<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADMINISTAFF, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 76-0479645
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
19001 CRESCENT SPRINGS DRIVE
KINGWOOD, TEXAS 77339-3802
(Address, including zip code, of Principal Executive Offices)
ADMINISTAFF, INC. 1997 INCENTIVE PLAN
(Full title of the plan)
JOHN H. SPURGIN, II
ADMINISTAFF, INC.
19001 CRESCENT SPRINGS DRIVE
KINGWOOD, TEXAS 77339-3802
(281) 358-8986
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copy to:
G. MICHAEL O'LEARY
ANDREWS & KURTH L.L.P.
4200 TEXAS COMMERCE TOWER
600 TRAVIS
HOUSTON, TEXAS 77002
(713) 220-4200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM
AMOUNT PROPOSED AGGREGATE AMOUNT OF
TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share 882,165 $21.56 $19,019,477 $5,764
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h), based upon the average of the high and low
prices per share for August 14, 1997 on the New York Stock Exchange
as reported in The Wall Street Journal on August 15, 1997.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Administaff, Inc. (the "Company") hereby incorporates by
reference the following documents listed below. In addition, all documents
subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (prior to the
filing of a post-effective amendment which indicates that all the securities
offered have been sold or which deregisters all securities then remaining
unsold) shall be deemed to be incorporated by reference in this Registration
Statement and to be a part thereof from the date of filing of such documents.
(a) The Company's Annual Report on Form 10-K for the year
ended December 31, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the
Quarter ended March 31, 1997 and June 30, 1997.
(c) The description of the Company's common stock, par
value $0.01 per share, contained in the Company's
Registration Statement on Form 8-A (No. 13998) filed
with the Commission on October 6, 1995 pursuant to
Section 12 of the Exchange Act.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The information required by Item 5 is not applicable to this
Registration Statement.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Subsection (a) of section 145 of the General Corporation Law
of the State of Delaware empowers a corporation 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.
Subsection (b) of Section 145 empowers a corporation 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
such person acted in any of the capacities set forth above, 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, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall
have been made to be liable to the corporation unless and only to
<PAGE> 3
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.
Section 145 further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and
(b) of Section 145 in the 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; that indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; that indemnification provided
for by Section 145 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 such person's heirs,
executors and administrators; and empowers the corporation to purchase and
maintain insurance on behalf of a director or officer of the corporation
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 liabilities under Section
145.
Section 102(b)(7) of the General Corporation Law of the State
of Delaware provides that a certificate of incorporation may contain a
provision eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director provided that such provision shall not eliminate or limit
the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit.
Article Eleventh of the Company's Certificate of Incorporation states that:
No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty by such director as a director; provided, however, that this
Article Eleventh shall not eliminate or limit the liability of a director to
the extent provided by applicable law (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware or (iv) for any transaction from which the director derived
an improper personal benefit. No amendment to or repeal of this Article
Eleventh shall apply to, or have any effect on, the liability or alleged
liability of any director of the Corporation for or with respect to any facts
or omissions of such director occurring prior to such amendment or repeal. If
the General Corporation Law of the State of Delaware is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
In addition, Article VI of the Company's Bylaws further
provides that the Company shall indemnify its officers, directors and employees
to the fullest extent permitted by law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement because the class of securities to be offered is
registered under Section 12 of the Exchange Act.
<PAGE> 4
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------- -----------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
23.2 Consent of Ernst & Young L.L.P.
24.1 Power of Attorney (included in signature page).
99.1 Administaff, Inc. 1997 Incentive Plan.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
Registration Statement;
(iii) 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 this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed by the Company pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference 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.
(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 Company's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
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.
<PAGE> 5
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company 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 Company
of expenses incurred or paid by a director, officer or controlling person of
the Company 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 Company 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.
<PAGE> 6
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, 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 Houston, State of Texas, on the 20th day of
August, 1997.
ADMINISTAFF, INC.
By: /S/ RICHARD G. RAWSON
-------------------------------
Richard G. Rawson
Executive Vice President of
Administration, Chief Financial
Officer and Treasurer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Administaff, Inc. (the "Company"), hereby constitutes and
appoints Paul J. Sarvadi and Richard G. Rawson, or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute and file
this Registration Statement under the Securities Act of 1933, as amended, and
any or all amendments (including, without limitation, post- effective
amendments), with all exhibits and any and all documents required to be filed
with respect thereto, with the Securities and Exchange Commission or any
regulatory authority, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might
or could do, if personally present, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 20th day of August, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/S/ PAUL J. SARVADI President, Chief Executive Officer and
- ------------------------------ Director (Principal Executive Officer)
Paul J. Sarvadi
/S/ RICHARD G. RAWSON Executive Vice President of Administration,
- ------------------------------ Chief Financial Officer, Treasurer and Director
Richard G. Rawson (Principal Financial Officer)
/S/ SAMUEL G. LARSON Vice President of Finance and Controller
- ------------------------------ (Principal Accounting Officer)
Samuel G. Larson
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
/S/ GERALD M. McINTOSH Senior Vice President, Research and Development
- ------------------------------ and Director
Gerald M. McIntosh
Director
- ------------------------------
Jack M. Fields, Jr.
/S/ SCOTT C. HENSEL Director
- ------------------------------
Scott C. Hensel
/S/ PAUL S. LATTANZIO Director
- ------------------------------
Paul S. Lattanzio
/S/ LINDA F. LEVINSON Director
- ------------------------------
Linda F. Levinson
</TABLE>
<PAGE> 8
INDEX TO EXHIBITS
=================
Exhibit
Number Description
- ------- -----------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney (included in signature page).
99.1 Administaff, Inc. 1997 Incentive Plan.
<PAGE> 1
EXHIBIT 5.1
August 20, 1997
Board of Directors
Administaff, Inc.
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
Ladies and Gentlemen:
We have acted as counsel to Administaff, Inc. (the "Company")
in connection with the Company's Registration Statement on Form S-8 (the
"Registration Statement") relating to the registration under the Securities Act
of 1933, as amended, of the issuance of up to 882,165 shares (the "Shares") of
the Company's common stock, par value $.01 per share, pursuant to the
Administaff, Inc. 1997 Incentive Plan (the "Plan").
In connection herewith, we have examined copies of such
statutes, regulations, corporate records and documents, certificates of public
and corporate officials and other agreements, contracts, documents and
instruments as we have deemed necessary as a basis for the opinion hereafter
expressed. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with the original documents of all documents submitted to us as
copies. We have also relied, to the extent we deem such reliance proper, upon
information supplied by officers and employees of the Company with respect to
various factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized and reserved for issuance and, when issued in accordance
with the terms of the Plan, will be validly issued, fully-paid and
nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/S/ ANDREWS & KURTH L.L.P.
1198/2325/2608
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the Administaff, Inc. 1997 Incentive Plan of
our report dated February 21, 1997, with respect to the consolidated financial
statements of Administaff, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1996, filed with the Securities and Exchange
Commission.
/S/ ERNST & YOUNG LLP
Houston, Texas
August 20, 1997
<PAGE> 1
EXHIBIT 99.1
ADMINISTAFF, INC.
1997 INCENTIVE PLAN
Administaff, Inc., a Delaware corporation (the "Company"), hereby
amends and restates the 1995 Administaff Stock Option Plan and renames said
plan the Administaff, Inc. 1997 Incentive Plan (the "Plan"), effective as of
May 28, 1997. The terms and provisions of the Plan are set forth below.
1. Purpose. The purpose of the Plan is to promote the interests
of the Company by encouraging employees of the Company and its Subsidiaries and
the nonemployee directors of the Company to acquire or increase their equity
interests in the Company and to provide a means whereby such persons may
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to remain with and
devote their best efforts to the business of the Company, thereby advancing the
interests of the Company and its stockholders. The Plan is also contemplated
to enhance the ability of the Company and its Subsidiaries to attract and
retain the services of individuals who are believed to be essential for the
growth and profitability of the Company.
2. Definitions. As used in this Plan:
(a) "Award" means an Option Right, a Director Option,
Phantom Shares, a Performance Unit, Bonus Stock, or Other Stock-Based
Award.
(b) "Board" means the Board of Directors of the Company.
(c) "Bonus Stock" means unrestricted shares of Common
Stock granted pursuant to Paragraph 9.
(d) "Change in Control" shall be deemed to have occurred
upon:
(i) the date of the acquisition by any "person"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 ("Exchange Act")), excluding
the Company or any of its Subsidiaries or affiliates, and the
group that may be deemed to exist solely by reason of that
certain Voting Agreement, dated as of May 13, 1994 among Paul
J. Sarvadi, Gerald M. McIntosh, James W. Hammond, Scott C.
Hensel, Richard G. Rawson, William E. Lange, Pyramid Ventures,
Inc., Texas Growth Fund--1991 Trust, the McIntosh Charitable
Remainder Unit Trust, the Hammond Family Foundation, the Gary
and Nancy Reed Foundation and the Sarvadi Family Foundation,
of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of 30% or more of either the then
outstanding shares of common stock of the Company, or the then
outstanding voting securities entitled to vote generally in
the election of directors; or
(ii) the date the individuals who constitute the
Board as of May 28, 1997 (the "Incumbent Board"), cease for
any reason to constitute at least a majority of the members of
the Board, provided that any person becoming a director
subsequent to May 28, 1997 whose election, or nomination for
election by the Company's stockholders, was approved by a vote
of at least a majority of the directors then comprising the
Incumbent Board (other than any individual whose nomination
for election to Board membership was not endorsed by the
Company's management prior
<PAGE> 2
to, or at the time of, such individual's initial nomination
for election) shall be, for purposes of this Plan, considered
as though such person were a member of the Incumbent Board;
(iii) the date of consummation of a merger,
consolidation, recapitalization, reorganization, sale or
disposition of all or a substantial portion of the Company's
assets, or the issuance of shares of stock of the Company in
connection with the acquisition of the stock or assets of
another entity, provided, however, that a Change in Control
shall not occur under this clause (iii) if consummation of the
transaction would result in at least 50% of the total voting
power represented by the voting securities of the Company (or,
if not the Company, the entity that succeeds to all or
substantially all of the Company's business) outstanding
immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 50% of the holders of outstanding
voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing
holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the date the Company files a report or proxy
statement with the Securities and Exchange Commission pursuant
to the Exchange Act disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule, form or report or
item therein) that a change in control of the Company has or
may have occurred or will or may occur in the future pursuant
to any then-existing contract or transaction.
(e) "Code" means the Internal Revenue Code of 1986, as in
effect from time to time.
(f) "Committee" means the Compensation Committee of the
Board.
(g) "Common Stock" means the Common Stock, $0.01 par
value, of the Company or any security into which such Common Stock may
be changed by reason of any transaction or event of the type described
in Paragraph 12.
(h) "Date of Grant" means (i) with respect to an Award,
other than a Director Option, the date specified by the Committee on
which such Award will become effective (which date will not be earlier
than the date on which the Committee takes action with respect
thereto) and (ii) with respect to a Director Option, the automatic
date of grant as provided in Paragraph 9.
(i) "Director" means a director of the Company who is not
also an employee of the Company or a Subsidiary, but excluding any
director who is also an employee, director, officer, partner,
principal, or affiliate of Texas Growth Fund--1991 Trust, Pyramid
Ventures, Inc. or any of their respective controlling persons.
(j) "Director Option" means the right to purchase a share
of Common Stock upon exercise of an option granted pursuant to
Paragraph 9.
(k) "Employee" means an employee of the Company or
Subsidiary, and any person who has been offered employment by the
Company or a Subsidiary, provided that any Award granted to such
prospective employee shall be canceled if such person fails to
commence such employment, and no payment of value may be made in
connection with such Award until such person has commenced such
employment; and provided, further, such person may not be granted an
incentive stock option prior to the date the person actually commences
employment.
(l) "Market Value per Share" means, at any date, the
closing sale price per share of the Common Stock on that date (or, if
there are no sales on that date, the last preceding date on which
there was a sale) in the principal market in which the Common Stock is
traded.
<PAGE> 3
(m) "Option Price" means the purchase price per share
payable on exercise of an Option Right or Director Option.
(n) "Option Right" means the right to purchase a share
of Common Stock upon exercise of an option granted pursuant to
Paragraph 4.
(o) "Other Stock-Based Award" means an Award as described
in Paragraph 8.
(p) "Participant" means an Employee who is selected by
the Committee to receive an Award under any of Paragraphs 4 through 8
and shall also include a Director who has received an automatic grant
of Director Options pursuant to Paragraph 9.
(q) "Performance Objectives" means the objectives, if
any, established by the Committee that are to be achieved with respect
to an Award granted under this Plan, which may be described in terms
of Company-wide objectives, in terms of objectives that are related to
performance of a division, Subsidiary, department, geographic market
or function within the Company or a Subsidiary in which the
Participant receiving the Award is employed or in individual or other
terms, and which will relate to the period of time (Performance Cycle)
determined by the Committee. The Performance Objectives intended to
qualify under Section 162(m) of the Code shall be with respect to one
or more of the following (i) net earnings; (ii) operating income;
(iii) earnings before interest and taxes ("EBIT"); (iv) earnings
before interest, taxes, depreciation, and amortization expenses
("EBITDA"); (v) earnings before taxes and unusual or nonrecurring
items; (vi) total revenue; (vii) return on investment; (viii) return
on equity; (ix) return on total capital; (x) return on assets; (xi)
total stockholder return; (xii) return on capital employed in the
business; (xiii) stock price performance; (xiv) earnings per share
growth; (xv) cash flows; (xvi) total profit; (xvii) operating
expenses; (xviii) fee revenue; (xix) total revenue less bonus payroll;
(xx) the number of paid work-site employees; and (xxi) gross mark-up
per employee. Which objectives to use with respect to an Award, the
weighting of the objectives if more than one is used, and whether the
objective is to be measured against a Company-established budget or
target, an index or a peer group of companies, shall be determined by
the Committee in its discretion at the time of grant of the Award. A
Performance Objective need not be based on an increase or a positive
result and may include, for example, maintaining the status quo or
limiting economic losses. The Committee, in its sole discretion and
without the consent of the Participant, may amend (i) any stock-based
Award to reflect (1) a change in corporate capitalization, such as a
stock split or dividend, (2) a corporate transaction, such as a
corporate merger, a corporate consolidation, any corporate separation
(including a spinoff or other distribution of stock or property by a
corporation), any corporate reorganization (whether or not such
reorganization comes within the definition of such term in Section 368
of the Code), (3) any partial or complete corporate liquidation, or
(4) a change in accounting rules required by the Financial Accounting
Standards Board and (ii) any Award that is not intended to meet the
requirements of Section 162(m) of the Code, to reflect a significant
event that the Committee, in its sole discretion, believes to be
appropriate to reflect the original intent in the grant of the Award.
(r) "Performance Unit" means a unit equivalent to $100
(or such other value as the Committee determines) awarded pursuant to
Paragraph 6.
(s) "Phantom Shares" means notional shares of Common
Stock awarded pursuant to Paragraph 5 or 8.
(t) "Rule 16b-3" means Rule 16b-3 of the Securities and
Exchange Commission (or any successor rule to the same effect) as in
effect from time to time.
(u) "Subsidiary" means, at any time, any corporation in
which at the time the Company then owns or controls, directly or
indirectly, not less than 50% of the total combined voting power
represented by all classes of stock issued by such corporation.
<PAGE> 4
3. Shares Available Under Plan. Subject to adjustments as
provided in Paragraph 12, the maximum number of shares of Common Stock which
may be issued with respect to Awards under this Plan is 882,957. Such shares
may be shares of original issuance or treasury shares or a combination of the
foregoing. Upon the payment of any Phantom Shares, there will be deemed to
have been delivered under this Plan for purposes of this Paragraph 3 the number
of shares of Common Stock equal to the Phantom Shares regardless of whether
such Phantom Shares were paid in cash or shares of Common Stock. Subject to
the provisions of the preceding sentence, any shares of Common Stock which are
subject to Option Rights or Phantom Shares awarded that are terminated
unexercised, forfeited or surrendered or which expire for any reason will again
be available for issuance under this Plan. No person may receive Option
Rights, Phantom Shares and Bonus Stock awards with respect to more than 100,000
shares during any calendar year. Further, the maximum value of Performance
Units that may be granted to any person during any calendar year may not exceed
$1 million.
4. Option Rights. The Committee may from time to time make
grants to any Employee of options to purchase shares of Common Stock upon such
terms and conditions as it may determine in accordance with the following
provisions:
(a) Each grant will specify the number of shares of
Common Stock to which it pertains.
(b) Each grant will specify its Option Price, which may
not be less than 100% of the Market Value per Share on the Date of
Grant.
(c) Each grant will specify that the Option Price will be
payable (i) in cash or by check payable and acceptable to the Company
or (ii) to the extent provided for in the option agreement, (a) by
tendering to the Company shares of Common Stock owned by the optionee
for at least six months, if acquired pursuant to a Company stock
option, and having an aggregate Market Value Per Share as of the date
of exercise and tender that is not greater than the full Option Price
for the shares with respect to which the Option is being exercised and
by paying any remaining amount of the Option Price as provided in (i)
above (provided that the Committee may, upon confirming that the
optionee owns the number of shares being tendered, authorize the
issuance of a new certificate for the number of shares being acquired
pursuant to the exercise of the option less the number of shares being
tendered upon the exercise and return to the optionee (or not require
surrender of) the certificate for the shares being tendered upon the
exercise) or (b) by the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash or a check payable and
acceptable to the Company to pay the Option Price and any required tax
withholding amounts; provided that in the event the optionee chooses
to pay the Option Price and withholding taxes as provided in (ii)(b)
above, the optionee and the broker shall comply with such procedures
and enter into such agreements as the Committee may prescribe as a
condition of such payment procedure, or (iii) by a combination of such
payment methods. Payment instruments will be received subject to
collection.
(d) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such
Participant remain unexercised.
(e) Each grant will specify the required period or
periods of continuous service by the Participant with the Company and
the Subsidiaries and/or the Performance Objectives (if any) to be
achieved before the Option Rights or installments thereof will become
exercisable, and any grant may provide, in the Committee's discretion,
for the earlier vesting of the Option Rights upon termination of the
Participant's employment due to death, disability or retirement.
(f) Each grant the exercise of which, or the timing of
the exercise of which, is dependent, in whole or in part, on the
achievement of Performance Objectives may specify a minimum level of
achievement in respect of the specified Performance Objectives below
which no Options Rights will be exercisable and
<PAGE> 5
may set forth a formula or other method for determining the number of
Option Rights that will be exercisable if performance is at or above
such minimum but short of full achievement of the Performance
Objectives.
(g) Option Rights granted under this Plan may be (i)
options which are intended to qualify as incentive stock options under
Section 422 of the Code, (ii) options which are not intended to so
qualify or (iii) combinations of the foregoing, as specified in the
option agreement.
(h) Option Rights granted to a Participant who is an
officer of the Company may, in the discretion of the Committee,
provide for an automatic "reload" grant upon the exercise of the
Option Right with shares of Common Stock, with such terms and
conditions on any such reload grant as the Committee may choose,
provided, however, the Option Price may not be less than 100% of the
Market Value per Share on the Date of Grant of the reload option and
its term may not exceed the remaining term for the exercised portion
of the Option Right.
(i) Each grant shall specify the period during which the
Option Right may be exercised, but no Option Right will be exercisable
more than ten years from the Date of Grant.
(j) Each grant of Option Rights will be evidenced by an
agreement executed on behalf of the Company by any authorized officer
and delivered to the Participant and containing such terms and
provisions consistent with this Plan, as the Committee may approve.
Notwithstanding the foregoing, Option Rights may be granted
from time to time in substitution for stock options held by employees of other
corporations who become Employees as the result of a merger or consolidation of
the employing corporation with the Company or any Subsidiary, or the
acquisition by the Company or any Subsidiary of the assets of the employing
corporation, or the acquisition by the Company or any Subsidiary of stock of
the employing corporation as the result of which it becomes a Subsidiary. The
terms and conditions of substitute Option Rights granted may vary from the
terms and conditions set forth above, to the extent the Committee, at the time
of grant, deems it appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are granted.
5. Phantom Shares. The Committee may also from time to time make
grants to any Employee of Phantom Shares upon such terms and conditions as it
may determine in accordance with the following provisions:
(a) Each grant will specify the number of Phantom Shares
to which it pertains, and whether phantom dividends will be credited
on such Phantom Shares.
(b) Each grant will specify the Performance Objectives
that are to be achieved in order for the Phantom Shares to be earned,
and will specify a minimum acceptable level of achievement in respect
of the specified Performance Objectives below which the Phantom Shares
will be forfeited and may set forth a formula or other method for
determining the number of Phantom Shares to be earned if performance
is at or above such minimum but short of full achievement of the
Performance Objectives.
(c) Each grant will specify the time and manner of
payment of Phantom Shares which have been earned, which payment may be
made in (i) cash, (ii) shares of Common Stock or (iii) any combination
thereof, as determined by the Committee in its sole discretion.
(d) Each grant of Phantom Shares will be evidenced by an
agreement executed on behalf of the Company by any authorized officer
and delivered to the Participant and containing such terms and
provisions, consistent with this Plan, as the Committee may approve,
which may include provisions relating to vesting upon termination of
the Participant's employment due to death, disability or retirement.
<PAGE> 6
6. Performance Units. The Committee may also from time to time
make grants to any Employee of Performance Units upon such terms and conditions
as it may determine in accordance with the following provisions:
(a) Each grant will specify the number of Performance
Units to which it pertains.
(b) Each grant will specify the Performance Objectives
that are to be achieved in order for the Performance Units to be
earned and will specify a minimum acceptable level of achievement in
respect of the specified Performance Objectives below which no payment
will be made and may set forth a formula or other method for
determining the amount of payment to be made if performance is at or
above such minimum but short of full achievement of the Performance
Objectives.
(c) Each grant will specify the time and manner of
payment of Performance Units which have become payable, which payment
may be made in (i) cash, (ii) shares of Common Stock having an
aggregate Market Value per Share equal to the aggregate value of the
Performance Units which have become payable or (iii) any combination
thereof, as determined by the Committee in its sole discretion at the
time of payment.
(d) Each grant of a Performance Unit will be evidenced by
an agreement executed on behalf of the Company by any authorized
officer and delivered to the Participant and containing such terms and
provisions, consistent with this Plan, as the Committee may approve,
which may include provisions relating to vesting upon the termination
of the Participant's employment due to death, disability or
retirement.
7. Bonus Stock. The Committee may also from time to time make
grants to any Employee of Bonus Stock, which shall constitute a transfer of
shares of Common Stock, without other payment therefor, as additional
compensation for the Participant's services to the Company or its Subsidiaries.
8. Other Stock-Based Awards. The Committee may also grant to
Employees an Other Stock-Based Award, which shall consist of a right which (i)
is not an Award described in Paragraphs 4 through 7 and (ii) is denominated or
payable in, valued in whole or in part by reference to, or otherwise based on
or related to, shares of Common Stock as is deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan,
the Committee shall determine the terms and conditions of any such Other
Stock-Based Award. In addition, and without limiting the foregoing, the
Committee may, in its sole discretion, permit a Participant, who is an
Employee, to elect to defer, in the form of Phantom Shares, all or a portion of
the payment of an Award until a specified future time, but in no event for more
than five years or, if earlier, the date of termination of employment.
9. Director Options. (a) Each Director who is elected or
appointed to the Board for the first time after April 23, 1996 shall
automatically receive, on the date of his or her election or appointment, a
Director Option for 7,500 shares of Common Stock, which shall become vested as
to one-third of the shares on each anniversary of the Date of Grant; provided,
however, if the Director ceases to be a member of the Board, his unvested
Director Options, if any, on such date shall be automatically canceled unpaid,
unless such termination is due to death or disability, in which event the
unvested Director Options shall be automatically vested in full.
(b) On the day of the regular Annual Meeting of the Stockholders
of the Company in each year that this Plan is in effect (commencing with the
1996 Annual Meeting of Stockholders), each Director who is in office
immediately after such annual meeting and who was not elected or appointed to
the Board for the first time at such annual meeting shall automatically receive
a Director Option for 2,500 shares of Common Stock, which shall be 100% vested
on the Date of Grant.
(c) Each Director Option will be subject to all of the limitations
contained in the following provisions:
(i) The Option Price of each Director Option shall be the
Market Value per Share on its Date of Grant.
<PAGE> 7
(ii) Each Director Option that is vested may be exercised
in full at one time or in part from time to time by giving written
notice to the Company, stating the number of shares of Common Stock
with respect to which the Director Option is being exercised,
accompanied by payment in full of the Option Price for such shares,
which payment may be (1) in cash by check acceptable to the Company,
(2) by tendering to the Company shares of Common Stock owned by the
optionee for more than six months and having an aggregate Market Value
Per Share as of the date of exercise and tender that is not greater
than the full Option Price for the shares with respect to which the
Option is being exercised and by paying any remaining amount of the
Option Price as provided in (1) above (provided that the Committee may,
upon confirming that the optionee owns the number of shares being
tendered, authorize the issuance of a new certificate for the number
of shares being acquired pursuant to the exercise of the option less
the number of shares being tendered upon the exercise and return to
the optionee (or not require surrender of) the certificate for the
shares being tendered upon the exercise), (3) by the optionee
delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the
Company cash or a check payable and acceptable to the Company to pay
the Option Price and any required tax withholding amounts; provided
that in the event the optionee chooses to pay the Option Price in this
manner, the optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as
the Committee shall prescribe as a condition of such payment
procedure, or (4) by a combination of such methods of payment.
Payment instruments will be received subject to collection.
(iii) Each Director Option shall expire 10 years from the
Date of Grant thereof, but shall be subject to earlier termination as
follows: Director Options, to the extent exercisable as of the date
the Director ceases to serve as a director of the Company for any
reason, including death, must be exercised within three years of such
date unless the Director is removed for cause, in which event the
Director Option must be exercised within three months from the date of
such removal; provided however, that in no event shall the normal
expiration date of such Director Options be extended.
(iv) In the event that the number of shares of Common
Stock available for grants under this Plan is insufficient to make all
automatic grants provided for in this Paragraph 9 on the applicable
date, then all Directors who are entitled to a grant on such date
shall share ratably in the number of shares then available for grant
under this Plan, and shall have no right to receive a grant with
respect to the deficiencies in the number of available shares and all
future grants under this Paragraph 9 shall terminate.
10. Acceleration upon a Change in Control. Notwithstanding
anything contained in the Plan to the contrary, all conditions and/or
restrictions relating to the continued performance of services and/or the
achievement of Performance Objectives with respect to the exercisability or
full entitlement to any Award shall immediately lapse upon a Change in Control.
11. Transferability. (a) Except as provided below, (1) no Award
(or any interest therein) will be transferable by a Participant other than by
(i) will or the laws of descent and distribution or (ii) a qualified domestic
relations order and (2) an Option Right will be exercisable during the
Participant's lifetime only by the Participant or by the Participant's guardian
or legal representative.
(b) The Committee may, in its discretion, provide in an option
agreement that the Option Right granted to the Participant (other than an
incentive stock option) may be transferred (in whole or in part and shall be
subject to such terms and conditions as the Committee may impose thereon) by
the Participant to (i) the spouse, children or grandchildren of the Participant
("Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of the Immediate Family Members and, if applicable, the Participant or (iii) a
partnership in which such Immediate Family Members and, if applicable, the
Participant are the only partners. Following transfer, any such transferred
Option Rights shall continue to be subject to the same terms and conditions as
were applicable to the Option Rights immediately prior to transfer; provided,
however, that no transferred Option Rights shall be exercisable unless
arrangements satisfactory to the Company have been made to satisfy any tax
withholding obligations the Company may have with respect to the Option Rights.
<PAGE> 8
12. Adjustments. The Board may make or provide for such
adjustments in the maximum number of shares specified in Paragraph 3, in the
numbers of shares of Common Stock covered by outstanding Director Options,
Option Rights and Phantom Shares granted hereunder, in the Option Price
applicable to any such Director Options and Option Rights, and/or in the kind
of shares covered thereby (including shares of another issuer), as the Board,
in its sole discretion exercised in good faith, may determine is equitably
required to prevent dilution or enlargement of the rights of Participants that
otherwise would result from any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, merger, consolidation, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase securities or any other
corporation transaction or event having an effect similar to any of the
foregoing.
13. Fractional Shares. The Company will not be required to issue
any fractional share of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions for the settlement of fractions in
cash.
14. Withholding of Taxes. To the extent that the Company is
required to withhold federal, state, local or foreign taxes in connection with
any grant or payment made to a Participant or any other person under this Plan,
it will be a condition to the receipt of such grant or payment that the
Participant or such other person make arrangements satisfactory to the Company
for the payment of such taxes required to be withheld. The Committee may
provide in any grant agreement that such taxes may be satisfied by the
relinquishment of a portion of such Award or payment.
15. Administration of the Plan. (a) This Plan will be
administered by the Committee. A majority of the Committee will constitute a
quorum, and the action of the members the Committee present at any meeting at
which a quorum is present, or acts unanimously approved writing, will be the
acts of the Committee.
(b) The interpretation and construction by the Committee of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of an Award and any determination by the Committee pursuant to any
provision of this Plan or of any such agreement, notification or documentation
will be final and conclusive. No member of the Committee will be liable for
any such action or determination made in good faith or in the absence of gross
negligence or willful misconduct on the part of such member.
16. Amendments, Etc. (a) The Board may amend or terminate the
Plan or the Committee's authority to grant Awards under the Plan without the
consent of stockholders or Participants, except that any such action shall be
subject to the approval of the Company's stockholders at or before the next
annual meeting of stockholders for which the record date is after such Board
action if such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Common Stock may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other such changes to the
Plan to stockholders for approval; provided, however, that without the consent
of an affected Participant, no such action may materially impair the rights of
such Participant under any Award theretofore granted to him.
(b) This Plan will not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor will it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
17. Effectiveness, Term, Etc. This amendment of the Plan shall be
effective upon its approval by the Company's stockholders at the 1997 annual
meeting of the stockholders of the Company; provided, however, in the event
that this amendment is not approved by the stockholders of the Company at such
meeting, it shall be automatically null and void for all purposes.
Notwithstanding anything in this amendment and restatement to the contrary, no
provision herein shall be applicable to any incentive stock option outstanding
prior to May 28, 1997 if such provision would constitute a "modification" of
such incentive stock option, within the meaning of Section 424 of the Code.
Unless sooner terminated, this Plan shall terminate on April 24, 2005 and no
further Awards shall be made after such date, but all outstanding Awards on
such date shall remain effective in accordance with their terms and the terms
of this Plan.
