<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 2000
REGISTRATION NO. 333-____
================================================================================
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
(Exact name of issuer as specified in its charter)
--------------
DELAWARE 76-0553110
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
4900 HOPYARD ROAD, SUITE 200, PLEASANTON, CA 94588
(Address of principal executive offices) (Zip Code)
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
1997 LONG-TERM INCENTIVE PLAN
(Full title of the plans)
MICHAEL A. OBER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
4900 HOPYARD ROAD, SUITE 200
PLEASANTON, CA 94588
(Name and address of agent for service)
(925) 251-0000
(Telephone number, including area code, of agent for service)
Copy to:
RICHARD S. GREY, ESQ.
ORRICK, HERRINGTON & SUTCLIFFE LLP
400 SANSOME STREET
SAN FRANCISCO, CALIFORNIA 94111
--------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================================
TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED SHARE* PRICE* FEE*
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock** 2,000,000 shares $3.97 $7,937,500 $2,095.50
============================================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee on
the basis of $3.97 per share, the average of the high and low prices
for the Common Stock on May 24, 2000 as reported by the NASDAQ Stock
Exchange.
** This Registration Statement shall also cover any additional shares of
Registrant's Common Stock that become issuable under the Registrant's
1997 Long-Term Incentive Plan by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without
the Registrant's receipt of consideration that results in an increase
in the number of the Registrant's outstanding Shares of Common Stock.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in this
registration statement:
(i) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999, filed with the Commission on March 30, 2000;
(ii) The Registrant's Current Report on Form 8-K, filed with
the Commission on January 14, 2000;
(iii) All other reports filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the fiscal year covered by the Annual Report referred to in (i)
above; and
(iv) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A, filed with the Commission on March
10, 1998, including any amendment or report filed for the purpose of updating
such description.
All documents filed by the Registrant or the Plan after the
date of this registration statement pursuant to Sections 13(a), 13(c), 14, and
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
(that indicates all securities offered have been sold or deregisters all
securities then remaining unsold), shall be deemed to be incorporated by
reference in this registration statement and to be a part hereof from the date
of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of
Delaware (the "Delaware Law") authorizes a Delaware corporation to indemnify
officers, directors, employees and agents of the corporation, in connection with
actual or threatened actions, suits or proceedings provided that such officer,
director, employee or agent acted in good faith and in a manner such officer
reasonably believed to be in or not opposed to the corporation's best interests,
and, for criminal proceedings, had no reasonable cause to believe his or her
conduct was unlawful. This authority is sufficiently broad to permit
indemnification under certain
2
<PAGE> 3
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act.
The Registrant's Certificate of Incorporation provides for
indemnification of officers and directors to the fullest extent permitted by
Delaware Law. In addition, the Registrant has, and intends in the future to
enter into, agreements to provide indemnification for directors and officers in
addition to that contained in the Restated Certificate of Incorporation and
By-laws. The Registrant also carries liability insurance covering officers and
directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Inapplicable.
ITEM 8. EXHIBITS.
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Grant Thornton LLP, Independent Auditors.
23.2 Consent of Deloitte & Touche LLP, Independent Auditors.
23.3 Consent of Orrick, Herrington & Sutcliffe LLP is included in Exhibit
5.1 to this Registration Statement.
24.1 Power of Attorney (included on signature page).
99.1 Brightstar Information Technology Group, Inc. 1997 Long-Term Incentive
Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
3
<PAGE> 4
Provided, however, that paragraphs (a)(l)(i) and (a)(l)(ii) do
not apply if the registration statement is on Form S-3 or Form S-8 and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (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 therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
4
<PAGE> 5
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California, on the 24
day of May, 2000.
BRIGHTSTAR INFORMATION TECHNOLOGY
GROUP, INC.
(Registrant)
By: /s/ MICHAEL A. OBER
------------------------------------
Michael A. Ober
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael A. Ober and George M. Siegel, and
each of them, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her 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 necessary to be done in connection therewith,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent, or her
substitutes or substitute, 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 dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
Principal Executive Officer:
/s/ MICHAEL A. OBER
- --------------------------------- President and Chief May 24, 2000
Michael A. Ober Executive Officer
Principal Financial Officer:
/s/ GEORGE M. SIEGEL
- --------------------------------- Chairman of the Board May 24, 2000
George M. Siegel
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Principal Accounting Officer:
/s/ DAVID L. CHRISTESON
- --------------------------------- Controller and Assistant May 24, 2000
David L. Christeson Secretary
Directors:
/s/ JENNIFER T. BARRETT
- --------------------------------
Jennifer T. Barrett Director May 24, 2000
/s/ JOSEPH A. WAGDA
- --------------------------------
Joseph A. Wagda Director May 24, 2000
/s/ MICHAEL A. OBER
- --------------------------------
Michael A. Ober Director May 24, 2000
/s/ DONALD W. ROWLEY
- --------------------------------
Donald W. Rowley Director May 24, 2000
/s/ GEORGE M. SIEGEL
- --------------------------------
George M. Siegel Director May 24, 2000
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No.
- -------
<S> <C>
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Grant Thornton LLP, Independent Auditors.
23.2 Consent of Deloitte & Touche LLP, Independent Auditors.
23.3 Consent of Orrick, Herrington & Sutcliffe LLP is included in Exhibit 5.1
to this Registration Statement.
24.1 Power of Attorney (included on signature page).
99.1 Brightstar Information Technology Group, Inc. 1997 Long-Term Incentive
Plan.
</TABLE>
<PAGE> 1
EXHIBIT 5.1
OPINION OF ORRICK, HERRINGTON & SUTCLIFFE LLP
May 24, 2000
Brightstar Information Technology Group, Inc.
4900 Hopyard Road, Suite 200
Pleasanton, CA 94588
Attention: Donald W. Rowley
Dear Madams and Sirs:
Brightstar Information Technology Group, Inc., a Delaware
corporation, has requested our opinion in connection with a Registration
Statement on Form S-8 (the "Registration Statement") to be filed by it today
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), relating to 2,000,000 shares of
Common Stock, $.001 par value, of Brightstar Information Technology Group, Inc.
to be issued under the Brightstar Information Technology Group, Inc. 1997
Long-Term Incentive Plan (the "Plan").
We have examined and are relying on originals, or copies
certified or otherwise identified to our satisfaction, of such corporate records
and such other instruments, certificates and representations of public
officials, officers and representatives of Brightstar Information Technology
Group, Inc. and such other persons, and we have made such investigations of law,
as we have deemed appropriate as a basis for the opinion expressed below.
Based on the foregoing, it is our opinion that the shares of
Brightstar Information Technology Group, Inc. issuable under the Plan are duly
authorized and, when issued in accordance with the terms of the Plan, at prices
in excess of the par value thereof, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. By giving such consent, we do not thereby admit
that we are experts with respect to any part of the Registration Statement,
including this exhibit, within the meaning of the term "expert" as used in the
Act or the rules and regulations of the Commission issued thereunder.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
BrightStar Information Technology Group, Inc.
We have issued our report dated March 28, 2000, accompanying the consolidated
financial statements of BrightStar Information Technology Group, Inc., and
subsidiaries appearing in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999, which is incorporated by reference in this Registration
Statement on Form S-8. We consent to the incorporation by reference in the
Registration Statement of the aforementioned report.
Grant Thornton LLP
San Jose, California
May 19, 2000
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Brightstar Information Technology Group, Inc.
We consent to the incorporation by reference in this
Registration Statement of BrightStar Information Technology Group, Inc. on Form
S-8 of our report, dated March 30, 1999, on the consolidated balance sheet of
BrightStar Information Technology Group, Inc. as of December 31, 1998, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the year ended September 30, 1997, the three months ended
December 31, 1997 and the year ended December 31, 1998, appearing in and
incorporated by reference in the Annual Report on Form 10-K of BrightStar
Information Technology Group, Inc. for the year ended December 31, 1999 (of
which the 1998 financial statements have been restated and are no longer
presented therein).
DELOITTE & TOUCHE LLP
Dallas, Texas
May 24, 2000
<PAGE> 1
EXHIBIT 99.1
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
1997 LONG-TERM INCENTIVE PLAN
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
1997 LONG-TERM INCENTIVE PLAN
AS AMENDED AND RESTATED JANUARY 19, 1999
<TABLE>
<CAPTION>
SECTION DESCRIPTION
------- -----------
<S> <C>
1 Purpose of the Plan
2 Definitions
3 Types of Awards Covered
4 Administration
5 Eligibility
6 Shares of Stock Subject to the Plan
7 Non-Employee Director Awards
8 Stock Options
9 Stock Appreciation Rights
10 Restricted Stock
11 Performance Awards
12 Other Stock-Based Incentive Awards
13 Exercise of Options
14 Rights in Event of Death or Disability
15 Award Agreements
16 Tax Withholding
17 Change of Control
18 Dilution or Other Adjustment
19 Transferability
20 Amendment or Termination
21 General Provisions
22 Plan Effective Date
23 Plan Termination
</TABLE>
<PAGE> 2
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
1997 LONG-TERM INCENTIVE PLAN
(As amended effective January 19, 1999, subject to stock holder approval at the
1999 Annual Meeting of Stockholders)
SECTION 1
PURPOSE OF THE PLAN
1.1 The 1997 Long-term Incentive Plan, maintained by BrightStar Information
Technology Group, Inc., is intended to motivate key employees to
enhance shareholder value by offering incentives to its key employees
who are primarily responsible for the growth of the Company and to
attract and retain qualified employees and non-employee directors.
SECTION 2
DEFINITIONS
2.1 Unless the context indicates otherwise, the following terms, when used
in this Plan, shall have the meanings set forth in this Section:
(a) "AWARD" shall mean grants or awards under this Plan in the form
of Options, SARs, Restricted Stock, Performance Awards or other
stock-based incentive awards.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CHANGE OF CONTROL" shall be deemed to have taken place on an
occurrence of an event as defined in Section 17 of this Plan.
(d) "CODE" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time and related Treasury Regulations.
(e) "COMMITTEE" shall mean the Board, or any Committee comprised of
two or more Outside Directors, to the extent required to
qualify for an exemption pursuant to Rule 16b-3 under the
Exchange Act and to satisfy the requirements regarding
committees of "outside directors" under Section 162(m) of the
Code, that may be designated by the Board to administer the
Plan, in accordance with Section 4 hereof.
(f) "COMMON STOCK" shall mean the common stock, par value $.01, of
the Company.
(g) "COMPANY" shall mean BrightStar Information Technology Group,
Inc.
(h) "DEFERRED SHARES" an award made pursuant to Section 12 of the
Plan of the right to receive Common Stock in lieu of cash
thereof at the end of a specified time period.
(i) "DIRECTOR" shall mean any member of the Board.
(j) "DISABILITY" shall mean permanent and total disability within
the meaning of Section 22(e)(3) of the Code.
(k) "EMPLOYEE" shall mean any full-time employee of the Company or
its Subsidiaries (including Directors who are otherwise
employed on a full-time basis by the Company or its
Subsidiaries).
(l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934
as it may be amended from time to time.
(m) "FAIR MARKET VALUE" of the Common Stock on a given date shall
be based upon either (i) if the Common Stock is listed on a
<PAGE> 3
national securities exchange or quoted in an interdealer
quotation system, the last sales price or, if unavailable, the
average of the closing bid and asked prices per share of the
Common Stock on such date (or, if there was no trading or
quotation in the Common Stock on such date, on the next
preceding date on which there was trading or quotation) as
provided by one of such organizations or (ii) if the Common
Stock is not listed on a national securities exchange or
quoted in an interdealer quotation system, the price will be
equal to the Company's fair market value, as determined by the
Committee in good faith based upon the best available facts
and circumstances at the time.
(n) "GRANTEE" shall mean a person granted an Award under the Plan.
(o) "IMMEDIATE FAMILY" shall mean with respect to a given Grantee
that Grantee's spouse, children, or grandchildren (including
adopted children or grandchildren).
(p) "IPO DATE" shall mean the date of closing of the initial public
offering of the Company's Common Stock.
(q) "ISO" shall mean an Award granted pursuant to the Plan to
purchase shares of the Stock and is intended to qualify as an
incentive stock option under Section 422 of the Code, as now or
hereafter constituted.
(r) "NON-EMPLOYEE DIRECTOR" shall mean a Director of the Company
who is not an Employee nor has been an Employee at any time
during the prior one-year period.
(s) "NQSO" shall mean an Award granted pursuant to the Plan to
purchase shares of stock and is not intended to qualify as an
incentive stock option under Section 422 of the Code, as now or
hereafter constituted.
(t) "OPTIONS" shall refer collectively to NQSOs and ISOs issued
under and subject to the Plan.
(u) "OUTSIDE DIRECTOR" shall mean a non-employee Director within
the meaning of Rule 16b-3(b)(3) under the Exchange Act, or any
successor thereto, who are also "outside directors" within the
meaning of Section 162(m) of the Code and the regulations
thereunder.
(v) "PERFORMANCE AWARDS" shall mean Awards under the Plan, payable
in cash, Common Stock, other securities or other awards and
shall confer on the holder thereof the right to receive
payments, upon the achievement of such performance goals during
such performance periods as the Committee shall establish.
(w) "PERMITTED TRANSFEREE" shall mean any individual or entity as
defined in Section 19.2 of this Plan.
(x) "PLAN" shall mean this 1997 Long-term Incentive Plan as set
forth herein and as amended from time to time.
(y) "RESTRICTED STOCK" shall mean an Award of Common Stock subject
to restrictions on transfer and/or such other restrictions on
incidents of ownership as the Committee may determine.
(z) "RULES" means Rule 16(b)(3) and any successor provisions
promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.
(aa) "SAR" shall mean an Award constituting the right to receive,
upon surrender of the right, but without payment, an amount
<PAGE> 4
payable in cash.
(ab) "SUBSIDIARY or SUBSIDIARIES" shall mean any entity or entities
in which the Company owns a majority of the voting power.
(ac) "TEN PERCENT SHAREHOLDER" shall mean any Grantee who owns more
than 10% of the combined voting power of all classes of stock
of the Company, within the meaning of Section 422 of the Code.
SECTION 3
TYPES OF AWARDS COVERED
3.1 Awards granted, under the Plan may be:
(a) stock options ("Options") which may be designated as:
(i) nonqualified stock options ("NQSOs"); or
(ii) incentive stock options ("ISOs");
(b) stock appreciation rights ("SARs");
(c) restricted stock awards ("Restricted Stock");
(d) performance awards ("Performance Awards"); or
(e) other forms of stock-based incentive awards.
SECTION 4
ADMINISTRATION
4.1 The Plan shall be administered by the Committee. Subject to the
provisions of the Plan and applicable law, the Committee shall have
full discretion and the exclusive power to:
(a) select the Employees who will participate in the Plan and to
make Awards to such Employees;
(b) determine the time at which such Awards shall be granted and
any terms and conditions with respect to such Awards as shall
not be inconsistent with the provisions of the Plan; and
(c) resolve all questions relating to the administration of the
Plan, and applicable law.
4.2 The interpretation of and application by the Committee of any provision
of the Plan shall be final and conclusive. The Committee, in its sole
discretion, may establish such rules and guidelines relating to the
Plan as it may deem appropriate.
4.3 The Committee may employ such legal counsel, consultants, and agents as
it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. The Committee
shall keep minutes of its actions under the Plan.
4.4 No member of the Board of Directors or the Committee shall be liable
for any action or determination made in good faith with respect to the
Plan or any Awards granted hereunder. All members of the Committee
shall be fully protected by the Company in respect to any such action,
determination or interpretation.
SECTION 5
ELIGIBILITY
5.1 The individuals who shall be eligible to participate in the Plan shall
be officers, management, and such other key Employees of the Company
<PAGE> 5
and Subsidiaries (including any directors who are also employees) as
the Committee may from time to time determine.
5.2 Directors of the Company who are not employees of the Company shall be
eligible to participate in the Plan as provided in Section 7.
5.3 An Employee or Non-Employee Director who has been granted an Award in
one year shall not necessarily be entitled to be granted Awards in
subsequent years.
SECTION 6
SHARES OF STOCK SUBJECT TO THE PLAN
6.1 Awards may be granted with respect to the Common Stock of the Company.
6.2 Shares delivered upon exercise of the Awards, at the election of the
Board of Directors of the Company, may be Common Stock that is
authorized but previously unissued, or stock reacquired by the Company,
or both.
6.3 Subject to the provisions of Section 18, the maximum number of shares
available for issuance under the Plan shall be 2,000,000. The number of
shares of Common Stock reserved under the Plan shall not be less than
the total number of shares granted, whether exercised or unexercised
for all Awards under the Plan.
6.4 Notwithstanding any other provision of the Plan to the contrary, in no
event may any Grantee in any calendar year receive more than 200,000
Options whether they be ISOs or NQSOs, subject to adjustments as
provided in Section 18 of the Plan.
6.5 Notwithstanding any other provision of the Plan to the contrary, in no
event may any Grantee in any calendar year receive more than 500,000
SARs, subject to adjustments as provided in Section 18 of the Plan.
6.6 Notwithstanding any other provision of the Plan to the contrary, in no
event may any Grantee in any calendar year receive an award of
Performance Awards having an aggregate maximum value as of their
respective date of grant in excess of $1,000,000
6.7 Any shares of Common Stock awarded under the Plan, which Award for any
reason expires or is terminated unexercised as to such shares, shall
again be available for the grant of other Awards under the Plan;
provided, however, that forfeited shares or other securities shall not
be available for further Awards if the Grantee has realized any
benefits of ownership from such shares.
SECTION 7
NON-EMPLOYEE DIRECTOR AWARDS
7.1 The Board may grant NQSOs to Non-Employee Directors in such amounts and
at such times as the Board may determine.
7.2 Each option granted to a Non-Employee Director shall be exercisable in
full immediately upon the date of grant.
7.3 Each option granted to a Non-Employee Director may not be exercised
more than 10 years after the date such option is granted and such
option shall expire on such date unless sooner exercised or cancelled
due to termination of service or death.
7.4 Upon the termination of directorship, such Non-Employee Director's
option privileges shall be limited to the shares which were immediately
purchasable at the date of such termination of directorship and shall
expire unless exercised on or before the second annual anniversary of
the date of such termination of directorship.
<PAGE> 6
7.5 If a Non-Employee Director dies while a member of the Board, his or her
option shall become fully exercisable and shall remain exercisable by
such Non-Employee Director's estate (or other successor) until the
first annual anniversary date of death, at which time they shall
expire.
SECTION 8
STOCK OPTIONS
8.1 The Committee may grant Options, as follows, which shall be evidenced
by a stock option agreement and may be designated as (i) NQSOs or (ii)
ISOs:
(a) NQSOS
(i) A NQSO is a right to purchase a specified number of
shares of Common Stock during such time as the
Committee may determine, not to exceed ten years, at a
price determined by the Committee that is not less than
50% of the Fair Market Value of the Common Stock on the
date the option is granted.
(ii) The purchase price of the Common Stock subject to the
NQSO may be paid in cash. At the discretion of the
Committee, the purchase price may also be paid by the
tender of Common Stock or through a combination of
Common Stock and cash or through such other means as
the Committee determines are consistent with the Plan's
purpose and applicable law. No fractional shares of
Common Stock will be issued or accepted.
(iii) No NQSO may be exercised more than ten years after the
date the NQSO is granted.
(iv) Without limiting the foregoing, to the extent permitted
by law (including relevant state law):
A. the Committee may agree to accept, as full or
partial payment of the purchase price of Common
Stock issued upon the exercise of the NQSO, a
promissory note of the person exercising the
NQSO evidencing the person's obligation to make
future cash payments to the Company, which
promissory note shall be payable as determined
by the Company (but in no event later than five
years after the date thereof), shall be secured
by a pledge of the shares of Common Stock
purchased and shall bear interest at a rate
established by the Committee; and
B. the Committee may permit the person exercising
the NQSO, either on a selective or aggregate
basis, to simultaneously exercise the NQSO and
sell the shares of Common Stock acquired,
pursuant to a brokerage or similar arrangement
approved in advance by the Committee, and use
the proceeds from sale as payment of the
exercise price of the NQSO.
(b) ISOS
(i) No ISO may be granted under the Plan to a Non-Employee
Director.
(ii) The aggregate Fair Market Value (determined at the time
of the grant of the Award) of the shares of Common
<PAGE> 7
Stock subject to ISOs which are exercisable by a
Grantee for the first time during a particular calendar
year shall not exceed $100,000. To the extent that ISOs
granted to a Grantee exceed the limitation set forth in
the preceding sentence, ISOs granted last shall be
treated as NQSOs.
(iii) No ISO may be exercisable more than:
A. in the case of a Grantee who is not a Ten
Percent Shareholder, on the date the ISO is
granted, ten years after the date the ISO is
granted; and
B. in the case of a Grantee who is a Ten Percent
Shareholder, on the date the ISO is granted,
five years after the date the ISO is granted.
(iv) The exercise price of any ISO shall be determined by
the Committee and shall not be less than:
A. in the case of a Grantee who is not a Ten
Percent Shareholder on the date the ISO is
granted, the Fair Market Value of the Common
Stock subject to the ISO on such date; and
B. in the case of an employee who is a Ten Percent
Shareholder on the date the ISO is granted, not
less than 110 percent of the Fair Market Value
of the Common Stock subject to the ISO on such
date.
(v) The Committee may provide that the option price under
an ISO may be paid by one or more of the methods
available for paying the option price of an NQSO per
Section 8.1(a)(iv).
8.2 The Committee shall specify in the stock option agreement the terms
upon which the Options shall become exercisable.
8.3 The aggregate number of shares of Common Stock to be issued pursuant to
ISOs shall not exceed 1,855,000 shares except in the event of a change
in capitalization as described in Section 18.2.
SECTION 9
STOCK APPRECIATION RIGHTS
9.1 The amount payable with respect to each SAR shall be equal in value to
the applicable percentage of the excess, if any, of the Fair Market
Value of a share of Common Stock on the exercise date over the exercise
price of the SAR. The exercise price of the SAR shall be determined by
the Committee and shall not be less than 50% of the Fair Market Value
of a share of Common Stock on the date the SAR is granted. SARs may be
granted in tandem with an Option in which event the Grantee has the
right to elect to exercise either the SAR or the Option. Upon their
election to exercise one of these Awards, the other Award is
subsequently terminated. SARs may also be granted as an independent
Award.
9.2 In the case of an SAR granted in tandem with an ISO to an employee who
is a Ten Percent Shareholder on the date of such grant, the amount
payable with respect to each SAR shall be equal in value to the
applicable percentage of the excess, if any, of the Fair Market Value
of a share of Common Stock on the exercise date over the exercise price
of the SAR, which exercise price shall not be less than 110 percent of
the Fair Market Value of a share of Common Stock on the date the SAR is
granted.
<PAGE> 8
9.3 The applicable percentage and exercise price shall be established by
the Committee at the time the SAR is granted.
SECTION 10
RESTRICTED STOCK
10.1 Restricted Stock is Common Stock of the Company that is issued to a
Grantee at a price determined by the Committee, which price may be
zero, and is subject to restrictions on transfer and/or such other
restrictions on incidents of ownership as the Committee may determine.
10.2 The Committee shall specify in the Award agreement the terms upon which
such shares of Common Stock granted to a Grantee as an Award shall
vest; provided, however that the Grantee continues to be employed by
the Company on such date.
10.3 The Committee may, in its discretion, provide for accelerated vesting
of Restricted Stock upon the achievement of specified performance goals
to be determined by the Committee.
10.4 Grantee may make the election under Section 83(b) of the Code.
SECTION 11
PERFORMANCE AWARDS
11.1 A Performance Award granted under the Plan:
(a) may be denominated or payable in cash, Common Stock,
Restricted Stock, other securities, or other Awards; and
(b) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such
performance goals during such performance periods as the
Committee shall establish.
11.2 Subject to the terms of the Plan and any applicable Award agreement,
the performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance Award
granted and the amount of any payment or transfer to be made pursuant
to any Performance Award shall be determined by the Committee. Such
performance goals that the Committee may select are earnings before
interest and taxes, net income, gross sales, earnings per share, return
on equity, return on investment, economic value added, divisional
performance goals, etc.
SECTION 12
OTHER STOCK-BASED INCENTIVE AWARDS
12.1 The Committee may from time to time grant Awards under this Plan that
provide a Grantee the right to purchase Common Stock or units that are
valued by reference to the Fair Market Value of the Common Stock
(including, but not limited to, phantom securities or dividend
equivalents) or to receive Deferred Shares which are stock-based
incentive grants in lieu of a cash deferral of bonuses. Such Awards
shall be in a form determined by the Committee (and may include terms
contingent upon a change of control of the Company); provided that such
Awards shall not be inconsistent with the terms and purposes of the
Plan.
12.2 The Committee shall determine the price of any Award and may accept any
lawful consideration.
SECTION 13
EXERCISE OF OPTIONS
13.1 The Committee may provide for the exercise of Options in installments
<PAGE> 9
and upon such terms, conditions and restrictions as it may determine
subject to applicable law and the other requirements of this Plan.
13.2 The Committee may provide for termination of an Option in the case of
termination of employment or directorship or any other reason.
13.3 An Option granted hereunder shall be exercisable, in whole or in part,
only by written notice delivered in person or by mail to the Secretary
of the Company at its principal office, specifying the number of shares
of Common Stock to be purchased and accompanied by payment thereof and
otherwise in accordance with the stock option agreement pursuant to
which the Option was granted.
SECTION 14
RIGHTS IN EVENT OF DEATH OR DISABILITY
14.1 If a Grantee dies or becomes subject to a Disability prior to
termination of his or her right to exercise an Option in accordance
with the provisions of his or her stock option agreement without having
totally exercised the Option, the stock option agreement may provide
that the Option may be exercised, to the extent that the shares with
respect to the Option could have been exercised by the Grantee on the
date of his or her death or Disability, by (i), in the event of the
Grantee's death, the Grantee's estate or by the person who acquired the
right to exercise the Option by bequest or inheritance or (ii), in the
event of the Grantee's Disability, the Grantee or his or her personal
representative.
14.2 In the event of the Grantee's death or Disability, the Option shall not
be exercisable after the date of its expiration or more than six months
from the date of the Grantee's death or Disability, whichever first
occurs.
14.3 The date of Disability of a Grantee shall be determined by the
Committee.
SECTION 15
AWARD AGREEMENTS
15.1 Each Award granted under the Plan shall be evidenced by an award
agreement between the Grantee to whom the Award is granted and the
Company, setting forth the number of shares of Common Stock, SARs, or
units subject to the Award and such other terms and conditions
applicable to the Award not inconsistent with the Plan as the Committee
may deem appropriate.
15.2 The award agreement for an Option shall also be referred to as a stock
option agreement.
SECTION 16
TAX WITHHOLDING
16.1 The Committee may establish such rules and procedures as it considers
desirable in order to satisfy any obligation of the Company to withhold
federal income taxes or other taxes with respect to any Award made
under the Plan. Such rules and procedures may provide:
(a) in the case of Awards paid in shares of Common Stock, the
Company may withhold shares of Common Stock otherwise issuable
upon exercise of such Award in order to satisfy withholding
obligations, unless otherwise instructed by the Grantee or
unless the Committee determines otherwise at the time of Grant;
and
(b) in the case of an Award paid in cash, that the withholding
obligation shall be satisfied by withholding the applicable
amount and paying the net amount in cash to the Grantee;
<PAGE> 10
provided that the requirements of the Rules, to the extent
applicable, must be satisfied with regard to any withholding
pursuant to clause (a).
SECTION 17
CHANGE OF CONTROL
17.1 For the purpose of the Plan, a "Change of Control" shall be deemed to
have occurred if:
(a) the Company is merged or consolidated with another corporation
and as a result of such merger or consolidation less than 50%
of the outstanding voting securities of the surviving or
resulting corporation are owned in the aggregate by the former
shareholders of the Company;
(b) the Company sells, leases or exchanges all or substantially all
of its assets to another corporation, which is not a
wholly-owned Subsidiary of the Company;
(c) any person or "group" within the meaning of Section 13(d)(3) of
the Exchange Act acquires (together with voting securities of
the Company held by such person or "group") 50% or more of the
outstanding voting securities of the Company (whether directly,
indirectly, beneficially or of record) pursuant to any
transaction or combination of transactions;
(d) there is a change of control of the Company of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange
Act, whether or not the Company is then subject to such
reporting requirements; or
(e) the individuals who, at the beginning of any period of twelve
consecutive months, constituted the Board of Directors cease,
for any reason, to constitute at least a majority thereof,
unless the nomination for election or election by the
Company's shareholders of each new Director of the Company was
approved by a vote of at least two-thirds of the Directors
then still in office who either were Directors at the
beginning of such period or whose election or nomination for
election was previously so approved.
17.2 In the event of a Change of Control affecting the Company, then,
notwithstanding any provision of the Plan or of any provisions of any
Award agreements entered into between the Company and any Grantee to
the contrary, all Awards that have not expired and which are then held
by any Grantee (or the person or persons to whom any deceased Grantee's
rights have been transferred) shall, as of such Change of Control,
become fully and immediately vested and exercisable and may be
exercised for the remaining term of such Awards.
SECTION 18
DILUTION OR OTHER ADJUSTMENT
18.1 If the Company is a party to any merger or consolidation, or undergoes
any merger, consolidation, separation, reorganization, liquidation or
the like, the Committee shall have the power to make arrangements,
which shall be binding upon the holders of unexpired Awards, for the
substitution of new Awards for, or the assumption by another
corporation of, any unexpired Awards then outstanding hereunder.
18.2 In the event of a reclassification, stock split, combination of shares,
separation (including a spin-off), dividend on shares of the Common
Stock payable in stock or other similar change in capitalization or in
the corporate structure of shares of the Common Stock, the Committee
shall conclusively determine the appropriate adjustment in the option
<PAGE> 11
prices of outstanding Options, and the number and kind of shares or
other securities as to which outstanding Awards shall be exercisable,
and in the aggregate number of shares with respect to which Awards may
be granted.
18.3 The number of shares reserved under the Plan shall adjust as the number
of shares of Common Stock increase as provided in Section 6.3 of this
Plan.
SECTION 19
TRANSFERABILITY
19.1 No Award, other than an NQSO, shall be sold, pledged, assigned,
transferred, or encumbered by a Grantee other than by will or by the
laws of descent and distribution.
19.2 Only an NQSO may be pledged, assigned, transferred, or gifted by a
Grantee to another individual provided that the NQSO is pledged,
assigned, transferred or gifted without consideration by a Grantee,
subject to such rules as the Committee may adopt, to (i) a member of
the Grantee's immediate family, (ii) a trust solely for the benefit of
the Grantee and his or her immediate family or (iii) a partnership or
limited liability company whose only partners or members are the
Grantee and his or her Immediate Family (hereinafter referred to as the
Permitted Transferee); provided that the Committee is notified in
advance in writing of the terms and conditions of any proposed pledge,
assignment, transfer, or gift and the Committee determines that such
pledge, assignment, transfer or gift complies with the requirements of
the Plan and the applicable Award agreement.
19.3 Any pledge, assignment or gift of an Award that does not comply with
the provisions of the Plan and the applicable Award agreement shall be
void and unenforceable against the Company.
19.4 All terms and conditions of a pledged, assigned, transferred or gifted
Award shall apply to the beneficiary, executor, administrator, and
Permitted Transferee, whether one or more, of the Grantee (including
the beneficiary, executor and administrator of a permitted transferee),
including the right to amend the applicable Award agreement; provided
that the Permitted Transferee shall not pledge, assign, transfer, or
gift an Award other than by will or by the laws of descent and
distribution.
SECTION 20
AMENDMENT OR TERMINATION
20.1 The Committee may at any time amend, suspend or terminate the Plan;
provided, that:
(a) no change in any Awards previously granted may be made without
the consent of the holder thereof; and
(b) no amendment, other than an amendment authorized by Section 18
or Section 6.3, may be made increasing the aggregate number of
shares of the Common Stock with respect to which ISOs may be
granted, or changing the class of employees eligible to receive
ISOs hereunder, without the approval of the holders of a
majority of the outstanding voting shares of the Company.
SECTION 21
GENERAL PROVISIONS
21.1 No Awards may be exercised by a Grantee if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of
counsel selected by the Company, contrary to law or the regulations of
any duly constituted authority having jurisdiction over the Plan.
<PAGE> 12
21.2 A bona fide leave of absence approved by a duly constituted officer of
the Company shall not be considered interruption or termination of
service of any Grantee for any purposes of the Plan or Awards granted
thereunder, except that no Awards may be granted to an Employee while
he or she is on a bona fide leave of absence.
21.3 No Grantee shall have any rights as a shareholder with respect to any
shares subject to Awards granted to him or her under the Plan prior to
the date as of which he or she is actually recorded as the holder of
such shares upon the stock records of the Company.
21.4 Nothing contained in the Plan or in an Award agreement granted
thereunder shall confer upon any Grantee any right to (i) continue in
the employ of the Company or any of its Subsidiaries or continue
serving on the Board of Directors of the Company or (ii) interfere in
any way with the right of the Company or any of its Subsidiaries to
terminate the Grantee's employment at any time or service on the Board.
21.5 Any Award agreement may provide that stock issued upon exercise of any
Awards may be subject to such restrictions, including, without
limitation, restrictions as to transferability and restrictions
constituting substantial risks of forfeiture as the Committee may
determine at the time such Award is granted.
SECTION 22
PLAN EFFECTIVE DATE
22.1 The Plan shall become effective on the date of its adoption by the
Board of Directors of the Company subject to approval of the Plan by
the holders of a majority of the outstanding voting shares of the
Company within twelve (12) months after the date of the Plan's adoption
by said Board of Directors. In the event of the failure to obtain such
shareholder approval, the Plan and any Awards granted thereunder, shall
be null and void and the Company shall have no liability thereunder.
22.2 No Award granted under the Plan shall be exercisable until such
shareholder approval has been obtained.
SECTION 23
PLAN TERMINATION
23.1 No Award may be granted under the Plan on or after December 31, 2007,
but Awards previously granted may be exercised in accordance with their
terms.
