As filed with the Securities and Exchange Commission on January 30, 1998.
File No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INDUSTRIAL DISTRIBUTION GROUP, INC.
--------------------------------------------------
(Exact Name of Issuer as Specified in its Charter)
Delaware 58-2299339
(State or Other (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation or
Organization)
2500 Royal Place
Tucker, Georgia 30084
(770) 243-9000
- ----------------------------------------------------------------------
(Address and Telephone Number of Issuer's Principal Executive Offices)
INDUSTRIAL DISTRIBUTION GROUP, INC. STOCK INCENTIVE PLAN
--------------------------------------------------------
(Full Title of the Plans)
Martin S. Pinson
Chairman and Chief Executive Officer
2500 Royal Place
Tucker, Georgia 30084
(770) 243-9000
- ------------------------------------------------------------------------------
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
Copies to:
W. Randy Eaddy, Esq.
KILPATRICK STOCKTON LLP
1100 Peachtree Street, N.E.
Atlanta, Georgia 30309-4530
(404) 815-6500
<TABLE>
<CAPTION>
Calculation of Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered Per Share <F1> Offering Price Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
Common Stock 1,000,000 shares $17.09 $17,093,750 $5,042.66
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> Determined in accordance with Rule 457(c) under the
Securities Act of 1933, based on $17.09, the average of the high
and low prices on the New York Stock Exchange on January 28,
1998.
</FN>
</TABLE>
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated by
reference into this Registration Statement and are deemed to be a
part hereof from the date of the filing of such documents:
(1) The Registrant's Prospectus dated September 23, 1997,
filed pursuant to Rule 424(b) under the Securities Act of 1933,
as amended (the "Securities Act").
(2) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act of 1934, as
amended (the "Exchange Act"), since the filing of the
Prospectus.
(3) The description of the Common Stock contained in the
Registrant's registration statement on Form 8-A, filed
under Section 12 of the Exchange Act, including all
amendments or reports filed for the purpose of updating
such description.
(4) All other documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all
securities offered pursuant to this Registration
Statement have been sold or which deregisters all
securities that remain unsold.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation provides for
indemnification of directors to the full extent permitted by
Delaware law and, to the extent permitted by such law, eliminates
or limits the personal liability of directors to the Registrant
and its stockholders for monetary damages for certain breaches of
fiduciary duty and the duty of care. Such indemnification may be
available for liabilities arising in connection with this
Offering. Insofar as indemnification for liabilities under the
Securities Act may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions,
the Registrant 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. Pursuant to its Certificate of
Incorporation, the Registrant may indemnify its officers,
employees, agents and other persons to the fullest extent
permitted by Delaware law. The Registrant's Bylaws obligate the
II-1
<PAGE>
Registrant, under certain circumstances, to advance expenses to
its directors and officers in defending an action, suit or
proceeding for which indemnification may be sought.
The Registrant's Bylaws also provide that the Registrant
shall have the power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or
agent of the Registrant, or who, while a director, officer,
employee or agent, is or was serving as a director, officer,
trustee, general partner, employee or agent of one of the
Registrant's subsidiaries or, at the request of the Registrant,
of any other organization, against any liability asserted against
such person or incurred by such person in any such capacity,
whether the Registrant would have the power to indemnify such
person against such liability under Delaware law. The Registrant
maintains such insurance on behalf of all of its directors and
executive officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
The exhibits included as part of this Registration
Statement are as follows:
Exhibit Number Description
4 Industrial Distribution Group, Inc.
Stock Incentive Plan
5 Opinion and Consent of Kilpatrick
Stockton LLP, counsel to the
Registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Miller & Co. LLP
23.3 Consent of Schenck & Associates, SC
23.4 Consent of Baird, Kurtz & Dobson
II-2
<PAGE>
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 a post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act 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 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Atlanta, State of Georgia, on January 29, 1998.
INDUSTRIAL DISTRIBUTION GROUP, INC.
By: /s/ Martin S. Pinson
Martin S. Pinson
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Martin S. Pinson
and Douglass C. Smith as attorneys-in-fact, having the power of
substitution, for them in any and all capacities, to sign any
amendments to this Registration Statement on Form S-8 and to file
the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following persons
in the capacities indicated on January 29, 1998.
/s/ Martin S. Pinson Chief Executive Officer and Chairman of the
MARTIN S. PINSON Board of Directors (Principal Executive
Officer)
/s/ Jack P. Healey Vice Chairman, Chief Financial Officer,
JACK P. HEALEY Secretary and Director (Principal Financial
and Accounting Officer)
/s/ David K. Barth Director
DAVID K. BARTH
/s/ William J. Burkland Director
WILLIAM J. BURKLAND
/s/ William R. Fenoglio Director
WILLIAM R. FENOGLIO
/s/ William T. Parr Director
WILLIAM T. PARR
/s/ George L. Sachs, Jr. Director
GEORGE L. SACHS, JR.
/s/ Richard M. Seigel Director
RICHARD M. SEIGEL
/s/ Andrew B. Shearer Director
ANDREW B. SHEARER
/s/ Douglass C. Smith Director
DOUGLASS C. SMITH
II-4<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
Exhibit Number Description
4 Industrial Distribution Group, Inc.
Stock Incentive Plan
5 Opinion and Consent of Kilpatrick
Stockton LLP, counsel to the
Registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Miller & Co. LLP
23.3 Consent of Schenck & Associates, SC
23.4 Consent of Baird, Kurtz & Dobson
INDUSTRIAL DISTRIBUTION GROUP, INC.
STOCK INCENTIVE PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION . . . . . 3
1.1 Establishment of the Plan . . . . . . . . . 3
1.2 Purpose of the Plan . . . . . . . . . . . . 3
1.3 Duration of the Plan . . . . . . . . . . . . 4
ARTICLE 2. DEFINITIONS . . . . . . . . . . . . . . . . . 4
ARTICLE 3. ADMINISTRATION . . . . . . . . . . . . . . . . 10
3.1 The Committee . . . . . . . . . . . . . . . 10
3.2 Authority of the Committee . . . . . . . . . 10
3.3 Decisions Binding . . . . . . . . . . . . . 11
ARTICLE 4. SHARES SUBJECT TO THE PLAN . . . . . . . . . . 11
4.1 Number of Shares . . . . . . . . . . . . . . 11
4.2 Lapsed Awards . . . . . . . . . . . . . . . 12
4.3 Adjustments In Authorized Shares . . . . . . 13
ARTICLE 5. ELIGIBILITY AND PARTICIPATION . . . . . . . . 13
ARTICLE 6. STOCK OPTIONS . . . . . . . . . . . . . . . . 14
6.1 Grant of Options . . . . . . . . . . . . . . 14
6.2 Agreement . . . . . . . . . . . . . . . . . 14
6.3 Option Price . . . . . . . . . . . . . . . . 15
6.4 Duration of Options . . . . . . . . . . . . 15
6.5 Exercise of Options . . . . . . . . . . . . 15
6.6 Payment . . . . . . . . . . . . . . . . . . 16
6.7 Limited Transferability . . . . . . . . . . 17
6.8 Shareholder Rights . . . . . . . . . . . . . 17
ARTICLE 7. STOCK APPRECIATION RIGHTS . . . . . . . . . . 18
7.1 Grants of SARs . . . . . . . . . . . . . . . 18
7.2 Duration of SARs . . . . . . . . . . . . . . 18
7.3 Exercise of SAR . . . . . . . . . . . . . . 18
7.4 Determination of Payment of Cash and/or
Common Stock Upon Exercise of SAR . . . . . 19
7.5 Nontransferability . . . . . . . . . . . . . 19
7.6 Shareholder Rights . . . . . . . . . . . . . 20
ARTICLE 8. RESTRICTED STOCK; STOCK AWARDS . . . . . . . . 20
8.1 Grants . . . . . . . . . . . . . . . . . . . 20
8.2 Restricted Period; Lapse of Restrictions . . 20
8.3 Rights of Holder; Limitations Thereon . . . 21
8.4 Delivery of Unrestricted Shares . . . . . . 23
8.5 Nonassignability of Restricted Stock . . . . 23
ARTICLE 9. PERFORMANCE SHARE AWARDS . . . . . . . . . . . 23
9.1 Award . . . . . . . . . . . . . . . . . . . 23
9.2 Earning the Award . . . . . . . . . . . . . 24
9.3 Payment . . . . . . . . . . . . . . . . . . 24
9.4 Shareholder Rights . . . . . . . . . . . . . 25
ARTICLE 10. BENEFICIARY DESIGNATION . . . . . . . . . . . 25
<PAGE>
ARTICLE 11. DEFERRALS . . . . . . . . . . . . . . . . . . 26
ARTICLE 12. RIGHTS OF EMPLOYEES . . . . . . . . . . . . . 26
12.1 Employment . . . . . . . . . . . . . . . . . 26
12.2 Participation . . . . . . . . . . . . . . . 26
ARTICLE 13. CHANGE IN CONTROL . . . . . . . . . . . . . . 27
13.1 Definition . . . . . . . . . . . . . . . . . 27
13.2 Limitation on Awards . . . . . . . . . . . . 29
ARTICLE 14. AMENDMENT, MODIFICATION AND TERMINATION . . . 30
14.1 Amendment, Modification and Termination . . 30
14.2 Awards Previously Granted . . . . . . . . . 30
14.3 Compliance With Code Section 162(m) . . . . 30
ARTICLE 15. WITHHOLDING . . . . . . . . . . . . . . . . . 31
15.1 Tax Withholding . . . . . . . . . . . . . . 31
15.2 Share Withholding . . . . . . . . . . . . . 31
ARTICLE 16. INDEMNIFICATION . . . . . . . . . . . . . . . 32
ARTICLE 17. SUCCESSORS . . . . . . . . . . . . . . . . . . 32
ARTICLE 18. LEGAL CONSTRUCTION . . . . . . . . . . . . . . 33
18.1 Gender and Number . . . . . . . . . . . . . 33
18.2 Severability . . . . . . . . . . . . . . . . 33
18.3 Requirements of Law . . . . . . . . . . . . 33
18.4 Regulatory Approvals and Listing . . . . . . 33
18.5 Securities Law Compliance . . . . . . . . . 34
18.6 Governing Law . . . . . . . . . . . . . . . 34
<PAGE>
INDUSTRIAL DISTRIBUTION GROUP, INC.
STOCK INCENTIVE PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Industrial Distribution
Group, Inc., a Delaware Corporation (hereinafter referred to
as the "COMPANY"), hereby establishes a stock option and
incentive award plan known as the "Industrial Distribution
Group, Inc. Stock Incentive Plan" (the "PLAN"), as set forth
in this document. The Plan permits the grant of Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock,
Stock Awards, Performance Share Awards and Stock Appreciation
Rights.
The Plan shall become effective on the date it is
approved by the Board of Directors (the "EFFECTIVE DATE"),
subject to approval of the Plan by the Company's stockholders
within the 12-month period immediately thereafter, and shall
remain in effect as provided in SECTION 1.3.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to
secure for the Company and its shareholders the benefits of
the incentive inherent in stock ownership in the Company by
employees, directors, and other persons who perform services
for the Company, who are responsible for its future growth and
continued success. The Plan promotes the success and enhances
the value of the Company by linking the personal interests of
Participants (as defined below) to those of the Company's
shareholders, and by providing Participants with an incentive
for outstanding performance.
The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract and retain the
services of Participants upon whose judgment, interest and
special effort the successful conduct of its operation largely
depends.
<PAGE>
1.3 DURATION OF THE PLAN. The Plan shall commence on
the Effective Date, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan
at any time pursuant to ARTICLE 14, until the day prior to the
tenth (10th) anniversary of the Effective Date.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have
the meanings set forth below:
(a) "AGREEMENT" means an agreement entered into by each
Participant and the Company, setting forth the terms
and provisions applicable to Awards granted to
Participants under this Plan.
(b) "AWARD" means, individually or collectively, a grant
under this Plan of Incentive Stock Options,
Nonqualified Stock Options, Restricted Stock, Stock
Awards, Performance Share Awards or Stock
Appreciation Rights.
(c) "BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall
have the meaning ascribed to such term in Rule 13d-3
of the Exchange Act.
(d) "BOARD" or "BOARD OF DIRECTORS" means the Board of
Directors of the Company.
(e) "CAUSE" means: (i) willful misconduct on the part
of a Participant that is materially detrimental to
the Company; or (ii) the conviction of a Participant
for the commission of a felony. The existence of
"Cause" under either (i) or (ii) shall be determined
by the Committee. Notwithstanding the foregoing, if
the Participant has entered into an employment
agreement that is binding as of the date of
employment termination, and if such employment
agreement defines "Cause," and/or provides a means
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<PAGE>
of determining whether "Cause" exists, such
definition of "Cause" and means of determining its
existence shall supersede this provision.
(f) "CODE" means the Internal Revenue Code of 1986, as
amended from time to time.
(g) "COMMITTEE" means a committee of two or more Non-
Employee Directors appointed by the Board to
administer the Plan with respect to grants of
Awards, as specified in ARTICLE 3, and to perform
the function set forth therein.
(h) "COMMON STOCK" means the common stock of the
Company, par value $.01 per share.
(i) "COMPANY" means Industrial Distribution Group, Inc.,
a Delaware corporation, or any successor thereto as
provided in ARTICLE 17.
(j) "CORRESPONDING SAR" means an SAR that is granted in
relation to a particular Option and that can be
exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which
the SAR relates.
(k) "DIRECTOR" means any individual who is a member of
the Board of Directors of the Company.
(l) "DISABILITY" shall have the meaning ascribed to such
term in the Company's long-term disability plan
covering the Participant, or in the absence of such
plan, a meaning consistent with Section 22(e)(3) of
the Code.
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(m) "EMPLOYEE" means any employee of the Company, or the
Company's Subsidiaries. Directors who are not
otherwise employed by the Company or the Company's
Subsidiaries are not considered Employees under this
Plan.
(n) "EFFECTIVE DATE" shall have the meaning ascribed to
such term in SECTION 1.1.
(o) "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended from time to time, or any successor
act thereto.
(p) "FAIR MARKET VALUE" shall be determined as follows:
(i) If, on the relevant date, the Shares are traded
on a national or regional securities exchange or
on The Nasdaq Stock Market ("Nasdaq") and closing
sale prices for the Shares are customarily quoted,
on the basis of the closing sale price on the
principal securities exchange on which the Shares
may then be traded or, if there is no such sale on
the relevant date, then on the immediately
preceding day on which a sale was reported;
(ii) If, on the relevant date, the Shares are not
listed on any securities exchange or traded on
Nasdaq, but nevertheless are publicly traded
and reported on Nasdaq without closing sale
prices for the Shares being customarily
quoted, on the basis of the mean between the
closing bid and asked quotations in such other
over-the-counter market as reported by Nasdaq;
but, if there are no bid and asked quotations
in the over-the-counter market as reported by
Nasdaq on that date, then the mean between the
closing bid and asked quotations in the over-
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the-counter market as reported by Nasdaq on
the immediately preceding day such bid and
asked prices were quoted; and
(iii) If, on the relevant date, the Shares are not
publicly traded as described in (i) or (ii),
on the basis of the good faith determination
of the Committee.
(q) "INCENTIVE STOCK OPTION" or "ISO" means an option to
purchase Shares granted under ARTICLE 6 which is
designated as an Incentive Stock Option and is
intended to meet the requirements of Section 422 of
the Code.
(r) "INITIAL VALUE" means, with respect to a Corresponding
SAR, the Option Price per share of the related Option,
and with respect to an SAR granted independently of an
Option, the Fair Market Value of one share of Common
Stock on the date of grant.
(s) "INSIDER" shall mean an Employee who is, on the
relevant date, an officer or a director, or a ten
percent (10%) beneficial owner of any class of the
Company's equity securities that is registered
pursuant to Section 12 of the Exchange Act or any
successor provision, as "officer" and "director" are
defined under Section 16 of the Exchange Act.
(t) "NAMED EXECUTIVE OFFICER" means a Participant who,
as of the date of vesting and/or payout of an Award
is one of the group of "covered employees," as
defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
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<PAGE>
(u) "NON-EMPLOYEE DIRECTOR" means a Director of the
Company who satisfies the requirements under Rule
16b-3(b)(3) of the Exchange Act.
(v) "NONQUALIFIED STOCK OPTION" or "NQSO" means an
option to purchase Shares granted under ARTICLE 6,
and which is not intended to meet the requirements
of Code Section 422.
(w) "OPTION" means an Incentive Stock Option or a
Nonqualified Stock Option.
(x) "OPTION PRICE" means the price at which a Share may
be purchased by a Participant pursuant to an Option,
as determined by the Committee. The Option Price
may not be less than the Fair Market Value of a
Share on the date the Option is granted.
(y) "PARTICIPANT" means an Employee, a Director, or
other person who performs services for the Company
or a Subsidiary, who has been determined by the
Committee to contribute significantly to the profits
or growth of the Company and who has been granted an
Award under the Plan which is outstanding.
(z) "PERFORMANCE SHARE AWARD" means an Award, which, in
accordance with and subject to an Agreement, will
entitle the Participant, or his estate or
beneficiary in the event of the Participant's death,
to receive cash, Common Stock or a combination
thereof.
(aa) "PERSON" shall have the meaning ascribed to such
term in Section 3(a)(9) of the Exchange Act and used
in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof.
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<PAGE>
(bb) "RETIREMENT" shall mean retiring from employment
with the Company or any Subsidiary on or after
attaining age 65.
(cc) "RESTRICTED STOCK" means an Award of Common Stock
granted in accordance with the terms of ARTICLE 8
and the other provisions of the Plan, and which is
nontransferable and subject to a substantial risk of
forfeiture. Shares of Common Stock shall cease to
be Restricted Stock when, in accordance with the
terms hereof and the applicable Agreement, they
become transferable and free of substantial risk of
forfeiture.
(dd) "SAR" means a stock appreciation right that entitles
the holder to receive, with respect to each share of
Common Stock encompassed by the exercise of such
SAR, the amount determined by the Committee and
specified in an Agreement. In the absence of such
specification, the holder shall be entitled to
receive in cash, with respect to each share of
Common Stock encompassed by the exercise of such
SAR, the excess of the Fair Market Value on the date
of exercise over the Initial Value. References to
"SARs" include both Corresponding SARs and SARs
granted independently of Options, unless the context
requires otherwise.
(ee) "SHARES" means the shares of Common Stock of the
Company (including any new, additional or different
stock or securities resulting from the changes
described in Section 4.3).
(ff) "STOCK AWARD" means a grant of Shares under ARTICLE
8 that is not generally subject to restrictions and
pursuant to which a certificate for the Shares is
transferred to the Employee.
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<PAGE>
(gg) "SUBSIDIARY" means any corporation, partnership,
joint venture or other entity in which the Company
has a fifty percent (50%) or greater voting
interest.
ARTICLE 3. ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by
the Compensation Committee of the Board, or by any other
Committee appointed by the Board that is granted authority to
administer the Plan, with such Committee consisting of not
less than two (2) Directors who are Non-Employee Directors.
The members of the Committee shall be appointed from time to
time by, and shall serve at the discretion of, the Board of
Directors.
3.2 AUTHORITY OF THE COMMITTEE. Subject to the
provisions of the Plan, the Committee shall have full power to
select the Employees, Directors, and other persons who perform
services for the Company or a Subsidiary, who are responsible
for the future growth and success of the Company who shall
participate in the Plan (who may change from year to year);
determine the size and types of Awards; determine the terms
and conditions of Awards in a manner consistent with the Plan
(including conditions on the exercisability of all or a part
of an Option or SAR, restrictions on transferability and
vesting provisions on Restricted Stock or Performance Share
Awards and the duration of the Awards); construe and interpret
the Plan and any agreement or instrument entered into under
the Plan; establish, amend or waive rules and regulations for
the Plan's administration; and (subject to the provisions of
ARTICLE 14) amend the terms and conditions of any outstanding
Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan, including
accelerating the time any Option or SAR may be exercised and
establishing different terms and conditions relating to the
effect of the termination of employment or other services to
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the Company. Further, the Committee shall make all other
determinations which may be necessary or advisable in the
Committee's opinion for the administration of the Plan. All
expenses of administering this Plan shall be borne by the
Company.
3.3 DECISIONS BINDING. All determinations and decisions
made by the Committee pursuant to the provisions of the Plan
and all related orders and resolutions of the Board shall be
final, conclusive and binding on all Persons, including the
Company, the shareholders, Employees, Participants and their
estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 NUMBER OF SHARES. Subject to adjustment as provided
in SECTION 4.3, the total number of Shares available for grant
of Awards under the Plan shall not exceed fifteen percent
(15%) of the total issued and outstanding shares as of the
date any Award is granted; provided, that the number of Shares
available for grant as ISOs under the Plan shall not exceed an
aggregate of 1,000,000 Shares. The Shares may, in the
discretion of the Company, be either authorized but unissued
Shares or Shares held as treasury shares, including Shares
purchased by the Company.
The following rules shall apply for purposes of the
determination of the number of Shares available for grant
under the Plan:
(a) While an Option, SAR, Stock Award, Restricted
Stock Award or Performance Share Award is
outstanding, it shall be counted against the
authorized pool of Shares, regardless of its
vested status.
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(b) The grant of an Option, SAR, Stock Award,
Restricted Stock Award or Performance Share
Award shall reduce the Shares available for
grant under the Plan by the number of Shares
subject to such Award.
4.2 LAPSED AWARDS. If any Award granted under this Plan
is canceled, terminates, expires or lapses for any reason, or
if Shares are withheld in payment of the Option Price or for
withholding taxes, any Shares subject to such Award or that
are withheld shall again be available for the grant of an
Award under the Plan. However, in the event that prior to the
Award's cancellation, termination, expiration or lapse, the
holder of the Award at any time received one or more "benefits
of ownership" pursuant to such Award (as defined by the
Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange
Act), the Shares subject to such Award shall not again be made
available for regrant under the Plan.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of
any change in corporate capitalization, such as a stock split,
or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of
stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such
term in Code Section 368) or any partial or complete
liquidation of the Company, such adjustment shall be made in
the number and class of Shares which may be delivered under
the Plan, and in the number and class of and/or price of
Shares subject to outstanding Awards granted under the Plan,
as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of
Shares subject to any Award shall always be a whole number and
the Committee shall make such adjustments as are necessary to
insure Awards of whole Shares.
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ARTICLE 5. ELIGIBILITY AND PARTICIPATION
Any key Employee of the Company or any Subsidiary,
including any such Employee who is also a director of the
Company or any Subsidiary, any non-employee Director, and any
other person who performs services for the Company or a
Subsidiary, whose judgment, initiative and efforts contribute
or may be expected to contribute materially to the successful
performance of the Company or any Subsidiary shall be eligible
to receive an Award under the Plan. In determining the
individuals to whom such an Award shall be granted and the
number of Shares which may be granted pursuant to that Award,
the Committee shall take into account the duties of the
respective individual, his or her present and potential
contributions to the success of the Company or any Subsidiary,
and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and
provisions of the Plan, Options may be granted to Participants
at any time and from time to time as shall be determined by
the Committee. The Committee shall have discretion in
determining the number of Shares subject to Options granted to
each Participant. An Option may be granted with or without a
Corresponding SAR. No Participant may be granted ISOs (under
the Plan and all other incentive stock option plans of the
Company and any Subsidiary) which are first exercisable in any
calendar year for Common Stock having an aggregate Fair Market
Value (determined as of the date an Option is granted) that
exceeds $100,000. The preceding annual limit shall not apply
to NQSOs. The Committee may grant a Participant ISOs, NQSOs
or a combination thereof, and may vary such Awards among
Participants.
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6.2 AGREEMENT. Each Option grant shall be evidenced by
an Agreement that shall specify the Option Price, the duration
of the Option, the number of Shares to which the Option
pertains and such other provisions as the Committee shall
determine. The Option Agreement shall further specify whether
the Award is intended to be an ISO or an NQSO. Any portion of
an Option that is not designated as an ISO or otherwise fails
or is not qualified as an ISO (even if designated as an ISO)
shall be a NQSO. If the Option is granted in connection with
a Corresponding SAR, the Agreement shall also specify the
terms that apply to the exercise of the Option and
Corresponding SAR.
6.3 OPTION PRICE. The Option Price for each grant of an
ISO or NQSO shall not be less than one hundred percent (100%)
of the Fair Market Value of a Share on the date the ISO is
granted. In no event, however, shall any Participant who, at
any time would otherwise be granted an Option, owns (within
the meaning of Section 424(d) of the Code) stock of the
Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company
be eligible to receive an ISO at an Option Price less than one
hundred ten percent (110%) of the Fair Market Value of a share
on the date the ISO is granted.
6.4 DURATION OF OPTIONS. Each Option shall expire at
such time as the Committee shall determine at the time of
grant; provided, however, that no Option shall be exercisable
later than the tenth (10th) anniversary date of its grant;
provided, further, however, that any ISO granted to any
Participant who at such time owns (within the meaning of
Section 424(d) of the Code) stock of the Company possessing
more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company, shall be exercisable
not later than the fifth (5th) anniversary date of its grant.
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6.5 EXERCISE OF OPTIONS. Options granted under the Plan
shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each
instance approve, including conditions related to the
employment of the Participant with the Company or any
Subsidiary, which need not be the same for each grant or for
each Participant. Each Option shall be exercisable for such
number of Shares and at such time or times, including periodic
installments, as may be determined by the Committee at the
time of the grant. The Committee may provide in the Agreement
for automatic accelerated vesting and other rights upon the
occurrence of a Change in Control of the Company. Except as
otherwise provided in the Agreement and ARTICLE 13, the right
to purchase Shares that are exercisable in periodic
installments shall be cumulative so that when the right to
purchase any Shares has accrued, such Shares or any part
thereof may be purchased at any time thereafter until the
expiration or termination of the Option. The exercise or
partial exercise of either an Option or its Corresponding SAR
shall result in the termination of the other to the extent of
the number of Shares with respect to which the Option or
Corresponding SAR is exercised.
6.6 PAYMENT. Options shall be exercised by the delivery
of a written notice of exercise to the Company, setting forth
the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares. The
Option Price upon exercise of any Option shall be payable to
the Company in full, either: (a) in cash, (b) cash equivalent
approved by the Committee, (c) if approved by the Committee,
by tendering previously acquired Shares (or delivering a
certification of ownership of such Shares) having an aggregate
Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must
have been held by the Participant for six months [if required
for accounting purposes] and for the period required by law,
if any, prior to their tender to satisfy the Option Price), or
(d) by a combination of (a), (b) and (c). The Committee also
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may allow cashless exercises as permitted under 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.
As soon as practicable after receipt of a written
notification of exercise and full payment, the Company shall
deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s), and may place
appropriate legends on the certificates representing such
Shares.
6.7 LIMITED TRANSFERABILITY. If permitted by the
Committee in the Agreement, a Participant may transfer an
Option granted hereunder, including but not limited to
transfers to members of his or her Immediate Family (as
defined below), to one or more trusts for the benefit of such
Immediate Family members, or to one or more partnerships where
such Immediate Family members are the only partners, if (i)
the Participant does not receive any consideration in any form
whatsoever for such transfer, (ii) such transfer is permitted
under applicable tax laws, and (iii) the Participant is an
Insider, such transfer is permitted under Rule 16b-3 of the
Exchange Act as in effect from time to time. Any Option so
transferred shall continue to be subject to the same terms and
conditions in the hands of the transferee as were applicable
to said Option immediately prior to the transfer thereof. Any
reference in any such Agreement to the employment by or
performance of services for the Company by the Participant
shall continue to refer to the employment of, or performance
by, the transferring Participant. For purposes hereof,
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"IMMEDIATE FAMILY" shall mean the Participant and the
Participant's spouse, children and grandchildren. Any Option
that is granted pursuant to any Agreement that did not
initially expressly allow the transfer of said Option and that
has not been amended to expressly permit such transfer, shall
not be transferable by the Participant otherwise than by will
or by the laws of descent and distribution and such Option
thus shall be exercisable in the Participant's lifetime only
by the Participant.
6.8 SHAREHOLDER RIGHTS. No Participant shall have any
rights as a shareholder with respect to Shares subject to his
Option until the issuance of such Shares to the Participant
pursuant to the exercise of such Option.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANTS OF SARS. The Committee shall designate
Participants to whom SARs are granted, and will specify the
number of Shares of Common Stock subject to each grant. An
SAR may be granted with or without a related Option. All SARs
granted under this Plan shall be subject to an Agreement in
accordance with the terms of this Plan. A payment to the
Participant upon the exercise of a Corresponding SAR may not
be more than the difference between the Fair Market Value of
the Shares subject to the ISO on the date of grant and the
Fair Market Value of the Shares on the date of exercise of the
Corresponding SAR.
7.2 DURATION OF SARS. The duration of an SAR shall be
set forth in the Agreement as determined by the Committee. An
SAR that is granted as a Corresponding SAR shall have the same
duration as the Option to which it relates. An SAR shall
terminate due to the Participant's termination of employment
at the same time as the date specified in ARTICLE 6 with
respect to Options, regardless of whether the SAR was granted
in connection with the grant of an Option.
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7.3 EXERCISE OF SAR. An SAR may be exercised in whole
at any time or in part from time to time and at such times and
in compliance with such requirements as the Committee shall
determine as set forth in the Agreement; provided, however,
that a Corresponding SAR that is related to an Incentive Stock
Option may be exercised only to the extent that the related
Option is exercisable and only when the Fair Market Value of
the Shares exceeds the Option Price of the related ISO. An
SAR granted under this Plan may be exercised with respect to
any number of shares less than a full number of whole shares
for which the SAR could be exercised. A partial exercise of
an SAR shall not affect the right to exercise the SAR from
time to time in accordance with this Plan and the applicable
Agreement with respect to the remaining shares subject to the
SAR. The exercise of either an Option or Corresponding SAR
shall result in the termination of the other to the extent of
the number of Shares with respect to which the Option or its
Corresponding SAR is exercised.
7.4 DETERMINATION OF PAYMENT OF CASH AND/0R COMMON STOCK
UPON EXERCISE OF SAR. At the Committee's discretion, the
amount payable as a result of the exercise of an SAR may be
settled in cash, Common Stock, or a combination of cash and
Common Stock. A fractional share shall not be deliverable
upon the exercise of an SAR, but a cash payment shall be made
in lieu thereof.
7.5 NONTRANSFERABILITY. Each SAR granted under the Plan
shall be nontransferable except by will or by the laws of
descent and distribution. During the lifetime of the
Participant to whom the SAR is granted, the SAR may be
exercised only by the Participant. No right or interest of a
Participant in any SAR shall be liable for, or subject to any
lien, obligation or liability of such Participant. A
Corresponding SAR shall be subject to the same restrictions on
transfer as the ISO to which it relates.
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Notwithstanding the foregoing, if the Agreement so
provides, a Participant may transfer an SAR (other than a
Corresponding SAR that relates to an Incentive Stock Option)
under the same rules and conditions as are set forth in
SECTION 6.7.
7.6 SHAREHOLDER RIGHTS. No Participant shall have any
rights as a shareholder with respect to Shares subject to his
SAR until the issuance of Shares (if any) to the Participant
pursuant to the exercise of such SAR.
ARTICLE 8. RESTRICTED STOCK; STOCK AWARDS
8.1 GRANTS. The Committee may from time to time in its
discretion grant Restricted Stock and Stock Awards to
Participants and may determine the number of Shares of
Restricted Stock or Stock Awards to be granted. The Committee
shall determine the terms and conditions of, and the amount of
payment, if any, to be made by the Employee for, such
Restricted Stock. A grant of Restricted Stock may, in
addition to other conditions, require the Participant to pay
for such Shares of Restricted Stock, but the Committee may
establish a price below Fair Market Value at which the
Participant can purchase the Shares of Restricted Stock. Each
grant of Restricted Stock shall be evidenced by an Agreement
containing terms and conditions not inconsistent with the Plan
as the Committee shall determine to be appropriate in its sole
discretion.
8.2 RESTRICTED PERIOD; LAPSE OF RESTRICTIONS. At the
time a grant of Restricted Stock is made, the Committee shall
establish a period or periods of time (the "RESTRICTED PERIOD")
applicable to such grant which, unless the Committee
otherwise provides, shall not be less than one year. Subject
to the other provisions of this SECTION 8, at the end of the
Restricted Period all restrictions shall lapse and the
Restricted Stock shall vest in the Participant. At the time a
grant is made, the Committee may, in its discretion, prescribe
conditions for the incremental lapse of restrictions during
the Restricted Period and for the lapse or termination of
restrictions upon the occurrence of other conditions in
addition to or other than the expiration of the Restricted
Period with respect to all or any portion of the Restricted
Stock. Such conditions may, but need not, include the
following:
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(a) The death, Disability or Retirement of the
Employee to whom Restricted Stock is granted,
or
(b) The occurrence of a Change in Control (as
defined in SECTION 13.1).
The Committee may also, in its discretion, shorten or
terminate the Restricted Period, or waive any conditions for
the lapse or termination of restrictions with respect to all
or any portion of the Restricted Stock at any time after the
date the grant is made.
8.3 RIGHTS OF HOLDER; LIMITATIONS THEREON. Upon a grant
of Restricted Stock, a stock certificate (or certificates)
representing the number of Shares of Restricted Stock granted
to the Participant shall be registered in the Participant's
name and shall be held in custody by the Company or a bank
selected by the Committee for the Participant's account.
Following such registration, the Participant shall have the
rights and privileges of a shareholder as to such Restricted
Stock, including the right to receive dividends, if and when
declared by the Board of Directors, and to vote such
Restricted Stock, except that the right to receive cash
dividends shall be the right to receive such dividends either
in cash currently or by payment in Restricted Stock, as the
Committee shall determine, and except further that, the
following restrictions shall apply:
(a) The Participant shall not be entitled to
delivery of a certificate until the expiration
or termination of the Restricted Period for
the Shares represented by such certificate and
the satisfaction of any and all other
conditions prescribed by the Committee;
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<PAGE>
(b) None of the Shares of Restricted Stock may be
sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the
Restricted Period and until the satisfaction
of any and all other conditions prescribed by
the Committee; and
(c) All of the Shares of Restricted Stock that
have not vested shall be forfeited and all
rights of the Participant to such Shares of
Restricted Stock shall terminate without
further obligation on the part of the Company,
unless the Participant has remained an
employee (or non-Employee Director) of the
Company or any of its Subsidiaries, until the
expiration or termination of the Restricted
Period and the satisfaction of any and all
other conditions prescribed by the Committee
applicable to such Shares of Restricted Stock.
Upon the forfeiture of any shares of
Restricted Stock, such forfeited Shares shall
be transferred to the Company without further
action by the Participant and shall, in
accordance with SECTION 4.2, again be
available for grant under the Plan.
With respect to any Shares received as a result of
adjustments under SECTION 4.3 hereof and any Shares received
with respect to cash dividends declared on Restricted Stock,
the Participant shall have the same rights and privileges, and
be subject to the same restrictions, as are set forth in this
SECTION 8.
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8.4 DELIVERY OF UNRESTRICTED SHARES. Upon the
expiration or termination of the Restricted Period for any
Shares of Restricted Stock and the satisfaction of any and all
other conditions prescribed by the Committee, the restrictions
applicable to such Shares of Restricted Stock shall lapse and
a stock certificate for the number of Shares of Restricted
Stock with respect to which the restrictions have lapsed shall
be delivered, free of all such restrictions except any that
may be imposed by law, to the holder of the Restricted Stock.
The Company shall not be required to deliver any fractional
Share but will pay, in lieu thereof, the Fair Market Value
(determined as of the date the restrictions lapse) of such
fractional share to the holder thereof. Concurrently with the
delivery of a certificate for Restricted Stock, the holder
shall be required to pay an amount necessary to satisfy any
applicable federal, state and local tax requirements as set
out in ARTICLE 15 below.
8.5 NONASSIGNABILITY OF RESTRICTED STOCK. Unless the
Committee provides otherwise in the Agreement, no grant of,
nor any right or interest of a Participant in or to, any
Restricted Stock, or in any instrument evidencing any grant of
Restricted Stock under the Plan, may be assigned, encumbered
or transferred except, in the event of the death of a
Participant, by will or the laws of descent and distribution.
ARTICLE 9. PERFORMANCE SHARE AWARDS
9.1 AWARD. The Committee may designate Participants to
whom Performance Share Awards will be granted from time to
time for no consideration and specify the number of shares of
Common Stock covered by the Award.
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9.2 EARNING THE AWARD. A Performance Share Award, or
portion thereof, will be earned, and the Participant will be
entitled to receive Common Stock, a cash payment or a
combination thereof, only upon the achievement by the
Participant, the Company, or a Subsidiary of such performance
objectives as the Committee, in its discretion, shall
prescribe on the date of grant. To the extent required, the
performance objectives applicable to Awards to Named Executive
Officers intended to qualify under Code Section 162(m) shall
be selected from among the following measures: return on
equity or assets, earnings per share, total earnings, earnings
growth, return on capital, economic value added and increase
in Fair Market Value of the Shares. The determination as to
whether such objectives have been achieved shall be made by
the Committee, and such determination shall be conclusive;
provided, however, that the period in which such performance
is measured shall be at least one year.
9.3 PAYMENT. In the discretion of the Committee, the
amount payable when a Performance Share Award is earned may be
settled in cash, by the grant of Common Stock or a combination
of cash and Common Stock. The aggregate Fair Market Value of
the Common Stock received by the Participant pursuant to a
Performance Share Award, together with any cash paid to the
Participant, shall be equal to the aggregate Fair Market
Value, on the date the Performance Shares are earned, of the
number of shares of Common Stock equal to each Performance
Share earned. A fractional share will not be deliverable when
a Performance Share Award is earned, but a cash payment will
be made in lieu thereof.
9.4 SHAREHOLDER RIGHTS. No Participant shall have, as a
result of receiving a Performance Share Award, any rights as a
shareholder until and to the extent that the Performance
Shares are earned and Common Stock is transferred to such
Participant. If the Agreement so provides, a Participant may
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receive a cash payment equal to the dividends that would have
been payable with respect to the number of shares of Common
Stock covered by the Award between (a) the date that the
Performance Shares are awarded and (b) the date that a
transfer of Common Stock to the Participant, cash settlement,
or combination thereof is made pursuant to the Performance
Share Award. A Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of a Performance
Share Award or the right to receive Common Stock thereunder
other than by will or the laws of descent and distribution.
After a Performance Share Award is earned and paid in Common
Stock, a Participant will have all the rights of a shareholder
with respect to the Common Stock so awarded.
ARTICLE 10. BENEFICIARY DESIGNATION
To the extent applicable, each Participant under the Plan
may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her
death before he or she receives any or all of such benefit.
Each such designation shall revoke all prior designations by
the same Participant, shall be in a form prescribed by the
Company and shall be effective only when filed by the
Participant, in writing, with the Company during the
Participant's lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participant's
death shall be paid to the Participant's estate.
If required, the spouse of a married Participant
domiciled in a community property jurisdiction shall join in
any designation of a beneficiary or beneficiaries other than
the spouse.
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ARTICLE 11. DEFERRALS
The Committee may permit a Participant to defer to
another plan or program such Participant's receipt of Shares
or cash that would otherwise be due to such Participant by
virtue of the exercise of an Option, the vesting of Restricted
Stock, or the earning of a Performance Share Award. If any
such deferral election is required or permitted, the Committee
shall, in its sole discretion, establish rules and procedures
for such payment deferrals.
ARTICLE 12. RIGHTS OF EMPLOYEES
12.1 EMPLOYMENT. Nothing in the Plan shall interfere
with or limit in any way the right of the Company or a
Subsidiary to terminate any Participant's employment by, or
performance of services for, the Company at any time, nor
confer upon any Participant any right to continue in the
employ or service of the Company or a Subsidiary. For
purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or
between Subsidiaries) shall not be deemed a termination of
employment.
12.2 PARTICIPATION. No Employee shall have the right to
be selected to receive an Award under this Plan, or, having
been so selected, to be selected to receive a future Award.
ARTICLE 13. CHANGE IN CONTROL
13.1 DEFINITION. For purposes of the Plan, a "Change in
Control" shall be deemed to have occurred if:
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(a) An acquisition by any Person of Beneficial
Ownership of the shares of Common Stock of the
Company then outstanding (the "COMPANY COMMON
STOCK OUTSTANDING") or the voting securities
of the Company then outstanding entitled to
vote generally in the election of directors
(the "COMPANY VOTING SECURITIES OUTSTANDING"),
if such acquisition of Beneficial Ownership
results in the Person beneficially owning
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) twenty-five percent
(25%) or more of the Company Common Stock
Outstanding or twenty-five percent (25%) or
more of the combined voting power of the
Company Voting Securities Outstanding;
provided, that immediately prior to such
acquisition such Person was not a direct or
indirect Beneficial Owner of twenty-five
percent (25%) or more of the Company Common
Stock Outstanding or twenty-five percent (25%)
or more of the combined voting power of
Company Voting Securities Outstanding, as the
case may be; or
(b) The approval by the shareholders of the
Company of a reorganization, merger,
consolidation, complete liquidation or
dissolution of the Company, the sale or
disposition of all or substantially all of the
assets of the Company or similar corporate
transaction (in each case referred to in this
SECTION 13 as a "CORPORATE TRANSACTION") or,
if consummation of such Corporate Transaction
is subject, at the time of such approval by
shareholders, to the consent of any government
or governmental agency, the obtaining of such
consent (either explicitly or implicitly); or
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(c) A change in the composition of the Board such
that the individuals who, as of the Effective
Date, constitute the Board (such Board shall
be hereinafter referred to as the "INCUMBENT
BOARD") cease for any reason to constitute at
least a majority of the Board; provided,
however, for purposes of this SECTION 13 that
any individual who becomes a member of the
Board subsequent to the Effective Date whose
election, or nomination for election by the
Company's shareholders, was approved by a vote
of at least a majority of those individuals
who are members of the Board and who were also
members of the Incumbent Board (or deemed to
be such pursuant to this proviso) shall be
considered as though such individual were a
member of the Incumbent Board; but, provided,
further, that any such individual whose
initial assumption of office occurs as a
result of either an actual or threatened
election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act, including any
successor to such Rule), or other actual or
threatened solicitation of proxies or consents
by or on behalf of a Person other than the
Board, shall not be so considered as a member
of the Incumbent Board.
Notwithstanding the provisions set forth in
subsections (a) and (b), the following shall
not constitute a Change in Control for
purposes of this Plan: (1) any acquisition of
shares of Common Stock by, or consummation of
a Corporate Transaction with, any Subsidiary
or any employee benefit plan (or related
trust) sponsored or maintained by the Company
or an affiliate; or (2) any acquisition of
shares of Common Stock, or consummation of a
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Corporate Transaction, following which more
than fifty percent (50%) of, respectively, the
shares then outstanding of common stock of the
corporation resulting from such acquisition or
Corporate Transaction and the combined voting
power of the voting securities then
outstanding of such corporation entitled to
vote generally in the election of directors is
then beneficially owned, directly or
indirectly, by all or substantially all of the
individuals and entities who were Beneficial
Owners, respectively, of the Company Common
Stock Outstanding and Company Voting
Securities Outstanding immediately prior to
such acquisition or Corporate Transaction in
substantially the same proportions as their
ownership, immediately prior to such
acquisition or Corporate Transaction, of the
Company Common Stock Outstanding and Company
Voting Securities Outstanding, as the case may
be.
13.2 LIMITATION OF AWARDS. Notwithstanding any other
provisions of the Plan, if the right to receive or benefit
from any Award under this Plan, either alone or together with
payments that a Participant has the right to receive from the
Company or a Subsidiary, would constitute a "parachute
payment" (as defined in Section 280G of the Code), all such
payments shall be reduced to the largest amount that will
result in no portion being subject to the excise tax imposed
by Section 4999 of the Code.
ARTICLE 14. AMENDMENT, MODIFICATION AND TERMINATION
14.1 AMENDMENT, MODIFICATION AND TERMINATION. The Board
may, at any time and from time to time, alter, amend, suspend
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or terminate the Plan in whole or in part; provided, that,
unless approved by the holders of a majority of the total
number of Shares of the Company represented and voted at a
meeting at which a quorum is present, no amendment shall be
made to the Plan if such amendment would (a) materially modify
the eligibility requirements provided in ARTICLE 5; (b)
increase the total number of Shares (except as provided in
SECTION 4.3) which may be granted under the Plan, as provided
in SECTION 4.1; (c) extend the term of the Plan; or (d) amend
the Plan in any other manner which the Board, in its
discretion, determines should become effective only if
approved by the shareholders even though such shareholder
approval is not expressly required by the Plan or by law.
14.2 AWARDS PREVIOUSLY GRANTED. No termination,
amendment or modification of the Plan shall adversely affect
in any material way any Award previously granted under the
Plan, without the written consent of the Participant holding
such Award. The Committee shall, with the written consent of
the Participant holding such Award, have the authority to
cancel Awards outstanding and grant replacement Awards
therefor.
14.3 COMPLIANCE WITH CODE SECTION 162(m). At all times
when the Committee determines that compliance with Code
Section 162(m) is required or desired, all Awards granted
under this Plan to Named Executive Officers shall comply with
the requirements of Code Section 162(m). In addition, in the
event that changes are made to Code Section 162(m) to permit
greater flexibility with respect to any Award or Awards under
the Plan, the Committee may, subject to this ARTICLE 14, make
any adjustments it deem appropriate.
ARTICLE 15. WITHHOLDING
15.1 TAX WITHHOLDING. The Company shall have the power
and the right to deduct or withhold, or require a Participant
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to remit to the Company, an amount sufficient to satisfy
federal, state and local taxes (including the Participant's
FICA obligation) required by law to be withheld with respect
to any taxable event arising in connection with an Award under
this Plan.
15.2 SHARE WITHHOLDING. With respect to withholding
required upon the exercise of Options, or upon any other
taxable event arising as a result of Awards granted hereunder
which are to be paid in the form of Shares, Participants may
elect, subject to the approval of the Committee, to satisfy
the withholding requirement, in whole or in part, by having
the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction.
All elections shall be irrevocable, made in writing, signed by
the Participant, and elections by Insiders shall additionally
comply with all legal requirements applicable to Share
transactions by such Participants.
ARTICLE 16. INDEMNIFICATION
Each person who is or shall have been a member of the
Committee, or the Board, shall be indemnified and held
harmless by the Company against and from any loss, cost,
liability or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from
any claim, action, suit or proceeding to which he or she may
be a party or in which he or she may be involved by reason of
any action taken or failure to act under the Plan and against
and from any and all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him in
satisfaction of any judgment in any such action, suit or
proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own
behalf. The foregoing right of indemnification shall be in
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<PAGE>
addition to any other rights of indemnification to which such
persons may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold
them harmless.
ARTICLE 17. SUCCESSORS
All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any
successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially
all of the business and/or assets of the Company.
ARTICLE 18. LEGAL CONSTRUCTION
18.1 GENDER AND NUMBER. Except where otherwise indicated
by the context, any masculine term used herein also shall
include the feminine; the plural shall include the singular
and the singular shall include the plural.
18.2 SEVERABILITY. In the event any provision of the
Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts
of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
18.3 REQUIREMENTS OF LAW. The granting of Awards and the
issuance of Shares under the Plan shall be subject to all
applicable laws, rules and regulations, and to such approvals
by any governmental agencies or national securities exchanges
as may be required.
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<PAGE>
18.4 REGULATORY APPROVALS AND LISTING. The Company shall
not be required to issue any certificate or certificates for
Shares under the Plan prior to (i) obtaining any approval from
any governmental agency which the Company shall, in its
discretion, determine to be necessary or advisable, (ii) the
admission of such shares to listing on any national securities
exchange or Nasdaq on which the Company's Shares may be
listed, and (iii) the completion of any registration or other
qualification of such Shares under any state or federal law or
ruling or regulations of any governmental body which the
Company shall, in its sole discretion, determine to be
necessary or advisable.
Notwithstanding any other provision set forth in the
Plan, if required by the then-current Section 16 of the
Exchange Act, any "derivative security" or "equity security"
offered pursuant to the Plan to any Insider may not be sold or
transferred for at least six (6) months after the date of
grant of such Award. The terms "equity security" and
"derivative security" shall have the meanings ascribed to them
in the then-current Rule 16(a) under the Exchange Act.
18.5 SECURITIES LAW COMPLIANCE. With respect to
Insiders, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its successors
under the Exchange Act. To the extent any provisions of the
Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
18.6 GOVERNING LAW. To the extent not preempted by
Federal law, the Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the
State of Delaware.
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AS APPROVED BY THE BOARD OF DIRECTORS OF INDUSTRIAL
DISTRIBUTION GROUP, INC. ON July 10, 1997.
INDUSTRIAL DISTRIBUTION GROUP, INC.
By: /s/ Martin S. Pinson
Martin S. Pinson
Chairman of the Board and
Chief Executive Officer
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KILPATRICK STOCKTON LLP Attorneys at Law
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555
Exhibit 5
January 29, 1998
Industrial Distribution Group, Inc.
2500 Royal Place
Tucker, Georgia 30084
Re: Form S-8 Registration Statement
Gentlemen:
We have acted as counsel for Industrial Distribution Group,
Inc., a Delaware corporation (the "Company"), in the preparation
of the Form S-8 Registration Statement relating to the Company's
Stock Incentive Plan and the proposed offer and sale of up to
1,000,000 shares of the Company's common stock, par value $.01
per share (the "Common Stock"), pursuant thereto.
In such capacity, we have examined certificates of public
officials and originals or copies of such corporate records,
documents, and other instruments relating to the authorization of
the Plan and the authorization and issuance of the shares of
Common Stock as we have deemed relevant under the circumstances.
Based on and subject to the foregoing, it is our opinion
that the Plan and the proposed offer and sale thereunder of up to
1,000,000 shares of Common Stock have been duly authorized by the
Board of Directors of the Company, and that the shares, when
issued in accordance with the terms and conditions of the Plan,
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to said Registration Statement.
Sincerely,
KILPATRICK STOCKTON LLP
By: /s/ W. Randy Eaddy
W. Randy Eaddy, a partner
Exhibit 23.1
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-8 of the reports included in Industrial Distribution Group,
Inc.'s Registration Statement on Form S-1 dated September 23,
1997:
Report Date Entity
------------ ------------------------------------
May 23, 1997 Industrial Distribution Group, Inc.
(Predecessor)
May 1, 1997 Associated Suppliers, Inc.
April 24, 1997 B&J Industrial Supply Company
June 20, 1997 Cramer Industrial Supplies, Inc.
August 26, 1997 Industrial Distribution Group, Inc.,
and to all references to our firm included in or made a part of
this Registration Statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
January 26, 1998
MILLER & CO. LLP
CERTIFIED PUBLIC ACCOUNTNATS
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
W. Randy Eaddy, Esquire
Kilpatrick Stockton LLP
1100 Peachtree Street
Atlanta, GA 30309
Re: Industrial Distribution Group, Inc./Shearer
Industrial Supply Co. and Subsidiaries
-------------------------------------------
As independent certified public accountants, we hereby
consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 21, 1997
included in Industrial Distribution Group, Inc.'s Registration
Statement on Form S-1 dated September 23, 1997 and to all
references to our Firm included in or made a part of this
Registration Statement.
/s/ Miller & Co. LLP
York, Pennsylvania
January 27, 1998
Exhibit 23.3
SCHENCK & ASSOCIATES SC
Certified Public Accountants and Consultants
January 28, 1998
Green Bay Office
Stephen C. Duggan
Arthur Andersen LLP
133 Peachtree Street NE Suite 2500
Atlanta, GA 30303-1846
Dear Mr. Duggan:
As independent public accountants for J. J. Stangel Company,
we hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 27, 1997 included
in Industrial Distribution Group, Inc.'s Registration Statement on Form S-1
dated September 23, 1997 and to all references to our firm
included in or made a part of this Registration Statement.
This consent is specifically restricted to the September 30, 1996
audited financial statements of J. J. Stangel Company. If we can be
of any further assistance, please feel free to contact us.
Sincerely,
/s/ William J. Meulbroek, CPS
William J. Meulbroek, CPA
Exhibit 23.4
BAIRD, KURTZ & DOBSON
CERTIFIED PUBLIC ACCOUNTANTS
Tri-Star Industrial Supply, Inc.
St. Louis, Missouri
Industrial Distribution Group, Inc.
Atlanta, Georgia
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-8 of our audit report respecting the financial statements of
Tri-Star Industrial Supply, Inc., at and for the years ended
September 30, 1996 and 1995, included in Industrial Distribution
Group, Inc.'s Registration Statement on Form S-1 dated September 23,
1997 and to the references to our firm in such registration
statement.
/s/ Baird, Kurtz & Dobson
St. Louis, Missouri
January 26, 1998
