this
registration statement which indicates that all securities offered have been
sold or which de-registers all securities then remaining in this registration
statement and to be part thereof from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interest of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Our Certificate of Incorporation and By-laws provide that we shall indemnify
to the fullest extent permitted by Florida law any person whom we may indemnify
thereunder, including our directors, officers, employees and agents. Such
indemnification (other than as ordered by a court) shall be made by us only upon
a determination that indemnification is proper in the circumstances because the
individual met the applicable standard of conduct i.e., such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to our
best interest. Advances for such indemnification may be made pending such
determination. Such determination shall be made by a majority vote of a quorum
consisting of disinterested directors, or by independent legal counsel or by the
stockholders. In addition, our Certificate of Incorporation provides for the
elimination, to the extent permitted by Florida law, of personal liability of
our directors and our stockholders for monetary damages for breach of fiduciary
duty as directors.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "1933 Act") may be permitted to our directors, officers
and controlling persons pursuant to the foregoing provisions, or otherwise, we
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by a director, officer or controlling person of us 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, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Number Description
- ------ -----------
4.1 Consulting Agreement between Jason Lyons and us dated July 18, 2003
4.2 2003 Stock Incentive Plan
5.1 Consent and Opinion of Anslow & Jaclin, LLP.
23.1 Consent of Schneider & Associates LLP
Item 9. Undertakings.
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:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
Provided, however, that paragraphs (1)(a) and (1)(b) do not apply if
the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by
this paragraphs is contained in periodic reports filed by us pursuant
to Section 13 or Section 15(d) of the 1934 Act that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the 1933 Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(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.
(4) That, for purposes of determining any liability under the 1933 Act, each
filing of our annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the 1934 Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(5) To deliver or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
1934 Act; and, where interim financial information required to be presented by
Item 310(b) of Regulation S-B is not set forth in the prospectus, to deliver, or
cause to be delivered, to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(6) To deliver or cause to be delivered with the prospectus to each employee to
whom the prospectus is sent or given, a copy of our annual report to
stockholders for its last fiscal year, unless such employee otherwise has
received a copy of such report, in which case the registration shall state in
the prospectus that it will promptly furnish, without charge, a copy of such
report on written request of the employee. If our last fiscal year has ended
within 120 days prior to the use of the prospectus, our annual report for the
preceding fiscal year may be delivered, but within such 120-day period the
annual report for the last fiscal year will be furnished to each employee.
(7) To transmit or cause to be transmitted to all employees participating in the
plans who do not otherwise receive such material as our stockholders, at the
time and in the manner such material is sent to its stockholders, copies of all
reports, proxy statements and other communications distributed to its
stockholders generally.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we certify 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, there unto duly authorized, in the City of New
Rochelle, State of New York, on September 29, 2003.
SECURITY INTELLIGENCE TECHNOLOGIES, INC.
By: /s/ Ben Jamil
---------------------------
BEN JAMIL
President, CEO and Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signatures Date
By: /s/ Ben Jamil September 29, 2003
-------------------------------
BEN JAMIL
President, CEO and Director
4.1 Consulting Agreement between Jason Lyons and us dated July 18, 2003
CONSULTING AGREEMENT
--------------------
THIS CONSULTING AGREEMENT, dated as of July 18, 2003 (the "Agreement"),
by and between Security Intelligence Technologies, Inc. a Florida Corporation
(the "Company"), and Jason S. Lyons, an individual residing in the State of
Florida (the "Consultant") (individually, a "Party", collectively, the
"Parties").
RECITALS
--------
WHEREAS, the Company has requested of Consultant and the Consultant has
agreed to provide certain strategic, financial and other general corporate
consulting services to the Company.
WHEREAS, in connection with and in consideration for such services, the
Company has agreed to compensate Consultant with warrants to purchase common
stock of the Company in lieu of cash payment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Parties agree as follows:
1. Services. Consultant agrees to familiarize itself to the
extent it deems appropriate and feasible with the business, operations,
properties, financial condition and prospects of the Company and to perform and
provide, as the Company reasonably and specifically requests, certain strategic,
financial, and other general corporate consulting services to the Company
("Services"), including but not limited to: (i) identifying prospective
strategic partners and strategic alliances; (ii) planning, strategizing and
negotiating with potential strategic business partners; (iii) assisting with
business development; (iv) reporting as to developments concerning the industry
which may be relevant or of interest or concern to the Company or the Company's
business; (v) developing strategic planning issues; (vi) providing management
consulting services including: analyzing historical operational performance,
reviewing operational performance of the Company, making recommendations to
enhance the operational efficiency of the Company; and (vii) consulting on
alternatives to enhance the growth of the Company. NONE OF THE SERVICES PROVIDED
BY CONSULTANT HEREIN SHALL INVOLVE THE RAISING OF DEBT OR EQUITY CAPITAL, AND
NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS TO OBLIGATE OR REQUIRE THE
CONSULTANT TO RAISE DEBT OR EQUITY CAPITAL.
2. Compensation. (i) In consideration of the Services to be
provided by the Consultant, and in lieu of a cash payment, the Company agrees to
issue to Consultant and/or its designee(s) warrants (the "Warrants") to purchase
400,000 shares ("Shares") of the Company's common stock. The Warrants shall be
exercisable for a period of two years from the date hereof with the following
exercise prices: (A) Warrant to purchase 100,000 shares of common stock shall
have an exercise price of $0.45 per share; (B) Warrant to purchase 100,000
shares of common stock shall have an exercise price of $0.55 per share; (C)
Warrant to purchase 100,000 shares of common stock shall have an exercise price
of $0.75 per share; (D) Warrant to purchase 100,000 shares of common stock shall
have an exercise price of $1.00 per share; The terms of the Warrants shall be
set forth in one or more agreements (the "Warrant Agreements") in form and
substance reasonably satisfactory to Consultant and the Company. The Warrant
Agreements shall contain
customary terms, including without limitation, provisions for change of
control, weighted-average price based anti-dilution and call features.
(ii) The Company hereby agrees to register the
Warrants and the Shares underlying the warrants by filing a Form S-8
Registration Statement covering the Shares within thirty (30) business days of
the date of this Agreement. Consultant shall take any action reasonably
requested by the Company in connection with registration or qualification of the
Warrants and Shares under federal or state securities laws
(iii) In addition to the foregoing, the Company shall
reimburse the Consultant for such business expenses which the Consultant
incurs solely in connection with the performance of the Services hereunder. The
Consultant shall obtain the prior written approval of the Company before
incurring any expenses for which the Consultant will seek reimbursement from the
Company. The Consultant must submit receipts for all expenses and otherwise
comply with all of the Company's general policies for expense reimbursement in
order to receive payment therefor. The Company shall reimburse the Consultant
for expenses within fifteen (15) days following submission of all required
documentation.
(iv) It is expressly understood and agreed that in
connection with the Services to be performed by the Consultant, the
Consultant shall be solely responsible for any and all taxes arising from the
consulting fees paid to the Consultant hereinafter.
3. Term. Consultant's engagement shall be for a period of One (1) year
("Term"). Thereafter, the agreement may be terminated by either the Company or
Consultant at any time, with or without cause, upon written notice to that
effect to the other party.
4. Information. The Company shall furnish Consultant such information
as Consultant reasonably requests in connection with the performance of its
services hereunder (all such information so furnished is referred to herein as
the "Information"). The Company understands and agrees that Consultant, in
performing its services hereunder, will use and rely upon the Information as
well as publicly available information regarding the Company and any potential
partners and that Consultant shall not assume responsibility for independent
verification of any information, whether publicly available or otherwise
furnished to it, concerning the Company or any potential partner, including,
without limitation, any financial information, forecasts or projections,
considered by Consultant in connection with the rendering of its services.
Accordingly, Consultant shall be entitled to assume and rely upon the accuracy
and completeness of all such information and is not required to conduct a
physical inspection of any of the properties or assets, or to prepare or obtain
any independent evaluation or appraisal of any of the assets or liabilities, of
the Company or any potential partner. With respect to any financial forecasts
and projections made available to Consultant by the Company or any potential
partners and used by Consultant in its analysis, Consultant shall be entitled to
assume that such forecasts and projections have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
management of the Company or any potential partner, as the case may be, as to
the matters covered thereby.
5. Timely Appraisals. The Company hereby agrees to use its commercially
reasonable efforts to keep Consultant up to date and apprised of all business,
market and legal developments related to the Company and its operations and
management. Accordingly:
(i) the Company shall provide Consultant with copies
of all amendments, revisions and changes to its business and marketing
plans, bylaws, articles of incorporation, private placement memoranda, key
contracts, employment and consulting agreements and other operational
agreements;
(ii) the Company shall promptly notify Consultant of
all new contracts agreements, joint ventures or filings with any state,
federal or local administrative agency, including without limitation the SEC,
NASD or any state agency, and shall provide all related documents, including
copies of the exact documents filed, to Consultant, including without
limitation, all annual reports, quarterly reports and notices of change of
events, and registration statements filed with the SEC and any state agency,
directly to Consultant;
(iii) the Company shall also provide directly to
Consultant current financial statements, including balance sheets, income
statements, cash flows and all other documents provided or generated by the
Company in the normal course of its business and requested by Consultant from
time to time; and
(iv) Consultant shall keep all documents and
information supplied to it hereunder confidential.
6. Representations and Warranties. The Consultant hereby represents and
warrants to the Company that:
(i) he has full legal capacity to enter into this
Agreement and to provide the Services hereunder without violation or
conflict with any other agreement or instrument to which the Consultant is a
party or may be bound;
(ii) in the course of performing the Services
hereunder, the Consultant will not infringe the patent, trademark or
copyright (collectively, "Intellectual Property") of any third party;
(iii) the execution, delivery and performance of this
Agreement does not and will not conflict with, violate or breach its
constituent documents or any agreement (including, without limitation, any other
distribution agreement), decree, order or judgment or any law or regulation to
which it is a party or subject or by which it or any of its properties or assets
is bound.
7. Relationship of the Parties. The Consultant shall be an independent
contractor and the Consultant shall not be considered in any manner an employee
of the Company and the relationship of the Company and the Consultant shall not
in any manner create an employer-employee relationship between the parties.
8. Reliance on Others. The Company confirms that it will rely on its
own counsel, accountants and other similar expert advisors for legal,
accounting, tax and other similar advice.
9. No Rights in Shareholders, etc. The Company recognizes that
Consultant has been engaged only by the Company, and that the Company's
engagement of Consultant is not deemed to be on behalf of and is not intended to
confer rights upon any shareholder, partner or other owner of the Company or any
other person not a party hereto as against Consultant or any of its affiliates
or any of their respective directors, officers, agents, employees or
representatives. Unless otherwise expressly agreed, no one other than the
Company is authorized to rely upon the Company's engagement of Consultant or any
statements, advice, opinions or conduct by Consultant. Without limiting the
foregoing, any opinions or advice
rendered to the Company's Board of Directors or management in the course of the
Company's engagement of Consultant are for the purpose of assisting the
Board or management, as the case may be, in evaluating the Transaction and do
not constitute a recommendation to any shareholder of the Company concerning
action that such shareholder might or should take in connection with the
Transaction. Consultant's role herein is that of an independent contractor;
nothing herein is intended to create or shall be construed as creating a
fiduciary relationship between the Company and Consultant.
10. No Waiver. The failure of any of the parties hereto to enforce any
provision hereof on any occasion shall not be deemed to be a waiver of any
preceding or succeeding breach of such provision or of any other provision.
11. Entire Agreement. This Agreement constitutes the entire Agreement
and understanding of the parties hereto.
12. Amendments. No amendment, modification or waiver of any provision
herein shall be effective unless in writing, executed by each of the parties
hereto.
13. Governing Law; Jurisdiction. This Agreement shall be construed,
interpreted and enforced in accordance with and shall be governed by the laws of
the State of New York applicable to agreements made and to be performed entirely
therein. In the event that either Party hereto shall take legal action to
enforce any of the provisions of this Agreement, the Parties agree that the
exclusive jurisdiction for such legal action shall be the state courts of New
York or the federal courts residing in the State of New York.
14. Binding Effect. This Agreement shall bind and inure to the benefit
of the Parties, their successors and assigns.
15. Notices. Any notice under the provisions of this Agreement shall be
deemed given when received and shall be given by hand, reputable overnight
courier service or by registered or certified mail, return receipt requested,
directed to the addresses set forth above, unless notice of a new address has
been sent pursuant to the terms of this section.
16. Unenforceability;Severability. If any provision of this Agreement
is found to be void or unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall, nevertheless, be binding upon the
Parties with the same force and effect as though the unenforceable part had been
severed and deleted.
17. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the Parties hereto have executed this instrument
the date first above written.
SECURITY INTELLIGENCE TECHNOLOGIES, INC.
By: /s/ Ben Jamil
------------------------------
Name: Ben Jamil
Title: Chief Executive Officer
CONSULTANT
By: /s/ Jason Lyons
--------------------------
Jason S. Lyons
4.2 2003 Stock Incentive Plan
SECURITY INTELLIGENCE TECHNOLOGIES, INC.
2003 Stock Incentive Plan
1. Purpose; Definitions.
The purpose of the Security Intelligence Technologies, Inc. 2003 Stock
Incentive Plan (the "Plan") is to enable Security Intelligence Technologies,
Inc. (the "Company") to attract, retain and reward the key employees, director
and consultants as hereinafter set forth.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Affiliate" means any corporation, partnership, limited liability
company, joint venture or other entity, other than the Company and its
Subsidiaries, that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least 20% of
the combined voting power of all classes of stock of such entity or at least 20%
of the ownership interests in such entity.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
(d) "Commission" means the Securities and Exchange Commission or any
successor thereto.
(e) "Common Stock" means the Common Stock, par value $.0001 per share, of
the Company or any class of common stock into which such common stock may
hereafter be converted or for which such common stock may be exchanged pursuant
to the Company's certificate of incorporation or as part of a recapitalization,
reorganization or similar transaction.
(f) "Company" means Security Intelligence Technologies, Inc., a Florida
corporation, or any successor corporation.
(g) "Eligible Persons" means persons who are natural persons and whose
services to the Company are not in connection with the offer or sale of
securities in a capital-raising transactions and do not directly or indirectly
promote or maintain a market for the Company's securities.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
(i) "Non-Qualified Stock Option" means any Stock Option that is not an
incentive stock option as defined in Section 422 of the Code.
(j) "Plan" means this Security Intelligence Technologies, Inc. 2003 Stock
Incentive Plan, as hereinafter amended from time to time.
(k) "Stock Grant" means an award of shares of Stock that is subject to
restrictions under Section 6 of the Plan.
(l) "Stock Option" or "Option" means any option to purchase shares of
Common Stock as set forth in Section 5 of the Plan.
(m)"Subsidiary" means any corporation or other business association,
including a partnership or limited liability company (other than the Company),
in an unbroken chain of corporations or other business associations beginning
with the Company if each of the corporations or other business associations
(other than the last corporation in the unbroken chain) owns equity interests
(including stock, partnership interests or membership interests in limited
liability companies) possessing 50% or more of the total combined voting power
of all classes of equity in one of the other corporations or other business
associations in the chain.
2. Administration.
The Plan shall be administered by a Committee of not less than two
directors of the Company who shall be appointed by the Board and who shall serve
at the pleasure of the Board. If, and to the extent that, no Committee exists
which has the authority to so administer the Plan, the functions of the
Committee specified in the Plan shall be exercised by the Board.
3. Common Stock Subject to Plan.
(a) The total number of shares of Common Stock reserved and available for
issuance under the Plan shall be three hundred twenty thousand (320,000) shares
of Common Stock. In the event that Options granted pursuant to said Section 4
shall for any reason terminate or expire unexercised or Stock Grants granted
pursuant to Section 6 shall be forfeited, such number of shares of Common Stock
shall be available for the registrant pursuant to Stock Options or Stock Grants
pursuant to the Plan.
(b) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, stock distribution, reverse
split, combination of shares or other change in corporate structure affecting
the Common Stock, such substitution or adjustment shall be made in the aggregate
number of shares reserved for issuance under the Plan and the Options, in the
number and option price of shares of Common Stock subject to outstanding
Options, as may be determined to be appropriate by the Committee, in its
reasonable discretion and consistent with generally accepted accounting
principles consistently applied, provided that the number of shares subject to
any Option shall always be a whole number.
4. Grant of Options. The Committee may grant Non-Qualified Stock Options under
the Plan to Eligible Persons. Options granted under the Plan shall be at such
exercise price, not less than the par value per share, and shall have such term
and shall be exercisable in such installments as the Committee shall, in its
sole discretion, determine.
5. Exercise of Options.
(a) The Options may be exercised by payment of cash or of shares of Common
Stock having a value equal to the exercise price. The value of the Common Stock
shall mean the closing price of the Common Stock on the date the Option is
exercised.
(b) The Committee may at any time offer to buy out for a payment in cash or
Common Stock, any Option in whole or in part and without regard to whether the
Option is then exercisable on such terms and conditions as the Committee shall
establish and communicate to the Option Holder at the time that such offer is
made. Nothing in this Paragraph 5(b) shall require any Option Holder to accept
such offer.
6. Stock Grants.
(a) Administration. Shares of Stock Grant may be issued to Eligible Persons
either alone, in addition to or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. The Committee shall determine
the Eligible Persons to whom, and the time or times at which, Stock Grants will
be made, the number of shares to be awarded, the price (if any) to be paid by
the recipient of a Stock Grant, subject to Paragraph 6(b) of the Plan, the time
or times within which such awards may be subject to forfeiture, and all other
terms and conditions of the awards. The Committee may condition the grant of
Stock Grant upon the attainment of specified performance goals or such other
factors as the Committee may, in its sole discretion, determine. The provisions
of Stock Grant awards need not be the same with respect to each recipient.
(b) Awards and Certificates.
(i) The prospective recipient of a Stock Grant shall have such rights
with respect to such award as are determined by the Committee, and, if
requested by the Committee, unless and until such recipient has executed an
agreement evidencing the award and has delivered a fully executed copy thereof
to the Company, and has otherwise complied with the applicable terms and
conditions of such award.
(ii) The purchase price for shares of Stock Grant may be equal to or
less than their par value and may be zero. Stock Grants may be issued to
Eligible Persons in consideration for services rendered.
(iii)Awards of Stock Grant must be accepted within a period of 60
days (or such shorter period as the Committee may specify at grant) after
the award date, by executing a Stock Grant Award Agreement (if required by the
Committee) and paying the price, if any, required under Paragraph 6(b)(ii).
(iv) Each participant receiving a Stock Grant shall be issued a stock
certificate in respect of such shares of Stock Grant. Such certificate
shall be registered in the name of such participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award; provided, however, that if such Stock Grant is not
subject to restrictions, the certificate shall only have such legends, if any,
as may be required by applicable federal securities laws.
(v) If the Stock Grant is subject to restrictions, the Committee
shall require that (A) the stock certificates evidencing shares of Stock
Grant be held in the custody of the Company until the restrictions thereon shall
have lapsed, and (B) as a condition of any Stock Grant award, the participant
shall have
delivered a stock power, endorsed in blank, relating to the Stock Grant covered
by such award.
(c) Restrictions and Conditions. The shares of Stock Grant awarded pursuant
to this Section 6 may, in the discretion of the Committee, be subject to any one
or more of the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the award agreement,
during a period set by the Committee commencing with the date of such award
(the "Restriction Period"), the participant shall not be permitted to sell,
transfer, pledge or assign shares of Stock Grant awarded under the Plan. Within
these limits, the Committee, in its sole discretion, may provide for the lapse
of such restrictions in installments and may accelerate or waive such
restrictions in whole or in part, based on service, performance and/or such
other factors or criteria as the Committee may determine, in its sole
discretion.
(ii) Except as provided in this Paragraph 6(c)(ii) and Paragraph
6(c)(i) of the Plan, the participant shall have, with respect to the shares
of Stock Grant, all of the rights of a stockholder of the Company, including the
right to vote the shares and the right to receive any regular cash dividends
paid out of current earnings. The Committee, in its sole discretion, as
determined at the time of award, may permit or require the payment of cash
dividends to be deferred and, if the Committee so determines, reinvested,
subject to Paragraph 6(c)(v) of the Plan, in additional Stock Grant to the
extent shares are available under Section 3 of the Plan, or otherwise
reinvested. Stock dividends, splits and distributions issued with respect to
Stock Grant shall be treated as additional shares of Stock Grant that are
subject to the same restrictions and other terms and conditions that apply to
the shares with respect to which such dividends are issued, and the Committee
may require the participant to deliver an additional stock power covering the
shares issuable pursuant to such stock dividend, split or distribution. Any
other dividends or property distributed with regard to Stock Grant, other than
regular dividends payable and paid out of current earnings, shall be held by the
Company subject to the same restrictions as the Stock Grant.
(iii)Subject to the applicable provisions of the award agreement and
this Section 6, upon termination of a participant's employment with the
Company and any Subsidiary or Affiliate for any reason during the Restriction
Period, all shares still subject to restriction will vest, or be forfeited, in
accordance with the terms and conditions established by the Committee at or
after grant.
(iv) If and when the Restriction Period expires without a prior
forfeiture of the Stock Grant subject to such Restriction Period,
certificates for an appropriate number of unrestricted shares, and other
property held by the Company with respect to such Restricted Shares, shall be
delivered to the participant promptly.
(v) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Stock Grant at the time of any dividend payment
shall only be permissible if sufficient shares of Stock are available under the
Plan for such reinvestment (taking into account then outstanding Stock Options,
Stock Purchase Rights and other Plan awards).
7. Amendments. Neither this Plan nor the Options or Stock Grants granted
pursuant to this Plan may be amended, altered or discontinued as to any Option
Holder without the approval of the Option Holder or the holder of the Stock
Grant.
8. General Provisions.
(a) The Committee may require each person purchasing shares pursuant to an
Option to represent to and agree with the Company in writing that the optionee
or participant is acquiring the shares without a view to distribution thereof.
The certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer. All certificates or
shares of Common Stock or other securities delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Commission, any stock exchange upon which the Common Stock is then listed, and
any applicable Federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(c) Neither the adoption of the Plan nor the grant of any award pursuant to
the Plan shall confer upon any employee of the Company or any Subsidiary or
Affiliate any right to continued employment with the Company or a Subsidiary or
Affiliate, as the case may be, nor shall it interfere in any way with the right
of the Company or a Subsidiary or Affiliate to terminate the employment of any
of its employees at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of an Option Holder for Federal income tax purposes with
respect to any Option, the Option Holder shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such amount. Unless otherwise determined by the Committee,
withholding obligations may be settled with Common Stock, including Common Stock
that is part of the award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements and the Company and its Subsidiaries or Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
9. Effective Date of Plan. The Plan shall be effective as of July 3, 2003 the
date the Plan was approved by the Board.
5.1 Consent and Opinion of Anslow & Jaclin, LLP.
ANSLOW & JACLIN, LLP RICHARD I. ANSLOW
Admitted in NJ, NY, DC
COUNSELORS AT LAW E-Mail: Ranslow@anslowlaw.com
GREGG E. JACLIN
Admitted in NJ, NY
E.Mail: Gjaclin@anslowlaw.com
ROSS A. GOLDSTEIN
Admitted in NJ, NY
E-Mail: Rgoldstein@anslowlaw.com
------------------------
Website: www.anslowlaw.com
E-Mail: Firm@anslowlaw.com
September 29, 2003
Combined Opinion and Consent
Security Intelligence Technologies, Inc.
145 Huguenot Street
New Rochelle, New York 10801
Re: Security Intelligence Technologies, Inc.
Gentlemen:
We have acted as counsel to Security Intelligence Technologies, Inc., a Florida
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933 as amended (the "Act") of the Company's Registration Statement on
Form S-8, filed contemporaneously with the Commission relating to the
registration under the Act of 720,000 shares (the "Shares") of the Company's
Common Stock, $0.0001 par value (the "Common Stock").
In rendering this opinion, we have reviewed the Registration Statement on Form
S-8, as well as a copy of the Certificate of Incorporation of the Company, as
amended, and the By-Laws of the Company. We have also reviewed such statutes and
judicial precedents as we have deemed relevant and necessary as a basis for the
opinion hereinafter expressed. In our examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity with
the original documents of all documents submitted to us as certified or
photostatic copies, and the authenticity of the originals of such copies.
Based on the foregoing and in reliance thereon, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
(1) The Company has been duly incorporated and is a validly existing corporation
under the laws of the State of Florida;
(2) The Shares, when issued in connection with the agreements (copies annexed to
the Registration Statement), will be legally issued, fully paid and non-
assessable.
This opinion is limited to the General Corporation Law and the Constitution of
the State of Florida and we express no opinion with respect to the laws of any
other jurisdiction. We consent to your filing this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement on Form S-8.
This opinion is not to be used, circulated, quoted or otherwise referred to for
any other purpose without our prior written consent.
Very truly yours,
ANSLOW & JACLIN, LLP
By: /s/ Gregg Jaclin
--------------------------
ANSLOW & JACLIN, LLP
4400 Route 9 South, 2nd Floor, Freehold, New Jersey 07728 Tel: (732) 409-
1212 Fax: (732) 577-1188
23.1 Consent of Schneider & Associates LLP
CONSENT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of Security Intelligence Technologies, Inc.
We hereby consent to the incorporation by reference, in this Registration
Statement on Form S-8 of Security Intelligence Technologies, Inc., of our report
dated October 17, 2002 relating to the consolidated financial statements of
Security Intelligence Technologies, Inc. and subsidiaries appearing in the
Annual Report on Form 10-KSB of Security Intelligence Technologies, Inc. for the
year ended June 30, 2002.
/s/ Schneider & Associates LLP
----------------------------
Schneider & Associates LLP
Certified Public Accountants
September 29, 2003
Jericho, New York