<PAGE> 1
As filed with the Securities and Exchange Commission on ____________, 1999
Registration No. 333-_____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
UNIVERSAL ELECTRONICS INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0304817
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6101 Gateway Drive
Cypress, California 90630
(Address of principal executive offices, including zip code)
----------------------
UNIVERSAL ELECTRONICS INC. 1998 STOCK INCENTIVE PLAN
(Full title of the plan)
Copy to:
Richard A. Firehammer, Jr. Thomas F. McKee, Esq.
Senior Vice President, General Counsel Calfee, Halter & Griswold LLP
And Secretary 1400 McDonald Investment Center
Universal Electronics Inc. 800 Superior Avenue
6101 Gateway Drive Cleveland, Ohio 44114
Cypress, California 90630 (216) 622-8200
(714) 820-1000
(Name, address and telephone number, including area code, of agent for
service)
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share (1) price (1) fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 315,000 shares $24.82 $7,818,300 $2,174.00
$0.01 par value
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee and based upon the average of the high
and low prices as quoted on The Nasdaq Stock Market for
November 10, 1999.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of Universal Electronics Inc. (the
"Company"), previously filed with the Securities and Exchange Commission (the
"Commission"), are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998;
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1999;
3. The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1999; and
4. The description of the common stock, par value $0.01 per
share, of the Company (the "Common Stock") contained in the Company's Form 8-A
dated June 6, 1995 (Reg. No. 0-21044);
other than the portions of such documents, which by statute, by designation in
such document or otherwise, are not deemed to be filed with the Commission or
are not required to be incorporated herein by reference.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
Registration Statement, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be a part hereof from the date of
filing of such documents other than the portions of such documents, which by
statute, by designation in such document or otherwise, are not deemed to be
filed with the Commission or are not required to be incorporated herein by
reference.
Any statement contained in a document incorporated or deemed
to be incorporated by reference in this Registration Statement shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained in this Registration Statement or in any other
subsequently filed document that also is, or is deemed to be, incorporated by
reference in this Registration Statement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of
Delaware grants each corporation organized thereunder the power to indemnify any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at its request as a director, officer, employee or agent of
another corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), by reason of being or having
been in any such capacity, if he acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation,
<PAGE> 3
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. Section 102(b)(7) of the General
Corporation Law of the State of Delaware enables a corporation in its
certificate of incorporation or an amendment thereto validly approved by
stockholders to limit or eliminate the personal liability of its board of
directors for violations of the directors' fiduciary duty of care.
Article Seventh of the Restated Certificate of Incorporation
of Universal Electronics Inc., as amended, and Article Twelfth of its Amended
and Restated By-laws provide that the Company shall indemnify its officers and
directors to the full extent permitted by applicable law and that such
indemnification shall not be deemed exclusive of any other rights to which any
person indemnified may be entitled by law or otherwise. In addition, Article
Twelfth of the Restated Certificate of Incorporation of the Company limits the
personal liability of its Board of Directors for a breach of the fiduciary duty
of care.
The Company has obtained liability insurance on behalf of its
directors and officers which provides coverage for certain liabilities and
expenses incurred by each director and officer in his capacity as such including
certain liabilities under the Securities Act of 1933.
The effect of the foregoing provisions of the General
Corporation Law of the State of Delaware, the Restated Certificate of
Incorporation, as amended, and the Company's Amended and Restated By-Laws would
be to permit such indemnification by the Company for liabilities arising under
the Securities Act of 1933.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
See the Exhibit Index at Page E-1 of this Registration
Statement.
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.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if
the total dollar value of securities offered
would not exceed that which was registered)
and any deviation from the low or high end of
the estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than a 20 percent change in
the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table
in the effective 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 Registration Statement is on Form S-3, Form S-8 or Form F-3 and
the information
<PAGE> 4
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 Sections 13 or 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 undertakes that, for purposes of
determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to
Sections 13(a) or 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 this Registration Statement shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
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 described under
Item 6 above, 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 Securities Act of 1933 and will be governed by the
final adjudication of such issue.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Cypress, State of California, this 26th day of
October, 1999.
UNIVERSAL ELECTRONICS INC.
By: /s/ Camille Jayne
------------------------------------
Camille Jayne
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities indicated on October 26, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Paul D. Arling President and Chief Operating Officer, Chief Financial
- ------------------------- Officer and Director (Principal Financial Officer)
Paul D. Arling
/s/ Camille Jayne Chairman and Chief Executive Officer and Director
- ------------------------- (Principal Executive Officer)
Camille Jayne
/s/ Mark Belzowski Vice President and Corporate Controller (Principal
- ------------------------- Accounting Officer)
Mark Belzowski
/s/ Peter L. Gartman Director
- -------------------------
Peter L. Gartman
/s/ Bruce A. Henderson Director
- -------------------------
Bruce A. Henderson
/s/ William C. Mulligan Director
- -------------------------
William C. Mulligan
/s/ J.C. Sparkman Director
- -------------------------
J.C. Sparkman
/s/ F. Rush McKnight Director
- -------------------------
F. Rush McKnight
</TABLE>
<PAGE> 6
UNIVERSAL ELECTRONICS INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Sequential Page
- -------------- ----------- ---------------
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the
Company, as amended (incorporated herein by
reference to Exhibit 3.1 to the Company's Form S-1
Registration Statement filed on or about December
24, 1992 (File No. 33-56358))
4.2 Amended and Restated By-laws of the Company
(incorporated herein by reference to Exhibit 3.2
to the Company's Form S-1 Registration Statement
filed on or about December 24, 1992 (File No.
33-56358))
4.3 Certificate of Amendment, dated June 2, 1995, to
the Certificate of Incorporation of the Company
(incorporated herein by reference to Exhibit 3.3
to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 (File No.
0-21044))
4.5 Universal Electronics Inc. 1998 Stock Incentive
Plan (filed herewith)
4.6 Form of Stock Option Agreement dated under the
Universal Electronics Inc. 1998 Stock Incentive
Plan (filed herewith)
5.1 Opinion of Calfee, Halter & Griswold LLP regarding
the validity of the securities being registered
(filed herewith)
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants (filed herewith)
23.2 Consent of Calfee, Halter & Griswold LLP (included
in Exhibit 5.1)
</TABLE>
<PAGE> 1
EXHIBIT 4.5
UNIVERSAL ELECTRONICS INC.
1998 STOCK INCENTIVE PLAN
TO BE EFFECTIVE MAY 27, 1998
TABLE OF CONTENTS
Section 1. General Purpose of Plan; Definitions
Section 2. Administration
Section 3. Number of Shares of Stock Subject to Plan
Section 4. Eligibility
Section 5. Stock Options
Section 6. Stock Appreciation Rights
Section 7. Restricted Stock Units and Performance Stock Units
Section 8. Grant Of Stock Options to Non-Affiliated Directors
Section 9. Amendment and Termination
Section 10. Unfunded Status of Plan
Section 11. General Provisions
Section 12. Effective Date of Plan
Section 13. Term of Plan
UNIVERSAL ELECTRONICS INC.
1998 STOCK INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of the plan is the Universal Electronics Inc. 1998 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to enable the
Corporation (as hereinafter defined) and its Subsidiaries (as hereinafter
defined) to obtain and retain competent personnel who will contribute to the
Corporation's success through their ability, ingenuity and industry and to
provide incentives to the participating officers, key employees and
Non-affiliated Directors (as hereinafter defined) which are related to increases
in stockholder value and will therefore inure to the benefit of all stockholders
of the Corporation.
<PAGE> 2
For purposes of the Plan, the following terms shall be defined as set
forth below:
(a) "Award" means any grant under the Plan in the form of
Stock Options, Stock Appreciation Rights, Performance Stock Units,
Restricted Stock Units or any combination of the foregoing.
(b) "Board" means the Board of Directors of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
(d) "Committee" means the Compensation Committee or any other
committee the Board may subsequently appoint to administer the Plan.
The Committee shall be composed entirely of directors who meet the
qualifications referred to in Section 2 of the Plan.
(e) "Corporation" means Universal Electronics Inc., a
corporation incorporated under the laws of the State of Delaware (or
any successor corporation).
(f) "Disability" means an event of illness or other incapacity
of Optionee resulting in Optionee's failure or inability to discharge
Optionee's duties as an employee or Non-affiliated Director of the
Corporation, any Subsidiary or any Related Entity for ninety (90) or
more days during any period of 120 consecutive days.
(g) "Disinterested Person" shall have the meaning set forth in
Rule 16b-3 ("Rule 16b-3"), as promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended from time to time (the "Exchange Act"), or any successor
definition adopted by the Securities and Exchange Commission.
(h) "Eligible Employee" means an employee of the Corporation,
any Subsidiary or any Related Entity as described in Section 4 of the
Plan.
(i) "Fair Market Value" means, as of any given date, with
respect to any Awards granted hereunder, the mean of the high and low
trading price of the Stock on such date as reported on The Nasdaq Stock
Market or if the Stock is not then traded on The Nasdaq Stock Market,
on such other national securities exchange on which the Stock is
admitted to trade or, if none, on the National Association of
Securities Dealers Automated Quotation System if the Stock is admitted
for quotation thereon; provided, however, that if any such system,
exchange or quotation system is closed on any day on which Fair Market
Value is to be determined, Fair Market Value shall be determined as of
the first day immediately proceeding such day on which such system,
exchange or quotation system was open for trading; provided, further,
that in all other circumstances, "Fair Market Value" means the value
determined by the Committee after obtaining an appraisal by one or more
independent appraisers meeting the requirements of regulations issued
under Section 170(a)(1) of the Code.
(j) "Incentive Stock Option" means any Stock Option intended
to qualify as an "incentive stock option" within the meaning of
Section 422 of the Code.
(k) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(l) "Optionee" means a Participant granted a Stock Option
pursuant to Section 5 of the Plan which remains outstanding.
<PAGE> 3
(m) "Participant" means any Eligible Employee selected by the
Committee, pursuant to the Committee's authority in Section 2 of the
Plan, to receive Awards and, solely to the extent provided by Section 8
of the Plan, Non-affiliated Directors of the Corporation.
(n) "Performance Stock Unit" means the right to receive one
share of Stock as set forth in an Award granted pursuant to Section
7 of the Plan.
(o) "Related Entity" means any corporation, joint venture or
other entity, domestic or foreign, other than a Subsidiary, in which
the Corporation owns, directly or indirectly, a substantial equity
interest.
(p) "Restricted Stock Unit" means the right to receive one
share of Stock as set forth in an Award granted pursuant to Section 7
of the Plan.
(q) "Retirement" means (i) retirement from active employment
under a retirement plan of the Corporation, any Subsidiary or Related
Entity or under an employment contract with any of them or (ii)
termination of employment at or after age 55 under circumstances which
the Committee, in its sole discretion, deems equivalent to retirement.
(r) "Stock" means the common stock of the Corporation.
(s) "Stock Appreciation Right" means the right pursuant to an
Award granted under Section 6 of the Plan, (i) in the case of a Related
Stock Appreciation Right (as defined in Section 6 of the Plan), to
surrender to the Corporation all or a portion of the related Stock
Option and receive an amount equal to the excess of the Fair Market
Value of one share of Stock as of the date such Stock Option or portion
thereof is surrendered over the option price per share specified in
such Stock Option, multiplied by the number of shares of Stock in
respect of which such Stock Option is being surrendered and (ii) in the
case of a Freestanding Stock Appreciation Right (as defined in Section
6 of the Plan) and receive an amount equal to the excess of the Fair
Market Value of one share of Stock as of the date of exercise over the
price per share specified in such Freestanding Stock Appreciation
Right, multiplied by the number of shares of Stock in respect of which
such Freestanding Stock Appreciation Right is being exercised.
(t) "Stock Option" means any option to purchase shares of
Stock granted pursuant to Section 5 of the Plan.
(u) "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Corporation, if each of the
corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Committee, composed of not less
than two directors who are Disinterested Persons, who shall be appointed by the
Board and who shall serve at the pleasure of the Board. In the event that a
Committee has not been appointed, then the Plan shall be administered by the
Board which shall have all of the power and authority of the Committee set forth
below until such time as a Committee is appointed. The Committee shall have the
power and authority in its sole discretion to grant Awards pursuant to the terms
and provisions of the Plan.
In particular, the Committee shall have the full authority, not
inconsistent with the Plan:
(a) to select Participants;
(b) to determine whether and to what extent Awards are to be
granted
<PAGE> 4
to Participants hereunder;
(c) to determine the number of shares of Stock to be covered
by each such Award granted hereunder, but in no case shall such number
be in the aggregate greater than that allowed under the Plan;
(d) to determine the terms and conditions of any Award granted
hereunder (including, without limitation, (i) the restrictive periods
applicable to Restricted Stock Unit Awards and (ii) the performance
objectives and periods applicable to Performance Stock Unit Awards);
(e) to waive compliance by a Participant with any obligation
to be performed by such Participant under any Award and to waive any
term or condition of any such Award (provided, however, that no such
waiver shall detrimentally affect the rights of the Participant without
such Participant's consent); and
(f) to determine the term and conditions which shall govern
all written agreements evidencing the Awards.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time deem advisable; to interpret the provisions of the Plan and
the terms and conditions of any Award issued, expired, terminated, canceled or
surrendered under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan and as to the terms and conditions of any Award (and any agreements
relating thereto) shall be final and binding on all persons, including the
Corporation and the Optionees.
SECTION 3. NUMBER OF SHARES OF STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for issuance
under the Plan shall be three hundred fifteen thousand (315,000). Such shares of
Stock may consist, in whole or in part, of authorized and unissued shares of
Stock or issued shares of Stock reacquired by the Corporation at any time, as
the Board may determine.
To the extent that (a) a Stock Option expires or is otherwise
terminated, cancelled or surrendered without being exercised (including, without
limitation, in connection with the grant of a replacement option) or (b) any
Restricted Stock Unit Award or Performance Stock Unit Award granted hereunder
expires or is otherwise terminated or is cancelled, the shares of Stock
underlying such Stock Option or subject to such Restricted Stock Unit Award or
Performance Stock Unit Award shall again be available for issuance in connection
with future Awards under the Plan. Upon the exercise of a Related Stock
Appreciation Right (as defined in Section 6 of the Plan), the Stock Option, or
the part thereof to which such Related Stock Appreciation Right is related,
shall be deemed to have been exercised for the purpose of the limitation on the
number of shares of Stock in respect of which the Related Stock Appreciation
Right was exercised.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, or other change in corporate structure or
capitalization affecting the Stock, the Committee in its sole discretion may
make an equitable adjustment or substitution in the number and class of shares
reserved for issuance under the Plan, the number and class of shares covered by
outstanding Awards and the option price per share of Stock Options or the
applicable price per share specified in Stock Appreciation Rights to reflect the
effect of such change in corporate structure or capitalization on the Stock;
provided, however, that any fractional shares resulting from such adjustment
shall be eliminated; provided further, however, that if by reason of any such
<PAGE> 5
change in corporate structure or capitalization a Participant holding a
Restricted Stock Unit Award or Performance Stock Unit Award shall be entitled,
subject to the terms and conditions of such Award, to additional or different
shares of any security, the issuance of such additional or different shares
shall thereupon be subject to all of the terms and conditions (including
restrictions and performance criteria) which were applicable to such Award prior
to such change in corporate structure or capitalization; and, provided, further,
however, that unless the Committee in its sole discretion determines otherwise,
any issuance by the Corporation of shares of stock of any class or securities
convertible into shares of stock of any class shall not affect, and no such
adjustment or substitution by reason thereof shall be made with respect to, the
number or class of shares reserved for issuance under the Plan, the number or
class of shares covered by outstanding Awards or any option price or applicable
price.
SECTION 4. ELIGIBILITY.
Officers and other key employees of the Corporation, its Subsidiaries
and its Related Entities who are responsible for or contribute to the
management, growth or profitability of the business of the Corporation, its
Subsidiaries or its Related Entities shall be eligible to be granted Awards;
provided however, with respect to an employee of a Related Entity, that such
person was an employee of the Corporation, a Subsidiary or, if originally an
employee of the Corporation or a Subsidiary, or another Related Entity
immediately prior to becoming employed by such Related Entity and accepted
employment with such Related Entity at the request of the Corporation or a
Subsidiary. The Participants under the Plan shall be selected, from time to
time, by the Committee, in its sole discretion, from among those Eligible
Employees or, as set forth in Section 8 of the Plan, Non-affiliated Directors.
SECTION 5. STOCK OPTIONS.
(a) Grant and Exercise. Stock Options may be granted either alone or in
addition to other Awards granted under the Plan. Any Stock Option granted under
the Plan shall be in such form as the Committee may, from time to time, approve,
and the terms and conditions of Stock Option Awards need not be the same with
respect to each Optionee. Each Optionee shall enter into a Stock Option
agreement ("Stock Option Agreement") with the Corporation, in such form as the
Corporation shall determine, which agreement shall set forth, among other
things, the option price of the option, the term of the option and conditions
regarding exercisability of the option granted thereunder.
(i) Nature of Options. The Committee shall have the authority
to grant any Participant either Incentive Stock Options, Nonqualified
Stock Options or both types of Stock Options (in each case with or
without Stock Appreciation Rights), except that the Committee shall not
grant any Incentive Stock Options to an employee of a Related Entity.
Any Stock Option which does not qualify as an Incentive Stock Option,
or the terms of which at the time of its grant provide that it shall
not be treated as an Incentive Stock Option, shall constitute a
Nonqualified Stock Option.
(ii) Exercisability. Subject to such terms and conditions as
shall be determined by the Committee in its sole discretion at or after
the time of grant, Stock Options shall be exercisable from time to time
to the extent of 25% of the number of shares of Stock covered by the
Stock Option on and after the first anniversary and before the second
anniversary of the date of grant of the Stock Option, to the extent of
50% of the number of shares of Stock covered by the Stock Option, on
and after the second anniversary and before the third anniversary of
the date of grant of the Stock Option to the extent of 75% of the
number of shares of Stock covered by the Stock Option on and after the
third anniversary and before the fourth anniversary of the date of
grant of the Stock Option, and to the extent of 100% on and
<PAGE> 6
after the fourth anniversary of the date of grant of the Stock Option
and before the expiration of the stated term of the Stock Option (or to
such lesser extent as the Committee in its sole discretion shall
determine at the time of grant or to such greater extent as the
Committee in its sole discretion shall determine at or after the time
of grant).
(iii) Method of Exercise. Stock Options may be exercised by
giving written notice of exercise delivered in person or by mail as
required by the terms of any Stock Option Agreement at the
Corporation's principal executive office, specifying the number of
shares of Stock with respect to which the Stock Option is being
exercised, accompanied by payment in full of the option price in cash
or its equivalent as determined by the Committee in its sole
discretion. If requested by the Committee, the Optionee shall deliver
to the Corporation the Stock Option Agreement evidencing the Stock
Option being exercised for notation thereon of such exercise and return
thereafter of such agreement to the Optionee. As determined by the
Committee in its sole discretion at or after the time of grant, payment
of the option price in full or in part may also be made in the form of
shares of unrestricted Stock already owned by the Optionee (based on
the Fair Market Value of the Stock on the date the Stock Option is
exercised); provided, however, that in the case of an Incentive Stock
Option, the right to make payment of the option price in the form of
already owned shares of Stock may be authorized only at the time of
grant. The Committee also may allow cashless exercise as permitted
under the Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law.
An Optionee shall generally have the rights to dividends or other
rights of a stockholder with respect to shares of Stock subject to the
Stock Option when the Optionee has given written notice of exercise,
has paid in full for such shares of Stock, and, if requested, has made
representations described in Section 11(a) of the Plan.
(b) Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable.
(i) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant, but shall be not less than 100% of the Fair
Market Value of the Stock on the date of the grant; provided, however,
that if any Participant owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Corporation or any
Subsidiary when an Incentive Stock Option is granted to such
Participant, the option price of such Incentive Stock Option (to the
extent required by the Code at the time of grant) shall be not less
than 110% of the Fair Market Value of the Stock on the date such
Incentive Stock Option is granted.
(ii) Option Term. The term of each Stock Option shall be fixed
by the Committee at the time of grant, but no Stock Option shall be
exercisable more than ten years after the date such Stock Option is
granted; provided, however, that if any Participant owns or is deemed
to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of
stock of the Corporation or any Subsidiary when an Incentive Stock
Option is granted to such Participant, such Stock Option (to the extent
required by the Code at time of grant) shall not be exercisable more
than five years from the date such Incentive Stock Option is granted.
<PAGE> 7
(iii) Transferability of Options. Except as otherwise
determined by the Committee, no Stock Options shall be transferable by
the Optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the
Optionee's lifetime, only by the Optionee.
(iv) Option Exercise After Termination by Reason of Death or
Disability. If an Optionee's employment with the Corporation, any
Subsidiary or any Related Entity terminates by reason of death or
Disability, any Stock Options held by such Optionee may thereafter be
exercised for a period of one year (or such shorter period as the
Committee in its sole discretion shall specify at or after the time of
grant) from the date of such termination or until the expiration of the
stated term of such Stock Option, whichever period is shorter, to the
extent to which the Optionee would on the date of termination have been
entitled to exercise the Stock Option (or to such greater or lesser
extent as the Committee in its sole discretion shall determine at or
after the time of grant). In the event of a termination of employment
by reason of death or Disability, if an Incentive Stock Option is
exercised after the expiration of the exercise period that applies for
purposes of Section 422 of the Code, such Stock Option will thereafter
be treated as a Nonqualified Stock Option.
(v) Option Exercise After Termination Without Cause or Due to
Constructive Termination. If an Optionee's employment with the
Corporation or any Subsidiary is terminated, by the Corporation or such
Subsidiary, without "Cause" (as such term is defined within the Stock
Option Agreement) or in the event of "Constructive Termination" (as
such term is defined within the Stock Option Agreement) of the
Optionee's employment with the Corporation or such Subsidiary or if an
Optionee's employment with a Related Entity is so terminated, the
Committee, in its sole discretion, may permit the Optionee to exercise
any Stock Option held by such Optionee, to the extent not theretofore
exercised, in whole or in part with respect to all remaining shares
covered by the Stock Option at any time prior to the expiration of the
Stock Option (or such shorter period as the Committee in its sole
discretion shall specify at or after the time of grant), to the extent
to which the Optionee would on the date of termination have been
entitled to exercise the Stock Option (or to such greater or lesser
extent as the Committee in it sole discretion shall determine at or
after the time of grant). An Optionee's acceptance of employment, at
the request of the Corporation or a Subsidiary, with a Related Entity
(or acceptance of employment, at the request of the Corporation or a
Subsidiary, with any other Related Entity), shall not be deemed a
termination of employment hereunder and any Stock Option held by
Optionee may be exercised thereafter to the extent that the Optionee
would on the date of exercise have been entitled to exercise such Stock
Option if such Optionee had continued to be employed by the Corporation
or such Subsidiary (or such initial Related Entity), provided that the
Optionee has been in continuous employ with the Related Entity to which
such Optionee has moved from the date of acceptance of employment
therewith until the date of exercise. In the event of termination of
employment by the Corporation, any Subsidiary or any Related Entity
without "Cause" or in the event of "Constructive Termination" of the
Optionee's employment or the acceptance of employment with a Related
Entity, if an Incentive Stock Option is exercised after the expiration
of the exercise period that applies for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Nonqualified
Stock Option.
(vi) Option Exercise After Termination Due to Resignation. If
an Optionee's employment with the Corporation, any Subsidiary, or any
Related Entity terminates for any reason not set forth in Sections
5(iv) or (v) above, the Committee, in its sole discretion, may permit
the Optionee to
<PAGE> 8
exercise any Stock Option held by such Optionee to the extent such
Option was exercisable on the date of such termination (or to such
greater or lesser extent as the Committee in its sole discretion shall
determine at or after the time of grant) for a period of ninety (90)
days from the date of such termination (or such shorter period as the
Committee in its sole discretion shall specify at or after the time of
grant).
(vii) Other Termination. Except as otherwise provided in this
Section 5 of the Plan, or as determined by the Committee in its sole
discretion, if an Optionee's employment with the Corporation, any
Subsidiary or any Related Entity terminates, all Stock Options held by
the Optionee will terminate.
(viii) Annual Limit on Incentive Stock Options. To the extent
required for incentive stock option treatment under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the date of
Incentive Stock Option is granted) of the shares of Stock with respect
to which Incentive Stock Options granted under the Plan and all other
option plans of the Corporation or any Subsidiary become exercisable
for the first time by an Optionee during any calendar year shall not
exceed $100,000; provided, however, that if the aggregate Fair Market
Value (so determined) of the shares of Stock covered by such options
exceeds $100,000 during any year in which they become exercisable, such
options with a Fair Market Value in excess of $100,000 will be
Nonqualified Stock Options.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) Grant and Exercise. Stock Appreciation Rights may be granted either
in conjunction with all or part of any Stock Option granted under the
Plan("Related Stock Appreciation Rights") or alone ("Freestanding Stock
Appreciation Rights") and, in either case, in addition to other Awards granted
under the Plan. Participants shall enter into a Stock Appreciation Rights
Agreement with the Corporation if requested by the Committee, in such form as
the Committee shall determine.
(i) Time of Grant. Related Stock Appreciation Rights related
to a Nonqualified Stock Option may be granted either at or after the
time of the grant of such Nonqualified Stock Option. Related Stock
Appreciation Rights related to such an Incentive Stock Option may be
granted only at the time of the grant of such Incentive Stock Option.
Freestanding Stock Appreciation Rights may be granted at any time.
(ii) Exercisability. Related Stock Appreciation Rights shall
be exercisable only at such time or times and to the extent that the
Stock Options to which they relate shall be exercisable in accordance
with the provisions of Section 5(a)(ii) of the Plan and Freestanding
Stock Appreciation Rights shall be exercisable, subject to such terms
and conditions as shall be determined by the Committee in its sole
discretion at or after the time of grant, from time to time, to the
extent that Stock Options are exercisable in accordance with the
provisions of Section 5(a)(ii) of the Plan; provided, however, that any
Stock Appreciation Right granted to a director or officer of the
Corporation shall not be exercisable during the first six months from
the date of grant of such Stock Appreciation Rights, except that this
additional limitation shall not apply in the event of death or
Disability of the director or officer prior to the expiration of the
six-month period. A Related Stock Appreciation Right granted in
connection with an Incentive Stock Option may be exercised only if and
when the Fair Market Value of the Stock subject to the Incentive Stock
Option exceeds the option price of such Stock Option.
(iii) Method of Exercise. Stock Appreciation Rights shall be
<PAGE> 9
exercised by a Participant by giving written notice of exercise
delivered in person or by mail as required by the terms of any
agreement evidencing the Stock Appreciation Right at the Corporation's
principal executive office, specifying the number of shares of Stock in
respect of which the Stock Appreciation Right is being exercised. If
requested by the Committee, the Participant shall deliver to the
Corporation the agreement evidencing the Stock Appreciation Right being
exercised and, in the case of a Related Stock Appreciation Right, the
Stock Option Agreement evidencing any related Stock Option, for
notation thereon of such exercise and return thereafter of such
agreements to the Participant.
(iv) Amount Payable. Upon the exercise of a Related Stock
Appreciation Right, an Optionee shall be entitled to receive an amount
in cash or shares of Stock equal in value to the excess of the Fair
Market Value of one share of Stock on the date of exercise over the
option price per share specified in the related Stock Option,
multiplied by the number of shares of Stock in respect of which the
Related Stock Appreciation Rights shall have been exercised, with the
Committee having in its sole discretion the right to determine the form
of payment. Upon the exercise of a Freestanding Stock Appreciation
Right, a Participant shall be entitled to receive an amount in cash or
shares of Stock equal in value to the excess of the Fair Market Value
of one share of Stock on the date of exercise over the price per share
specified in the Freestanding Stock Appreciation Right, which shall be
not less than 100% of the Fair Market Value of the Stock on the date of
Grant, multiplied by the number of shares of Stock in respect of which
the Freestanding Stock Appreciation Rights shall have been exercised,
with the Committee having in its sole discretion the right to determine
the form of payment
(b) Terms and Conditions. Stock Appreciation Rights under the Plan
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions not inconsistent with the terms of the Plan, as
the Committee shall deem desirable.
(i) Terms of Stock Appreciation Rights. The term of a Related
Stock Appreciation Right shall be the same as the term of the related
Stock Option. A Related Stock Appreciation Right or applicable portion
thereof shall terminate and no longer be exercisable upon the exercise,
termination, cancellation or surrender of the related Stock Option,
except that, unless otherwise provided by the Committee in its sole
discretion at or after the time of grant, a Related Stock Appreciation
Right granted with respect to less than the full number of shares of
Stock covered by a related Stock Option shall terminate and no longer
be exercisable if and to the extent that the number of shares of Stock
covered by the exercise, termination, cancellation or surrender of the
related Stock Option exceeds the number of shares of Stock not covered
by the Related Stock Appreciation Right.
The term of each Freestanding Stock Appreciation Right shall
be fixed by the Committee, but no Freestanding Stock Appreciation Right
shall be exercisable more than ten years after the date such right is
granted.
(ii) Transferability of Stock Appreciation Rights. Stock
Appreciation Rights shall be transferable only when and to the extent
that a Stock Option would be transferable under Section 5(b)(iii) of
the Plan.
(iii) Termination of Employment. In the event of the
termination of employment of an Optionee holding a Related Stock
Appreciation Right, such right shall be exercisable to the same extent
that the related Stock Option is exercisable after such termination. In
the event of the termination of employment of the holder of a
Freestanding Stock Appreciation Right, such right shall be exercisable
to the same extent that a Stock Option with the same or substantially
similar terms and conditions as such
<PAGE> 10
Freestanding Stock Appreciation Right would have been exercisable in
the event of the termination of employment of the holder of such Stock
Option.
SECTION 7. RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS.
(a) Grant. Awards of Restricted Stock Units or Performance Stock Units
maybe granted either alone or in addition to other Awards granted under the
Plan. Each Restricted Stock Unit or Performance Stock Unit represents the right
to receive, subject to the terms and provisions of the Plan and any agreements
evidencing such Awards, one share of Stock. If the Committee in its sole
discretion so determines at the time of grant, a Participant to whom a
Restricted Stock Unit Award or Performance Stock Unit Award has been granted
may be credited with an amount equivalent to all cash dividends ("Dividend
Equivalents") that would have been paid to the holder of such Restricted Stock
Unit Award or Performance Stock Unit Award if one share of Stock for every
Restricted Stock Unit or Performance Stock Unit awarded had been issued to the
holder on the date of grant of such Restricted Stock Unit Award or Performance
Stock Unit Award. The Committee shall determine the terms and conditions of each
Restricted Stock Unit Award and Performance Stock Unit, including without
limitation, the number of Restricted Stock Units or Performance Stock Units to
be covered by such Awards, the restricted period applicable to Restricted Stock
Unit Awards and the performance objectives applicable to Performance Stock Unit
Awards. The Committee in its sole discretion may prescribe terms and conditions
applicable to the vesting of such Restricted Stock Unit Awards or Performance
Stock Unit Awards in addition to those provided in the Plan. The Committee shall
establish such rules and guidelines governing the crediting of Dividend
Equivalents, including the timing, form of payment and payment contingencies of
Dividend Equivalents, as it may deem desirable. The Committee in its sole
discretion may at any time accelerate the time at which the restrictions on all
or any part of a Restricted Stock Unit Award lapse or deem the performance
objectives with respect to all or any part of a Performance Stock Unit Award to
have been attained. Restricted Stock Unit Awards and Performance Stock Unit
Awards shall not be transferable otherwise than by will or by the laws of
descent and distribution. Shares of Stock shall be deliverable upon the vesting
of Restricted Stock Unit Awards and Performance Stock Unit Awards for no
consideration other than services rendered or, in the Committee's sole
discretion, the minimum amount of consideration other than services or, in the
Committee's sole discretion, the minimum amount of consideration other than
services (such as the par value of Stock) required to be received by the
Corporation in order to assure compliance with applicable state law, which
amount shall not exceed 10% of the Fair Market Value of such shares of Stock on
the date of issuance. Each such Award shall be evidenced by a Restricted Stock
Unit agreement ("Restricted Stock Unit Award Agreement") or Performance Stock
Unit Award agreement ("Performance Stock Unit Award Agreement").
(b) Terms and Conditions. Unless otherwise determined by the Committee
in its sole discretion:
(i) a breach of any term or condition provided in the Plan,
the Restricted Stock Unit Award Agreement or the Performance Stock Unit
Award Agreement or established by the Committee with respect to such
Restricted Stock Unit Award or Performance Stock Unit Award will cause
a cancellation of the unvested portion of such Restricted Stock Unit
Award or Performance Stock Unit Award (including any Dividend
Equivalents credited in respect thereof) and the Participant shall not
be entitled to receive any consideration in respect of such
cancellation; and
(ii) termination of such holder's employment with the
Corporation, any Subsidiary or any Related Entity prior to the lapsing
of the applicable restriction period or attainment of applicable
performance objectives will cause a cancellation of the unvested
portion of such Restricted Stock Unit Award or Performance Stock Unit
Award (including any Dividend Equivalents
<PAGE> 11
credited in respect thereof) and the Participant shall not be entitled
to receive any consideration in respect of such cancellation.
(c) Completion of Restriction Period and Attainment of Performance
Objectives. To the extent that restrictions with respect to any Restricted Stock
Unit Award lapse or performance objectives with respect to any Performance Stock
Unit Award are attained and provided that other applicable terms and conditions
have been satisfied:
(i) such of the Restricted Stock Units or Performance Stock
Units as to which restrictions have lapsed or performance objectives
have been attained shall become vested and the Committee shall cause to
be issued and delivered to the Participant a stock certificate
representing a number of shares of Stock equal to such number of
Restricted Stock Units or Performance Stock Units, and, subject to
Section 11(a) hereof, free of all restrictions; and
(ii) any Dividend Equivalents credited in respect of such
Restricted Stock Units or Performance Stock Units shall become vested
to the extent that such Restricted Stock Units or Performance Stock
Units shall have become vested and the Committee shall cause such
Dividend Equivalents to be delivered to the Participant.
Any such Restricted Stock Unit Award or Performance Stock Unit
Award(including any Dividend Equivalents credited in respect thereof) that shall
not have become vested at the end of the applicable restricted period or the
period given for the attainment of performance objectives shall expire,
terminate and be cancelled and the Participant shall not thereafter have any
rights with respect to the Restricted Stock Units or Performance Stock Units (or
any Dividend Equivalents credited in respect thereto) covered thereby.
SECTION 8. GRANT OF STOCK OPTIONS TO NON-AFFILIATED DIRECTORS.
Each person who is not an employee of the Corporation, any Subsidiary
or any Related Entity, who is elected as a director and who is not prior to such
election affiliated with the Corporation or otherwise has a similar relationship
to the Corporation (a "Non-affiliated Director"), may as of the date of each
such election and any subsequent reelection or such other dates as shall be
determined by the Committee in its sole discretion, be granted an Award
consisting of a Stock Option to purchase shares of Stock for an option price
equal to 100% of the Fair Market Value of the Stock on the date of such election
or reelection. All such Stock Options shall be designated as Nonqualified Stock
Options. A Non-affiliated Director must serve continuously as a Non-affiliated
Director of the Corporation for a period of twelve (12) consecutive months from
the date such Award is granted before such Non-affiliated Director can exercise
any part of such Award. Thereafter, on and after the first anniversary of the
date of granting the Award and before the second anniversary, the Non-affiliated
Director may exercise the Award with respect to not more than one-third (1/3rd)
of the number of shares of Stock covered thereby; on and after the second
anniversary and before the third anniversary, the Non-affiliated Director may
exercise the Award with respect to not more than two-thirds(2/3rds) of the
number of shares of Stock covered thereby; and on and after the third
anniversary and before the expiration of the stated term of the Award, which
shall be no more than ten years from the date of its granting, the
Non-affiliated Director may at any time or from time to time exercise the Award
with respect to all or any portion of the shares of Stock covered thereby. If a
Non-affiliated Director's service with the Corporation terminates by reason of
death or Disability or retirement from active service as a director of the
Corporation or if such Non-affiliated Director ceases being a Non-affiliated
Director, any Award held by such Non-affiliated Director may be exercised for a
period of three years from the date of such termination or until the expiration
<PAGE> 12
of the Award, whichever is shorter, to the extent to which the individual would
on the date of exercise have been entitled to exercise the Award if such
individual had continued to serve as a Non-affiliated Director. All applicable
provisions of the Plan not inconsistent with this Section 8 shall apply to
Awards granted to Non-affiliated Directors; provided, however, the Committee may
not exercise discretion under any provisions of the Plan with respect to Awards
granted under this Section 8 to the extent that such discretion is inconsistent
with Rule 16b-3 under the Exchange Act.
SECTION 9. AMENDMENT AND TERMINATION.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of a
Participant under any Award theretofore granted without such Participant's
consent, or which, without the approval of the stockholders of the
Corporation(where such approval is necessary to satisfy then applicable
requirements of Rule 16b-3 under the Exchange Act, any federal tax law relating
to Incentive Stock Options, or applicable state law), would:
(a) except as provided in Section 3 of the Plan, increase the
total number of shares of Stock which may be issued under the Plan;
(b) except as provided in Section 3 of the Plan, decrease the
option price of any Stock Option to less than 100% of the Fair Market
Value on the date of the grant of the Option;
(c) change the class of employees eligible to participate in
the Plan; or
(d) extend (i) the period during which Stock Options may be
granted or (ii) the maximum period of any Award under Sections 5(b)(ii)
or 6(b)(i) of the Plan.
Except as restricted herein with respect to Incentive Stock Options,
the Committee may amend or alter the terms and conditions of any Award
theretofore granted, and of any agreement evidencing such Award, prospectively
or retroactively, but no such amendment or alteration shall impair the rights of
any Optionee under such Award or agreement without such Optionee's consent.
SECTION 10. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan. With respect to
any payments not yet made and due to a Participant by the Corporation, nothing
contained herein shall give any such Participant any rights that are greater
than those of a general unsecured creditor of the Corporation.
SECTION 11. GENERAL PROVISIONS.
(a) The Committee may require each Optionee purchasing shares of Stock
pursuant to a Stock Option to represent to and agree with the Corporation in
writing that such Optionee is acquiring the shares of Stock without a view to
distribution thereof.
All certificates for shares of Stock delivered under the Plan and, to
the extent applicable, all evidences of ownership with respect to Dividend
Equivalents delivered under the Plan, shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed or quotation
system on which the Stock is admitted for trading and any applicable Federal or
<PAGE> 13
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any employee of the Corporation, any Subsidiary or any Related
Entity any right to continued employment with the Corporation, any Subsidiary or
any Related Entity as the case may be, nor shall it interfere in any way with
the right of the Corporation, any Subsidiary or any Related Entity to terminate
the employment of any of its employees at any time.
(c) Each Participant shall be deemed to have been granted an Award on
the date the Committee took action to grant such Award under the Plan or such
later date as the Committee in its sole discretion shall determine at the time
such grant is authorized.
(d) Unless the Committee otherwise determines, each Participant shall,
no later than the date as of which the value of an Award first becomes
includable in the gross income of the Participant for federal income tax
purposes, pay to the Corporation, or make arrangements satisfactory to the
Committee regarding payment of, any federal, state or local taxes of any kind
required by law to be withheld with respect to the Award. The obligations of the
Corporation under the Plan shall be conditional on such payment or arrangements
and the Corporation(and, where applicable, its Subsidiaries and its Related
Entities) shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Participant. A
Participant (other than a Non-affiliated Director) may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Corporation to withhold from shares of Stock to be issued upon the exercise of a
Stock Option or upon the vesting of any Restricted Stock Unit Award or the
Performance Stock Unit Award a number of shares of Stock with an aggregate Fair
Market Value that would satisfy the withholding amount due, or (ii) transferring
to the Corporation shares of Stock owned by the Participant with an aggregate
Fair Market Value that would satisfy the withholding amount due. With respect to
any Participant who is a director or officer, the following additional
restrictions shall apply:
(i) the election to satisfy the tax withholding obligations
relating to the exercise of a Stock Option or to the vesting of a
Restricted Stock Unit Award or Performance Stock Unit Award in the
manner permitted by this subsection (d) shall be made either (x) during
the "window period" as described within the Corporation Insider Trading
Policy, or (y) at least six months prior to the date on which the
amount of tax to be withheld upon the exercise of such Stock Option or
the vesting of such Restricted Stock Unit Award or Performance Stock
Unit Award is determinable;
(ii) such election shall be irrevocable;
(iii) such election shall be subject to the consent or
disapproval of the Committee; and
(iv) such election shall not be made within six months of the
date of the grant of such Award.
(e) No member of the Board or the Committee, nor any officer or
employee of the Corporation acting on behalf of the Board or the Committee,
shall be personally liable for any action, failure to act, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
<PAGE> 14
the Corporation acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Corporation in respect of any such
action, failure to act, determination or interpretation.
(f) The Plan is intended to satisfy the conditions of Rule 16b-3 under
the Exchange Act, and all interpretations of the Plan shall, to the extent
permitted by law, regulations and rulings, be made in a manner consistent with
and so as to satisfy the conditions of Rule 16b-3 under the Exchange Act. The
phrase "director or officer" as used in the Plan means any director or officer
who is subject to the provisions of Section 16(b) of the Exchange Act. Any
provisions of the Plan or the application of any provision of the Plan
inconsistent with Rule 16b-3 under the Exchange Act shall be inoperative and
shall not affect the validity of the Plan.
(g) In interpreting and applying the provisions of the Plan, any Stock
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, regulations and rulings be construed as, and any
ambiguity shall be resolved in favor of preserving its status as, an "incentive
stock option" within the meaning of Section 422 of the Code. Once an Incentive
Stock Option has been granted, no action by the Committee that would cause such
Stock Option to lose its status under the Code as an "incentive stock option"
shall be effective as to such Incentive Stock Option unless taken at the request
of or with the consent of the Participant. Notwithstanding any provision to the
contrary in the Plan or in any Incentive Stock Option granted pursuant to the
Plan, if any change in law or any regulation or ruling of the Internal Revenue
Service shall have the effect of disqualifying any Stock Option granted under
the Plan which is intended to be an "incentive stock option" within the meaning
of Section 422 of the Code, the Stock Option granted shall nevertheless continue
to be outstanding as and shall be deemed to be a Nonqualified Stock Option under
the Plan.
SECTION 12. EFFECTIVE DATE OF PLAN.
The Plan shall be effective May 27, 1998, the date it is approved by
the affirmative vote of the holders of a majority of the shares of Stock of the
Corporation present in person or by proxy at the meeting of stockholders on that
date.
SECTION 13. TERM OF PLAN
No Award shall be granted under the Plan on or after the tenth
anniversary of the effective date of the Plan; provided, however, that Awards
granted prior to such tenth anniversary may extend beyond that date.
<PAGE> 1
Exhibit 4.6
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made as of the date set forth on the
signature page hereof by and between Universal Electronics Inc., a Delaware
corporation (the "Corporation") and the undersigned Optionee (the "Optionee").
As used in this Agreement, the term "Corporation" shall include, where
applicable, any and all of its subsidiaries.
WHEREAS, the stockholders of the Corporation at the annual shareholder
meeting and the Board of Directors of the Corporation (the "Board") have
approved the Universal Electronics Inc. 1998 Stock Incentive Plan (the "Plan");
and
WHEREAS, the Corporation desires to grant to the Optionee an option
("Option") to purchase shares of the Corporation's common stock, par value $0.01
per share (the "Stock"), upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, the parties, intending to be legally bound, hereto
agree as follows:
1. GRANT AND DESIGNATION OF OPTION. Upon the execution and delivery of
this Agreement and the related Stock Option Certificate of even date herewith
(the "Certificate"), the Corporation hereby grants to the Optionee the Option to
purchase the aggregate number of shares of Stock set forth on the Certificate at
the price per share ("Option Price") further set forth on the Certificate. The
Option granted hereunder shall not be treated as an incentive stock option
within the meaning of Section 422A of the Internal Revenue Code of 1986, as
amended.
2. TERM AND EXERCISE OF OPTION. Subject to earlier termination,
acceleration or cancellation of the Option as provided herein, the term of the
Option shall be for that period of time also set forth on the Certificate (the
"Option Period") and, subject to the provisions of this Agreement, the Option
shall be exercisable at such times and as to such number of shares as determined
on the schedule set forth on the Certificate.
3. METHOD OF EXERCISE. The Option may be exercised by written notice to
the Corporation (the "Exercise Notice") at its offices at 6101 Gateway Drive,
Cypress, California 90630 to the attention of the Secretary of the Corporation.
The Exercise Notice shall state (i) the election to exercise the Option, (ii)
the total number of full shares in respect to which it is being exercised, and
(iii) shall be signed by the person or persons exercising the Option. The
Exercise Notice shall be accompanied by the Certificate and a certified or
cashier's check for the full amount of the purchase price of such shares, or as
may be permitted by the Board, by certificates for shares of Stock which have
been owned by the Optionee for more than six months prior to the date of
exercise and which have a fair market value of the date of exercise equal to the
purchase price, or by a combination of such methods of payment. Upon receipt of
the foregoing, the Corporation shall issue the shares of Stock as to which the
Option has been duly exercised and shall return the Certificate, duly endorsed
to reflect such exercise, to the Optionee.
1
<PAGE> 2
4. OPTIONEE'S REPRESENTATIONS.
(a) Optionee represents and warrants that any and all shares
acquired through the exercise of rights under the Option granted pursuant to
this Agreement will be acquired for Optionee's own account and not with a view
to, or present intention of, distribution thereof in violation of the Securities
Act of 1933, as amended and the rules and regulations promulgated thereunder
(the "1933 Act") and will not be disposed of in contravention of the 1933 Act.
(b) Optionee acknowledges that Optionee is able to bear the
economic risk of the investment in any and all shares of Stock acquired through
the exercise of rights under the Option for an indefinite period of time because
the Stock has not been registered under the 1933 Act and, therefore, cannot be
sold unless subsequently registered under the 1933 Act or an exemption from such
registration is available.
(c) Optionee has reviewed this Agreement and has had an
opportunity to ask questions and receive answers concerning the terms and
conditions of the offering of Stock and has had full access to such other
information concerning the Corporation as Optionee has requested.
5. RESTRICTION ON EXERCISE. This Option may not be exercised if the
issuance of such shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation. As a condition to the
exercise of this Option, the Corporation may require Optionee to make any
representation and warranty to the Corporation as may be required by any
applicable law or regulation. All exercises of the Option must be for full
shares of Stock only.
6. EFFECT OF TERMINATION OF EMPLOYMENT. Except as set forth in
Paragraphs 7 and 8 below, in the event that Optionee's employment with the
Corporation ceases for any reason, Optionee may (or Optionee's estate or
representative, in the event of Optionee's death during the applicable exercise
period as set forth in this Paragraph 6), during the earlier of (i) the 180 day
period following such cessation of employment or (ii) the remaining term of the
Option Period, exercise the Option to the extent such Option was exercisable on
the date such employment ceased and, on such date, that portion of the Option
which was not exercisable shall automatically terminate without further action
by the parties hereto and, in all events, to the extent not exercised, the
Option shall terminate in its entirety at the end of business on the applicable
exercise period as set forth in this Paragraph 6.
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7. EFFECT OF TERMINATION OF EMPLOYMENT WITHOUT CAUSE OR DUE TO
CONSTRUCTIVE TERMINATION.
(a) In the event that Optionee's employment with the
Corporation is terminated by the Corporation without "Cause" (as such term is
defined in subparagraph 7(b) below) or in the event of "Constructive
Termination" (as such term is defined in subparagraph 7(c) below), Optionee
shall become immediately fully vested in the Option without further action by
the parties hereto, and, to the extent not previously exercised, shall be
exercisable in whole or in part with respect to all remaining shares of Stock
covered by the Option and may be exercised by Optionee (or Optionee's estate or
representative, in the event of Optionee's death) at any time prior to the
expiration of the Option Period.
(b) For purposes of this Agreement, "Cause" shall mean (i) the
willful and continued failure by Optionee to substantially perform Optionee's
duties with the Corporation (other than a failure resulting from Optionee's
death or "Total Disability" (as such term is defined in subparagraph 7(e)
below)) after a demand for substantial performance is delivered to Optionee by
the Corporation which specifically identifies the manner in which it is believed
that Optionee has not substantially performed Optionee's duties; (ii) the
willful engaging by Optionee in gross misconduct materially and demonstrably
injurious to the property or business of the Corporation; or (iii) Optionee's
commission of fraud, misappropriation or a felony. For purposes of this
definition of "Cause", no act or failure to act on Optionee's part will be
considered "willful" unless done, or omitted to be done, by Optionee not in good
faith and without reasonable belief that Optionee's action or omission was in
the interests of the Corporation or not opposed to the interests of the
Corporation.
(c) For purposes of this Agreement, "Constructive Termination"
shall occur on that date on which Optionee resigns from employment with the
Corporation, if such resignation occurs within eighteen (18) months after the
occurrence of (i) the failure of Optionee to be elected or re-elected or
appointed or reappointed to such office which Optionee holds (other than as a
result of a termination for "Cause") if Optionee is an officer of the
Corporation and the office which Optionee holds is one to which Optionee is
elected according to the Corporation's By-laws; (ii) a change in Optionee's
functions, duties, or responsibilities such that Optionee's position with the
Corporation becomes substantially less in responsibility, importance, or scope;
or (iii) a "Change in Control" (as such term is defined in subparagraph 7(d)
below).
(d) For purposes of this Agreement, a "Change in Control"
shall be deemed to occur when (i) any "person" or "group" (as such terms are
used in Sections 3(a), 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (the "1934
Act")), other than (1) a trustee or other fiduciary holding securities under any
employee benefit plan of the Corporation or (2) a corporation owned directly or
indirectly by the stockholders of the Corporation in substantially the same
proportions as their ownership of Stock in the Corporation immediately prior to
any such occurrence, is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the total voting power of the then
outstanding securities of the
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Corporation entitled to vote generally in the election of directors (the "Voting
Stock"); (ii) individuals who are members of the Board on the date of this
Agreement and any individual who becomes a member of the Board hereafter whose
nomination for election as a director was approved by the affirmative vote of a
majority of such Directors, cease to constitute a majority of the members of the
Board; (iii) there occurs a merger or consolidation of the Corporation with any
other corporation or entity, other than a merger or consolidation which would
result in the Voting Stock of the Corporation immediately outstanding prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
total voting power represented by the Voting Stock or the voting securities of
such surviving entity outstanding immediately after such merger or
consolidation; (iv) there occurs a sale or transfer or disposition of all or
substantially all of the Corporation's assets to any other corporation or
entity, other than a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportions as their
ownership of Stock in the Corporation immediately prior to such sale, transfer
or disposition; or (v) the dissolution or liquidation of the Corporation.
(e) For purposes of this Agreement, "Total Disability" shall
mean an event of illness or other incapacity of Optionee resulting in Optionee's
failure or inability to discharge Optionee's duties as an employee of the
Corporation for ninety (90) or more days during any period of 120 consecutive
days.
8. EFFECT OF TERMINATION OF EMPLOYMENT DUE TO DEATH OR TOTAL
DISABILITY. In the event that Optionee's employment with the Corporation ceases
or is terminated due to Optionee's death or Total Disability, Optionee (or
Optionee's estate or representative, in the event of Optionee's death) may
during the earlier of (i) the one (1) year period following such cessation or
termination of employment or (ii) the remaining term of the Option Period,
exercise the Option to the extent such Option was exercisable on the date such
employment ceased or was terminated and, on such date, that portion of the
Option which was not exercisable shall automatically terminate without further
action by the parties hereto and, in all events, to the extent not exercised,
the Option shall terminate in its entirety at the end of business on the
applicable exercise period as set forth in this Paragraph 8; provided, however,
the Board, in its sole discretion, may approve the full vesting to Optionee (or
Optionee's estate or representative, in the event of Optionee's death) in the
Option and, in such event, to the extent not previously exercised, the Option
shall be exercisable in whole or in part with respect to all remaining shares of
Stock covered the Option and may be exercised by Optionee (or Optionee's estate
or representative, in the event of Optionee's death) at any time prior to the
expiration of the Option Period.
9. RIGHT OF A STOCKHOLDER. Optionee shall not have any rights as a
stockholder with respect to any shares of Stock unless and until legended
certificates for such shares of such Stock are issued.
10. WITHHOLDING OF TAXES. Whenever the Corporation is required to issue
shares of Stock upon exercise hereunder, the Corporation shall have the right to
require the recipient to remit in cash (or with the consent of the Board, shares
of Stock previously owned by the recipient or
4
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issuable upon such exercise) to the Corporation an amount sufficient to satisfy
any federal, state and/or local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares of Stock.
11. ADJUSTMENTS. In the event of any change in the outstanding shares
of Stock of the Corporation by reason of a stock dividend or distribution,
recapitalization, spin-off, merger, consolidation, split-up, combination,
exchange of shares or the like, the Board shall adjust the number of shares of
Stock which may be issued under the Plan and shall provide for an equitable
adjustment of any outstanding Option or shares of Stock issuable pursuant to an
outstanding Option under the Plan.
12. COMPLIANCE WITH CERTAIN LAWS AND REGULATIONS. If the Board shall
determine, in its sole discretion, that the listing, registration or
qualification of the shares subject to the Option upon any securities exchange
or under any law or regulation, or that the consent or approval of any
governmental regulatory body is necessary or desirable in connection with the
granting of the Option or the acquisition of shares thereunder, the Optionee
shall supply the Board or the Corporation, as the case may be, with such
certificates, representations and information as the Board or the Corporation,
as the case may be, may request and shall otherwise cooperate with the
Corporation in obtaining any such listing, registration, qualification, consent
or approval.
13. TRANSFERABILITY OF OPTION. The Option is not transferable by the
Optionee otherwise than by will or by the laws of descent and distribution and
is exercisable, during the Optionee's lifetime, only by the Optionee, or in the
case of Optionee's legal incompetency, only by Optionee's guardian or legal
representative.
14. ADDITIONAL RESTRICTIONS ON TRANSFER. The certificates representing
the Stock purchased upon the exercise of the Option will bear the following
legend until such shares of Stock have been registered under an effective
registration statement under the 1933 Act:
The securities represented by this certificate were originally issued
on _____________________, 19___, have not been registered under the
Securities Act of 1933, as amended, or under the securities laws of any
state or other jurisdiction (together, the "Securities Laws") and may
not be offered for sale, sold or otherwise transferred or encumbered in
the absence of compliance with such Securities Laws and until the
issuer hereof shall have received from counsel acceptable to issuer a
written opinion reasonably satisfactory to issuer that the proposed
transaction will not violate any applicable Securities Laws.
15. NOTICES. Any notice or demand provided for in this Agreement must
be in writing and must be either personally delivered, delivered by overnight
courier, or mailed by first class mail, to the Optionee at Optionee's most
recent address on file in the records of the Corporation, to the Corporation at
the address set forth or established pursuant to Paragraph 3 or to such other
address or to the attention of such other person as the recipient party shall
have specified by prior written
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notice to the sending party. Any notice or demand under this Agreement will be
deemed to have been given when received.
16. SEVERABILITY. This Agreement and each provision hereof shall be
valid and enforced to the fullest extent permitted by law. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision. Without limiting the
generality of the foregoing, if the scope of any provision contained in this
Agreement is too broad to permit enforcement to its fullest extent, such
provision shall be enforced to the maximum extent permitted by law, and the
parties hereby agree that such scope may be judicially modified accordingly.
17. COMPLETE AGREEMENT. This Agreement and those documents expressly
referred to herein embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
18. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same agreement.
19. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Optionee, the Corporation and
their respective permitted successors and assigns (including personal
representatives, heirs and legatees), and is intended to bind all successors and
assigns of the respective parties, except that Optionee may not assign any of
Optionee's rights or obligations under this Agreement except to the extent and
in the manner expressly permitted hereby.
20. REMEDIES. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may, in its sole discretion,
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement, without the necessity of posting
bond or any other security.
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21. WAIVER OR MODIFICATION. Any waiver or modification of any of the
provisions of this Agreement shall not be valid unless made in writing and
signed by the parties hereto. A waiver by either party of any breach of this
Agreement shall not operate as a waiver of any subsequent breach.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the ____ day of ______________, 1998.
OPTIONEE UNIVERSAL ELECTRONICS INC.
_________________ By: ____________________________________
Signature Its: Chairman and Chief Executive Officer
_________________
Print Name
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Certificate Number: ____
UNIVERSAL ELECTRONICS INC.
1998 STOCK INCENTIVE PLAN
STOCK OPTION CERTIFICATE
------------------------
THIS CERTIFIES THAT ____________has been awarded an OPTION to purchase
________ shares of common stock, par value $0.01 per share, of UNIVERSAL
ELECTRONICS INC. at a price per share of $____. This Certificate is issued in
accordance with and is subject to the terms and conditions of the related Stock
Option Agreement of even date herewith (the "Agreement").
THIS OPTION is not transferable except in accordance with the terms and
conditions of the Agreement.
THIS OPTION shall expire ten (10) years from the date of this
Certificate.
THIS OPTION shall be exercisable as to all or a portion of the number
of shares set forth above as follows:
On and After the Following Maximum Percentage Taking
Dates, But Prior to Expiration Into Account Prior Exercises
- ------------------------------ ----------------------------
__/__/00 25%
__/__/01 50%
__/__/02 75%
__/__/03 100%
IN WITNESS WHEREOF, UNIVERSAL ELECTRONICS INC. has caused this Stock
Option Certificate to be signed by its duly authorized officer the ____ day of
______, 1998.
UNIVERSAL ELECTRONICS INC.
By: _____________________
Its: _____________________
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Exhibit 5.1
[LETTERHEAD OF CALFEE, HALTER & GRISWOLD LLP]
November 11, 1999
Universal Electronics Inc.
6101 Gateway Drive
Cypress, California 90630
We are familiar with the proceedings taken by Universal Electronics
Inc., a Delaware corporation (the "Company"), with respect to 315,000 shares of
Common Stock, $0.01 par value per share (the "Shares"), of the company to be
offered and sold from time to time pursuant to the Universal Electronics Inc.
1998 Stock Incentive Plan (the "Plan"). As special counsel to the Company, we
have assisted in the preparation of a Registration Statement on Form S-8 (the
"Registration Statement") to be filed by the Company with the Securities and
Exchange Commission to effect the registration of the Shares under the
Securities Act of 1933, as amended.
In this connection, we have examined the Restated Certificate of
Incorporation of the Company, as amended, and the Amended and Restated By-laws
of the Company, records of proceedings of the Board of Directors of the Company,
and such other records and documents as we have deemed necessary or advisable to
render the opinion contained herein. Based upon our examination and inquiries,
we are of the opinion that the Shares are duly authorized and, when issued
pursuant to the terms and conditions of the Plan, will be validly issued, fully
paid and nonassessable.
This opinion is intended solely for your use in the above-described
transaction and may not be reproduced, filed publicly or relied upon by any
other person for any purpose without the express written consent of the
undersigned.
This opinion is limited to the General Corporation Laws of the State
of Delaware and we express no view as to the effect of any other law on the
opinion set forth herein.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Calfee, Halter & Griswold LLP
CALFEE, HALTER & GRISWOLD LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated January 22, 1999
which appears in Universal Electronics Inc.'s Annual Report Form 10-K/A
for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Costa Mesa, California
November 8, 1999
