SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VALCOM, INC.
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(Exact name of registrant as specified in its charter)
SECURITIES AND EXCHANGE COMMISSION FILE NUMBER O-28416
Delaware 58-1700840
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2113A GULF BOULEVARD, INDIAN ROCKS BEACH, FL 33785
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(Address of principal executive offices) (Zip Code)
2010 CONSULTANT STOCK PLAN
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(Full title of the plan)
Vince Vellardita
2113A GULF BOULEVARD, INDIAN ROCKS BEACH
FLORIDA 33785
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(Name and address of agent for service)
(727) 953-9778
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amounts to be Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee
- -------------- ------------- ------------- ---------- -----------
Common Stock 3,000,000 $.10 $300,000 $21.39
============== ============= ============= =========== ===========
(1) Includes an indeterminate number of additional shares that may be issued to
adjust the number of shares issued pursuant to the stock plan described herein
as the result of any future stock split, stock dividend or similar adjustment
of the registrant's outstanding common stock.
(2) Estimated pursuant to Rule 457(h) solely for purposes of calculating amount
of registration fee, based upon the average of the high and low prices reported
on the Over-the-Counter Bulletin Board on November 15, 2005.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference into this
registration statement:
(a) The Annual Report on Form 10-K/A for the fiscal years ended September 30,
2009 and 2008, filed by the registrant with the Securities and Exchange
Commission (the "Commission") on February 22, 2010 which contains audited
consolidated financial statements for the most recent fiscal year for which
such statements have been filed.
(b) The Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2010, filed by the registrant with the Commission on May 24, 2010.
(c) The Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 2009, filed by the registrant with the Commission on March 08, 2010.
(d) The Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2009, and filed by the registrant with the Commission on August 21, 2009, and
the Amendment to the Form 10-Q filed with the Commission on October 5, 2009.
(e) The description of the registrant's common stock, which is included in
Form 10KSB, filed with the Commission on February 17, 2004.
(k) In addition, all documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference into this registration
statement and to be a part hereof from the date of filing of such documents.
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ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable. The class of securities to be offered is registered under
Section 12 of the Exchange Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 ("Indemnification of officers, directors, employees and agents;
insurance") of the Delaware General Corporation Law provides in pertinent part
as follows:
"(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.
(c) To the extent that a present and former director or officer of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
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(d) Any indemnification under subsections (a) and (b) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the present or former director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (a) and (b). Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) by a committee of such directors designated by
majority vote of such directors, even though less than a quorum, or (3) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion, or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director in
defending any civil, criminal, administrative or investigative action, suit or
proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall be
ultimately determined that he is not entitled to be indemnified by the
corporation as authorized in this Section. Such expenses (including attorneys'
fees) incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the corporation deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Section
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person " Article Nine of the registrant's Amended and
Restated Certificate of Incorporation authorizes the registrant to indemnify
any current or former director, officer, employee, or agent of the registrant
against expenses, judgments, fines, and amounts paid in settlement incurred by
him in connection with any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, to the
fullest extent permitted by Section 145 of the Delaware General Corporation
Law. Article Ninth further provides that such indemnification shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her 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
inure to the benefit of the heirs, executors and administrators of such person.
Article IX of the registrant's Bylaws provides that the registrant "shall
indemnify its officers, directors and authorized agents for all liabilities
incurred directly, indirectly or incidentally to services performed for the
Corporation, to the fullest extent permitted under Delaware law existing now or
hereinafter enacted."
ITEM 6. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 7. EXHIBITS.
5. Opinion regarding legality, Consent of Joseph L. Pittera (included in
Exhibit 5)
23.1 Consent of MaloneBailey, LLP
99. 2010 Consultant Stock Plan
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes to file, during any period in
which offers or sales are being made, a post-effective amendment to this
registration statement (1) to include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement; (2)
that, for the purpose of determining any liability under the Securities Act of
1933, 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; and (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 purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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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 Indian Rocks Beach, State of Florida, on this 25th
day of May 2010.
VALCOM, INC.
By: /s/ Vince Vellardita
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Vince Vellardita
Chairman, Chief Executive Officer
and President
Pursuant to the requirements of the Securities Act of 1933, this Form S-8
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Dated: June 3, 2010 /s/ Vince Vellardita
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Vince Vellardita
Chairman, Chief Executive
Officer and President
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INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION
5. Opinion regarding legality, Consent of Joseph L. Pittera
(included in Exhibit 5)
23.1 Consent of MaloneBailey, LLP
99. 2010 Consultant Stock Plan
5
EXHIBIT 5.
LAW OFFICES OF JOSEPH L. PITTERA
2214 Torrance Blvd.
Suite 101
Torrance, California 90501
Telephone (310) 328-3588
Facsimile (310) 328-3063
June 2, 2010
ValCom, Inc., 2113 A Gulf Boulevard
Indian Rocks Beach, Florida 33785
Re: 2010 Consultant Stock Plan (the "Plan")
Ladies and Gentlemen:
We have acted as counsel to ValCom, Inc., a Delaware corporation (the
"Company") in connection with the preparation and filing with the Securities
and Exchange Commission under the Securities Act of 1933 of the Company's
Registration Statement on Form S-8 relating to 3,000,000 shares of the
Company's common stock, par value $.001 (the "Shares"). In connection with that
registration, we have reviewed the proceedings of the Board of Directors of the
Company relating to the registration and proposed issuance of the Shares, the
Amended and Restated Certificate of Incorporation of the Company and all
amendments thereto, the Bylaws of the Company, and such other documents and
matters as we have deemed necessary to the rendering of the following opinion.
Based upon that review, it is our opinion that the Shares, when issued in
conformance with the terms and conditions of the Plan, will be validly issued,
fully paid, and non-assessable under the Delaware General Corporation Law. We
do not find it necessary for the purposes of this opinion to cover, and
accordingly we express no opinion as to, the application of the securities or
blue sky laws of the various states as to the issuance and sale of the Shares.
We consent to the use of this opinion in the registration statement filed with
the Securities and Exchange Commission in connection with the registration of
the Shares.
JOSEPH L. PITTERA, ESQ.
/s/ Joseph L. Pittera
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Joseph L. Pittera
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EXHIBIT 23.1
AUDITOR'S CONSENT
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated February 22, 2010 with respect to the audited
consolidated financial statements of ValCom, Inc. for the years ended September
30, 2009 and 2008.
/s/ MaloneBailey, LLP
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MaloneBailey, LLP
www.malone*bailey.com
Houston, Texas
June 3, 2010
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EXHIBIT 99.
VALCOM, INC.
2010 CONSULTANT STOCK PLAN
PURPOSE OF PLAN
WHEREAS, the purpose of this 2010 Consultant Stock Plan is to advance the
interests of the Company by helping the Company obtain and retain the services
of persons providing consulting services upon whose judgment, initiative,
efforts and/or services the Company is substantially dependent, by offering to
or providing those persons with incentives or inducements affording such
persons an opportunity to become owners of capital stock of the Company.
TERMS AND CONDITIONS OF PLAN
1. DEFINITIONS. Set forth below are definitions of capitalized terms that are
generally used throughout this Plan, or references to provisions containing
such definitions (capitalized terms whose use is limited to specific provisions
are not referenced in this Section):
(a) AFFILIATE - The term "Affiliate" is defined as any person controlling the
Company, controlled by the Company, or under common control with the Company.
(b) AWARD - The term "Award" is collectively and severally defined as any
Options or Award Shares granted under this Plan.
(c) AWARD SHARES - The term "Award Shares" is defined as shares of Common Stock
granted by the Plan Committee in accordance with SECTION 6 of this Plan.
(d) BOARD - The term "Board" is defined as the Board of Directors of the
Company, as such body may be reconstituted from time to time.
(e) COMMON STOCK - The term "Common Stock" is defined as the Company's common
stock, par value $0.001.
(f) COMPANY - The term "Company" is defined as ValCom, Inc., a Delaware
corporation.
(g) DISPOSED - The term "Disposed" (or the equivalent terms "Disposition" or
"Dispose") is defined as any transfer or alienation of an Award which would
directly or indirectly change the legal or beneficial ownership thereof,
whether voluntary or by operation of law, or with or without the payment or
provision of consideration, including, by way of example and not limitation:
(i) the sale, assignment, bequest or gift of the Award; (ii) any transaction
that creates or grants an option, warrant, or right to obtain an interest in
the Award; (iii) any transaction that creates a form of joint ownership in the
Award between the Recipient and one or more other Persons; (iv) any Disposition
of the Award to a creditor of the Recipient, including the hypothecation,
encumbrance or pledge of the Award or any interest therein, or the attachment
or imposition of a lien by a creditor of the Recipient of the Award or any
interest therein which is not released within thirty (30) days after the
imposition thereof; (v) any distribution by a Recipient which is an entity to
its stockholders, partners, co-venturers or members, as the case may be, or
(vi) any distribution by a Recipient which is a fiduciary such as a trustee or
custodian to its settlors or beneficiaries.
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(h) ELIGIBLE PERSON - The term "Eligible Person" means any Person who, at a
particular time, is a consultant to the Company or an Affiliate who provides
bona fide consulting services to the Company or the Affiliate, PROVIDED,
HOWEVER, no Award hereunder may be granted to any Person in connection with the
provision of any services incident to the raising of capital or promotion or
maintenance of a market for the Company's securities.
(i) FAIR MARKET VALUE - The term "Fair Market Value" means the fair market
value as of the applicable valuation date of the Option Shares, Award Shares,
or other shares of Common Stock, as the case may be, to be valued (the "SUBJECT
SHARES"), determined by the Plan Committee in its good faith judgment, but in
no event shall the Fair Market Value be less than the par value of the Subject
Shares.
(j) ISSUED SHARES - The term "Issued Shares" is defined as shares of Common
Stock issued pursuant to the terms of this Plan.
(k) OPTION - The term "Option" is defined as an option to purchase Common Stock
granted by the Plan Committee pursuant to the terms of the Plan and, in
particular, the terms of SECTION 5 of the Plan.
(l) OPTION PRICE - The term "Option Price" is defined in SECTION 5(b) of this
Plan.
(m) OPTION SHARES - The term "Option Shares" is defined as the shares of Common
Stock which an Option entitles the holder thereof to purchase.
(n) PERSON - The term "Person" is defined, in its broadest sense, as any
individual, entity or fiduciary such as, by way of example and not limitation,
individual or natural persons, corporations, partnerships (limited or general),
joint-ventures, associations, limited liability companies/partnerships, or
fiduciary arrangements, such as trusts.
(o) PLAN - The term "Plan" is defined as this 2010 Consultant Stock Plan.
(p) PLAN COMMITTEE - The term "Plan Committee" is defined as that Committee
appointed by the Board to administer and interpret this Plan as more
particularly described in SECTION 3 of the Plan; PROVIDED, HOWEVER, that the
term Plan Committee will refer to the Board during such times as no Plan
Committee is appointed by the Board.
(q) RESTRICTED SHARES - The term "Restricted Shares" is defined as Option
Shares or Award Shares, as the case may be, that are subject to restrictions as
more particularly set forth in SECTION 7 of this Plan.
(r) RECIPIENT - The term "Recipient" is defined as any Eligible Person who, at
a particular time, receives the grant of an Award. 2 (s) SECURITIES ACT - The
term "Securities Act" is defined as the Securities Act of 1933, as amended
(references herein to Sections of the Securities Act are intended to refer to
Sections of the Securities Act as enacted at the time of the adoption of this
Plan by the Board and as subsequently amended, or to any substantially similar
successor provisions of the Securities Act resulting from recodification,
renumbering or otherwise).
2. TERM OF PLAN. This Plan shall be effective as of such time and date as this
Plan is adopted by the Board, and this Plan shall terminate on the first
business day prior to the ten (10) year anniversary of the date this Plan
became effective. No grants of Options shall be made under this Plan before the
date this Plan becomes effective or after the date this Plan terminates;
PROVIDED, HOWEVER, that (i) all Awards granted pursuant to this Plan prior to
the effective date of this Plan shall not be affected by the termination of
this Plan and (ii) all other provisions of this Plan shall remain in effect
until the terms of all outstanding Awards have been satisfied or terminated in
accordance with this Plan and the terms of such Awards.
3. PLAN ADMINISTRATION.
(a) Plan Committee.
(i) The Plan shall be administered and interpreted by a committee consisting of
one (1) or more members of the Board; PROVIDED, HOWEVER, no member of the Board
who may serve as a member of the Plan Committee if such person serves or served
as a member of the plan committee with respect to any plan (other than this
Plan) of the Company or its Affiliates which plan was or is established to
comply with the provisions of Rule 16b-3(c)(2)(i) to the Securities and
Exchange Act of 1934, as amended (i.e., pertaining to the establishment of so-
called "Section 16b-3 Plans"), and, by reason of such person's proposed service
as a member of the Plan Committee, such person would not be considered a
"disinterested" person within the meaning of said Rule with respect to such
other plan.
(ii) Members of the Plan Committee may resign at any time by delivering written
notice to the Board. Vacancies in the Plan Committee shall be filled by the
Board. The Plan Committee shall act by a majority of its members in office. The
Plan Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Plan Committee.
(iii) If the Board, in its discretion, does not appoint a Plan Committee, the
Board itself will administer and interpret the Plan and take such other actions
as the Plan Committee is authorized to take hereunder; provided that the Board
may take such actions hereunder in the same manner as the Board may take other
actions under the Certificate of Incorporation and bylaws of the Company
generally.
(b) ELIGIBILITY OF PLAN COMMITTEE MEMBERS TO RECEIVE AWARDS. While serving on
the Plan Committee, such members shall not be eligible for selection as
Eligible Persons to whom an Award may be granted under the Plan.
(c) POWER TO MAKE AWARDS. The Plan Committee shall have the full and final
authority in its sole discretion, at any time and from time-to-time, subject
only to the express terms, conditions and other provisions of the Certificate
of Incorporation of the Company and this Plan, and the specific limitations on
such discretion set forth herein, to
(i) Designate the Eligible Persons or classes of Eligible Persons eligible to
receive Awards from among the Eligible Persons;
(ii) Grant Awards to such selected Eligible Persons or classes of Eligible
Persons in such form and amount (subject to the terms of the Plan) as the Plan
Committee shall determine;
(iii) Impose such limitations, restrictions and conditions upon any Award as
the Plan Committee shall deem appropriate and necessary including, without
limitation, the term of Options and any vesting conditions attached thereto,
and any vesting and repurchase conditions described in SECTIONS 5 or 7 placed
upon grants of Option Shares or Award Shares;
(iv) Interpret the Plan, adopt, amend and rescind rules and regulations
relating to the Plan, and make all other determinations and take all other
action necessary or advisable for the implementation and administration of the
Plan; and
(v) Delegate all or a portion of its authority under subsections (i) through
(iii) of this SECTION 3(c) to one or more directors of the Company who are
executive officers of the Company, subject to such restrictions and limitations
(such as the aggregate number of shares of Common Stock that may be awarded) as
the Plan Committee may decide to impose on such delegate directors. In
determining the recipient, form and amount of Awards, the Plan Committee shall
consider any factors deemed relevant, including the individual's functions,
responsibilities, value of services to the Company and past and potential
contributions to the Company's profitability and sound growth.
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(d) INTERPRETATION OF PLAN. The Plan Committee shall, in its sole and absolute
discretion, interpret and determine the effect of all matters and questions
relating to this Plan. The interpretations and determinations of the Plan
Committee under the Plan (including without limitation determinations
pertaining to the eligibility of Persons to receive Awards, the form, amount
and timing of Awards, the methods of payment for Awards, the restrictions and
conditions placed upon Awards, and the other terms and provisions of Awards and
the certificates or agreements evidencing same) need not be uniform and may be
made by the Plan Committee selectively among Persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such Persons are
similarly situated. All actions taken and all interpretations and
determinations made under this Plan in good faith by the Plan Committee shall
be final and binding upon the Recipient, the Company, and all other interested
Persons. No member of the Plan Committee shall be personally liable for any
action taken or decision made in good faith relating to this Plan, and all
members of the Plan Committee shall be fully protected and indemnified to the
fullest extent permitted under applicable law by the Company in respect to any
such action, determination, or interpretation.
(e) COMPENSATION; ADVISORS. Members of the Plan Committee shall receive such
compensation for their services as members as may be determined by the Board.
All expenses and liabilities incurred by members of the Plan Committee in
connection with the administration of the Plan shall be borne by the Company.
The Plan Committee may, with the approval of the Board, employ attorneys,
consultants, accountants, appraisers, brokers, or other Persons, at the cost of
the Company. The Plan Committee, the Company and its officers and directors
shall be entitled to rely upon the advice, opinions, or valuations of any such
Persons.
4. STOCK POOL.
(a) MAXIMUM NUMBER OF SHARES AUTHORIZED UNDER PLAN. Shares of stock which may
be issued or granted under the Plan shall be authorized and unissued or
treasury shares of Common Stock. The aggregate maximum number of shares of
Common Stock which may be issued in exercise of Options or as a grant of Award
Shares, as the case may be, shall not exceed 3,000,000 shares of Common Stock
(the "STOCK POOL"); PROVIDED, HOWEVER, that such number shall be increased by
the following:
(i) Any shares of Common Stock tendered by a Recipient as payment for Option
Shares or Award Shares;
(ii) Any rights to shares of Common Stock surrendered by a Recipient as payment
for Option Shares or Award Shares;
(iii) Any shares of Common Stock subject to an Option which for any reason is
terminated unexercised or expires; and
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(iv) Any Restricted Shares, which are granted as Option Shares or Award Shares,
and are subsequently forfeited by the holders thereof.
(b) CALCULATING SHARES AVAILABLE FOR AWARDS. For purposes of calculating the
maximum number of shares of Common Stock in the Stock Pool which may be issued
under the Plan, the following rules shall apply:
(i) When Options are exercised, and when cash is used as full payment for
shares issued upon exercise of such Options, all the shares issued (including
the shares, if any, withheld for tax withholding requirements) shall be
counted;
(ii) When Options are exercised, and when shares of Common Stock are used as
full or partial payment for shares issued upon exercise of such Options, if
permitted by the Plan Committee, only the net shares issued (including the
shares, if any, withheld for tax withholding requirements) shall be counted;
and
(iii) When Award Shares are granted and the Plan Committee elects to require
payment with respect to such grant, and when shares of Common Stock are used as
full or partial payment for the grant of such shares, only the net shares
issued (including the shares, if any, withheld for tax withholding
requirements) shall be counted.
(c) DATE OF AWARD. The date an Award is granted shall mean the date selected by
the Plan Committee as of which the Plan Committee allots a specific number of
shares to a Recipient with respect to such Award pursuant to the Plan.
5. OPTIONS (TO PURCHASE OPTION SHARES).
(a) GRANT. The Plan Committee may from time to time, and subject to the
provisions of the Plan and such other terms and conditions as the Plan
Committee may prescribe, grant to any Eligible Person one or more options to
purchase for cash or shares the number of shares of Common Stock ("Options")
allotted by the Plan Committee; PROVIDED, HOWEVER, no Option shall be granted
to any Eligible Person who is a member of the Plan Committee. The grant of an
Option shall be evidenced by either a written consulting agreement or a written
option certificate separate from such agreement, executed by the Company and
the Recipient, stating the number of shares of Common Stock subject to the
Option, and stating all terms and conditions of such Option.
(b) OPTION PRICE. The purchase price per Option Share deliverable upon the
exercise of an Option (the "OPTION PRICE") shall be such price as may be
determined by the Plan Committee; PROVIDED, HOWEVER, the Option Price may not
be less than the eighty five percent (85%) of Fair Market Value of the
underlying Option Shares as of the date of the grant of the Option.
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(c) OPTION TERM; EXPIRATION. The term of each Option shall commence at the
grant date for such Option as determined by the Plan Committee, and shall
expire, unless an earlier expiration date is expressly provided in the
underlying consulting agreement or separate option certificate or another
Section of this Plan, on the first business day prior to the ten (10) year
anniversary of the date of grant thereof.
(d) EXERCISE DATE. Unless a later exercise date is expressly provided in the
underlying consulting agreement or option certificate or another Section of the
Plan, each Option shall become exercisable on the date of its grant as
determined by the Plan Committee. No Option shall be exercisable after the
expiration of its applicable term. Subject to the foregoing, each Option shall
be exercisable in whole or in part during its applicable term unless expressly
provided otherwise in the underlying consulting agreement or option
certificate.
(e) VESTING PROVISIONS. The Plan Committee may, in its sole discretion, subject
Options granted to Recipients to such vesting conditions pertaining to
continued provision of consulting services to the Company or any Affiliate or
the attainment of goals as the Plan Committee, in its sole discretion,
determines are appropriate; PROVIDED, HOWEVER, in no case shall any Option
provide for the vesting of Option Shares for a period of time which exceeds
five (5) years from date of grant of the Option, or on a cumulative incremental
percentage basis which is less than twenty percent (20%) per year. If no
vesting is expressly provided in the underlying consulting agreement or
separate option certificate, the Option shares shall be deemed fully vested
upon date of grant.
(f) MANNER OF EXERCISE AND PAYMENT. An exercisable Option, or any exercisable
portion thereof, may be exercised solely by delivery of all of the following to
the Secretary of the Company at his or her office at the Company prior to the
time when such Option or such portion becomes unexercisable under this SECTION
5: (i) Notice in writing signed by the Recipient or other Person then entitled
to exercise the Option or portion thereof stating that such Option or portion
is exercised, such notice complying with the procedures set forth in the
applicable consulting agreement or option certificate which governs the
exercise of the Option, and any other applicable rules established by the Plan
Committee.
(ii) Full payment for the shares with respect to which such Option or portion
is thereby exercised as follows (or any combination of the following):
(1) In good funds (in U.S. dollars) by cash or by check; and/or
(2) If expressly permitted in the underlying consulting agreement or option
certificate, or otherwise consented to by the Plan Committee in writing:
(A) Shares of Common Stock owned by the Recipient duly endorsed for transfer to
the Company with a Fair Market Value on the date of delivery equal to the
aggregate Option Price of the Option Shares with respect to which the Option or
portion is thereby exercised;
(B) The surrender or relinquishment of rights to acquire Common Stock owned by
the Recipient with a Fair Market Value on the date of delivery equal to the
aggregate Option Price of the Option Shares with respect to which the Option or
portion is thereby exercised; or
(C) A full recourse promissory note bearing interest (not less than a rate as
shall then preclude the imputation of interest under the Internal Revenue Code
of 1986, as amended) and payable upon such terms as may be prescribed by the
Plan Committee. The Plan Committee may also prescribe the form of such note and
the security to be given for such note. PROVIDED, HOWEVER, no Option may be
exercised by delivery of a promissory note or by a loan from the Company if
such loan or other extension of credit is prohibited by law at the time of
exercise of this Option or does not comply with the provisions of Regulation G
promulgated by the Federal Reserve Board with respect to "Margin Stock" if the
Company and the Recipient are then subject to such Regulation.
(iii) Such representations and documents as the Plan Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Plan Committee may, in its absolute
discretion, also take whatever additional actions it deems appropriate to
effect such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and
registrars.
(iv) In the event that the Option or portion thereof shall be exercised by any
Person other than the Recipient, appropriate proof of the right of such person
or persons to exercise the Option or portion thereof.
(g) NON-ASSIGNABILITY. Except as expressly provided in the underlying
consulting agreement or option certificate, Options may not be Disposed by the
Recipient, nor exercised by any Person other than the Recipient, without the
prior written consent of the Company, which consent the Company may withhold in
its sole and absolute discretion, and such Options shall, upon the Disposition
or exercise of such Option without the Company's prior written consent,
terminate and be null and void AB INITIO and of no further force and effect.
(h) NO STOCKHOLDER RIGHTS. The Recipient shall not be, nor have any of the
rights or privileges of, a stockholder of the Company with respect to the
Option Shares unless and until all conditions for exercise of the Option and
the issuance of certificates for the Option Shares shall be satisfied, at which
time the Recipient shall become a stockholder of the Company with respect to
the Option Shares and as such shall thereafter be fully entitled to receive
dividends (if any are declared and paid), to vote and to exercise all other
rights of a stockholder with respect to the Option Shares.
6. AWARD SHARES.
(a) GRANT. The Plan Committee may from time to time, and subject to the
provisions of the Plan and such other terms and conditions as the Plan
Committee may prescribe, grant to any Eligible Person one or more shares of
Common Stock ("AWARD SHARES") allotted by the Plan Committee. The grant of
Award Shares or grant of the right to receive Award Shares shall be evidenced
by either a written consulting agreement or a separate written agreement
confirming such grant, executed by the Company and the
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Recipient, stating the number of Award Shares granted and stating all terms and
conditions of such grant.
(b) PURCHASE PRICE AND MANNER OF PAYMENT. The Plan Committee, in its sole
discretion, may grant Award Shares in any of the following instances:
(i) as a "bonus" or "reward" for services previously rendered and compensated,
in which case the recipient of the Award Shares shall not be required to pay
any consideration for such Award Shares, and the value of such Award Shares
shall be the Fair Market Value of such Award Shares on the date of grant;
(ii) as "compensation" for the previous performance or future performance of
services or attainment of goals, in which case the recipient of the Award
Shares shall not be required to pay any consideration for such Award Shares
(other than the performance of his services), and the value of such Award
Shares received (together with the value of such services or attainment of
goals attained by the Recipient), may not be less than eighty-five percent
(85%) of the Fair Market Value of such Award Shares on the date of grant; or
(iii) in consideration for the payment of a purchase price for such Award
Shares in an amount established by the Plan Committee, which purchase price may
not be less than eighty-five percent (85%) of the Fair Market Value of such
Award Shares as of the date of grant of such purchase right.
7. RESTRICTED SHARES.
(a) VESTING CONDITIONS; FORFEITURE OF UNVESTED SHARES. The Plan Committee may
subject or condition the grant of Issued Shares (hereinafter referred to as
"RESTRICTED SHARES") to such vesting conditions based upon continued provision
of services or attainment of goals subsequent to such grant of Restricted
Shares as the Plan Committee, in its sole discretion, may deem appropriate. In
the event the Recipient does not satisfy such vesting conditions, the Company
may require the Recipient, subject to the payment terms of SECTION 7(b), to
forfeit such unvested Restricted Shares. All vesting conditions imposed on the
grant of Restricted Shares, including payment terms complying with SECTION
7(b), shall be set forth in either a written consulting agreement or a separate
written restricted stock agreement, executed by the Company and the Recipient
on or before the time of the grant of such Restricted Shares, stating the
number of said Restricted Shares subject to such conditions and further
specifying the vesting conditions. If no vesting conditions are expressly
provided in the underlying consulting agreement or in a separate restricted
stock agreement, the Issued Shares shall not be deemed to be Restricted Shares,
and will not be required to be forfeited. Any grant of Restricted Shares shall
be subject to the following limitations:
(i) In no case shall such vesting conditions require continued provision of
services or attainment of goals, as the case may be, subsequent to the grant of
Restricted Shares, for a period of time which exceeds five (5) years from the
date of grant, or on a cumulative incremental percentage basis which is less
than twenty percent (20%) per year;
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(ii) In no case shall the Recipient be required to forfeit any vested
Restricted Shares; and
(iii) In the event of the forfeiture of any unvested Restricted Shares, the
Company shall pay to the Recipient with respect to all of such unvested
Restricted Shares an amount equal to the original purchase price, if any, paid
by the Recipient for such unvested Restricted Shares.
(b) REPURCHASE PRICE FOR FORFEITED RESTRICTED SHARES. In the event a Recipient
does not satisfy applicable vesting conditions placed upon Restricted Shares,
and the Company exercises its right to require the Recipient to forfeit such
unvested Restricted Shares, the Company shall be required to pay the Recipient
an amount not less than:
(i) The higher of the original purchase price for such forfeited Restricted
Shares OR the Fair Market Value of such forfeited Restricted Shares on the date
of the event triggering such repurchase rights; or
(ii) The original purchase price for such vested Restricted Shares; PROVIDED,
HOWEVER, that the right to repurchase in favor of the Company must lapse at the
rate of at least twenty percent (20%) per year over five (5) years from the
date of grant of the Restricted Shares. The payments to be made by the Company
to a Recipient for forfeited Restricted Shares pursuant to SUBSECTION (ii) may
only be in the form of cash or cancellation of purchase money indebtedness with
respect to the purchase of said Restricted Shares by the Recipient, if any, and
must be paid no later than ninety (90) days of the date of termination.
(c) RESTRICTIVE LEGEND. Until such time as all conditions placed upon
Restricted Shares lapse, the Plan Committee may place a restrictive legend on
the share certificate representing such Restricted Shares which evidences said
restrictions in such form and subject to such stop instructions as the Plan
Committee shall deem appropriate. The conditions shall similarly apply to any
new, additional or different securities the Recipient may become entitled to
receive with respect to such Restricted Shares by virtue of a stock split or
stock dividend or any other change in the corporate or capital structure of the
Company. The Plan Committee shall also have the right, should it elect to do
so, to require the Recipient to deposit the share certificate for the
Restricted Shares with the Company or its agent, endorsed in blank or
accompanied by a duly executed irrevocable stock power or other instrument of
transfer, until such time as the conditions lapse. The Company shall remove the
legend with respect to any Restricted Shares, which become vested.
(d) STOCKHOLDER RIGHTS. The Recipient of Restricted Shares shall have all
rights or privileges of a stockholder of the Company with respect to the
Restricted Shares notwithstanding the terms of this SECTION 7 (with the
exception of SUBSECTION (e) hereof) and, as such, shall be fully entitled to
receive dividends (if any are declared and paid), to vote and to exercise all
other rights of a stockholder with respect to the
Restricted Shares.
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(e) NON-ASSIGNABILITY. Except as expressly provided in the underlying
consulting agreement or restricted stock agreement, unvested Restricted Shares
may not be Disposed by the Recipient without the prior written consent of the
Company, which consent the Company may withhold in its sole and absolute
discretion, and such purported Disposition shall be null and void AB INITIO and
of no force and effect.
8. REGISTRATION OF ISSUED SHARES.
(a) REGISTRATION OR EXEMPTION FROM REGISTRATION. Unless expressly stipulated in
the underlying consulting agreement or separate option certificate or
agreement, in no event shall the Company be required at any time to register
the Issued Shares under the Securities Act (including, without limitation, as
part of any primary or secondary offering, or pursuant to Form S-8) or to
register or qualify the Issued Shares under the securities laws of any state or
territory (including, without limitation, pursuant to Section 25110 of the
California Securities Act). In the event the Company is not required to
register or qualify the Issued Shares, the Issued Shares shall be issued in
reliance upon such exemptions from registration or qualification under federal
and state securities laws, as the case may be, that the Company and its legal
counsel, in their reasonable discretion, shall determine to be appropriate,
including, without limitation:
(i) In the case of federal securities laws, any of the following, if available:
Section 3(b) of the Securities Act for Limited Offerings and Rules 504 and/or
505 of Regulation D promulgated thereto, and/or Section 4(2) of the Securities
Act for private offerings and Rule 506 of Regulation D promulgated thereto, and
(ii) In the case of California securities laws, Section 25102(f) of the
California Securities Act of 1968, as amended, or, if the Recipient is then a
resident of and/or domiciled within another state, the requirements of any
applicable exemptions from registration or qualification afforded by the
securities laws of such state. If requested by the Company, the Recipient shall
provide such further representations or documents as the Company or its legal
counsel, in their reasonable discretion, deem necessary or advisable in order
to effect compliance with the conditions of any and all of the aforesaid
exemptions from federal or state registration or qualification which it is
relying upon, or with all applicable rules and regulations of any applicable
securities exchanges. If required by the Company, the Recipient shall provide a
letter from a purchaser representative with credentials reasonably acceptable
to the Company to the effect that such purchaser representative has reviewed
the Recipient's proposed investment in the Issued Shares and has determined
that an investment in the Issued Shares: (A) is appropriate in light of the
Recipient's financial circumstances, (B) that the purchaser representative and,
if applicable, the Recipient, have such knowledge and experience in financial
and business matters that such persons are capable of evaluating the merits and
risks of an investment in the Issued
Shares, and (C) that the purchaser representative and, if applicable, the
Recipient, have such business or financial experience to be reasonably assumed
to have the capacity to protect the Recipient's interests in connection with
the purchase of the Issued Shares.
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In the event the Company is unable to obtain, without undue burden or expense,
such consents or approvals that may be required from any applicable regulatory
authority (or may be deemed reasonably necessary or advisable by legal counsel
for the Company) with respect to the applicable exemptions from federal or
state registration or qualification which the Company is reasonably relying
upon, the Company shall have no obligation under this Agreement to issue or
sell the Issued Shares until such time as such consents or approvals may be
reasonably obtained without undue burden or expense, and the Company shall be
relieved of all liability with respect to its inability to issue or sell the
Issued Shares.
(b) LEGEND. In the event the Company delivers unregistered shares, the Company
reserves the right to place a restricted legend on the share certificate or
certificates to comply with the Securities Act and any state and territory
securities laws or any exemption from registration or qualification thereunder
which is being relied upon by the Company.
9. ADJUSTMENTS.
(a) SUBDIVISION OR STOCK DIVIDEND. If (i) outstanding shares of Common Stock
shall be subdivided into a greater number of shares by reason of
recapitalization or reclassification, the number of shares of Common Stock, if
any, available for issuance in the Stock Pool shall, simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend, be proportionately increased, and the Option Price of any outstanding
Options in effect immediately prior to such subdivision or at the record date
of such dividend shall, simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend, be
proportionately reduced, and (ii) conversely, if the outstanding shares of
Common Stock shall be combined into a smaller number of shares, the number of
shares of Common Stock, if any, available for issuance in the Stock Pool shall,
simultaneously with the effectiveness of such combination, be proportionately
increased, and the Option Price of any outstanding Option in effect immediately
prior to such combination shall, simultaneously with the effectiveness of such
combination, be proportionately increased.
(b) ADJUSTMENT TO OPTION PRICE. When any adjustment is required to be made in
the Option Price, the number of shares purchasable upon the exercise of any
outstanding Option shall be adjusted to that number of shares determined by:
(i) multiplying an amount equal to the number of shares purchasable upon the
exercise of the Option immediately prior to such adjustment by the Option Price
in effect immediately prior to such adjustment, and then
(ii) dividing that product by the Option Price in effect immediately after such
adjustment. PROVIDED, HOWEVER, no fractional shares shall be issued, and any
fractional shares resulting from the computations pursuant to this SECTION 10
shall be eliminated from the Option.
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(c) CAPITAL REORGANIZATION OR RECLASSIFICATION; CONSOLIDATION or MERGER. In
case of any capital reorganization or any reclassification of Common Stock
(other than a recapitalization hereinabove described in SECTION 10(a), or the
consolidation, merger, combination or exchange of shares with another entity,
or the divisive reorganization of the Company, the Recipient shall thereafter
be entitled upon exercise of the Option to purchase the kind and number of
shares of stock or other securities or property of the Company (or its
successor{s}) receivable upon such event by a Recipient of the number of shares
of Common Stock of the Company which such Option entitles the Recipient to
purchase from the Company immediately prior to such event. In every such case,
the Company may appropriately adjust the number of shares of Common Stock in
the Pool which may be issued under the Plan, the number of shares of Common
Stock subject to Options theretofore granted under the Plan, the Option Price
of Options theretofore granted under the Plan, and any and all other matters
deemed appropriate by the Plan Committee.
(d) ADJUSTMENTS DETERMINED IN SOLE DISCRETION OF BOARD. To the extent that the
foregoing adjustments relate to stock or securities of the Company, such
adjustments shall be made by the Plan Committee, whose determination in that
respect shall be final, binding and conclusive.
(e) NO OTHER RIGHTS TO RECIPIENT. Except as expressly provided in this SECTION
10, (i) the Recipient shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class, and (ii) the dissolution, liquidation, merger, consolidation or
divisive reorganization or sale of assets or stock to another corporation, or
any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of, or
the Option Price for, the shares. The grant of an Award pursuant to this Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, consolidate, dissolve or liquidate, or to sell
or transfer all or any part of its business or assets.
10. PERFORMANCE ON BUSINESS DAY. In the event the date on which a party to this
Plan is required to take any action under the terms of this Plan is not a
business day, the action shall, unless otherwise provided herein, be deemed to
be required to be taken on the next succeeding business day.
11. EMPLOYMENT STATUS. In no event shall the granting of an Award be construed
as granting a continued right of employment to a Recipient if such Person is
employed by the Company, nor effect any right which the Company may have to
terminate the employment of such Person, at any time, with or without cause,
except to the extent that such Person and the Company have agreed otherwise in
writing.
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12. NON-LIABILITY FOR DEBTS. No Options granted hereunder, or unvested
Restricted Shares granted hereunder, or any part thereof, shall be liable for
the debts, contracts, or engagements of a Recipient or such Recipient's
successors in interest or shall be subject to disposition by transfer,
alienation, or any other means whether such disposition be voluntary or
involuntary or by operation of law, by judgment, levy, attachment, garnishment,
or any other legal or equitable proceeding (including bankruptcy), and any
attempted disposition thereof shall be null and void ab initio and of no
further force and effect.
13. AMENDMENT AND DISCONTINUATION OF PLAN; MODIFICATION OF AWARDS.
(a) AMENDMENT, MODIFICATION OR TERMINATION OF PLAN. The Board may amend the
Plan or suspend or discontinue the Plan at any time or from time-to-time;
PROVIDED, HOWEVER no such action may adversely alter or impair any Award
previously granted under this Plan without the consent of each Recipient
affected thereby.
(b) MODIFICATION OF TERMS OF OUTSTANDING OPTIONS. Subject to the terms and
conditions and within the limitations of this Plan, the Plan Committee may
modify, extend or renew outstanding Options granted under this Plan, including
vesting conditions, or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options in
substitution therefore (to the extent not theretofore exercised).
Notwithstanding the foregoing, however, no modification of any outstanding
Option may, without the consent of the Recipient affected thereby, adversely
alter or impair such Recipient's rights under such Option.
(c) MODIFICATION OF RESTRICTED SHARE VESTING CONDITIONS. Subject to the terms
and conditions and within the limitations of this Plan, including vesting
conditions, the Plan Committee may modify the conditions placed upon the grant
of any Restricted Shares, PROVIDED, HOWEVER, no modification of any conditions
placed upon Restricted Shares may, without the consent of the Recipient
thereof, adversely alter or impair such Recipient's rights with respect to such
Restricted Shares.
(d) COMPLIANCE WITH LAWS. The Plan Committee may at any time or from time-to-
time, without receiving further consideration from any Person who may become
entitled to receive or who has received the grant of an Award hereunder, modify
or amend Awards granted under this Plan as required to: (i) comport with
changes in securities, tax or other laws or rules, regulations or regulatory
interpretations thereof applicable to this Plan or Awards there-under or to
comply with stock exchange rules or requirements and/or (ii) ensure that this
Plan is and remains or shall become exempt from the application of any
participation, vesting, benefit accrual, funding, fiduciary, reporting,
disclosure, administration or enforcement requirement of either the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
corresponding provisions of the Internal Revenue Code of 1986, as amended
(Subchapter D of Title A, Chapter 1 of the Code {encompassing SECTIONS 400 to
18
420 of the Code}). PROVIDED, HOWEVER, no such modification may, without the
consent of the holder thereof, adversely alter or impair his or her rights with
respect to such Award Shares.
14. WITHHOLDING TAXES. As a condition of the grant of any Award and/or exercise
of any Option, as the case may be, the Company shall have the right to require
the Recipient to remit to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements incident to such grant
or exercise. PROVIDED, HOWEVER, whenever the Company is delivering any shares
of Common Stock the Company may, in its sole discretion, but without obligation
to do so, issue or transfer such shares of Common Stock net of the number of
shares sufficient to satisfy any withholding tax requirements incident to such
issuance or transfer. For withholding tax purposes, the shares of Common Stock
shall be valued on the date the withholding obligation is incurred.
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