<PAGE> 1
As filed with the Securities and Exchange Commission on July 29, 1997.
Registration No. 333-____
================================================================================
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------------------
SIPEX CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Massachusetts 04-6135748
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
22 Linnell Circle
Billerica, Massachusetts 01821
(508) 667- 8700
(Address of Principal Executive Offices) (Zip Code)
------------------------------------
1997 Stock Option Plan
(Full title of the plans)
------------------------------------
James E. Donegan
President and Chief Executive Officer
SIPEX Corporation
22 Linnell Circle
Billerica, Massachusetts 01821
(508) 667- 8700
(Name and address including zip code and telephone number,
including area code, of agent for service)
------------------------------------
Copy to:
Timothy C. Maguire, Esq.
TESTA, HURWITZ & THIBEAULT, LLP
High Street Tower, 125 High Street
Boston, Massachusetts 02110
(617) 248-7000
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
--------------------------------------------
================================================================================
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate Amount of
Securities to to be Price Per Offering Registration
be Registered Registered Share Price Fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1997 STOCK OPTION PLAN
Common Stock (Par Value 600,000 $43.94 (1) $26,362,500 $7,988.64
$.01)
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) The price of $43.94 per share, which is the average of the high and low
prices of the common stock of the registrant reported on the Nasdaq
National Market on July 23, 1997, is set forth solely for purposes of
calculating the filing fee pursuant to Rule 457(c) and (h).
<PAGE> 3
-3-
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
----------------
The documents containing the information specified in this Item 1 will be
sent or given to employees, directors or others as specified by Rule 428(b)(1).
In accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission") and the instructions to Form S-8, such documents
are not being filed with the Commission either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
Item 2. Registrant Information and Employee Plan Annual Information.
-----------------------------------------------------------
The documents containing the information specified in this Item 2 will be
sent or given to employees as specified by Rule 428(b)(1). In accordance with
the rules and regulations of the Commission and the instructions to Form S-8,
such documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed with the Commission are incorporated by
reference in this Registration Statement:
(a) The section entitled "Description of Registrant's Securities to be
Registered," contained in the Registrant's Registration Statement on
Form 8-A, filed on March 1, 1996 pursuant to Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, as filed with the Commission on March 28, 1997; and
(c) Registrants Form 10-Q for the fiscal quarter ended March 29, 1997, as
filed with the Commission on May 6, 1997.
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered herein 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 hereof from the date of filing of such documents.
<PAGE> 4
-4-
Item 4. Description of Securities.
-------------------------
Not applicable.
Item 5. Interest of Named Experts and Counsel.
-------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
Massachusetts General Laws Chapter 156B, Section 67 provides that a
corporation may indemnify its directors and officers to the extent specified in
or authorized by (i) the articles of organization, (ii) a by-law adopted by the
shareholders, or (iii) a vote adopted by the holders of a majority of the shares
of stock entitled to vote on the election of directors. In all instances, the
extent to which a corporation provides indemnification to its directors and
officers under Section 67 is optional. Massachusetts General Laws Chapter 156B,
Section 67 forbids the indemnification of any person with respect to any matter
to which he shall have been adjudicated in any proceeding not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the corporation.
The Company's Restated By-Laws indemnifies the directors and officers
against liabilities arising out of legal proceedings brought against them by
reason of their status as directors and officers or by reason of their agreeing
to serve, at the request of the Company, as a director or officer of another
organization. Under the Restated By-Laws, each director and officer shall be
indemnified by the Company for all costs and expenses (including attorneys'
fees), judgments, liabilities and amounts paid in settlement of such
proceedings, even if he is not successful on the merits, if he acted in good
faith in the reasonable belief that his action was in the best interest of the
Company. The Board of Directors may authorize advancing litigation expenses to a
director or officer at his request upon receipt of an undertaking by such
director or officer to repay such expenses if it is ultimately determined that
he is not entitled to indemnification for such expense. The Restated By-Laws
provide that the directors and officers of the Company shall be indemnified by
the Company to the fullest extent authorized by Massachusetts Law, as it now
exists or may in the future be amended. In addition, the Restated Articles
provide that the directors of the Company will not be personally liable for
monetary damages to the Company for breaches of their fiduciary duty as
directors, unless they violated their duty of loyalty to the Company or its
shareholders, acted in bad faith, knowingly or intentionally violated the law,
authorized illegal dividends or redemptions or derived an improper personal
benefit from their action as directors.
The Company has entered into separate indemnification agreements with each
of its directors and executive officers, whereby the Company agreed, among other
things, (i) to indemnify them to the fullest extent permitted by the Business
Corporation Law of the Commonwealth of Massachusetts, subject to specified
limitations, against certain liabilities actually and reasonably incurred by
them in any proceedings in which they are a party that may arise by reason of
their status as directors, officers, employees or agents or may arise by reason
of their serving as such at the request of the Company for another entity and
(ii) to advance their expenses incurred as a result of any proceeding against
them as to which they could be indemnified. The Company intends to enter into
similar separate indemnification agreements with any directors or officers who
may join the Company in the future.
<PAGE> 5
-5-
Item 7. Exemption From Registration Claimed.
-----------------------------------
Not applicable.
Item 8. Exhibits.
--------
Exhibit No. Description of Exhibit
---------- ----------------------
Exhibit 4.1 Restated Articles of Organization of the Registrant
(filed as Exhibit 3.2 to the Registrant's Registration
Statement on Form S-1, File No. 333-1328, and
incorporated herein by reference).
Exhibit 4.2 Restated By-Laws of the Registrant (filed as Exhibit
3.3 to the Registrant's Registration Statement on Form
S-1, File No. 333-1328, and incorporated herein by
reference).
Exhibit 4.3 Specimen certificate representing the Common Stock of
the Registrant (filed as Exhibit 4.1 to the Registrant's
Registration Statement on Form S-1, File No. 333-1328,
and incorporated herein by reference).
Exhibit 4.4 1997 Stock Option Plan (filed herewith).
Exhibit 5.1 Opinion of Testa, Hurwitz & Thibeault, LLP (filed
herewith).
Exhibit 23.1 Consent of Testa, Hurwitz & Thibeault, LLP (contained in
Exhibit 5.1).
Exhibit 23.2 Consent of KPMG Peat Marwick LLP (filed herewith).
Exhibit 23.2 Consent of Ernst & Young LLP (filed herewith).
Exhibit 24.1 Power of Attorney (included as part of the signature
page to this Registration Statement).
<PAGE> 6
-6-
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 the 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 the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in
a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to
the Commission by the Registrant 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 Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE> 7
-7-
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 8
-8-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
SIPEX Corporation, 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 Town of Billerica, Commonwealth of Massachusetts, on
this 29th day of July, 1997.
SIPEX Corporation
By: /s/ James E. Donegan
----------------------------------
James E. Donegan
Chairman, Chief Executive Officer,
President and Clerk
POWER OF ATTORNEY
We, the undersigned officers and directors of SIPEX Corporation hereby
severally constitute and appoint James E. Donegan and Frank R. DiPietro, and
each of them singly, our true and lawful attorneys, with full power to them and
each of them singly, to sign for us in our names in the capacities indicated
below, any amendments to this Registration Statement on Form S-8 (including
post-effective amendments), and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, and generally to do all things in our names and on our behalf in our
capacities as officers and directors to enable SIPEX Corporation to comply with
the provisions of the Securities Act of 1933, as amended, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any of
them, to said Registration Statement and all amendments thereto.
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.
SIGNATURE TITLE(S) DATE
--------- -------- ----
/s/ James E. Donegan President, Chief July 29, 1997
- --------------------------------- Executive Officer
James E. Donegan (Principal Executive
Officer) and Clerk
<PAGE> 9
-9-
SIGNATURE TITLE(S) DATE
--------- -------- ----
/s/ Frank R. DiPietro Executive Vice July 29, 1997
- --------------------------------- President, Chief
Frank R. DiPietro Financial Officer and
Treasurer (Principal
Financial Officer and
Principal Accounting
Officer)
/s/ Daniel Deroux Director July 29, 1997
- ---------------------------------
Daniel Deroux
/s/ Manfred Loeb Director July 29, 1997
- ---------------------------------
Manfred Loeb
/s/ Lionel H. Olmer Director July 29, 1997
- ---------------------------------
Lionel H. Olmer
/s/ Steward S. Flaschen Director July 29, 1997
- ---------------------------------
Steward S. Flaschen
/s/ John L. Sprague Director July 29, 1997
- ---------------------------------
John L. Sprague
<PAGE> 10
Exhibit Index
-------------
Exhibit No. Description of Exhibit
----------- ----------------------
4.1* Restated Articles of Organization of the
Registrant
4.2* Restated By-Laws of the Registrant
4.3* Specimen certificate representing the
Common Stock of the Registrant
4.4 1997 Stock Option Plan
5.1 Opinion of Testa, Hurwitz & Thibeault,
LLP
23.1 Consent of Testa, Hurwitz & Thibeault,
LLP (contained in Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Ernst & Young LLP
24.1 Power of Attorney (included as part of the
signature page to this Registration
Statement)
- --------------------------
* Incorporated by reference to Exhibits to the Registrant's Registration
Statement on Form S-1, No. 333-1328
<PAGE> 1
1997 STOCK OPTION PLAN
1. PURPOSE. The purpose of the SIPEX Corporation 1997 Stock Option Plan
(the "Plan") is to encourage key employees of SIPEX Corporation (the "Company")
and of any present or future parent or subsidiary of the Company (collectively,
"Related Corporations") and other individuals who render services to the Company
or a Related Corporation, by providing opportunities to participate in the
ownership of the Company and its future growth through (a) the grant of options
which qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code"); (b) the grant of options
which do not qualify as ISOs ("Non-Qualified Options"); (c) awards of stock in
the Company ("Awards"); and (d) opportunities to make direct purchases of stock
in the Company ("Purchases"). Both ISOs and Non-Qualified Options are referred
to hereafter individually as an "Option" and collectively as "Options." Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation,"
respectively, as those terms are defined in Section 424 of the Code.
2. Administration of the Plan
--------------------------
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall (be
administered by the Board of Directors of the Company (the
"Board") or, subject to paragraph 2(D) (relating to compliance
with Section 162(m) of the Code), by a committee appointed by the
Board (the "Committee"). Hereinafter, all references in this Plan
to the "Committee" shall mean the Board if no Committee has been
appointed. Subject to ratification of the grant or authorization
of each Stock Right by the Board (if so required by applicable
state law), and subject to the terms of the Plan, the Committee
shall have the authority to (i) determine to whom (from among the
class of employees eligible under paragraph 3 to receive ISOs)
ISOs shall be granted, and to whom (from among the class of
individuals and entities eligible under paragraph 3 to receive
Non-Qualified Options and Awards and to make Purchases)
Non-Qualified Options, Awards and authorizations to make
Purchases may be granted; (ii) determine the time or times at
which Options or Awards shall be granted or Purchases made; (iii)
determine the purchase price of shares subject to each Option or
Purchase, which prices shall not be less than the minimum price
specified in paragraph 6; (iv) determine whether each Option
granted shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 8) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi)
extend the period during which outstanding Options may be
exercised; (vii) determine whether restrictions such as
repurchase options are to be imposed on shares subject to
Options, Awards and Purchases and the nature of such
restrictions, if any, and (viii) interpret the Plan and prescribe
and rescind rules and regulations relating to it. If the
Committee determines to issue a Non-Qualified Option, it shall
take whatever actions it deems necessary, under Section 422 of
the Code and the regulations promulgated thereunder, to ensure
that such Option is not treated as an ISO. The interpretation and
construction by the Committee of any provisions of the Plan or of
any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it
may deem advisable. No member of the Board or the Committee shall
be liable for any action or determination made in good faith with
respect to the Plan or any Stock Right granted under it.
B. COMMITTEE ACTIONS. The Committee may select one of its
members as its chairman, and shall hold meetings at such time and
places as it may determine. A majority of the Committee shall
constitute a quorum and acts of a majority of the members of the
Committee at a meeting at which a quorum is present, or acts
reduced to
<PAGE> 2
or approved in writing by all the members of the Committee (if
consistent with applicable state law), shall be the valid acts of
the Committee. From time to time the Board may increase the size
of the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer
the Plan.
C. GRANT OF STOCK RIGHTS TO BOARD MEMBERS. Stock Rights may
be granted to members of the Board. All grants of Stock Rights to
members of the Board shall in all respects be made in accordance
with the provisions of this Plan applicable to other eligible
persons. Members of the Board who either (i) are eligible to
receive grants of Stock Rights pursuant to the Plan or (ii) have
been granted Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights
pursuant to the Plan, except that no such member shall act upon
the granting to himself or herself of Stock Rights, but any such
member may be counted in determining the existence of a quorum at
any meeting of the Board during which action is taken with
respect to the granting to such member of Stock Rights.
D. PERFORMANCE-BASED COMPENSATION. The Board, in its
discretion, may take such action as may be necessary to ensure
that Stock Rights granted under the Plan qualify as "qualified
performance-based compensation" within the meaning of Section
162(m) of the Code and applicable regulations promulgated
thereunder ("Performance-Based Compensation"). Such action may
include, in the Board's discretion, some or all of the following
(i) if the Board determines that Stock Rights granted under the
Plan generally shall constitute Performance-Based Compensation,
the Plan shall be administered, to the extent required for such
Stock Rights to constitute Performance-Based Compensation, by a
Committee consisting solely of two or more "outside directors"
(as defined in applicable regulations promulgated under Section
162(m) of the Code), (ii) if any Non-Qualified Options with an
exercise price less than the fair market value per share of
Common Stock are granted under the Plan and the Board determines
that such Options should constitute Performance-Based
Compensation, such options shall be made exercisable only upon
the attainment of a pre-established, objective performance goal
established by the Committee, and such grant shall be submitted
for, and shall be contingent upon shareholder approval and (iii)
Stock Rights granted under the Plan may be subject to such other
terms and conditions as are necessary for compensation recognized
in connection with the exercise or disposition of such Stock
Right or the disposition of Common Stock acquired pursuant to
such Stock Right, to constitute Performance-Based Compensation.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees of
the Company or any Related Corporation. Non-Qualified Options, Awards and
authorizations to make Purchases may be granted to any employee, officer or
director (whether or not also an employee) or consultant of the Company or any
Related Corporation. The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant a Stock Right. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify such individual or entity from,
participation in any other grant of Stock Rights.
4. STOCK. The stock subject to Stock Rights shall be authorized but
unissued shares of Common Stock of the Company, par value $.01 per share (the
"Common Stock"), or shares of Common Stock reacquired by the Company in any
manner. The aggregate number of shares which may be issued pursuant to the Plan
is 600,000, subject to adjustment as provided in paragraph 14. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the
<PAGE> 3
unpurchased shares of Common Stock subject to such Option shall again be
available for grants of Stock Rights under the Plan.
No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 420,000 shares of Common Stock
under the Plan during any fiscal year of the Company. If any Option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole or in
part or shall be repurchased by the Company, the shares subject to such Option
shall be included in the determination of the aggregate number of shares of
Common Stock deemed to have been granted to such employee under the Plan.
5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan at
any time on or after March 14, 1997 and prior to March 13, 2007. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant.
6. Automatic Grant of Options to Non-Employee Directors.
----------------------------------------------------
A. Each director who is not an employee or officer or
consultant of the Company (a "Non-Employee Director") who becomes
a director after the third Monday in July, 1997 shall be
automatically granted on the date such person first becomes a
member of the Board, without further action by the Board, an
Option to purchase 5,000 shares of Common Stock.
B. Subject to the availability of shares under this Plan,
each person who is a member of the Company's Board of Directors
on the third Monday in July, 1997 and on the same day of each
year thereafter during the term of this Plan, and who is a
Non-Employee Director of the Company on any such date, is
automatically granted on each such date, without further action
by the Board of Directors, an Option to purchase 5,000 shares of
the Company's Common Stock.
C. OPTION PRICE. The purchase price of the stock covered by
an Option granted pursuant to this Section shall be 100% of the
fair market value of such shares on the day the Option is
granted. "Fair market value" shall be determined in accordance
with Paragraph 7D hereof.
D. PERIOD OF OPTION. An Option granted under this Section
shall expire on the date which is ten (10) years after the date
of grant of the Option unless sooner terminated in accordance
with Sections 10 or 11 of this Plan.
E. VESTING OF SHARES. Options granted under this Section
shall become exercisable, in accordance with the following
schedule, provided that the optionee has continuously served as a
member of the Board through such date:
<TABLE>
<CAPTION>
Percentage of Option
Shares for which Date Option Shares
Option Will be Exercisable Become Exercisable
-------------------------- ------------------
<S> <C> <C>
0% Less than 1 year from the date
of grant
20% 1 year from the date of grant
40% 2 years from the date of grant
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
60% 3 years from the date of grant
80% 4 years from the date of grant
100% 5 years from the date of grant
</TABLE>
The number of shares as to which Options may be exercised
shall be cumulative, so that once the Option shall become
exercisable as to any shares it shall continue to be exercisable
as to said shares, until expiration or termination of the Option
as provided in this Plan.
7. Minimum Option Price; ISO Limitations.
-------------------------------------
A. PRICE FOR NON-QUALIFIED OPTIONS, AWARDS AND PURCHASES.
Subject to paragraph 2(D) (relating to compliance with Section
162(m) of the Code), the exercise price per share specified in
the agreement relating to each Non-Qualified Option granted, and
the purchase price per share of stock granted in any Award or
authorized as a Purchase, under the Plan may be less than the
fair market value of the Common Stock of the Company on the date
of grant; provided that, in no event shall such exercise price or
such purchase price be less than the minimum legal consideration
required therefor under the laws of any jurisdiction in which the
Company or its successors in interest may be organized.
B. PRICE FOR ISOs. The exercise price per share specified in
the agreement relating to each ISO granted under the Plan shall
not be less than the fair market value per share of Common Stock
on the date of such grant. In the case of an ISO to be granted to
an employee owning stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the
Company or any Related Corporation, the price per share specified
in the agreement relating to such ISO shall not be less than one
hundred ten percent (110%) of the fair market value per share of
Common Stock on the date of grant. For purposes of determining
stock ownership under this paragraph, the rules of Section 424(d)
of the Code shall apply.
C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible
employee may be granted Options treated as ISOs only to the
extent that, in the aggregate under this Plan and all incentive
stock option plans of the Company and any Related Corporation,
ISOs do not become exercisable for the first time by such
employee during any calendar year with respect to stock having a
fair market value (determined at the time the ISOs were granted)
in excess of $100,000. The Company intends to designate any
Options granted in excess of such limitation as Non-Qualified
Options, and the Company shall issue separate certificates to the
optionee with respect to Options that are Non-Qualified Options
and Options that are ISOs.
D. DETERMINATION OF FAIR MARKET VALUE. If, at the time an
Option is granted under the Plan, the Company's Common Stock is
publicly traded, "fair market value" shall be determined as of
the date of grant or, if the prices or quotes discussed in this
sentence are unavailable for such date, the last business day for
which such prices or quotes are available prior to the date of
grant and shall mean (i) the average (on that date) of the high
and low prices of the Common Stock on the principal national
securities exchange on which the Common Stock is traded, if the
Common Stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common
Stock on the Nasdaq National Market, if the Common Stock is not
then traded on a national securities exchange; or (iii) the
closing bid price (or average of bid prices) last quoted (on that
date) by an established quotation service for over-the-counter
<PAGE> 5
securities, if the Common Stock is not reported on the Nasdaq
National Market. If the Common Stock is not publicly traded at
the time an Option is granted under the Plan, "fair market value"
shall mean the fair value of the Common Stock as determined by
the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale
and offer prices of the Common Stock in private transactions
negotiated at arm's length.
8. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 10 and 11 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 7(B). Subject to earlier termination as provided in paragraphs
10 and 11, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 17.
9. EXERCISE OF OPTION. Subject to the provisions of paragraphs 10 through
13, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. Except for options granted under paragraph 6,
Options shall either be fully exercisable on the date of grant or
shall become exercisable thereafter in such installments as the
Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable, it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the
Committee.
C. PARTIAL EXERCISE. Each Option or installment may be
exercised at any time or from time to time, in whole or in part,
for up to the total number of shares with respect to which it is
then exercisable.
D. ACCELERATION OF VESTING. The Committee, or Board with
respect to Options granted to any Non-Employee Director pursuant
to Section 6, shall have the right to accelerate the date that
any installment of any Option becomes exercisable; provided that
the Committee shall not, without the consent of an optionee,
accelerate the permitted exercise date of any installment of any
Option granted to any employee as an ISO (and not previously
converted into a Non-Qualified Option pursuant to paragraph 17)
if such acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in
paragraph 7(C).
10. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the agreement
relating to such ISO, if an ISO optionee ceases to be employed by the Company
and all Related Corporations other than by reason of death or disability as
defined in paragraph 11, no further installments of his or her ISOs shall become
exercisable, and his or her ISOs shall terminate on the earlier of (a) three
months after the date of termination of his or her employment, or (b) their
specified expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant to
paragraph 17. For purposes of this paragraph 10, employment shall be considered
as continuing uninterrupted during any bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute or
by contract. A bona fide leave of absence with the written approval of the
Committee shall not be considered an interruption of employment under this
paragraph 10, provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of the
<PAGE> 6
optionee after the approved period of absence. ISOs granted under the Plan
shall not be affected by any change of employment within or among the Company
and Related Corporations, so long as the optionee continues to be an employee
of the Company or any Related Corporation. Nothing in the Plan shall be deemed
to give any grantee of any Stock Right the right to be retained in employment
or other service by the Company or any Related Corporation for any period of
time.
11. Death; Disability.
-----------------
A. DEATH. If an ISO optionee ceases to be employed by the
Company and all Related Corporations by reason of his or her
death, any ISO owned by such optionee may be exercised, to the
extent otherwise exercisable on the date of death, by the estate,
personal representative or beneficiary who has acquired the ISO
by will or by the laws of descent and distribution, until the
earlier of (i) the specified expiration date of the ISO or (ii)
180 days from the date of the optionee's death.
B. DISABILITY. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his or her
disability, such optionee shall have the right to exercise any
ISO held by him or her on the date of termination of employment,
for the number of shares for which he or she could have exercised
it on that date, until the earlier of (i) the specified
expiration date of the ISO or (ii) 180 days from the date of the
termination of the optionee's employment. For the purposes of the
Plan, the term "disability" shall mean "permanent and total
disability" as defined in Section 22(e)(3) of the Code or any
successor statute.
12. ASSIGNABILITY. No ISO shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee shall be exercisable only by such optionee. Stock
Rights other than ISOs shall be transferable to the extent set forth in the
agreement relating to such Stock Right.
13. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 12 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as the
Committee may determine. The Committee may from time to time confer authority
and responsibility on one or more of its own members and/or one or more officers
of the Company to execute and deliver such instruments. The proper officers of
the Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.
14. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Common
Stock shall be subdivided or combined into a greater or smaller
number of shares or if the Company shall issue any shares of
Common Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the
exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination
or stock dividend.
<PAGE> 7
B. CONSOLIDATIONS OR MERGERS. If the Company is to be
consolidated with or acquired by another entity in a merger or
other reorganization in which the holders of the outstanding
voting stock of the Company immediately preceding the consummation
of such event, shall, immediately following such event, hold, as a
group, less than a majority of the voting securities of the
surviving or successor entity, or in the event of a sale of all or
substantially all of the Company's assets or otherwise (each, an
"Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Options, either (i)
make appropriate provision for the continuation of such Options by
substituting on an equitable basis for the shares then subject to
such Options either (a) the consideration payable with respect to
the outstanding shares of Common Stock in connection with the
Acquisition, (b) shares of stock of the surviving or successor
corporation or (c) such other securities as the Successor Board
deems appropriate, the fair market value of which shall not
materially exceed the fair market value of the shares of Common
Stock subject to such Options immediately preceding the
Acquisition; or (ii) upon written notice to the optionees, provide
that all Options must be exercised, to the extent then exercisable
or to be exercisable as a result of the Acquisition, within a
specified number of days of the date of such notice, at the end of
which period the Options shall terminate; or (iii) terminate all
Options in exchange for a cash payment equal to the excess of the
fair market value of the shares subject to such Options (to the
extent then exercisable or to be exercisable as a result of the
Acquisition) over the exercise price thereof.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued
with respect to the outstanding shares of Common Stock, an
optionee upon exercising an Option shall be entitled to receive
for the purchase price paid upon such exercise the securities he
or she would have received if he or she had exercised such Option
prior to such recapitalization or reorganization.
D. MODIFICATION OF ISOs. Notwithstanding the foregoing, any
adjustments made pursuant to subparagraphs A, B or C with respect
to ISOs shall be made only after the Committee, after consulting
with counsel for the Company, determines whether such adjustments
would constitute a "modification" of such ISOs (as that term is
defined in Section 424 of the Code) or would cause any adverse
tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs or would cause adverse tax
consequences to the holders, it may refrain from making such
adjustments.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, then the Committee
shall, as to outstanding Options, at its discretion provide, upon
written notice to the optionees, (i) that all Options must be
exercised, to the extent then exercisable within a specified
number of days of the date of such notice, at the end of which
period, the Options shall terminate or (ii) that such Options
(including those which have not yet vested) shall be exercisable
within a specified number of days of such notice, at the end of
which period the Options shall terminate.
F. ISSUANCES OF SECURITIES. Except as expressly provided
herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares subject to
Options. No adjustments
<PAGE> 8
shall be made for dividends paid in cash or in property other
than securities of the Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued
under the Plan and the optionee shall receive from the Company
cash in lieu of such fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events
described in subparagraphs A, B, C or E above, the class and
aggregate number of shares set forth in paragraph 4 hereof that
are subject to Stock Rights which previously have been or
subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such
subparagraphs. The Committee or the Successor Board shall
determine the specific adjustments to be made under this
paragraph 14 and, subject to paragraph 2, its determination shall
be conclusive.
15. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) at the discretion of the Committee, through delivery of
shares of Common Stock having a fair market value equal as of the date of the
exercise to the cash exercise price of the Option, (c) at the discretion of the
Committee, by delivery of the grantee's personal recourse note bearing interest
payable not less than annually at no less than 100% of the lowest applicable
Federal rate, as defined in Section 1274(d) of the Code, (d) at the discretion
of the Committee and consistent with applicable law, through the delivery of an
assignment to the Company of a sufficient amount of the proceeds from the sale
of the Common Stock acquired upon exercise of the Option and an authorization to
the broker or selling agent to pay that amount to the Company, which sale shall
be at the participant's direction at the time of exercise, or (e) at the
discretion of the Committee, by any combination of (a), (b), (c) and (d) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), (d) or
(e) of the preceding sentence, such discretion shall be exercised in writing at
the time of the grant of the ISO in question. The holder of an Option shall not
have the rights of a shareholder with respect to the shares covered by such
Option until the date of issuance of a stock certificate to such holder for such
shares. Except as expressly provided above in paragraph 14 with respect to
changes in capitalization and stock dividends, no adjustment shall be made for
dividends or similar rights for which the record date is before the date such
stock certificate is issued.
16. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on March
14, 1997, subject, with respect to the validation of ISOs granted under the
Plan, to approval of the Plan by the shareholders of the Company at the next
Meeting of Shareholders or, in lieu thereof, by written consent. If the approval
of shareholders is not obtained prior to March 14, 1998, any grants of ISOs
under the Plan made prior to that date will be rescinded. The Plan shall expire
at the end of the day on March 13, 2007 (except as to Options outstanding on
that date). Subject to the provisions of paragraph 5 above, Options may be
granted under the Plan prior to the date of shareholder approval of the Plan.
The Board may terminate or amend the Plan in any respect at any time, except
that, without the approval of the shareholders obtained within 12 months before
or after the Board adopts a resolution authorizing any of the following actions:
(a) the total number of shares that may be issued under the Plan may not be
increased (except by adjustment pursuant to paragraph 14); (b) the provisions of
paragraph 3 regarding eligibility for grants of ISOs may not be modified; (c)
the provisions of paragraph 7(B) regarding the exercise price at which shares
may be offered pursuant to ISOs may not be modified (except by adjustment
pursuant to paragraph 14); and (d) the expiration date of the Plan may not be
extended. Except as otherwise provided in this paragraph 16, in no event may
action of the Board or shareholders alter or impair the rights of a grantee,
without such grantee's consent, under any Stock Right previously granted to such
grantee.
<PAGE> 9
17. MODIFICATIONS OF ISOS; CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS.
Subject to paragraph 14(D), without the prior written consent of the holder of
an ISO, the Committee shall not alter the terms of such ISO (including the means
of exercising such ISO) if such alteration would constitute a modification
(within the meaning of Section 424(h)(3) of the Code). The Committee, at the
written request or with the written consent of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but shall not be limited to, extending the exercise
period or reducing the exercise price of the appropriate installments of such
ISOs. At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall occur until
and unless the Committee takes appropriate action. Upon the taking of such
action, the Company shall issue separate certificates to the optionee with
respect to Options that are Non-Qualified Options and Options that are ISOs.
18. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
19. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an ISO
granted under the Plan, each optionee agrees to notify the Company in writing
immediately after such optionee makes a Disqualifying Disposition (as described
in Sections 421, 422 and 424 of the Code and regulations thereunder) of any
stock acquired pursuant to the exercise of ISOs granted under the Plan. A
Disqualifying Disposition is generally any disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
20. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's-length transaction, the grant of an Award, the making of a Purchase of
Common Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 19), the vesting or transfer of restricted
stock or securities acquired on the exercise of an Option hereunder, or the
making of a distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts that constitute
compensation includible in gross income. The Committee in its discretion may
condition (i) the exercise of an Option, (ii) the transfer of a Non-Qualified
Stock Option, (iii) the grant of an Award, (iv) the making of a Purchase of
Common Stock for less than its fair market value, or (v) the vesting or
transferability of restricted stock or securities acquired by exercising an
Option, on the grantee's making satisfactory arrangement for such withholding.
Such arrangement may include payment by the grantee in cash or by check of the
amount of the withholding taxes or, at the discretion of the Committee, by the
grantee's delivery of previously held shares of Common Stock or the withholding
from the shares of Common Stock otherwise deliverable upon exercise of a Option
shares having an aggregate fair market value equal to the amount of such
withholding taxes.
21. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by grantees of Options in connection with
the Plan.
<PAGE> 10
22. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing Stock Rights shall be governed by the laws of
Massachusetts, or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
<PAGE> 1
July 29, 1997
SIPEX Corporation
22 Linnell Circle
Billerica, Massachusetts 01821
Re: Registration Statement on Form S-8 Relating to the 1997
Stock Option Plan of SIPEX Corporation (the "Plan")
------------------------------------------------------------
Dear Sir or Madam:
Reference is made to the above-captioned Registration Statement on Form S-8
(the "Registration Statement") filed by SIPEX Corporation (the "Company") on the
date hereof with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, relating to an aggregate of 600,000 shares of Common Stock,
$.01 par value, of the Company issuable pursuant to the Plan (the "Shares").
We have examined, and are familiar with, and have relied as to factual
matters solely upon, a copy of the Plan, the Restated Articles of Organization
and the Restated By-Laws of the Company, the minute books and stock records of
the Company and originals of such other documents, certificates and proceedings
as we have deemed necessary for the purpose of rendering this opinion.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued and paid for in accordance with the terms of
the related Plan, the terms of any option granted thereunder and the terms of
any related agreements with the Company, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Sipex Corporation
We consent to the use of our report incorporated herein by reference.
KPMG Peat Marwick LLP
Boston, Massachusetts
July 24, 1997
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the 1997 Stock Option Plan of Sipex Corporation of our
report dated February 3, 1995 (except for Note 7, as to which the date is
November 5, 1996) with respect to the consolidated statements of operations,
stockholders' equity (deficit) and cash flows of Sipex Corporation for the year
ended December 31, 1994 included in its Annual Report (Form 10-K) for the year
ended December 31, 1996 filed with the Securities and Exchange Commission.
Ernst & Young LLP
Boston, Massachusetts
July 24, 1997
