<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 2, 1999
Registration No.333-
===============================================================================
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 76-0454641
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1360 POST OAK BOULEVARD, SUITE 2250
HOUSTON, TEXAS 77056
(Address of principal executive offices, including zip code)
--------------------
DENALI INCORPORATED 1999 STOCK INCENTIVE PLAN
(Full title of the plans)
MEL S. CARTER
1360 POST OAK BOULEVARD, SUITE 2250
HOUSTON, TEXAS 77056
(Name and address of agent for service)
(713) 627-0933
(Telephone number, including area code, of agent for service)
Copy to:
T. Mark Kelly
Vinson & Elkins L.L.P.
2300 First City Tower, 1001 Fannin
Houston, Texas 77002-6760
(713) 758-4592
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Title of Proposed Proposed
securities to be Amount to be maximum maximum
registered registered offering price aggregate Amount of
per share(1) offering price(1) registration fee (1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 300,000 shares $8.25 $1,749,023.50 $461.75
=========================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(h). (The fee has been calculated based on the issuance of
129,182 shares at an exercise price of $8.25 per share and 170,818 shares
at the average of the high and low price per share of the stock on
November 26, 1999, such being $4.00 per share.)
===============================================================================
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
- --------------------------
* The document(s) containing the plan information required by Item 1 of Form S-8
and the statement of availability of registrant information and any other
information required by Item 2 of Form S-8 will be sent or given to participants
as specified by Rule 428 under the Securities Act of 1933, as amended (the
"Securities Act"). In accordance with Rule 428 and the requirements of Part I of
Form S-8, such documents are not being filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424 under the
Securities Act. Denali Incorporated shall maintain a file of such documents in
accordance with the provisions of Rule 428. Upon request, the Registrant shall
furnish to the Commission or its staff a copy or copies of all of the documents
included in such file.
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THIS REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following are incorporated herein by reference and made a part hereof:
(i) the Company's Annual Report on Form 10-K for the year ended July 3, 1999;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter ended October
2, 1999; (iii) the Description of the Common Stock contained in the Company's
Prospectus dated November 20, 1997, included in the Company's Rule 424(b)(a)
filing for Form S-1 (Registration Statement No. 333-36857); (iv) the Company's
Current Reports on Form 8-K filed with the Commission on July 14, 1999, as
amended, by Form 8-K/A filed with the Commission on September 14, 1999; and (v)
the Company's Registration Statement on Form 8-A declared effective by the
Commission on November 20, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 subsequent to the effective
date of this Registration Statement, prior to the filing of a post-effective
amendment to this Registration Statement indicating that all securities offered
hereby have been sold or deregistering all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents. Any statement contained herein or in
any document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part of this
Registration Statement, except as so modified or superseded.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Company's Second Restated Certificate of Incorporation, a
copy of which is filed as Exhibit 3.01 to the Form S-1 (Registration Statement
No. 333-36857), provides that the directors shall be indemnified to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law
("DGCL"). Article 6 of the Company's Amended and Restated Bylaws, a copy of
which is filed as Exhibit 3.02 to the Form S-1 (Registration Statement No.
333-36857) provides that the officers and directors shall be indemnified to the
fullest extent permitted by Section 145 of the DGCL.
Section 145 of the DGCL authorizes, inter alia, a corporation to indemnify
any person ("indemnitee") who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact that such person
is or was an officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. A
Delaware corporation may indemnify past or present officers and directors of
such corporation or of another corporation or other enterprise at the former
corporation's request, in an action by or in the right of the corporation to
procure a judgment in its favor under the same conditions, except that no
indemnification is permitted without judicial approval if such person is
adjudged to be liable to the corporation. Where an officer or director is
successful on the merits or otherwise in defense of any action referred to
above, or in defense of any action referred to above, or in defense of any
claim, issue or matter therein, the corporation must indemnify him against the
expenses (including attorneys' fees)
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<PAGE> 4
which he actually and reasonably incurred in connection therewith. Section 145
further provides that any indemnification shall be made by the corporation only
as authorized in each specific case upon a determination by the (i)
stockholders, (ii) Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding or (iii)
independent counsel if a quorum of disinterested directors so directs. Section
145 provides that indemnification pursuant to its provision is not exclusive of
other rights of indemnification to which a person may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Section 145 of the DGCL also empowers the Company to purchase and
maintain insurance on behalf of any person who is or was an officer or director
of the Company against liability asserted against or incurred by him in any such
capacity, whether or not the Company would have the power to indemnify such
officer or director against such liability under the provisions of Section 145.
The Company maintains a directors' and officers' liability policy for such
purposes.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Unless otherwise indicated below as being incorporated by reference to
another filing of the Company with the Commission, each of the following
exhibits is filed herewith:
4.1 Denali Incorporated 1999 Stock Incentive Plan;
4.2 Second Restated Certificate of Incorporation (filed with the
Commission as Exhibit 3.01 to Registration Statement No.
333-36857 and incorporated herein by reference);
4.3 Amended and Restated Bylaws (filed with the Commission as
Exhibit 3.02 to Registration Statement No. 333-36857 and
incorporated herein by reference);
5.1 Opinion of Vinson & Elkins L.L.P.;
23.1 Consent of Ernst & Young LLP.;
23.2 Consent of Deloitte & Touche;
23.3 Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1);
24.1 Powers of Attorney (included on the signature page to this
Registration Statement).
UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(b) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
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<PAGE> 5
(c) 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;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Sec tion 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (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 this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 6
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 1st day of December,
1999.
DENALI INCORPORATED
By: /s/ Edward de Boer
---------------------------------------
Edward de Boer
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints R. Kevin Andrews and Mel S. Carter or any
of them, his true and lawful attorney-in-fact and agent, with full power of
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 attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the 1st day of December, 1999.
SIGNATURE TITLE
--------- -----
/s/ Edward de Boer President and
- ------------------------------------------ Chief Executive Officer
Edward de Boer and Director
(Principal Executive Officer)
/s/ R. Kevin Andrews Chief Financial Officer
- ------------------------------------------ and Treasurer
R. Kevin Andrews (Principal Financial and
Accounting-Officer)
/s/ Richard W. Volk Chairman of the Board
- ------------------------------------------ and Director
Richard W. Volk
/s/ Philip J. Burguieres Director
- ------------------------------------------
Philip J. Burguieres
/s/ Ernest H. Cockrell
- ------------------------------------------ Director
Ernest H. Cockrell
/s/ Thomas D. Simmons, Jr. Director
- ------------------------------------------
Thomas D. Simmons, Jr.
/s/ Joel V. Staff Director
- ------------------------------------------
Joel V. Staff
/s/ J. Taft Symonds Director
- ------------------------------------------
J. Taft Symonds
/s/ Stephen M. Youts Director
- ------------------------------------------
Stephen M. Youts
/s/ Bob Elfring Director
- ------------------------------------------
Bob Elfring
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<PAGE> 7
EXHIBIT INDEX
EXHIBIT
NUMBERS DESCRIPTION
------- -----------
4.1 Denali Incorporated 1999 Stock Incentive Plan;
4.2 Second Restated Certificate of Incorporation (filed with the
Commission as Exhibit 3.01 to Registration Statement No.
333-36857 and incorporated herein by reference);
4.3 Amended and Restated Bylaws (filed with the Commission as
Exhibit 3.02 to Registration Statement No. 333-36857 and
incorporated herein by reference);
5.1 Opinion of Vinson & Elkins L.L.P.;
23.1 Consent of Ernst & Young LLP.;
23.2 Consent of Deloitte & Touche;
23.3 Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1);
24.1 Powers of Attorney (included on the signature page to this
Registration Statement).
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<PAGE> 1
EXHIBIT 4.1
DENALI INCORPORATED
1999 STOCK INCENTIVE PLAN
I. PURPOSE
The purpose of the DENALI INCORPORATED 1999 STOCK INCENTIVE PLAN (the
"Plan") is to provide a means through which DENALI INCORPORATED, a Delaware
corporation (the "Company"), and its subsidiaries may attract able persons to
serve as directors, consultants, or advisors or to enter the employ of the
Company or its subsidiaries and to provide a means whereby those individuals
upon whom the responsibilities of the successful administration and management
of the Company and its subsidiaries rest, and whose present and potential
contributions to the welfare of the Company and its subsidiaries are of
importance, can acquire and maintain stock ownership, thereby strengthening
their concern for the welfare of the Company and its subsidiaries. A further
purpose of the Plan is to provide such individuals with additional incentive and
reward opportunities designed to enhance the profitable growth of the Company
and its subsidiaries. Accordingly, the Plan provides for granting Incentive
Stock Options, options that do not constitute Incentive Stock Options,
Restricted Stock Awards, or any combination of the foregoing, as is best suited
to the circumstances of the particular employee, consultant, advisor, or
director as provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan
unless specifically modified by any paragraph:
(a) "AWARD" means, individually or collectively, any Option or
Restricted Stock Award.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended.
Reference in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any regulations under
such section.
(d) "COMMITTEE" means a committee of the Board that is selected by the
Board as provided in Paragraph IV (a).
(e) "COMMON STOCK" means the common stock, par value $.01 per share, of
the Company, or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph IX.
(f) "COMPANY" means Denali Incorporated, a Delaware corporation.
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(g) "CONSULTANT" means any person who is not an employee and who is
providing advisory or consulting services to the Company or any parent or
subsidiary corporation (as defined in section 424 of the Code).
(h) "DIRECTOR" means an individual elected to the Board by the
stockholders of the Company or by the Board under applicable corporate law who
is serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.
(i) An "EMPLOYEE" means any person (including a Director) in an
employment relationship with the Company or any parent or subsidiary corporation
(as defined in section 424 of the Code).
(j) "FAIR MARKET VALUE" means, as of any specified date, the mean of
the high and low sales prices of the Common Stock (i) reported by the National
Market System of NASDAQ on that date or (ii) if the Common Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date; or, in either case, if no prices are reported on that date, on the last
preceding date on which such prices of the Common Stock are so reported. If the
Common Stock is traded over the counter at the time a determination of its fair
market value is required to be made hereunder, its fair market value shall be
deemed to be equal to the average between the reported high and low or closing
bid and asked prices of Common Stock on the most recent date on which Common
Stock was publicly traded. In the event Common Stock is not publicly traded at
the time a determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee in such
manner as it deems appropriate.
(k) "HOLDER" means an employee, Consultant, or Director who has been
granted an Award.
(l) "INCENTIVE STOCK OPTION" means an incentive stock option within the
meaning of section 422 of the Code.
(m) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(n) "OPTION" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Common Stock and Options that
do not constitute Incentive Stock Options to purchase Common Stock.
(o) "OPTION AGREEMENT" means a written agreement between the Company
and a Holder with respect to an Option.
(p) "PLAN" means the Denali Incorporated 1999 Stock Incentive Plan, as
amended from time to time.
(q) "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.
(r) "RESTRICTED STOCK AWARD" means an Award granted under Paragraph
VIII of the Plan.
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<PAGE> 3
(s) "RULE 16B-3" means SEC Rule 16b-3 promulgated under the 1934 Act,
as such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.
(t) "STOCK APPRECIATION RIGHT" shall have the meaning assigned to such
term in Paragraph VII (d) of the Plan.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective upon the date of its adoption by the
Board, provided the Plan is approved by the stockholders of the Company within
twelve months thereafter. Notwithstanding any provision in the Plan, in any
Option Agreement or in any Restricted Stock Agreement, no Option shall be
exercisable and no Restricted Stock Award shall vest prior to such stockholder
approval. No further Awards may be granted under the Plan after ten years from
the date the Plan is adopted by the Board. The Plan shall remain in effect until
all Options granted under the Plan have been satisfied or expired, and all
Restricted Stock Awards granted under the Plan have vested or been forfeited.
IV. ADMINISTRATION
(a) COMPOSITION OF COMMITTEE. The Plan shall be administered by a
committee of, and appointed by, the Board, and such Committee shall be comprised
solely of two or more outside Directors (within the meaning of the term "outside
directors" as used in section 162(m) of the Code and applicable interpretive
authority thereunder and within the meaning of "Non-Employee Director" as
defined in Rule 16b-3).
(b) POWERS. Subject to the express provisions of the Plan, the
Committee shall have authority, in its discretion, to determine which employees,
Consultants, or Directors shall receive an Award, the time or times when such
Award shall be made, whether an Incentive Stock Option or nonqualified Option
shall be granted, and the number of shares to be subject to each Option or
Restricted Stock Award. In making such determinations, the Committee shall take
into account the nature of the services rendered by the respective employees,
Consultants, or Directors, their present and potential contribution to the
Company's success and such other factors as the Committee in its discretion
shall deem relevant.
(c) ADDITIONAL POWERS. The Committee shall have such additional powers
as are delegated to it by the other provisions of the Plan. Subject to the
express provisions of the Plan, this shall include the power to construe the
Plan and the respective agreements executed hereunder, to prescribe rules and
regulations relating to the Plan, and to determine the terms, restrictions and
provisions of the agreement relating to each Award, including such terms,
restrictions and provisions as shall be requisite in the judgment of the
Committee to cause designated Options to qualify as Incentive Stock Options, and
to make all other determinations necessary or advisable for administering the
Plan. The Committee may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any agreement relating to an Award in the
manner and to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Paragraph IV
shall be conclusive.
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<PAGE> 4
V. SHARES SUBJECT TO THE PLAN; GRANT OF OPTIONS;
GRANT OF RESTRICTED STOCK AWARDS
(a) SHARES SUBJECT TO THE PLAN AND AWARD LIMITS. Subject to adjustment
in the same manner as provided in Paragraph IX with respect to shares of Common
Stock subject to Options then outstanding, the aggregate number of shares of
Common Stock that may be issued under the Plan shall not exceed 300,000 shares.
Shares shall be deemed to have been issued under the Plan only (i) to the extent
actually issued and delivered pursuant to an Award or (ii) to the extent an
Award is settled in cash. To the extent that an Award lapses or the rights of
its Holder terminate, any shares of Common Stock subject to such Award shall
again be available for the grant of an Award under the Plan. Notwithstanding any
provision in the Plan to the contrary, the maximum number of shares of Common
Stock that may be subject to Awards granted to any one individual during any
calendar year may not exceed 100,000 shares of Common Stock (subject to
adjustment in the same manner as provided in paragraph IX with respect to shares
of Common Stock subject to Options then outstanding). The limitation set forth
in the preceding sentence shall be applied in a manner which will permit
compensation generated under the Plan to constitute "performance-based"
compensation for purposes of section 162(m) of the Code, including, without
limitation, counting against such maximum number of shares, to the extent
required under section 162(m) of the Code and applicable interpretive authority
thereunder, any shares subject to Options that are canceled or repriced.
(b) GRANT OF OPTIONS. The Committee may from time to time grant Options
to one or more employees, Consultants, or Directors determined by it to be
eligible for participation in the Plan in accordance with the terms of the Plan.
(c) GRANT OF RESTRICTED STOCK AWARDS. The Committee may from time to
time grant Restricted Stock Awards to one or more employees, Consultants, or
Directors determined by it to be eligible for participation in the Plan in
accordance with the terms of the Plan.
(d) STOCK OFFERED. Subject to the limitations set forth in Paragraph V
(a), the stock to be offered pursuant to the grant of an Award may be authorized
but unissued Common Stock or Common Stock previously issued and outstanding and
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Awards at the termination of the Plan shall cease
to be subject to the Plan but, until termination of the Plan, the Company shall
at all times make available a sufficient number of shares to meet the
requirements of the Plan.
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<PAGE> 5
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are
employees, Consultants, or Directors. An Award may be granted on more than one
occasion to the same person, and, subject to the limitations set forth in the
Plan, such Award may include an Incentive Stock Option, an Option that is not an
Incentive Stock Option, a Restricted Stock Award, or any combination thereof.
VII. STOCK OPTIONS
(a) OPTION PERIOD. The term of each Option shall be as specified by the
Committee at the date of grant.
(b) LIMITATIONS ON EXERCISE OF OPTION. An Option shall be exercisable
in whole or in such installments and at such times as determined by the
Committee.
(c) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. An Incentive Stock
Option may be granted only to an individual who is an employee at the time the
Option is granted. To the extent that the aggregate Fair Market Value
(determined at the time the respective Incentive Stock Option is granted) of
Common Stock with respect to which Incentive Stock Options granted after 1986
are exercisable for the first time by an individual during any calendar year
under all incentive stock option plans of the Company and its parent and
subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be
treated as Options which do not constitute Incentive Stock Options. The
Committee shall determine, in accordance with applicable provisions of the Code,
Treasury Regulations and other administrative pronouncements, which of a
Holder's Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the Holder of such determination as
soon as practicable after such determination. No Incentive Stock Option shall be
granted to an individual if, at the time the Option is granted, such individual
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or subsidiary corporation,
within the meaning of section 422(b)(6) of the Code, unless (i) at the time such
Option is granted the option price is at least 110% of the Fair Market Value of
the Common Stock subject to the Option and (ii) such Option by its terms is not
exercisable after the expiration of five years from the date of grant. An
Incentive Stock Option shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable during the Holder's
lifetime only by such Holder or the Holder's guardian or legal representative.
(d) OPTION AGREEMENT. Each Option shall be evidenced by an Option
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,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. Each Option Agreement shall specify the effect of
termination of (i) employment, (ii) the consulting or advisory relationship, or
(iii) membership on the Board, as applicable, on the exercisability of the
Option. An Option Agreement may provide for the payment of the option price, in
whole or in part, by the delivery of a number of shares of Common Stock (plus
cash if necessary) having a Fair Market Value equal to such option price.
Moreover, an Option Agreement may provide for a "cashless exercise" of the
Option by establishing procedures satisfactory to the Committee with respect
thereto. Further, an Option Agreement may provide for the surrender of the right
to purchase shares under the Option in return
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<PAGE> 6
for a payment in cash or shares of Common Stock or a combination of cash and
shares of Common Stock equal in value to the excess of the Fair Market Value of
the shares with respect to which the right to purchase is surrendered over the
option price therefor ("Stock Appreciation Rights"), on such terms and
conditions as the Committee in its sole discretion may prescribe. In the case of
any such Stock Appreciation Right that is granted in connection with an
Incentive Stock Option, such right shall be exercisable only when the Fair
Market Value of the Common Stock exceeds the price specified therefor in the
Option or the portion thereof to be surrendered. The terms and conditions of the
respective Option Agreements need not be identical.
(e) OPTION PRICE AND PAYMENT. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be determined by the
Committee but, subject to adjustment as provided in Paragraph IX, (i) in the
case of an Incentive Stock Option, such purchase price shall not be less than
the Fair Market Value of a share of Common Stock on the date such Option is
granted, and (ii) in the case of an Option that does not constitute an Incentive
Stock Option, such purchase price shall not be less than 80% of the Fair Market
Value of a share of Common Stock on the date such Option is granted. The Option
or portion thereof may be exercised by delivery of an irrevocable notice of
exercise to the Company, as specified by the Committee. The purchase price of
the Option or portion thereof shall be paid in full in the manner prescribed by
the Committee. Separate stock certificates shall be issued by the Company for
those shares acquired pursuant to the exercise of an Incentive Stock Option and
for those shares acquired pursuant to the exercise of any Option that does not
constitute an Incentive Stock Option.
(f) STOCKHOLDER RIGHTS AND PRIVILEGES. The Holder shall be entitled to
all the privileges and rights of a stockholder only with respect to such shares
of Common Stock as have been purchased under the Option and for which
certificates of stock have been registered in the Holder's name.
(g) OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY
OTHER CORPORATIONS. Options and Stock Appreciation Rights may be granted under
the Plan from time to time in substitution for stock options held by individuals
employed by corporations who become employees as a result of a merger or
consolidation or other business combination of the employing corporation with
the Company or any subsidiary.
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VIII. RESTRICTED STOCK AWARDS
(a) FORFEITURE RESTRICTIONS TO BE ESTABLISHED BY THE COMMITTEE. Shares
of Common Stock that are the subject of a Restricted Stock Award shall be
subject to restrictions on disposition by the Holder and an obligation of the
Holder to forfeit and surrender the shares to the Company under certain
circumstances (the "Forfeiture Restrictions"). The Forfeiture Restrictions shall
be determined by the Committee in its sole discretion, and the Committee may
provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of
one or more performance targets established by the Committee that are based on
(1) the price of a share of Common Stock, (2) the Company's earnings per share,
(3) the Company's market share, (4) the market share of a business unit of the
Company designated by the Committee, (5) the Company's sales, (6) the sales of a
business unit of the Company designated by the Committee, (7) the net income
(before or after taxes) of the Company or any business unit of the Company
designated by the Committee, (8) the cash flow return on investment of the
Company or any business unit of the Company designated by the Committee, (9) the
earnings before or after interest, taxes, depreciation, and/or amortization of
the Company or any business unit of the Company designated by the Committee,
(10) the economic value added, or (11) the return on stockholders' equity
achieved by the Company, (ii) the Holder's continued employment with the Company
or continued service as a Consultant or Director for a specified period of time,
(iii) the occurrence of any event or the satisfaction of any other condition
specified by the Committee in its sole discretion, or (iv) a combination of any
of the foregoing. Each Restricted Stock Award may have different Forfeiture
Restrictions, in the discretion of the Committee.
(b) OTHER TERMS AND CONDITIONS. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. The Holder shall have the
right to receive dividends with respect to Common Stock subject to a Restricted
Stock Award, to vote Common Stock subject thereto and to enjoy all other
stockholder rights, except that (i) the Holder shall not be entitled to delivery
of the stock certificate until the Forfeiture Restrictions have expired, (ii)
the Company shall retain custody of the stock until the Forfeiture Restrictions
have expired, (iii) the Holder may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions
have expired, and (iv) a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of
the Restricted Stock Award. At the time of such Award, the Committee may, in its
sole discretion, prescribe additional terms, conditions or restrictions relating
to Restricted Stock Awards, including, but not limited to, rules pertaining to
the termination of employment or service as a Consultant or Director (by
retirement, disability, death or otherwise) of a Holder prior to expiration of
the Forfeitures Restrictions. Such additional terms, conditions or restrictions
shall be set forth in a Restricted Stock Agreement made in conjunction with the
Award.
(c) PAYMENT FOR RESTRICTED STOCK. The Committee shall determine the
amount and form of any payment for Common Stock received pursuant to a
Restricted Stock Award, provided that in the absence of such a determination, a
Holder shall not be required to make any payment for Common Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required by
law.
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(d) COMMITTEE'S DISCRETION TO ACCELERATE VESTING OF RESTRICTED STOCK
AWARDS. The Committee may, in its discretion and as of a date determined by the
Committee, fully vest any or all Common Stock awarded to a Holder pursuant to a
Restricted Stock Award and, upon such vesting, all restrictions applicable to
such Restricted Stock Award shall terminate as of such date. Any action by the
Committee pursuant to this Subparagraph may vary among individual Holders and
may vary among the Restricted Stock Awards held by any individual Holder.
Notwithstanding the preceding provisions of this Subparagraph, the Committee may
not take any action described in this Subparagraph with respect to a Restricted
Stock Award that has been granted to a "covered employee" (within the meaning of
Treasury Regulation section 1.162-27(c)(2)) if such Award has been designed to
meet the exception for performance-based compensation under section 162(m) of
the Code.
(e) RESTRICTED STOCK AGREEMENTS. At the time any Award is made under
this Paragraph VIII, the Company and the Holder shall enter into a Restricted
Stock Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need not be identical.
IX. RECAPITALIZATION OR REORGANIZATION
(a) NO EFFECT ON RIGHT OR POWER. The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's or any
subsidiary's capital structure or its business, any merger or consolidation of
the Company or any subsidiary, any issue of debt or equity securities ahead of
or affecting Common Stock or the rights thereof, the dissolution or liquidation
of the Company or any subsidiary or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(b) SUBDIVISION OR CONSOLIDATION OF SHARES; STOCK DIVIDENDS. The shares
with respect to which Options may be granted are shares of Common Stock as
presently constituted, but if, and whenever, prior to the expiration of an
Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Company, the number of
shares of Common Stock with respect to which such Option may thereafter be
exercised (i) in the event of an increase in the number of outstanding shares
shall be proportionately increased, and the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares shall be proportionately reduced, and the purchase price per
share shall be proportionately increased. Any fractional share resulting from
such adjustment shall be rounded up to the next whole share.
(c) RECAPITALIZATIONS AND CORPORATE CHANGES. If the Company
recapitalizes, reclassifies its capital stock, or otherwise changes its capital
structure (a "recapitalization"), the number and class of shares of Common Stock
covered by an Option theretofore granted shall be adjusted so that such Option
shall thereafter cover the number and class of shares of stock and securities to
which the Holder would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to the recapitalization, the Holder had
been the holder of record of the number
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of shares of Common Stock then covered by such Option. If (i) the Company shall
not be the surviving entity in any merger or consolidation (or survives only as
a subsidiary of an entity), (ii) the Company sells, leases or exchanges or
agrees to sell, lease or exchange all or substantially all of its assets to any
other person or entity, (iii) the Company is to be dissolved and liquidated,
(iv) any person or entity, including a "group" as contemplated by Section
13(d)(3) of the 1934 Act, acquires or gains ownership or control (including,
without limitation, power to vote) of more than 50% of the outstanding shares of
the Company's voting stock (based upon voting power), or (v) as a result of or
in connection with a contested election of Directors, the persons who were
Directors of the Company before such election shall cease to constitute a
majority of the Board (each such event is referred to herein as a "Corporate
Change"), no later than (x) ten days after the approval by the stockholders of
the Company of such merger, consolidation, reorganization, sale, lease or
exchange of assets or dissolution or such election of Directors or (y) thirty
days after a Corporate Change of the type described in clause (iv), the
Committee, acting in its sole discretion without the consent or approval of any
Holder, shall effect one or more of the following alternatives, which
alternatives may vary among individual Holders and which may vary among Options
held by any individual Holder: (1) accelerate the time at which Options then
outstanding may be exercised so that such Options may be exercised in full for a
limited period of time on or before a specified date (before or after such
Corporate Change) fixed by the Committee, after which specified date all
unexercised Options and all rights of Holders thereunder shall terminate, (2)
require the mandatory surrender to the Company by selected Holders of some or
all of the outstanding Options held by such Holders (irrespective of whether
such Options are then exercisable under the provisions of the Plan) as of a
date, before or after such Corporate Change, specified by the Committee, in
which event the Committee shall thereupon cancel such Options and cause the
Company to pay to each Holder an amount of cash per share equal to the excess,
if any, of the amount calculated in Subparagraph (d) below (the "Change of
Control Value") of the shares subject to such Option over the exercise price(s)
under such Options for such shares, (3) make such adjustments to Options then
outstanding as the Committee deems appropriate to reflect such Corporate Change
(provided, however, that the Committee may determine in its sole discretion that
no adjustment is necessary to Options then outstanding), or (4) provide that the
number and class of shares of Common Stock covered by an Option theretofore
granted shall be adjusted so that such Option shall thereafter cover the number
and class of shares of stock or other securities or property (including, without
limitation, cash) to which the Holder would have been entitled pursuant to the
terms of the agreement of merger, consolidation or sale of assets and
dissolution if, immediately prior to such merger, consolidation or sale of
assets and dissolution, the Holder had been the holder of record of the number
of shares of Common Stock then covered by such Option.
(d) CHANGE OF CONTROL VALUE. For the purposes of clause (2) in
Subparagraph (c) above, the "Change of Control Value" shall equal the amount
determined in clause (i), (ii) or (iii), whichever is applicable, as follows:
(i) the per share price offered to stockholders of the Company in any such
merger, consolidation, sale of assets or dissolution transaction, (ii) the price
per share offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place, or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to stockholders of the Company in any
transaction described in this Subparagraph (d) or Subparagraph (c) above
consists of anything other than cash, the Committee
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shall determine the fair cash equivalent of the portion of the consideration
offered which is other than cash.
(e) OTHER CHANGES IN THE COMMON STOCK. In the event of changes in the
outstanding Common Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, split-ups, split-offs, spin-offs,
exchanges or other relevant changes in capitalization or distributions to the
holders of Common Stock occurring after the date of the grant of any Award and
not otherwise provided for by this Paragraph IX, such Award and any agreement
evidencing such Award shall be subject to adjustment by the Committee at its
discretion as to the number and price of shares of Common Stock or other
consideration subject to such Award. In the event of any such change in the
outstanding Common Stock or distribution to the holders of Common Stock, the
aggregate number of shares available under the Plan and the maximum number of
shares that may be subject to Awards granted to any one individual may be
appropriately adjusted by the Committee, whose determination shall be
conclusive.
(f) STOCKHOLDER ACTION. Any adjustment provided for in the above
Subparagraphs shall be subject to any required stockholder action.
(g) NO ADJUSTMENTS UNLESS OTHERWISE PROVIDED. Except as hereinbefore
expressly provided, the issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not
for fair value, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Common Stock subject to Awards
theretofore granted or the purchase price per share, if applicable.
X. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares of Common Stock for which Awards have not theretofore been
granted. The Board shall have the right to alter or amend the Plan or any part
thereof from time to time; provided that no change in any Award theretofore
granted may be made which would impair the rights of the Holder without the
consent of the Holder, and provided, further, that the Board may not, without
approval of the stockholders, amend the Plan to (a) increase the maximum
aggregate number of shares that may be issued under the Plan or (b) change the
class of individuals eligible to receive Awards under the Plan.
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XI. MISCELLANEOUS
(a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan nor any
action of the Board or of the Committee shall be deemed to give an employee,
Consultant, or Director any right to be granted an Option, a right to a
Restricted Stock Award, or any other rights hereunder except as may be evidenced
by an Option Agreement or a Restricted Stock Agreement duly executed on behalf
of the Company, and then only to the extent and on the terms and conditions
expressly set forth therein. The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make any other
segregation of funds or assets to assure the performance of its obligations
under any Award.
(b) NO EMPLOYMENT/MEMBERSHIP RIGHTS CONFERRED. Nothing contained in the
Plan shall (i) confer upon any employee or Consultant any right with respect to
continuation of employment or of a consulting or advisory relationship with the
Company or any subsidiary or (ii) interfere in any way with the right of the
Company or any subsidiary to terminate his or her employment or consulting or
advisory relationship at any time. Nothing contained in the Plan shall confer
upon any Director any right with respect to continuation of membership on the
Board.
(c) OTHER LAWS; WITHHOLDING. The Company shall not be obligated to
issue any Common Stock pursuant to any Award granted under the Plan at any time
when the shares covered by such Award have not been registered under the
Securities Act of 1933, as amended, and such other state and federal laws, rules
and regulations as the Company or the Committee deems applicable and, in the
opinion of legal counsel for the Company, there is no exemption from the
registration requirements of such laws, rules and regulations available for the
issuance and sale of such shares. No fractional shares of Common Stock shall be
delivered, nor shall any cash in lieu of fractional shares be paid. The Company
shall have the right to deduct in connection with all Awards any taxes required
by law to be withheld and to require any payments required to enable it to
satisfy its withholding obligations.
(d) NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any subsidiary from taking any
corporate action which is deemed by the Company or such subsidiary to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No employee,
Consultant, Director, beneficiary or other person shall have any claim against
the Company or any subsidiary as a result of any such action.
(e) RESTRICTIONS ON TRANSFER. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with
the consent of the Committee.
(f) GOVERNING LAW. THE PLAN SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.
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EXHIBIT 5.1
[VINSON & ELKINS LETTERHEAD]
Writer's Phone: (713) 758-2058 E-mail: [email protected]
Writer's Fax: (713) 615-5565 Web: www.velaw.com
December 1, 1999
Denali Incorporated
1360 Post Oak Boulevard, Suite 2250
Houston, Texas 77056
Ladies and Gentlemen:
We have acted as counsel for Denali Incorporated, a Delaware
corporation (the "Company"), with respect to certain legal matters in connection
with the registration by the Company under the Securities Act of 1933, as
amended (the "Securities Act"), of the offer and sale of up to 300,000 shares of
Common Stock, par value $0.01 per share (the "Shares") that may be issued
pursuant to the Denali Incorporated 1999 Stock Incentive Plan (the "Plan").
In connection with the foregoing, we have examined or are familiar with
the Certificate of Incorporation of the Company, the Amended and Restated Bylaws
of the Company, the corporate proceedings with respect to the issuance of the
Shares, and the Registration Statement on Form S-8 filed in connection with the
registration of the Shares (the "Registration Statement"), and such other
certificates, instruments and documents as we have considered necessary or
appropriate for purposes of this opinion.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when the Shares are issued in accordance with the
provisions of the Plan, will be validly issued and fully paid and
non-assessable.
The foregoing opinion is limited to the laws of the United States of
America and the States of Texas and 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. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act and the rules and regulations thereunder.
Very truly yours,
/s/ Vinson & Elkins, L.L.P.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Denali Incorporated 1999 Stock Incentive Plan of our
report dated August 16, 1999 with respect to the consolidated financial
statements and schedule of Denali Incorporated included in its Annual Report
(Form 10-K) for the fiscal year ended July 3, 1999, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
December 1, 1999
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
Welna NV
Postbus 309
7570 AH OLDENZAAL
Date Reference
November 30, 1999 J.J.M. Dekker R.A.
Consent of independent auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Denali Incorporated 1999 Stock Incentive Plan of our
report dated August 16, 1999 with respect to the consolidated balance sheet of
Welna N.V. included in Denali Inc.'s Annual Report (Form 10-K) for the fiscal
year ended July 3, 1999 and our report dated March 16, 1999 with respect to the
consolidated financial statements of Welna N.V. included in Denali Inc.'s
Current Report on Form 8-K/A dated September 14, 1999, filed with the Securities
and Exchange Commission.
For Deloitte & Touche
Registeraccountants
/s/ Deloitte & Touche
