As filed with the Securities and Exchange Commission on June 2, 1998
Registration No. 333-
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________
ATMI, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1481060
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
______________
7 Commerce Drive, Danbury, Connecticut 06810
(Address of Principal Executive Offices) (Zip Code)
______________
ATMI, Inc.
1998 Stock Plan
(Full title of the plan)
______________
Eugene G. Banucci
Chief Executive Officer
ATMI, Inc.
7 Commerce Drive
Danbury, Connecticut 06810
(Name and address of agent for service)
______________
(203) 794-1100
(Telephone number, including area code, of agent for service)
______________
Copy to:
Donna L. Brooks, Esq.
Shipman & Goodwin LLP
One American Row
Hartford, Connecticut 06103
(860) 251-5000
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
<S> <C> <C> <C> <C>
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Proposed
Proposed maximum
Title of Securities Amount to be maximum offering aggregate offering Amount of
to be registered Registered price per unit (1) price (1) registration fee
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
Common Stock, par value
$.01....................... 2,000,000 $16.875 $33,750,000 $9,956.25
- ------------------------------ --------------------- --------------------- --------------------- ---------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h), the proposed maximum offering price per share is based
on the average of the high and low price per share of $16.875 on June 1, 1998,
as reported by the Nasdaq National Market.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The Section 10(a) prospectus being delivered by ATMI, Inc. (the "Company")
to participants in the Company's 1998 Stock Plan, as required by Rule 428 under
the Securities Act of 1933, as amended (the "Securities Act"), has been prepared
in accordance with the requirements of Form S-8 and relates to shares of Common
Stock, par value $.01 per share, issued or reserved for issuance pursuant to
awards granted under the 1998 Stock Plan. The information with respect to awards
granted under the 1998 Stock Plan required in the Section 10(a) prospectus is
included in documents being maintained and delivered by the Company as required
by Rule 428 under the Securities Act. The Company shall provide to participants
a written statement advising them of the availability without charge, upon
written or oral request, of documents incorporated by reference herein, as is
required by Item 2 of Part I of Form S-8.
II-4
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are hereby incorporated by reference in this
registration statement:
(a) The Company's Annual Report on Form 10-K for the year ended December 31,
1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998; and
(c) The description of the common stock of the Company's predecessor
registrant, Advanced Technology Materials, Inc. ("ATM"), contained in ATM's
registration statement on Form 8-A filed on October 29, 1993, which
description was amended on Form 8-A/A filed on November 11, 1993, and any
amendment or report filed for the purpose of further updating such
description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all such securities then remaining unsold, shall be deemed to
be incorporated by reference in this registration statement and to be part
thereof from the date of filing of such documents. 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 herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein 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.
This Item is not applicable.
Item 5. Interests of Named Experts and Counsel.
As of the date of this registration statement, 7,000 shares of the
Company's Common Stock are beneficially owned by lawyers employed at Shipman &
Goodwin LLP, counsel to the Company.
Item 6. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation provides that the personal
liability of the directors of the Company shall be limited to the fullest extent
permitted by the provisions of Section 102(b)(7) of the Delaware General
Corporation Law, as amended (the "DGCL"). Section 102(b)(7) of the DGCL
generally provides that no director shall be liable personally to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director; however, the Certificate of Incorporation does not eliminate the
liability of a director for (i) any breach of the director's duty of loyalty to
the Company or its stockholders; (ii) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law; (iii) acts or
omissions in respect of certain unlawful dividend payments or stock redemptions
or repurchases; or (iv) any transaction from which such director derives
improper personal benefit. The effect of this provision is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of his or her fiduciary duty of care as a director (including
breaches resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (i) through (iv) above. The limitations
summarized above, however, do not affect the ability of the Company or its
stockholders to seek nonmonetary remedies, such as an injunction or rescission,
against a director for breach of his or her fiduciary duty.
In addition, the Company's Certificate of Incorporation provides that the
Company shall, to the fullest extent permitted by Section 145 of the DGCL,
indemnify all persons whom it may indemnify pursuant to Section 145 of the DGCL.
Section 145 of the DGCL permits a company to indemnify an officer or director
who was or is a party or is threatened to be made a party to any proceeding
because of his or her position, if the officer or director acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, or persons controlling the Company pursuant
to the foregoing provisions, the Company has been informed that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
The Company maintains insurance for officers and directors against certain
liabilities, including liabilities under the Securities Act. The effect of this
insurance is to indemnify any officer or director of the Company against
expenses, including, without limitation, attorneys' fees, judgments, fines and
amounts paid in settlement, incurred by an officer or director upon a
determination that such person acted in good faith.
Item 7. Exemption from Registration Claimed.
This item is not applicable.
Item 8. Exhibits.
Exhibit No. Description
4.1(a) Certificate of Incorporation of the Company (Exhibit 3.01 to the
Company's Registration Statement on Form S-4, filed September
10, 1997, File No. 333-35323 (the "Form S-4 Registration
Statement")). (1)
4.1(b) Certificate of Amendment to Certificate of Incorporation
(Exhibit 4.1(b) to the Company's Post-Effective Amendment No. 1
to Registration Statement on Form S-8, filed October 10, 1997,
Registration No. 33-77060). (1)
4.2 Bylaws of the Company (Exhibit 3.02 to the Form S-4 Registration
Statement). (1)
5.1 Opinion of Shipman & Goodwin LLP as to the legality of the
securities being registered. (2)
23.1 Consent of Shipman & Goodwin LLP (included in Exhibit 5.1). (2)
23.2 Consent of Ernst & Young LLP. (2)
23.3 Consent of Price Waterhouse LLP. (2)
24.1 Power of Attorney (included in the signature page of this
registration statement). (2)
99.1 The Company's 1998 Stock Plan. (2)
__________________________
(1) Incorporated by reference.
(2) Filed herewith.
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 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.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
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 and will be governed by the final
adjudication of such issue.
<PAGE>
II-6
SIGNATURES
Pursuant to 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 Danbury, State of Connecticut, on June 2, 1998.
ATMI, INC.
By:/s/ Eugene G. Banucci________________
Eugene G. Banucci,
President, Chief Executive Officer
and Chairman of the Board
POWER OF ATTORNEY
Know All Persons by These Presents, that each person whose signature
appears below constitutes and appoints Eugene G. Banucci, Ph.D. and Daniel P.
Sharkey, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file same, with all exhibits thereto, and other documents in connection
therewith, with full power and authority to do and perform each and every act
and thing requisite or necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, of
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
___________________
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/Eugene G. Banucci President, Chief Executive Officer, June 2, 1998
Eugene G. Banucci, Ph.D. Chairman of the Board and
Director (principal executive
officer)
/s/Daniel P. Sharkey Vice President, Treasurer and Chief June 2, 1998
Daniel P. Sharkey Financial Officer (principal
financial and accounting officer)
/s/Mark A. Adley Director June 2, 1998
Mark A. Adley
/s/John A. Armstrong Director June 2, 1998
John A. Armstrong
/s/Lamonte H. Lawrence Director June 2, 1998
Lamonte H. Lawrence
/s/Robert S. Hillas Director June 2, 1998
Robert S. Hillas
/s/Stephen H. Mahle Director June 2, 1998
Stephen H. Mahle
/s/Stephen H. Siegele Director June 2, 1998
Stephen H. Siegele
<PAGE>
Exhibit Index
Sequentially
Exhibit No. Description Mumbered Page
4.1(a) Certificate of Incorporation of the
Company (Exhibit 3.01 to the Company's
Registration Statement on Form S-4,
filed September 10, 1997, File No.
333-35323 (the "Form S-4 Registration
Statement")). (1)
4.1(b) Certificate of Amendment to
Certificate of Incorporation (Exhibit
4.1(b) to the Company's Post-Effective
Amendment No. 1 to Registration
Statement on Form S-8, filed October 10,
1997, Registration No. 33-77060). (1)
4.2 Bylaws of the Company (Exhibit 3.02 to
the Form S-4 Registration Statement).
(1)
5.1 Opinion of Shipman & Goodwin LLP as to
the legality of the securities being
registered. (2)
23.1 Consent of Shipman & Goodwin LLP (included
in Exhibit 5.1). (2)
23.2 Consent of Ernst & Young LLP. (2)
23.3 Consent of Price Waterhouse LLP. (2)
24.1 Power of Attorney (included in the
signature page of this
registration statement). (2)
99.1 The Company's 1998 Stock Plan. (2)
______________________
(1) Incorporated by reference.
(2) Filed herewith.
Exhibit 5.1
Shipman & Goodwin LLP One American Row
Counselors at Law Hartford, CT 06103-2819
Tel: (860) 251-5000
June 1, 1998
ATMI, Inc.
7 Commerce Drive
Danbury, CT 06810
Re: Registration Statement on Form S-8
Relating to Shares of Common Stock of
ATMI, Inc. Issuable under its 1998 Stock Plan
Ladies and Gentlemen:
As counsel for ATMI, Inc., a Delaware corporation (the "Company"), we are
furnishing you with this opinion in connection with the issuance of a maximum of
2,000,000 shares of Common Stock of the Company (the "Shares") pursuant to the
above-referenced Plan (the "Plan"), to which the above-referenced Registration
Statement relates.
We have examined such originals or copies of corporate records of the
Company, certificates of public officials and of officers of the Company and
other documents, have obtained such assurances from officers and representatives
of the Company, have made such other factual inquiries, and have made such
examination of law, as we have deemed proper and necessary to enable us to
render this opinion.
Based on the foregoing, it is our opinion that the Shares will, when issued
as contemplated by the Plan and said Registration Statement, be duly authorized
and legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Shipman & Goodwin LLP
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated February 11, 1998, with respect to the
consolidated financial statements and schedule of ATMI, Inc. included in its
Annual Report on Form 10-K for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Stamford, CT
June 1, 1998
Exhibit 23.3
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of ATMI, Inc. of our report dated May 17, 1997, except for
the last paragraph of Note 3 which is as of July 29, 1997 and the last paragraph
of Note 6 which is as of December 18, 1997, pertaining to the combined financial
statements of Lawrence Semiconductor Laboratories, Inc. and Affiliate included
in ATMI, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997.
It should be noted, however, that such financial statement are not included
separately in the Form 10-K. We also consent to the application of such report
to the Financial Statement Schedule for the two years ended December 31, 1996
included in the Form 10-K when such schedule is read in conjunction with the
financial statements referred to in our report. The audits referred to in such
report also included this schedule.
/s/ Price Waterhouse LLP
Phoenix, Arizona
May 29, 1998
Exhibit 99.1
ATMI, INC.
1998 STOCK PLAN
SECTION 1. Purpose
The purpose of the 1998 Stock Plan (the "Plan") is to secure for ATMI, Inc.
(the "Company"), its parent (if any) and any subsidiaries of the Company
(collectively the "Related Companies") the benefits arising from capital stock
ownership and the receipt of capital stock-based incentives by those employees,
directors, officers and consultants of the Company and any Related Companies who
will be responsible for the Company's future growth and continued success.
The Plan will provide a means whereby (a) employees of the Company and any
Related Companies may purchase stock in the Company pursuant to options which
qualify as "incentive stock options" ("Incentive Stock Options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"); (b)
directors, employees and consultants of the Company and any Related Companies
may purchase stock in the Company pursuant to options granted hereunder which do
not qualify as Incentive Stock Options ("Non-Qualified Option" or "Non-Qualified
Options"); (c) directors, employees and consultants of the Company and any
Related Companies may be awarded stock in the Company ("Awards"); and (d)
directors, employees and consultants of the Company and any Related Companies
may receive stock appreciation rights ("SARs"). Both Incentive Stock Options and
Non-Qualified Options are referred to hereafter individually as an "Option" and
collectively as "Options." As used herein, the terms "parent" and "subsidiary"
mean "parent corporation" and "subsidiary corporation" as those terms are
defined in Section 424 of the Code. Options, Awards and SARs are referred to
hereafter individually as a "Plan Benefit" and collectively as "Plan Benefits."
Directors, employees and consultants of the Company and any Related Companies
are referred to herein as "Participants."
SECTION 2. Administration
2.1 Board of Directors and the Committee. The Plan will be administered by
the Board of Directors of the Company whose construction and interpretation of
the terms and provisions hereof shall be final and conclusive. Any director to
whom a Plan Benefit is awarded shall be ineligible to vote upon his or her Plan
Benefit, but Plan Benefits may be granted to any such director by a vote of the
remainder of the directors, except as limited below. The Board of Directors may
in its sole discretion grant Options, issue shares upon exercise of such
Options, grant Awards and grant SARs all as provided in the Plan. The Board of
Directors shall have authority, subject to the express provisions of the Plan,
to construe the Plan and its related agreements, to prescribe, amend and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of the respective Option, Award and SAR agreements, which need not be
identical, and to make all other determinations in the judgment of the Board of
Directors necessary or desirable for the administration of the Plan. The Board
of Directors may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any related agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency. No director shall be liable for any
action or determination made in good faith. The Board of Directors may delegate
any or all of its powers under the Plan to a Compensation Committee or other
Committee (the "Committee") appointed by the Board of Directors consisting of at
least two members of the Board of Directors. If Plan Benefits are to be approved
solely by a Committee, the members of the Committee shall at all times be: (i)
"outside directors" as that term is defined in Treas. Reg. S1.162-27(e)(3) (or
any successor regulation); and (ii) "non-employee directors" within the meaning
of Rule 16b-3 (or any successor rule) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as such terms are interpreted from time to
time. If the Committee is so appointed, all references to the Board of Directors
herein shall mean and relate to such Committee, unless the context otherwise
requires.
2.2 Compliance with Section 162(m) of the Code. Section 162(m) of the Code
generally limits the tax deductibility to publicly held companies of
compensation in excess of $1,000,000 paid to certain "covered employees"
("Covered Employees"). It is the Company's intention to preserve the
deductibility of such compensation to the extent it is reasonably practicable
and to the extent it is consistent with the Company's compensation objectives.
For purposes of this Plan, Covered Employees of the Company shall be those
employees of the Company described in Section 162(m)(3) of the Code.
SECTION 3. Eligibility
3.1 Incentive Stock Options. Participants who are employees shall be
eligible to receive Incentive Stock Options pursuant to the Plan; provided that
no person shall be granted any Incentive Stock Option under the Plan who, at the
time such Option is granted, owns, directly or indirectly, Common Stock of the
Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its Related Companies, unless the
requirements of Section 6.6(b) hereof are satisfied. In determining whether this
10% threshold has been reached, the stock attribution rules of Section 424(d) of
the Code shall apply. Directors who are not regular employees are not eligible
to receive Incentive Stock Options.
3.2 Non-Qualified Options, Awards and SARs. Non-Qualified Options, Awards
and SARs may be granted to any Participant.
3.3 Generally. The Board of Directors may take into consideration a
Participant's individual circumstances in determining whether to grant an
Incentive Stock Option, a Non-Qualified Option, an Award or an SAR. Granting of
any Option, Award or SAR for any Participant shall neither entitle that
Participant to, nor disqualify that Participant from, participation in any other
grant of Plan Benefits.
SECTION 4. Stock Subject to Plan
Subject to adjustment as provided in Sections 9 and 10 hereof, the stock to
be offered under the Plan shall consist of shares of the Company's Common Stock,
$.01 par value, and the maximum number of shares which will be reserved for
issuance, and in respect of which Plan Benefits may be granted pursuant to the
provisions of the Plan, shall not exceed in the aggregate 2,000,000 shares. Such
shares may be authorized and unissued shares, treasury shares or shares
purchased on the open market. If an Option or SAR granted hereunder shall expire
or terminate for any reason without having been exercised in full, or if the
Company shall reacquire any unvested shares issued pursuant to Awards, the
unpurchased shares subject thereto and any unvested shares so reacquired shall
again be available for subsequent grants of Plan Benefits under the Plan. Stock
issued pursuant to the Plan may be subject to such restrictions on transfer,
repurchase rights or other restrictions as shall be determined by the Board of
Directors.
SECTION 5. Granting of Options, SARs and Awards
Plan Benefits may be granted under the Plan at any time after May 20, 1998
(the date of approval of the Plan by the stockholders of the Company) and prior
to May 20, 2008; provided, however, that nothing in the Plan shall be construed
to obligate the Company to grant Plan Benefits to a Participant or anyone
claiming under or through a Participant. The date of grant of Plan Benefits
under the Plan will be the date specified by the Board of Directors at the time
the Board of Directors grants such Plan Benefits; provided, however, that such
date shall not be prior to the date on which the Board of Directors takes such
action. The Board of Directors shall have the right, with the consent of a
Participant, to convert an Incentive Stock Option granted under the Plan to a
Non-Qualified Option pursuant to Section 6.7. Plan Benefits may be granted alone
or in addition to other grants under the Plan.
SECTION 6. Special Provisions Applicable to Options and SARs
6.1 Purchase Price and Shares Subject to Options and SARs.
(a) The purchase price per share of Common Stock deliverable upon the
exercise of an Option shall be determined by the Board of Directors;
provided, however, that (i) in the case of an Incentive Stock Option, the
exercise price shall not be less than 100% of the fair market value of such
Common Stock on the day the Option is granted (except as modified in
Section 6.6(b) hereof), and (ii) in the case of a Non-Qualified Option, the
exercise price shall not be less than 50% of the fair market value on the
day such Option is granted.
(b) Options granted under the Plan may provide for the payment of the
exercise price by delivery of (i) cash or a check payable to the order of
the Company in an amount equal to the exercise price of such Options, (ii)
shares of Common Stock of the Company owned by the Participant having a
fair market value equal in amount to the exercise price of the Options
being exercised, or (iii) any combination of (i) and (ii). The fair market
value of any shares of the Company's Common Stock which may be delivered
upon exercise of an Option shall be determined by the Board of Directors.
The Board of Directors may also permit Participants, either on a selective
or aggregate basis, to simultaneously exercise Options and sell the shares
of Common Stock thereby acquired, pursuant to a brokerage or similar
arrangement, approved in advance by the Board of Directors, and to use the
proceeds from such sale as payment of the purchase price of such shares.
(c) If, at the time an Option is granted under the Plan, the Company's
Common Stock is publicly traded, "fair market value" shall be determined as
of the last business day for which the prices or quotes discussed in this
sentence are available prior to the date such Option is granted (the
"Determination Date") and shall mean (i) the average (on the Determination
Date) of the high and low prices of the Common Stock on the principal
national securities exchange on which the Common Stock is traded, if such
Common Stock is then traded on a national securities exchange; (ii) the
last reported sale price (on the Determination Date) of the Common Stock on
The Nasdaq Stock Market if the Common Stock is not then traded on a
national securities exchange; or (iii) the closing bid price (or average of
bid prices) last quoted (on the Determination Date) by an established
quotation service for over-the-counter securities, if the Common Stock is
not reported on The Nasdaq Stock Market. However, if the Common Stock is
not publicly traded at the time an Option is granted under the Plan, "fair
market value" shall be deemed to be the fair value of the Common Stock as
determined by the Board of Directors after taking into consideration all
factors which it deems appropriate, including, without limitation, recent
sale and offer prices of the Common Stock in private transactions
negotiated at arm's length.
(d) The maximum number of shares with respect to which Options or SARs
may be granted to any employee, including any transactions contemplated by
Treas. Reg. S1.162(e)(2)(vi), shall be limited to 112,500 shares in any
calendar year.
6.2 Duration of Options and SARs. Subject to Section 6.6(b) hereof, each
Option and SAR and all rights thereunder shall be expressed to expire on such
date as the Board of Directors may determine, but in no event later than ten
years from the day on which the Option or SAR is granted and shall be subject to
earlier termination as provided herein.
6.3 Exercise of Options and SARs.
(a) Subject to Section 6.6(b) hereof, each Option and SAR granted
under the Plan shall be exercisable at such time or times and during such
period as shall be set forth in the instrument evidencing such Option or
SAR. To the extent that an Option or SAR is not exercised by a Participant
when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period. No partial exercise may be for less than
ten (10) full shares of Common Stock (or its equivalent).
(b) The Board of Directors shall have the right to accelerate the date
of exercise of any installments of any Option or SAR; provided that the
Board of Directors shall not accelerate the exercise date of any
installment of any Option granted to a Participant as an Incentive Stock
Option (and not previously converted into a Non-Qualified Option pursuant
to Section 6.7) if such acceleration would violate the annual vesting
limitation contained in Section 422(d)(1) of the Code, which provides
generally that the aggregate fair market value (determined at the time the
Option is granted) of the stock with respect to which Incentive Stock
Options granted to any Participant are exercisable for the first time by
such Participant during any calendar year (under all plans of the Company
and any Related Companies) shall not exceed $100,000.
6.4 Nontransferability of Options and SARs. No Option or SAR granted under
the Plan shall be assignable or transferable by the Participant, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, with respect to Non-Qualified Options and SARs, unless the
Participant's non-qualified stock option agreement granting such options (the
"Non-Qualified Stock Option Agreement") or the Participant's SAR agreement
granting such SARs (the "SAR Agreement") provides otherwise. Unless otherwise
provided by the Non-Qualified Stock Option Agreement or the SAR Agreement, as
applicable, during the life of the Participant, the Option or SAR shall be
exercisable only by the Participant. If any Participant should attempt to
dispose of or encumber the Participant's Options or SARs, other than in
accordance with the applicable terms of a Non-Qualified Stock Option Agreement
or SAR Agreement, the Participant's interest in such Options or SARs shall
terminate.
6.5 Effect of Termination of Employment or Death on Options and SARs.
(a) Except as otherwise provided in the instrument evidencing the Plan
Benefit, if a Participant ceases to be employed by the Company or a Related
Company for any reason, including retirement but other than death, any
Option or SAR granted to such Participant under the Plan shall immediately
terminate; provided, however, that, except as otherwise provided in the
instrument evidencing the Plan Benefit, any portion of such Option or SAR
which was otherwise exercisable on the date of termination of the
Participant's employment may be exercised within the three-month period
following the date on which the Participant ceased to be so employed, but
in no event after the expiration of the exercise period. Except as
otherwise provided in the instrument evidencing the Plan Benefit, any such
exercise may be made only to the extent of the number of shares subject to
the Option or SAR which were purchasable or exercisable on the date of such
termination of employment. If the Participant dies during such three-month
period, the Option or SAR shall be exercisable by the Participant's
personal representatives, heirs or legatees to the same extent and during
the same period that the Participant could have exercised the Option or SAR
on the date of his or her death, except as otherwise provided in the
instrument evidencing the Plan Benefit.
(b) Except as otherwise provided in the instrument evidencing the Plan
Benefit, if the Participant dies while an employee of the Company or any
Related Company, any Option or SAR granted to such Participant under the
Plan shall be exercisable by the Participant's personal representatives,
heirs or legatees, for the purchase of or exercise relative to that number
of shares and to the same extent that the Participant could have exercised
the Option or SAR on the date of his or her death. Except as otherwise
provided in the instrument evidencing the Plan Benefit, the Option or SAR
or any unexercised portion thereof shall terminate unless so exercised
prior to the earlier of the expiration of six months from the date of such
death or the expiration of the exercise period.
6.6 Designation of Incentive Stock Options; Limitations. Options granted
under the Plan which are intended to be Incentive Stock Options qualifying under
Section 422 of the Code shall be designated as Incentive Stock Options and shall
be subject to the following additional terms and conditions:
(a) Dollar Limitation. The aggregate fair market value (determined at
the time the option is granted) of the Common Stock for which Incentive
Stock Options are exercisable for the first time during any calendar year
by any person under the Plan (and all other incentive stock option plans of
the Company and any Related Companies) shall not exceed $100,000. In the
event that Section 422(d)(1) of the Code is amended to alter the limitation
set forth therein so that following such amendment such limitation shall
differ from the limitation set forth in this Section 6.6(a), the limitation
of this Section 6.6(a) shall be automatically adjusted accordingly.
(b) 10% Stockholder. If any Participant to whom an Incentive Stock
Option is to be granted pursuant to the provisions of the Plan is on the
date of grant the owner of stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Related
Companies, then the following special provisions shall be applicable to the
Incentive Stock Option granted to such individual:
(i) The option price per share of the Common Stock subject to
such Incentive Stock Option shall not be less than 110% of the fair
market value of one share of Common Stock on the date of grant; and
(ii) The option exercise period shall not exceed five years from
the date of grant.
In determining whether the 10% threshold has been reached, the stock
attribution rules of Section 424(d) of the Code shall apply.
(c) Except as modified by the preceding provisions of this Section 6.6, all
of the provisions of the Plan shall be applicable to Incentive Stock Options
granted hereunder.
6.7 Conversion of Incentive Stock Options into Non-Qualified Options;
Termination of Incentive Stock Options. The Board of Directors, at the written
request of any Participant, may in its discretion take such actions as may be
necessary to convert such Participant's Incentive Stock Options (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such Incentive Stock Options, regardless of whether the
Participant is an employee of the Company or a Related Company at the time of
such conversion. Such actions may include, but not be limited to, extending the
exercise period or reducing the exercise price of the appropriate installments
of such Options. At the time of such conversion, the Board of Directors (with
the consent of the Participant) may impose such conditions on the exercise of
the resulting Non-Qualified Options as the Board of Directors in its discretion
may determine, provided that such conditions shall not be inconsistent with the
Plan. Nothing in the Plan shall be deemed to give any Participant the right to
have such Participant's Incentive Stock Options converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Board of
Directors takes appropriate action. The Board of Directors, with the consent of
the Participant, may also terminate any portion of any Incentive Stock Option
that has not been exercised at the time of such termination.
6.8 Stock Appreciation Rights. An SAR is the right to receive, without
payment, an amount equal to the excess, if any, of the fair market value of a
share of Common Stock on the date of exercise over the grant price, which amount
will be multiplied by the number of shares with respect to which the SARs shall
have been exercised. The grant of SARs under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the Board of
Directors shall deem desirable:
(a) Grant. SARs may be granted in tandem with, in addition to or completely
independent of any Plan Benefit.
(b) Grant Price. The grant price of an SAR may be the fair market value of
a share of Common Stock on the date of grant or such other price as the Board of
Directors may determine.
(c) Exercise. An SAR may be exercised by a Participant in accordance with
procedures established by the Board of Directors or as otherwise provided in any
agreement evidencing any SARs. The Board of Directors may provide that an SAR
shall be automatically exercised on one or more specified dates.
(d) Form of Payment. Payment upon exercise of an SAR may be made in cash,
in shares of Common Stock or any combination thereof, as the Board of Directors
shall determine.
(e) Fair Market Value. Fair market value shall be determined in accordance
with Section 6.1(c) with the "Determination Date" being determined by reference
to the date of grant or the date of exercise of an SAR, as applicable.
6.9 Rights as a Stockholder. A Participant shall have no rights as a
stockholder with respect to any shares covered by an Option or SAR until the
date of issue of a stock certificate to the Participant for such shares. Except
as otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
6.10 Special Provisions Applicable to Non-Qualified Options and SARs
Granted to Covered Employees. In order for the full value of Non-Qualified
Options and SARs granted to Covered Employees to be deductible by the Company
for federal income tax purposes, the Company may intend for such Non-Qualified
Options and SARs to be treated as "qualified performance-based compensation" as
described in Treas. Reg. S1.162-27(e) (or any successor regulation). In such
case, Non-Qualified Options and SARs granted to Covered Employees shall be
subject to the following additional requirements:
(a) such options and rights shall be granted only by the Committee;
and
(b) the exercise price of such Options and the grant price of such
SARs granted shall in no event be less than the fair market value of the
Common Stock as of the date of grant of such Options or SARs.
SECTION 7. Special Provisions Applicable to Awards
7.1 Grants of Awards. The Board of Directors may grant a Participant an
Award subject to such terms and conditions as the Board of Directors deems
appropriate, including, without limitation, restrictions on the pledging, sale,
assignment, transfer or other disposition of such shares and the requirement
that the Participant forfeit all or a portion of such shares back to the Company
upon termination of employment.
7.2 Conditions. Approvals of Awards may be subject to the following
conditions:
(a) Each Participant receiving an Award shall enter into an agreement
(a "Stock Restriction Agreement") with the Company, if required by the
Board of Directors, in a form specified by the Board of Directors agreeing
to such terms and conditions of the Award as the Board of Directors deems
appropriate.
(b) Shares issued and transferred to a Participant pursuant to an
Award may, if required by the Board of Directors, be deposited with the
Treasurer or other officer of the Company designated by the Board of
Directors to be held until the lapse of the restrictions upon such shares,
and the Participant shall execute and deliver to the Company stock powers
enabling the Company to exercise its rights hereunder.
(c) Certificates for shares issued pursuant to an Award shall, if the
Company shall deem it advisable, bear a legend to the effect that they are
issued subject to specified restrictions.
(d) Certificates representing the shares issued pursuant to an Award
shall be registered in the name of the Participant and shall be owned by
such Participant. Such Participant shall be the holder of record of such
shares for all purposes, including voting and receipt of dividends paid
with respect to such shares.
(e) If required by the Board of Directors, no Participant receiving an
Award shall make, in connection with such Award, the election permitted
under Section 83(b) of the Code.
7.3 Nontransferability. Shares issued pursuant to an Award may not be sold,
assigned, transferred, alienated, commuted, anticipated, or otherwise disposed
of (except, subject to the provisions of such Participant's Stock Restriction
Agreement, by will or the laws of descent and distribution), or pledged or
hypothecated as collateral for a loan or as security for the performance of any
obligation, or be otherwise encumbered, and are not subject to attachment,
garnishment, execution or other legal or equitable process, prior to the lapse
of restrictions on such shares, and any attempt at action in contravention of
this Section shall be null and void. If any Participant should attempt to
dispose of or encumber the Participant's shares issued pursuant to an Award
prior to the lapse of the restrictions imposed on such shares, the Participant's
interest in such shares shall terminate.
7.4 Effect of Termination of Employment or Death on Awards. Except as
otherwise provided in the instrument evidencing the Awards, if, prior to the
lapse of restrictions applicable to Awards, the Participant ceases to be an
employee of the Company or the Related Companies for any reason, Awards to such
Participant, as to which restrictions have not lapsed, shall be forfeited to the
Company, effective on the date of the Participant's termination of employment.
The Board of Directors shall have the sole power to decide in each case to what
extent leaves of absence shall be deemed a termination of employment.
SECTION 8. Requirements of Law
8.1 Violations of Law. No shares shall be issued and delivered upon
exercise of any Option or the making of any Award or the payment of any SAR
unless and until, in the opinion of counsel for the Company, any applicable
registration requirements of the Securities Act of 1933, any applicable listing
requirements of any national securities exchange on which stock of the same
class is then listed, and any other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery, shall have been
fully complied with. Each Participant may, by accepting Plan Benefits, be
required to represent and agree in writing, for himself or herself and for his
or her transferees by will or the laws of descent and distribution, that the
stock acquired by him, her or them is being acquired for investment. The
requirement for any such representation may be waived at any time by the Board
of Directors.
8.2 Compliance with Rule 16b-3. The intent of this Plan is to qualify for
the exemption provided by Rule 16b-3 under the Exchange Act. To the extent any
provision of the Plan does not comply with the requirements of Rule 16b-3, it
shall be deemed inoperative to the extent permitted by law and deemed advisable
by the Board of Directors and shall not affect the validity of the Plan. In the
event Rule 16b-3 is revised or replaced, the Board of Directors may exercise
discretion to modify this Plan in any respect necessary to satisfy the
requirements of the revised exemption or its replacement.
SECTION 9. Recapitalization
In the event that dividends are payable in Common Stock of the Company or
in the event there are splits, sub-divisions or combinations of shares of Common
Stock of the Company, the number of shares available under the Plan shall be
increased or decreased proportionately, as the case may be, and the number of
shares deliverable upon the exercise thereafter of any Option previously granted
shall be increased or decreased proportionately, as the case may be, without
change in the aggregate purchase price, and the number of shares to which
granted SARs relate shall be increased or decreased proportionately, as the case
may be, and the grant price of such SARs shall be decreased or increased
proportionately, as the case may be.
SECTION 10. Reorganization
If the Company is merged, consolidated with another corporation and the
Company is not the Surviving Corporation, or the property or stock of the
Company is acquired by any other corporation or in the case of a reorganization
or liquidation of the Company, the Board of Directors of the Company, or the
board of directors of any corporation assuming the obligations of the Company
hereunder, shall, as to outstanding Plan Benefits, (i) make appropriate
provision for the protection of any such outstanding Plan Benefits by the
substitution on an equitable basis of appropriate stock of the Company or of the
merged, consolidated or otherwise reorganized corporation which will be issuable
in respect of the shares of Common Stock of the Company; provided only that the
excess of the aggregate fair market value of the shares subject to the Plan
Benefits immediately after such substitution over the purchase or grant price
thereof is not more than the excess of the aggregate fair market value of the
shares subject to such Plan Benefits immediately before such substitution over
the purchase or grant price thereof, (ii) upon written notice to the
Participants, provide that all unexercised Plan Benefits must be exercised
within a specified number of days of the date of such notice or such Plan
Benefits will be terminated, or (iii) upon written notice to the Participants,
provide that the Company or the merged, consolidated or otherwise reorganized
corporation shall have the right, upon the effective date of any such merger,
consolidation, sale of assets or reorganization, to purchase all Plan Benefits
held by each Participant and unexercised as of that date at an amount equal to
the aggregate fair market value on such date of the shares subject to the Plan
Benefits held by such Participant over the aggregate purchase or grant price
therefor, such amount to be paid in cash or, if stock of the merged,
consolidated or otherwise reorganized corporation is issuable in respect of the
shares of the Common Stock of the Company, then, in the discretion of the Board
of Directors, in stock of such merged, consolidated or otherwise reorganized
corporation equal in fair market value to the aforesaid amount. In any such case
the Board of Directors shall, in good faith, determine fair market value and
may, in its discretion, advance the lapse of any waiting or installment periods
and exercise dates.
SECTION 11. No Special Employment Rights
Nothing contained in the Plan or in any Plan Benefit documentation shall
confer upon any Participant receiving a grant of any Plan Benefit any right with
respect to the continuation of his or her employment by the Company (or any
Related Company) or interfere in any way with the right of the Company (or any
Related Company), subject to the terms of any separate employment agreement to
the contrary, at any time to terminate such employment or to increase or
decrease the compensation of the Participant from the rate in existence at the
time of the grant of any Plan Benefit. Whether an authorized leave of absence or
absence in military or government service shall constitute termination of
employment shall be determined by the Board of Directors, in accordance with any
applicable laws.
SECTION 12. Amendment of the Plan
The Board of Directors may at any time and from time to time suspend or
terminate all or any portion of the Plan or modify or amend the Plan in any
respect. The termination or any modification or amendment of the Plan shall not,
without the consent of a Participant, affect the Participant's rights under any
Plan Benefit previously granted. With the consent of the affected Participant,
the Board of Directors may amend outstanding agreements relating to any Plan
Benefit in a manner not inconsistent with the Plan. The Board of Directors
hereby reserves the right to amend or modify the terms and provisions of the
Plan and of any outstanding Options to the extent necessary to qualify any or
all Options under the Plan for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code, provided, however, that the consent
of a Participant is required if such amendment or modification would cause
unfavorable income tax treatment for such Participant.
SECTION 13. Withholding
The Company's obligation to deliver shares of stock upon the exercise of
any Option or SAR or the granting of an Award and to make payment upon exercise
of any SAR shall be subject to the satisfaction by the Participant of all
applicable federal, state and local income and employment tax withholding
requirements.
SECTION 14. Effective Date and Duration of the Plan
14.1 Effective Date. The Plan shall become effective as of May 20, 1998
(the date of approval of the Plan by the stockholders of the Company).
14.2 Duration. Unless sooner terminated in accordance with Section 10
hereof, the Plan shall terminate upon the earlier of (i) the tenth anniversary
of the effective date or (ii) the date on which all shares available for
issuance under the Plan shall have been issued pursuant to any Awards or the
exercise or cancellation of Options and SARs granted hereunder. If the date of
termination is determined under (i) above, then Plan Benefits outstanding on
such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Plan Benefits.
SECTION 15. Governing Law
The Plan and all actions taken thereunder shall be governed by the laws of
the State of Delaware.
