<PAGE>
As filed with the Securities and Exchange Commission on May 14, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
WSI INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0691607
(State or other jurisdic- (I.R.S. Employer
tion of incorporation Identification No.)
or organization)
2605 W. Wayzata Boulevard
Long Lake, Minnesota 55356
(Address of Principal Executive Offices and zip code)
----------------------------
WSI INDUSTRIES, INC.
1994 STOCK PLAN
(Full title of the Plan)
----------------------------
Michael J. Pudil Copy to:
President Charles P. Moorse
WSI Industries, Inc. Kristin L. Johnson
2065 W. Wayzata Boulevard Lindquist & Vennum P.L.L.P.
Long Lake, MN 55356 4200 IDS Center
(612) 473-1271 80 South Eighth Street
(Name, address, including zip code and Minneapolis, MN 55402
telephone number of agent for service) (612) 371-3211
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Securities Maximum Maximum
to be Registered Amount Offering Aggregate Amount of
to be Price Offering Registration
Registered Per Share Price Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 200,000 shares(2) $3.50(1) $700,000(1) $194.60
$.10 par value to be issued
pursuant to the WSI Industries, Inc.
1994 Stock Plan
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and (h) and based upon the closing price of the
Company's Common Stock on the Nasdaq National Market on May 11, 1999.
(2) 250,000 shares were registered on Form S-8 (No. 33-58565) on
April 12, 1995, and 200,000 shares are being registered herewith.
1
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INCORPORATION OF CONTENTS OF REGISTRATION STATEMENT
BY REFERENCE
A Registration Statement on form S-8 (file No. 33-58565) was filed with
the Securities and Exchange Commission on April 12, 1995 covering the
registration of 250,000 shares initially authorized for issuance under the
Company's 1994 Stock Plan (the "Plan"). Pursuant to General Instruction E of
Form S-8, this Registration Statement is being filed to register the additional
200,000 shares authorized under the Plan. An amendment to the Plan to increase
the number of shares under the plan by 200,000 was authorized by the Company's
Board of Directors and was approved by shareholders on January 7, 1999. This
Registration Statement should also be considered a post-effective amendment to
the prior Registration Statement. The content of the prior Registration
Statement is incorporated herein by reference.
PART I
Pursuant to the Note to Part I of Form S-8, the information
required by Items 1 and 2 of Form S-8 is not filed as a part of this
Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference.
- -------------------------------------------------
The following documents filed with the Securities and Exchange
Commission are hereby incorporated by reference herein:
(a) The Annual Report of the Company on Form 10-K for the fiscal year
ended August 30, 1998.
(b) The Definitive Proxy Statement dated December 4, 1998 for the 1999
Annual Meeting of Shareholders held on January 7, 1999.
(c) The Quarterly Reports on Form 10-Q for the quarters ended November
29, 1998 and February 28, 1999.
(d) The description of the Company's Common Stock as set forth in the
Company's Form S-8 Registration Statement dated January 15, 1988 (Registration
No. 33-19650), including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which registers 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.
Item 4. Description of Securities.
- -----------------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------------------------------------------------
Gerald E. Magnuson, Secretary of the Company, is a retired partner of
Lindquist & Vennum, P.L. L.P. which is the law firm passing on the validity of
the securities issued under the Plan.
2
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Item 6. Indemnification of Directors and Officers.
- ---------------------------------------------------
The Company's Bylaws provide that the Company shall indemnify its
officers, directors, employees or agents of another corporation, partnership,
joint venture, trust or other enterprise, and their respective heirs,
administrators and executors, in accordance with, and to the fullest extent
permitted by the provisions of the Minnesota Business Corporation Act, as it may
be amended from time to time.
Section 302A.521 of the Minnesota Business Corporation Act provides
that a corporation shall indemnify a person made or threatened to be made a
party to a proceeding by reason of the former or present official capacity of
the person against judgments, penalties, fines, including, without limitation,
excise taxes assessed against the person with respect to an employee benefit
plan, settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions of the person complained of in the
proceeding, the person:
(1) Has not been indemnified by another organization or employee
benefit plan for the same judgments, penalties, fines,
including, without limitation, excise taxes assessed against
the person with respect to an employee benefit plan,
settlements, and reasonable expenses, including attorneys'
fees and disbursements, incurred by the person in connection
with the proceeding with respect to the same acts or
omissions;
(2) Acted in good faith;
(3) Received no improper personal benefit and section 302A.255
(Director Conflicts of Interest), if applicable, has been
satisfied;
(4) In the case of a criminal proceeding, had no reasonable cause
to believe the conduct was unlawful; and
(5) In the case of acts or omissions occurring in the official
capacity described in subdivision 1, paragraph (c), clause (1)
or (2), reasonably believed that the conduct was in the best
interests of the corporation, or in the case of acts or
omissions occurring in the official capacity described in
subdivision 1, paragraph (c), clause (3), reasonably believed
that the conduct was not opposed to the best interests of the
corporation. If the person's acts or omissions complained of
in the proceeding relate to conduct as a director, officer,
trustee, employee, or agent of an employee benefit plan, the
conduct is not considered to be opposed to the best interests
of the corporation if the person reasonably believed that the
conduct was in the best interests of the participants or
beneficiaries of the employee benefit plan.
Item 7. Exemption from Registration Claimed.
- ---------------------------------------------
Not applicable.
3
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Item 8. Exhibits.
- ------------------
Exhibit
- -------
4.1 WSI, Industries Inc. 1994 Stock Plan, as amended
5.1 Opinion of Lindquist & Vennum P.L.L.P.
23.1 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1)
23.2 Consent of Ernst & Young LLP, independent public auditors.
24.1 Power of Attorney (set forth on the signature page hereof)
- ---------------------
Item 9. Undertakings.
- ----------------------
(a) The Company hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act of 1933 if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
(iii) Include any additional or changed material information
on the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered
4
<PAGE>
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer 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 small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer 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 small
business issuer 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.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the City of Long Lake, State of Minnesota, on May 14, 1999.
WSI INDUSTRIES, INC.
By /s/ Michael J. Pudil
----------------------------------
Michael J. Pudil, President
POWER OF ATTORNEY
The undersigned officers and directors of WSI Industries, Inc. hereby
constitute and appoint Michael J. Pudil and Gerald E. Magnuson, or either of
them, with power to act one without the other, our true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for us and in our stead, in any and all capacities to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents relating thereto, 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 necessary or
advisable 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 attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons on
May 14, 1999 in the capacities indicated.
Signature
/s/ Michael J. Pudil
- --------------------------------------------
Michael J. Pudil, President,
Chief Executive Officer (Principal
Executive Officer) and Director
/s/ Paul Sheely
- --------------------------------------------
Paul Sheely, Vice
President and Chief Financial
Officer (Principal Financial
Officer), Treasurer and Assistant Secretary
6
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/s/ George J. Martin
- --------------------------------------------
George J. Martin, Chairman of
the Board
/s/ Paul Baszucki
- --------------------------------------------
Paul Baszucki, Director
/s/ Melvin L. Katten
- --------------------------------------------
Melvin L. Katten, Director
/s/ Gerald E. Magnuson
- --------------------------------------------
Gerald E. Magnuson, Director
/s/ Eugene J. Mora
- --------------------------------------------
Eugene J. Mora, Director
7
<PAGE>
Exhibit 4.1
WSI INDUSTRIES, INC.
1994 STOCK PLAN
SECTION 1. General Purpose of Plan; Definitions.
The name of this plan is the WSI Industries, Inc. 1994 Stock Plan (the
"Plan"). The purpose of the Plan is to enable WSI Industries, Inc. (the
"Company") and its Subsidiaries to retain and attract executives and other key
employees, consultants and non-employee directors who contribute to the
Company's success by their ability, ingenuity and industry, and to enable such
individuals to participate in the long-term success and growth of the Company by
giving them a proprietary interest in the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Board" means the Board of Directors of the Company.
b. "Cause" means a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony,
or a participant's willful misconduct or dishonesty, any of
which is directly and materially harmful to the business or
reputation of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Committee" means the Committee referred to in Section 2 of
the Plan. If at any time no Committee shall be in office, then
the functions of the Committee specified in the Plan shall be
exercised by the Board, unless the Plan specifically states
otherwise.
e. "Company" means WSI Industries, Inc., a corporation organized
under the laws of the State of Minnesota (or any successor
corporation).
f. "Deferred Stock" means an award made pursuant to Section 8
below of the right to receive Stock at the end of a specified
deferral period.
g. "Disability" means permanent and total disability as
determined by the Committee.
h. "Disinterested Person" shall have the meaning set forth in
Rule 16b-3(d)(3) as promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, or any
successor definition adopted by the Commission.
i. "Early Retirement" means retirement, with consent of the
Committee at the time of retirement, from active employment
with the Company and any Subsidiary or Parent Corporation of
the Company.
j. "Fair Market Value" means the value of the Stock on a given
date as determined by the Committee in accordance with Section
422(c)(7) of the Code and any applicable Treasury Department
regulations promulgated thereunder.
8
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k. "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
l. "Non-Employee Director" means any member of the Board who is
not an employee of the Company, any Parent Corporation or
Subsidiary.
m. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option, and is intended to be and is
designated as a "Non-Qualified Stock Option."
n. "Normal Retirement" means retirement from active employment
with the Company and any Subsidiary or Parent Corporation of
the Company on or after age 65.
o. "Parent Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the
Company if, at the time of the granting of a Stock Option,
each of the corporations (other than the Company) owns stock
possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the
chain as provided in Section 424(e) of the Code.
p. "Restricted Stock" means an award of shares of Stock that are
subject to restrictions under Section 7 below.
q. "Retirement" means Normal Retirement or Early Retirement.
r. "Stock" means the Common Stock, $.10 par value per share, of
the Company.
s. "Stock Appreciation Right" means the right pursuant to an
award granted under Section 6 below to surrender to the
Company all or a portion of a Stock Option in exchange for an
amount equal to the difference between (i) the Fair Market
Value, as of the date such Stock Option or such portion
thereof is surrendered, of the shares of Stock covered by such
Stock Option or such portion thereof, and (ii) the aggregate
exercise price of such Stock Option or such portion thereof.
t. "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 below.
u. "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company
if, at the time of the granting of a Stock Option, each of the
corporations (other than the last corporation in the unbroken
chain) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other
corporations in the chain as provided in Section 424(f) of the
Code.
SECTION 2. Administration.
---------------
The Plan shall be administered by the Board of Directors or by a
Committee of not less than three Disinterested Persons, who shall be appointed
by the Board of Directors of the Company and who shall serve at the pleasure of
the Board.
9
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The Committee shall have the power and authority to grant to eligible
persons, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, or (iv) Deferred Stock awards.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the
Company and its Subsidiaries, and consultants and
other persons having a contractual relationship with
the Company or its Subsidiaries, to whom Stock
Options, Stock Appreciation Rights, Restricted Stock
and/or Deferred Stock awards may from time to time be
granted hereunder;
(ii) to determine whether and to what extent Incentive
Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred
Stock awards, or a combination of the foregoing, are
to be granted hereunder;
(iii) to determine the number of shares to be covered by
each such award granted hereunder;
(iv) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award
granted hereunder (including, but not limited to, any
restriction on any Stock Option or other award and/or
the shares of Stock relating thereto), and to amend
such terms and conditions (including, but not limited
to, any amendment which accelerates the vesting of
any award); and
(v) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with
respect to an award under this Plan shall be deferred
either automatically or at the election of the
participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate its authority to officers of the Company for the purpose of selecting
employees who are not officers of the Company for purposes of (i) above.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and Plan
participants.
SECTION 3. Stock Subject to Plan.
----------------------
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 450,000. Such shares shall consist, in
whole or in part, of authorized and unissued shares.
Subject to paragraph (b)(iv) of Section 6 below, if any shares that
have been optioned ceased to be subject to Options, or if any shares subject to
any Restricted Stock or Deferred Stock award granted hereunder
10
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are forfeited or such award otherwise terminates without a payment being made to
the participant, such shares shall again be available for distribution in
connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding options granted under the Plan, and in the number of
shares subject to Restricted Stock or Deferred Stock awards granted under the
Plan as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always
be a whole number. Such adjusted option price shall also be used to determine
the amount payable by the Company upon the exercise of any Stock Appreciation
Right associated with any Option.
SECTION 4. Eligibility.
------------
Officers, other key employees of the Company or its Subsidiaries,
Non-Employee Directors and consultants and other persons having a contractual
relationship with the Company or its Subsidiaries who are responsible for or
contribute to the management, growth and/or profitability of the business of the
Company and its Subsidiaries are eligible to be granted Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards under the Plan.
Except for Non-Employee Directors, whose participation in the Plan shall be
limited as provided in paragraph (k) of Section 5, the optionees and
participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares covered by each
award.
SECTION 5. Stock Options.
--------------
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock
Options shall be granted under the Plan after September 29, 2004.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, NonQualified Stock Options, or both types of options (in each
case with or without Stock Appreciation Rights). To the extent that any option
does not qualify as an Incentive Stock Option, it shall constitute a separate
NonQualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code. The preceding sentence shall not preclude any
modification or amendment to an outstanding Incentive Stock Option, whether or
not such modification or amendment results in disqualification of such Option as
an Incentive Stock Option, provided the optionee consents in writing to the
modification or amendment.
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Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of grant. In no
event shall the option price per share of Stock purchasable under an Incentive
Stock Option be less than 100% of the Fair Market Value of the Stock on the date
of the grant of the option. If an employee owns or is deemed to own (by reason
of the attribution rules applicable under Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or any
Parent Corporation or Subsidiary and an Incentive Stock Option is granted to
such employee, the option price shall be no less than 110% of the Fair Market
Value of the Stock on the date the option is granted.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or any
Parent Corporation or Subsidiary and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.
(c) Exercisability. Stock Options shall be exercisable at such time or
times as determined by the Committee at or after grant. If the Committee
provides, in its discretion, that any option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time. Notwithstanding the foregoing, unless the Stock Option Agreement
provides otherwise, any Stock Option granted under this Plan shall be
exercisable in full, without regard to any installment exercise provisions, for
a period specified by the Company, but not to exceed sixty (60) days, prior to
the occurrence of any of the following events: (i) dissolution or liquidation of
the Company other than in conjunction with a bankruptcy of the Company or any
similar occurrence, (ii) any merger, consolidation, acquisition, separation,
reorganization, or similar occurrence, where the Company will not be the
surviving entity or (iii) the transfer of substantially all of the assets of the
Company or 75% or more of the outstanding Stock of the Company.
(d) Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price, either by
certified or bank check, or by any other form of legal consideration deemed
sufficient by the Committee and consistent with the Plan's purpose and
applicable law, including promissory notes or a properly executed exercise
notice together with irrevocable instructions to a broker acceptable to the
Company to promptly deliver to the Company the amount of sale or loan proceeds
to pay the exercise price. As determined by the Committee, in its sole
discretion, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the optionee or, in the case of the exercise
of a Non-Qualified Stock Option, Restricted Stock or Deferred Stock subject to
an award hereunder (based, in each case, on the Fair Market Value of the Stock
on the date the option is exercised, as determined by the Committee), provided,
however, that in the event payment is made in the form of shares of Restricted
Stock or a Deferred Stock award, the optionee will receive a portion of the
option shares in the form of, and in an amount equal to, the Restricted Stock or
Deferred Stock award tendered as payment by the optionee. An optionee may elect
to pay all or part of the option exercise price by having the Company withhold
from the shares of Stock that would otherwise be issued upon exercise that
number of shares of Stock having a Fair Market Value equal to the aggregate
option exercise price for the shares with respect to which such election is
made. No shares of Stock shall be
12
<PAGE>
issued until full payment therefor has been made. An optionee shall generally
have the rights to dividends and other rights of a shareholder with respect to
shares subject to the option when the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given the
representation described in paragraph (a) of Section 12.
(e) Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(f) Termination by Death. If an optionee's employment by the Company
and any Subsidiary or Parent Corporation terminates by reason of death, the
Stock Option may thereafter be immediately exercised, to the extent then
exercisable (or on such accelerated basis as the Committee shall determine at or
after grant), by the legal representative of the estate or by the legatee of the
optionee under the will of the optionee, for a period of one year (or such
shorter period as the Committee shall specify at grant) from the date of such
death or until the expiration of the stated term of the option, whichever period
is shorter.
(g) Termination by Reason of Disability. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Disability
(or on such accelerated basis as the Committee shall determine at or after
grant), but may not be exercised after one year (or such shorter period as the
Committee shall specify at grant) from the date of such termination of
employment or the expiration of the stated term of the option, whichever period
is the shorter. In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, the
option will thereafter be treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised
to the extent it was exercisable at the time of such Retirement, but may not be
exercised after three months (or such longer period as the Committee shall
specify at Retirement)from the date of such termination of employment or the
expiration of the stated term of the option, whichever period is the shorter. In
the event of termination of employment by reason of Retirement, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, the option will thereafter be
treated as a Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee, if
an optionee's employment by the Company and any Subsidiary or Parent Corporation
terminates for any reason other than death, Disability or Retirement, the Stock
Option shall thereupon terminate, except that the option may be exercised to the
extent it was exercisable at such termination for the lesser of three months (or
such shorter period as the Committee shall specify at grant) or the balance of
the option's term, provided, however, that if the optionee's employment is
terminated for Cause, all rights under the Stock Option shall terminate and
expire upon such termination.
(j) Annual Limit on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Option is granted) of the Common Stock with
respect to which an Incentive Stock Option under this Plan or any other plan of
the Company and any Subsidiary or Parent Corporation is exercisable for the
first time by an optionee during any calendar year shall not exceed $100,000.
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(k) Non-Employee Directors. Each Non-Employee Director who on or after
the date this Plan is approved by the shareholders of the Company (A) is elected
or re-elected as a director of the Company at any annual meeting of the
shareholders of the Company, or (B) is elected as a director of the Company at
any special meeting of the shareholders of the Company, shall as of the date of
such election or re-election automatically be granted a Stock Option to purchase
2,000 shares of Stock at the option price per share equal to 100% of the Fair
Market Value of a share of Stock on such date. In the case of a special meeting,
the action of the shareholders in electing a Non-Employee Director shall
constitute the granting of the Stock Option to such director, and, in the case
of an annual meeting, the action of the shareholders in electing or reelecting a
Non-Employee Director shall constitute the granting of a Stock Option to such
director; and the date when the shareholders take such action shall be the date
of grant of the Stock Option. All such Stock Options shall be designated as
Non-Qualified Stock Options and shall be subject to the same terms and
provisions as are then in effect with respect to the granting of Non-Qualified
Stock Options to officers and key employees of the Company, except that (i) the
term of each such Stock Option shall be equal to five (5) years, unless such
Non-Employee Director ceases to be a member of the Board, in which case the
Stock Option shall expire 30 days after such Non-Employee Director's departure
from the Board; (ii) the Stock Option shall be exercisable as to 25% of the
shares subject to the Stock Option six months after the date the Stock Option is
granted and as to an additional 25% each of the three subsequent anniversary
dates of the grant of such options, and (iii) no Stock Appreciation Rights may
be granted to any Non-Employee Director under this paragraph (k) or in any other
manner under this Plan. Subject to the foregoing, all provisions of this Plan
not inconsistent with the foregoing shall apply to Stock Options granted to
Non-Employee Directors.
SECTION 6. Stock Appreciation Rights.
--------------------------
(a) Grant and Exercise. Except as set forth in paragraph (k) of Section
5, Stock Appreciation Rights may be granted in conjunction with all or part of
any Stock Option granted under the Plan. In the case of a Non-Qualified Stock
Option, such rights may be granted either at or after the time of the grant of
such Option. In the case of an Incentive Stock Option, such rights may be
granted only at the time of the grant of the option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that a
Stock Appreciation Right granted with respect to less than the full number of
shares covered by a related stock Option shall not be reduced until the exercise
or termination of the related Stock Option exceeds the number of shares not
covered by the Stock Appreciation Right.
A Stock Appreciation Right may be exercised by an optionee, in
accordance with paragraph (b) of this Section 6, by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
optionee shall be entitled to receive an amount determined in the manner
prescribed in paragraph (b) of this Section 6. Stock Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to the extent
the related Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:
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<PAGE>
(i) Stock Appreciation Rights shall be exercisable only at
such time or times and to the extent that the Stock Options to which
they relate shall be exercisable in accordance with the provisions of
Section 5 and this Section 6 of the Plan.
(ii) Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive up to, but not more than, an
amount in cash or shares of Stock equal in value to the excess of the
Fair Market Value of one share of Stock over the option price per share
specified in the related option multiplied by the number of shares in
respect of which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the form of
payment.
(iii) Stock Appreciation Rights shall be transferable only
when and to the extent that the underlying Stock Option would be
transferable under Section 5 of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right, the
Stock Option or part thereof to which such Stock Appreciation Right is
related shall be deemed to have been exercised for the purpose of the
limitation set forth in Section 3 of the Plan on the number of shares
of Stock to be issued under the Plan, but only to the extent of the
number of shares issued or issuable under the Stock Appreciation Right
at the time of exercise based on the value of the Stock Appreciation
Right at such time.
(v) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the market
price of the Stock subject to the Incentive Stock Option exceeds the
exercise price of such Option.
SECTION 7. Restricted Stock.
-----------------
(a) Administration. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee shall
determine the officers and key employees of the Company and Subsidiaries to
whom, and the time or times at which, grants of Restricted Stock will be made,
the number of shares to be awarded, the time or times within which such awards
may be subject to forfeiture, and all other conditions of the awards. The
Committee may also condition the grant of Restricted Stock upon the attainment
of specified performance goals. The provisions of Restricted Stock awards need
not be the same with respect to each recipient.
(b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.
(i) Each participant shall be issued a stock certificate in
respect of shares of Restricted Stock awarded under the Plan. Such
certificate shall be registered in the name of the participant, and
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such award, substantially in the
following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including
15
<PAGE>
forfeiture) of the WSI Industries, Inc. 1994 Stock Plan and an
Agreement entered into between the registered owner and WSI
Industries, Inc. Copies of such Plan and Agreement are on
file in the offices of WSI Industries, Inc., 2605 West Wayzata
Boulevard, Long Lake, MN 55356."
(ii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock award, the participant shall have delivered a stock
power, endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the
date of such award (the "Restriction Period"), the participant shall
not be permitted to sell, transfer, pledge or assign shares of
Restricted Stock awarded under the Plan. In no event shall the
Restriction Period be less than one (1) year. Within these limits, the
Committee may provide for the lapse of such restrictions in
installments where deemed appropriate.
(ii) Except as provided in paragraph (c)(i) of this Section 7,
the participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a shareholder of the Company, including the
right to vote the shares and the right to receive any cash dividends.
The Committee, in its sole discretion, may permit or require the
payment of cash dividends to be deferred and, if the Committee so
determines, reinvested in additional shares of Restricted Stock (to the
extent shares are available under Section 3). Certificates for shares
of unrestricted Stock shall be delivered to the grantee promptly after,
and only after, the period of forfeiture shall have expired without
forfeiture in respect of such shares of Restricted Stock.
(iii) Subject to the provisions of the award agreement and
paragraph (c)(iv) of this Section 7, upon termination of employment for
any reason during the Restriction Period, all shares still subject to
restriction shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other than for Cause),
including death, Disability or Retirement, or in the event of an
unforeseeable emergency of a participant still in service, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interest of the Company, waive in whole or in part
any or all remaining restrictions with respect to such participant's
shares of Restricted Stock.
(v) Notwithstanding the foregoing, all restrictions with
respect to any participant's shares of Restricted Stock shall lapse, on
the date determined by the Committee, prior to, but in no event more
than sixty (60) days prior to, the occurrence of any of the following
events: (i) dissolution or liquidation of the Company, other than in
conjunction with a bankruptcy of the Company or any similar occurrence,
(ii) any merger, consolidation, acquisition, separation,
reorganization, or similar occurrence, where the Company will not be
the surviving entity or (iii) the transfer of substantially all of the
assets of the Company or 75% or more of the outstanding Stock of the
Company.
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<PAGE>
SECTION 8. Deferred Stock Awards.
----------------------
(a) Administration. Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the officers and key employees of the Company and Subsidiaries to whom and the
time or times at which Deferred Stock shall be awarded, the number of Shares of
Deferred Stock to be awarded to any participant or group of participants, the
duration of the period (the "Deferral Period") during which, and the conditions
under which, receipt of the Stock will be deferred, and the terms and conditions
of the award in addition to those contained in paragraph (b) of this Section 8.
The Committee may also condition the grant of Deferred Stock upon the attainment
of specified performance goals. The provisions of Deferred Stock awards need not
be the same with respect to each recipient.
(b) Terms and Conditions.
(i) Subject to the provisions of this Plan and the award
agreement, Deferred Stock awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Deferral
Period. In no event shall the Deferral Period be less than one (1)
year. At the expiration of the Deferral Period (or Elective Deferral
Period, where applicable), share certificates shall be delivered to the
participant, or his legal representative, in a number equal to the
shares covered by the Deferred Stock award.
(ii) Amounts equal to any dividends declared during the
Deferral Period with respect to the number of shares covered by a
Deferred Stock award will be paid to the participant currently or
deferred and deemed to be reinvested in additional Deferred Stock or
otherwise reinvested, all as determined at the time of the award by the
Committee, in its sole discretion.
(iii) Subject to the provisions of the award agreement and
paragraph (b)(iv) of this Section 8, upon termination of employment for
any reason during the Deferral Period for a given award, the Deferred
Stock in question shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other than for Cause)
including death, Disability or Retirement, or in the event of an
unforeseeable emergency of a participant still in service, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interest of the Company, waive in whole or in part
any or all of the remaining deferral limitations imposed hereunder with
respect to any or all of the participant's Deferred Stock.
(v) A participant may elect to further defer receipt of the
award for a specified period or until a specified event (the "Elective
Deferral Period"), subject in each case to the Committee's approval and
to such terms as are determined by the Committee, all in its sole
discretion. Subject to any exceptions adopted by the Committee, such
election must generally be made prior to completion of one half of the
Deferral Period for a Deferred Stock award (or for an installment of
such an award).
(vi) Each award shall be confirmed by, and subject to the
terms of, a Deferred Stock agreement executed by the Company and the
participant.
17
<PAGE>
SECTION 9. Transfer, Leave of Absence, etc.
--------------------------------
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer of an employee from the Company to a Parent Corporation
or Subsidiary, or from a Parent Corporation or Subsidiary to the Company, or
from one Subsidiary to another;
(b) a leave of absence, approved in writing by the Committee, for
military service or sickness, or for any other purpose approved by the Company
if the period of such leave does not exceed ninety (90) days (or such longer
period as the Committee may approve, in its sole discretion); and
(c) a leave of absence in excess of ninety (90) days, approved in
writing by the Committee, but only if the employee's right to reemployment is
guaranteed either by a statute or by contract, and provided that, in the case of
any leave of absence, the employee returns to work within 30 days after the end
of such leave.
SECTION 10. Amendments and Termination.
---------------------------
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option, Stock Appreciation Right,
Restricted Stock, Deferred Stock or other Stock-based award theretofore granted,
without the optionee's or participant's consent, or (ii) which without the
approval of the stockholders of the Company would cause the Plan to no longer
comply with Rule 16b-3 under the Securities Exchange Act of 1934, Section 422 of
the Code or any other regulatory requirements.
The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively, but, subject to Section 3 above, no
such amendment shall impair the rights of any holder without his consent. The
Committee may also substitute new Stock Options for previously granted options,
including previously granted options having higher option prices.
SECTION 11. Unfunded Status of Plan.
------------------------
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
SECTION 12. General Provisions.
-------------------
(a) The Committee may require each person purchasing shares pursuant to
a Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee is acquiring the shares
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<PAGE>
without a view to distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Stock delivered under the Plan pursuant
to any Restricted Stock, Deferred Stock or other Stock-based awards shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Subject to paragraph (d) below, recipients of Restricted Stock,
Deferred Stock and other Stock-based awards under the Plan (other than Stock
Options) are not required to make any payment or provide consideration other
than the rendering of services.
(c) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any Subsidiary
any right to continued employment with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its employees at any time.
(d) Each participant shall, no later than the date as of which any part
of the value of an award first becomes includible as compensation in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company and Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the participant. With respect to
any award under the Plan, if the terms of such award so permit, a participant
may elect by written notice to the Company to satisfy part or all of the
withholding tax requirements associated with the award by (i) authorizing the
Company to retain from the number of shares of Stock that would otherwise be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock already owned by the participant, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
participant under this Section 12(d). Any such election shall be in accordance
with, and subject to, applicable tax and securities laws, regulations and
rulings.
SECTION 13. Effective Date of Plan.
-----------------------
The Plan shall be effective on September 29, 1994 (the date of approval
by the Board of Directors), subject to approval by a vote of the holders of a
majority of the Stock present and entitled to vote at the Annual Meeting of the
Company's Shareholders on January 12, 1995, and shall expire (unless terminated
earlier) as of September 29, 2004. Awards may be granted under the Plan prior to
Shareholder approval, provided such awards are made subject to Shareholder
approval. Shareholder approval of the Plan was obtained on January 12, 1995.
Amended by the Board of Directors on August 26, 1998
Approved by Shareholders on January 7, 1999
<PAGE>
<TABLE>
<S> <C> <C>
4200 IDS CENTER IN DENVER
80 SOUTH EIGHTH STREET LINDQUIST, VENNUM & CHRISTENSEN P.L.L.P.
MINNEAPOLIS, MINNESOTA 55402-2205 600 17TH STREET, SUITE 2125
TELEPHONE: 612-371-3211 DENVER, COLORADO 80202-5401
LINDQUIST & VENNUM P.L.L.P. FAX: 612-371-3207 TELEPHONE: 303-573-5900
- --------------------------------------------------------------------------------------------------------------
</TABLE>
ATTORNEYS AT LAW
Exhibit 5.1
-----------
May 14, 1999
WSI Industries, Inc.
2605 W. Wayzata Boulevard
Long Lake, Minnesota 55356
Re: Opinion of Counsel as to Legality of 200,000 Shares of Common Stock to
be registered under the Securities Act of 1933
Ladies and Gentlemen:
This opinion is furnished in connection with the registration under the
Securities Act of 1933 on Form S-8 of 200,000 shares of Common Stock, $0.10 par
value, of WSI Industries, Inc. (the "Company") offered to officers, other key
employees and non-employee directors pursuant to the WSI, Inc. 1994 Stock Plan
(the "Plan"). These shares are in addition to the 250,000 shares offered
pursuant to the Plan and registered on a previous Registration Statement on Form
S-8 (File No. 33-58565).
As counsel for the Company, we advise you that it is our opinion, based on
our familiarity with the affairs of the Company and upon our examination of
pertinent documents, that the 200,000 shares of Common Stock to be issued by the
Company under the Plan, will, when paid for and issued, be legally and validly
issued and lawfully outstanding, fully paid and nonassessable shares of Common
Stock of the Company.
The undersigned hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to the Registration Statement
with respect to said shares of Common Stock under the Securities Act of 1933.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Fort S-8 pertaining to the WSI Industries, Inc. 1994 Stock Plan, as amended, of
our report dated October 2, 1998, with respect to the consolidated financial
statements and schedule of WSI Industries, Inc. included in its Annual Report on
Form 10-K for the year ended August 30, 1998 filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
May 5, 1999
