<PAGE>
As filed with the Securities and Exchange Commission on January 23, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------------
Midas, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-4180556
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
225 North Michigan Avenue 60601
Chicago, Illinois (Zip Code)
(Address of principal executive offices)
Midas, Inc.
Stock Incentive Plan
(Full title of the plan)
Robert H. Sorensen
Vice President, Secretary and General Counsel
Midas, Inc.
225 North Michigan Avenue
Chicago, Illinois 60601
(312) 565-7500
(Name, address, and telephone number,
including area code, of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate
Securities to be to be Price Per Offering Amount of
Registered Registered Share Price Registration Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,010,000 shares(1) $15.6875(2) $15,844,375(2) $4,674.10
$.001 par value
Preferred Stock 1,010,000 rights (3) (3) (3)
Purchase Rights
==================================================================================================
</TABLE>
(1) This registration statement also covers such additional and indeterminate
number of shares as may become issuable because of the provisions of the
Midas, Inc. Stock Incentive Plan (the "Plan") relating to adjustments for
changes resulting from a stock dividend, spin-off, split-up,
recapitalization, merger, consolidation, combination or exchange of shares,
or similar change.
(2) Estimated solely for the purpose of calculating the registration fee and,
pursuant to Rule 457(h) under the Securities Act of 1933, based upon the
average of the high and low sale prices of the Common Stock reported on the
New York Stock Exchange on January 21, 1998.
(3) Rights to purchase Series A Junior Participating Preferred Stock (the
"Rights") initially are attached to and trade with the shares of Common
Stock being registered hereby. Value attributable to such Rights, if any,
is reflected in the market price of the Common Stock.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by Midas, Inc. (the "Company") are
incorporated herein by reference:
(a) The Company's effective Registration Statement on Form 10, as amended
(Commission File No. 1-13409);
(b) All of the Company's other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since December 31, 1996; and
(c) The descriptions of the Company's Common Stock, par value $.001 per
share, and the Rights associated therewith, which are contained in the
Section entitled "Description of Capital Stock of the Companies" in
Exhibit 99 to the Company's Registration Statement on Form 10/A No. 3
(Post-Effective Amendment No. 1).
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the respective dates of filing of such documents (such
documents, and the documents enumerated above, being hereinafter referred to as
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
In accordance with Section 102(b)(7) of the Delaware General Corporation
Law (the "Delaware Law"), the Company's Certificate of Incorporation, as amended
(the "Charter"), provides that directors shall not be personally liable to the
Company or its shareholders for monetary damages for breaches of their fiduciary
duty as directors except for (i) breaches of their duty of loyalty to the
Company or its shareholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or knowing violations of law, (iii) certain
transactions under Section 174 of the Delaware Law, which concerns unlawful
payments of dividends, stock purchases or redemptions or (iv) transactions from
which a director derives an improper personal benefit.
The Charter provides that each person who is or was or had agreed to become
a director or officer of the Company, or each person who is or was serving or
who had agreed to serve at the request of the board of directors of the Company
or an officer of the Company as a director, officer or employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
(including the heirs, executors, administrators or estate of such person), will
be indemnified by the Company, in accordance with and pursuant to the By-Laws of
the Company (the "By-Laws"). In addition, the Company may provide
indemnification to its employees and agents to the extent provided by action of
its board of directors pursuant to the By-Laws. The Company may also enter into
one or more agreements with any person providing for indemnification greater or
different than that provided in the Charter.
<PAGE>
The By-Laws provide that each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative is or was a director or officer of the Company
or is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such Proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while servicing as a director, officer, employee or agent, will be indemnified
and held harmless by the Company to the fullest extent authorized by the
Delaware Law as the same exists or may in the future be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Company to provide broader indemnification rights than Delaware Law permitted
the Company to provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, excise taxes under the
Employee Retirement Income Security Act of 1974 or penalties and amounts paid in
settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification will continue as to a person who has ceased
to be a director, officer, employee or agent and will inure to the benefit if
his or her heirs, executors and administrators; provided, however, that except
as described in the following paragraph with respect to Proceedings to enforce
rights to indemnification, the Company will indemnify any such person seeking
indemnification in connection with a Proceeding (or part thereof) initiated by
such person only if such Proceeding (or part thereof) was authorized by the
board of directors or the Company. The Company's board of directors may provide
indemnification to employees and agents of the Company to the same extent as
provided to directors and officers of the Company.
Pursuant to the By-Laws, if a claim described in the preceding paragraph is
not paid in full by the Company within thirty days after a written claim has
been received by the Company, the claimant may at any time thereafter bring suit
against the Company to recover the unpaid amount of the claim and, if successful
in whole or in part, the claimant will also be entitled to be paid the expense
of prosecuting such claim. The By-Laws provide that it will be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any Proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the Company)
that the claimant has not met the standards of conduct which make it permissible
under the Delaware Law for the Company to indemnify the claimant for the amount
claimed, but the burden of providing such defense will be on the Company.
Neither the failure of the Company (including the board of directors of the
Company, independent legal counsel or stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in the Delaware Law, nor an actual determination by the
Company (including the board of directors of the Company, independent legal
counsel or shareholders) that the claimant has not met such applicable standard
of conduct, will be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
The By-Laws provide that the right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in the By-Laws will not be exclusive of any other right which any
person may have or may in the future acquire under any statute, provision of the
Charter, the By-Laws, agreement, vote of stockholders or disinterested directors
or otherwise. The By-Laws permit the Company to maintain insurance, at its
expense to protect itself and any director, officer, employee or agent of the
Company or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the Company
would have the power to indemnify such person against such expense, liability or
loss under the Delaware Law. The Company has obtained liability insurance
providing coverage to its directors and officers.
The By-Laws provide that the right to indemnification conferred therein is
a contract right and includes the right to be paid by the Company the expenses
incurred in defending any such Proceeding in advance of its final disposition,
except that if the Delaware Law requires, the payment of such expenses incurred
by a director or officer in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such person
while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a Proceeding, will
be made only upon delivery to the Company of an undertaking by or on behalf of
such director or officer, to repay all amounts so advanced if it is ultimately
determined that such director or officer is not entitled to be indemnified under
the By-Laws or otherwise.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-2
<PAGE>
Item 8. Exhibits.
See the accompanying Exhibit Index for a list of Exhibits to this
Registration Statement.
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remained unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
The Registrant. 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 Chicago, State of Illinois on this 22nd day of
January, 1998.
MIDAS, INC.
By: R. Lee Barclay
-----------------------------
R. Lee Barclay
Executive Vice President and Chief Financial
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints R. Lee Barclay and Robert H.
Sorensen, and each or either of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated, on this 22nd day of January, 1998.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
Wendel H. Province Chairman and Chief Executive Officer
- ---------------------------- (principal executive officer)
Wendel H. Province
R. Lee Barclay Executive Vice President and Chief Financial Officer
- ---------------------------- (principal financial officer)
R. Lee Barclay
Edwin A. Grell Vice President-Controller
- ---------------------------- (principal accounting officer)
Edwin A. Grell
Thomas L. Bindley Director
- ----------------------------
Thomas L. Bindley
William B. Moore Director
- ----------------------------
William B. Moore
Frank T. Westover Director
- -----------------------------
Frank T. Westover
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
4.1 Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3(i).1 to the Company's Registration
Statement on Form 10 (Commission File No. 1-13409)).
4.2 Certificate of Amendment of the Certificate of Incorporation of
the Company, dated December 30, 1997 (incorporated by reference
to Exhibit 3(i).2 to the Company's Registration Statement on Form
10/A No. 3 (Post-Effective Amendment No. 1)).
4.3 Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company (incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on Form S-8
(Registration No. 333-44625) (the "Form S-8")).
4.4 By-Laws of the Company (as amended December 31, 1997)
(incorporated by reference to Exhibit 4.4 to the Form S-8).
4.5 Rights Agreement, dated as of December 31, 1997, between the
Company and First Chicago Trust Company of New York, as Rights
Agent (incorporated by reference to Exhibit 4.5 to the Form S-8).
4.6* Midas, Inc. Stock Option Plan.
5* Opinion of Sidley & Austin.
23.1* Consent of KPMG Peat Marwick LLP.
23.2* Consent of Sidley & Austin (contained in Exhibit 5 hereto).
24* Powers of Attorney (contained on the signature page to this
Registration Statement).
</TABLE>
________________________
*Filed herewith
II-5
<PAGE>
EXHIBIT 4.6
MIDAS, INC.
STOCK INCENTIVE PLAN
(as adopted November 21, 1997)
1. Definitions
The following definitions shall be applicable throughout this Plan:
(a) "Code" shall mean the Internal Revenue Code of 1986, as the same
may be amended from time to time. Reference in the Plan to any section of
the Code shall be deemed to include any amendments or successor provision
to such section and any regulations under such section.
(b) "Committee" shall mean the Committee selected by the Board of
Directors as provided in Paragraph 4, consisting of two or more members of
the Board of Directors, each of whom shall be (i) a "Non-Employee Director"
within the meaning of Rule 16b-3 under the Exchange Act, and (ii) an
"outside director" within the meaning of Section 162(m) of the Code.
(c) "Common Stock" shall mean common stock of the Corporation, with
par value of $.001 per share.
(d) "Corporation" shall mean Midas, Inc., a Delaware corporation.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f) "Holder" shall mean an individual who has been granted an Option,
Restricted Stock Award or Performance Award.
(g) "Option" shall mean any option granted under the Plan for the
purchase of Common Stock.
(h) "Performance Award" shall mean an award granted under the
Performance Award provisions of the Plan.
(i) "Plan" shall mean the Corporation's Stock Incentive Plan, as
amended from time to time.
(j) "Restricted Stock Award" shall mean an award of Common Stock
granted under the Restricted Stock Award provisions of the Plan.
<PAGE>
(k) "Retirement" shall mean cessation of active employment or service
with the Corporation or a subsidiary pursuant to the Corporation's
retirement policies and programs.
(l) "SAR" shall mean a stock appreciation right which is issued in
tandem with, or by reference to, an Option, which entitles the Holder
thereof to receive, upon exercise of such SAR and surrender for
cancellation of all or a portion of such Option, shares of Common Stock,
cash or a combination thereof with an aggregate value equal to the excess
of the fair market value of one share of Common Stock on the date of
exercise over the purchase price specified in such Option, multiplied by
the number of shares of Common Stock subject to such Option, or portion
thereof, which is surrendered.
2. Purpose
It is the purpose of the Plan to provide a means through which the
Corporation may attract able persons to enter its employ and the employ of its
subsidiaries, to serve as directors and to provide a means whereby those persons
upon whom the responsibilities of the successful administration and management
of the Corporation or its subsidiaries rest, and whose present and potential
contributions to the welfare of the Corporation or its subsidiaries are of
importance, can acquire and maintain stock ownership. Such persons should thus
have a greater than ordinary concern for the welfare of the Corporation and/or
its subsidiaries and would be expected to strengthen and maintain a desire to
remain in the employ or service of the Corporation or its subsidiaries. It is a
further purpose of the Plan to provide such persons with additional incentive
and reward opportunities designed to enhance the profitable growth of the
Corporation. So that the maximum incentive can be provided each participant in
the Plan by granting such participant an Option or award best suited to such
participant's circumstances, the Plan provides for granting "incentive stock
options" (as defined in Section 422 of the Code) and nonqualified stock options
(with or without SARs), Restricted Stock Awards and Performance Awards, or any
combination of the foregoing.
3. Effective Date and Duration of the Plan
The Plan is subject to approval by Whitman Corporation ("Whitman"),
the sole shareholder of the Corporation, and shall become effective concurrently
with the distribution by Whitman to its shareholders of all of the outstanding
shares of Common Stock held by Whitman (the "Distribution"). The Plan may be
submitted at the 1999 annual meeting of the shareholders of the Corporation for
approval in accordance with Section 162(m) of the Code. The Plan shall remain
in effect until all Options granted under the Plan have been exercised, all
restrictions imposed upon Restricted Stock Awards have been eliminated and all
Performance Awards have been satisfied.
2
<PAGE>
4. Administration
The members of the Committee shall be selected by the Board of
Directors to administer the Plan. A majority of the Committee shall constitute
a quorum. Subject to the express provisions of the Plan, the Committee shall
have authority, in its discretion, to determine the individuals to receive
Options (with or without SARs), Restricted Stock Awards and Performance Awards,
the time or times when they shall receive them, whether an "incentive stock
option" under Section 422 of the Code or nonqualified option shall be granted,
the number of shares to be subject to each Option and Restricted Stock Award and
the value of each Performance Award. In making such determinations the
Committee shall take into account the nature of the services rendered by each
individual, such individual's present and potential contribution to the
Corporation's success, and such other factors as the Committee shall deem
relevant.
The Committee shall have such additional powers as are delegated to it
by the other provisions of the Plan and, subject to the express provisions of
the Plan, to construe the respective Option, Restricted Stock Award and
Performance Award agreements and the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan and to determine the terms, restrictions
and provisions of the Option, Restricted Stock Award and Performance Award
agreements (which need not be identical) including such terms, restrictions and
provisions as shall be requisite in the judgment of the Committee to cause
certain Options to qualify as "incentive stock options" under Section 422 of the
Code, and to make all other determinations necessary or advisable for
administering the Plan. The Committee may, in its sole discretion and for any
reason at any time, subject to the requirements imposed under Section 162(m) of
the Code and regulations promulgated thereunder in the case of an award intended
to be qualified performance-based compensation, take action such that (i) any or
all outstanding Options shall become exercisable in part or in full, (ii) all or
some of the restrictions applicable to any outstanding Restricted Stock Award
shall lapse and (iii) all or a portion of any outstanding Performance Award
shall be satisfied. The Committee may correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any Option, Restricted Stock
Award or Performance Award agreement in the manner and to the extent it shall
deem expedient to carry it into effect, and it shall be the sole and final judge
of such expediency. The determinations of the Committee on matters referred to
in this Paragraph 4 shall be conclusive.
The Committee shall act by majority action at a meeting, except that
action permitted to be taken at a meeting may be taken without a meeting if
written consent thereto is given by all members of the Committee.
3
<PAGE>
5. Grants of Options, Restricted Stock Awards and Performance Awards; Shares
Subject to the Plan
The Committee may from time to time grant both "incentive stock
options" under Section 422 of the Code and nonqualified options to purchase
shares of Common Stock (with or without SARs), Restricted Stock Awards and
Performance Awards to one or more officers, key employees or directors
determined by it to be eligible for participation in accordance with the
provisions of Paragraph 6 and providing for the issuance of such number of
shares and, in the case of Performance Awards, having such value as in the
discretion of the Committee may be fitting and proper. Subject to Paragraph 10,
not more than 1,000,000 shares of Common Stock may be issued upon exercise of
Options or SARs or pursuant to Restricted Stock Awards or Performance Awards
granted under the Plan, plus the number of shares of Common Stock issued under
Options or Restricted Stock Awards substituted for options to purchase Common
Stock or restricted stock awards of Whitman in connection with the Distribution.
Performance Awards which may be exercised or paid only in cash shall not affect
the number of shares of Common Stock available for issuance under the Plan.
The Common Stock to be offered under the Plan pursuant to Options,
SARs, Restricted Stock Awards and Performance Awards may be authorized but
unissued Common Stock or Common Stock previously issued and outstanding and
reacquired by the Corporation.
The number of shares of Common Stock available for issuance under the
Plan shall be reduced by the sum of the aggregate number of shares of Common
Stock then subject to outstanding Options, Restricted Stock Awards and
outstanding Performance Awards which may be paid solely in shares of Common
Stock or in either shares of Common Stock or cash. To the extent (i) that an
outstanding Option expires or terminates unexercised or is canceled or forfeited
(other than in connection with the exercise of an SAR for Common Stock as set
forth in the immediately following sentence) or (ii) that an outstanding
Restricted Stock Award or outstanding Performance Award which may be paid solely
in shares of Common Stock or in either shares of Common Stock or cash expires or
terminates without vesting or is canceled or forfeited or (iii) shares of Common
Stock are withheld or delivered pursuant to the provisions on Share Withholding
set forth in Paragraph 11(A), then the shares of Common Stock subject to such
expired, terminated, unexercised, canceled or forfeited portion of such Option,
Restricted Stock Award or Performance Award, or the shares of Common Stock so
withheld or delivered, shall again be available for issuance under the Plan. In
the event all or a portion of an SAR is exercised, the number of shares of
Common Stock subject to the related Option (or portion thereof) shall again be
available for issuance under the Plan, except to the extent that shares of
Common Stock were actually issued upon exercise of the SAR.
4
<PAGE>
To the extent necessary for an award hereunder to be qualified
performance-based compensation under Section 162(m) of the Code and the rules
and regulations thereunder, the maximum number of shares of Common Stock with
respect to which Options, SARs or Restricted Stock Awards or a combination
thereof may be granted during any calendar year to any person shall be 200,000,
subject to adjustment as provided in Paragraph 10. Grants of Options,
Restricted Stock Awards or Performance Awards that are canceled shall count
toward the maximum stated in the preceding sentence.
6. Eligibility
Options, Restricted Stock Awards and Performance Awards may be granted
only to persons who, at the time of the grant or award, are officers, other key
employees or directors of the Corporation or any of its present and future
subsidiaries within the meaning of Section 424(f) of the Code (herein called
subsidiaries). Options, Restricted Stock Awards or Performance Awards, or any
combination thereof, may be granted on more than one occasion to the same
person. A person who has received or is eligible to receive options to purchase
stock of any subsidiary of the Corporation or incentive awards from any
subsidiary of the Corporation will not, by reason thereof, be ineligible to
receive Options, Restricted Stock Awards or Performance Awards under the Plan
unless prohibited by the plan of such subsidiary.
Nothing in the Plan or any Option, Restricted Stock Award or
Performance Award agreement shall be construed to constitute or be evidence of
an agreement or understanding, expressed or implied, on the part of the
Corporation or its subsidiaries to employ any person for any specific period of
time.
7. Options and SARs
(A) Number of Shares. The Committee may, in its discretion, grant
Options to such eligible persons as may be selected by the Committee. With
respect to each Option, the Committee shall determine the number of shares
subject to the Option and the manner and the time of exercise of such Option.
The Committee shall make such other determinations which in its discretion
appear to be fitting and proper.
(B) Stock Option Agreement. Each Option shall be evidenced by a
stock option agreement in such form containing such provisions not inconsistent
with the provisions of the Plan as the Committee from time to time shall
approve, including, without limitation, provisions to qualify certain Options as
"incentive stock options" under Section 422 of the Code. An incentive stock
option may not be granted to any person who is not an employee of the
Corporation or any parent or subsidiary (as defined in Section 424 of the Code).
Each incentive stock option shall be granted within ten years of the earlier of
the date the Plan is adopted by the Corporation's
5
<PAGE>
Board of Directors and the date the Plan is approved by Whitman as the sole
shareholder of the Corporation. To the extent that the aggregate fair market
value (determined as of the date of grant) of shares of Common Stock with
respect to which Options designated as incentive stock options are exercisable
for the first time by a person during any calendar year exceeds the amount
(currently $100,000) established by the Code, such Options shall be deemed to be
non-qualified stock options.
(C) Option Price and Term of Option. The purchase price per share of
the Common Stock under each Option shall be determined by the Committee;
provided, however, that the purchase price per share of Common Stock purchasable
upon exercise of an incentive stock option shall not be less than 100% of the
fair market value of the Common Stock at the date such Option is granted;
provided, further, that if an incentive stock option shall be granted to any
person who, at the time such Option is granted, owns capital stock of the
Corporation possessing more than ten percent of the total combined voting power
of all classes of capital stock of the Corporation (or of any parent or
subsidiary of the Corporation) (a "Ten Percent Holder"), such purchase price
shall be the price (currently 110% of fair market value) required by the Code in
order to constitute an incentive stock option.
The period during which an Option may be exercised shall be determined
by the Committee; provided, however, that no incentive stock option shall be
exercised later than ten years after its date of grant; provided further, that
if an incentive stock option shall be granted to a Ten Percent Holder, such
option shall not be exercised later than five years after its date of grant.
The Committee shall determine whether an Option shall become exercisable in
cumulative or non-cumulative installments and in part or in full at any time.
An exercisable Option, or portion thereof, may be exercised only with respect to
whole shares of Common Stock.
(D) Payment. An Option may be exercised by giving written notice to
the Corporation specifying the number of shares of Common Stock to be purchased
and accompanied by payment of the purchase price in full (or arrangement made
for such payment to the Corporation's satisfaction). As determined by the
Committee at the time of grant of an Option and set forth in the agreement
evidencing the Option, the purchase price may be paid (a) in cash or (b) by
delivery (either actual delivery or by attestation procedures established by the
Corporation) of previously-owned whole shares of Common Stock (for which the
holder has good title, free and clear of all liens and encumbrances and which
such holder either (i) has held for at least six months or (ii) has purchased on
the open market) valued at their fair market value on the date of exercise. If
applicable, a person exercising an Option shall surrender to the Corporation any
SARs which are canceled by reason of the exercise of such Option.
(E) Termination of Employment or Service or Death of Holder. In the
event of any termination of the employment or service of a Holder with the
Corporation or one of its subsidiaries, other than by reason of death or, in the
case of a Holder of a
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nonqualified option, Retirement, the Holder may (unless otherwise provided in
the Option agreement) exercise each Option held by such Holder at any time
within three months (or one year if the Holder is permanently and totally
disabled within the meaning of Section 22(e)(3) of the Code) after such
termination of employment or service, but only if and to the extent such Option
is exercisable at the date of such termination of employment or service, and in
no event after the date on which such Option would otherwise terminate;
provided, however, that if such termination of employment or service is for
cause or voluntary on the part of the Holder without the written consent of the
Corporation, any Option held by such Holder under the Plan shall terminate
unless otherwise provided in the Option agreement.
In the event of the termination of employment or service of a Holder
of a nonqualified option by reason of Retirement, then each nonqualified option
held by the Holder shall be fully exercisable, and, subject to the following
paragraph, such nonqualified option shall be exercisable by the Holder at any
time up to and including (but not after) the date on which the nonqualified
option would otherwise terminate (unless otherwise provided in the Option
Agreement).
In the event of the death of a Holder (i) while employed by or
providing service to the Corporation or one of its subsidiaries or after
Retirement, (ii) within three months after termination of the Holder's
employment, other than a termination by reason of permanent and total disability
within the meaning of Section 22(e)(3) of the Code, or (iii) within one year
after termination of the Holder's employment by reason of such disability, then
each Option held by such Holder may be exercised by the legatees of the Holder
under his last will, or by his personal representatives or distributees, at any
time within a period of nine months after the Holder's death, but only if and to
the extent such Option is exercisable at the date of death (unless death occurs
while the Holder is employed by or providing service to the Corporation or one
of its subsidiaries, in which case each Option held by the Holder shall be fully
exercisable), and in no event after the date on which such Option would
otherwise terminate.
(F) Privileges of the Holder as Shareholder. The Holder shall be
entitled to all the privileges and rights of a shareholder with respect only to
such shares of Common Stock as have been actually purchased under the Option and
registered in the Holder's name.
(G) SARs. The Committee may, in its sole discretion, grant an SAR
(concurrently with the grant of the Option or, in the case of a nonqualified
option which is not intended to be qualified performance-based compensation
under Section 162(m) of the Code and the rules and regulations thereunder,
subsequent to such grant) to any Holder of any Option granted under the Plan (or
such Holder's legatees, personal representatives or distributees then entitled
to exercise such Option). An SAR may be exercised (i) by giving written notice
to the Corporation specifying the number of SARs which are being exercised and
(ii) by surrendering to the Corporation any Options
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which are canceled by reason of the exercise of the SAR. An SAR shall be
exercisable upon such additional terms and conditions as may from time to time
be prescribed by the Committee. No fractional share shall be issued upon the
exercise of any SAR.
(H) Non-Transferability. Unless otherwise specified in the agreement
evidencing an Option or SAR, no Option or SAR hereunder shall be transferable
other than by will or the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Corporation. Except to the
extent permitted by the foregoing sentence, each Option or SAR may be exercised
during the Holder's lifetime only by the Holder or the Holder's legal
representative or similar person. Except as permitted by the second preceding
sentence, no Option or SAR hereunder shall be sold, transferred, assigned,
pledged, hypothecated, encumbered or otherwise disposed of (whether by operation
of law or otherwise) or be subject to execution, attachment or similar process.
Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or
otherwise dispose of any Option or SAR hereunder, such Option or SAR and all
rights thereunder shall immediately become null and void.
8. Restricted Stock Awards
(A) Restriction Period to Be Established by the Committee. At the
time of the making of a Restricted Stock Award, the Committee shall establish a
period of time (the "Restriction Period") applicable to such award. The
Committee may establish different Restriction Periods from time to time and each
Restricted Stock Award may have a different Restriction Period, in the
discretion of the Committee.
(B) Other Terms and Conditions. Common Stock, when awarded pursuant
to a Restricted Stock Award, shall be represented by a stock certificate or
book-entry credits registered in the name of the Holder who receives the
Restricted Stock Award or a nominee for the benefit of the Holder. The Holder
shall have the right to receive dividends (or the cash equivalent thereof)
during the Restriction Period and shall also have the right to vote such Common
Stock and all other shareholder's rights (in each case unless otherwise provided
in the agreement evidencing the Restricted Stock Award), with the exception that
(i) the Holder shall not be entitled to delivery of the stock certificate (or
the removal of restrictions in the Corporation's books and records) until the
Restriction Period established by the Committee pursuant to Paragraph 8(A) shall
have expired, (ii) the Corporation shall retain custody of the stock certificate
during the Restriction Period, (iii) the Holder may not sell, transfer, pledge,
exchange, hypothecate or dispose of such Common Stock during the Restriction
Period, and (iv) a breach of restriction or breach of terms and conditions
established by the Committee pursuant to the Restricted Stock Award shall cause
a forfeiture of the Restricted Stock Award. If requested by the Corporation, a
Holder of a Restricted Stock Award shall deposit with the Corporation stock
powers or other instruments of assignment (including a power of attorney), each
endorsed in blank with a guarantee of
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signature if deemed necessary or appropriate by the Corporation, which would
permit transfer to the Corporation of all or a portion of the shares of Common
Stock subject to the Restricted Stock Award in the event such award is forfeited
in whole or in part. A distribution with respect to shares of Common Stock,
other than a distribution in cash, shall be subject to the same restrictions as
the shares of Common Stock with respect to which such distribution was made,
unless otherwise determined by the Committee. The Committee may, in addition,
prescribe additional restrictions, terms or conditions upon or to the Restricted
Stock Award in the manner prescribed by Paragraph 4. The Committee may, in its
sole discretion, also establish rules pertaining to the Restricted Stock Award
in the event of termination of employment or service (by Retirement, disability,
death or otherwise) of a Holder of such award prior to the expiration of the
Restriction Period.
(C) Restricted Stock Award Agreement. Each Restricted Stock Award
shall be evidenced by an agreement in such form and containing such provisions
not inconsistent with the provisions of the Plan as the Committee from time to
time shall approve.
(D) Payment for Restricted Stock. Restricted Stock Awards may be made
by the Committee whereby the Holder receives Common Stock subject to those
terms, conditions and restrictions established by the Committee but is not
required to make any payment for said Common Stock. The Committee may also
establish terms as to each Holder whereby such Holder, as a condition to the
Restricted Stock Award, is required to pay, in cash or other consideration, all
(or any lesser amount than all) of the fair market value of the Common Stock,
determined as of the date the Restricted Stock Award is made.
(E) Termination of Employment or Service or Death of Holder. A
Restricted Stock Award shall terminate for all purposes if the Holder does not
remain continuously in the employ or service of the Corporation or a subsidiary
at all times during the applicable Restriction Period, except as may otherwise
be determined by the Committee.
9. Performance Awards
(A) Performance Period. The Committee shall establish with respect to
each Performance Award a performance period over which the performance of the
Holder shall be measured. The performance period shall be established at the
time of such award.
(B) Performance Awards. Each Performance Award shall have a maximum
value established by the Committee at the time of such award.
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(C) Performance Measures. Performance Awards shall be awarded to an
eligible person contingent upon future performance of the Corporation and/or the
Corporation's subsidiary, division or department in which such person is
employed over the performance period. The Committee shall establish the
performance measures applicable to such performance. The performance measures
determined by the Committee shall be established prior to the beginning of each
performance period but, except as necessary to qualify a Performance Award as
"performance-based compensation" under Section 162(m) of the Code and the rules
and regulations thereunder, may be subject to such later revisions to reflect
significant, unforeseen events or changes, as the Committee shall deem
appropriate.
(D) Award Criteria. In determining the value of Performance Awards,
the Committee shall take into account an eligible person's responsibility level,
performance, potential, cash compensation level, unexercised stock options,
other incentive awards and such other considerations as it deems appropriate.
Notwithstanding the preceding sentence, to the extent necessary for a
Performance Award to be qualified performance-based compensation under Section
162(m) of the Code and the rules and regulations thereunder, the performance
period shall be not less than three years and, if a Performance Award is payable
in shares of Common Stock, the maximum number of shares that may be paid under
the Performance Award during such performance period shall be 500,000 and, if a
Performance Award is payable in cash, the maximum amount that may be paid under
the Performance Award during such performance period shall be $10,000,000.
(E) Payment. Following the end of each performance period, the Holder
of each Performance Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the performance measures for such performance period, as determined by the
Committee. Payment of Performance Awards may be made wholly in cash, wholly in
shares of Common Stock or a combination thereof, all at the discretion of the
Committee. Payment shall be made in a lump sum or in installments, and shall be
subject to such vesting and other terms and conditions as may be prescribed by
the Committee for such purpose. Notwithstanding anything contained herein to the
contrary, in the case of a Performance Award intended to be qualified
performance-based compensation under Section 162(m) and the rules and
regulations thereunder, no payment shall be made under any such Performance
Award until the Committee certifies in writing that the performance measures for
the performance period have in fact been achieved.
(F) Termination of Employment or Service or Death of Holder. A
Performance Award shall terminate for all purposes if the Holder does not remain
continuously in the employ or service of the Corporation or a subsidiary at all
times during the applicable performance period, except as may otherwise be
determined by the Committee.
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In the event that a Holder of a Performance Award ceases to be an
employee or director of the Corporation following the end of the applicable
performance period but prior to full payment according to the terms of the
Performance Award, payment shall be made in accordance with terms established by
the Committee for the payment of such Performance Award.
(G) Other Terms and Conditions. When a Performance Award is payable
in installments in Common Stock, if determined by the Committee, one or more
stock certificates or book-entry credits registered in the name of the Holder
representing shares of Common Stock which would have been issuable to the Holder
of the Performance Award if such payment had been made in full on the day
following the end of the applicable performance period may be registered in the
name of such Holder, and during the period until such installment becomes due
such Holder shall have the right to receive dividends (or the cash equivalent
thereof) and shall also have the right to vote such Common Stock and all other
shareholder's rights (in each case unless otherwise provided in the agreement
evidencing the Performance Award), with the exception that (i) the Holder shall
not be entitled to delivery of any stock certificate until the installment
payable in shares becomes due, (ii) the Corporation shall retain custody of any
stock certificates until such time and (iii) the Holder may not sell, transfer,
pledge, exchange, hypothecate or dispose of such Common Stock until such time. A
distribution with respect to shares of Common Stock payable in installments
which has not become due, other than a distribution in cash, shall be subject to
the same restrictions as the shares of Common Stock with respect to which such
distribution was made, unless otherwise determined by the Committee.
(H) Performance Award Agreements. Each Performance Award shall be
evidenced by an agreement in such form and containing such provisions not
inconsistent with the provisions of the Plan as the Committee from time to time
shall approve.
10. Adjustments Upon Changes in Capitalization; Change in Control
(A) Notwithstanding any other provision of the Plan, each Option,
Restricted Stock Award or Performance Award agreement may contain such
provisions as the Committee shall determine to be appropriate for the adjustment
of (i) the number and class of shares or other consideration subject to any
Option or to be delivered pursuant to any Restricted Stock Award or Performance
Award and (ii) the Option or Restricted Stock Award price, in the event of a
stock dividend, spin-off, split-up, recapitalization, merger, consolidation,
combination or exchange of shares, or the like. In such event, the maximum
number and class of shares available under the Plan, and the number and class of
shares subject to Options, SARs, Restricted Stock Awards or Performance Awards,
shall be appropriately adjusted by the Committee, whose determination shall be
conclusive.
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(B)(i) In the event of a "change in control" (as hereinafter defined)
pursuant to subparagraph (C)(i) or (ii) below, or in the event of a change in
control pursuant to subparagraph (C)(iii) or (iv) below in connection with which
the holders of Common Stock receive consideration other than shares of common
stock that are registered under Section 12 of the Exchange Act:
(1)(x) each Option granted under the Plan shall be exercisable in
full, (y) each Holder of an Option shall receive from the Corporation
within 60 days after the change in control, in exchange for the surrender
of the Option or any portion thereof to the extent the Option is then
exercisable in accordance with clause (x), an amount in cash equal to the
difference between the fair market value (as determined by the Committee)
on the date of the change in control of the Common Stock covered by the
Option or portion thereof which is so surrendered and the purchase price of
such Common Stock under the Option and (z) each SAR shall be surrendered by
the Holder thereof and shall be canceled simultaneously with the
cancellation of the related Option;
(2) each Holder of a Restricted Stock Award shall receive from the
Corporation within 60 days after the change in control, in exchange for the
surrender of the Restricted Stock Award, an amount in cash equal to the
fair market value (as determined by the Committee) on the date of the
change in control of the Common Stock subject to the Restricted Stock
Award;
(3) each Holder of a Performance Award for which the performance
period has not expired shall receive from the Corporation within 60 days
after the change in control, in exchange for the surrender of the
Performance Award, an amount in cash equal to the product of the value of
the Performance Award and a fraction the numerator of which is the number
of whole months which have elapsed from the beginning of the performance
period to the date of the change in control and the denominator of which is
the number of whole months in the performance period; and
(4) each Holder of a Performance Award that has been earned but not
yet paid shall receive an amount in cash equal to the value of the
Performance Award.
(ii) Notwithstanding any other provision of the Plan or any
agreement relating to an Option, Restricted Stock Award or Performance Award, in
the event of a change in control pursuant to subparagraph (C)(iii) or (iv) below
in connection with which the holders of Common Stock receive shares of common
stock that are registered under Section 12 of the Exchange Act:
(1) each Option and SAR granted under the Plan shall be exercisable
in full;
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(2) the Restriction Period applicable to any outstanding Restricted
Stock Award shall lapse and, if applicable, any other restrictions, terms
or conditions shall lapse and/or be deemed to be satisfied at the maximum
value or level;
(3) the performance measures applicable to any outstanding
Performance Award shall be deemed to be satisfied at the maximum value; and
(4) there shall be substituted for each share of Common Stock
remaining available for issuance under the Plan, whether or not then
subject to an outstanding Option (and SAR), Restricted Stock Award or
Performance Award, the number and class of shares into which each
outstanding share of Common Stock shall be converted pursuant to such
Change in Control. In the event of any such substitution, the purchase
price per share in the case of an Option shall be appropriately adjusted by
the Committee (whose determination shall be conclusive), such adjustments
to be made without any increase in the aggregate purchase price.
(C) For purposes of this paragraph, the term "change in control"
shall mean:
(i) the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 25% or more of either (x) the then
outstanding shares of common stock of the Corporation (the "Outstanding Common
Stock") or (y) the combined voting power of the then outstanding securities of
the Corporation entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); excluding, however, the following: (1) any
acquisition directly from the Corporation (excluding any acquisition resulting
from the exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired directly from
the Corporation), (2) any acquisition by the Corporation, (3) any acquisition by
an employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (4) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (1), (2) and (3) of clause (iii) in this definition of change in
control;
(ii) individuals who, as of the effective date of the Plan, constitute
the Board of Directors of the Corporation (the "Incumbent Board") cease for any
reason to constitute at least a majority of such Board; provided, however, that
any individual who becomes a director of the Corporation subsequent to such
effective date whose election, or nomination for election by the Corporation's
shareholders, was approved by the vote of at least a majority of the directors
then comprising the Incumbent Board shall be deemed a member of the Incumbent
Board; and provided further, that any individual who was initially elected as a
director of the Corporation as a result of an
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actual or threatened election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any Person
other than the Board of Directors shall not be deemed a member of the Incumbent
Board;
(iii) the consummation of a reorganization, merger or consolidation of
the Corporation or sale or other disposition of all or substantially all of the
assets of the Corporation (a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which (1) all or substantially all of the
individuals or entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities immediately prior
to such Corporate Transaction will beneficially own, directly or indirectly,
more than 66-2/3% of, respectively, the outstanding shares of common stock, and
the combined voting power of the outstanding securities of such corporation
entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation's assets either
directly or indirectly) in substantially the same proportions relative to each
other as their ownership, immediately prior to such Corporate Transaction, of
the Outstanding Common Stock and the Outstanding Voting Securities, as the case
may be, (2) no Person (other than: the Corporation; any employee benefit plan
(or related trust) sponsored or maintained by the Corporation or any corporation
controlled by the Corporation; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be) will
beneficially own, directly or indirectly, 25% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding securities
of such corporation entitled to vote generally in the election of directors and
(3) individuals who were members of the Incumbent Board will constitute at least
a majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(iv) the consummation of a plan of complete liquidation or
dissolution of the Corporation.
(D) With respect to any Holder of an Option or SAR who is subject to
Section 16 of the Exchange Act, (i) notwithstanding the exercise periods set
forth in Paragraph 7(E) or as set forth pursuant to Paragraph 7(E) in any
agreement evidencing such Option or SAR and (ii) notwithstanding the expiration
date of the term of such Option or SAR, in the event the Corporation is involved
in a business combination which is intended to be treated as a pooling of
interests for financial accounting purposes (a "Pooling Transaction") or
pursuant to which such Holder receives a substitute option to purchase
securities of any entity, including an entity directly or indirectly acquiring
the Corporation, then each Option or SAR (or option or stock
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appreciation right in substitution thereof) held by such Holder shall be
exercisable to the extent set forth in the agreement evidencing such Option or
SAR until and including the latest of (x) the expiration date of the term of the
Option or SAR or, in the event of such Holder's termination of employment or
service, the date determined pursuant to Paragraph 7(E), (y) the date which is
six months and ten business days after the consummation of such business
combination and (z) the date which is ten business days after the date of
expiration of any period during which such Holder may not dispose of a security
issued in the Pooling Transaction in order for the Pooling Transaction to be
accounted for as a pooling of interests.
11. Withholding Taxes
(A) If provided in the agreement evidencing an Option, SAR,
Restricted Stock Award or Performance Award, the Holder thereof may elect, by
written notice to the Corporation at the office of the Corporation designated
for that purpose, to pay through withholding by the Corporation all or a portion
of the estimated federal, state, local and other taxes arising from (1) the
exercise of an Option or SAR and (2) the vesting or distribution of shares of
Common Stock pursuant to a Restricted Stock Award or Performance Award (a) by
having the Corporation withhold shares of Common Stock or (b) by delivering
previously-owned shares (collectively, "Share Withholding"), in each case being
such number of shares of Common Stock as shall have a fair market value equal to
the amount of taxes to be withheld, rounded up to the nearest whole share.
(B) A Share Withholding election shall be subject to disapproval by
the Corporation.
(C) If the date as of which the amount of tax to be withheld is
determined (the "Tax Date") is deferred until after the exercise of an Option or
SAR, the expiration of the Restriction Period applicable to a Restricted Stock
Award or the payment of a Performance Award, and if the Holder elects Share
Withholding, the Corporation shall issue to the Holder the full number of shares
of Common Stock, if any, resulting from such exercise, expiration or payment and
the Holder shall be unconditionally obligated to deliver to the Corporation on
the Tax Date such number of shares of Common Stock as shall have an aggregate
fair market value equal to the amount to be withheld on the Tax Date, rounded up
to the nearest whole share.
(D) The fair market value of shares of Common Stock used for payment
of taxes, as provided in this Paragraph 11, shall be the mean sale price per
share, as reported for New York Stock Exchange Composite Transactions, on the
Tax Date.
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12. Termination of Plan
The Plan may be terminated at any time by the Board of Directors,
except with respect to any Options, SARs, Restricted Stock Awards or Performance
Awards then outstanding. The Corporation reserves the right to restrict, in
whole or in part, the exercise of any Options or SARs or the delivery of Common
Stock pursuant to any Restricted Stock Awards or Performance Awards granted
under the Plan until such time as:
(A) any legal requirements or regulations have been met relating to
the issuance of the shares covered thereby or to their registration under
the Securities Act of 1933 or to any applicable State laws; and
(B) satisfactory assurances are received that the shares when issued
will be duly listed on the New York Stock Exchange, Inc.
13. Amendment of the Plan
The Board of Directors may amend the Plan; provided, however, that
without approval of the shareholders the Board of Directors may not amend the
Plan, subject to Paragraph 10, to (a) increase the maximum number of shares
which may be issued on exercise of Options or SARs or pursuant to Restricted
Stock Awards or Performance Awards granted under the Plan or (b) effect any
change inconsistent with Section 422 of the Code.
14. Effect of the Plan
Neither the adoption of the Plan nor any action of the Board of
Directors or of the Committee shall be deemed to give any person any right to be
granted an Option, a right to a Restricted Stock Award or a right to a
Performance Award or any rights hereunder except as may be evidenced by an
Option agreement, Restricted Stock Award agreement or Performance Award
agreement, duly executed on behalf of the Corporation, and then only to the
extent and on the terms and conditions expressly set forth therein.
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[LETTERHEAD OF SIDLEY & AUSTIN]
EXHIBIT 5
January 23, 1998
Midas, Inc.
225 North Michigan Avenue
Suite 1100
Chicago, Illinois 60601
Re: Midas, Inc.
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
We have acted as counsel for Midas, Inc., a Delaware corporation (the
"Company"), in connection with the filing of a Registration Statement on Form
S-8 (the "Registration Statement") relating to 1,010,000 shares of common stock,
par value $.001 per share, including associated preferred stock purchase rights
of the Company (the "Common Stock"), to be offered to participants in the
Company's Stock Incentive Plan (the "Plan").
We are familiar with the Restated Certificate of Incorporation, as
amended, and the By-laws of the Company and all amendments thereto and
resolutions of the Board of Directors of the Company relating to the Plan and
the Registration Statement.
In this connection, we have examined originals, or copies of originals
certified or otherwise identified to our satisfaction, of such records of the
Company and others, have examined such questions of law and have satisfied
ourselves as to such matters of fact as we have considered relevant and
necessary as a basis for the opinions set forth herein. We have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures, the legal capacity of all natural persons and the conformity
with the original documents of any copies thereof submitted to us for our
examination.
<PAGE>
Midas, Inc.
January 23, 1998
Page 2
Based upon the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under the
laws of the State of Delaware.
2. Each share of Common Stock will be legally issued, fully paid and
nonassessable when: (i) the Registration Statement shall have become effective
under the Securities Act; (ii) such share of Common Stock shall have been duly
issued and sold in the manner contemplated by the Plan; and (iii) a certificate
representing such share shall have been duly executed, countersigned and
registered and duly delivered to the purchaser thereof against payment of the
agreed consideration therefor (not less than the par value thereof) in
accordance with the Plan.
We do not find it necessary for the purposes of this opinion to cover,
and accordingly we express no opinion as to the application of the securities or
blue sky laws of the various states to the sale of the Common Stock.
This opinion is limited to the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement.
Very truly yours,
Sidley & Austin
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Midas, Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-8 and the related prospectus pertaining to the registration of Midas,
Inc. common stock for the Midas, Inc. Stock Incentive Plan of our report dated
January 8, 1997, relating to the combined balance sheets of Midas as of December
1996 and 1995, and the related combined statements of operations and cash flows
for each of the years in the three-year period ended December 1996, which report
appears in the Midas, Inc. registration statement on Form 10/A No. 3 (Post-
Effective Amendment No. 1).
KPMG PEAT MARWICK LLP
Chicago, Illinois
January 21, 1998
