<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 1998
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
WESTOWER CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
WASHINGTON 91-1825860
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
7001 N.E. 40TH AVENUE
VANCOUVER, WASHINGTON 98661
(Address of principal executive offices, including zip code)
1997 STOCK COMPENSATION PLAN OF WESTOWER CORPORATION
WESTOWER CORPORATION 1998 STOCK INCENTIVE COMPENSATION PLAN
OPTIONS TO PURCHASE AN AGGREGATE OF 246,539 SHARES OF COMMON STOCK GRANTED
PURSUANT TO INDIVIDUAL STOCK OPTION LETTER AGREEMENTS
(Full title of the plans)
CALVIN JAY PAYNE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
7001 N.E. 40TH AVENUE
VANCOUVER, WASHINGTON 98661
(360) 750-9355
(Name, address and telephone number, including area code, of agent for service)
______________________
COPY TO:
GREGORY GORDER
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR
SEATTLE, WASHINGTON 98101-3099
______________________
CALCULATION OF REGISTRATION FEE
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<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES NUMBER TO BE PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) PER SHARE(2) PRICE(2) FEE
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01
par value per share
- -----------------------------------------------------------------------------------------------------------------------------------
1997 Stock Compensation 400,000 $ 21.00 $ 8,400,000 $2,478
Plan of Westower Corporation(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Westower Corporation 1998 1,000,000 21.00 21,000,000 6,195
Stock Incentive Compensation Plan(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Options to Purchase Shares of 246,539 11.375 2,804,422 827
Common Stock Granted Pursuant to
Individual Stock Option
Letter Agreements(3)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL: 1,646,539 $32,204,422 $9,500
===================================================================================================================================
</TABLE>
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
such employee benefit plans as the result of any future stock split, stock
dividend or similar adjustment of the Registrant's outstanding Common Stock.
(2) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee. For the 1997 Stock Compensation Plan and the 1998 Stock
Incentive Compensation Plan, the price per share is estimated to be $21.00
based on the average of the high ($21.25) and low ($20.75) sales prices for
the Common Stock on October 1, 1998 as reported by the American Stock
Exchange.
(3) The proposed maximum offering price per share is based on the weighted
average exercise prices for the options.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Post-Effective Amendment No. 2 on Form SB-2 filed
on September 11, 1998 and the Registrant's prospectus (the "Prospectus") filed
on September 23, 1998, pursuant to Rule 424(b) of the Securities Act of 1933, as
amended (the "Securities Act");
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), since the filing of the documents referred to in (a) above; and
(c) The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed on October 14, 1997 under Section 12(g)
of the Exchange Act, including any amendments or reports filed for the purpose
of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date hereof and prior to the filing of a
post-effective amendment, which indicate that the securities offered hereby have
been sold or which deregister the securities covered hereby then remaining
unsold, shall also be deemed to be incorporated by reference into this
Registration Statement and to be a part hereof commencing on the respective
dates on which such documents are filed.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Article VII of the Registrant's Articles of Incorporation
provides for indemnification of the Registrant's directors, officers, employees
and agents to the maximum extent permitted by Washington law.
Section 23B.08.320 of the Washington Business Corporation Act
authorizes a corporation to limit a director's liability to the corporation or
its shareholders for monetary damages for acts or omissions as a director,
except in certain circumstances involving intentional misconduct, self-dealing
or illegal corporate loans or distributions, or any transactions from which the
director personally receives a benefit in money, property or services to which
the director is not entitled. Article VI of the Registrant's Articles of
Incorporation contains provisions implementing, to the fullest extent permitted
by Washington law, such limitations on a director's liability to the Registrant
and its shareholders.
II-1
<PAGE>
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
Exhibit
Number Description
5.1 Opinion of Maurice J. Bates L.L.C. regarding legality of the Common Stock being registered
under the 1997 Stock Compensation Plan of Westower Corporation
5.2 Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered under
the Westower Corporation 1998 Stock Incentive Compensation Plan
23.1 Consent of Moss Adams LLP
23.2 Consent of Maurice J. Bates L.L.C. (included in opinion filed as Exhibit 5.1)
23.3 Consent of Perkins Coie LLP (included in opinion filed as Exhibit 5.2)
24.1 Power of Attorney (see signature page)
99.1 1997 Stock Compensation Plan of Westower Corporation
99.2 Westower Corporation 1998 Stock Incentive Compensation Plan
99.3 Form of Nonqualified Stock Option Letter Agreement
</TABLE>
ITEM 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement; and
(iii) To include any material information with respect to the pl of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this 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 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefits plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
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 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redmond, State of Washington, on the 2nd day of
October, 1998.
WESTOWER CORPORATION
/s/ CALVIN JAY PAYNE
--------------------
By: Calvin Jay Payne
President, Chief Executive Officer
and Chairman of the Board
Each person whose individual signature appears below hereby authorizes
Calvin Jay Payne and Peter Lucas, or either of them, as attorneys-in-fact with
full power of substitution, to execute in the name and on the behalf of each
person, individually and in each capacity stated below, and to file, any and all
post-effective amendments to this Registration Statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on the 2nd day of October, 1998.
SIGNATURE TITLE
/s/ CALVIN JAY PAYNE President, Chief Executive Officer and Chairman of the
- ------------------------ Board (Principal Executive Officer)
Calvin Jay Payne
/s/ PETER LUCAS Vice-President, Chief Financial Officer, Secretary,
- ------------------------ Treasurer and Director (Principal Financial and
Peter Lucas Accounting Officer)
/s/ RONALD P. ERICKSON Director
- ------------------------
Ronald P. Erickson
/s/ WALTER FRIESEN Director
- ------------------------
Walter Friesen
/s/ DONALD A. HARRIS Director
- ------------------------
Donald A. Harris
/s/ S. ROY JEFFREY Director
- ------------------------
Stanley Roy Jeffrey
/s/ ROBERT E. SHUEY III Director
- ------------------------
Robert E. Shuey III
/s/ MICHAEL J. ANDERSON Director
- ------------------------
Michael J. Anderson
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
5.1 Opinion of Maurice J. Bates L.L.C. regarding legality of
the Common Stock being registered under the 1997 Stock
Compensation Plan of Westower Corporation
5.2 Opinion of Perkins Coie LLP regarding legality of the Common
Stock being registered under the Westower Corporation 1998
Stock Incentive Compensation Plan
23.1 Consent of Moss Adams LLP
23.2 Consent of Maurice J. Bates L.L.C. (included in opinion filed
as Exhibit 5.1)
23.3 Consent of Perkins Coie LLP (included in opinion filed as
Exhibit 5.2)
24.1 Power of Attorney (see signature page)
99.1 1997 Stock Compensation Plan of Westower Corporation
99.2 Westower Corporation 1998 Stock Incentive Compensation Plan
99.3 Form of Nonqualified Stock Option Letter Agreement
<PAGE>
EXHIBIT 5.1
MAURICE J. BATES, L.L.C.
ATTORNEY AT LAW
8214 WESTCHESTER SUITE, 500
DALLAS, TEXAS 75225
Telephone (214) 692-3566
Fax (214) 987-2091
July 21, 1998
Westower Corporation
7001 NE 40th Avenue
Vancouver, Washington 98661
Re: Registration Statement on Form S-8
Gentlemen:
You have requested my opinion in connection with a registration statement
on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to 400,000 shares of common stock, $.01 par value, (the
"Shares") issuable pursuant to the 1997 Stock Compensation Plan of Westower
Corporation (the "1997 Plan"). I have examined the minute books of the Company,
the Registration Statement and such other documents as I deemed necessary to
render this opinion.
Based upon the foregoing, I am of the opinion that the 1997 Plan and the
Shares have been duly authorized and, when issued and paid for in accordance
with the terms of the 1997 Plan, the Shares will be validly issued, fully paid
and non-assessable.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ MAURICE J. BATES
Maurice J. Bates
<PAGE>
EXHIBIT 5.2
PERKINS COIE LLP
1201 THIRD AVENUE, 40TH FLOOR, SEATTLE, WASHINGTON 98101-3099
TELEPHONE: 206 583-8888 FACSIMILE: 206 583-8500
October 2, 1998
Westower Corporation
7001 N.E. 40th Avenue
Vancouver, WA 98661
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended ("the Act"), that you are filing with the
Securities and Exchange Commission with respect to 1,246,539 shares of Common
Stock, $.01 par value (the "Shares"), proposed to be issued as follows:
1,000,000 shares pursuant to the Westower Corporation 1998 Stock Incentive
Compensation Plan (the "Plan") and 246,539 shares pursuant to individual stock
option letter agreements (the "Options"). We have examined the Registration
Statement and such documents and records of the Company and other documents as
we have deemed necessary for the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that the
issuance of the Shares pursuant to the Plan and the Options have been duly
authorized and that, upon the due execution by the Company and the registration
by its registrar of the Shares and the sale thereof by the Company in accordance
with the terms of the Plan and the Options, and the receipt of consideration
therefor in accordance with the terms of the Plan and the Options, the Shares
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ PERKINS COIE LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
____________________________________________________________
We consent to the incorporation by reference in this Registration Statement of
Westower Corporation on Form S-8 of our report dated April 14, 1998, except for
Note 16, as to which the date is May 28, 1998, and Note 3, as to which the date
is May 31, 1998, appearing in Post-Effective Amendment No. 2 to Registration
Statement No. 333-32963 of Westower Corporation on Form SB-2 for the years ended
February 28, 1998 and 1997.
/s/ Moss Adams LLP
Moss Adams LLP
Bellingham, Washington
October 5, 1998
<PAGE>
EXHIBIT 99.1
1997 STOCK COMPENSATION PLAN
OF
WESTOWER CORPORATION
1. PURPOSE OF PLAN
This 1997 Stock Compensation Plan ("Plan") is intended to encourage
ownership of the common stock of WESTOWER CORPORATION (the "Company") by certain
officers, directors, employees and advisors of the Company or any Subsidiary or
Subsidiaries of the Company (as hereinafter defined) in order to provide
additional incentive for such persons to promote the success and the business of
the Company or its Subsidiaries and to encourage them to remain in the employ of
the Company or its Subsidiaries by providing such persons an opportunity to
benefit from any appreciation of the common stock of the Company through the
issuance of stock options and related stock appreciation rights to such persons
in accordance with the terms of the Plan. It is further intended that options
granted pursuant to this Plan shall constitute either incentive stock options
("Incentive Options") within the meaning of Section 422 (formerly Section 422A)
of the Internal Revenue Code of 1986, as amended ("Code"), or options which do
not constitute Incentive Options ("Nonqualified Options") as determined by the
Committee (as hereinafter defined) at the time of issuance of such options.
Incentive Options, Nonqualified Options and Reload Options (as defined in
Section 11 hereof) are herein sometimes referred to collectively as "Options."
As used herein, the term Subsidiary or Subsidiaries shall mean any corporation
(other than the employer corporation) in an unbroken chain of corporations
beginning with the employer corporation if, at the time of granting of the
Option, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
2. STOCK SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 14 hereof, there will be
reserved for the use upon the exercise of Options to be granted from time to
time under the Plan, an aggregate of four hundred thousand (400,000) shares of
the common stock, $.01 par value, of the Company ("Common Stock"), which shares
in whole or in part shall be authorized, but unissued, shares of the Common
Stock or issued shares of Common Stock which shall have been reacquired by the
Company as determined from time to time by the Board of Directors of the Company
("Board of Directors"). To determine the number of shares of Common Stock
available at any time for the granting of Options under the Plan, there shall be
deducted from the total number of reserved shares of Common Stock, the number of
shares of Common Stock in respect of which Options have been granted pursuant to
the Plan which remain outstanding or which have been exercised. If and to the
extent that any Option to purchase reserved shares shall not be exercised by the
optionee for any reason or if such Option to purchase shall terminate as
provided herein, such shares which have not been so purchased hereunder shall
again become available for the purposes of the Plan unless the Plan shall have
been terminated, but such unpurchased shares shall not be deemed to increase the
aggregate number of shares specified above to be reserved for purposes of the
Plan (subject to adjustment as provided in Section 14 hereof).
3. ADMINISTRATION OF THE PLAN
(a) General. The Plan shall be administered by a Compensation Committee
("Committee") appointed by the Board of Directors, which Committee shall consist
of not less than two (2) members of the Board of Directors who are not eligible
to participate in the Plan, and have not, for a period of at least one (1) year
prior
<PAGE>
thereto been eligible to participate in the Plan, except that if at any time
there shall be less than two (2) directors who are qualified to serve on the
Committee, then the Plan shall be administered by the full Board of Directors.
All references in this Plan to the Committee shall be deemed to refer instead to
the full Board of Directors at any time there is not a committee of two (2)
members qualified to act hereunder. The Board of Directors may from time to time
appoint members of the Committee in substitution for or in addition to members
previously appointed and may fill vacancies, however caused, in the Committee.
If the Board of Directors does not designate a Chairman of the Committee, the
Committee shall select one of its members as its Chairman. The Committee shall
hold its meetings at such times and places as it shall deem advisable. A
majority of its members shall constitute a quorum. Any action of the Committee
shall be taken by a majority vote of its members at a meeting at which a quorum
is present. Notwithstanding the preceding, any action of the Committee may be
taken without a meeting by a written consent signed by all of the members, and
any action so taken shall be deemed fully as effective as if it had been taken
by a vote of the members present in person at the meeting duly called and held.
The Committee may appoint a Secretary, shall keep minutes of its meetings, and
shall make such rules and regulations for the conduct of its business as it
shall deem advisable.
The Committee shall have the sole authority and power, subject to the
express provisions and limitations of the Plan, to construe the Plan and option
agreements granted hereunder, and to adopt, prescribe, amend, and rescind rules
and regulations relating to the Plan, and to make all determinations necessary
or advisable for administering the Plan, including, but not limited to, (i) who
shall be granted Options under the Plan, (ii) the term of each Option, (iii) the
number of shares covered by such Option, (iv) whether the Option shall
constitute an Incentive Option or a Nonqualified Option or a Reload Option, (v)
the exercise price for the purchase of the shares of the Common Stock covered by
the Option, (vi) the period during which the Option may be exercised, (vii)
whether the right to purchase the number of shares covered by the Option shall
be fully vested on issuance of the Option so that such shares may be purchased
in full at one time or whether the right to purchase such shares shall become
vested over a period of time so that such shares may only be purchased in
installments, and (viii) the time or times at which Options shall be granted.
The Committee's determinations under the Plan, including the above enumerated
determinations, need not be uniform and may be made by it selectively among the
persons who receive, or are eligible to receive, Options under the Plan, whether
or not such persons are similarly situated.
The interpretation by the Committee of any provision of the Plan or of any
option agreement entered into hereunder with respect to any Incentive Option
shall be in accordance with Section 422 of the Code and the regulations issued
thereunder, as such section or regulations may be amended from time to time, in
order that the rights granted hereunder and under said option agreements shall
constitute "Incentive Stock Options" within the meaning of such section. The
interpretation and construction by the Committee of any provision of the Plan or
of any Option granted hereunder shall be final and conclusive, unless otherwise
determined by the Board of Directors. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted under it. Upon issuing an Option
under the Plan, the Committee shall report to the Board of Directors the name of
the person granted the Option, whether the Option is an Incentive Option or a
Nonqualified Option, the number of shares of Common Stock covered by the Option,
and the terms and conditions of such Option.
(b) Changes in Law Applicable. If the laws relating to Incentive Options
or Nonqualified Options are changed, altered or amended during the term of the
Plan, the Board of Directors shall have full authority and power to alter or
amend the Plan with respect to Incentive Options or Nonqualified Options,
respectively, to conform to such changes in the law without the necessity of
obtaining further shareholder approval, unless the changes require such
approval.
-2-
<PAGE>
4. TYPES OF AWARDS UNDER THE PLAN
Awards under the Plan may be in the form of either Options, alternate stock
appreciation rights (as described in Section 10 hereof), or a combination
thereof.
5. PERSONS TO WHOM OPTIONS SHALL BE GRANTED
(a) Nonqualified Options. Nonqualified Options shall be granted only to
officers, directors (other than "Outside Directors" of the Company or a
Subsidiary as hereinafter defined), employees and advisors of the Company or a
Subsidiary who, in the judgment of the Committee, are responsible for or
contribute to the management or success of the Company or a Subsidiary and who,
at the time of the granting of the Nonqualified Options, are either officers,
directors (other than Outside Directors), employees or advisors of the Company
or a Subsidiary. As used herein, the term "Outside Director" shall mean any
director of the Company or a Subsidiary who is not an employee of the Company or
a Subsidiary.
(b) Incentive Options. Incentive Options shall be granted only to
employees of the Company or a Subsidiary who, in the judgment of the Committee,
are responsible for or contribute to the management or success of the Company or
a Subsidiary and who, at the time of the granting of the Incentive Option are
either an employee of the Company or a Subsidiary. Subject to the provisions of
Section 8(g) hereof, no individual shall be granted an Incentive Option who,
immediately before such Incentive Option was granted, would own more than ten
percent (10%) of the total combined voting power or value of all classes of
stock of the Company ("10% Shareholder").
6. FACTORS TO BE CONSIDERED IN GRANTING OPTIONS
In making any determination as to persons to whom Options shall be granted
and as to the number of shares to be covered by such Options, the Committee
shall take into account the duties and responsibilities of the respective
officers, directors, employees, or advisors, their current and potential
contributions to the success of the Company or a Subsidiary, and such other
factors as the Committee shall deem relevant in connection with accomplishing
the purpose of the Plan.
7. TIME OF GRANTING OPTIONS
Neither anything contained in the Plan or in any resolution adopted or to
be adopted by the Board of Directors or the shareholders of the Company or a
Subsidiary nor any action taken by the Committee shall constitute the granting
of any Option. The granting of an Option shall be effected only when a written
option agreement acceptable in form and substance to the Committee, subject to
the terms and conditions hereof including those set forth in Section 8 hereof,
shall have been duly executed and delivered by or on behalf of the Company and
the person to whom such Option shall be granted. No person shall have any rights
under the Plan until such time, if any, as a written option agreement shall have
been duly executed and delivered as set forth in this Section 7.
8. TERMS AND CONDITIONS OF OPTIONS
All Options granted pursuant to this Plan must be granted within ten (10)
years from the date the Plan is adopted by the Board of Directors of the
Company. Each option agreement governing an Option granted hereunder shall be
subject to at least the following terms and conditions, and shall contain such
other terms and conditions, not inconsistent therewith, that the Committee shall
deem appropriate:
(a) Number of Shares. Each Option shall state the number of shares of
Common Stock which it represents.
-3-
<PAGE>
(b) Type of Option. Each Option shall state whether it is intended to be
an Incentive Option or a Nonqualified Option.
(c) Option Period.
(1) General. Each Option shall state the date upon which it is
granted. Each Option shall be exercisable in whole or in part during such period
as is provided under the terms of the Option subject to any vesting period set
forth in the Option, but in no event shall an Option be exercisable either in
whole or in part after the expiration of ten (10) years from the date of grant;
provided, however, if an Incentive Option is granted to a 10% Shareholder, such
Incentive Option shall not be exercisable more than five (5) years from the date
of grant thereof.
(2) Termination of Employment. Except as otherwise provided in case
of Disability (as hereinafter defined), death or Change of Control (as
hereinafter defined), no Option shall be exercisable after an optionee who is an
employee of the Company or a Subsidiary ceases to be employed by the Company or
a Subsidiary as an employee; provided, however, that the Committee shall have
the right in its sole discretion, but not the obligation, to extend the exercise
period for not more than three (3) months following the date of termination of
such optionee's employment; provided further, however, that no Option shall be
exercisable after the expiration of ten (10) years from the date it is granted
and provided further, no Incentive Option granted to a 10% Shareholder shall be
exercisable after the expiration of five (5) years from the date it is granted.
(3) Cessation of Service as Director or Advisor. In the event an
optionee who was a director or advisor of the Company or a Subsidiary ceases to
be a director or advisor of the Company or a Subsidiary for any reason, other
than Disability or death, prior to the full exercise of the Option, such
optionee may exercise his Option at any time within ninety (90) days after such
optionee's status as a director or advisor of the Company or a Subsidiary is so
terminated to the extent he was entitled to exercise such Option at the date
such optionee's status as a director or advisor of the Company or a Subsidiary
terminated; provided, however, that no Option shall be exercisable after the
expiration of ten (10) years from the date it is granted.
(4) Disability. If an optionee's employment is terminated by reason
of the permanent and total Disability of such optionee or if an optionee who is
a director or advisor of the Company or a Subsidiary ceases to serve as a
director or advisor by reason of the permanent and total Disability of such
optionee, the Committee shall have the right in its sole discretion, but not the
obligation, to extend the exercise period for not more than one (1) year
following the date of termination of the optionee's employment or the date such
optionee ceases to be a director or advisor of the Company or a Subsidiary, as
the case may be, subject to the condition that no Option shall be exercisable
after the expiration of ten (10) years from the date it is granted and subject
to the further condition that no Incentive Option granted to a 10% Shareholder
shall be exercisable after the expiration of five (5) years from the date it is
granted. For purposes of this Plan, the term "Disability" shall mean the
inability of the optionee to fulfill such optionee's obligations to the Company
or a Subsidiary by reason of any physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months as determined by a
physician acceptable to the Committee in its sole discretion.
(5) Death. If an optionee dies while in the employ of the Company or
a Subsidiary, or while serving as a director or advisor of the Company or a
Subsidiary, and shall not have fully exercised Options granted pursuant to the
Plan, such Options may be exercised in whole or in part at any time within one
(1) year after the optionee's death, by the executors or administrators of the
optionee's estate or by any person or persons who shall have acquired the
Options directly from the optionee by bequest or inheritance, but only to the
extent that the optionee was entitled to exercise such Option at the date of
such optionee's death, subject to the condition that no Option shall be
exercisable after the expiration of ten (10) years from the date it is granted
and subject to the
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further condition that no Incentive Option granted to a 10% Shareholder shall be
exercisable after the expiration of five (5) years from the date it is granted.
(6) Acceleration and Exercise Upon Change of Control. Notwithstanding
the preceding provisions of this Section 8(c), if any Option granted under the
Plan provides for either (a) an incremental vesting period whereby such Option
may only be exercised in installments as such incremental vesting period is
satisfied or (b) a delayed vesting period whereby such Option may only be
exercised after the lapse of a specified period of time, such as after the
expiration of one (1) year, such vesting period shall be accelerated upon the
occurrence of a Change of Control (as hereinafter defined) of the Company, or a
threatened Change of Control of the Company as determined by the Committee, so
that such Option shall thereupon become exercisable immediately in part or its
entirety by the holder thereof, as such holder shall elect. For the purposes of
this Plan, a "Change of Control" shall be deemed to have occurred if:
(i) Any "person", including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange Act of 1934
("Exchange Act") and the Rules and Regulations promulgated thereunder, is or
becomes, through one or a series of related transactions or through one or more
intermediaries, the beneficial owner, directly or indirectly, of securities of
the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities, other than a person who is such a
beneficial owner on the effective date of the Plan and any affiliate of such
person;
(ii) As a result of, or in connection with, any tender offer or
exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions
("Transaction"), the persons who were Directors of the Company before the
Transaction shall cease to constitute a majority of the Board of Directors of
the Company or any successor to the Company;
(iii) Following the effective date of the Plan, the Company is
merged or consolidated with another corporation and as a result of such merger
or consolidation less than 40% of the outstanding voting securities of the
surviving or resulting corporation shall then be owned in the aggregate by the
former stockholders of the Company, other than (x) any party to such merger or
consolidation, or (y) any affiliates of any such party;
(iv) A tender offer or exchange offer is made and consummated
for the ownership of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding voting securities; or
(v) The Company transfers more than 50% of its assets, or the
last of a series of transfers result in the transfer of more than 50% of the
assets of the Company, to another corporation that is not a wholly-owned
corporation of the Company. For purposes of this subsection 8(c)(6)(v), the
determination of what constitutes more than 50% of the assets of the Company
shall be determined based on the sum of the values attributed to (i) the
Company's real property as determined by an independent appraisal thereof, and
(ii) the net book value of all other assets of the Company, each taken as of the
date of the Transaction involved.
In addition, upon a Change of Control, any Options previously granted under
the Plan to the extent not already exercised may be exercised in whole or in
part either immediately or at any time during the term of the Option as such
holder shall elect.
(d) Option Prices.
(1) Nonqualified Options. The purchase price or prices of the shares
of the Common Stock which shall be offered to any person under the Plan and
covered by a Nonqualified Option shall be the price
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determined by the Committee at the time of granting of the Nonqualified Option,
which price may be less than, equal to or higher than one hundred percent (100%)
of the fair market value of the Common Stock at the time of granting the
Nonqualified Option.
(2) Incentive Options. The purchase price or prices of the shares of
the Common Stock which shall be offered to any person under the Plan and covered
by an Incentive Option shall be one hundred percent (100%) of the fair market
value of the Common Stock at the time of granting the Incentive Option or such
higher purchase price as may be determined by the Committee at the time of
granting the Incentive Option; provided, however, if an Incentive Option is
granted to a 10% Shareholder, the purchase price of the shares of the Common
Stock of the Company covered by such Incentive Option may not be less than one
hundred ten percent (110%) of the fair market value of such shares on the day
the Incentive Option is granted.
(3) Determination of Fair Market Value. During such time as the
Common Stock of the Company is not listed upon an established stock exchange,
the fair market value per share shall be deemed to be the closing sales price of
the Common Stock on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") on the day the Option is granted, as reported by
NASDAQ, if the Common Stock is so quoted, and if not so quoted, the mean between
dealer "bid" and "ask," prices of the Common Stock in the New York over-the-
counter market on the day the Option is granted, as reported by the National
Association of Securities Dealers, Inc. If the Common Stock is listed upon an
established stock exchange or exchanges, such fair market value shall be deemed
to be the highest closing price of the Common Stock on such stock exchange or
exchanges on the day the Option is granted or, if no sale of the Common Stock of
the Company shall have been made on established stock exchange on such day, on
the next preceding day on which there was a sale of such stock. If there is no
market price for the Common Stock, then the Board of Directors and the Committee
may, after taking all relevant facts into consideration, determine the fair
market value of the Common Stock.
(e) Exercise of Options. To the extent that a holder of an Option has a
current right to exercise, the Option may be exercised from time to time by
written notice to the Company at its principal place of business. Such notice
shall state the election to exercise the Option, the number of whole shares in
respect of which it is being exercised, shall be signed by the person or persons
so exercising the Option, and shall contain any investment representation
required by Section 8(i) hereof. Such notice shall be accompanied by payment of
the full purchase price of such shares and by the option agreement evidencing
the Option. In addition, if the Option shall be exercised, pursuant to Section
8(c)(4) or Section 8(c)(5) hereof, by any person or persons other than the
optionee, such notice shall also be accompanied by appropriate proof of the
right of such person or persons to exercise the Option. The Company shall
deliver a certificate or certificates representing such shares as soon as
practicable after the aforesaid notice and payment of such shares shall be
received. The certificate or certificates for the shares as to which the Option
shall have been so exercised shall be registered in the name of the person or
persons so exercising the Option. In the event the Option shall not be exercised
in full, the Secretary of the Company shall endorse or cause to be endorsed on
the Option the number of shares which has been exercised thereunder and the
number of shares that remain exercisable under the Option and return such option
agreement to the holder thereof.
(f) Nontransferability of Options. An Option granted pursuant to the Plan
shall be exercisable only by the optionee or the optionee's court appointed
guardian as set forth in Section 8(c)(4) hereof during the optionee's lifetime
and shall not be assignable or transferable by the optionee otherwise than by
will or the laws of descent and distribution. An Option granted pursuant to the
Plan shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise other than by will or the laws of descent and
distribution) and shall not be subject to execution, attachment, or similar
process. Any attempted transfer, assignment, pledge, hypothecation, or other
disposition of any Option or of any rights granted thereunder contrary to the
foregoing provisions of this Section 8(f), or the levy of any attachment or
similar process upon an Option or such rights, shall be null and void.
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(g) Limitations on 10% Shareholders. No Incentive Option may be granted
under the Plan to any 10% Shareholder unless (i) such Incentive Option is
granted at an option price not less than one hundred ten percent (110%) of the
fair market value of the shares on the day the Incentive Option is granted and
(ii) such Incentive Option expires on a date not later than five (5) years from
the date the Incentive Option is granted.
(h) Limits on Vesting of Incentive Options. An individual may be granted
one or more Incentive Options, provided that the aggregate fair market value (as
determined at the time such Incentive Option is granted) of the stock with
respect to which Incentive Options are exercisable for the first time by such
individual during any calendar year shall not exceed $100,000. To the extent the
$100,000 limitation in the preceding sentence is exceeded, such option shall be
treated as an option which is not an Incentive Option.
(i) Compliance with Securities Laws. The Plan and the grant and exercise
of the rights to purchase shares hereunder, and the Company's obligations to
sell and deliver shares upon the exercise of rights to purchase shares, shall be
subject to all applicable federal and state laws, rules and regulations, and to
such approvals by any regulatory or governmental agency as may, in the opinion
of counsel for the Company, be required, and shall also be subject to all
applicable rules and regulations of any stock exchange upon which the Common
Stock of the Company may then be listed. At the time of exercise of any Option,
the Company may require the optionee to execute any documents or take any action
which may be then necessary to comply with the Securities Act of 1933, as
amended ("Securities Act"), and the rules and regulations promulgated
thereunder, or any other applicable federal or state laws regulating the sale
and issuance of securities, and the Company may, if it deems necessary, include
provisions in the stock option agreements to assure such compliance. The Company
may, from time to time, change its requirements with respect to enforcing
compliance with federal and state securities laws, including the request for and
enforcement of letters of investment intent, such requirements to be determined
by the Company in its judgment as necessary to assure compliance with said laws.
Such changes may be made with respect to any particular Option or stock issued
upon exercise thereof. Without limiting the generality of the foregoing, if the
Common Stock issuable upon exercise of an Option granted under the Plan is not
registered under the Securities Act, the Company at the time of exercise will
require that the registered owner execute and deliver an investment
representation agreement to the Company in form acceptable to the Company and
its counsel, and the Company will place a legend on the certificate evidencing
such Common Stock restricting the transfer thereof, which legend shall be
substantially as follows:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAW BUT HAVE BEEN ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER
HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL EITHER (i) A
REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY AND
ITS COUNSEL THAT REGISTRATION UNDER SUCH SECURITIES ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED OFFER, SALE OR
TRANSFER.
(j) Additional Provisions. The option agreements authorized under the
Plan shall contain such other provisions as the Committee shall deem advisable,
including, without limitation, restrictions upon the exercise of the Option. Any
such option agreement with respect to an Incentive Option shall contain such
limitations and restrictions upon the exercise of the Incentive Option as shall
be necessary in order that the option will be an "Incentive Stock Option" as
defined in Section 422 of the Code .
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9. MEDIUM AND TIME OF PAYMENT
The purchase price of the shares of the Common Stock as to which the Option
shall be exercised shall be paid in full either (i) in cash at the time of
exercise of the Option, (ii) by tendering to the Company shares of the Company's
Common Stock having a fair market value (as of the date of receipt of such
shares by the Company) equal to the purchase price for the number of shares of
Common Stock purchased, or (iii) partly in cash and partly in shares of the
Company's Common Stock valued at fair market value as of the date of receipt of
such shares by the Company. Cash payment for the shares of the Common Stock
purchased upon exercise of the Option shall be in the form of either a cashier's
check, certified check or money order. Personal checks may be submitted, but
will not be considered as payment for the shares of the Common Stock purchased
and no certificate for such shares will be issued until the personal check
clears in normal banking channels. If a personal check is not paid upon
presentment by the Company, then the attempted exercise of the Option will be
null and void. In the event the optionee tenders shares of the Company's Common
Stock in full or partial payment for the shares being purchased pursuant to the
Option, the shares of Common Stock so tendered shall be accompanied by fully
executed stock powers endorsed in favor of the Company with the signature on
such stock power being guaranteed. If an optionee tenders shares, such optionee
assumes sole and full responsibility for the tax consequences, if any, to such
optionee arising therefrom, including the possible application of Code Section
424(c), or its successor Code section, which negates any nonrecognition of
income rule with respect to such transferred shares, if such transferred shares
have not been held for the minimum statutory holding period to receive
preferential tax treatment.
10. ALTERNATE STOCK APPRECIATION RIGHTS
(a) Award of Alternate Stock Rights. Concurrently with or subsequent to
the award of any Option to purchase one or more shares of Common Stock, the
Committee may in its sole discretion, subject to the provisions of the Plan and
such other terms and conditions as the Committee may prescribe, award to the
optionee with respect to each share of Common Stock covered by an Option
("Related Option"), a related alternate stock appreciation right ("SAR"),
permitting the optionee to be paid the appreciation on the Related Option in
lieu of exercising the Related Option. A SAR granted with respect to an
Incentive Option must be granted together with the Related Option. A SAR granted
with respect to a Nonqualified Option may be granted together with or subsequent
to the grant of such Related Option.
(b) Alternate Stock Rights Agreement. Each SAR shall be on such terms and
conditions not inconsistent with this Plan as the Committee may determine and
shall be evidenced by a written agreement executed by the Company and the
optionee receiving the Related Option.
(c) Exercise. An SAR may be exercised only if and to the extent that its
Related Option is eligible to be exercised on the date of exercise of the SAR.
To the extent that a holder of a SAR has a current right to exercise, the SAR
may be exercised from time to time by written notice to the Company at its
principal place of business.
Such notice shall state the election to exercise the SAR, the number of
shares in respect of which it is being exercised, shall be signed by the person
so exercising the SAR and shall be accompanied by the agreement evidencing the
SAR and the Related Option. In the event the SAR shall not be exercised in full,
the Secretary of the Company shall endorse or cause to be endorsed on the SAR
and the Related Option the number of shares which have been exercised thereunder
and the number of shares that remain exercisable under the SAR and the Related
Option and return such SAR and Related Option to the holder thereof.
(d) Amount of Payment. The amount of payment to which an optionee shall
be entitled upon the exercise of each SAR shall be equal to 100% of the amount,
if any, by which the fair market value of a share of
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Common Stock on the exercise date exceeds the fair market value of a share of
Common Stock on the date the Option related to said SAR was granted or became
effective, as the case may be; provided, however, the Company may, in its sole
discretion, withhold from such cash payment any amount necessary to satisfy the
Company's obligation for withholding taxes with respect to such payment. For
this purpose, the fair market value of a share of Common Stock shall be
determined as set forth in Section 8(d) hereof.
(e) Form of Payment. The amount payable by the Company to an optionee
upon exercise of a SAR may be paid in shares of Common Stock, cash or a
combination thereof. The number of shares of Common Stock to be paid to an
optionee upon such optionee's exercise of SAR shall be determined by dividing
the amount of payment determined pursuant to Section 10(d) hereof by the fair
market value of a share of Common Stock on the exercise date of such SAR. For
purposes of this Plan, the exercise date of a SAR shall be the date the Company
receives written notification from the optionee of the exercise of the SAR in
accordance with the provisions of Section 10(c) hereof. As soon as practicable
after exercise, the Company shall either deliver to the optionee the amount of
cash due such optionee or a certificate or certificates for such shares of
Common Stock. All such shares shall be issued with the rights and restrictions
specified herein.
(f) Termination of SAR. Except as otherwise provided in case of
Disability (as defined in Section 8(c)(4) hereof) or death, no SAR shall be
exercisable after an optionee ceases to be an employee, director or advisor of
the Company or Subsidiary; provided, however, that the Committee shall have the
right in its sole discretion, but not the obligation, to extend the exercise
period for not more than three (3) months following the date such optionee
ceases to be an employee, director or advisor of the Company or a Subsidiary;
provided further, that the Committee may not extend the period during which an
optionee may exercise a SAR for a period greater than the period during which an
optionee may exercise the Related Option. If an optionee's position as an
employee, director or advisor of the Company is terminated due to the Disability
or death of such optionee, the Committee shall have the right, in its sole
discretion, but not the obligation, to extend the exercise period applicable to
the SAR for a period not to exceed the period in which the optionee may exercise
the Option related to said SAR as set forth in Sections 8(c)(4) and 8(c)(5)
hereof, respectively.
(g) Effect of Exercise of SAR. The exercise of any SAR shall cancel and
terminate the right to purchase an equal number of shares covered by the Related
Option.
(h) Effect of Exercise of Related Option. Upon the exercise or
termination of any Related Option, the SAR with respect to such Related Option
shall terminate to the extent of the number of shares of Common Stock as to
which the Related Option was exercised or terminated.
(i) Nontransferability of SAR. A SAR granted pursuant to this Plan shall
be exercisable only by the optionee or the optionee's court appointed guardian
as set forth in Section 8(c)(4) hereof during the optionee's lifetime and,
subject to the provisions of Section 10(f) hereof, shall not be assignable or
transferable by the optionee. A SAR granted pursuant to the Plan shall not be
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment, or similar
process. Any attempted transfer, assignment, pledge, hypothecation, or other
disposition of any SAR or of any rights granted thereunder contrary to the
foregoing provisions of this Section 10(i), or the levy of any attachment or
similar process upon a SAR or such rights, shall be null and void.
11. RELOAD OPTIONS
(a) Authorization of Reload Options. Concurrently with the award of
Nonqualified Options and/or the award of Incentive Options to any participant in
the Plan, the Committee may authorize reload options ("Reload Options") to
purchase for cash or shares that number of shares of Common Stock equal to the
sum of:
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(1) The number of shares of Common Stock used to exercise the
underlying Nonqualifying Option or Incentive Option; and
(2) To the extent authorized by the Committee, the number of shares
of Common Stock used to satisfy any tax withholding requirement incident to the
exercise of the underlying Nonqualifying Option or Incentive Options.
The grant of a Reload Option will become effective upon the exercise of the
underlying Nonqualifying Option, Incentive Option or Reload Option through the
use of shares of Common Stock held by the optionee for at least 12 months.
Notwithstanding the fact that the underlying option may be an Incentive Option,
a Reload Option is not intended to qualify as an "incentive stock option" under
Section 422 of the Code.
(b) Reload Option Amendment. Each option agreement shall state whether
the Committee has authorized Reload Options with respect to the underlying
Nonqualifying Option and/or Incentive Option. Upon the exercise of an underlying
Option or Incentive Option, the Reload Option will be evidenced by an amendment
to the underlying option agreement.
(c) Reload Option Price. The option price per share of Common Stock
deliverable upon the exercise of a Reload Option shall be the fair market value
of a share of Common Stock on the date the grant of the Reload Option becomes
effective.
(d) Term and Exercise. Each Reload Option is fully exercisable six months
from the effective date of grant. The term of each Reload Option shall be equal
to the remaining option term of the underlying Nonqualifying Option and/or
Incentive Option.
(e) Termination of Employment. No additional Reload Options shall be
granted to optionees when Nonqualifying Options, Incentive Option and/or Reload
Options are exercised pursuant to the terms of this Plan following termination
of the optionee's employment.
(f) Applicability of Other Sections. To the extent not inconsistent with
the foregoing provisions of this Section, the other Sections of this Plan
pertaining to Options, including Sections 5, 8, and 9, are incorporated herein
by this reference thereto as through fully set forth herein.
12. RIGHTS AS A SHAREHOLDER
The holder of an Option or a SAR shall have no rights as a shareholder with
respect to the shares covered by the Option or SAR until the due exercise of the
Option, Related Option, or SAR and the date of issuance of one or more stock
certificates to such holder for such shares. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in Section 14
hereof.
13. OPTIONEE'S AGREEMENT TO SERVE
Each employee receiving an Option shall, as one of the terms of the option
agreement agree that such employee will remain in the employ of the Company or
Subsidiary for a period of at least one (1) year from the date on which the
Option shall be granted to such employee; and that such employee will, during
such employment, devote such employee's entire time, energy, and skill to the
service of the Company or a Subsidiary as may be required by the management
thereof, subject to vacations, sick leaves, and military absences. Such
employment, subject to the provisions of any written contract between the
Company or a Subsidiary and such employee, shall be at the pleasure of the Board
of Directors of the Company or a Subsidiary, and at such compensation as the
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Company or a Subsidiary shall reasonably determine. Any termination of such
employee's employment during the period which the employee has agreed pursuant
to the foregoing provisions of this Section 13 to remain in employment that is
either for cause or voluntary on the part of the employee shall be deemed a
violation by the employee of such employee's agreement. In the event of such
violation, any Option or Options held by such employee, to the extent not
theretofore exercised, shall forthwith terminate, unless otherwise determined by
the Committee. Notwithstanding the preceding, neither the action of the Company
in establishing the Plan nor any action taken by the Company, a Subsidiary or
the Committee under the provisions hereof shall be construed as granting the
optionee the right to be retained in the employ of the Company or a Subsidiary,
or to limit or restrict the right of the Company or a Subsidiary, as applicable,
to terminate the employment of any employee of the Company or a Subsidiary, with
or without cause.
14. ADJUSTMENTS ON CHANGES IN CAPITALIZATION
(a) Changes in Capitalization. Subject to any required action by the
Shareholders of the Company, the number of shares of Common Stock covered by the
Plan, the number of shares of Common Stock covered by each outstanding Option,
and the exercise price per share thereof specified in each such Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Company resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only on the
Common Stock) or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company after the date the
Option is granted, so that upon exercise of the Option, the optionee shall
receive the same number of shares the optionee would have received had the
optionee been the holder of all shares subject to such optionee's outstanding
Option immediately before the effective date of such change in the number of
issued shares of the Common Stock of the Company.
(b) Reorganization, Dissolution or Liquidation. Subject to any required
action by the Shareholders of the Company, if the Company shall be the surviving
corporation in any merger or consolidation, each outstanding Option shall
pertain to and apply to the securities to which a holder of the number of shares
of Common Stock subject to the Option would have been entitled. A dissolution or
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving corporation, shall cause each outstanding Option to terminate
as of a date to be fixed by the Committee (which date shall be as of or prior to
the effective date of any such dissolution or liquidation or merger or
consolidation); provided, that not less than thirty (30) days written notice of
the date so fixed as such termination date shall be given to each optionee, and
each optionee shall, in such event, have the right, during the said period of
thirty (30) days preceding such termination date, to exercise such optionee's
Option in whole or in part in the manner herein set forth.
(c) Change in Par Value. In the event of a change in the Common Stock of
the Company as presently constituted, which change is limited to a change of all
of its authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any change
shall be deemed to be the Common Stock within the meaning of the Plan.
(d) Notice of Adjustments. To the extent that the adjustments set forth
in the foregoing paragraphs of this Section 14 relate to stock or securities of
the Company, such adjustments, if any, shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive, provided
that each Incentive Option granted pursuant to this Plan shall not be adjusted
in a manner that causes the Incentive Option to fail to continue to qualify as
an "Incentive Stock Option" within the meaning of Section 422 of the Code.
The Company shall give timely notice of any adjustments made to each holder
of an Option under this Plan and such adjustments shall be effective and binding
on the optionee.
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(e) Effect Upon Holder of Option. Except as hereinbefore expressly
provided in this Section 14, the holder of an Option shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class by reason of any dissolution,
liquidation, merger, reorganization, or consolidation, or spin-off of assets or
stock of another corporation, and any issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to the Option. Without
limiting the generality of the foregoing, no adjustment shall be made with
respect to the number or price of shares subject to any Option granted hereunder
upon the occurrence of any of the following events:
(1) The grant or exercise of any other options which may be granted
or exercised under any qualified or nonqualified stock option plan or under any
other employee benefit plan of the Company whether or not such options were
outstanding on the date of grant of the Option or thereafter granted;
(2) The sale of any shares of Common Stock in the Company's initial
or any subsequent public offering, including, without limitation, shares sold
upon the exercise of any overallotment option granted to the underwriter in
connection with such offering;
(3) The issuance, sale or exercise of any warrants to purchase shares
of Common Stock whether or not such warrants were outstanding on the date of
grant of the Option or thereafter issued;
(4) The issuance or sale of rights, promissory notes or other
securities convertible into shares of Common Stock in accordance with the terms
of such securities ("Convertible Securities") whether or not such Convertible
Securities were outstanding on the date of grant of the Option or were
thereafter issued or sold;
(5) The issuance or sale of Common Stock upon conversion or exchange
of any Convertible Securities, whether or not any adjustment in the purchase
price was made or required to be made upon the issuance or sale of such
Convertible Securities and whether or not such Convertible Securities were
outstanding on the date of grant of the Option or were thereafter issued or
sold; or
(6) Upon any amendment to or change in the terms of any rights or
warrants to subscribe for or purchase, or options for the purchase of, Common
Stock or Convertible Securities or in the terms of any Convertible Securities,
including, but not limited to, any extension of any expiration date of any such
right, warrant or option, any change in any exercise or purchase price provided
for in any such right, warrant or option, any extension of any date through
which any Convertible Securities are convertible into or exchangeable for Common
Stock or any change in the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock.
(f) Right of Company to Make Adjustments. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the Company to
make adjustments, reclassification, reorganizations, or changes of its capital
or business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
15. INVESTMENT PURPOSE
Each Option under the Plan shall be granted on the condition that the
purchase of the shares of stock thereunder shall be for investment purposes, and
not with a view to resale or distribution; provided, however, that in the event
the shares of stock subject to such Option are registered under the Securities
Act or in the event a resale of such shares of stock without such registration
would otherwise be permissible, such condition shall be inoperative if
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in the opinion of counsel for the Company such condition is not required under
the Securities Act or any other applicable law, regulation, or rule of any
governmental agency.
16. NO OBLIGATION TO EXERCISE OPTION OR SAR
The granting of an Option or SAR shall impose no obligation upon the
optionee to exercise such Option or SAR.
17. MODIFICATION, EXTENSION, AND RENEWAL OF OPTIONS
Subject to the terms and conditions and within the limitations of the Plan,
the Committee and the Board of Directors may modify, extend or renew outstanding
Options granted under the Plan, or accept the surrender of outstanding Options
(to the extent not theretofore exercised). Neither the Committee nor the Board
of Directors shall, however, modify any outstanding Options so as to specify a
lower price or accept the surrender of outstanding Options and authorize the
granting of new Options in substitution therefor specifying a lower price.
Notwithstanding the foregoing, however, no modification of an Option shall,
without the consent of the optionee, alter or impair any rights or obligations
under any Option theretofore granted under the Plan.
18. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective on the date of execution hereof, which date
is the date the Board of Directors approved and adopted the Plan ("Effective
Date"); provided, however, if the Shareholders of the Company shall not have
approved the Plan by the requisite vote of the Shareholders, within twelve (12)
months after the Effective Date, then the Plan shall terminate and all Options
theretofore granted under the Plan shall terminate and be null and void.
19. TERMINATION OF THE PLAN
This Plan shall terminate as of the expiration of ten (10) years from the
Effective Date. Options may be granted under this Plan at any time and from time
to time prior to its termination. Any Option outstanding under the Plan at the
time of its termination shall remain in effect until the Option shall have been
exercised or shall have expired.
20. AMENDMENT OF THE PLAN
The Plan may be terminated at any time by the Board of Directors of the
Company. The Board of Directors may at any time and from time to time without
obtaining the approval of the Shareholders of the Company or a Subsidiary,
modify or amend the Plan (including such form of option agreement as hereinabove
mentioned) in such respects as it shall deem advisable in order that the
Incentive Options granted under the Plan shall be "Incentive Stock Options" as
defined in Section 422 of the Code or to conform to any change in the law, or in
any other respect which shall not change: (a) the maximum number of shares for
which Options may be granted under the Plan, except as provided in Section 14
hereof; or (b) the option prices other than to change the manner of determining
the fair market value of the Common Stock for the purpose of Section 8(d) hereof
to conform with any then applicable provisions of the Code or regulations
thereunder; or (c) the periods during which Options may be granted or exercised;
or (d) the provisions relating to the determination of persons to whom Options
shall be granted and the number of shares to be covered by such Options; or (e)
the provisions relating to adjustments to be made upon changes in
capitalization. The termination or any modification or amendment of the Plan
shall not, without the consent of the person to whom any Option shall
theretofore have been granted, affect that person's rights under an Option
theretofore granted to such person. With the consent of the person to whom such
Option was granted, an outstanding Option may be modified or amended by the
Committee in such manner as it may deem appropriate and
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consistent with the requirements of this Plan applicable to the grant of a new
Option on the date of modification or amendment.
21. WITHHOLDING
Whenever an optionee shall recognize compensation income as a result of the
exercise of any Option or SAR granted under the Plan, the optionee shall remit
in cash to the Company or Subsidiary the minimum amount of federal income and
employment tax withholding which the Company or Subsidiary is required to remit
to the Internal Revenue Service in accordance with the then current provisions
of the Code. The full amount of such withholding shall be paid by the optionee
simultaneously with the award or exercise of an Option or SAR, as applicable.
22. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall be
indemnified by the Company against the reasonable expenses, including attorneys'
fees actually and necessarily incurred in connection with the defense of any
action, suit or proceedings, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member is liable for negligence or
misconduct in the performance of his duties; provided that within sixty (60)
days after institution of any such action, suit or proceeding a Committee member
shall in writing offer the Company the opportunity, at its own expense, to
pursue and defend the same.
23. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock pursuant
to Options granted hereunder will be used for general corporate purposes.
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24. GOVERNING LAW
This Plan shall be governed and construed in accordance with the laws of
the state of incorporation of the Company.
EXECUTED this 20th day of June, 1997.
WESTOWER CORPORATION
--------------------------------
By: Calvin J. Payne, President
ATTEST:
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Peter Lucas, Secretary
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<PAGE>
EXHIBIT 99.2
WESTOWER CORPORATION
1998 STOCK INCENTIVE COMPENSATION PLAN
SECTION 1. PURPOSE
The purpose of the Westower Corporation 1998 Stock Incentive Compensation
Plan (the "Plan") is to enhance the long-term shareholder value of Westower
Corporation, a Washington corporation (the "Company"), by offering opportunities
to employees, directors, officers, consultants, agents, advisors and independent
contractors of the Company and its Subsidiaries (as defined in Section 2) to
participate in the Company's growth and success, and to encourage them to remain
in the service of the Company and its Subsidiaries and to acquire and maintain
stock ownership in the Company.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined as set
forth below:
2.1 AWARD
"Award" means an award or grant made pursuant to the Plan, including,
without limitation, awards or grants of Options and Stock Awards, or any
combination of the foregoing.
2.2 BOARD
"Board" means the Board of Directors of the Company.
2.3 CAUSE
"Cause" means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4 CODE
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.5 COMMON STOCK
"Common Stock" means the common stock, par value $0.01 per share, of the
Company.
2.6 CORPORATE TRANSACTION
"Corporate Transaction" means any of the following events:
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Common Stock are
<PAGE>
converted into cash, securities or other property, if following such
merger or consolidation the holders of the Company's outstanding voting
securities immediately prior to such merger or consolidation own less than
a majority of the outstanding voting securities of the surviving
corporation;
(b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially
all of the Company's assets other than a transfer of the Company's assets
to a majority-owned subsidiary corporation (as the term "subsidiary
corporation" is defined in Section 8.3) of the Company;
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) under the Exchange Act.
2.7 DISABILITY
"Disability" means "disability" as that term is defined for purposes of
Section 22(e)(3) of the Code.
2.8 EARLY RETIREMENT
"Early Retirement" means early retirement as that term is defined by the
Plan Administrator from time to time for purposes of the Plan.
2.9 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.10 FAIR MARKET VALUE
"Fair Market Value" shall be as established in good faith by the Plan
Administrator or (a) if the Common Stock is listed on the American Stock
Exchange or the New York Stock Exchange, the average of the high and low per
share sales prices for the Common Stock as such price is officially quoted in
the composite tape of transactions on such exchange for a single trading day or
(b) if the Common Stock is listed on the Nasdaq National Market, the average of
the high and low per share sales prices for the Common Stock as reported by the
Nasdaq National Market for a single trading day. If there is no such reported
price for the Common Stock for the date in question, then such price on the last
preceding date for which such price exists shall be determinative of Fair Market
Value.
2.11 GOOD REASON
"Good Reason" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice by the Holder:
(a) a change in the Holder's status, title, position or
responsibilities (including reporting responsibilities) that, in the Holder's
reasonable judgment, represents a substantial reduction in the status, title,
position or responsibilities as in effect immediately prior thereto; the
assignment to the Holder of any duties or responsibilities that, in the Holder's
reasonable judgment, are materially inconsistent with such status, title,
position or responsibilities; or any removal of the Holder from or failure to
reappoint or reelect the Holder to any of such positions, except in connection
with the termination of the Holder's employment for Cause, for Disability or as
a result of his or her death, or by the Holder other than for Good Reason as
defined in this Section 2.11;
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(b) a reduction in the Holder's annual base salary;
(c) the Successor Corporation's requiring the Holder (without the
Holder's consent) to be based at any place outside a 35-mile radius of his or
her place of employment prior to a Corporate Transaction, except for reasonably
required travel on the Successor Corporation's business that is not materially
greater than such travel requirements prior to the Corporate Transaction;
(d) the Successor Corporation's failure to (i) continue in effect any
material compensation or benefit plan (or the substantial equivalent thereof) in
which the Holder was participating at the time of a Corporate Transaction,
including, but not limited to, the Plan, or (ii) provide the Holder with
compensation and benefits substantially equivalent (in terms of benefit levels
and/or reward opportunities) to those provided for under each material employee
benefit plan, program and practice as in effect immediately prior to the
Corporate Transaction;
(e) any material breach by the Successor Corporation of its
obligations to the Holder under the Plan or any substantially equivalent plan of
the Successor Corporation; or
(f) any purported termination of the Holder's employment or services
for Cause by the Successor Corporation that does not comply with the terms of
the Plan or any substantially equivalent plan of the Successor Corporation.
2.12 GRANT DATE
"Grant Date" means the date the Plan Administrator adopted the granting
resolution or a later date designated in a resolution of the Plan Administrator
as the date an Award is to be granted.
2.13 HOLDER
"Holder" means (a) the person to whom an Award is granted; (b) for a
Holder who has died, the personal representative of the Holder's estate, the
person(s) to whom the Holder's rights under the Award have passed by will or by
the applicable laws of descent and distribution, or the beneficiary designated
in accordance with Section 10; or (c) person(s) to whom an Award has been
transferred in accordance with Section 10.
2.14 INCENTIVE STOCK OPTION
"Incentive Stock Option" means an Option to purchase Common Stock granted
under Section 7 with the intention that it qualify as an "incentive stock
option" as that term is defined in Section 422 of the Code.
2.15 NONQUALIFIED STOCK OPTION
"Nonqualified Stock Option" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.
2.16 OPTION
"Option" means the right to purchase Common Stock granted under Section 7.
2.17 PLAN ADMINISTRATOR
"Plan Administrator" means the Board or any committee of the Board
designated to administer the Plan under Section 3.1.
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<PAGE>
2.18 RESTRICTED STOCK
"Restricted Stock" means shares of Common Stock granted under Section 9,
the rights of ownership of which are subject to restrictions prescribed by the
Plan Administrator.
2.19 RETIREMENT
"Retirement" means retirement as of the individual's normal retirement
date as that term is defined by the Plan Administrator from time to time for
purposes of the Plan.
2.20 SECURITIES ACT
"Securities Act" means the Securities Act of 1933, as amended.
2.21 STOCK AWARD
"Stock Award" means an Award granted under Section 9.
2.22 SUBSIDIARY
"Subsidiary," except as provided in Section 8.3 in connection with
Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.
2.23 SUCCESSOR CORPORATION
"Successor Corporation" has the meaning set forth in Section 11.2.
SECTION 3. ADMINISTRATION
3.1 PLAN ADMINISTRATOR
The Plan shall be administered by the Board or a committee or committees
(which term includes subcommittees) appointed by, and consisting of two or more
members of, the Board. If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in
selecting the Plan Administrator and the membership of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee
directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may
delegate the responsibility for administering the Plan with respect to
designated classes of eligible persons to different committees consisting of
two or more members of the Board, subject to such limitations as the Board deems
appropriate. Committee members shall serve for such term as the Board may
determine, subject to removal by the Board at any time. To the extent
consistent with applicable law, the Board may authorize a senior executive
officer of the Company to grant Awards, within limits specifically prescribed by
the Board.
3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR
Except for the terms and conditions explicitly set forth in the Plan, the
Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the
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selection of individuals to be granted Awards, the type of Awards, the number of
shares of Common Stock subject to an Award, all terms, conditions, restrictions
and limitations, if any, of an Award and the terms of any instrument that
evidences the Award. The Plan Administrator shall also have exclusive authority
to interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
SECTION 4. STOCK SUBJECT TO THE PLAN
4.1 AUTHORIZED NUMBER OF SHARES
Subject to adjustment from time to time as provided in Section 11.1, the
maximum number of shares of Common Stock which shall be available for issuance
under the Plan shall not exceed in the aggregate 10% of the issued shares of
Common Stock as of the Plan's effective date; provided that, if the number of
issued shares of Common Stock is increased after the Plan's effective date, the
maximum number of shares of Common Stock which shall be available for issuance
under the Plan shall be increased by 10% of such increase. The Plan's effective
date shall be as provided in Section 15. Subject to adjustment from time to time
as provided in Section 11.1, in no event, however, shall more than 750,000
shares of Common Stock be cumulatively available for issuance pursuant to the
exercise of Incentive Stock Options under the Plan.
4.2 LIMITATIONS
Subject to adjustment from time to time as provided in Section 11.1, not
more than 110,000 shares of Common Stock may be made subject to Awards under the
Plan to any individual in the aggregate in any one fiscal year of the Company,
except that the Company may make additional one-time grants of up to 200,000
shares to newly hired individuals, such limitation to be applied in a manner
consistent with the requirements of, and only to the extent required for
compliance with, the exclusion from the limitation on deductibility of
compensation under Section 162(m) of the Code.
4.3 REUSE OF SHARES
Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or payment of
the Award to the extent it is exercised for or settled in shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan; provided, however, that for purposes of Section 4.2, any such shares shall
be counted in accordance with the requirements of Section 162(m) of the Code.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisors
and independent contractors who provide services to the Company and its
Subsidiaries.
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<PAGE>
SECTION 6. AWARDS
6.1 FORM AND GRANT OF OPTIONS
The Plan Administrator shall have the authority, in its sole discretion,
to determine the type or types of Awards to be made under the Plan. Such Awards
may consist of Incentive Stock Options, Nonqualified Stock Options and Stock
Awards. Options may be granted singly or in combination.
6.2 ACQUIRED COMPANY AWARDS
Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or of stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding such
Awards shall be deemed to be Holders.
SECTION 7. AWARDS OF OPTIONS
7.1 GRANT OF OPTIONS
The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.
7.2 OPTION EXERCISE PRICE
The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but shall not be less than 100% of the
Fair Market Value of the Common Stock on the Grant Date with respect to
Incentive Stock Options and not less than 100% of the Fair Market Value of the
Common Stock on the Grant Date with respect to Nonqualified Stock Options.
7.3 TERM OF OPTIONS
The term of each Option shall be as established by the Plan Administrator
or, if not so established, shall be 10 years from the Grant Date.
7.4 EXERCISE OF OPTIONS
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which or the installments in which the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option will vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:
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<TABLE>
<CAPTION>
Period of Holder's Continuous Employment or Service With
the Company or Its Subsidiaries Percent of Total Option
From the Option Grant Date That Is Vested and Exercisable
<S> <C>
After 1 year 25%
After 2 years 50%
After 3 years 75%
After 4 years 100%
</TABLE>
To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised and
accompanied by payment in full as described in Section 7.5. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time (or the lesser number of remaining
shares covered by the Option).
7.5 PAYMENT OF EXERCISE PRICE
The exercise price for shares purchased under an Option shall be paid in
full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check or, unless the Plan Administrator in its sole
discretion determines otherwise, either at the time the Option is granted or at
any time before it is exercised, a combination of cash and/or check (if any)
and/or one or both of the following alternative forms: (a) tendering (either
actually or, if and so long as the Common Stock is registered under Section
12(b) or 12(g) of the Exchange Act, by attestation) Common Stock already owned
by the Holder for at least six months (or any shorter period necessary to avoid
a charge to the Company's earnings for financial reporting purposes) having a
Fair Market Value on the day prior to the exercise date equal to the aggregate
Option exercise price or (b) if and so long as the Common Stock is registered
under Section 12(b) or 12(g) of the Exchange Act, delivery of a properly
executed exercise notice, together with irrevocable instructions, to (i) a
brokerage firm designated by the Company to deliver promptly to the Company the
aggregate amount of sale or loan proceeds to pay the Option exercise price and
any withholding tax obligations that may arise in connection with the exercise
and (ii) the Company to deliver the certificates for such purchased shares
directly to such brokerage firm, all in accordance with the regulations of the
Federal Reserve Board. In addition, the exercise price for shares purchased
under an Option may be paid, either singly or in combination with one or more of
the alternative forms of payment authorized by this Section 7.5, by such other
consideration as the Plan Administrator may permit.
7.6 POST-TERMINATION EXERCISES
The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option will continue to be exercisable, and
the terms and conditions of such exercise, if a Holder ceases to be employed by,
or to provide services to, the Company or its Subsidiaries, which provisions may
be waived or modified by the Plan Administrator at any time. If not so
established in the instrument evidencing the Option, the Option will be
exercisable according to the following terms and conditions, which may be waived
or modified by the Plan Administrator at any time.
In case of termination of the Holder's employment or services other than
by reason of death or Cause, the Option shall be exercisable, to the extent of
the number of shares purchasable by the Holder at the date of such termination,
only (a) within one year if the termination of the Holder's employment or
services is coincident with
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Retirement, Early Retirement at the Company's request or Disability or (b)
within three months after the date the Holder ceases to be an employee,
director, officer, consultant, agent, advisor or independent contractor of the
Company or a Subsidiary if termination of the Holder's employment or services is
for any reason other than Retirement, Early Retirement at the Company's request
or Disability, but in no event later than the remaining term of the Option. Any
Option exercisable at the time of the Holder's death may be exercised, to the
extent of the number of shares purchasable by the Holder at the date of the
Holder's death, by the personal representative of the Holder's estate, the
person(s) to whom the Holder's rights under the Option have passed by will or
the applicable laws of descent and distribution or the beneficiary designated
pursuant to Section 10 at any time or from time to time within one year after
the date of death, but in no event later than the remaining term of the Option.
Any portion of an Option that is not exercisable on the date of termination of
the Holder's employment or services shall terminate on such date, unless the
Plan Administrator determines otherwise. In case of termination of the Holder's
employment or services for Cause, the Option shall automatically terminate upon
first notification to the Holder of such termination, unless the Plan
Administrator determines otherwise. If a Holder's employment or services with
the Company are suspended pending an investigation of whether the Holder shall
be terminated for Cause, all the Holder's rights under any Option likewise shall
be suspended during the period of investigation.
A transfer of employment or services between or among the Company and its
Subsidiaries shall not be considered a termination of employment or services.
The effect of a Company-approved leave of absence on the terms and conditions of
an Option shall be determined by the Plan Administrator, in its sole discretion.
SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:
8.1 DOLLAR LIMITATION
To the extent the aggregate Fair Market Value (determined as of the Grant
Date) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company) exceeds $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock Option. In the
event the Holder holds two or more such Options that become exercisable for the
first time in the same calendar year, such limitation shall be applied on the
basis of the order in which such Options are granted.
8.2 10% SHAREHOLDERS
If an individual owns more than 10% of the total voting power of all
classes of the Company's stock, then the exercise price per share of an
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Grant Date and the Option term shall not exceed five
years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.
8.3 ELIGIBLE EMPLOYEES
Individuals who are not employees of the Company or one of its parent
corporations or subsidiary corporations may not be granted Incentive Stock
Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary
corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.
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8.4 TERM
The term of an Incentive Stock Option shall not exceed 10 years.
8.5 EXERCISABILITY
To qualify for Incentive Stock Option tax treatment, an Option designated
as an Incentive Stock Option must be exercised within three months after
termination of employment for reasons other than death, except that, in the case
of termination of employment due to total disability, such Option must be
exercised within one year after such termination. Employment shall not be
deemed to continue beyond the first 90 days of a leave of absence unless the
Holder's reemployment rights are guaranteed by statute or contract. For
purposes of this Section 8.5, "total disability" shall mean a mental or physical
impairment of the Holder that is expected to result in death or that has lasted
or is expected to last for a continuous period of 12 months or more and that
causes the Holder to be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties for the Company and to be
engaged in any substantial gainful activity. Total disability shall be deemed
to have occurred on the first day after the Company and the two independent
physicians have furnished their opinion of total disability to the Plan
Administrator.
8.6 TAXATION OF INCENTIVE STOCK OPTIONS
In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Holder must hold the shares issued
upon the exercise of an Incentive Stock Option for two years after the Grant
Date of the Incentive Stock Option and one year from the date of exercise. A
Holder may be subject to the alternative minimum tax at the time of exercise of
an Incentive Stock Option. The Plan Administrator may require a Holder to give
the Company prompt notice of any disposition of shares acquired by the exercise
of an Incentive Stock Option prior to the expiration of such holding periods.
SECTION 9. STOCK AWARDS
9.1 GRANT OF STOCK AWARDS
The Plan Administrator is authorized to make Awards of Common Stock on
such terms and conditions and subject to such restrictions, if any (which may be
based on continuous service with the Company or the achievement of performance
goals related to profits, profit growth, profit-related return ratios, cash flow
or total shareholder return, where such goals may be stated in absolute terms or
relative to comparison companies), as the Plan Administrator shall determine, in
its sole discretion, which terms, conditions and restrictions shall be set forth
in the instrument evidencing the Award. The terms, conditions and restrictions
that the Plan Administrator shall have the power to determine shall include,
without limitation, the manner in which shares subject to Stock Awards are held
during the periods they are subject to restrictions and the circumstances under
which forfeiture of Restricted Stock shall occur by reason of termination of the
Holder's services.
9.2 ISSUANCE OF SHARES
Upon the satisfaction of any terms, conditions and restrictions prescribed
in respect to a Stock Award, or upon the Holder's release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan
Administrator, the Company shall release, as soon as practicable, to the Holder
or, in the case of the Holder's death, to the personal representative of the
Holder's estate or as the appropriate court directs, the appropriate number of
shares of Common Stock.
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9.3 WAIVER OF RESTRICTIONS
Notwithstanding any other provisions of the Plan, the Plan Administrator
may, in its sole discretion, waive the forfeiture period and any other terms,
conditions or restrictions on any Restricted Stock under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem
appropriate.
SECTION 10. ASSIGNABILITY
No Option or Stock Award granted under the Plan may be assigned, pledged
or transferred by the Holder other than by will or by the applicable laws of
descent and distribution, and, during the Holder's lifetime, such Awards may be
exercised only by the Holder or a permitted assignee or transferee of the Holder
(as provided below). Notwithstanding the foregoing, and to the extent permitted
by Section 422 of the Code, the Plan Administrator, in its sole discretion, may
permit such assignment, transfer and exercisability and may permit an Holder to
designate a beneficiary who may exercise the Award after the Holder's death;
provided, however, that any Award so assigned or transferred shall be subject to
all the same terms and conditions contained in the instrument evidencing the
Award.
SECTION 11. ADJUSTMENTS
11.1 ADJUSTMENT OF SHARES
In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to shareholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure
results in (a) the outstanding shares, or any securities exchanged therefor or
received in their place, being exchanged for a different number or class of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities subject to the Plan as set forth in Section 4.1, (ii) the
maximum number and kind of securities that may be made subject to Awards to any
individual as set forth in Section 4.2, and (iii) the number and kind of
securities that are subject to any outstanding Award and the per share price of
such securities, without any change in the aggregate price to be paid therefor.
The determination by the Plan Administrator as to the terms of any of the
foregoing adjustments shall be conclusive and binding. Notwithstanding the
foregoing, a Corporate Transaction shall not be governed by this Section 11.1
but shall be governed by Section 11.2.
11.2 CORPORATE TRANSACTION
(a) Except as otherwise provided in the instrument that evidences the
Award, in the event of any Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100% vested and exercisable.
(b) Such Award shall not so accelerate, however, if and to the extent that
such Award is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof (the "Successor
Corporation") or to be replaced with a comparable award for the purchase of
shares of the capital stock of the Successor Corporation. The determination of
Award comparability shall be made by the Plan Administrator, and its
determination shall be conclusive and binding. Any such Awards that are assumed
or replaced in the Corporate Transaction and do not otherwise accelerate at that
time shall be accelerated in the event that the Holder's employment or services
should subsequently terminate within two years following such Corporate
Transaction,
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<PAGE>
unless such employment or services are terminated by the Successor Corporation
for Cause or by the Holder's voluntarily without Good Reason.
(c) All such Awards shall terminate and cease to remain outstanding
immediately following the consummation of the Corporate Transaction, except to
the extent assumed by the Successor Corporation.
(d) The acceleration will not occur if, in the opinion of the Company's
outside accountants, it would render unavailable "pooling of interest"
accounting for a Corporate Transaction that would otherwise qualify for such
accounting treatment.
11.3 FURTHER ADJUSTMENT OF OPTIONS
Subject to Section 11.2, the Plan Administrator shall have the discretion,
exercisable at any time before a sale, merger, consolidation, reorganization,
liquidation or change in control of the Company, as defined by the Plan
Administrator, to take such further action as it determines to be necessary or
advisable, and fair and equitable to Holders, with respect to Awards. Such
authorized action may include (but shall not be limited to) establishing,
amending or waiving the type, terms, conditions or duration of, or restrictions
on, Awards so as to provide for earlier, later, extended or additional time for
exercise and other modifications, and the Plan Administrator may take such
actions with respect to all Holders, to certain categories of Holders or only to
individual Holders. The Plan Administrator may take such action before or after
granting Awards to which the action relates and before or after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation or change in control that is the reason for such action.
11.4 LIMITATIONS
The grant of Awards will in no way affect the Company's right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
SECTION 12. WITHHOLDING
The Company may require the Holder to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, vesting or exercise of any Award. Subject to the Plan and applicable
law, the Plan Administrator may, in its sole discretion, permit the Holder to
satisfy withholding obligations, in whole or in part, by paying cash, by
electing to have the Company withhold shares of Common Stock or by transferring
shares of Common Stock to the Company, in such amounts as are equivalent to the
Fair Market Value of the withholding obligation. The Company shall have the
right to withhold from any Award or any shares of Common Stock issuable pursuant
to an Award or from any cash amounts otherwise due or to become due from the
Company to the Holder an amount equal to such taxes. The Company may also
deduct from any Award any other amounts due from the Holder to the Company or a
Subsidiary.
SECTION 13. AMENDMENT AND TERMINATION OF PLAN
13.1 AMENDMENT OF PLAN
The Plan may be amended only by the Board in such respects as it shall
deem advisable; however, to the extent required for compliance with Section 422
of the Code or any applicable law or regulation, shareholder approval will be
required for any amendment that will (a) increase the total number of shares as
to which Options may be granted under the Plan or that may be issued as Stock
Awards, (b) modify the class of persons eligible to receive Options, or (c)
otherwise require shareholder approval under any applicable law or regulation.
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<PAGE>
13.2 TERMINATION OF PLAN
The Board may suspend or terminate the Plan at any time. The Plan will
have no fixed expiration date; provided, however, that no Incentive Stock
Options may be granted more than 10 years after the earlier of the Plan's
adoption by the Board and approval by the shareholders.
13.3 CONSENT OF HOLDER
The amendment or termination of the Plan shall not, without the consent of
the Holder of any Award under the Plan, impair or diminish any rights or
obligations under any Award theretofore granted under the Plan.
Any change or adjustment to an outstanding Incentive Stock Option shall
not, without the consent of the Holder, be made in a manner so as to constitute
a "modification" that would cause such Incentive Stock Option to fail to
continue to qualify as an Incentive Stock Option.
SECTION 14. GENERAL
14.1 AWARD AGREEMENTS
Awards granted under the Plan shall be evidenced by a written agreement
that shall contain such terms, conditions, limitations and restrictions as the
Plan Administrator shall deem advisable and that are not inconsistent with the
Plan.
14.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN AWARDS
None of the Plan, participation in the Plan or any action of the Plan
Administrator taken under the Plan shall be construed as giving any person any
right to be retained in the employ of the Company or limit the Company's right
to terminate the employment or services of any person.
14.3 REGISTRATION
The Company shall be under no obligation to any Holder to register for
offering or resale or to qualify for exemption under the Securities Act, or to
register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.
The Company may issue certificates for shares with such legends and subject to
such restrictions on transfer and stop-transfer instructions as counsel for the
Company deems necessary or desirable for compliance by the Company with federal
and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
14.4 NO RIGHTS AS A SHAREHOLDER
No Option shall entitle the Holder to any dividend, voting or other right
of a shareholder unless and until the date of issuance under the Plan of the
shares that are the subject of such Option, free of all applicable restrictions.
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<PAGE>
14.5 COMPLIANCE WITH LAWS AND REGULATIONS
Notwithstanding anything in the Plan to the contrary, the Board, in its
sole discretion, may bifurcate the Plan so as to restrict, limit or condition
the use of any provision of the Plan to Holders who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other Holders. Additionally, in
interpreting and applying the provisions of the Plan, any Option granted as an
Incentive Stock Option pursuant to the Plan shall, to the extent permitted by
law, be construed as an "incentive stock option" within the meaning of Section
422 of the Code.
14.6 NO TRUST OR FUND
The Plan is intended to constitute an "unfunded" plan. Nothing contained
herein shall require the Company to segregate any monies or other property, or
shares of Common Stock, or to create any trusts, or to make any special deposits
for any immediate or deferred amounts payable to any Holder, and no Holder shall
have any rights that are greater than those of a general unsecured creditor of
the Company.
14.7 SEVERABILITY
If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
SECTION 15. EFFECTIVE DATE
The Plan's effective date is the date on which it is adopted by the Board,
so long as it is approved by the Company's shareholders at any time within 12
months of such adoption.
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<PAGE>
EXHIBIT 99.3
WESTOWER CORPORATION
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
FOR NONEMPLOYEE DIRECTORS
TO: [[Name]] Date of Grant: [[Grant]]
We are pleased to inform you that you have been selected by the Board of
Directors of Westower Corporation (the "Company") to receive a nonqualified
stock option for the purchase of [[Shares]] shares of the Common Stock of the
Company at an exercise price of $[[Price]] per share.
The grant of the option described in this Agreement is made pursuant to the
terms and conditions of this Agreement and except as otherwise provided herein,
upon the other terms and conditions set forth in the Company's 1997 Stock
Compensation Plan (the "Plan"), a copy of which is incorporated into this
Agreement by reference.
The terms of this option are summarized as follows:
TERM: The term of this option is five years from date of grant ("Grant
Date"), unless sooner terminated as provided below.
VESTING: This option will vest and become immediately exercisable upon the
Grant Date.
EXERCISE: During your lifetime only you can exercise this option, except
that the option may be exercised by the personal representative of your estate
or the beneficiary thereof following your death. You may use the Notice of
Exercise of Nonqualified Stock Option in the form attached to this Agreement
when you exercise this option.
TERMINATION: The option will terminate one year after termination of your
relationship with the Company as a result of disability or death and ninety days
after all other terminations, but in each case not later than the remaining term
of this option. Any portion of the option that is not exercisable at the time
of cessation of your relationship with the Company will terminate at such time.
PAYMENT FOR SHARES: This option may be exercised by the delivery of one or
more of the following:
(a) Cash or check; and/or
(b) Tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), by attestation) shares of the Common Stock of
the Company having a fair market value (as of the date of receipt of such shares
by the Company) equal to the purchase price for the number of shares of Common
Stock purchased. (You should consult your tax advisor before exercising this
option with stock you received upon the exercise of an incentive stock option.)
<PAGE>
CONTINUATION OF DIRECTOR IN SAME STATUS: Nothing contained in this
Agreement or in any action taken pursuant to this Agreement will be construed as
creating or constituting evidence of any agreement or understanding, express or
implied, that a nonemployee director will have any right to continue as a
director of the Company or in any other capacity for any period of time or at a
particular retainer or other rate of compensation.
TRANSFER OF OPTION: This option is not transferable except by will or by
the applicable laws of descent and distribution.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
HOLDING PERIODS:
A. SECURITIES EXCHANGE ACT SECTION 16
If an individual subject to Section 16 of the Exchange Act sells shares of
Common Stock obtained upon the exercise of a stock option within six months
after the date this option was granted, such sale may result in short-swing
profit recovery under Section 16(b) of the Exchange Act.
B. TAXATION
You should obtain tax advice when exercising any option and prior to the
disposition of the shares issued upon the exercise of any option.
REGISTRATION: AT THE PRESENT TIME, THE COMPANY INTENDS TO FILE AND
MAINTAIN AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES THAT
WILL BE ISSUED UPON THE EXERCISE OF THIS OPTION. THE COMPANY INTENDS TO
MAINTAIN THIS REGISTRATION BUT HAS NO OBLIGATION TO DO SO. IN THE EVENT THAT
SUCH REGISTRATION IS NO LONGER EFFECTIVE, YOU WILL NOT BE ABLE TO EXERCISE THIS
OPTION UNLESS EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES
LAWS ARE AVAILABLE; SUCH EXEMPTIONS FROM REGISTRATION ARE VERY LIMITED AND MIGHT
BE UNAVAILABLE.
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
WESTOWER CORPORATION
By_________________________________
Its ____________________________
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<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ____________, accept the nonqualified stock
option described above and acknowledge receipt of a copy of this Agreement and
the Plan. I have read and understood the Agreement.
Dated: _____________________________ _______________________________________
[[Name]]
Address________________________________
____________________________________ _______________________________________
Taxpayer I.D. Number _______________________________________
By his or her signature below, the spouse of the Optionee, if such Optionee
is legally married as of the date of his or her execution of this Agreement,
acknowledges that he or she has read this Agreement and is familiar with the
terms and provisions thereof, and agrees to be bound by all the terms and
conditions of this Agreement.
Dated: _________________
_____________________________
Spouse's Signature
_____________________________
Printed Name
By his or her signature below, the Optionee represents that he or she is
not legally married as of the date of execution of this Agreement.
Dated: _________________
_____________________________
Optionee's Signature
<PAGE>
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: WESTOWER CORPORATION
I, a resident of the State of _____________, hereby exercise my
nonqualified stock option granted by the Board of Directors of Westower
Corporation (the "Company") on ____________, 19__, subject to all the terms and
provisions of the Nonqualified Stock Option Letter Agreement and notify the
Company of my desire to purchase _______ shares of Common Stock of the Company
(the "Securities") at the exercise price of $[[Price]] per share which were
offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with a copy
of the Plan and all information which I deem necessary to evaluate the merits
and risks of the purchase of the Securities; (2) I have had the opportunity to
ask questions and receive answers concerning the information received about the
Securities and the Company; and (3) I have been given the opportunity to obtain
any additional information I deem necessary to verify the accuracy of any
information obtained concerning the Securities and the Company.
Dated: _____________________________ _____________________________________
[[Name]]
Address _____________________________
____________________________________ _____________________________________
Taxpayer I.D. Number _____________________________________
<PAGE>
RECEIPT
______________________ hereby acknowledges receipt from _________________
in payment for ________ shares of Common Stock of Westower Corporation, a
Washington corporation, of $___________________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] __________ shares of the Company's Common Stock,
fair market value $_______ per share
Date: _______________________ By: __________________________
FMV on such date: $__________ For: Westower Corporation
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<PAGE>
WESTOWER CORPORATION
NONQUALIFIED STOCK OPTION LETTER AGREEMENT
TO: [[Name]] Date of Grant: [[Grant]]
We are pleased to inform you that you have been selected by the Board of
Directors of Westower Corporation (the "Company") to receive a nonqualified
stock option for the purchase of [[Shares]] shares of the Common Stock of the
Company at an exercise price of $[[Price]] per share.
The grant of the option described in this Agreement is made pursuant to the
terms and conditions of this Agreement and except as otherwise provided herein,
upon the other terms and conditions set forth in the Company's 1997 Stock
Compensation Plan (the "Plan"), a copy of which is incorporated into this
Agreement by reference.
The terms of this option are summarized as follows:
TERM: The term of this option is five years from date of grant ("Grant
Date"), unless sooner terminated.
VESTING: This option will vest and become exercisable according to the
following schedule:
DATE ON AND AFTER WHICH OPTION IS PORTION OF TOTAL OPTION WHICH IS
EXERCISABLE EXERCISABLE
[[Grant1]] 33.33%
[[Grant2]] 66.66%
[[Grant3]] 100%
TERMINATION: This option will terminate immediately upon termination for
cause, as defined below, or one year after termination of employment as a result
of disability or death, but in each case not later than the remaining term of
this option. This option will terminate three months after all other
terminations, but in each case not later than the remaining term of this option;
provided, however, that if the optionee terminates employment voluntarily within
one year from the Grant Date, this option will terminate immediately on the date
of such termination.
"Cause," for purposes of this Agreement, means dishonesty, fraud,
misconduct, unauthorized use or disclosure of confidential information or trade
secrets, or conviction or confession of a crime punishable by law (except minor
violations), in each case as determined by the Plan Administrator, and its
determination will be conclusive and binding.
EXERCISE: During your lifetime only you can exercise this option. The
personal representative of your estate or the beneficiary thereof following your
death also may exercise this option. You may use the Notice of Exercise of
Nonqualified Stock Option in the form attached to this Agreement when you
exercise this option.
PAYMENT FOR SHARES: This option may be exercised by the delivery of one or
more of the following:
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<PAGE>
(a) Cash or check; and/or
(b) Tendering (either actually or, if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), by attestation) shares of the Common Stock of
the Company having a fair market value (as of the date of receipt of such shares
by the Company) equal to the purchase price for the number of shares of Common
Stock purchased. (You should consult your tax advisor before exercising this
option with stock you received upon the exercise of an incentive stock option.)
WITHHOLDING TAXES: As a condition to the exercise of this option, you will
remit in cash to the Company the amount of any payment required by the Company
for the satisfaction of any federal, state or local withholding tax obligations
that may arise in connection with such exercise.
CONTINUED EMPLOYMENT OR SERVICES: Nothing contained in this Agreement or
in any action taken pursuant to this Agreement will be construed as giving any
person the right to be retained in the employ of the Company or limit the
Company's right to terminate the employment or services of any person.
TRANSFER OF OPTION: This option is not transferable except by will or by
the applicable laws of descent and distribution.
NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights
and privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
HOLDING PERIODS:
A. SECURITIES EXCHANGE ACT SECTION 16
If an individual subject to Section 16 of the Exchange Act sells shares of
Common Stock obtained upon the exercise of a stock option within six months
after the date this option was granted, such sale may result in short-swing
profit recovery under Section 16(b) of the Exchange Act.
B. TAXATION
You should obtain tax advice when exercising any option and prior to the
disposition of the shares issued upon the exercise of any option.
REGISTRATION: AT THE PRESENT TIME, THE COMPANY INTENDS TO FILE AND
MAINTAIN AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES THAT
WILL BE ISSUED UPON THE EXERCISE OF THIS OPTION. THE COMPANY INTENDS TO
MAINTAIN THIS REGISTRATION BUT HAS NO OBLIGATION TO DO SO. IN THE EVENT THAT
SUCH REGISTRATION IS NO LONGER EFFECTIVE, YOU WILL NOT BE ABLE TO EXERCISE THIS
OPTION UNLESS EXEMPTIONS FROM REGISTRATION UNDER FEDERAL AND STATE SECURITIES
LAWS ARE AVAILABLE; SUCH EXEMPTIONS FROM REGISTRATION ARE VERY LIMITED AND MIGHT
BE UNAVAILABLE.
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<PAGE>
Please execute the Acceptance and Acknowledgment set forth below on the
enclosed copy of this Agreement and return it to the undersigned.
Very truly yours,
WESTOWER CORPORATION
By______________________________
Its_________________________
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<PAGE>
ACCEPTANCE AND ACKNOWLEDGMENT
I, a resident of the State of ____________, accept the nonqualified stock
option described above and acknowledge receipt of a copy of this Agreement and
the Plan. I have read and understood the Agreement.
Dated: ____________________________ ___________________________________
[[Name]]
Address____________________________
___________________________________ ___________________________________
Taxpayer I.D. Number ___________________________________
By his or her signature below, the spouse of the Optionee, if such Optionee
is legally married as of the date of his or her execution of this Agreement,
acknowledges that he or she has read this Agreement and is familiar with the
terms and provisions thereof, and agrees to be bound by all the terms and
conditions of this Agreement.
Dated: _________________
__________________________________
Spouse's Signature
__________________________________
Printed Name
By his or her signature below, the Optionee represents that he or she is
not legally married as of the date of execution of this Agreement.
Dated: _________________
__________________________________
Optionee's Signature
<PAGE>
NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION
To: WESTOWER CORPORATION
I, a resident of the State of _____________, hereby exercise my
nonqualified stock option granted by the Board of Directors of Westower
Corporation (the "Company") on ____________, 19__, subject to all the terms and
provisions of the Nonqualified Stock Option Letter Agreement and notify the
Company of my desire to purchase _______ shares of Common Stock of the Company
(the "Securities") at the exercise price of $[[Price]] per share which were
offered to me pursuant to said option.
I hereby represent and warrant that (1) I have been furnished with a copy
of the Plan and all information which I deem necessary to evaluate the merits
and risks of the purchase of the Securities; (2) I have had the opportunity to
ask questions and receive answers concerning the information received about the
Securities and the Company; and (3) I have been given the opportunity to obtain
any additional information I deem necessary to verify the accuracy of any
information obtained concerning the Securities and the Company.
Dated: ________________________ _________________________________
[[Name]]
Address__________________________
_______________________________ _________________________________
Taxpayer I.D. Number _________________________________
<PAGE>
RECEIPT
______________________ hereby acknowledges receipt from ___________ in
payment for ________ shares of Common Stock of Westower Corporation, a
Washington corporation, of $___________________ in the form of
[_] Cash
[_] Check (personal, cashier's or bank certified)
[_] _______ shares of the Company's Common Stock,
fair market value $______ per share
Date: ________________________ By: _____________________________
FMV on such date: $___________ For: Westower Corporation
