<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1997.
REGISTRATION NO. 333-29303.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 4
TO
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
GRANITE FINANCIAL, INC.
(Name of small business issuer in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 6153 84-1349929
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code) Identification No.)
WILLIAM W. WEHNER
6424 WEST 91ST AVENUE 6424 WEST 91ST AVENUE
WESTMINSTER, COLORADO 80030 WESTMINSTER, COLORADO 80030
TELEPHONE: (303) 650-4059 TELEPHONE: (303) 650-4059
(Address and telephone number of principal executive (Name, address and telephone number
offices and principal place of business) of agent for service)
Copies to:
ROBERT W. WALTER, ESQ. STEVEN E. SEGAL, ESQ. NOLAN S. TAYLOR, ESQ.
DAVID C. ROOS, ESQ. LEBOEUF, LAMB, GREENE THOMAS R. TAYLOR, ESQ.
CURT R. FOUST, ESQ. & MACRAE, L.L.P. LEBOEUF, LAMB, GREENE
BERLINER ZISSER WALTER & GALLEGOS, P.C. SUITE 2000 & MACRAE, L.L.P.
1700 LINCOLN STREET, SUITE 4700 633 SEVENTEENTH STREET 136 SOUTH MAIN STREET, SUITE 1000
DENVER, COLORADO 80203 DENVER, COLORADO 80202 SALT LAKE CITY, UTAH 84101
TELEPHONE: (303) 830-1700 TELEPHONE: (303) 291-2600 TELEPHONE: (801) 320-6700
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number
of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check
the following box and list the Securities Act registration statement number of
the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law permits a corporation organized
thereunder to indemnify its directors and officers for certain of their acts.
The Certificate of Incorporation of the Company has been framed so as to conform
to the Delaware General Corporation Law.
In general, any officer, director, employee or agent may be indemnified
against expenses, fines, settlements or judgments arising in connection with a
legal proceeding to which such person is a party, if that person's actions were
in good faith, were believed to be in the Company's best interest and were not
unlawful. Unless such person is successful upon the merits in such an action,
indemnification may be awarded only after a determination by independent
decision of the Board of Directors, by legal counsel or by a vote of the
stockholders that the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in connection with
an action brought on behalf of the Company are generally the same as those set
forth above; however, with respect to such actions, indemnification is granted
only with respect to expenses actually incurred in connection with the defense
or settlement of the action. In such actions, the person to be indemnified must
have acted in good faith, in a manner believed to have been in the Company's
best interest and with respect to which such person was not adjudged liable for
negligence or misconduct.
Indemnification may also be granted pursuant to the terms of agreements
which may be entered into in the future pursuant to a vote of stockholders or
directors. The Delaware General Corporation Law and the referenced portion of
the Certificate of Incorporation also grant the power to the Company to purchase
and maintain insurance which protects its officers and directors against any
liabilities incurred in connection with their services in such a position, and
such a policy may be obtained by the Company in the future.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses other than
underwriting discounts, payable by the Company in connection with the sale and
distribution of the Common Stock being registered hereby. All amounts shown are
estimates, except the SEC registration fee, the NASD filing fee and the Nasdaq
listing fee.
<TABLE>
<CAPTION>
AMOUNT PAYABLE
BY THE
ITEM COMPANY
---- ---------------
<S> <C>
S.E.C. Registration Fees................ $ 7,492.30
N.A.S.D. Filing Fees.................... 2,972.46
State Securities Laws (Blue Sky) Legal
Fees.................................. 2,500.00*
Printing and Engraving.................. 120,000.00*
Legal Fees.............................. 120,000.00
Nasdaq Additional Registration Fee...... 10,000.00
Accounting Fees and Expenses............ 80,000.00*
Transfer Agent's Fees................... 5,000.00*
Miscellaneous Expenses.................. 27,035.24*
-----------
Total......................... $375,000.00*
===========
</TABLE>
- ---------------
* Estimated for the purpose of filing.
II-1
<PAGE> 3
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(a) The Company has made the following sales of its Common Stock within the
past three years to the following persons for the cash or other consideration
indicated, which sales were not registered under the Securities Act of 1933.
<TABLE>
<CAPTION>
DATE OF NUMBER OF
NAME ISSUANCE CONSIDERATION SHARES
---- -------- ------------- ---------
<S> <C> <C> <C>
1. William W. Wehner(1)........................... 07/11/96 $2,000 200,000
10/07/96 Membership interest in 180,000
Granite Financial, LLC
2. James E. Lewis(1).............................. 10/07/96 Membership interest in 720,000
Granite Financial, LLC
3. Heartland Leasing Corporation of Missouri...... 10/07/96 Membership interest in 900,000
Granite Financial, LLC
</TABLE>
- ---------------
(1) Director or officer.
All the foregoing sales were made to individuals or entities which had
access to information enabling them to evaluate the merits and risks of the
investment by virtue of their relationship to the Company or their economic
bargaining power.
The Company relied on Section 4(2) of the Securities Act of 1933 for the
exemption from the registration requirements of such Act. Each investor was
furnished with information concerning the operations of the Company and each had
the opportunity to verify the information supplied. Additionally, the Company
obtained a signed representation from each of the foregoing persons or entities
of his or its intent to acquire the Common Stock of the Company for the purpose
of investment only, and not with a view toward the subsequent distribution
thereof; each of the certificates representing the Common Stock issued to the
foregoing persons or entities has been stamped with a legend restricting
transfer of the Common Stock represented thereby, and the Company issued stop
transfer instructions to American Securities Transfer & Trust, Inc., the
Transfer Agent for the Common Stock of the Company, concerning all the
certificates representing the Common Stock of the Company issued and outstanding
as represented by the foregoing table.
ITEM 27. EXHIBITS.
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
*1.1 -- Form of Purchase Agreement by and between Granite
Financial, Inc. (the "Company"), Piper Jaffray Inc. and
Cruttenden Roth Incorporated.
+2.1 -- Exchange Memorandum, dated October 7, 1996 regarding the
reorganization of the Registrant from a Colorado limited
liability company to a Delaware corporation (the
"Exchange Memorandum").
+3.1 -- Certificate of Incorporation of the Company as filed on
June 20, 1996 with the Secretary of State of the State of
Delaware.
+3.2 -- By-laws of the Company.
+4.1.1 -- Form of specimen certificate for Common Stock of the
Company.
+4.1.2 -- Form of Representative's Warrant issued by the Company to
Cruttenden Roth Incorporated in connection with the
Company's initial public offering.
*4.1.3 -- Underwriters' Warrant to be issued by the Company to
Piper Jaffray Inc. and Cruttenden Roth Incorporated
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
*5. -- Opinion of Berliner Zisser Walter & Gallegos, P.C.,
regarding legality of the securities covered by this
Registration Statement.
*10.1.1 -- Form of Employment Agreement, dated April 1, 1997, by and
between William W. Wehner and the Company.
*10.1.2 -- Employment Agreement, dated April 28, 1997, by and
between Larry K. White and the Company.
+10.2 -- Form of Indemnification Agreement entered into between
the Company and each officer and director of the Company.
+10.3 -- 1996 Omnibus Stock Option Plan, as adopted June 22, 1996,
authorizing 450,000 shares of Common Stock for issuance
pursuant to the Plan.
**10.3.1 -- 1996 Omnibus Stock Option Plan, as amended and restated
on April 24, 1997 and June 14, 1997, authorizing 900,000
shares of Common Stock for issuance pursuant to the Plan.
+10.4.1 -- Membership Units Purchase Agreement, dated January 31,
1996, by and among Heartland Leasing Corporation of
Missouri, Granite Financial, LLC, James E. Lewis, William
W. Wehner, Andrew S. Love, Jr., Laurence A. Schiffer and
Heartland Bank.
+10.4.2 -- Members' Agreement of Granite Financial, LLC, dated
January 31, 1996, by and among Granite Financial, LLC,
James E. Lewis, William W. Wehner and Heartland Leasing
Corporation of Missouri.
+10.4.3 -- Lease Purchase Agreement, dated June 14, 1995, by and
between Granite Financial, LLC and Heartland Bank.
+10.4.4 -- Lease Sale Agreement, dated April 1, 1996, by and between
Heartland Bank and Granite Financial, LLC.
+10.4.5 -- Lease Service Agreement, dated June 14, 1995, by and
between Heartland Bank and Granite Financial, LLC.
+++10.5.1 -- Loan and Security Agreement, dated February 4, 1997, by
and between CoreStates Bank, N.A. and Granite Financial,
Inc.
+++10.5.2 -- Unsecured Revolving Credit Agreement, dated January 30,
1997, by and between Colorado National Bank, and Granite
Financial, Inc.
+10.6 -- Lease of Space, dated June 26, 1995, by and between Arbor
Lake Limited Partnership, a Colorado limited partnership,
and Granite Financial, LLC.
+10.7 -- Form of Broker/Lessor Partnership Agreement, dated
various dates, by and between Lease Originators and
Granite Financial, LLC.
+10.8.1 -- Servicing Agreement, dated April 1, 1996, by and among GF
Funding Corp. I, Norwest Bank Minnesota, National
Association and Granite Financial, LLC.
+10.8.2 -- Indenture, dated April 1, 1996, by and among GF Funding
Corp. I, Norwest Bank Minnesota, National Association and
Granite Financial, LLC.
+10.8.3 -- Lease Acquisition Agreement, dated April 10, 1996, by and
between Granite Financial, LLC and GF Funding Corp. I.
++10.9.1 -- Trust and Security Agreement, dated November 1, 1996,
among G.F. Funding Corp. II, the Company, Norwest Bank
Minnesota, National Association.
++10.9.2 -- Lease Acquisition Agreement, dated November 1, 1996,
between the Company and G.F. Funding Corp. II.
++10.9.3 -- Servicing Agreement, dated November 1, 1996, among G.F.
Funding Corp. II, the Company, Norwest Bank Minnesota,
National Association.
+++10.10.1 -- Trust and Security Agreement, dated March 1, 1997, by and
among GF Funding Corp. III, the Company and Norwest Bank
Minnesota, National Association.
+++10.10.2 -- Lease Acquisition Agreement, dated March 1, 1997, by and
between the Company and GF Funding Corp. III.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
+++10.10.3 -- Servicing Agreement, dated March 1, 1997, by and among
the Company, GF Funding Corp. III and Norwest Bank
Minnesota, National Association.
+10.11.1 -- CreditDesk(R) License Agreement, dated September 22,
1995, by and between Fair, Isaac and Company, Inc. and
Granite Financial, LLC.
+10.11.2 -- InfoLease License Agreement, dated October 5, 1995, by
and between Decision Systems, Inc. and Granite Financial,
LLC.
+++10.12 -- Asset Purchase Agreement, dated March 31, 1997, by and
among Granite Financial Acquisition Corp. I, Global
Finance & Leasing, Inc. and Thomas Mannes.
*10.13 -- Agreement, dated December 13, 1996, by and between
BrokerWare, Inc. and the Company.
*10.14 -- Standard Form Industrial Lease, dated June 6, 1997, by
and between General American Life Insurance Company and
the Company.
*22. -- List of Subsidiaries.
*23.1 -- The consent of Berliner Zisser Walter & Gallegos, P.C.,
to the use of its opinion with respect to the legality of
the securities covered by this Registration Statement and
to the references to such firm in the Prospectus filed as
part of this Registration Statement is included in
Exhibit 5.
*23.2 -- Consent of Ehrhardt Keefe Steiner & Hottman PC,
independent certified public accountants for the Company.
*24. -- The Power of Attorney is included in the signature page
of this Registration Statement.
+++27. -- Financial Data Schedule.
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Previously filed.
** Filed herewith.
+ Incorporated by reference from the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-5264-D).
++ Incorporated by reference from the Company's Form 10-QSB
filed February 14, 1997 (S.E.C. File No. 1-21591).
+++ Incorporated by reference from the Company's Form 10-QSB
filed May 15, 1997 (S.E.C. File No. 1-21591).
</TABLE>
ITEM 28. UNDERTAKINGS.
(e) Indemnification.
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 Act, 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.
II-4
<PAGE> 6
(f) Rule 430A.
The undersigned Registrant hereby undertakes that:
(i) For the purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of Prospectus filed by the Registrant under Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time the Commission declared
it effective.
(ii) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus 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.
II-5
<PAGE> 7
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 SB-2 and authorized this Registration Statement
or Amendment to be signed on its behalf by the undersigned in the City of
Westminster, State of Colorado on July 22, 1997.
GRANITE FINANCIAL, INC.
By: /s/ WILLIAM W. WEHNER
----------------------------------
William W. Wehner,
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, jointly and severally, William W. Wehner
or James E. Lewis, or any of them, with full power to act alone, his true and
lawful attorneys-in-fact, 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 (including post-effective amendments) to this Registration
Statement or any Registration Statement filed pursuant to Rule 462 under the
Securities Act of 1933, and file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact full power and authority to do and perform
each and every act and thing requisite and necessary to be done 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, 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 or Amendment has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM W. WEHNER Chairman of the Board and Chief July 22, 1997
- ----------------------------------------------------- Executive Officer (Principal
William W. Wehner Executive Officer)
/s/ WILLIAM S. COBB Senior Vice President of July 22, 1997
- ----------------------------------------------------- Corporate Development and Chief
William S. Cobb Financial Officer (Principal
Financial and Accounting
Officer)
/s/ JAMES E. LEWIS* Director July 22, 1997
- -----------------------------------------------------
James E. Lewis
/s/ LAURENCE A. SCHIFFER* Director July 22, 1997
- -----------------------------------------------------
Laurence A. Schiffer
/s/ ANDREW S. LOVE, JR.* Director July 22, 1997
- -----------------------------------------------------
Andrew S. Love, Jr.
/s/ SAMUEL R. FREEMAN* Director July 22, 1997
- -----------------------------------------------------
Samuel R. Freeman
*By: /s/ WILLIAM W. WEHNER
-------------------------------------------------
William W. Wehner
Attorney-in-fact
</TABLE>
II-6
<PAGE> 8
EXHIBIT INDEX
The following is a complete list of Exhibits filed as part of this
Registration Statement and which are incorporated herein.
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
*1.1 -- Form of Purchase Agreement by and between Granite
Financial, Inc. (the "Company"), Piper Jaffray Inc. and
Cruttenden Roth Incorporated.
+2.1 -- Exchange Memorandum, dated October 7, 1996 regarding the
reorganization of the Registrant from a Colorado limited
liability company to a Delaware corporation (the
"Exchange Memorandum").
+3.1 -- Certificate of Incorporation of the Company as filed on
June 20, 1996 with the Secretary of State of the State of
Delaware.
+3.2 -- By-laws of the Company.
+4.1.1 -- Form of specimen certificate for Common Stock of the
Company.
+4.1.2 -- Form of Representative's Warrant issued by the Company to
Cruttenden Roth Incorporated in connection with the
Company's initial public offering.
*4.1.3 -- Underwriters' Warrant to be issued by the Company to
Piper Jaffray Inc. and Cruttenden Roth Incorporated
*5. -- Opinion of Berliner Zisser Walter & Gallegos, P.C.,
regarding legality of the securities covered by this
Registration Statement.
*10.1.1 -- Form of Employment Agreement, dated April 1, 1997, by and
between William W. Wehner and the Company.
*10.1.2 -- Employment Agreement, dated April 28, 1997, by and
between Larry K. White and the Company.
+10.2 -- Form of Indemnification Agreement entered into between
the Company and each officer and director of the Company.
+10.3 -- 1996 Omnibus Stock Option Plan, as adopted June 22, 1996,
authorizing 450,000 shares of Common Stock for issuance
pursuant to the Plan.
**10.3.1 -- 1996 Omnibus Stock Option Plan, as amended and restated
on April 24, 1997 and June 14, 1997, authorizing 900,000
shares of Common Stock for issuance pursuant to the Plan.
+10.4.1 -- Membership Units Purchase Agreement, dated January 31,
1996, by and among Heartland Leasing Corporation of
Missouri, Granite Financial, LLC, James E. Lewis, William
W. Wehner, Andrew S. Love, Jr., Laurence A. Schiffer and
Heartland Bank.
+10.4.2 -- Members' Agreement of Granite Financial, LLC, dated
January 31, 1996, by and among Granite Financial, LLC,
James E. Lewis, William W. Wehner and Heartland Leasing
Corporation of Missouri.
+10.4.3 -- Lease Purchase Agreement, dated June 14, 1995, by and
between Granite Financial, LLC and Heartland Bank.
+10.4.4 -- Lease Sale Agreement, dated April 1, 1996, by and between
Heartland Bank and Granite Financial, LLC.
+10.4.5 -- Lease Service Agreement, dated June 14, 1995, by and
between Heartland Bank and Granite Financial, LLC.
+++10.5.1 -- Loan and Security Agreement, dated February 4, 1997, by
and between CoreStates Bank, N.A. and Granite Financial,
Inc.
+++10.5.2 -- Unsecured Revolving Credit Agreement, dated January 30,
1997, by and between Colorado National Bank, and Granite
Financial, Inc.
+10.6 -- Lease of Space, dated June 26, 1995, by and between Arbor
Lake Limited Partnership, a Colorado limited partnership,
and Granite Financial, LLC.
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE NO.
- ----------- --------
<C> <S> <C>
+10.7 -- Form of Broker/Lessor Partnership Agreement, dated
various dates, by and between Lease Originators and
Granite Financial, LLC.
+10.8.1 -- Servicing Agreement, dated April 1, 1996, by and among GF
Funding Corp. I, Norwest Bank Minnesota, National
Association and Granite Financial, LLC.
+10.8.2 -- Indenture, dated April 1, 1996, by and among GF Funding
Corp. I, Norwest Bank Minnesota, National Association and
Granite Financial, LLC.
+10.8.3 -- Lease Acquisition Agreement, dated April 10, 1996, by and
between Granite Financial, LLC and GF Funding Corp. I.
++10.9.1 -- Trust and Security Agreement, dated November 1, 1996,
among G.F. Funding Corp. II, the Company, Norwest Bank
Minnesota, National Association.
++10.9.2 -- Lease Acquisition Agreement, dated November 1, 1996,
between the Company and G.F. Funding Corp. II.
++10.9.3 -- Servicing Agreement, dated November 1, 1996, among G.F.
Funding Corp. II, the Company, Norwest Bank Minnesota,
National Association.
+++10.10.1 -- Trust and Security Agreement, dated March 1, 1997, by and
among GF Funding Corp. III, the Company and Norwest Bank
Minnesota, National Association.
+++10.10.2 -- Lease Acquisition Agreement, dated March 1, 1997, by and
between the Company and GF Funding Corp. III.
+++10.10.3 -- Servicing Agreement, dated March 1, 1997, by and among
the Company, GF Funding Corp. III and Norwest Bank
Minnesota, National Association.
+10.11.1 -- CreditDesk(R) License Agreement, dated September 22,
1995, by and between Fair, Isaac and Company, Inc. and
Granite Financial, LLC.
+10.11.2 -- InfoLease License Agreement, dated October 5, 1995, by
and between Decision Systems, Inc. and Granite Financial,
LLC.
+++10.12 -- Asset Purchase Agreement, dated March 31, 1997, by and
among Granite Financial Acquisition Corp. I, Global
Finance & Leasing, Inc. and Thomas Mannes.
*10.13 -- Agreement, dated December 13, 1996, by and between
BrokerWare, Inc. and the Company.
*10.14 -- Standard Form Industrial Lease, dated June 6, 1997, by
and between General American Life Insurance Company and
the Company.
*22. -- List of Subsidiaries.
*23.1 -- The consent of Berliner Zisser Walter & Gallegos, P.C.,
to the use of its opinion with respect to the legality of
the securities covered by this Registration Statement and
to the references to such firm in the Prospectus filed as
part of this Registration Statement is included in
Exhibit 5.
*23.2 -- Consent of Ehrhardt Keefe Steiner & Hottman PC,
independent certified public accountants for the Company.
*24. -- The Power of Attorney is included in the signature page
of this Registration Statement.
+++27. -- Financial Data Schedule.
</TABLE>
- ---------------
<TABLE>
<S> <C>
* Previously filed.
** Filed herewith.
</TABLE>
<PAGE> 10
+ Incorporated by reference from the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-5264-D).
++ Incorporated by reference from the Company's Form 10-QSB
filed February 14, 1997 (S.E.C. File No. 1-21591).
+++ Incorporated by reference from the Company's Form 10-QSB
filed May 15, 1997 (S.E.C. File No. 1-21591).
<PAGE> 1
EXHIBIT 10.3.1
GRANITE FINANCIAL, INC.
OMNIBUS STOCK PLAN OF 1996
AMENDED AND RESTATED
AS OF APRIL 24, 1997 AND JUNE 14, 1997
1. PURPOSE
The purpose of this Plan is to promote the interest of the Corporation
and its stockholders and the Corporation's success by providing a method
whereby a variety of equity-based incentive and other Awards may be granted to
Employees and Directors of the Corporation and its Subsidiaries and to selected
Consultants.
2. DEFINITIONS
A. "AWARD" means any form of stock option, restricted stock,
Performance Unit, Performance Share, stock appreciation right, dividend
equivalent or other incentive award granted under the Plan.
B. "AWARD NOTICE" means any written notice from the Corporation
to a Participant or agreement between the Corporation and a Participant that
establishes the terms applicable to an Award.
C. "BOARD OF DIRECTORS" means the Board of Directors of the
Corporation.
D. "CODE" means the Internal Revenue Code of 1986, as amended.
E. "COMMITTEE" means the Board of Directors, which is hereby
authorized to administer the Plan; provided, however, that Board of Directors
shall have the authority to delegate administration of the Plan to the
Compensation Committee of the Board of Directors, which may be authorized to
administer the Plan. The number of persons who shall serve on the Compensation
Committee shall be specified from time to time by the Board of Directors;
however, in no event shall there be fewer than two members of the Compensation
Committee. If the Board of Directors delegates administration of the Plan to
the Compensation Committee, then such Committee will be composed in a manner
such that the Plan will qualify under Rule 16b-3 with regard to Awards to
persons who are subject to Section 16 of the Exchange Act. In the event the
Board of Directors elects to delegate administration of the Plan to
<PAGE> 2
the Compensation Committee, then during all periods of time in which the
Compensation Committee exists and is comprised in accordance with the
requirements set forth above, all references herein to the "Committee" shall
refer to the Compensation Committee.
F. "COMMON STOCK" means Common Shares of the Corporation, $.001
par value.
G. "CONSULTANT" means any individual who renders services
directly to the Corporation or a Subsidiary or to the Corporation's customers
as defined and designated from time to time by the Committee.
H. "CORPORATION" means Granite Financial, Inc.
I. "DIRECTOR" means a member of the Board of Directors or a
member of the Board of Directors of a Subsidiary.
J. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
K. "FAIR MARKET VALUE" means, "on any given date (i) if the
Common Stock is traded in the over-the-counter market and not in The Nasdaq
Stock Market or on any national securities exchange, the per share closing bid
prices of the Common Stock as reported by Nasdaq or an equivalent generally
accepted reporting service, (ii) if the Common Stock is traded in The Nasdaq
Stock Market or on a national securities exchange, the per share closing price
of the Common Stock on which it is so listed, as the case may be, (iii) if
trading in the Common Stock is not reported by Nasdaq, the lowest per share bid
price of the Common Stock as reported in the "pink sheets" published by
National Quotation Bureau, Incorporated, (iv) if no such reported price is
reported for such date pursuant to (i), (ii) or (iii) above, then the bid,
closing sale or bid price, respectively, on the first preceding day on which so
reported, or (v) if the Common Stock is not so traded and/or reported for a
30-day period immediately preceding the date for determining Fair Market Value,
the Committee shall, in good faith and in conformity with the requirements of
Section 422 of the Code, establish a method for determining the Fair Market
Value."
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L. "EMPLOYEE" means any employee of the Corporation or a
Subsidiary whose performance the Committee determines can have a significant
effect on the success of the Corporation.
M. "PARTICIPANT" means any individual to whom an Award is granted
under the Plan.
N. "PERFORMANCE SHARE" means a Unit expressed in terms of, or
valued by reference to, a share of Common Stock.
O. "PERFORMANCE UNIT" means a Unit valued by reference to
designated criteria established by the Committee, other than Common Stock.
P. "PLAN" means this Plan, which shall be known as Granite
Financial, Inc. 1996 Omnibus Stock Plan.
Q. "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange
Act, as amended effective November 1, 1996, or any successor rule.
R. "SUBSIDIARY" means a corporation or other business entity (i)
of which the Corporation directly or indirectly has an ownership interest of
50% or more, or (ii) of which it has a right to elect or appoint 50% or more of
the board of directors or other governing body. A Subsidiary shall include
both currently owned Subsidiaries as well as any Subsidiary hereafter acquired.
S. "UNIT" means a bookkeeping entry used by the Corporation to
record the grant of an Award until such time as the Award is paid, cancelled,
forfeited or terminated.
3. ADMINISTRATION
A. The Plan shall be administered by the Committee. The
Committee shall have the authority to:
(i) construe and interpret the Plan;
(ii) promulgate, amend and rescind rules relating to the
implementation of the Plan;
(iii) make all determinations necessary or advisable for
the administration of the Plan, including the
selection of Employees, Consultants and affiliated
individuals who shall be granted Awards, the number
of shares of Common Stock or Units to be subject to
each Award, the Award price, if any, the vesting or
duration of
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Awards, and the designation of stock options as
incentive stock options or non-qualified stock
options;
(iv) determine the disposition of Awards in the event of a
Participant's divorce or dissolution of marriage;
(v) determine whether Awards will be granted alone or in
combination or in tandem with other Awards;
(vi) determine whether cash will be paid or Awards will be
granted in replacement of, or as alternatives to,
other grants under the Plan or any other incentive or
compensation plan of the Corporation, a Subsidiary or
an acquired business unit.
(vii) approve in advance each particular Award to be
granted hereunder in a manner which will cause the
Award to be exempt from Section 16(b) of the Exchange
Act by virtue of Rule 16b-3.
B. Subject to the requirements of applicable law, the Committee
may correct any defect, supply any omission, or reconcile any inconsistency in
the Plan, any Award, or any Award Notice; take any and all other actions it
deems necessary or advisable for the proper administration of the Plan;
designate persons other than members of the Committee to carry out its
responsibilities; and prescribe such conditions and limitations as it may deem
appropriate; except that the Committee may not delegate its authority with
regard to the selection for participation of, or the granting of Awards to,
persons under Section 16 of the Exchange Act. Any determination, decision, or
action of the Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive and
binding upon all persons validly claiming under or through persons
participating in the Plan.
C. The Committee may at any time, and from time to time amend or
cancel any outstanding Award, but only with the consent of the person to whom
the Award was granted.
4. ELIGIBILITY
A. Any Employee is eligible to become a Participant in the Plan.
B. Directors who are not Employees of the Corporation or a
Subsidiary shall receive Awards in accordance with Section 7.
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C. Consultants who are not Directors of the Corporation shall be
eligible to receive Awards in accordance with Section 8.
5. SHARES AVAILABLE
Subject to Section 16 of the Plan, the maximum number of shares of
Common Stock available for Award grants (including incentive stock options)
shall be 900,000. Notwithstanding the foregoing sentence, the maximum number
of shares of Common Stock that may be awarded under this Plan in the form of
restricted stock awards pursuant to Section 10 may be limited by the Committee.
6. TERM
The Plan shall become effective on June 22, 1996 and shall continue in
effect until June 21, 2006.
7. AWARDS TO NON-EMPLOYEE DIRECTORS
Options granted to Directors who are not Employees of the Corporation
or a Subsidiary shall be subject to the following terms:
(i) The exercise price shall be equal to 85% of the Fair
Market Value of the underlying Shares of Common Stock
on the date of the grant, payable in accordance with
the alternatives stated in Section 9.B.(ii) of the
Plan;
(ii) The term of the options shall be ten (10) years;
(iii) The options shall be exercisable beginning six months
after the date of the grant; and
(iv) The options shall be subject to Section 14 of the
Plan.
8. AWARDS TO CONSULTANTS
Consultants shall receive Awards in accordance with the following
terms:
A. No Awards of incentive stock options shall be made to
Consultants.
B. Awards of non-qualified stock options to such Consultants
shall be subject to the following terms:
(i) The exercise price shall be not less than 85% of the
Fair Market Value of the underlying shares of Common
Stock on the date of the grant, payable in accordance
with the alternatives stated in Sections 9.B(ii) and
(iii) of the Plan;
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(ii) The term of the options shall be ten (10) years;
(iii) The options shall be exercisable beginning six months
after the date of the grant; and
(iv) The options shall be subject to Section 14 of the
Plan.
9. STOCK OPTIONS
A. Awards may be granted in the form of stock options. Stock
options may be incentive stock options within the meaning of Section 422 of the
Code or non-qualified stock options (i.e., stock options which are not
incentive stock options).
B. Subject to Section 9.C. relating to incentive stock options,
options shall be in such form and contain such terms as the Committee deems
appropriate. While the terms of options need not be identical, each option
shall be subject to the following terms:
(i) The exercise price shall be the price set by the
Committee but may not be less than 85% of the Fair
Market Value of the underlying shares of Common Stock
on the date of the grant.
(ii) The exercise price shall be paid in cash (including
check, bank draft, or money order), or at the
discretion of the Committee, all or part of the
purchase price may be paid by delivery of the
optionee's full recourse promissory note, delivery of
Common Stock already owned by the Participant for at
least six (6) months and valued at its Fair Market
Value, or any combination of the foregoing methods of
payment. In the case of incentive stock options, the
terms of payment shall be determined at the time of
grant.
(iii) Promissory notes given as payment of the exercise
price, if permitted by the Committee, shall contain
such terms as set by the Committee which are not
inconsistent with the following: the unpaid
principal shall bear interest at a rate set from time
to time by the Committee; payments of principal and
interest shall be made no less frequently than
annually; no part of the note shall be payable later
than ten (10) years from the date of purchase of the
underlying shares of Common Stock; and the optionee
shall give such security as the Committee deems
necessary to ensure full payment.
(iv) The term of an option may not be greater than ten
(10) years from the date of the grant.
(v) Neither a person to whom an option is granted nor
such person's legal representative, heir, legatee or
distributee shall be deemed to be the holder of, or
to have any of the rights of a holder or owner with
respect to, any shares of
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Common Stock subject to such option unless and until
such person has exercised the option.
C. The following special terms shall apply to grants of incentive
stock options:
(i) Subject to Section 9.C.(ii) of the Plan, the exercise
price of each incentive stock option shall not be
less than 100% of the Fair Market Value of the
underlying shares of Common Stock on the date of the
grant.
(ii) No incentive stock option shall be granted to any
Employee who directly or indirectly owns stock
possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation,
unless at the time of such grant the exercise price
of the option is at least 110% of the Fair Market
Value of the underlying shares of Common Stock
subject to the option and such option is not
exercisable after the expiration of five (5) years
from the date of the grant.
(iii) No incentive stock option shall be granted to a
person in his capacity as a Employee of a Subsidiary
if the Corporation has less than a 50% ownership
interest in such Subsidiary.
(iv) Options shall contain such other terms as may be
necessary to qualify the options granted therein as
incentive stock options pursuant to Section 422 of
the Code, or any successor statute, including that
such incentive stock options shall be granted only to
Employees, that such incentive stock options are
non-transferrable, and which shall conform to all
other requirements of the Code.
10. RESTRICTED STOCK
A. Awards may be granted in the form of restricted stock.
B. Grants of restricted stock shall be awarded in exchange for
consideration in an amount determined by the Committee. The price, if any, of
such restricted stock shall be paid in cash, or at the discretion of the
Committee, all or part of the purchase price may be paid by delivery of the
Participant's full recourse promissory note, delivery of Common Stock already
owned by the Participant for at least six (6) months and valued at its Fair
Market Value, or any combination of the foregoing methods of payment, provided
no less than the par value of the stock is paid in cash, and the Participant
has rendered no less than three (3) months prior service to the Corporation.
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C. Restricted stock awards shall be subject to such restrictions
as the Committee may impose and may include, if the Committee shall so
determine, restrictions on transferability and restrictions relating to
continued employment.
D. The Committee shall have the discretion to grant to a
Participant receiving restricted shares all or any of the rights of a
stockholder while such shares continue to be subject to restrictions.
11. PERFORMANCE UNITS AND PERFORMANCE SHARES
A. Awards may be granted in the form of Performance Units or
Performance Shares. Awards of Performance Units and Performance Shares shall
refer to a commitment by the Corporation to make a distribution to the
Participant or to his beneficiary depending on (i) the attainment of the
performance objective(s) and other conditions established by the Committee and
(ii) the base value of the Performance Unit or Performance Shares,
respectively, as established by the Committee.
B. Settlement of Performance Units and Performance Shares may be
in cash, in shares of Common Stock, or a combination thereof. The Committee
may designate a method of converting Performance Units into Common Stock,
including, but not limited to, a method based on the Fair Market Value of
Common Stock over a series of consecutive trading days.
C. Participants shall not be entitled to exercise any voting
rights with respect to Performance Units or Performance Shares, but the
Committee in its sole discretion may attach dividend equivalents to such
Awards.
12. STOCK APPRECIATION RIGHTS
A. Awards may be granted in the form of stock appreciation
rights. Stock appreciation rights may be awarded in tandem with a stock
option, in addition to a stock option, or may be free-standing and unrelated to
a stock option.
B. A stock appreciation right entitles the Participant to receive
from the Corporation an amount equal to the positive difference between (i) the
Fair Market Value of Common Stock on the date
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of exercise of the stock appreciation right and (ii) the grant price or some
other amount as the Committee may determine at the time of grant (but not less
than the Fair Market Value of Common Stock on the date of grant).
C. With respect to persons subject to Section 16 of the Exchange
Act, a stock appreciation right may only be exercised during a period which (i)
begins on the third business day following a date when the Corporation's
quarterly summary statement of sales and earnings is released to the public and
(ii) ends on the 12th business day following such date. This Section 12.C
shall not apply if the exercise occurs automatically on the date when a related
stock option expires.
D. Settlement of stock appreciation rights may be in cash, in
shares of Common Stock, or a combination thereof, as determined by the
Committee.
13. DEFERRAL OF AWARDS
At the discretion of the Committee, payment of an Award, dividend
equivalent, or any portion thereof may be deferred until a time established by
the Committee. Deferrals shall be made in accordance with guidelines
established by the Committee to ensure that such deferrals comply with
applicable requirements of the Code and its regulations. Deferrals shall be
initiated by the delivery of a written, irrevocable election by the participant
to the Committee or its nominee. Such election shall be made prior to the date
specified by the Committee. The Committee may also (A) credit interest
equivalents on cash payments that are deferred and set the rates of such
interest equivalents and (B) credit dividends equivalents on deferred payments
denominated in the form of shares of Common Stock.
14. EXERCISE OF STOCK OPTIONS OR AWARDS UPON TERMINATION OF EMPLOYMENT OR
SERVICES.
A. Options granted under Sections 7 and 9 shall be exercisable
until the Participant's (i.e., Non-Employee Directors or Employees) termination
of service or within the following specified periods only. The definition of
termination of service applicable to Consultants shall be defined and
determined by the Committee in its sole discretion. Subject to Section 22,
stock options granted to other Participants
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may permit the exercise of options upon the Participant's termination of
employment within the following periods, or such shorter periods as determined
by the Committee at the time of grant:
(i) If on account of death, within twelve (12) months of
such event by the person or persons to whom the
Participant's rights pass by will or the laws of
descent or distribution.
(ii) If on account of retirement (as defined from time to
time by Corporation policy), stock options may be
exercised within 3 months of such termination.
(iii) If on account of resignation, options may be
exercised within one (1) month of such termination.
(iv) If for cause (as defined from time to time by
Corporation policy), no unexercised option shall be
exercisable to any extent after termination.
(v) If on account of the taking of a leave of absence for
the purpose of servicing the government or the
country in which the principal place of employment of
the Participant is located, either in a military or a
civilian capacity, or for such other purpose or
reason as the Committee may approve, a Participant
shall not be deemed during the period of any such
absence alone, to have terminated his service, except
as the Committee may otherwise expressly provide.
(vi) If on account of disability, within one year
following the disability of the Participant.
(vii) If for any reason other than death, retirement,
resignation, cause, or disability, options may be
exercised within three (3) months of such
termination.
B. An unexercised option shall be exercisable only to the extent
that such option was exercisable on the date the Participant's employment or
service terminated. Notwithstanding the foregoing, and except as provided in
Section 14.A. above, terms relating to the exerciseability of options may be
amended by the Committee before or after such termination, except in respect to
options granted under Section 7.
C. In no case may an unexercised option be exercised to any
extent by anyone after expiration of its term.
D. To the extent any Award other than stock options is
exercisable by a Participant, such Award shall be exercisable only until
termination (in the case of Employees only) or within the time
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periods specified in A(i) to A(vii) above. In the case of a non-Employee
Participant, such Award will be exercisable in accordance with the terms
thereof unless the Committee has required continued service to the Corporation
or a Subsidiary as a condition to the exercise of an Award, in which event the
exercise of an Award following termination of services by a non-Employee
Participant shall be as provided for by the Committee.
15. NONASSIGNABILITY
The rights of a Participant under the Plan shall not be assignable by
such Participant, by operation of law or otherwise, except by will or the laws
of descent and distribution. During the lifetime of the person to whom a stock
option or similar right (including a stock appreciation right) is granted, such
person alone may exercise it. No Participant may create a lien on any funds,
securities, rights or other property to which such Participant may have an
interest under the Plan, or which is held by the Corporation for the account of
the Participant under the Plan.
16. ADJUSTMENT OF SHARES AVAILABLE
The Committee shall make appropriate and equitable adjustments in the
shares of Common Stock available for future Awards and the number of shares of
Common Stock covered by unexercised, unvested or unpaid Awards upon the
subdivision of the outstanding shares of Common Stock; the declaration of a
dividend payable in Common Stock; the declaration of a dividend payable in a
form other than Common Stock in an amount that has a material effect on the
price of the shares of Common Stock; the combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
lesser number of shares of Common Stock; a recapitalization; or a similar
event.
17. PAYMENT OF WITHHOLDING TAXES
As a condition to receiving or exercising an Award, as the case may
be, the Participant shall pay to the Corporation or the employer Subsidiary the
amount of all applicable Federal, state, local and foreign taxes required by
law to be paid or withheld relating to receipt or exercise of the Award.
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Alternatively, the Corporation may withhold shares of Common Stock with an
aggregate Fair Market Value equal to such withholding taxes, from any Award in
shares of Common Stock, to the extent the withholding is required by law. The
Corporation also may deduct such withholding taxes from any Award paid in cash.
18. AMENDMENTS
The Board of Directors may amend the Plan at any time without
stockholder approval; provided, however, that stockholder approval of any
proposed amendment to the Plan shall be obtained whenever required by Rule
16b-3, by the Code or by other applicable law or regulation. Rights and
obligations under any Award granted before amendment of the Plan shall not be
materially altered or impaired adversely by such amendment, except with the
consent of the person to whom the Award was granted.
19. REGULATORY APPROVALS AND LISTINGS
Notwithstanding any other provision in the Plan, the Corporation shall
have no obligation to issue or deliver certificates for shares of Common Stock
under the Plan prior to (A) obtaining approval from any governmental agency
which the Corporation determines is necessary or advisable, (B) admission of
such shares to listing on the stock exchange on which the Common Stock may be
listed, and (C) completion of any registration or other qualification of such
shares under any state or Federal law or ruling of any governmental body which
the Corporation determines to be necessary or advisable.
20. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS
Participation in the Plan shall not give any Employee any right to
remain in the employ of the Corporation or any Subsidiary. Further, the
adoption of this Plan shall not be deemed to give any Employee or other
individual the right to be selected as a Participant or to be granted an Award.
21. NO RIGHT, TITLE, OR INTEREST IN CORPORATION ASSETS
No Participant shall have any rights as a stockholder of the
Corporation until Participant acquires an unconditional right under an Award to
have shares of Common Stock issued to such Participant. In
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the case of a recipient of a stock option, the unconditional right to have
shares of Common Stock issued to such Participant shall be defined as the date
upon which the Participant has exercised the stock option and tendered valid
consideration to the Corporation for the exercise thereof. To the extent any
person acquires a right to receive payments from the Corporation under this
Plan, such rights shall be no greater than the rights of an unsecured creditor
of the Corporation.
22. SPECIAL PROVISION PERTAINING TO PERSONS SUBJECT TO SECTION 16
A. Notwithstanding any other item of this Plan, the following shall
apply to persons subject to Section 16 of the Exchange Act who receive an Award
prior to April 24, 1997, except in the case of death or disability:
(i) Restricted stock or other equity securities (within the
meaning used in Rule 16b-3) offered pursuant to this Plan must be held for at
least six (6) months from the date of grant; and
(ii) At least six (6) months must elapse from the date of
acquisition of any stock option, Performance Unit, Performance Share, stock
appreciation right or other derivative security (within the meaning used in
Rule 16b-3) issued pursuant to the Plan to the date of disposition of such
derivative security (other than upon exercise or conversion) or its underlying
equity security.
B. The restrictions contained in paragraphs A(i) and (ii) of this
Section 22 shall also apply to any Award made to a person who is subject to
Section 16 of the Exchange Act without the advance approval of the Committee in
the manner described in paragraph 3A(vii) above. Such restrictions shall be
applied and construed in a manner which will cause the Award to be exempt from
Section 16(b) of the Exchange Act by virtue of Rule 16b-3.
23. INDEMNIFICATION
In addition to such other rights of indemnification as they may have
as Directors, the members of the Board of Directors or the Committee
administering the Plan shall be indemnified by the Corporation against
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in
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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 Award granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by 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 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 member shall in writing offer the Corporation the opportunity, at its own
expense, to handle and defend the same.
24. MERGER, REORGANIZATION, EXCHANGE OR SALE OF ASSETS
In the event the Company enters into an agreement providing for the
merger of the Company into another corporation, an exchange of shares with
another corporation, the reorganization of the Company or the sale of
substantially all of the Company's assets, any Awards in the form of unvested
stock options shall become immediately exercisable as of the date of such
merger agreement, exchange agreement, reorganization or sale agreement. Upon
consummation of the merger, exchange, reorganization or sale of assets, any
successor corporation shall assume all rights, obligations and responsibilities
under this Plan, or shall substitute options therefor on terms substantially
identical to the terms of any unvested stock options issued and outstanding
under the Plan. Likewise, each vested stock option, Performance Unit,
Performance Share and stock appreciation right shall either be assumed by the
successor corporation or, if not so assumed, the successor corporation shall
substitute a vested stock option, Performance Unit, Performance Share or stock
appreciation right for each outstanding vested stock option, Performance Unit,
Performance Share and stock appreciation right on substantially identical terms
to the terms of outstanding Awards in this form.
25. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware.
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