Registration of Securities to be Offered to Employees Pursuant to an Employee Benefit Plan — Form S-8
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-8 Registration of Securities to be Offered to 8 42K
Employees Pursuant to an Employee
Benefit Plan
2: EX-4.1B Amendment to Certificate of Incorporation 3 13K
3: EX-5 Opinion of Berman Wolfe & Rennert P.A. 2 13K
4: EX-23.2 Consent of Hoffman, Morrison & Fitzgerald P.C. 1 6K
5: EX-99.1 1998 Stock Option Plan 6 36K
EX-99.1 — 1998 Stock Option Plan
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EXHIBIT 99.1
DIDAX INC.
1998 STOCK OPTION PLAN
As Amended February 26, 1999
1.PURPOSE. The purpose of this Plan is to advance the interests of DIDAX, INC.
(the "Company") by providing an opportunity to its selected directors, key
employees (as defined in Paragraph 2(b)) and consultants (as defined in
Paragraph 2(a)) to purchase shares (the "Shares") of the Common Stock, par value
$.01 per share (the "Common Stock"), of the Company. By encouraging stock
ownership, the Company seeks to attract, retain and motivate key employees,
consultants and ministry partners. It is intended that this purpose will be
effected by the granting of (i) incentive stock options ("Incentive Options") as
described in Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"); and (ii) nonqualified stock options ("Nonqualified Options," and,
together with the incentive options, the "Options") as provided herein.
(Collectively, the "Stock Incentives").
2.DEFINITIONS.
(a) The term "consultants" means those persons, other than employees of
the Company, who provide services to the Company, including nonemployee
directors of the Company, and who are determined by the Compensation
Committee to be eligible for Stock Incentives under this Plan.
(b) The term "key employees" means those executive, administrative,
operational, engineering or managerial employees who are determined by
the Compensation Committee to be eligible for Stock Incentives under this
Plan.
(c) The term "ministry partners" means those organizations or
individuals. other than employees and consultants, whose relationship
with DIDAX is critical to meeting the Company's business objectives and
who are determined by the Compensation Committee to be eligible for stock
incentives under this plan.
(d) The term "optionee" means an individual to whom an option is granted
under this Plan.
(e) The term "grantee" means an individual to whom a purchase right is
granted under this Plan.
3. EFFECTIVE DATE. This Plan becomes effective April 6, 1998, with amendment on
February 26, 1999 to increase the number of shares underlying the Plan from
400,000 to 800,000, as so adopted by the Board of Directors of the Company, and
approved by the shareholders on May 5, 1999.
4. STOCK SUBJECT TO THE PLAN. The Shares that may be purchased (through the
exercise of options) under this Plan shall not exceed in the aggregate 800,000
Shares. If any Stock Incentives granted under the Plan shall terminate, expire
or be cancelled as to any Shares, new Stock Incentives may thereafter be granted
covering such Shares. In addition, any Shares purchased under this Plan
subsequently repurchased by the Company pursuant to the terms hereof may again
be granted under the Plan. The Shares issued upon exercise of Stock Incentives
under this Plan may, in whole or in part, be either authorized but unissued
Shares or issued Shares reacquired by the Company. Notwithstanding any other
provisions of this Plan, the aggregate number of Shares subject to outstanding
options granted under the Plan, plus the aggregate number of shares issued upon
the exercise of all options granted under the Plan, shall never be permitted to
exceed the number of Shares specified in the first sentence of section 4, except
in accordance with subsection 8(a) below.
5. ADMINISTRATION. The Plan shall be administered by the Board of Directors of
the Company (the "Board"), or by a committee appointed by the Board which shall
not have less than two (2) members (in either case, the "Compensation
Committee"). No single participant may receive options to purchase more than the
total number of shares authorized for issuance under the 1998 Plan. The
Compensation Committee is tasked with the responsibility of recommending option
grants for approval
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by the Board of Directors and the Compensation Committee or the Board of
Directors may delegate administrative duties to such employees of the Company as
it deems proper. However, it is only through a majority vote of the Board of
Directors, either acting on its own or via the recommendation of the
Compensation Committee, that nonqualified stock options or incentive stock
options to purchase shares of Common Stock may be granted, and thus it is
ultimately the Board of Directors, subject to the provisions of the 1998 Plan,
that shall have the sole authority, in its discretion:"
(a) to determine to which of the eligible individuals, and the time or
times at which, options to purchase Common Stock of the Company shall be
granted;
(b) to determine the number of shares of Common Stock to be subject to
options granted to each eligible individual;
(c) to determine the price to be paid for the shares of Common Stock upon
the exercise of each option;
(d) to terminate the Plan or accelerate Option vesting, and to determine
the vesting and duration of each option granted;
(e) to determine the terms and conditions of each stock option agreement
(which need not be identical) entered into between the Company and any
eligible individual to whom the Board of Directors has granted an option;
(f) to interpret the Plan; and
(g) to make all determinations deemed necessary or advisable for the
administration of the Plan.
The Compensation Committee, if any, shall be appointed by and shall serve at the
pleasure of the Board of Directors of the Company. No member of the Compensation
Committee shall be liable for any action or determination made with respect to
the Plan.
6. ELGIBLE EMPLOYEES, CONSULTANTS AND MINISTRY PARTNERS. Incentive Options may
be granted to such key employees of the Company, including members of the Board
of Directors who are also employees of the Company, as are selected by the
Compensation Committee and approved by Board of Directors. Nonqualified Options
may be granted to such key employees, consultants and ministry partners,
including members of the Board of Directors, as are selected by the Compensation
Committee and approved by the Board of Directors. The term "employee" includes
an officer or director who is an employee of the Company or a parent or
subsidiary of it, as well as a nonofficer, nondirector employee of the Company
or a parent or subsidiary or it.
7. DURATION OF THE PLAN. This Plan shall terminate ten (10) years from the
effective date of this Plan, unless terminated earlier pursuant to Paragraph 13
hereof, and no Stock Incentives may be granted after such termination.
8. RESTRICTIONS ON INCENTIVE OPTIONS. Incentive Options (but not Nonqualified
Options) granted under this Plan shall be subject to the following restrictions:
(a) Limitation on Number of Shares. The aggregate fair market value,
determined as of the date the Incentive Option is granted, of the Shares
with respect to which Incentive Options are exercisable for the first
time by an employee during any calendar year shall not exceed $100,000.
If an employee is eligible to participate in any other incentive stock
option plans of the Company which are also intended to comply with the
provisions of Section 422A of the Code, the applicable annual limitation
shall apply to the aggregate number of Shares for which Incentive Options
may be granted under all such plans. An Incentive Option may be granted
which exceeds the $100,000 limitation, as long as under then applicable
law the portion of such option which is exercisable for
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shares in excess of the $100,000 limitation shall be treated as a
nonqualified option. No Incentive Options may be exercised until and
unless the Plan is approved by the shareholders within one year of the
date hereof, such approval to be expressed in any legal way under
Delaware law.
(b) 10% Stockholder. If any employee to whom an Incentive Option is
granted pursuant to the provisions of the Plan is on the date of grant
the owner of stock (as determined under Section 425(d) of the Code)
possessing more than 10% of the total combined voting power of all
classes of stock of the Company (or of any parent or subsidiary of the
Company), then the following special provisions shall be applicable to
the Incentive Option granted to such individual:
(i) The option price per Share subject to such Incentive Option
shall not be less than 110% of the fair market value of one Share
on the date of grant; and
(ii) The Incentive Option shall not have a term in excess of five
(5) years from the date of grant.
In determining stock ownership, an Optionee shall be considered as
owning the voting capital stock owned, directly or indirectly, by
or for his brother and sisters, spouse, ancestors, and lineal
descendants. Voting capital stock owned, directly or indirectly,
by or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its
shareholders, partners, or beneficiaries, as applicable. Common
Stock with respect to which any such Optionee holds an option
shall not be counted. Additionally, outstanding capital stock
shall include all capital stock actually issued and outstanding
immediately after the grant of the option to the Optionee.
Outstanding capital stock shall not include capital stock
authorized for issue under outstanding options held by the
Optionee or by any other person.
9. TERMS AND CONDITIONS OF OPTIONS. Incentive and Nonqualified Options granted
under this Plan shall be evidenced by stock option agreements in such form and
not inconsistent with the Plan as the Compensation Committee may recommend and
the Board of Directors shall approve from time to time, which agreements shall
evidence the following terms and conditions:
(a) Price.
(i) Incentive Options. Subject to the condition of subparagraph
(b)(i) of Paragraph 8, if applicable, with respect to each
Incentive Option, the purchase price per Share payable upon the
exercise of each Incentive Option granted hereunder shall be
recommended by the Compensation Committee and approved by the
Board of Directors and shall be not less than 100% of the fair
market value of one Share on the day the option is granted.
(ii) Nonqualified Options. With respect to each Nonqualified
Option, the purchase price per Share payable upon the exercise of
each Nonqualified Option granted hereunder shall be recommended by
the Compensation Committee and approved by the Board of Directors
at the time the Nonqualified Option is granted, but shall not be
less than 40% of fair market value at the time of grant.
(b) Number of Shares. Each option agreement shall specify the number of
Shares to which it pertains.
(c) Exercise. Subject to the conditions of subparagraphs (a) and (b) (ii)
of Paragraph 8, if applicable, each option shall be exercisable for the
full amount or for any part thereof and at such intervals or in such
installments as the Compensation Committee recommends and the Board of
Directors determines at the time it grants such option; provided,
however, that no option shall be exercisable with respect to any Shares
later than ten (10) years after the date of the grant of such option.
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(d) Notice of Exercise and Payment. An option shall be exercisable only
by delivery of a written notice to the Compensation Committee or the
Board of Directors, any member of the Compensation Committee or the Board
of Directors, the Company's Secretary, or any other officer of the
Company designated by the Compensation Committee and approved by the
Board of Directors to accept such notices on its behalf, specifying the
number of Shares for which it is exercised. If such Shares are not at the
time effectively registered under the Securities Act of 1933, as amended,
the Optionee shall include with such notice a letter, in form and
substance satisfactory to the Company confirming that such Shares are
being purchased for the Optionee's own account for investment and not
with a view to the resale or distribution thereof. Payment shall be made
in full at the time of delivery to the Optionee of a certificate or
certificates covering the number of Shares for which the option was
exercised. Payment shall be made (i) by cash or check, (ii) if permitted
by the Compensation Committee and approved by the Board of Directors, by
delivery and assignment to the Company of shares of the Company's stock
having a fair market value (as determined by the Compensation Committee)
equal to the exercise price, (iii) if permitted by the Compensation
Committee and approved by the Board of Directors, by a promissory note,
or (iv) by a combination of (i), (ii), and (iii). The value of the shares
of the Company's stock for such purpose shall be its fair market value as
of the date the option is exercised, as determined in accordance with
procedures to be established by the Compensation Committee and approved
by the Board of Directors.
(e) Withholding Taxes; Delivery of Shares. The Company's obligation to
deliver Shares upon exercise of a Nonqualified Option, in whole or in
part, shall be subject to the Optionee's satisfaction of all applicable
federal, state, and local income and employment tax withholding
obligations. The Optionee may satisfy the obligation, in whole or in
part, by electing to have the Company withhold Shares having a value
equal to the amount required to be withheld. The value of Shares to be
withheld shall be based on the fair market value of the Shares on the
date the amount of tax to be withheld is to be determined. If Common
Stock acquired by exercise of an incentive stock option granted pursuant
to this Plan is disposed of within two (2) years from the date of grant
of the option or within one (1) year after the transfer of the Common
Stock to the Optionee, the holder of the Common Stock immediately prior
to the disposition shall promptly notify the Company in writing of the
date and terms of the disposition and shall provide such other
information regarding the disposition as the Company may reasonably
require.
(f) Nontransferability. No option shall be transferable by the Optionee
otherwise than by will or the laws of descent or distribution, and each
option shall be exercisable during his lifetime only by him (except as
otherwise provided for in subparagraph (g) below).
(g) Termination of Options. Each option shall terminate and may no longer
be exercised if the Optionee ceases for any reason to be an employee of,
or consultant to, or ministry partner with the Company, except that:
(i) if the Optionee's performance of services shall have
terminated for any reason other than cause, resignation or other
voluntary action before his eligibility to retire, disability (as
defined below) or death, he may at any time within a period of
thirty (30) days after such termination of the performance of
services exercise his option to the extent that the option was
exercisable by him on the date of termination of his performance
of services;
(ii) if the Optionee's performance of services shall have been
terminated because of disability within the meaning of Section
22(e)(3) of the Internal Revenue Code, the Optionee may, at any
time within a period of one (1) year after the termination of
performance of services, exercise his option to the extent that
the option was exercisable by him on the date of termination of
his employment or performance of services; and
(iii) if the Optionee dies at a time when the option was
exercisable by him, then his estate, personal representative or
beneficiary to whom it has been transferred may, at any time
within a
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period of one (1) year following his death if the Optionee's
performance of services shall have been terminated by his death,
or for the period following the termination of his performance of
services during which the option would have remained exercisable
under clauses (i) or (ii) above if the Optionee's performance of
services shall have been terminated prior to his death, exercise
the option to the extent the Optionee might have exercised it at
the time of his death; provided, however, that no option may be
exercised to any extent by anyone after the date of expiration of
the option.
(iv) The Board of Directors determines to extend the option
exercise date for the nonqualified portion of the plan on a case
by case basis.
(h) Rights as Stockholder. The Optionee shall have no rights as a
stockholder with respect to any Shares covered by his option until the
date of issuance of a stock certificate to him for such Shares.
(i) Repurchase of Shares by the Company. Any Shares purchased by
an Optionee upon exercise of an option may in the discretion of
the Compensation Committee and approved by the Board of Directors
be subject to repurchase by the Company if and to the extent
specifically set forth in the agreement pursuant to which the
Shares were purchased.
10. STOCK DIVIDENDS; STOCK SPLITS; STOCK COMBINATIONS; RECAPITALIZATIONS.
Appropriate adjustment shall be made in the maximum number of Shares of Common
Stock subject to the Plan and in the number, kind and price of Shares covered by
any Stock Incentive granted hereunder to give effect to any stock dividends or
other distributions, stock splits, stock combinations, recapitalizations and
other similar changes in the capital structure of the Company after the
effective date of the Plan.
11. MERGER; SALE OF ASSETS; DISSOLUTION. In the event of a change of the Common
Stock resulting from a merger or similar reorganization as to which the Company
is the surviving corporation, the number and kind of shares which thereafter may
be subject to Stock Incentives granted under this Plan and the number, kind and
price of Shares then subject to Stock Incentives shall be appropriately adjusted
in such manner as the Compensation Committee recommends and the Board of
Directors may deem equitable to prevent substantial dilution or enlargement of
the rights available or granted hereunder. Except as otherwise determined by the
Board of Directors of the Company, a merger or a similar reorganization that the
Company does not survive, or a sale of all or substantially all of the assets of
the Company, shall cause every nonvested Incentive Option and Nonqualified
Option outstanding hereunder to terminate, to the extent not then exercised,
unless any surviving entity agrees to assume the obligations hereunder.
12. NO RIGHTS. Except as hereinabove expressly provided in Sections 10, no
Optionee shall have any rights by reason of any subdivision or consolidation of
shares of the capital stock of any class or the payment of any stock dividend or
any other increase or decrease in the number of shares of any class or by reason
of any dissolution, liquidation, merger or consolidation or spin-off of assets
or stock of another corporation, and any issue by the Company of shares of stock
of any class or of 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 or price of shares subject to any option granted hereunder. The
grant of an option 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 or consolidate or to
dissolve, liquidate, sell, or transfer all or any part of its business or
assets.
13. COMPLIANCE WITH APPLICABLE LAWS. Notwithstanding any other provision of the
Plan, the Company shall have no liability to issue any shares under the Plan
unless such issuance would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity. Prior to the issuance
of any shares under the Plan, the Company may require a written statement that
the recipient is acquiring the shares for investment and not for the purpose or
with the intention of distributing the shares.
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14. DEATH OF A PARTICIPANT. In the event of the death of an Optionee, any
options which the Optionee was entitled to exercise on the date immediately
preceding his death shall be exercisable by the person or persons to whom those
rights pass by will or by the laws of descent and distribution. Any such
exercise shall be by written notice thereof filed with the Secretary of the
Company at the Company's corporate headquarters prior to the option's expiration
date, and any person exercising such an option shall be treated as an Optionee
for purposes of the provisions of this Plan.
15. EMPLOYMENT AND SHAREHOLDER STATUS. The Plan does not constitute a contract
of employment, and selection as an Optionee will not give any employee the right
to be retained in the employ of the Company. The grant of an option under the
Plan shall not confer upon the holder thereof any right as a shareholder of the
Company. As of the date on which an Optionee exercises an option, the Optionee
shall have all rights of a stockholder of record with respect to the number of
shares of Common Stock as to which the option is exercised, irrespective of
whether certificates to evidence the shares of stock have been issued on such
date. If the redistribution of shares is restricted pursuant to Paragraph 12,
certificates representing such shares may bear a legend referred to such
restrictions.
16. TERMINATION OR AMENDMENT OF PLAN. The Board of Directors may at any time
terminate this Plan or make such changes in or additions to the Plan as it deems
advisable without further action on the part of the stockholders of the Company,
including revising the number of shares reserved for issuance hereunder,
provided that no such termination or amendment shall adversely affect or impair
any then outstanding Stock Incentive without the consent of the person holding
such Stock Incentive.
17. TERMINATION. The Plan shall terminate automatically on April 6, 2008, and
may be terminated at any earlier date by the Board. No option shall be granted
hereunder after the termination of the Plan, but such termination shall not
affect the validity of any option then outstanding.
18. TIME OF GRANTING OPTIONS. The date of grant of an option hereunder shall,
for all purposes, be the date on which the Board of Directors makes the
determination granting such option.
19. RESERVATION OF SHARES. The Company, during the terms of this Plan, will at
all times reserve and keep available such number of shares of its Common Stock
as shall be sufficient to satisfy the requirements of the Plan.
20. EFFECTIVE DATE. This Plan was adopted by the Board of Directors, pursuant to
shareholder approval in accordance with the requirements of the Internal Revenue
Code and the Delaware General Corporation Law of the Company, on April 6, 1998,
and shall be effective on said date, provided the Plan is approved within twelve
(12) months of said date. Options may be granted, but may not be exercised,
prior to the date of such shareholder approval.
21. CORPORATION FINANCIAL INFORMATION. The Company shall provide, upon request,
all Optionees on an annual basis with a balance sheet and income statement for
the then ending fiscal year.
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Dates Referenced Herein and Documents Incorporated by Reference
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