<PAGE> 1
As filed with the Securities and Exchange Commission
on December 3, 1998
Registration No. 333-________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
SCB COMPUTER TECHNOLOGY, INC.
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
TENNESSEE
------------------------------------
(State or other jurisdiction of incorporation or organization)
62-1201561
------------------------------
(I.R.S. employer identification no.)
1365 WEST BRIERBROOK ROAD
MEMPHIS, TENNESSEE 38138
-------------------------------
(Address of principal executive offices, including zip code)
SCB COMPUTER TECHNOLOGY, INC.
1997 STOCK INCENTIVE PLAN
-------------------------
(Full title of the plan)
GORDON L. BATEMAN
1365 WEST BRIERBROOK ROAD
MEMPHIS, TENNESSEE 38138
------------------------------
(Name and address of agent for service)
(901) 754-6577
-----------------------
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum Amount of
Title of securities Amount to be offering price aggregate offering registration
to be registered registered per share(1) price fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,800,000 shares $8.3125 $14,962,500 $4,160
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) The offering price is estimated solely for the purpose of determining
the amount of the registration fee in accordance with Rule 457(c) under
the Securities Act of 1933, as amended, and is based on the average of
the high and low price per share of the Registrant's Common Stock, as
reported on The Nasdaq Stock Market's National Market on November 27,
1998.
<PAGE> 2
REGISTRATION OF ADDITIONAL SECURITIES
This Registration Statement is filed pursuant to General Instruction E
of Form S-8 for the purpose of registering additional shares of common stock,
$.01 par value, of SCB Computer Technology, Inc., a Tennessee corporation (the
"Registrant"), for the Registrant's 1997 Stock Incentive Plan, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The Registration Statement on Form S-8 (Registration No. 333-36971)
previously filed by the Registrant with the Securities and Exchange Commission
on October 1, 1997, is hereby incorporated by reference herein.
Item 8. Exhibits
See Exhibit Index (page II-3).
II-1
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Memphis, State of Tennessee, on the 30th day of
November, 1998.
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ Ben C. Bryant, Jr.
----------------------------------------------------------
Ben C. Bryant, Jr., Chief Executive Officer and President
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below hereby constitutes and appoints Ben C. Bryant, Jr. and Gary E. McCarter,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents 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, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ T. Scott Cobb Chairman of the Board November 30, 1998
- ------------------------------
T. Scott Cobb
/s/ Ben C. Bryant, Jr. Vice Chairman of the Board, November 30, 1998
- ------------------------------ Chief Executive Officer
Ben C. Bryant, Jr. (Principal Executive Officer),
President, and Treasurer
/s/ Gary E. McCarter Chief Financial Officer November 30, 1998
- ------------------------------ (Principal Financial and
Gary E. McCarter Accounting Officer)
/s/ James E. Harwood Director November 30, 1998
- ------------------------------
James E. Harwood
/s/ Joseph W. McLeary Director November 30, 1998
- ------------------------------
Joseph W. McLeary
</TABLE>
II-2
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
4.1 Amended and Restated Charter of the Registrant
(incorporated herein by reference to Exhibit 3.1 to
Registration Statement on Form S-1 (Registration No.
33-80707))
4.2 Articles of Amendment to the Amended and Restated
Charter, dated November 3, 1998
4.3 Amended and Restated Bylaws of the Registrant
(incorporated herein by reference to Exhibit 3.2 to
Registration Statement on Form S-1 (Registration No.
33-80707))
4.4 SCB Computer Technology, Inc. 1997 Stock Incentive
Plan, as amended
5 Opinion of Bass, Berry & Sims PLC
23.1 Consent of Ernst & Young, LLP
23.2 Consent of Bass, Berry & Sims PLC (included in
Exhibit 5)
24 Power of Attorney (included on Page II-2)
</TABLE>
II-3
<PAGE> 1
EXHIBIT 4.2
ARTICLES OF AMENDMENT TO THE AMENDED AND RESTATED CHARTER
OF
SCB COMPUTER TECHNOLOGY, INC.
In accordance with the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
Articles of Amendment (the "Articles of Amendment") to its Amended and Restated
Charter (the "Amended and Restated Charter"):
1. Name of Corporation. The name of the Corporation is SCB
Computer Technology, Inc.
2. The first paragraph of Section 7 of the Amended and Restated
Charter is hereby amended to read in its entirety as follows:
"7. The corporation is authorized to issue two classes of
stock in the following number of shares: (i)
100,000,000 shares of common stock, par value $.01
per share (the "Common Stock"), and (ii) 1,000,000
shares of preferred stock, no par value (the
"Preferred Stock")."
Except as amended hereby, Section 7 of the Amended and Restated Charter shall
remain in full force and effect.
3. Adoption. These Articles of Amendment were duly adopted by the
Board of Directors on May 19, 1998, and by the Shareholders of the Corporation
on November 3, 1998.
4. Effective Date. These Articles of Amendment will be effective
when filed with the Secretary of State.
Date: November 3, 1998
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ Gordon L. Bateman
---------------------------------------------
Gordon L. Bateman
Chief Administrative Officer and Secretary
<PAGE> 1
EXHIBIT 4.4
SCB COMPUTER TECHNOLOGY, INC.
1997 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
The purpose of the SCB Computer Technology, Inc. 1997 Stock Incentive
Plan (the "Plan") is to enable SCB Computer Technology, Inc. (the "Corporation")
to attract, retain and reward key employees of and consultants to the
Corporation and its Subsidiaries and Affiliates, and directors who are not also
employees of the Corporation, and to strengthen the mutuality of interests
between such key employees, consultants, and directors by awarding such key
employees, consultants, and directors performance-based stock incentives and/or
other equity interests or equity-based incentives in the Corporation, as well as
performance-based incentives payable in cash. The provisions of the Plan are
intended to satisfy the requirements of Section 16(b) of the Exchange Act, and
shall be interpreted in a manner consistent with the requirements thereof, as
now or hereafter construed, interpreted, and applied by regulations, rulings,
and cases. The Plan is also designed so that awards granted hereunder intended
to comply with the requirements for "performance-based" compensation under
Section 162(m) of the Code may comply with such requirements. The creation and
implementation of the Plan will not diminish or prejudice other compensation
plans or programs approved from time to time by the Board.
For purposes of the Plan, the following terms shall be defined as set
forth below:
A. "Affiliate" means any entity other than the Corporation and
its Subsidiaries that is designated by the Board as a participating employer
under the Plan, provided that the Corporation directly or indirectly owns at
least 20% of the combined voting power of all classes of stock of such entity or
at least 20% of the ownership interests in such entity.
B. "Board" means the Board of Directors of the Corporation.
C. "Cause" has the meaning provided in Section 5(j) of the Plan.
D. "Change in Control" has the meaning provided in Section 10(b)
of the Plan.
E. "Change in Control Price" has the meaning provided in Section
10(d) of the Plan.
F. "Common Stock" means the Corporation's Common Stock, par value
$.01 per share.
G. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
H. "Committee" means the Committee referred to in Section 2 of
the Plan.
1
<PAGE> 2
I. "Corporation" means SCB Computer Technology, Inc., a
corporation organized under the laws of the State of Tennessee or any successor
corporation.
J. "Disability" means disability as determined under the
Corporation's Group Long Term Disability Insurance Plan.
K. "Early Retirement" means retirement, for purposes of this Plan
with the express consent of the Corporation at or before the time of such
retirement, from active employment with the Corporation and any Subsidiary or
Affiliate prior to age 65, in accordance with any applicable early retirement
policy of the Corporation then in effect or as may be approved by the Committee.
L. "Effective Date" has the meaning provided in Section 14 of the
Plan.
M. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
N. "Fair Market Value" means with respect to the Common Stock, as
of any given date or dates, unless otherwise determined by the Committee in good
faith, the reported closing price of a share of Common Stock on Nasdaq or such
other market or exchange as is the principal trading market for the Common
Stock, or, if no such sale of a share of Common Stock is reported on Nasdaq or
other exchange or principal trading market on such date, the fair market value
of a share of Common Stock as determined by the Committee in good faith.
O. "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.
P. "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
adoptive relationships.
Q. "Nasdaq" means The Nasdaq Stock Market.
R. "Non-Employee Director" means a member of the Board who is a
Non-Employee Director within the meaning of Rule 16b-3(b)(3) promulgated under
the Exchange Act and an outside director within the meaning of Treasury
Regulation Sec. 162-27(e)(3) promulgated under the Code.
S. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
T. "Normal Retirement" means retirement from active employment
with the Corporation and any Subsidiary or Affiliate on or after age 65.
U. "Other Stock-Based Award" means an award under Section 8 below
that is valued in whole or in part by reference to, or is otherwise based on,
the Common Stock.
V. "Outside Director" means a member of the Board who is not an
officer or employee of the Corporation or any Subsidiary or Affiliate of the
Corporation.
2
<PAGE> 3
W. "Outside Director Option" means an award to an Outside
Director under Section 9 below.
X. "Performance Goals" means performance goals based on one or
more of the following criteria: (i) pre-tax income or after-tax income; (ii)
operating cash flow; (iii) operating profit; (iv) return on equity, assets,
capital, or investment; (v) earnings or book value per share; (vi) sales or
revenues; (vii) operating expenses; (viii) Common Stock price appreciation; and
(ix) implementation, management, or completion of critical projects or
processes. Where applicable, the Performance Goals may be expressed in terms of
attaining a specified level of the particular criteria or the attainment of a
percentage increase or decrease in the particular criteria, and may be applied
to one or more of the Corporation or any Subsidiary, or a division or strategic
business unit of the Corporation, or may be applied to the performance of the
Corporation relative to a market index, a group of other companies, or a
combination thereof, all as determined by the Committee. The Performance Goals
may include a threshold level of performance below which no payment will be made
(or no vesting will occur), levels of performance at which specified payments
will be made (or specified vesting will occur), and a maximum level of
performance above which no additional payment will be made (or at which full
vesting will occur). Each of the foregoing Performance Goals shall be
determined, to the extent applicable, in accordance with generally accepted
accounting principles and shall be subject to certification by the Committee;
provided, that the Committee shall have the authority to make equitable
adjustments to the Performance Goals in recognition of unusual or non-recurring
events affecting the Corporation or any Subsidiary or the financial statements
of the Corporation or any Subsidiary, in response to changes in applicable laws
or regulations, or to account for items of gain, loss, or expense determined to
be extraordinary or unusual in nature or infrequent in occurrence or related to
the disposal of a segment of business or related to a change in accounting
principles.
Y. "Plan" means this SCB Computer Technology, Inc. 1997 Stock
Incentive Plan, as amended from time to time.
Z. "Restricted Stock" means an award of shares of Common Stock
that is subject to restrictions under Section 7 of the Plan.
AA. "Restriction Period" has the meaning provided in Section 7 of
the Plan.
BB. "Retirement" means Normal or Early Retirement.
CC. "Section 162(m) Maximum" has the meaning provided in Section
3(a) hereof.
DD. "Stock Appreciation Right" means the right pursuant to an
award granted under Section 6 below to surrender to the Corporation all (or a
portion) of a Stock Option in exchange for an amount equal to the difference
between (i) the Fair Market Value, as of the date such Stock Option (or such
portion thereof) is surrendered, of the shares of Common Stock covered by such
Stock Option (or such portion thereof), subject, where applicable, to the
pricing provisions in Section 6(b)(ii), and (ii) the aggregate exercise price of
such Stock Option (or such portion thereof).
EE. "Stock Option" or "Option" means any option to purchase shares
of Common Stock (including Restricted Stock, if the Committee so determines)
granted pursuant to Section 5 below.
3
<PAGE> 4
FF. "Subsidiary" means any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the Corporation
if each of the corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION.
Except as provided below, the Plan shall be administered by a Committee
of not less than two Non-Employee Directors, who shall be appointed by the Board
and who shall serve at the pleasure of the Board. The functions of the Committee
specified in the Plan may be exercised by an existing Committee of the Board
composed exclusively of Non-Employee Directors. The initial Committee shall be
the Compensation Committee of the Board. In the event there are not at least two
Non-Employee Directors on the Board, the Plan shall be administered by the Board
and all references herein to the Committee shall refer to the Board.
The Committee shall have the power to delegate authority to the
Corporation's Chief Executive Officer, or to a committee composed of executive
officers of the Corporation, to grant, on behalf of the Committee, Non-Qualified
Stock Options exercisable at Fair Market Value on the date of grant, subject to
such guidelines as the Committee may determine from time to time; provided,
however that (i) options may only be granted pursuant to such delegated
authority for the purposes specified by the Committee, which may include
attracting new employees, awarding outstanding performance, or retaining
employees, (ii) the Committee shall specify the maximum number of shares that
may be granted for purposes of attracting any single new employee at any
specified level and the maximum number that may be granted to any other employee
for any other purpose, (iii) options to purchase no more than 120,000 shares may
be granted in any fiscal year pursuant to such delegated authority, and (iv) a
report of each grant of an option pursuant to such delegated authority shall be
presented to the Committee at the first meeting of the Committee following such
grant. Options granted pursuant to such delegated authority in accordance
herewith shall be deemed, to the extent permitted under applicable law, to have
been granted by the Committee for all purposes under the Plan.
The Committee shall have authority to grant, pursuant to the terms of
the Plan, to officers, other key employees and consultants eligible under
Section 4: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted
Stock, and/or (iv) Other Stock-Based Awards.
In particular, the Committee, or the Board, as the case may be, shall
have the authority, consistent with the terms of the Plan:
(a) to select the officers, key employees of and
consultants to the Corporation and its Subsidiaries and Affiliates to
whom Stock Options, Stock Appreciation Rights, Restricted Stock, and/or
Other Stock-Based Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Incentive
Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock, and/or Other Stock-Based Awards, or any combination
thereof, are to be granted hereunder to one or more eligible persons;
(c) to determine the number of shares to be covered by
each such award granted hereunder;
4
<PAGE> 5
(d) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder
(including, but not limited to, the share price and any restriction or
limitation, or any vesting acceleration or waiver of forfeiture
restrictions regarding any Stock Option or other award and/or the
shares of Common Stock relating thereto, based in each case on such
factors as the Committee shall determine, in its sole discretion); and
to amend or waive any such terms and conditions to the extent permitted
by Section 11 hereof;
(e) to determine whether and under what circumstances a
Stock Option may be settled in cash or Restricted Stock under Section
5(m) or (n), as applicable, instead of Common Stock;
(f) to determine whether, to what extent, and under what
circumstances Option grants and/or other awards under the Plan are to
be made, and operate, on a tandem basis vis-a-vis other awards under
the Plan and/or cash awards made outside of the Plan;
(g) to determine whether, to what extent, and under what
circumstances shares of Common Stock and other amounts payable with
respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);
(h) to determine the terms, conditions, and restrictions
of any Performance Goals and the number of Options, SARs, or shares of
Restricted Stock subject thereto;
(i) to determine whether to require payment of tax
withholding requirements in shares of Common Stock subject to the
award; and
(j) to impose any holding period required to satisfy
Section 16 under the Exchange Act.
The Committee shall have the authority to adopt, alter, and repeal such
rules, guidelines, and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan; and, except as expressly set
forth herein or otherwise required by law, all decisions made by the Committee
pursuant to the provisions of the Plan shall be made in the Committee's sole
discretion and shall be final and binding on all persons, including the
Corporation and Plan participants.
SECTION 3. SHARES OF COMMON STOCK SUBJECT TO PLAN.
(k) As of the Effective Date, the aggregate number of
shares of Common Stock that may be issued under the Plan shall be
3,000,000 shares. The shares of Common Stock issuable under the Plan
may consist, in whole or in part, of authorized and unissued shares or
treasury shares. No officer of the Corporation or other person whose
compensation may be subject to the limitations on deductibility under
Section 162(m) of the Code shall be eligible to receive awards pursuant
to this Plan relating to in excess of 200,000 shares of Common Stock in
any fiscal year (the "Section 162(m) Maximum").
(l) If any shares of Common Stock that have been optioned
cease to be subject to a Stock Option, or if any shares of Common Stock
that are subject to any Restricted Stock or Other Stock-Based
5
<PAGE> 6
Award granted hereunder are forfeited prior to the payment of any
dividends, if applicable, with respect to such shares of Common Stock,
or any such award otherwise terminates without a payment being made to
the participant in the form of Common Stock, such shares shall again be
available for distribution in connection with future awards under the
Plan.
(m) In the event of any merger, reorganization,
consolidation, recapitalization, extraordinary cash dividend, stock
dividend, stock split or other change in corporate structure affecting
the Common Stock, an appropriate substitution or adjustment shall be
made in the maximum number of shares that may be awarded under the
Plan, in the number and option price of shares subject to outstanding
Options granted under the Plan, in the Performance Goals, in the number
of shares underlying Outside Director Options to be granted under
Section 9 hereof, in the Section 162(m) Maximum, and in the number of
shares subject to other outstanding awards granted under the Plan as
may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award
shall always be a whole number. An adjusted option price shall also be
used to determine the amount payable by the Corporation upon the
exercise of any Stock Appreciation Right associated with any Stock
Option.
SECTION 4. ELIGIBILITY.
Officers, other key employees and Outside Directors of and consultants
to the Corporation and its Subsidiaries and Affiliates who are responsible for
or contribute to the management, growth and/or profitability of the business of
the Corporation and/or its Subsidiaries and Affiliates are eligible to be
granted awards under the Plan. Outside Directors are eligible to receive awards
pursuant to Section 9 and not pursuant to any other provisions of the Plan.
SECTION 5. STOCK OPTIONS.
Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the Plan.
Any Stock Option granted under the Plan shall be in such form as the Committee
may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non- Qualified Stock Options. Incentive Stock Options may
be granted only to individuals who are employees of the Corporation or any
Subsidiary of the Corporation.
The Committee shall have the authority to grant to any optionee
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options (in each case with or without Stock Appreciation Rights).
Options granted to officers, key employees, Outside Directors and
consultants under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Common
Stock purchasable under a Stock Option shall be determined by the
Committee at the time of grant but shall be not less than 100% (or, in
the case of any employee who owns stock possessing more than 10% of the
total combined voting power
6
<PAGE> 7
of all classes of stock of the Corporation or of any of its
Subsidiaries, not less than 110%) of the Fair Market Value of the
Common Stock at grant, in the case of Incentive Stock Options, and not
less than 50% of the Fair Market Value of the Common Stock at grant, in
the case of Non-Qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Incentive Stock Option shall be
exercisable more than ten years (or, in the case of an employee who
owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation or any of its Subsidiaries
or parent corporations, more than five years) after the date the Option
is granted.
(c) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee at or after grant. The Committee may
provide that a Stock Option shall vest over a period of future service
at a rate specified at the time of grant, or that the Stock Option is
exercisable only in installments. If the Committee provides, in its
sole discretion, that any Stock Option is exercisable only in
installments, the Committee may waive such installment exercise
provisions at any time at or after grant, in whole or in part, based on
such factors as the Committee shall determine in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise restrictions apply under Section 5(c), Stock Options may be
exercised in whole or in part at any time during the option period, by
giving written notice of exercise to the Corporation specifying the
number of shares to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, either by check, note, or such
other instrument as the Committee may accept. As determined by the
Committee, in its sole discretion, at or (except in the case of an
Incentive Stock Option) after grant, payment in full or in part may
also be made in the form of shares of Common Stock already owned by the
optionee or, in the case of a NonQualified Stock Option, shares of
Restricted Stock or shares subject to such Option or another award
hereunder (in each case valued at the Fair Market Value of the Common
Stock on the date the Option is exercised). If payment of the exercise
price is made in part or in full with Common Stock, the Committee may
award to the employee a new Stock Option to replace the Common Stock
which was surrendered. If payment of the option exercise price of a
Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock, such Restricted Stock (and any replacement shares
relating thereto) shall remain (or be) restricted in accordance with
the original terms of the Restricted Stock award in question, and any
additional Common Stock received upon the exercise shall be subject to
the same forfeiture restrictions, unless otherwise determined by the
Committee, in its sole discretion, at or after grant. No shares of
Common Stock shall be issued until full payment therefor has been made.
An optionee shall generally have the rights to dividends or other
rights of a shareholder with respect to shares subject to the Option
when the optionee has given written notice of exercise, has paid in
full for such shares, and, if requested, has given the representation
described in Section 13(a).
(e) Transferability of Options. No Non-Qualified Stock
Option shall be transferable by the optionee without the prior written
consent of the Committee other than (i) transfers by the Optionee to a
member of his or her Immediate Family or a trust for the benefit of the
optionee or a member of his or her Immediate Family, or (ii) transfers
by will or by the laws of descent and distribution. No Incentive Stock
Option shall be transferable by the optionee otherwise than by will or
by the laws of descent and distribution and all Incentive Stock Options
shall be exercisable, during the optionee's lifetime, only by the
optionee.
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<PAGE> 8
(f) Bonus for Taxes. In the case of a Non-Qualified Stock
Option or an optionee who elects to make a disqualifying disposition
(as defined in Section 422(a)(1) of the Code) of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option, the Committee in
its discretion may award at the time of grant or thereafter the right
to receive upon exercise of such Stock Option a cash bonus calculated
to pay part or all of the federal and state, if any, income tax
incurred by the optionee upon such exercise.
(g) Termination by Death. Subject to Section 5(k), if an
optionee's employment by the Corporation and any Subsidiary or (except
in the case of an Incentive Stock Option) Affiliate terminates by
reason of death, any Stock Option held by such optionee may thereafter
be exercised, to the extent such option was exercisable at the time of
death or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or
except in the case of an Incentive Stock Option, as may be determined
in accordance with procedures established by the Committee) by the
legal representative of the estate or by the legatee of the optionee
under the will of the optionee, for a period of one year (or such other
period as the Committee may specify at or after grant) from the date of
such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(h) Termination by Reason of Disability. Subject to
Section 5(k), if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Disability, any Stock Option held by
such optionee may thereafter be exercised by the optionee, to the
extent it was exercisable at the time of termination or (except in the
case of an Incentive Stock Option) on such accelerated basis as the
Committee may determine at or after grant (or, except in the case of an
Incentive Stock Option, as may be determined in accordance with
procedures established by the Committee), for a period of (i) three
years (or such other period as the Committee may specify at or after
grant) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is
the shorter, in the case of a Non-Qualified Stock Option and (ii) one
year from the date of termination of employment or until the expiration
of the stated term of such Stock Option, whichever period is shorter,
in the case of an Incentive Stock Option; provided however, that, if
the optionee dies within the period specified in (i) above (or other
such period as the Committee shall specify at or after grant), any
unexercised Non-Qualified Stock Option held by such optionee shall
thereafter be exercisable to the extent to which it was exercisable at
the time of death for a period of twelve months from the date of such
death or until the expiration of the stated term of such Stock Option,
whichever period is shorter. In the event of termination of employment
by reason of Disability, if an Incentive Stock Option is exercised
after the expiration of the exercise period applicable to Incentive
Stock Options, but before the expiration of any period that would apply
if such Stock Option were a Non-Qualified Stock Option, such Stock
Option will thereafter be treated as a Non-Qualified Stock Option.
(i) Termination by Reason of Retirement. Subject to
Section 5(k), if an optionee's employment by the Corporation and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Normal or Early Retirement, any Stock
Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of such
Retirement or (except in the case of an Incentive Stock Option) on such
accelerated basis as the Committee may determine at or after grant (or,
except in the case of an Incentive Stock Option, as may be determined
in accordance with procedures established by the Committee), for a
period of (i) three
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years (or such other period as the Committee may specify at or after
grant) from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever period is
the shorter, in the case of a Non-Qualified Stock Option and (ii) three
months from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever period is
the shorter, in the event of an Incentive Stock Option; provided
however, that, if the optionee dies within the period specified in (i)
above (or other such period as the Committee shall specify at or after
grant), any unexercised Non-Qualified Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from the
date of such death or until the expiration of the stated term of such
Stock Option, whichever period is shorter. In the event of termination
of employment by reason of Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise period applicable to
Incentive Stock Options, but before the expiration of the period that
would apply if such Stock Option were a Non-Qualified Stock Option, the
option will thereafter be treated as a Non-Qualified Stock Option.
(j) Other Termination. Subject to Section 5(k), unless
otherwise determined by the Committee (or pursuant to procedures
established by the Committee) at or (except in the case of an Incentive
Stock Option) after grant, if an optionee's employment by the
Corporation and any Subsidiary or (except in the case of an Incentive
Stock Option) Affiliate is involuntarily terminated for any reason
other than death, Disability or Normal or Early Retirement, the Stock
Option shall thereupon terminate, except that such Stock Option may be
exercised, to the extent otherwise then exercisable, for the lesser of
three months or the balance of such Stock Option's term if the
involuntary termination is without Cause. For purposes of this Plan,
"Cause" means (i) a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, or (ii) a
participant's willful misconduct or dishonesty, which is directly and
materially harmful to the business or reputation of the Corporation or
any Subsidiary or Affiliate, in each case as determined by the
Committee, in its sole direction. If an optionee voluntarily terminates
employment with the Corporation and any Subsidiary or (except in the
case of an Incentive Stock Option) Affiliate (except for Disability,
Normal or Early Retirement), the Stock Option shall thereupon
terminate; provided, however, that the Committee at grant or (except in
the case of an Incentive Stock Option) thereafter may extend the
exercise period in this situation for the lesser of three months or the
balance of such Stock Option's term.
(k) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to Incentive
Stock Options shall be interpreted, amended, or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as
to disqualify the Plan under Section 422 of the Code, or, without the
consent of the optionee(s) affected, to disqualify any Incentive Stock
Option under such Section 422. No Incentive Stock Option shall be
granted to any participant under the Plan if such grant would cause the
aggregate Fair Market Value (as of the date the Incentive Stock Option
is granted) of the Common Stock with respect to which all Incentive
Stock Options are exercisable for the first time by such participant
during any calendar year (under all such plans of the Company and any
Subsidiary) to exceed $100,000. To the extent permitted under Section
422 of the Code or the applicable regulations thereunder or any
applicable Internal Revenue Service pronouncement:
(i) if (x) a participant's employment is
terminated by reason of death, Disability, or Retirement and
(y) the portion of any Incentive Stock Option that is
otherwise exercisable during the post-termination period
specified under Section 5(g), (h) or (i), applied without
regard to the
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$100,000 limitation contained in Section 422(d) of the Code,
is greater than the portion of such Option that is immediately
exercisable as an "Incentive Stock Option" during such
post-termination period under Section 422, such excess shall
be treated as a Non-Qualified Stock Option; and
(ii) if the exercise of an Incentive Stock Option
is accelerated by reason of a Change in Control, any portion
of such Option that is not exercisable as an Incentive Stock
Option by reason of the $100,000 limitation contained in
Section 422(d) of the Code shall be treated as a Non-Qualified
Stock Option.
(l) Buyout Provisions. The Committee may at any time
offer to buy out for a payment in cash, Common Stock, or Restricted
Stock an Option previously granted, based on such terms and conditions
as the Committee shall establish and communicate to the optionee at the
time that such offer is made.
(m) Settlement Provisions. If the option agreement so
provides at grant or (except in the case of an Incentive Stock Option)
is amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the
shares to be issued with respect to the spread value of an exercised
Option take the form of Restricted Stock, which shall be valued on the
date of exercise on the basis of the Fair Market Value (as determined
by the Committee) of such Restricted Stock determined without regards
to the forfeiture restrictions involved.
(n) Performance and Other Conditions. The Committee may
condition the exercise of any Option upon the attainment of specified
Performance Goals or other factors as the Committee may determine, in
its sole discretion. Unless specifically provided in the option
agreement, any such conditional Option shall vest six months prior to
its expiration if the conditions to exercise have not theretofore been
satisfied.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option granted
under the Plan. In the case of a Non-Qualified Stock Option, such
rights may be granted either at or after the time of the grant of such
Stock Option. In the case of an Incentive Stock Option, such rights may
be granted only at the time of the grant of such Stock Option. A Stock
Appreciation Right or applicable portion thereof granted with respect
to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, subject
to such provisions as the Committee may specify at grant where a Stock
Appreciation Right is granted with respect to less than the full number
of shares covered by a related Stock Option. A Stock Appreciation Right
may be exercised by an optionee, subject to Section 6(b), in accordance
with the procedures established by the Committee for such purpose. Upon
such exercise, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options
relating to exercised Stock Appreciation Rights shall no longer be
exercisable to the extent that the related Stock Appreciation Rights
have been exercised.
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(b) Terms and Conditions. Stock Appreciation Rights shall
be subject to such terms and conditions, not inconsistent with the
provisions of the Plan, as shall be determined from time to time by the
Committee, including the following:
(i) Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that
the Stock Options to which they relate shall be exercisable in
accordance with the provisions of Section 5 and this Section 6
of the Plan.
(ii) Upon the exercise of a Stock Appreciation
Right, an optionee shall be entitled to receive an amount in
cash and/or shares of Common Stock equal in value to the
excess of the Fair Market Value of one share of Common Stock
over the option price per share specified in the related Stock
Option multiplied by the number of shares in respect of which
the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of
payment. When payment is to be made in shares, the number of
shares to be paid shall be calculated on the basis of the Fair
Market Value of the shares on the date of exercise. When
payment is to be made in cash, such amount shall be calculated
on the basis of the Fair Market Value of the Common Stock on
the date of exercise.
(iii) Stock Appreciation Rights shall be
transferable only when and to the extent that the underlying
Stock Option would be transferable under Section 5(e) of the
Plan.
(iv) Upon the exercise of a Stock Appreciation
Right, the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been
exercised for the purpose of the limitation set forth in
Section 3 of the Plan on the number of shares of Common Stock
to be issued under the Plan.
(v) The Committee, in its sole discretion, may
also provide that, in the event of a Change in Control and/or
a Potential Change in Control, the amount to be paid upon the
exercise of a Stock Appreciation Right shall be based on the
Change in Control Price, subject to such terms and conditions
as the Committee may specify at grant.
(vi) The Committee may condition the exercise of
any Stock Appreciation Right upon the attainment of specified
Performance Goals or other factors as the Committee may
determine, in its sole discretion.
SECTION 7. RESTRICTED STOCK.
(a) Administration. Shares of Restricted Stock may be
issued either alone, in addition to, or in tandem with other awards
granted under the Plan and/or cash awards made outside the Plan. The
Committee shall determine the eligible persons to whom, and the time or
times at which, grants of Restricted Stock will be made, the number of
shares of Restricted Stock to be awarded to any person, the price (if
any) to be paid by the recipient of Restricted Stock (subject to
Section 7(b)), the time or times within which such awards may be
subject to forfeiture, and the other terms, restrictions and conditions
of the awards in addition to those set forth in Section 7(c). The
Committee may condition the grant of Restricted Stock upon the
attainment of specified Performance Goals or such other factors as the
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<PAGE> 12
Committee may determine, in its sole discretion. The provisions of
Restricted Stock awards need not be the same with respect to each
recipient.
(b) Awards and Certificates. The prospective recipient of
a Restricted Stock award shall not have any rights with respect to such
award, unless and until such recipient has executed an agreement
evidencing the award and has delivered a fully executed copy thereof to
the Corporation, and has otherwise complied with the applicable terms
and conditions of such award.
(i) The purchase price for shares of Restricted
Stock shall be established by the Committee and may be zero.
(ii) Awards of Restricted Stock must be accepted
within a period of 60 days (or such shorter period as the
Committee may specify at grant) after the award date, by
executing a Restricted Stock Award Agreement and paying
whatever price (if any) is required under Section 7(b)(i).
(iii) Each participant receiving a Restricted
Stock award shall be issued a stock certificate in respect of
such shares of Restricted Stock. Such certificate shall be
registered in the name of such participant (or a transferee
permitted by Section 13(h) hereof), and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
(iv) The Committee shall require that the stock
certificates evidencing such shares be held in custody by the
Corporation until the restrictions thereon shall have lapsed,
and that, as a condition of any Restricted Stock award, the
participant shall have delivered a stock power, endorsed in
blank, relating to the shares of Common Stock covered by such
award.
(c) Restrictions and Conditions. The shares of Restricted
Stock awarded pursuant to this Section 7 shall be subject to the
following restrictions and conditions:
(i) In accordance with the provisions of this
Plan and the award agreement, during a period set by the
Committee commencing with the date of such award (the
"Restriction Period"), the participant shall not be permitted
to sell, transfer, pledge, assign, or otherwise encumber
shares of Restricted Stock awarded under the Plan. Within
these limits, the Committee, in its sole discretion, may
provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions, in whole or in
part, based on service, the attainment of Performance Goals,
or such other factors or criteria as the Committee may
determine in its sole discretion.
(ii) Except as provided in this paragraph (ii)
and Section 7(c)(i), the participant shall have, with respect
to the shares of Restricted Stock, all of the rights of a
shareholder of the Corporation, including the right to vote
the shares, and the right to receive any cash dividends. The
Committee, in its sole discretion, as determined at the time
of award, may permit or require the payment of cash dividends
to be deferred and, if the Committee so determines,
reinvested, subject to Section 13(e), in additional Restricted
Stock to the extent shares are available under Section 3, or
otherwise reinvested. Pursuant to Section 3 above, stock
dividends issued with respect to Restricted Stock shall be
treated as additional shares of Restricted Stock that are
subject
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to the same restrictions and other terms and conditions that
apply to the shares with respect to which such dividends are
issued. If the Committee so determines, the award agreement
may also impose restrictions on the right to vote and the
right to receive dividends.
(iii) Subject to the applicable provisions of the
award agreement and this Section 7, upon termination of a
participant's employment with the Corporation and any
Subsidiary or Affiliate for any reason during the Restriction
Period, all shares still subject to restriction will vest, or
be forfeited, in accordance with the terms and conditions
established by the Committee at or after grant.
(iv) If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to
such Restriction Period, certificates for an appropriate
number of unrestricted shares shall be delivered to the
participant (or a transferee permitted by Section 13(h)
hereof) promptly.
(d) Minimum Value Provisions. In order to better ensure
that award payments actually reflect the performance of the Corporation
and service of the participant, the Committee may provide, in its sole
discretion, for a tandem performance-based or other award designed to
guarantee a minimum value, payable in cash or Common Stock to the
recipient of a restricted stock award, subject to such performance,
future service, deferral, and other terms and conditions as may be
specified by the Committee.
SECTION 8. OTHER STOCK-BASED AWARDS.
(a) Administration. Other Stock-Based Awards, including,
without limitation, performance shares, convertible preferred stock,
convertible debentures, exchangeable securities and Common Stock awards
or options valued by reference to earnings per share or Subsidiary
performance, may be granted either alone, in addition to, or in tandem
with Stock Options, Stock Appreciation Rights, or Restricted Stock
granted under the Plan and cash awards made outside of the Plan;
provided that no such Other Stock-Based Awards may be granted in tandem
with Incentive Stock Options if that would cause such Stock Options not
to qualify as Incentive Stock Options pursuant to Section 422 of the
Code. Subject to the provisions of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at
which such awards shall be made, the number of shares of Common Stock
to be awarded pursuant to such awards, and all other conditions of the
awards. The Committee may also provide for the grant of Common Stock
upon the completion of a specified performance period. The provisions
of Other Stock-Based Awards need not be the same with respect to each
recipient.
(b) Terms and Conditions. Other Stock-Based Awards made
pursuant to this Section 8 shall be subject to the following terms and
conditions:
(i) Shares subject to awards under this Section
8 and the award agreement referred to in Section 8(b)(v)
below, may not be sold, assigned, transferred, pledged, or
otherwise encumbered prior to the date on which the shares are
issued, or, if later, the date on which any applicable
restriction, performance, or deferral period lapses.
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(ii) Subject to the provisions of this Plan and
the award agreement and unless otherwise determined by the
Committee at grant, the recipient of an award under this
Section 8 shall be entitled to receive, currently or on a
deferred basis, interest or dividends or interest or dividend
equivalents with respect to the number of shares covered by
the award, as determined at the time of the award by the
Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have
been reinvested in additional shares of Common Stock or
otherwise reinvested.
(iii) Any award under Section 8 and any shares of
Common Stock covered by any such award shall vest or be
forfeited to the extent so provided in the award agreement, as
determined by the Committee in its sole discretion.
(iv) In the event of the participant's
Retirement, Disability, or death, or in cases of special
circumstances, the Committee may, in its sole discretion,
waive in whole or in part any or all of the remaining
limitations imposed hereunder (if any) with respect to any or
all of an award under this Section 8.
(v) Each award under this Section 8 shall be
confirmed by, and subject to the terms of, an agreement or
other instrument by the Corporation and the participant.
(vi) Common Stock (including securities
convertible into Common Stock) issued on a bonus basis under
this Section 8 may be issued for no cash consideration. Common
Stock (including securities convertible into Common Stock)
purchased pursuant to a purchase right awarded under this
Section 8 shall be priced at least 85% of the Fair Market
Value of the Common Stock on the date of grant.
SECTION 9. AWARDS TO OUTSIDE DIRECTORS.
(a) The provisions of this Section 9 shall apply only to
awards to Outside Directors in accordance with this Section 9. The
Committee shall have no authority to determine the timing of or the
terms or conditions of any award under this Section 9.
(b) A Non-Qualified Stock Option to purchase 10,000
shares of Common Stock will be granted to Outside Directors upon their
initial appointment or election to the Board, with an exercise price
equal to the Fair Market Value of the Common Stock on the date of
grant.
(c) On the date of each Annual Meeting of Shareholders of
the Corporation, each Outside Director will receive an automatic grant
of a Non-Qualified Stock Option to purchase 5,000 shares of Common
Stock, provided that such Outside Director has served as such for at
least eleven months as of the date of the Annual Meeting. The exercise
price of each option granted pursuant to this Section 9(c) shall equal
the Fair Market Value of such Common Stock on the date of grant.
(d) Each Outside Director Option shall vest and become
exercisable on the first anniversary of the date of grant if the
grantee is still a member of the Board on such date, but shall not be
exercisable before such date except as provided in Section 10.
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<PAGE> 15
(e) No Outside Director Option shall be exercisable prior
to vesting. Each Outside Director Option shall expire, if unexercised,
on the tenth anniversary of the date of grant. The exercise price may
be paid in cash or in shares of Common Stock, including shares of
Common Stock subject to the Outside Director Option.
(f) Outside Director Options shall not be transferable
without the prior written consent of the Board other than (i) transfers
by the optionee to a member of his or her Immediate Family or a trust
for the benefit of optionee or a member of his or her Immediate Family,
or (ii) transfers by will or by the laws of descent and distribution.
(g) Recipients of Outside Director Options shall enter
into a stock option agreement with the Corporation setting forth the
exercise price and other terms as provided herein.
(h) Upon termination of an Outside Director's service as
a director of the Corporation, (i) all Outside Director Options shall
be governed by the provisions of Sections 5(g), 5(i), and 5(j) hereof
as if Outside Directors were employees of the Corporation, except that
there shall be no discretion to accelerate the vesting of any Outside
Director Options in connection with the termination of service of any
individual Outside Director.
(i) Outside Director Options shall be subject to Section
10. The number of shares and the exercise price per share of each
Outside Director Option theretofore awarded shall be adjusted
automatically in the same manner as the number of shares and the
exercise price for Stock Options under Section 3(c) hereof at any time
that Stock Options are adjusted as provided in Section 3(c). The number
of shares underlying Outside Director Options to be awarded in the
future shall be adjusted automatically in the same manner as the number
of shares underlying outstanding Stock Options are adjusted under
Section 3(c) hereof at any time that Stock Options are adjusted under
Section 3(c) hereof.
(j) Any applicable withholding taxes shall be paid in
shares of Common Stock subject to the Outside Director Option valued as
the Fair Market Value of such shares unless the Corporation agrees to
accept payment in cash in the amount of such withholding taxes.
(k) The Board, in its sole discretion, may determine to
reduce the size of any Outside Director Option prior to grant or to
postpone the vesting and exercisability of any Outside Director Option
prior to grant.
SECTION 10. CHANGE IN CONTROL PROVISIONS.
(a) Impact of Event. In the event of:
(1) a "Change in Control" as defined in Section
10(b); or
(2) a "Potential Change in Control" as defined
in Section 10(c), but only if and to the extent so determined
by the Committee or the Board at or after grant (subject to
any right of approval expressly reserved by the Committee or
the Board at the time of such determination);
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(i) subject to the limitations set forth below
in this Section 10(a), the following acceleration provisions
shall apply:
(a) Any Stock Appreciation Right, Stock
Option or Outside Director Option awarded under the
Plan not previously exercisable and vested shall
become fully exercisable and vested.
(b) The restrictions applicable to any
Restricted Stock and Other Stock-Based Awards, in
each case to the extent not already vested under the
Plan, shall lapse and such shares and awards shall be
deemed fully vested.
(ii) subject to the limitations set forth below
in this Section 10(a), the value of all outstanding Stock
Options, Stock Appreciation Rights, Restricted Stock, Outside
Director Options and Other Stock-Based Awards, in each case to
the extent vested, shall, unless otherwise determined Board or
by the Committee in its sole discretion prior to any Change in
Control, be cashed out on the basis of the "Change in Control
Price" as defined in Section 10(d) as of the date such Change
in Control or such Potential Change in Control is determined
to have occurred or such other date as the Board or Committee
may determine prior to the Change in Control.
(iii) The Board or the Committee may impose
additional conditions on the acceleration or valuation of any
award in the award agreement.
(b) Definition of Change in Control. For purposes of
Section 10(a), a "Change in Control" means the happening of any of the
following:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Exchange Act, other than
the Corporation or a wholly-owned subsidiary thereof or any
employee benefit plan of the Corporation or any of its
Subsidiaries, becomes the beneficial owner of the
Corporation's securities having 35% or more of the combined
voting power of the then outstanding securities of the
Corporation that may be cast for the election of directors of
the Corporation (other than as a result of an issuance of
securities initiated by the Corporation in the ordinary course
of business); or
(ii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sales of assets or contested election, or any
combination of the foregoing transactions, less than a
majority of the combined voting power of the then outstanding
securities of the Corporation or any successor corporation or
entity entitled to vote generally in the election of the
directors of the Corporation or such other corporation or
entity after such transaction are held in the aggregate by the
holders of the Corporation's securities entitled to vote
generally in the election of directors of the Corporation
immediately prior to such transaction; or
(iii) during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Board cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Corporation's shareholders, of each director
of the Corporation first elected during such period was
approved by a vote of at least
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two-thirds of the directors of the Corporation then still in
office who were directors of the Corporation at the beginning
of any such period.
(c) Definition of Potential Change in Control. For
purposes of Section 10(a), a "Potential Change in Control" means the
happening of any one of the following:
(i) The approval by shareholders of an agreement
by the Corporation, the consummation of which would result in
a Change in Control of the Corporation as defined in Section
10(b); or
(ii) The acquisition of beneficial ownership,
directly or indirectly, by any entity, person or group (other
than the Corporation or a Subsidiary or any Corporation
employee benefit plan (including any trustee of such plan
acting as such trustee)) of securities of the Corporation
representing 5% or more of the combined voting power of the
Corporation's outstanding securities and the adoption by the
Committee of a resolution to the effect that a Potential
Change in Control of the Corporation has occurred for purposes
of this Plan.
(d) Change in Control Price. For purposes of this Section
10, "Change in Control Price" means the highest price per share paid in
any transaction reported on Nasdaq or such other exchange or market as
is the principal trading market for the Common Stock, or paid or
offered in any bona fide transaction related to a Potential or actual
Change in Control of the Corporation at any time during the 60 day
period immediately preceding the occurrence of the Change in Control
(or, where applicable, the occurrence of the Potential Change in
Control event), in each case as determined by the Committee except
that, in the case of Incentive Stock Options and Stock Appreciation
Rights relating to Incentive Stock Options, such price shall be based
only on transactions reported for the date on which the optionee
exercises such Stock Appreciation Rights or, where applicable, the date
on which a cash out occurs under Section 10(a)(ii).
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may at any time amend, alter or discontinue the Plan without
shareholder approval to the fullest extent permitted by the Exchange Act and the
Code; provided, however, that no amendment, alteration, or discontinuation shall
be made which would impair the rights of an optionee or participant under a
Stock Option, Stock Appreciation Right, Restricted Stock, Other Stock-Based
Award or Outside Director Option theretofore granted, without the participant's
consent.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices. Solely
for purposes of computing the Section 162(m) Maximum, if any Stock Options or
other awards previously granted to a participant are canceled and new Stock
Options or other awards having a lower exercise price or other more favorable
terms for the participant are substituted in their place, both the initial Stock
Options or other awards and the replacement Stock Options
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or other awards will be deemed to be outstanding (although the canceled Stock
Options or other awards will not be exercisable or deemed outstanding for any
other purposes).
SECTION 12. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Corporation, nothing contained herein shall give
any such participant or optionee any rights that are greater than those of a
general creditor of the Corporation. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or payments in lieu of or with
respect to awards hereunder; provided, however, that, unless the Committee
otherwise determines with the consent of the affected participant, the existence
of such trusts or other arrangements is consistent with the "unfunded" status of
the Plan.
SECTION 13. GENERAL PROVISIONS.
(a) The Committee may require each person purchasing
shares pursuant to a Stock Option or other award under the Plan to
represent to and agree with the Corporation in writing that the
optionee or participant is acquiring the shares without a view to
distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for shares of Common Stock
or other securities delivered under the Plan shall be subject to such
stop-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the
Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable Federal or state securities law, and the
Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
(c) The adoption of the Plan shall not confer upon any
employee of the Corporation or any Subsidiary or Affiliate any right to
continued employment with the Corporation or a Subsidiary or Affiliate,
as the case may be, nor shall it interfere in any way with the right of
the Corporation or a Subsidiary or Affiliate to terminate the
employment of any of its employees at any time.
(d) No later than the date as of which an amount first
becomes includible in the gross income of the participant for Federal
income tax purposes with respect to any award under the Plan, the
participant shall pay to the Corporation, or make arrangements
satisfactory to the Committee regarding the payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with
respect to such amount. The Committee may require withholding
obligations to be settled with Common Stock, including Common Stock
that is part of the award that gives rise to the withholding
requirement. The obligations of the Corporation under the Plan shall be
conditional on such payment or arrangements and
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the Corporation and its Subsidiaries or Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(e) The actual or deemed reinvestment of dividends or
dividend equivalents in additional Restricted Stock (or other types of
Plan awards) at the time of any dividend payment shall only be
permissible if sufficient shares of Common Stock are available under
Section 3 for such reinvestment (taking into account then outstanding
Stock Options and other Plan awards).
(f) The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the
laws of the State of Tennessee.
(g) The members of the Committee and the Board shall not
be liable to any employee or other person with respect to any
determination made hereunder in a manner that is not inconsistent with
their legal obligations as members of the Board. In addition to such
other rights of indemnification as they may have as directors or as
members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be
a party by reason of any action taken or failure to act under or in
connection with the Plan or any option granted thereunder, and against
all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the
Corporation) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that such
Committee member is liable for negligence or misconduct in the
performance of his duties; provided that within 60 days after
institution of any such action, suit or proceeding, the Committee
member shall in writing offer the Corporation the opportunity, at its
own expense, to handle and defend the same.
(h) In addition to any other restrictions on transfer
that may be applicable under the terms of this Plan or the applicable
award agreement, no Stock Option, Stock Appreciation Right, Restricted
Stock award, or Other Stock-Based Award or other right issued under
this Plan is transferable by the participant without the prior written
consent of the Committee, or, in the case of an Outside Director, the
Board, other than (i) transfers by an optionee to a member of his or
her Immediate Family or a trust for the benefit of the optionee or a
member of his or her Immediate Family or (ii) transfers by will or by
the laws of descent and distribution. The designation of a beneficiary
will not constitute a transfer.
(i) The Committee may, at or after grant, condition the
receipt of any payment in respect of any award or the transfer of any
shares subject to an award on the satisfaction of a six-month holding
period, if such holding period is required for compliance with Section
16 under the Exchange Act.
SECTION 14. EFFECTIVE DATE OF PLAN.
The Plan shall be effective as of the date of approval of the Plan by a
majority of the votes cast by the holders of the Corporation's Common Stock (the
"Effective Date").
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SECTION 15. TERM OF PLAN.
No Stock Option, Stock Appreciation Right, Restricted Stock Award,
Other Stock-Based Award or Outside Director Option award shall be granted
pursuant to the Plan on or after the tenth anniversary of the Effective Date of
the Plan, but awards granted prior to such tenth anniversary may be extended
beyond that date.
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EXHIBIT 5
[BASS, BERRY & SIMS PLC LETTERHEAD]
December 3, 1998
SCB Computer Technology, Inc.
1365 W. Brierbrook Road
Memphis, Tennessee 38138
Re: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as your counsel in the preparation of the Registration
Statement on Form S-8 (the "Registration Statement") relating to the Company's
1997 Stock Incentive Plan (the "Plan") filed by you with the Securities and
Exchange Commission relating to an additional 1,800,000 shares (the "Shares") of
common stock, par value $.01 per share, issuable pursuant to the Plan.
In so acting we have examined and relied upon such records, documents,
and other instruments as in our judgment are necessary or appropriate in order
to express the opinions hereinafter set forth and have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies.
Based on the foregoing, we are of the opinion that the Shares, when
issued pursuant to and in accordance with 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/ Bass, Berry & Sims PLC
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-00000) pertaining to the SCB Computer Technology, Inc. 1997 Stock
Incentive Plan of our report dated June 16, 1998, with respect to the
consolidated financial statements of SCB Computer Technology, Inc. included in
its Annual Report (Form 10-K) for the year ended April 30, 1998, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Memphis, Tennessee
November 30, 1998
