<PAGE> 1
As filed with the Securities and Exchange Commission on May 4, 1998
Registration No. 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
DENALI INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 76-045464-1
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1360 POST OAK BLVD.
SUITE 2250
HOUSTON, TEXAS 77056
(Address of registrant's principal executive offices, including zip code)
DENALI INCORPORATED
1997 INCENTIVE STOCK OPTION PLAN
(Full Title of Plan)
---------------
STEPHEN T. HARCROW
Chairman and Chief Executive Officer
Denali Incorporated
1360 Post Oak Blvd., Suite 2250
Houston, Texas 77056
(713) 627-0933
(Name and address, including zip code, and telephone number,
including area code, of registrant's agent for service)
Copy to:
William Mark Young
Gardere Wynne Sewell & Riggs, LLP
333 Clay, Suite 800
Houston, Texas 77002
(713) 308-5500
fax: (713) 308-5555
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER SHARE* PRICE* REGISTRATION FEE*
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 362,873 shares $17.375 $ 6,304,919 $ 1,860
======================================================================================================================
</TABLE>
* Calculated pursuant to Rule 457(h), based on the average of the high and
low prices for Common Stock on April 29, 1998, as reported on The Nasdaq
Stock Market.
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<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
*Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance with Rule
428 under the Securities Act of 1933, as amended, and the Note to Part I of Form
S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents, and all documents subsequently filed by
Denali Incorporated (the "Company") pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment to the Registration Statement
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and shall be deemed to be a part
hereof from the date of the filing of such documents:
1. The Company's Prospectus dated November 20, 1997, filed
by the Company on November 21, 1997 pursuant to Rule
424(b) of the Securities Act of 1933 (Commission File No.
333-36857).
2. The Corporation's Quarterly Report on Form 10-Q for the
quarter ended December 27, 1997 (Commission File No.
000-23353).
3. All other reports filed by the Company pursuant to
sections 13(a) or 15(d) of the Exchange Act since
November 21, 1997.
In addition, all documents subsequently filed by the Corporation pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment which indicates that
all securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. The audited financial statements incorporated by reference in this
Registration Statement have been audited by the independents public accountants
Ernst & Young LLP, Gaynor and Fawcett, Inc., and Leming, Schallner & Co., as
indicated in their respective reports, and are included herein in reliance upon
the authority of said firm as experts in giving said reports. Future financial
statements of the Corporation and the reports thereon of Ernst & Young LLP,
Gaynor and Fawcett, Inc., and Leming, Schallner & Co., or such other
independent public accountant as appointed by the Corporation, also will be
incorporated by reference in this Registration Statement in reliance upon the
authority of that firm as experts in giving those reports to the extent said
firm has audited those financial statements and consented to the use of their
reports thereon.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Delaware law, the Company's Certificate of
Incorporation limits the personal liability of directors. The Certificate of
Incorporation provides that a director of the Company will not be personally
liable to the Company or its shareholders for monetary damages for reach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) payment of an improper dividend or improper
repurchase of the Company's stock under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived
any improper personal benefit. The Company's Certificate of Incorporation
further provides that in the event the Delaware General Corporation Law is
amended to allow the further elimination or limitation of the liability of
directors, then the liability of the Company's directors shall be limited or
eliminated to the fullest extent permitted by the amended Delaware General
Corporation Law. This provision is intended to afford directors additional
protection from, and limit their potential liability for, suits alleging a
breach of the duty of care by a director. The Company believes that this
provision will assist it in securing the services of directors who are not
employees of the Company. While stockholders may be unable to recover monetary
damages against directors for actions that are in violation of their fiduciary
duties, it may be possible to obtain injunctive or other equitable relief with
respect to such actions.
Under Article 6 of the Company's Bylaws as currently in effect, each
person who is or was a director or officer of the Company or a subsidiary of
the Company, or who serves or served any other enterprise or organization at
the request of the Company or a subsidiary of the Company, shall be indemnified
by the Company to the full extent permitted by the Delaware General Corporation
Law.
Under such law, to the extent that such person is successful on the
merits in defense of a suit or proceeding brought against him by reason of the
fact that he is or was a director or officer of the Company, or serves or
served any other enterprise or organization at the request of the Company, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred in connection with such action.
Under such law, if unsuccessful in defense of a third party civil
suit or a criminal suit, or if such suit is settled, such a person shall be
indemnified against both (i) expenses, including attorneys' fees, and (ii)
judgments, fines and amounts paid in settlement if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Company, and, with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of
the Company, where such suit is settled, such a person shall be indemnified
under such law only against expenses (including attorneys' fees) actually and
reasonably incurred in the defense or settlement of such suit if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Company, except that if such person is adjudged to be
liable in such a suit for negligence or misconduct in the performance of his
duty to the Company, he cannot be made whole even for expenses unless the court
determines that he is fully and reasonably entitled to indemnity for such
expenses.
The Company has entered into indemnification agreements with each of
its directors that provide for indemnification and expense advancement to the
fullest extent permitted under the Delaware General Corporation Law. Such
indemnification agreements include related provisions intended to facilitate
the indemnitee's receipt of such benefits, including certain provisions
applicable to constituent corporations in the event of certain mergers or
acquisitions.
Delaware corporations also are authorized to obtain insurance to
protect officers and directors from certain liabilities, including liabilities
against which the corporation cannot indemnify its directors and officers. The
Company has purchased and maintains a directors' and officers' liability policy
for such purposes.
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<PAGE> 4
Insofar as indemnification for liabilities under the Securities Act
may be permitted to directors, officers of persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and therefore is unenforceable.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 The Company's 1997 Incentive Stock Option Plan
5.1 Opinion of Gardere Wynne Sewell & Riggs
23.1 Consent of Gardere Wynne Sewell & Riggs (included in its
opinion filed as Exhibit 5.1)
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Gaynor and Fawcett, Inc., independent auditors
23.4 Consent of Leming, Schallner & Co., independent auditors
24.1 Power of Attorney (set forth on the signature pages of
this Registration Statement).
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made of the securities registered hereby, a
post-effective amendment to this Registration Statement
to include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned Registrant hereby further 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 Securities Exchange Act of 1934 that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer
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<PAGE> 5
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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 Houston, State of Texas, on the 4th day of
May, 1998.
DENALI INCORPORATED
(Registrant)
By: /s/ Stephen T. Harcrow
------------------------------------
Stephen T. Harcrow
Chairman and Chief Executive Officer
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POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Stephen T. Harcrow and R. Kevin Andrews true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and
re-substitution, 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 attorneys-in-fact and
agents, each acting alone, full powers and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, each acting alone, or his or her 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 below in the City of Houston, State of Texas on the 4th
day of May, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chairman of the Board, Chief
/s/ Stephen T. Harcrow Executive Officer and Director
- ------------------------------------ (Principal Executive Officer) May 4, 1998
Stephen T. Harcrow
Chief Financial Officer (Principal
/s/ R. Kevin Andrews Financial Officer and Principal
- ------------------------------------ Accounting Officer) May 4, 1998
R. Kevin Andrews
/s/ Ernest H. Cockrell
- ------------------------------------ Director May 4, 1998
Ernest H. Cockrell
/s/ Thomas D. Simmons, Jr.
- ------------------------------------ Director May 4, 1998
Thomas D. Simmons, Jr.
/s/ J. Taft Symonds
- ------------------------------------ Director May 4, 1998
J. Taft Symonds
/s/ Stephen M. Youts
- ------------------------------------ Director May 4, 1998
Stephen M. Youts
/s/ Joel V. Staff
- ------------------------------------ Director May 4, 1998
Joel V. Staff
/s/ Philip Burguires
- ------------------------------------ Director May 4, 1998
Philip Burguires
</TABLE>
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<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------ ------- ------------
<S> <C> <C>
4.1 The Company's 1997 Incentive Stock Option Plan 8
5.1 Opinion of Gardere Wynne Sewell & Riggs 14
23.1 Consent of Gardere Wynne Sewell & Riggs
(included in its opinion filed as Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, independent auditors 15
23.3 Consent of Gaynor and Fawcett, Inc., independent auditors 16
23.4 Consent of Leming, Schallner & Co., independent auditors
24.1 Power of Attorney (set forth on the signature
pages of this Registration Statement)
</TABLE>
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<PAGE> 1
Exhibit 4.1
DENALI INCORPORATED
1997 INCENTIVE STOCK OPTION PLAN
Article I
General Provisions
1. Purpose. The purpose of this Plan is to promote the interests of
Denali Incorporated (the "Company") by providing participating key employees of
the Company the opportunity to acquire or increase their proprietary interest
in the Company and increase their personal interest in its continued success
and progress, in order to (i) induce qualified persons to become employees of
the Company; and (ii) provide an incentive for key employees to remain in the
employ of the Company and to continue their contributions and efforts toward
the Company's success.
2. Definitions. As used in this Plan, the following words and phrases
shall have the meanings indicated:
(a) "Agreement" shall mean the written document evidencing the grant
of Options under this Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time and any successor legislation.
(d) "Committee" shall mean the committee appointed by the Board in
accordance with Section 3(a) of Article I of the Plan, if one is appointed.
(e) "Common Stock" shall mean the Company's Common Stock, except as
modified pursuant to the provisions of Section 6 of Article III of the Plan.
(f) "Company" shall mean Denali Incorporated, together with all its
present and future subsidiaries.
(g) "Disability" shall mean a Recipient's inability to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or that has lasted
or can be expected to last for a continuous period of not less than 12 months.
(h) "Employee" shall mean any eligible employee of the Company.
(i) "Fair Market Value" as of a particular date with respect to any
share of Common Stock shall be determined by the Committee in such manner as it
may deem appropriate.
(j) "Incentive Stock Option" shall mean an Option granted pursuant
to Article II of the Plan which is intended to qualify as an Incentive Stock
Option under Section 422 of the Code.
(k) "Non-Qualified Stock Option" shall mean an Option which is not
intended to qualify as an Incentive Stock Option.
(l) "Option" shall mean the right granted under the Plan to purchase
Common Stock.
(m) "Option Price" shall mean the purchase price established by the
Committee for Common Stock to be acquired under an Option granted pursuant to
the Plan.
(n) "Plan" shall mean the Denali Incorporated 1997 Incentive Stock
Option Plan.
(o) "Recipient" shall mean any Employee granted an Option under the
Plan.
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<PAGE> 2
3. Administration.
(a) The Plan shall be administered by the Board or a Committee of
one or more members of the Board. The Board shall appoint the members of the
Committee, who shall serve at the pleasure of the Board. References in the
Plan to the Committee shall include the Board if no Committee is appointed.
(b) The Committee shall have the authority in its discretion,
subject to and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either
specifically conferred under the Plan or necessary or advisable in the
administration of the Plan, including the power and authority:
(1) to grant Options;
(2) to determine the Employees to whom, and the time or times
at which, Options shall be granted, the number of shares to
be covered by each Option, the Option Price of the shares
of Common Stock covered by each Option, the vesting
schedule, exercise period and other restrictions, terms and
conditions, if any, relating to Options;
(3) to determine the terms and provisions of the Agreements
(which need not be identical) entered into in connection
with Options granted under the Plan;
(4) to interpret the Plan and the Agreements and to prescribe,
amend and rescind rules and regulations relating to the
Plan; and
(5) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Agreement or Option in the
manner and to the extent that it shall deem expedient to carry into effect the
purposes of the Plan, and it shall be the sole and final judge of such
expediency. All actions or determinations of the Committee shall be by
majority vote of its members, if more than one, and the determination of the
Committee shall be conclusive. Any action taken by the Committee shall be
reported to the Board.
(d) The Committee may delegate to one or more of its members or to
one or more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties may employ one or more
persons to render advice with respect to any right or responsibility the
Committee or such person may have under the Plan.
(e) Options granted under the Plan shall be evidenced by duly
adopted resolutions of the Committee.
(f) The interpretation and construction of any provision of the Plan
by the Committee shall be final.
(g) No member of the Committee shall be liable for any action taken
or determination made in good faith with respect to the Plan, an Agreement, or
any Option granted hereunder.
4. Eligibility for Participation.
(a) Subject to certain limitations hereinafter set forth, Options
may be granted to Employees. In determining the Employees to whom Options
shall be granted and the number of shares to be covered by each Option, the
Committee shall take into account the present and potential contributions by
the Employee to the success of the Company and such other factors as the
Committee shall deem relevant to accomplish the purposes of the Plan.
(b) A Recipient shall be eligible to receive more than one grant of
an Option during the term of the Plan.
5. Number of Shares Subject to Options.
(a) The stock subject to Incentive Stock Options hereunder shall be
Common Stock. Such shares, in whole or in part, may be authorized but unissued
shares or shares that shall have been or that may be reacquired by the Company.
Under the Plan, the aggregate number of shares of Common Stock as to which
Incentive Stock
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<PAGE> 3
Options may be granted from time to time shall not exceed 362,873, and the
aggregate number of shares of Common Stock as to which Incentive Stock Options
may be granted to any one Employee shall not exceed 100,000, both of which
shall be subject to adjustment as provided in Section 6 of Article III below.
(b) If any outstanding Option, or any portion thereof, for any
reason expires, is cancelled pursuant to the Plan or the Agreement, or is
terminated without having been exercised in full, the shares of Common Stock
allocable to the unexercised portion of such Option shall become available for
subsequent grants of Options under the Plan unless the Plan shall have been
terminated.
Article II
Incentive Stock Options
1. Award of Incentive Stock Option. Options granted pursuant to this
Article II are intended to constitute Incentive Stock Options and shall be
subject to the following terms and conditions. The Committee may from time to
time, and subject to the provisions of the Plan and such other terms and
conditions as the Committee may prescribe, grant to any Recipient in the Plan
one or more Options to purchase for cash the number of shares of Common Stock
allotted by the Committee. The date an Option is granted shall mean the date
selected by the Committee as of which the Committee allots a specific number of
shares of Common Stock to a Recipient pursuant to the Plan.
2. Maximum Amount of Incentive Stock Option Award. The aggregate Fair
Market Value (determined as of the date the Incentive Stock Option is granted)
of the shares of Common Stock with respect to which Incentive Stock Options
granted under this and any other plan of the Company are exercisable for the
first time by a Recipient during any calendar year may not exceed $100,000.
3. Stock Option Agreements. The grant of an Incentive Stock Option
shall be evidenced by a written Agreement, executed by the Company and the
Recipient, stating the number of shares of Common Stock subject to the Option.
The Agreement shall be in such form, and may include such limitations,
restrictions and other provisions, as the Committee may from time to time
determine.
4. Option Price. Each Agreement shall stipulate the Option Price as
determined by the Committee, which shall be, in the case of an Incentive Stock
Option, not less than 100% of the Fair Market Value per share on the date the
Option is granted, subject to adjustment as provided in Section 6 of Article
III. Any Incentive Stock Option granted under the Plan to a person owning more
than ten percent of the total combined voting power of the Common Stock shall
be at a price no less than 110% of the Fair Market Value per share on the date
of grant of such Option.
5. Term of Option. Each Agreement shall state the period during and
times at which the Option shall be exercisable; provided, however:
(a) The exercise period shall not exceed five years from the date of
grant of the Option, and no Option shall be granted pursuant to the Plan after
the expiration of ten years from the Plan's adoption date.
(b) The Committee shall have the authority to accelerate or extend
the exercisability of any outstanding Option at such time and under such
circumstances as the Committee, in its sole discretion, deems appropriate.
(c) The exercise period shall be subject to earlier termination as
provided in Section 8 of this Article II.
(d) Notwithstanding anything to the contrary in this Plan, no Option
shall be exercisable after the expiration of its term.
6. Exercise of Option.
(a) An Option may be exercised as to any or all whole shares of
Common Stock as to which it then is exercisable.
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<PAGE> 4
(b) Each exercise of an Option granted hereunder, whether in whole
or in part, shall be by written notice to the Company designating the number of
shares as to which the Option is being exercised, and shall be accompanied by
payment in full of the Option Price for the number of shares so designated,
together with any written statements reasonably requested by the Company for
purposes of compliance with any applicable securities law.
7. Manner of Payment. The Option Price shall be paid in cash.
8. Termination.
(a) If the Recipient ceases to be an Employee by reason of
termination without cause, resignation, retirement, death, Disability, or any
other reason other than termination for cause, all Options theretofore granted
to such Recipient which are exercisable at the date of such event may be
exercised by the Recipient or by the Recipient's estate or by a person who
acquired the right to exercise such Options by bequest or inheritance or
otherwise by reason of the death or Disability of the Recipient, at any time
within 3 months after the date of such event.
(b) If the Recipient ceases to be an Employee by reason of
termination with cause, all Options theretofore granted to such Recipient shall
terminate automatically, effective as of such cessation, to the extent not
theretofore exercised. For purposes of this Plan and the Options granted
hereunder, termination with cause shall include, but not be limited to (1) the
refusal or failure of the Employee to implement, perform or adhere to
reasonable policies, directives or orders of the Company; (2) any other action
by the Employee involving willful misconduct or malfeasance or gross negligence
in the performance of the Employee's duties; (3) conduct of a criminal nature
which may have an adverse impact on the Company's reputation and standing in
the community; (4) conviction of a crime involving moral turpitude, including
fraud, theft or embezzlement; (5) conduct which is in violation of the
Employee's common law duty of loyalty to the Company; (6) fraudulent conduct in
connection with the business affairs of the Company, regardless of whether said
conduct is designed to defraud the Company or others; or (7) willful or
persistent failure to attend to the Employee's duties.
9. Construction of Provisions. Incentive Stock Options granted under
the Plan are intended to satisfy all requirements for incentive stock options
under Section 422 of the Code and the Treasury Regulations thereunder and,
notwithstanding any other provision of the Plan, the Plan and all Incentive
Stock Options granted under it shall be so construed, and all contrary
provisions shall be so limited in scope and effect and, to the extent they
cannot be so limited, they shall be void. An Option granted under the Plan
shall, if it is construed for whatever reason not to qualify as an incentive
stock option under Section 422 of the Code, be construed to be a Non-Qualified
Stock Option.
Article III
Miscellaneous Provisions
1. Gender and Number. Whenever required by the context of this Plan,
the singular includes the plural, and the masculine includes the feminine or
the neuter.
2. Transferability Restriction. Options granted under the Plan shall
not be assignable, nor shall they be transferable. The exercise of Options may
be conditioned upon the execution of a transfer restriction or right of first
refusal agreement between the Company and the Recipient covering the Common
Stock acquired pursuant to the Option. Options may be exercised only by the
Recipient.
3. Withholding Taxes. Whenever the Company is required to issue or
transfer shares of Common Stock under this Plan, the Company shall require the
Recipient to remit to the Company an amount sufficient to satisfy any federal,
state or local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. Alternatively, the Company at its
sole discretion may issue or transfer such shares of Common Stock net of the
number of shares sufficient to satisfy the withholding tax requirements. For
withholding tax purposes, the shares of Common Stock shall be valued at their
Fair Market Value on the date the withholding obligation is incurred.
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<PAGE> 5
4. Right to Terminate Employment. Nothing in the Plan or in any
Agreement entered into pursuant to the Plan shall confer upon any Recipient the
right to continue in the employment of the Company or affect any right which
the Company may have to terminate the employment of such Recipient with or
without cause.
5. Rights as Shareholder. The Recipient of any grant or award under
the Plan shall have no rights as a shareholder with respect to the Common Stock
covered by an Option unless and until certificates for shares of Common Stock
are issued to him.
6. Adjustments.
(a) In the event of any change in the outstanding Common Stock by
reason of a stock dividend or distribution, recapitalization, split-up, or the
like, the Committee, in its sole discretion, may appropriately adjust the
maximum number of shares of Common Stock which may be issued under the Plan,
the number of shares of Common Stock subject to outstanding Options granted
under the Plan, the option price of outstanding Options granted under the Plan,
and any and all other matters deemed appropriate by the Committee, in its sole
discretion. Fractional shares resulting from any such adjustment shall be
eliminated. Unless the Committee expressly determines otherwise, any
adjustments under this Section 6(a) shall be effective on the effective date of
the event giving rise to such adjustment.
(b) If the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of shares or other securities or
property (including cash) of the Company or another corporation for any reason,
including by reason of reorganization, merger, sale or transfer of all or
substantially all of the Company's assets to another corporation, or exchange
of shares or consolidation, the Committee shall make appropriate adjustments in
the number and kind of shares, other securities, or property for which options
may be granted under the Plan, including the maximum number that may be granted
to any Recipient. In addition, the Committee shall make appropriate
adjustments in the number and kind of shares, other securities, or property as
to which outstanding Options shall be exercisable. If any event giving rise to
an adjustment involves an election afforded shareholders to receive cash or
some security or other property, then such adjustment shall be made as if only
cash were available to shareholders; the amount of cash used in determining the
appropriate adjustment shall be the amount of cash per share provided by such
election or such higher per share amount, if any, as the Committee determines
to be the fair market value of the security or other property available to
shareholders pursuant to the election. Unless the Committee expressly
determines otherwise, any adjustment or determination made by the Committee
under this Section 6(b) shall be effective on the effective date of the event
giving rise to such adjustment or determination, and shall be conclusive when
made by the Committee.
(c) The existence of outstanding Options hereunder shall not affect
in any way the right or power of the Company or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise. In the event of
dissolution of the Company, any unexercised Options theretofore granted under
the Plan shall be deemed cancelled.
7. Amendment and Termination of the Plan.
(a) The Board at any time and from time to time may suspend,
terminate, modify or amend the Plan, provided, however, that any amendment that
would require shareholder approval under Texas law, the Code or any other
applicable law, shall be subject to the approval of the shareholders of the
Company, except that any such increase or modification that may result from
adjustments authorized by Section 6 of this Article III or which are required
for compliance with the Code, the Employee Retirement Income Security Act of
1974, related rules and regulations, or other laws or judicial orders, shall
not require such approval of shareholders.
(b) Except as provided in Section 6, no suspension, termination,
modification or amendment of the Plan may adversely affect any Option
previously granted, unless the written consent of the Recipient is obtained.
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<PAGE> 6
8. Governing Law. This Plan is to be governed by and construed in
accordance with the substantive laws of the State of Texas, without regard to
principles of conflicts of law, and is performable in Montgomery County, Texas.
The Company and each Recipient hereby submits to the jurisdiction of the courts
of the State of Texas and the federal courts in and for the Southern District
of Texas in connection with any matter relating to this Plan and or any other
document executed in connection herewith.
9. Approval of Shareholders. The Plan shall take effect upon its
adoption by the Board but shall be subject to approval by the shareholders in
conformance with applicable law or the rules and regulations of any national
securities exchange upon which the Company's Common Stock is listed and traded,
each to the extent applicable.
10. Adoption.
(a) This Plan was approved by the Board on September 18, 1997.
(b) This Plan was approved by the shareholders of the Company on
September 18, 1997.
DENALI INCORPORATED
By: /s/ Stephen T. Harcrow
------------------------------------
Stephen T. Harcrow
Chief Executive Officer
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<PAGE> 1
Exhibit 5.1
[[GARDERE WYNNE SEWELL & RIGGS LETTERHEAD]]
May 4, 1998
Denali Incorporated
1360 Post Oak Blvd.
Suite 2250
Houston, Texas 77056
Gentlemen:
We have acted as counsel for Denali Incorporated, a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-8 (the
"Registration Statement"), filed with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of 362,873 shares of the Company's Common Stock, no par value (the "Common
Stock"), to be issued upon exercise of stock options granted by the Company to
certain of its employees (the "Options") pursuant to the Company's 1997
Incentive Stock Option Plan (the "Plan").
With respect to the foregoing, we have examined such documents and
questions of law as we have deemed necessary to render the opinions expressed
below. Based upon the foregoing, we are of the opinion that the Common Stock,
when issued, sold and delivered in the manner and for the consideration stated
in the form of the Plan pursuant to the exercise of Options, will be duly and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as Exhibit 5.1 to the Registration
Statement.
This opinion letter is as of the date hereof, and we undertake no
obligation, and expressly disclaim any obligation, to advise you of any change
in the matters set forth herein. Please note that the opinions expressed
herein relate only to the matters specifically set forth, and no opinion is
implied or should be inferred as to any other matters.
Very truly yours,
GARDERE WYNNE SEWELL & RIGGS, L.L.P.
By: /s/ William Mark Young
---------------------------------------
William Mark Young, Partner
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-00000) pertaining to the Denali Incorporated 1997 Incentive
Stock Option Plan of our reports dated August 27, 1997, except for Notes 7 and
18 as to which the date is November 3, 1997, with respect to the consolidated
financial statements and schedule of Denali Incorporated, dated September 12,
1997 with respect to the financial statements of Hoover Containment Systems,
Inc., dated September 22, 1997 with respect to the financial statements of
Ershigs, Inc., and dated September 9, 1997 with respect to the financial
statements of GL & V/LaValley Construction, Inc. included in the Company's
Registration Statement (No. 333-36857) on Form S-1 and related Prospectus dated
November 20, 1997, as filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
May 1, 1998
<PAGE> 1
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-00000) of Denali Incorporated pertaining to the Denali Incorporated
1997 Incentive Stock Option Plan of our report dated February 5, 1996, with
respect to the consolidated financial statements of SEFCO, Inc. in the
Registration Statement (Form S-1 No. 333-36857) of Denali Incorporated as filed
with the Securities and Exchange Commission.
GAYNOR AND FAWCETT, INC.
Tulsa, Oklahoma
May 1, 1998
<PAGE> 1
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-00000) of Denali Incorporated pertaining to the Denali Incorporated
1997 Incentive Stock Option Plan of our report dated January 22, 1997 relating
to the financial statements of SEFCO, Inc. in the Registration Statement (Form
S-1 No. 33-36857) of Denali Incorporated as filed with the Securities and
Exchange Commission.
LEMING, SCHALLNER & CO.
Tulsa, Oklahoma
May 1, 1998
