-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PearYOcTKP5SkUnxPCetYvJ6JX4EiRPqQ74v41FUnYqwrU4IMH7Ol0F/N1+qNl5m hmqH+aEGjDmztdDgQRKX4g== 0001137760-02-000090.txt : 20020621 0001137760-02-000090.hdr.sgml : 20020621 20020621105038 ACCESSION NUMBER: 0001137760-02-000090 CONFORMED SUBMISSION TYPE: DEF 14C PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020604 FILED AS OF DATE: 20020621 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRINCETON MINING CO CENTRAL INDEX KEY: 0000080327 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS METAL ORES [1090] IRS NUMBER: 826008727 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14C SEC ACT: 1934 Act SEC FILE NUMBER: 001-04026 FILM NUMBER: 02683913 BUSINESS ADDRESS: STREET 1: 111 SOUTH MAIN STREET SUITE 127 CITY: GRAPEVINE STATE: TX ZIP: 83873 BUSINESS PHONE: 8174105762 MAIL ADDRESS: STREET 1: 413 CEDAR ST STREET 2: PO BOX 469 CITY: WALLACE STATE: ID ZIP: 83873 DEF 14C 1 pmc14c.txt PMC 14C SCHEDULE 14C INFORMATION INFORMATION STATEMENT PURSUANT TO SECTION 14 (C) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] File by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Information Statement [ ] Confidential,for Use of the Commission [X] Definitive Information Statement Only (as permitted by Rule 14c-5(d)(2) PRINCETON MINING COMPANY - ------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - ------------------------------------------------------------------------------ (Name of Person(s) Filing Information Statement, if other than Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount of which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a) (2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: 1 PRINCETON MINING COMPANY 3801 William D. Tate Avenue, Suite 100 Grapevine, TX 76051 ------------------------- Information Statement Pursuant to Section 14C of the Securities Exchange Act of 1934 ------------------------- This information statement is provided by the Board of Directors of Princeton Mining Company, a Nevada corporation (the "Company" or "PRNM"), to all holders of common stock of the Company in connection with the stockholder approval obtained by written majority consent authorizing. 1. Reverse split of the Company's current outstanding shares on a 1 for 7 basis; 2. Change the name of the Company to Lifestyle Innovations, Inc.; 3. Amend the Certificate of Incorporation to increase the authorized shares to 250,000,000; 4. Amend the Certificate of Incorporation to decrease the par value to $.001; and 5. Approve Princeton Mining Company's 2002 Stock Option Plan (The above actions to be collectively referred to as the"Amendments"). The Board of Directors and the person owning the majority of the outstanding common stock of PRNM have unanimously adopted, ratified and approved a resolution to effect the Amendment. In accordance with the regulations of the Securities and Exchange Commission (the "Commission"), the shareholders Consent will become effective approximately 21 days following the distribution of this information statement to the Company's shareholders. It is expected that the amendments to the Certificate of Incorporation will become effective on or about July 15, 2002. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY ------------------------------------ The Company's principal executive office address is 3801 William D. Tate Avenue, Suite 100, Grapevine, TX 76051. This Information Statement will be mailed to the Company's stockholders on or about June 24, 2002. 2 INTRODUCTION GENERAL ------- On May 12, 2002, the Board of Directors approved, subject to shareholder approval, the Amendments. On May 15, 2002, the Amendments were approved by the written consent of a majority of the Company's common stockholders. A copy of the proposed amendment to the Articles of Incorporation is attached to this Information Statement as Appendix A. A copy of the Princeton Mining Company 2002 Stock Option Plan is attached to this Information Statement as Appendix B. The Board of Directors has fixed the close of business on May 15, 2002 as the record date for the determination of shareholders who are entitled to give consent and receive this Information Statement. As of the record date, the Company had outstanding 27,677,140 shares of common stock held by approximately 1,048 shareholders of record. REVERSE STOCK SPLIT ------------------- On April 15, 2002, the Board of Directors and holder of a majority of the outstanding Common Stock of the Company authorized and approved by written consent a Reverse Stock Split of one-for-seven of the Companys outstanding Common Stock. The intent of the Reverse Stock Split is to increase the marketability and liquidity of the Common Stock. However, shareholders are cautioned that there can be no assurance that this will come to pass. As of the date of this Information Statement, it is anticipated that the Reverse Stock Split will become effective on or about July 1, 2002 (the "Effective Date"). PURPOSES AND EFFECTS OF THE REVERSE STOCK SPLIT ----------------------------------------------- The Common Stock is listed for trading on the OTC Bulletin Board under the symbol PRNM. On the Record Date, the reported closing price of the Common Stock on the OTC Bulletin Board was $.58 per share. The Board believes that the current per-share price of the Common Stock has limited the effective marketability of the Common Stock because of the reluctance of many brokerage firms and institutional investors to recommend lower-priced stocks to their clients or to hold them in their own portfolios. Certain policies and practices of the securities industry may tend to discourage individual brokers within those firms from dealing in lower-priced stocks. Some of those policies and practices involve time-consuming procedures that make handling of lower-priced stock economically unattractive. The brokerage commission on lower-priced stock may also represent a higher percentage of the sale price than the brokerage commission on a higher priced issue. Any reduction in brokerage commissions resulting from the Reverse Stock Split may be offset, however, in whole or in part, by increased brokerage commissions required to be paid by stockholders selling "odd lots" created by such Reverse Stock Split. 3 On the Record Date the number of beneficial holders of the Common Stock was approximately 1,048. The Company does not anticipate that the Reverse Stock Split will result in a significant reduction in the number of such holders, and does not currently intend to effect any Reverse Stock Split that would result in a reduction in the number of holders large enough to eliminate the Company's being subject to the periodic reporting requirements of the Securities and Exchange Commission. The Reverse Stock Split would have the following effects upon the number of shares of Common Stock outstanding (27,677,140 shares as of the Record Date) assuming that no additional shares of Common Stock are issued by the Company after the Record Date and that the Reverse Stock Split is effected and without taking into account any increase in the number of outstanding shares resulting from the exercise of outstanding options. In addition, the Common Stock's par value will be reduced of $0.001 per share following the Reverse Stock Split, and the number of shares Common Stock outstanding will be reduced to approximately 3,953,878 shares. At the Effective Date, each share of Common Stock issued and outstanding immediately prior thereto (the "Old Shares") will be reclassified as and changed into the appropriate fraction of a share of the Common Stock (the "New Common Stock"), subject to the treatment of fractional share interests as described below. Shortly after the Effective Date, the Company will send transmittal forms to the holders of the Old Common Stock to be used in forwarding their certificates formerly representing Old Common Stock for surrender and exchange for certificates representing New Common Stock. No certificates or scrip representing fractional share interests in the New Common Stock will be issued, and no such fractional share interest will entitle the holder thereof to vote, or to any rights of a shareholder of the Company. In lieu of any such fractional share interest, each holder of Old Common Stock who would otherwise be entitled to receive a fractional share interest of New Common Stock will in lieu receive one full share upon surrender of certificates formerly representing Old Common Stock held by such holder. 4 FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ---------------------------------------------------------- The following is a summary of the material federal income tax consequences of the proposed Reverse Stock Split. This summary does not purport to be complete and does not address the tax consequences to holders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, foreign entities, non-resident alien individuals, broker-dealers and tax-exempt entities. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations and proposed regulations, court decisions and current administrative rulings and pronouncements of the Internal Revenue Service (the "IRS"), all of which are subject to change, possibly with retroactive effect, and assumes that the New Common Stock will be held as a "capital asset" (generally, property held for investment) as defined in the Code. Holders of Old Common Stock are advised to consult their own tax advisers regarding the federal income tax consequences of the Reverse Stock Split in light of their personal circumstances and the consequences under state, local and foreign tax laws. 1. The Reverse Stock Split will qualify as a recapitalization described in Section 368(a)(1)(E) of the Code. 2. No gain or loss will be recognized by the Company in connection with the Reverse Stock Split. 3. No gain or loss will be recognized by a shareholder who exchanges all of his or her Old Common Stock solely for New Common Stock. 4. The aggregate basis of the New Common Stock to be received in the Reverse Stock Split (including any whole shares received in lieu of fractional shares) will be the same as the aggregate basis of the Old Common Stock surrendered in exchange therefore. 5. The holding period of the New Common Stock to be received in the Reverse Stock Split (including any whole shares received in lieu of fractional shares) will include the holding period of the Old Common Stock surrendered in exchange therefore. THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. ACCORDINGLY, EACH HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OR HER OWN TAX ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, MUNICIPAL, FOREIGN OR OTHER TAXING AUTHORITY. 5 AMENDMENT TO INCREASE NUMBER OF AUTHORIZED SHARES ------------------------------------------------- The Board of Directors believes that it is advisable and in the Company's best interests to have available additional authorized but unissued shares of common and preferred stock in an amount adequate to provide for the Company's future needs. The additional shares will be available for issuance from time to time by the Company in the discretion of the Board of Directors, normally without further stockholder action (except as may be required for a particular transaction by applicable law, requirements of regulatory agencies or by stock exchange rules), for any proper corporate purpose including, among other things, future acquisitions of property or securities of other corporations, stock dividends, stock splits, stock options, convertible debt and equity financing. The availability of additional authorized but unissued shares will be achieved by effectuating an increase in the number of authorized shares of common stock from 29,000,000 to 250,000,000. This step is necessary, in the judgment of the Board of Directors, in order to raise additional capital and carry out the Company's business objectives. From time to time, the Company may consider acquisitions or other transactions which may require the issuance of shares of Common Stock. The Company presently has no understandings or arrangements which would require the issuance of any of the additional shares of Common Stock which are proposed to be authorized. Further, there are no definitive agreements at this time respecting any merger or consolidation with or acquisition of another business, or the sale or liquidation of the Company or its business. However, management believes that the increase in the number of authorized shares of Common Stock is in the best interest of the Company and its stockholders since additional shares of Common Stock will provide the Company with the flexibility of having a broader choice in the type and number of equity securities available to it for the above and other corporate purposes. 6 Due to the Board of Directors' discretion in connection with the issuance of additional shares of Common Stock to be issued in a private placement, it may, under certain circumstances, possess timing and other advantages in responding to a tender offer or other attempt to gain control of the Company, which may make such attempts more difficult and less attractive. For example, issuance of additional shares would increase the number of shares outstanding and could necessitate the acquisition of a greater number of shares by a person making a tender offer and could make such acquisition more difficult since the recipient of such additional shares may favor the incumbent management. Moreover, these advantages give the Board of Directors the ability to provide any such holders with a veto power over actions proposed to be taken by the holders of the Company's Common Stock. This could have the effect of insulating existing management from removal, even if it is in the best interest of the common stockholders. Management of the Company is not aware of any existing of threatened efforts to obtain control of the Company. ADOPTION OF THE PRINCETON MINING COMPANY CORPORATION 2002 STOCK OPTION PLAN --------------------------------------------------------------------------- The following summary provides an overview of the more commonly applicable terms of the Princeton Mining Company 2002 Stock Option Plan (the "Plan"). A full and complete copy of the Plan is attached hereto as Appendix B. The Plan shall be administered in accordance with Rule 16b-3 under the Exchange Act. Therefore, future grants of stock options thereunder are exempt from Section 16(b) short-swing profit liability. A total of 2,000,000 shares of Common Stock, $.10 par value, subject to adjustments for changes in capitalization or reorganization, may be issued pursuant to the Plan. As discussed below, the Plan is a "dual plan" which provides for the grant of both Non-Qualified Options and Incentive Stock Options. ELIGIBILITY TO RECEIVE OPTIONS. All employees, officers and directors of Princeton Mining Company and any subsidiary are eligible for grants of options under the Plan. However, Directors who are not officers or employees may only receive Non-Qualified Stock Options, not Incentive Stock Options. The Board of Directors, or the Compensation Committee, which shall serve at the pleasure of the Board of Directors and be comprised of two or more Non-Employee Directors, as defined in Rule 16b-3 under the Exchange Act, shall have sole discretion to determine which eligible person shall receive future grants of options under the Plan. 7 THE OPTIONS. Options will be granted pursuant to Stock Option Agreements which contains such terms and conditions as the Board of Directors or Compensation Committee determines to be consistent with the Plan. EXERCISE PRICE. The Board of Directors or Compensation Committee shall determine the exercise price for all options, and except in the case of an Incentive Stock Option to an employee who owns more than 10% of the total combined voting power of all classes of stock of Princeton Mining Company, in which case the exercise price will be 110% of fair market value. However, the purchase price may not be less than the fair market value of the shares subject to the option on the date the option is granted. TIME OF EXERCISE. The Board of Directors or Compensation Committee shall determine the dates of exercise for all options, but in no case will the exercise period exceed 10 years except in the case of an Incentive Stock Option for an employee who owns more than 10% of the total combined voting power of all classes of stock of Princeton Mining Company in which case the exercise period shall be five (5) years. NUMBER OF SHARES OF COMMON STOCK SUBJECT TO AN OPTION. The Board of Directors or Compensation Committee will determine the number of shares of Common Stock subject to an option. However, the fair market value of the stock, determined as of the date of grant, for which Incentive Stock Options may first become exercisable by an Optionee during any calendar year under the Plan, together with that of stock subject to Incentive Stock Options first exercisable (other than as a result of acceleration) by such Optionee under another plan of Princeton Mining Company or any subsidiary or parent corporation shall not exceed $100,000. OTHER TERMS, COVENANTS AND CONDITIONS. The other terms, conditions and restrictions may vary. The grant of an option does not restrict Princeton Mining Company's right to terminate employment of a recipient at any time. ADJUSTMENT IN NUMBER, PRICE, AND KIND OF SHARES. The shares of common stock of Princeton Mining Company subject to the options shall be appropriately adjusted by the Board of Directors in the event of a reorganization, merger, consolidation, recapitalization, reclassification, stock split, stock dividend, etc. In the event of a dissolution or liquidation of Princeton Mining Company, a merger, consolidation, combination or reorganization in which Princeton Mining Company is not the surviving corporation, or a sale of substantially all of the assets of Princeton Mining Company, any outstanding option shall become fully vested immediately upon Princeton Mining Company's public announcement of any of the foregoing. 8 TERMINATION OF STATUS AS AN EMPLOYEE, OFFICER OR DIRECTOR. If an Optionee ceases to serve as an employee, officer or director of Princeton Mining Company the options held by the Optionee may be exercised within three months after the date the Optionee ceases rendering services. After such three month period, all unexercised options shall terminate. If an Optionee granted an Incentive Stock Option terminates employment but continues as a consultant, advisor or in a similar capacity to Princeton Mining Company, the Optionee need not exercise the option within three months of termination of employment but shall be entitled to exercise within three months of termination of services to Princeton Mining Company (one year in the event of death or disability). However, if the Optionee does not exercise within three months of termination of employment, the option will not qualify as an Incentive Stock Option. Notwithstanding the foregoing, in no event may an option be exercised after its term has expired. RIGHTS AS STOCKHOLDER. The Optionee shall have no rights as a stockholder with respect to any shares until the date of issuance of a stock certificate for such shares. DEATH. If an Optionee should die while serving as an employee, officer or director of Princeton Mining Company, the options held may be exercised by the Optionee's estate at any time within one year after the death and shall terminate thereafter. Notwithstanding the foregoing, in no event may an option be exercised after its term has expired. AMENDMENTS. Without stockholder approval, no amendments may be made to the Plan to increase the limit on the maximum number of shares to be granted (except for adjustments resulting from stock splits and similar events), to modify the eligibility requirements or to increase materially the benefits accruing to participants under the Plan. In substantially all other aspects, the Plan can be amended by the Board of Directors. 9 SUSPENSION OR TERMINATION OF OPTIONS. No options shall be exercisable by any person after its expiration date. If the Compensation Committee reasonably believes that a participant has committed an act of misconduct, the Compensation Committee may suspend the Optionee's right to exercise any option pending a final determination by the Compensation Committee. If the Compensation Committee determines an Optionee has committed an act of embezzlement, fraud, breach of fiduciary duty or deliberate disregard of Princeton Mining Company's rules or if a participant makes an unauthorized disclosure of any trade secret or confidential information, engages in any conduct constituting unfair competition, induces any of Princeton Mining Company's customers or contracting parties to breach a contract with Princeton Mining Company, or induces any principal for whom Princeton Mining Company acts as an agent to terminate such agency relationship, neither the Optionee nor his estate shall be entitled to exercise any option whatsoever. In making such determination, the Committee shall act fairly and in good faith and shall give the Optionee an opportunity to appear and present evidence on the Optionee's behalf at a hearing before the Compensation Committee. The determination of the Compensation Committee shall be final and conclusive unless overruled by the Board of Directors. NON-TRANSFERABILITY OF OPTIONS. An option is nontransferable, other than by will or the laws of descent and distribution, and is exercisable only by the Optionee during his or her lifetime or, in the event of death, by the executors, administrators, legatees or heirs of his or her estate during the time period referenced above. TERMINATION OF THE PLAN. The Plan can be terminated at any time by the Board of Directors. If not terminated earlier by the Board of Directors, the Plan will terminate automatically in or around August, 2012. If the Plan is terminated, options previously granted shall nevertheless continue in accordance with the provisions of the Plan without materially affecting the recipients' rights under such options. 10 OTHER PROVISIONS. The option agreement may contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee. FEDERAL TAX ASPECTS. The Plan is a "dual plan" in that it provides for the grant of both Non-Qualified Options and Incentive Stock Options. NON-QUALIFIED OPTIONS. In general, the grant of an option under the Plan that is designated as a non-qualified option will not result in taxable income to the recipient at the time of grant. In general, under the Plan, an Optionee who exercised the option will recognize ordinary income in an amount equal to the excess of the fair market value of the shares at the time of exercise over the option price. An exception to the general rules set forth above exists in the case of common stock subject to a substantial risk of forfeiture and which is non-transferable. This occurs if restrictions in connection with the issuance of the stock options are present. In such circumstances, ordinary income will be recognized when the risk of forfeiture lapses or the shares become transferable, whichever occurs first, rather than the dates described in the two foregoing paragraphs, unless the participant timely files a statement with the IRS electing to be taxed on the date of issuance. Princeton Mining Company will be entitled to tax deductions in the same amounts and at the same times as the participant takes amounts into income. The Optionee's cost basis in the acquired shares will be the same as the fair market value of the shares on the date they are valued to determine taxable income. INCENTIVE STOCK OPTIONS. The grant of an option under the Plan that is designated as an Incentive Stock Option under Section 422 of the Internal Revenue Code and if the requirements of Section 422 are met, will not result in taxable gain to the recipient at the time of the grant nor at the time of exercise. The Optionee will, however, recognize taxable income in the year in which the shares purchased under the Incentive Stock Option are sold or otherwise made the subject of disposition. 11 For federal income tax purposes, dispositions are divided into two categories: qualifying and disqualifying. The Optionee will make a qualifying disposition of the purchased shares if the sale or other disposition of such shares is made after the participant has had the shares for more than two years after the grant date of the Incentive Stock Option and more than one year after the exercise date. If the participant fails to satisfy either of these two holding periods prior to the sale or other disposition of the purchased shares, then a disqualifying disposition will result. Upon a qualifying disposition, the Optionee will recognize capital gain in an amount equal to the excess of (i) the amount realized upon the sale or other disposition of the purchased shares over (ii) the option price paid for the shares. If there is a disqualifying disposition of the shares, then the Optionee will recognize as ordinary income in an amount equal to the excess of (i) the fair market value of those shares at the date of exercise over (ii) the option price paid for such shares. Any additional gain recognized upon the disposition will be capital gain. If the participant makes a disqualifying disposition of the purchased shares, then Princeton Mining Company will be entitled to an income tax deduction for the taxable year in which such disposition occurs, equal to the amount by which the fair market value of such shares on the date the option was exercised exceeded the option price. In no other instance will Princeton Mining Company be allowed a deduction with respect to the Optionee's disposition of the purchased shares. WITHHOLDING TAXES. Princeton Mining Company is entitled to take appropriate measures to withhold from the shares of common stock, or to otherwise obtain from the recipients, sufficient sums Princeton Mining Company deems necessary to satisfy any applicable federal, state and local withholding taxes, including FICA taxes, before the delivery of the common stock to the recipient. VOTE REQUIRED. Adoption of the Plan requires approval of the majority of the voting power of the shares of Princeton Mining Company Common Stock, which has occurred pursuant to the written consent of the Majority Holder. VOTE REQUIRED FOR APPROVAL Section 78.390 of the Nevada Revised Statutes ("NRS") provides an outline of the scope of the amendments of the Articles of Incorporation allowed a Nevada corporation and the procedures and requirements to effect an amendment to the Articles of Incorporation of a Delaware corporation. Pursuant to Section 78.390 proposed amendments must first be adopted by the Board of Directors and then submitted to shareholders for their consideration at an annual or special meeting and must be approved by a majority of the outstanding voting securities. Section 78.320 of the NRS provides that any action required to be taken at a special or annual meeting of the stockholders of a Nevada corporation may be taken by written consent, in lieu of a meeting, if the consent is signed by stockholders owning at least a majority of the voting power. 12 The Board of Directors of PRNM and persons owning and having voting power in excess of 50% of the outstanding voting securities of PRNM have adopted, ratified and approved the change in the authorized shares of PRNM. No further votes are required or necessary to effect the proposed amendment. The securities that would have been entitled to vote if a meeting was required to be held to amend the Company's Articles of Incorporation consist of 27,677,140 shares of issued and outstanding shares of the Company's $.10 par value common voting stock outstanding on May 15, 2002, the record date for determining shareholders who would have been entitled to notice of and to vote on the proposed amendment to TSPT's Articles of Incorporation. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Percentage of Common Stock Common Stock Beneficially Beneficially Owned Name (1) Title Owned (1) On Record Date - -------- ----- --------- -------------- Randy Howell Chief 18,000,000 65.04% 2842 Placid Circle Exec. Off. Grapevine, TX 76051 & Director 13 ADDITIONAL INFORMATION Additional information concerning PRNM, including its Form 10-KSB statement, which has been filed with the Securities and Exchange Commission, may be accessed through the EDGAR archives, at www.sec.gov. DATED: June 4, 2002 BY ORDER OF THE BOARD OF DIRECTORS: /s/ Randy Howell, CEO - --------------------- 14 EX-99 2 pmccoi.txt AMENDED COI CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF PRINCETON MINING COMPANY Princeton Mining Company, a corporation organized and existing under and by virtue of the Nevada Revised Statutes, DOES HEREBY CERTIFY: FIRST: That pursuant to the recommendations of the Board of Directors of said corporation, the following resolutions amending the Certificate of Incorporation of said corporation, have been adopted by the vote of stockholders of said corporation holding a majority of the outstanding stock entitled to vote thereon. The resolutions setting forth the amendments are as follows: RESOLVED, that the Certificate of Incorporation of Princeton Mining Company be amended by changing the Article 1 thereof so that, as amended, said Article shall be and read as follows: "The name of the corporation shall be LIFESTYLE INNOVATIONS, INC. (the "Corporation"). SECOND: That pursuant to the recommendation of the Board of Directors of Princeton Mining Company, the following resolution amending the Certificate of Incorporation of said corporation has been adopted by the vote of stockholders of said corporation holding a majority of the outstanding stock entitled to vote thereon. The resolution setting forth the amendment is as follows: RESOLVED, that ARTICLE 4 of the Certificate of Incorporation shall be amended to read in its entirety as follows: "The aggregate number of shares which the Corporation shall have the authorityto issue is 251,000,000 shares of which there shall be 250,000,000 shares of Common Stock having a par value of $.001 per share and 1,000,000 shares of Preferred Stock having a par value of $.10. Upon the filing of this Certificate of Amendment, all issued and outstanding common shares as of this Amendment's filing date, shall be subject to a reverse split on a 1 for 9 basis. 1 The shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby authorized, by filing a certificate pursuant to the applicable law of the State of Nevada, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences, and rights of the shares of each such series and the qualifications, limitations, or restrictions thereof, including, but not limited to, the fixing or alteration of the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), the redemption price or prices, and the liquidation preferences of any wholly unissued series of shares of Preferred Stock, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of that series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status they had prior to the adoption of the resolution originally fixing the number of shares of that series." THIRD: That in lieu of a meeting and vote of stockholders, the stockholders have given written consent to said amendments in accordance with the applicable provisions of the Nevada Revised Statutes and notice of the adoption of the amendment has been given as provided therein to every stockholder entitled to such notice. FOURTH: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of the Nevada Revised Statutes. FIFTH: That this Certificate of Amendment of the Certificate of Incorporation shall be effective on the date of filing. IN WITNESS WHEREOF, said Princeton Mining Company has caused this certificate to be signed by its Chief Executive Officer, this _____ day of June, 2002. PRINCETON MINING COMPANY /s/ Randy Howell, CEO --------------------- Randy Howell, CEO 2 EX-99 4 pmcsp.txt PMC STOCK PLAN PRINCETON MINING COMPANY (a Delaware Corporation) STOCK OPTION PLAN May 7, 2002 1. PURPOSE OF PLAN; ADMINISTRATION 1. Purpose. The Princeton Mining Company 2002 Stock Option Plan (hereinafter, the "Plan"), is hereby established to grant to officers and other employees of Princeton Mining Company, a Delaware corporation (the "Company") or its parents or subsidiaries (as defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the "Code")), if any, and to non-employee directors, consultants and advisors and other persons who may perform significant services for or on behalf of the Company, a favorable opportunity to acquire common stock, $.10 par value ("Common Stock"), of the Company and, thereby, to create an incentive for such persons to remain in the employ of or provide services to the Company and to contribute to its success. The Company may grant under the Plan both incentive stock options within the meaning of Section 422 of the Code ("Incentive Stock Options") and stock options that do not qualify for treatment as Incentive Stock Options ("Nonstatutory Options"). Unless expressly provided to the contrary herein, all references herein to "options," shall include both incentive Stock Options and Nonstatutory Options. 1.2 Administration The Plan shall be administered by the Board of Directors of the Company (the "Board"), if each member is a "Non-Employee Director" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"), or a committee (the "Committee") of two or more directors, a majority of whom shall be Non-Employee Directors. Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee may be filled by the Board. A majority of the members of the Committee shall constitute a quorum for the purposes of the Plan. Provided a quorum is present, the Committee may take action by affirmative vote or consent of a majority of its members present at a meeting. Meetings may be held telephonically as long as all members are able to hear one another, and a member of the Committee shall be deemed to be present for this purpose if he or she is in simultaneous communication by telephone with the other members who are able to hear one another. In lieu of action at a meeting, the Committee may act by written consent of a majority of its members. 1 Subject to the express provisions of the Plan, the Committee shall have the authority to construe and interpret the Plan and all Stock Option Agreements (as defined in Section 3.4) entered into pursuant hereto and to define the terms used therein, to prescribe, adopt, amend and rescind rules and regulations relating to the administration of the Plan and to make all other determinations necessary or advisable for the administration of the Plan; provided, however, that the Committee may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper; and, provided, further, in its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan. Subject to the express limitations of the Plan, the Committee shall designate the individuals from among the class of persons eligible to participate as provided in Section 1.3 who shall receive options, whether an optionee will receive Incentive Stock Options or Nonstatutory Options, or both, and the amount, price, restrictions and all other terms and provisions of such options (which need not be identical). Members of the Committee shall receive such compensation for their services as members as may be determined by the Board. All expenses and liabilities which members of the Committee incur in connection with the administration of this Plan shall be borne by the Company. The Committee may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the Company and the Company's officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. No members of the Committee or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully protected by the Company in respect of any such action, determination or interpretation. 1.3 Participation Officers and other employees of the Company, non-employee directors, consultants and advisors and other persons who may perform significant services on behalf of the Company shall be eligible for selection to participate in the Plan upon approval by the Committee; provided, however, that only "employees" (within the meaning of Section 3401(c) of the Code) of the Company shall be eligible for the grant of Incentive Stock Options. An individual who has been granted an option may, if otherwise eligible, be granted additional options if the Committee shall so determine. No person is eligible to participate in the Plan by matter of right; only those eligible persons who are selected by the Committee in its discretion shall participate in the Plan. 1.4 Stock Subject to the Plan. Subject to adjustment as provided in Section 3.5, the stock to be offered under the Plan shall be shares of authorized by unissued Common Stock, including any shares repurchased under the terms of the Plan or any Stock Option Agreement entered into pursuant hereto. The cumulative number of shares of Common Stock to be issued under the Plan shall not exceed 2,000,000, subject to adjustment as set forth in Section 3.5. 2 If any option granted hereunder shall expire or terminate for any reason without having been fully exercised, the unpurchased shares subject thereto shall again be available for the purposes of the Plan. For purposes of this Section 1.4, where the exercise price of options is paid by means of the grantee's surrender of previously owned shares of Common Stock, only the net number of additional shares of Common Stock, which remain outstanding in connection with such exercise shall be deemed "issued" for purposes of the Plan. 2. STOCK OPTIONS 2.1 Exercise Price; Payment. (a) The exercise price of each Incentive Stock Option granted under the Plan shall be determined by the Committee, but shall not be less than 100% of the "Fair Market Value" (as defined below) of Common Stock on the date of grant. If an Incentive Stock Option is granted to an employee who at the time such option is granted owns (within the meaning of section 424(d) of the Code) more than 10% of the total combined voting power of all classes of capital stock of the Company, the option exercise price shall be at least 110% of the Fair Market Value of Common Stock on the date of grant. The exercise price of each Nonstatutory Option also shall be determined by the Committee, but shall not be less than 85% of the Fair Market Value of Common Stock on the date of grant. The status of each option granted under the Plan as either an Incentive Stock Option or a Nonstatutory Option shall be determined by the Committee at the time the Committee acts to grant the option, and shall be clearly identified as such in the Stock Option Agreement relating thereto. "Fair Market Value" for purposes of the Plan shall mean: (i) the closing price of a share of Common Stock on the principal exchange on which shares of Common Stock are then trading, if any, on the day immediately preceding the date of grant, or, if shares were not traded on the day preceding such date of grant, then on the next preceding trading day during which a sale occurred; or (ii) if Common Stock is not traded on an exchange but is quoted on Nasdaq or a successor quotation system, (1) the last sales price (if Common Stock is then listed on the Nasdaq Stock Market) or (2) the mean between the closing representative bid and asked price (in all other cases) for Common Stock on the day prior to the date of grant as reported by Nasdaq or such successor quotation system; or (iii) if there is no listing or trading of Common Stock either on a national exchange or over-the-counter, that price determined in good faith by the Committee to be the fair value per share of Common Stock, based upon such evidence as it deems necessary or advisable. 3 (b) In the discretion of the Committee at the time the option is exercised, the exercise price of any option granted under the Plan shall be paid in full in cash, by check or by the optionee's interest-bearing promissory note (subject to any limitations of applicable state corporations law) delivered at the time of exercise; provided, however, that subject to the timing requirements of Section 2.7, in the discretion of the Committee and upon receipt of all regulatory approvals, the person exercising the option may deliver as payment in whole or in part of such exercise price certificates for Common Stock of the Company (duly endorsed or with duly endorsed stock powers attached), which shall be valued at its Fair Market Value on the day of exercise fo the option, or other property deemed appropriate by the Committee; and, provided further, that subject to Section 422 of the Code, so-called cashless exercises as permitted under applicable rules and regulations of the Securities and Exchange Commission and the Federal Reserve Board shall be permitted in the discretion of the Committee. Without limiting the Committee's discretion in this regard, consecutive book entry stock-for-stock exercises of options (or "pyramiding") also are permitted in the Committee's discretion. Irrespective of the form of payment, the delivery of shares issuable upon the exercise of an option shall be conditioned upon payment by the optionee to the Company of amounts sufficient to enable the Company to pay all federal, state, and local withholding taxes resulting in, the Company's judgment, from the exercise. In the discretion of the Committee, such payment to the Company may be effected through (i) the Company's withholding from the number of shares of Common Stock that would otherwise be delivered to the optionee by the Company on exercise of the option a number of shares of Common Stock equal in value (as determined by the Fair Market Value of Common Stock on the date of the exercise) to the aggregate withholding taxes, (ii) payment by the optionee to the Company of the aggregate withholding taxes in cash, (iii) withholding by the Company from other amounts contemporaneously owed by the Company to the optionee, or (iv) any combination of these three methods, as determined by the Committee in its discretion. 2.2 Option Period. (a) The Committee shall provide, in the terms of each Stock Option Agreement, when the option subject to such agreement expires and becomes unexercisable, but in no event will an Incentive Stock Option granted under the Plan be exercisable after the expiration of ten years from the date is granted. Without limiting the generality of the foregoing, the Committee may provide in the Stock Option Agreement that the option subject thereto expires 30 days following a Termination of Employment (as defined in Section 3.2 hereof) for any reason other than death or disability, or six months following a Termination of Employment for disability or following an optionee's death. (b) Outside Date for Exercise. Notwithstanding any provisions of this Section 2.2, in no event shall any option granted under the Plan be exercised after the expiration date of such option set forth in the applicable Stock Option Agreement. 2.3 Exercise of Options. 4 Each option granted under the Plan shall become exercisable and the total number of shares subject thereto shall be purchaseable, in a lump sum or in such installments, which need not be equal, as the Committee shall determine; provided, however, that each option shall become exercisable in full no later than ten years after such option is granted, and each option shall become exercisable as to at least 10% of the shares of Common Stock covered thereby on each anniversary of the date such option is granted; and provided, further, that if the holder of an option shall not in any given installment period purchase all of the shares which such holder is entitled to purchase in such installment period, such holder's right to purchase any share not purchased in such installment period shall continue until the expiration or sooner termination of such holder's option. The Committee may, at any time after grant of the option and from time to time, increase the number of shares purchasable in any installment, subject to the total number of shares subject to the option and the limitations set forth in Section 2.5. At any time and from time to time prior to the time when any exercisable option or exercisable portion thereof becomes unexercisable under the Plan or the applicable Stock Option Agreement, such option, or portion thereof may be exercised in whole or in part; provided, however, that the Committee may, by the terms of the option, require any partial exercise to be with respect to a specified minimum number of shares. No option or installment thereof shall be exercisable except with respect to whole shares. Fractional share interests shall be disregarded, except that they may be accumulated as provided above and except that if such a fractional share interest constitutes the total the total shares of Common Stock remaining available for purchase under an option at the time of exercise, the optionee shall be entitled to receive on exercise a certified or bank cashier's check in an amount equal to the Fair Market Value of such fractional share of stock. 2.4 Transferability of Options. Except as the Committee may determine as aforesaid, an option granted under the Plan shall, by its terms, be nontransferable by the optionee other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order (as defined by the Code), and shall be exercisable during the optionee's lifetime only by the optionee or by his or her guardian or legal representative. More particularly, but without limiting the generality of the immediately preceding sentence, an option may not be assigned, transferred (except as provided in the preceding sentence), pledged or hypothecated (whether by operation of law or otherwise), and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of any option contrary to the provisions of the Plan and the applicable Stock Option Agreement, and any levy of any attachment or similar process upon an option, shall be null and void, and otherwise without effect, and the Committee may, in its sole discretion, upon the happening of any such event, terminate such option forthwith. 2.5 Limitation on Exercise of Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined on the date of grant as provided in Section 2.1 above) of the Common Stock with respect to which Incentive Stock Options granted hereunder (together with all other Incentive Stock Option plans of the Company) are exercisable for the first time by an optionee in any calendar year under the Plan exceeds $100,000, such options granted hereunder shall be treated as Nonstatutory Options to the extent required by Section 422 of the Code. The rule set forth in the preceding sentence shall be applied by taking options into account in the order in which they were granted. 5 2.6 Disqualifying Dispositions of Incentive Stock Options. If Common Stock acquired upon exercise of any Incentive Stock Option is disposed of in a disposition that, under Section 422 of the Code, disqualifies the option holder from the application of Section 421(a) of the Code, the holder of the Common Stock immediately before the disposition shall comply with any requirements imposed by the Company in order to enable the Company to secure the related income tax deduction to which it is entitled in such event. 2.7 Certain Timing Requirements. At the discretion of the Committee, shares of Common Stock issuable to the optionee upon exercise of an option may be used to satisfy the option exercise price or the tax withholding consequences of such exercise, in the case of persons subject to Section 16 of the Securities Exchange Act of 1934, as amended, only (i) during the period beginning on the third business day following the date of release of the quarterly or annual summary statement of sales and earnings of the company and ending on the twelfth business day following such date or (ii) pursuant to an irrevocable written election by the optionee to use shares of Common Stock issuable to the optionee upon exercise of the option to pay all or part of the option price or the withholding taxes made at least six months prior to the payment of such option price or the withholding taxes made at least six months prior to the payment of such option price or withholding taxes. 2.8 No Effect on Employment. Nothing in the Plan or in any Stock Option Agreement hereunder shall confer upon any optionee any right to continue in the employ of the Company, any Parent Corporate or any subsidiary or shall interfere with or restrict in any way the rights of the Company, its Parent Corporation and its Subsidiaries, which are hereby expressly reserved, to discharge any optionee at any time for any reason whatsoever, with or without cause. For purposes of the Plan, "Parent Corporation" shall mean any corporation in an unbroken chain of corporations ending with the Company if each of the corporations other than the Company then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. For purposes of the Plan, "Subsidiary" shall mean any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 3. OTHER PROVISIONS 3.1 Sick Leave and Leaves of Absence 6 Unless otherwise provided in the Stock Option Agreement, and to the extent permitted by Section 422 of the Code, an optionee's employment shall not be deemed to terminate by reason of sick leave, military leave or other leave of absence approved by the Company if the period of any such leave does not exceed a period approved by the Company is guaranteed either contractually or by statute. A Stock Option Agreement may contain such additional or different provisions with respect to leave of absence as the Committee may approve, either at the time of grant of an option or at a later time. 3.2 Termination of Employment. For purposes of the Plan "Termination of Employment," shall mean the time when the employee-employer relationship between the optionee and the Company, any Subsidiary or any Parent Corporation is terminated for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement; but excluding (i) terminations where there is a simultaneous reemployment or continuing employment of an optionee by the Company, any Subsidiary or any Parent Corporation, (ii) at the discretion of the Committee, terminations which result in a temporary severance of the employee-employer relationship, and (iii) at the discretion of the committee, terminations which are followed by the simultaneous establishment of a consulting relationship by the Company, a Subsidiary or any Parent Corporation with the former employee. Subject to Section 3.1, the Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment; provided, however, that, with respect to employee-employer relationship shall constitute a Termination of Employment if, and to the extent that such leave of absence or other change interrupts employment for the purposes of Section 422(a) (2) of the Code and the then-applicable regulations and revenue ruling under said Section. 3.3 Issuance of Stock Certificates. Upon exercise of an option, the Company shall deliver to the person exercising such option a stock certificate evidencing the shares of Common Stock acquired upon exercise. Notwithstanding the foregoing, the Committee in its discretion may require the Company to retain possession of any certificate evidencing stock acquired upon exercise of an option which remains subject to repurchase under the provisions of the Stock Option Agreement or any other agreement signed by the optionee in order to facilitate such repurchase provisions. 3.4 Terms and Conditions of Options. Each option granted under the Plan shall be evidenced by a written Stock Option Agreement ("Stock Option Agreement") between the option holder and the Company providing that the option is subject to the terms and conditions of the Plan and to such other terms and conditions not inconsistent therewith as the Committee may deem appropriate in each case. 7 3.5 Adjustments Upon Changes in Capitalization; Merger and Consolidation. If the outstanding share of Common Stock are changed into, or exchanged for cash or a different number or kind of shares or securities of the Company or of another corporation through reorganization, merger, recapitalization, reclassification, stock split-up, reverse stock split, stock dividend, stock consolidation, stock combination, stock reclassification or similar transaction, an appropriate adjustment shall be made by the Committee in the number and kind of shares as to which options may be granted. In the event of such a change or exchange, other than for shares or securities of another corporation or by reason of reorganization, the Committee shall also make a corresponding adjustment changing the number or kind of shares and the exercise price per share allocated to unexercised options or portions thereof, which shall have been granted prior to any such change, shall likewise be made. Any such adjustment, however, shall be made without change in the total price applicable to the unexercised portion of the option (except for any change in the aggregate price resulting from rounding-off of shares quantities or prices). In the event of a "spin-off" or other substantial distribution of assets of the Company which has a material diminutive effect upon the Fair Market Value of the Common Stock, the Committee in its discretion shall make an appropriate and equitable adjustment to the exercise prices of options then outstanding under the Plan. Where an adjustment under this Section 3.5 of the type described above is made to an Incentive Stock Option, the adjustment will be made in a manner which will not be considered a "modification" under the provisions of subsection 424(b)(3) of the Code. 8 In connection with the dissolution or liquidation of the Company or aq partial liquidation involving 50% or more of the assets of the Company, a reorganization of the Company in which another entity is the survivor, a merger or reorganization of the Company under which more than 50% of the Common Stock outstanding prior to the merger or reorganization is converted into cash or into a security of another entity, a sale of more than 50% of the Company's assets, or a similar event that the Committee determines, in its discretion, would materially alter the structure of the Company or its ownership, the Committee, upon 30 days prior written notice to the option holders, may, in its discretion, do one or more of the following: (i) shorten the period during which options are exercisable (provided they remain exercisable for at least 30 days after the date the notice is given); (ii) accelerate any vesting schedule to which an option is subject; (iii) arrange to have the surviving or successor entity grant securities and option prices, or (iv) cancel options upon payment to the option holders in cash, with respect to each option to the extent then exercisable (including any options as to which the exercise has been accelerated as contemplated in clause (ii) above, of any amount that is the equivalent of the Fair Market Value of the Common Stock (at the effective time of the dissolution, liquidation, merger, reorganization, sale or other event) or the fair market value of the option. In the case of a change in corporate control, the Committee acceleration of the exercisability of any option pursuant to this Section 3.5, take into account the penalties that my result directly or indirectly from such acceleration to either the Company or the option holder, or both, under Section 280G of the Code, and may decide to limit such acceleration to the extent necessary to avoid or mitigate such penalties or their effects. No fractional share of Common Stock shall be issued under the Plan on account of any adjustment under this Section 3.5. 3.6 Rights of Participants and Beneficiaries. The Company shall pay all amounts payable hereunder only to the option holder or beneficiaries entitled thereto pursuant to the Plan. The Company shall not be liable for the date, contracts or engagements of any optionee or his or her beneficiaries, and rights to cash payments under the Plan may not be taken in execution by attachment or garnishment, or by any other legal or equitable proceeding while in the hands of the Company. 3.7 Government Regulations. The Plan, and the grant and exercise of options and the issuance and delivery of shares of Common Stock under options granted hereunder, shall be subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities law) and federal margin requirements and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company me deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and options granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 3.8 Amendment and Termination. The Board or the Committee may at any time suspend, amend or terminate the Plan and may, with the consent of the option holder, make such modification of the terms and conditions of such option holder's option as it shall deem advisable, provided, however, that, without approval of the Company's stockholders given within twelve months before or after the action by the Board or the Committee, no action of the Board or the Committee may, (A) materially increase the benefits accruing to participants under the Plan: (B) materially increase the number of securities which may be issued under the Plan; or (C) materially modify the requirement as to eligibility for participation in the Plan. No option may be granted during any suspension of the Plan or after such termination. The amendment, suspension or termination of the Plan shall not, without the consent of the option holder affected thereby, alter or impair any rights or obligations under any option theretofore granted under the Plan. No option may be granted during any period of suspension nor after termination of the Plan, and in no event may any option be granted under the Plan after the expiration of ten years from the date the Plan is adopted by the Board. 9 3.9 Time of Grant and Exercise of Option. An option shall be deemed to be exercised when the Secretary of the Company receives written notice from an option holder of such exercise, payment of the exercise price determined pursuant to Section 2.1 of the Plan and set forth in the Stock Option Agreement, and all representations, indemnifications and documents reasonably requested by the Committee. 3.10 Privileges of Stock Ownership; Non-Distributive Intent; Reports to Option Holders. A participant in the Plan shall not be entitled to the privilege of stock ownership as to any shares of Common Stock not actually issued to the optionee. Upon exercise of an option at a time when there is not in effect under the Securities Act of 1933, as amended, a Registration Statement relating to the delivery a Prospectus meeting the requirement of Section 10(a)(3) of said Act, the optionee shall represent and warrant in writing to the Company that the shares purchased are being acquired for investment and not with a view to the distribution thereof. The Company shall furnish to each optionee under the Plan the Company's annual report and such other periodic reports, if any, as are disseminated by the Company in the ordinary course to its stockholders. 3.11 Legending Share Certificates. In order the enforce any restrictions imposed upon Common Stock issued upon exercise of an option granted under the Plan or to which such Common Stock may be subject, the Committee may cause a legend or legends to be placed on any share certificates representing such Common Stock, which legend or legends shall made appropriate reference to such restrictions, including, but not limited to, a restriction against sale of such Common Stock for any period of time as may be required by applicable laws or regulations. If any restrictions with respect to which a legend was placed on any certificate ceases to apply to Common Stock represented by such certificate, the owner of the Common Stock represented by such certificates may require the Company to cause the issuance of a new certificate not bearing the legend. Additionally, and not by way of limitation, the Committee may impose such restrictions on any Common Stock issued pursuant to the Plan as it may deem advisable, including, without limitation, restrictions under the requirements of any stock exchange upon which Common Stock is then traded. 3.12 Use of Proceeds. Proceeds realized pursuant to the exercise of options under the Plan shall constitute general funds of the Company. 10 3.13 Changes in Capital Structure; No Impediment to Corporate Transaction. The existence of outstanding options under the Plan shall not effect the Company's right to effect adjustments, recapitalization, reorganizations or other changes in its or any other corporation's capital structure or business, any merger or consolidation, any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting Common Stock, the dissolution or liquidation of the Company's or any other corporation's assets or business, or any other corporate act, whether similar to the events described above or otherwise. 3.14 Effective Date of the Plan. The Plan shall be effective as of the date of its approval by the stockholders of the Company within twelve months after the date of the Board's initial adoption of the Plan. Options may be granted but not exercised prior to stockholder approval of the Plan. If any options are so granted and stockholder approval shall not have been obtained within twelve months of the date of adoption of this Plan by the Board of Directors, such options shall terminate retroactively as of the date they were granted. 3.15 Termination. The Plan shall terminate automatically as of the close of business on May 1, 2012, or earlier as provided in Section 3.8. Unless otherwise provided herein, the termination of the Plan shall not affect the validity of any option agreement outstanding at the date of such termination. 3.16 No Effect on Other Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company, any Subsidiary or any Parent Corporation. Nothing in the Plan shall be construed to limit the right of the Company (i) to establish any other forms or incentives or compensation for employees of the Company, any Subsidiary or any Parent Corporation or (ii) to grant or assume options or other rights otherwise that under the Plan in connection with any proper corporate purpose including but not by way of limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, firm or association. 11 -----END PRIVACY-ENHANCED MESSAGE-----