As Filed with the Securities and Exchange Commission on June 11, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
RESOURCE BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1904386
(State of Incorporation) (IRS Employer Identification Number)
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
(Address of Principal Executive Offices)
(757) 463-2265
(Registrant's telephone number including area code)
RESOURCE BANKSHARES CORPORATION
Amended and Restated 1996 Long-Term Incentive Plan
(Full title of the Plan)
-----------------------------------
Lawrence N. Smith
President and Chief Executive Officer
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
(757) 463-2265
(Name, address and telephone number of agent for service)
-----------------------------------
Copy to:
T. Richard Litton, Jr., Esq.
Kaufman & Canoles
One Commercial Place
P.O. Box 3037
Norfolk, Virginia 23514
(757) 624-3241
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) Per Share Price Fee(2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Common Stock, par 150,000 $19.94 $2,991,000 $831.50
value $1.50 per shares
share
- --------------------------------------------------------------------------------
(1) Also registered hereunder are such additional number of shares of Common
Stock, presently indeterminable, as may be necessary to satisfy the antidilution
provisions of the Amended and Restated 1996 Long-Term Incentive Plan to which
this Registration Statement relates.
(2) The registration fee has been calculated in accordance with Rule 457(c)
and 457(h) with respect to the 150,000 shares of Common Stock registered hereby
on the basis of the price of shares of the Company's Common Stock on the
American Stock Exchange on June 8, 1999.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Note: The document(s) containing the information required by Item 1 of
Form S-8 and the statement of availability of registrant information and any
other information required by Item 2 of Form S-8 will be sent or given to
participants as specified by Rule 428 under the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with Rule 428 and the requirements
of Part I of Form S-8, such documents are not being filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424
under the Securities Act. Resource Bankshares Corporation (the "Registrant"' or
the "Company") shall maintain a file of such documents in accordance with the
provisions of Rule 428. Upon request, the Registrant shall furnish the
Commission or its staff a copy or copies of all of the documents included in
such file.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The Registrant previously filed a Registration Statement on Form S-8
(Commission File No. 333-58417) ("Original Registration Statement") registering
247,500 shares of common stock available for issuance pursuant to the
Registrant's 1996 Long-Term Incentive Plan ("1996 Plan"). The Registrant has
amended (with shareholder approval) the 1996 Plan to increase shares of the
Registrant's common stock available for issuance from 247,500 to 397,500.
Accordingly, the Registrant is filing this Registration Statement to register
under the Securities Act the additional 150,000 shares of common stock now
available for issuance pursuant to the 1996 Plan. Pursuant to General
Instruction E of Form S-8, the Original Registration Statement is incorporated
by reference into this Registration Statement. A copy of the 1996 Plan, as
amended, is filed with this Registration Statement as Exhibit 99.1
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all 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 Virginia Beach, Virginia, on June 11, 1999.
RESOURCE BANKSHARES CORPORATION
By: /s/ Lawrence N. Smith
-------------------------------------------
Lawrence N. Smith
Chief Executive Officer and President
Witness our hands and common seals on the date set forth below.
Signature Title Date
--------- ----- ----
/s/ Lawrence N. Smith Director, Chief Executive Officer June 11, 1999
- ---------------------- and President (Principal
Lawrence N. Smith Executive Officer)
/s/ Eleanor J. Whitehurst Senior Vice President, Chief June 11, 1999
- ------------------------- Financial Officer (Principal
Eleanor J. Whitehurst Financial Officer and Principal
Accounting Officer)
* Chairman of the Board, Director ______ __, 1999
- -------------------------
John B. Bernhardt
* Director ______ __, 1999
- -------------------------
Alfred E. Abiouness
* Director ______ __, 1999
- -------------------------
Thomas W. Hunt
* Director ______ __, 1999
- -------------------------
Louis R. Jones
* Director ______ __, 1999
- -------------------------
A. Russell Kirk
* Director ______ __, 1999
- -------------------------
Elizabeth A. Twohy
*Lawrence N. Smith, by signing his name hereto, does sign this document on
behalf of the persons indicated above for whom he is attorney in fact pursuant
to a power of attorney duly executed by such person and previously filed with
the Securities and Exchange Commission as part of the Original Registration
Statement.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
to
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933, AS AMENDED
RESOURCE BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
6
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Exhibits
Pursuant to General Instruction E of Form S-8, only opinions and consents
are required to be filed as exhibits to this Registration Statement. A copy of
the 1996 Plan, as amended, is filed voluntarily as Exhibit 99.1.
Number Description
5.1 Opinion of Kaufman & Canoles
23.1 Consent of Kaufman & Canoles (included in Exhibit 5.1)
23.2 Consent of Goodman & Company, L.L.P.
99.1 Resource Bankshares Corporation Amended and Restated 1996
Long-Term Incentive Plan.
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Exhibit 5.1
June 11, 1999
Resource Bankshares Corporation
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
Re: Amended and Restated 1996 Long-Term Incentive Plan
Dear Sirs:
In connection with the registration on Form S-8 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"), of 150,000
shares of Common Stock, par value $1.50 per share, of Resource Bankshares
Corporation (the "Company"), which may be issued pursuant to the terms of the
Company's Amended and Restated 1996 Long-Term Incentive Plan (the "Plan"), we
hereby advise you that it is our opinion that upon issuance pursuant to the
terms of the Plan, the shares of Common Stock which may be issued pursuant
thereto will be validly issued, fully paid and nonassessable.
We hereby consent to use of this opinion as Exhibit 5 to the Registration
Statement and to all references to our firm in the Registration Statement. In
giving such consent, we do not thereby admit that we are acting within the
category of persons whose consent is required under Section 7 of the Act and the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Kaufman & Canoles, P.C.
Kaufman & Canoles, P.C.
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Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Resource Bankshares Corporation
We consent to incorporation by reference in the Registration Statement on
Form S-8 of Resource Bankshares Corporation of our report dated January 28,
1999, except for Note 21 as to which the date is March 24, 1999, relating to the
consolidated balance sheets of Resource Bankshares Corporation and subsidiary as
of December 31, 1998 and 1997, and the related consolidated statements of
income, shareholders equity and cash flows for the years then ended, which
report appears in the December 31, 1998 Annual Report of Resource Bankshares
Corporation.
/s/ Goodman & Company, L.L.P.
One Commercial Place
Norfolk, Virginia
June 9, 1999
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Exhibit 99.1
AMENDED AND RESTATED
1996 LONG-TERM INCENTIVE PLAN
1. General.
1.1 Purpose. The purpose of the 1996 Long-Term Incentive Plan (the
"Plan") is to enable Resource Bankshares Corporation, a Virginia corporation
(the "Company"), and its subsidiaries to attract and retain qualified corporate
directors ("Company Directors") and key employees ("Key Employees"), and
increase the proprietary interest of such Company Directors and Key Employees in
the Company in order to provide them with additional motivation to continue
serving the Company and to further its profitable growth. The awards granted
under the Plan will consist of incentive stock options available to certain Key
Employees ("Incentive Stock Options"), and stock options available to Company
Directors ("Company Director Stock Options").
1.2 Incentive Stock Options. The purpose of Incentive Stock Options
granted under the Plan is (i) to give certain Key Employees of the Company and
its subsidiaries an opportunity to acquire shares of the common stock of the
Company ("Common Stock"), (ii) to provide an incentive for Key Employees to
continue to promote the best interests of the Company and enhance its long-term
performance, and (iii) to provide an incentive for Key Employees to join or
remain with the Company and its subsidiaries. The Company intends that the
Incentive Stock Options will qualify as "incentive stock options" for the
purposes of Section 422 of the Internal Revenue Code, as amended (the "Code");
provided, however, that the Company may issue some options that do not qualify
under Section 422 of the Code. The Company intends that awards of Incentive
Stock Options will constitute exempt transactions pursuant to Rule 16b-3
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Exchange Act of 1934, as amended (the "Act").
1.3 Company Director Stock Options. The purpose of Company Director
Stock Options granted under the Plan is to provide a means by which the Company
Directors may be given an opportunity to acquire shares of Common Stock, so that
the Company may secure and retain the services of persons best qualified to
serve as directors of the Company and so that the Company may provide incentives
for such persons to exert maximum efforts for the success of the Company. The
Company does not intend that the Company Director Stock Options will qualify as
"incentive stock options" for the purposes of Section 422 of the Code.
Accordingly, the Company Director Stock Options will be subject to taxation
under Section 83 of the Code. The Company intends that the Company Director
Stock Options granted prior to November 1, 1996, will constitute a formula award
plan as described in Rule 16b-3(c)(2)(ii) promulgated by the Commission under
the Act in effect on the date of grant. The Company intends that grants of
Company Director Stock Options after November 1, 1996 will constitute exempt
transactions pursuant to Rule 16b-3 in effect on the date of grant.
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2. Administration.
2.1 Incentive Stock Options.
(a) Incentive Stock Option Committee. Incentive Stock Options
shall be administered by an incentive stock option committee (the "Committee")
appointed by the Board and composed of not less than two. Unless otherwise
designated by the Board, the Compensation Committee of the Board shall serve as
the Committee under the Plan. No members of the Board who are employees of the
Company and who are eligible to receive Incentive Stock Options shall be
eligible for appointment to the Committee. After November 1, 1996, each member
of the Committee shall be a "Non-Employee Director" as that term is defined in
Rule 16b-3(d) under the Act.
(b) Powers of the Committee. Within the limits of the express
provisions of the Plan, the Committee shall determine: (i) the Key Employees to
whom Incentive Stock Options hereunder shall be granted, (ii) the time or times
at which such Incentive Stock Options shall be granted, (iii) the form and
amount of the Incentive Stock Options and (iv) the limitations, restrictions and
conditions applicable to any such Incentive Stock Options. In making such
determinations, the Committee may take into account the nature of the services
rendered by such Key Employees, their present and potential contributions to the
Company's success and such other factors as the Committee in its discretion
shall deem relevant.
(c) Interpretations. Subject to the express provisions of the
Plan, the Committee may prescribe, amend and rescind rules and regulations
relating to Incentive Stock Options, determine the terms and provisions of the
Incentive Stock Options and make all other determinations it deems necessary or
advisable for the administration of the Incentive Stock Options.
(d) Determinations. The determinations of the Committee on
all matters regarding the Incentive Stock Options shall be conclusive. A member
of the Committee shall only be liable for any action taken or determination made
in bad faith.
(e) Nonuniform Determinations. The Committee's determinations
with respect to Incentive Stock Options, including without limitation,
determinations as to the Key Employees to receive Incentive Stock Options, the
terms and provisions of such Incentive Stock Options and the agreements
evidencing the same, need not be uniform and may be made by it selectively among
the Key Employees who receive or are eligible to receive Incentive Stock
Options, whether or not such Key Employees are similarly situated.
2.2 Company Director Stock Options.
(a) Administration by Board. The Company Director Stock
Options shall be administered by the Board of Directors of the Company (the
"Board"). Prior to November 1, 1996, the Board had no authority, discretion or
power to select the individuals who were eligible to receive the Company
Director Stock Options under the Plan, nor did it have any discretion to
determine the amount, price or timing of any Company Director Stock Option
granted hereunder, as the specific grants were set forth in the Plan. With
respect to grants made after November 1, 1996, the Board shall have authority to
select the individuals who are or will be eligible to receive the Company
Director Stock Options under the Plan. The Board shall determine the amount,
price and timing of any Company Director Stock Options granted or to be granted
hereunder, and shall administer the Company Director Stock Options pursuant to
the terms of the Plan.
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(b) Powers of Board. The Board shall have the power, subject
to, and within the limitations of, the express provisions of the Plan:
(i) to determine the Company Directors to receive Company
Director Stock Options, and set the amounts, place, timing, and terms of any
Company Director Stock Options granted hereunder;
(ii) to construe and interpret the Plan with respect to any
Company Director Stock Options, to construe and interpret any conditions or
restrictions imposed on the Common Stock acquired pursuant to the exercise of
Company Director Stock Options, to define the terms used herein (to the extent
not already defined) and to establish, amend, and revoke rules and regulations
for administration of the Company Director Stock Options. The Board, in the
exercise of this power, may correct any defect, omission, or inconsistency in
the Company Director Stock Options in a manner and to the extent it shall deem
necessary or expedient to make the Company Director Stock Options fully
effective;
(iii) to amend, modify, suspend, or terminate the Company
Director Stock Options in accordance with Section 13; and
(iv) generally, to exercise such powers and to perform such
acts as the Board deems necessary or expedient to promote the best interests of
the Company in connection with the Company Director Stock Options.
3. Maximum Limitations; Option Shares.
3.1 Maximum Limitations with Respect to Incentive Stock Options.
The aggregate number of shares of Common Stock for which Incentive Stock Options
may be granted under the Plan is 160,000, subject to Section 3.3 below and
subject to adjustment pursuant to Section 8. If, prior to the end of the period
during which Incentive Stock Options may be granted under the Plan, any
Incentive Stock Option expires unexercised or is terminated, surrendered or
canceled without being exercised, in whole or in part, for any reason, the
number of shares subject to such Incentive Stock Option, or the unexercised,
terminated, surrendered or canceled portion thereof, shall be added to the
remaining number of shares of Common Stock available for issuance pursuant to
exercise of Incentive Stock Options under the Plan, including a grant to a
former holder of such Incentive Stock Option, upon such terms and conditions as
the Committee shall determine, which terms may be more or less favorable than
those applicable to the holder of such former Incentive Stock Option.
3.2 Maximum Limitations with Respect to Company Director Stock
Options. The aggregate number of shares of Common Stock for which Company
Director Stock Options may be granted under the Plan is 87,500, subject to
Section 3.3 below and subject to adjustment pursuant to Section 8. If, prior to
the end of the period during which Company Director Stock Options may be granted
under the Plan, any Company Director Stock Option expires unexercised or is
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terminated, surrendered or cancelled without being exercised, in whole or in
part, for any reason, the number of shares subject to such Company Director
Stock Option, or the unexercised, terminated, surrendered or cancelled portion
thereof, shall be added to the remaining number of shares of Common Stock
available for issuance pursuant to exercise of Company Director Stock Options
under the Plan, including a grant to a former holder of such Company Director
Stock Option, upon such terms and conditions as the Board shall determine, which
terms may be more or less favorable than those applicable to the holder of such
former Company Director Stock Option.
3.3 Additional Shares. In addition to the shares of Common Stock
specifically available for awards of Incentive Stock Options and Company
Director Stock Options as described above, an additional 150,000 shares of
Common Stock shall be available for awards of options pursuant to this Plan
(such shares the "Additional Shares"). Awards of options with respect to the
Additional Shares shall be allocated between Incentive Stock Options and Company
Director Options in such proportions as the Board shall determine in its sole
and absolute discretion (it being understood that, for purposes of the Code, the
maximum shares available for awards of Incentive Stock Options under this Plan
shall be 310,000, which equals the sum of the shares authorized under Section
3.1 and the Additional Shares).
3.4 Option Shares. Shares of Common Stock issued pursuant to
the Plan shall be authorized but unissued shares.
4. Incentive Stock Options.
4.1 Taxation of Incentive Stock Options; Nonqualified Stock
Options. The Company intends that Incentive Stock Options granted under the Plan
shall constitute "incentive stock options" within the meaning of, and be taxed
under, Section 422 of the Code. However, the Committee may in its discretion
choose to issue "nonqualified options" to Key Employees, within the aggregate
number of shares of Common Stock available under the Plan, which violate one or
more of the requirements of this Section 4 ("Nonqualified Options"), (i) as long
as the Key Employees to whom such Nonqualified Options are granted are advised
that such options will be taxable under Section 83 of the Code, rather than
Section 422, and (ii) as long as Nonqualified Options are not issued in tandem
with Incentive Stock Options as described in Internal Revenue Service Treas.
Reg. ss. 14a.422A-1 (Q&A-39).
4.2 Provisions Applicable to Incentive Stock Options.
Incentive Stock Options granted under the Plan for the purchase of shares of
Common Stock shall be in such form and upon such conditions as the Committee
shall from time to time determine, subject to the following:
(a) Option Price. The option price for each share of Common
Stock issuable under each Incentive Stock Option shall be at least 100% of the
fair market value of the Common Stock (as defined in Section 16.7 herein)
subject to such Incentive Stock Option on the date of grant.
(b) Condition Precedent to Exercise; Duration. Each Option
Agreement (as defined in Section 6) pursuant to which Incentive Stock Options
are granted shall state the period or periods of time within which the Incentive
Stock Options may be
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exercised by the Key Employee, in whole or in part, which shall be such period
or periods of time as may be determined by the Committee. Notwithstanding the
foregoing, except as otherwise set forth in Section 4.2(d) below, no Incentive
Stock Option shall be exercisable after the date ten (10) years from the date
such Incentive Stock Option is granted.
(c) Limitation on Amounts. The aggregate fair market value
(determined with respect to each Incentive Stock Option as of the time such
Incentive Stock Option is granted) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a Key Employee
during any calendar year shall not exceed $100,000. This limitation (i) does not
limit the right to exercise Incentive Stock Options cumulatively in excess of
$100,000 once the $100,000 limitation has been met, and (ii) does not apply to
any Nonqualified Options granted by the Committee, if any.
(d) Ten percent Shareholder. Notwithstanding any other
provision contained in the Plan, if, at the time an Incentive Stock Option is
granted, a Key Employee "owns" (as defined in Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, the option price for such Incentive Stock Option shall be
at least 110% of the fair market value of the Common Stock (as defined in
Section 16.7 herein) subject to such Incentive Stock Option on the date of grant
and such Incentive Stock Option shall not be exercisable after the date five
years from the date such Incentive Stock Option is granted.
5. Company Director Stock Options
5.1 Taxation of Company Director Stock Options. The Company does not
intend that Company Director Stock Options granted under the Plan shall
constitute "incentive stock options" within the meaning of Section 422 of the
Code. Accordingly, the Company Director Stock Options shall be subject to
taxation under Section 83 of the Code.
5.2 Option Grant; Number of Shares. The Board of Directors may
issue Company Director Stock Options available for grant under the Plan to such
Company Directors as the Board deems reasonable and appropriate.
5.3 Option Price. The option price for each share of Common Stock
issuable under each Company Director Stock Option shall be equal to 100% of the
fair market value of the Common Stock (as defined in Section 16.7 herein) on the
date the Company Director Stock Option is granted, but in no event can the
exercise price be less than the per share book value.
5.4 Condition Precedent to Exercise; Duration. Each Option Agreement
(as defined in Section 6) pursuant to which Company Director Stock Options are
granted shall state the period or periods of time within which the Company
Director Stock Options may be exercised by the Company Directors, in whole or in
part, which shall be such period or periods of time as may be determined by the
Board. Notwithstanding the foregoing, no Company Director Stock Option shall be
exercisable after the date ten (10) years from the date such Company Director
Stock Option is granted.
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6. Option Agreement. Incentive Stock Options and Company Director Stock
Options (sometimes collectively referred to hereinafter as the "Options") shall
be evidenced by such form of written option agreement (the "Option Agreement")
between a Plan participant (a Plan participant who is granted an Option is
sometimes hereinafter referred to as the "optionee") and the Company as the
Committee (or the Board in the case of Company Director Stock Options) shall
determine, provided that such Option Agreements are not inconsistent with the
other provisions of the Plan, or in the case of Incentive Stock Options, with
Section 422 of the Code or the regulations thereunder.
7. Transferability. No Option may be transferred, assigned, pledged or
hypothecated (whether by operation of law or otherwise), except as provided by
will or the applicable laws of descent or distribution, and no Option shall be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of an Option, or levy of
attachment or similar process upon the Option not specifically permitted herein
shall be null and void and without effect. An Option may be exercised only by an
optionee during his or her lifetime or, pursuant to Sections 11 and 12, by his
or her estate or the person who acquires the right to exercise such Option upon
his or her death by bequest or inheritance.
8. Adjustment Provisions. The aggregate number of shares of Common Stock
with respect to which Options may be granted, the aggregate number of shares of
Common Stock subject to each outstanding Option, and the option price per share
of each such Option, may all be appropriately adjusted as the Committee (or the
Board in the case of Company Director Stock Options) may determine for any
increase or decrease in the number of shares of issued Common Stock resulting
from a subdivision or consolidation of shares, whether through reorganization,
recapitalization, stock split, stock distribution or combination of shares, or
the payment of a share dividend or other increase or decrease in the number of
such shares outstanding effected without receipt of consideration by the Company
("Change in Capitalization"). If, by reason of a Change in Capitalization, an
optionee shall be entitled to exercise an Option with respect to new, additional
or different shares of stock or securities, such new, additional or different
shares shall thereupon be subject to all of the conditions which were applicable
to the Common Stock subject to the Option prior to such Change in
Capitalization. Any adjustment in the Common Stock subject to an outstanding
Option shall be made only to the extent necessary to maintain the proportionate
interest of the optionee and preserve, without exceeding, the value of such
Option. Adjustments under this Section 8 shall be made according to the sole
discretion of the Committee (or the Board in the case of Company Director Stock
Options), and its decisions shall be binding and conclusive.
9. Dissolution, Merger and Consolidation.
9.1 Change of Control. Upon a Change of Control (as defined below),
all Options will become fully exercisable. A Change of Control for this purpose
means the occurrence of any one or more of the following events, unless
otherwise determined by the Board at or after the grant of Options but prior to
the occurrence of such Change of Control:
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(a) a person, entity, or group (other than the Company, any
Company subsidiary, any Company benefit plan, or any underwriter temporarily
holding securities for an offering of such securities) acquires ownership of
more than 50% of the undiluted total voting power of the Company's
then-outstanding securities eligible to vote to elect members of the Board
("Company Voting Securities");
(b) the individuals (A) who, as of April 1, 1999, constitute
the Board of Directors of the Company (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3) of
the Original Directors then still in office (such directors becoming "Additional
Original Directors" immediately following their election) or (C) who are elected
to the Board and whose election, or nomination for election, to the Board was
approved by a vote of at least two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office (such directors also becoming
"Additional Original Directors" immediately following their election) cease for
any reason to constitute a majority of the members of the Board;
(c) consummation of a merger or consolidation of the Company
into any other entity unless the holders of the Company Voting Securities
outstanding immediately before such consummation, together with any trustee or
other fiduciary holding securities under a Company benefit plan, hold securities
that represent immediately after such merger or consolidation at least 50% of
the combined voting power of the then outstanding voting securities of either
the Company or the other surviving entity or its parent; or
(d) the shareholders of the Company approve (i) a plan of
complete liquidation or dissolution of the Company or (ii) an agreement for the
Company's sale or disposition of all or substantially all the Company's assets,
(i.e., 50% or more of the total assets of the Company) and such liquidation,
dissolution, sale, or disposition is consummated.
9.2 Substantial Corporate Change. Upon a Substantial Corporate
Change (as defined below), the Plan and any unexercised Options will terminate
unless provision is made in writing in connection with such transaction for the
assumption or continuation of outstanding Options, or the substitution for such
Options of options covering the stock or securities of a successor employer
corporation, or a parent or subsidiary of such successor, with appropriate
adjustments as to the number and kind of shares of stock and prices, in which
event the Options will continue in the manner and under the terms so provided
(any such assumption, continuation or substitution a "Substitute Award"). If an
Option would terminate because the Option is not replaced with a Substitute
Award, participants will be given notice at least 30 days prior to the
occurrence of the transaction constituting the Substantial Corporate Change.
During this 30 day notice period, participants will have the right to exercise
any unexercised portion of an Option that by its terms is exercisable. In
addition, if an Option would terminate because the Option is not replaced with a
Substitute Award, all unexercisable Options will accelerate and become
immediately exercisable during this 30 day notice period.
A Substantial Corporate Change means the (i) dissolution or
liquidation of the Company, (ii) merger, consolidation, or reorganization of the
Company with one or more corporations in which the Company is not the surviving
corporation, (iii) the sale of substantially all of the assets of the Company to
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another corporation, or (iv) any transaction (including a merger or
reorganization in which the Company survives) approved by the Board that results
in any person or entity (other than any affiliate of the Company as defined in
Rule 144(a)(1) under the Securities Act of 1933) owning 100% of the combined
voting power of all classes of stock of the Company.
10. Effective Date; Limitations on Grants of Options.
10.1 Effective Date. The original Plan became effective on July 2,
1996 ("Effective Date"). This Amended and Restated Plan shall become effective
on the date of its approval by the holders of a majority of the shares of Common
Stock of the Company voting on such matter.
10.2 Grants of Options. No Option shall be granted under the Plan
more than ten (10) years after the Effective Date.
10.3 Intentionally Omitted.
10.4 Existing Options. The Plan and all Options that are actually
granted under the Plan shall remain in effect and be subject to adjustment and
amendment as herein provided until they have been satisfied or terminated in
accordance with the terms of the grants and the applicable Option Agreement.
11. Termination of Service of Key Employee. Each Incentive Stock Option
shall, unless sooner expired pursuant to Sections 11.1 or 11.2 below, expire on
the first to occur of (i) the tenth (10th) anniversary of the date of grant
thereof or (ii) the expiration date set forth in the applicable Option Agreement
(the "Expiration Date").
11.1 Termination other than for Death or Disability. Notwithstanding
any provision in the Plan to the contrary, an Incentive Stock Option shall
expire on the date that the employment of the Key Employee with the Company or
any of its subsidiaries terminates for any reason other than death or
disability; provided, however, that the Committee in its sole discretion may, by
written notice given to an ex-employee, permit the ex-employee to exercise
Incentive Stock Options during a period following his or her termination of
employment, which period shall not exceed three months. In no event, however,
may the Committee permit an ex-employee to exercise an Incentive Stock Option
after the Expiration Date. If the Committee permits an ex-employee to exercise
an Incentive Stock Option during a period following his or her termination of
employment pursuant to this Section 11.1, such Incentive Stock Option shall, to
the extent unexercised, expire on the date that such ex-employee violates (as
determined by the Committee in its sole and absolute discretion) any covenant
not to compete in effect between the Company or its subsidiaries and the
ex-employee.
11.2 Termination for Death or Disability. Notwithstanding any
provision in the Plan to the contrary, if the employment of a Key Employee with
the Company or any of its subsidiaries terminates by reason of the Key
Employee's disability (as defined in Section 422(c)(9) of the Code and as
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determined by the Committee in its sole and absolute discretion) or death, his
or her Incentive Stock Option shall expire on the first to occur of the
Expiration Date or the first anniversary of such termination of employment.
11.3 Terms of Incentive Stock Options Not Extended. Sections 11.1
and 11.2 shall not be construed to extend the term of any Incentive Stock Option
or to permit anyone to exercise any Incentive Stock Option after the expiration
of its term, nor shall it be construed to increase the number of shares of
Common Stock as to which any Incentive Stock Option is exercisable from the
amount exercisable on the date of termination of the Key Employee's service to
the Company.
12. Termination of Service of Company Director. Each Company Director
Stock Option shall, unless sooner expired pursuant to Sections 12.1 or 12.2
below, expire on the first to occur of (i) the tenth (10th) anniversary of the
date of grant thereof or (ii) the Expiration Date.
12.1 Termination for Cause. If an optionee's service as a Company
Director terminates for cause (as defined in Section 16.6 herein), the Company
Director Stock Options granted to the optionee hereunder shall immediately
terminate in full and no rights thereunder may be exercised.
12.2 Termination Not for Cause. If an optionee's service as a
Company Director terminates for any reason other than cause, the optionee (or
any guardian, legal representative, heir or successor of the optionee) may
exercise his Company Director Stock Options in accordance with their terms to
the extent, and only to the extent, that such Company Director Stock Options or
portions thereof were vested as of the date the optionee's service as a Company
Director terminated, after which time the Company Director Stock Options that
are not vested shall automatically terminate.
12.3 Terms of Company Director Options Not Extended. Sections 12.1
and 12.2 shall not be construed to extend the term of any Company Director Stock
Option or to permit anyone to exercise any Company Director Stock Option after
the expiration of its term, nor shall it be construed to increase the number of
shares of Common Stock as to which any Company Director Stock Option is
exercisable from the amount exercisable on the date of termination of the
optionee's service to the Company.
13. Termination and Amendment of the Plan. The Committee (or the Board in
the case of Company Director Stock Options) may from time to time amend, modify,
terminate or suspend the Plan; provided, however, that:
13.1 Except as provided in Sections 8 and 9, no such amendment,
modification, suspension, or termination shall impair or adversely alter any
Options or rights theretofore granted under the Plan, except with the consent of
the optionee, nor shall any amendment, modification, suspension, or termination
deprive any optionee of any Common Stock which he may have acquired through or
as a result of the Plan;
13.2 No amendment to the Plan shall be effective unless approved by
the shareholders of the Company in accordance with applicable law and the
regulations of any automated quotation system or national stock exchange on
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which the Common Stock is listed or trades (if shareholder approval is so
required under such law or regulations). In addition, the Committee (or the
Board in the case of Company Director Stock Options) may not without the
approval of the shareholders of the Company:
(i) materially increase the total number of shares of Common
Stock available for grant under the Plan;
(ii) materially modify the class of eligible individuals under
the Plan; or
(iii) materially increase the benefits to any Plan participant
who is subject to the restrictions of Section 16 of the Act.
14. Non-Exclusivity of the Plan. Nothing contained in the Plan prohibits a
Company Director from being appointed as an officer or employee of the Company
at any time, nor does anything contained in the Plan specifically require a
Company Director to surrender or forfeit a Company Director Stock Option solely
because he accepts an appointment as an officer or employee of the Company at
any time after being granted a Company Director Stock Option hereunder.
15. Limitation of Liability. Nothing in the Plan shall be construed to:
15.1 give any Key Employee or Company Director any right to be
granted an Option other than as specifically provided by the Plan;
15.2 give any Key Employee or Company Director any rights whatsoever
with respect to Common Stock except as specifically provided in the Plan;
15.3 limit in any way the right of the Company to terminate the
service of any Company Director as a member of the Board pursuant to the
Company's bylaws and articles of incorporation;
15.4 be evidence of any agreement or understanding, express or
implied, that the Company will nominate or appoint any person as a member of the
Board; or
15.5 confer upon any Key Employee or optionee the right to continue
in the employment of the Company or its subsidiaries or affect any right which
the Company may have to terminate the employment of each Key Employee or
optionee.
16. Miscellaneous.
16.1 Legal Requirements. The obligation of the Company to sell and
deliver Common Stock under the Plan shall be subject to all applicable laws,
regulations, rules and approvals. Certificates for shares of Common Stock issued
hereunder may be legended as the Committee (or the Board in the case of Company
Director Stock Options) shall deem appropriate.
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16.2 No Obligation To Exercise Options. The granting of an Option
shall impose no obligation upon an optionee to exercise such Option.
16.3 Application of Funds. The proceeds received by the Company from
the sale of Common Stock pursuant to Options issued hereunder will be used for
general corporate purposes.
16.4 Withholding Taxes. The Company is authorized to withhold from
any Option, any payment relating to an Option under the Plan, including from a
distribution of Common Stock, or any payroll or other payment to an optionee,
amounts of withholding and other taxes due with respect thereto, the exercise
thereof, or any payment thereunder, and to take such other action as the
Committee (or the Board in the case of Company Director Stock Options) may deem
necessary or advisable to enable the Company and any optionee to satisfy
obligations for the payment of withholding taxes and other tax liabilities
relating to any Option. The authority shall include authority to withhold Common
Stock and to make cash payments in respect thereof in satisfaction of an
optionee's tax obligations. The Company may also require, as a condition to
delivery of Common Stock upon exercise of an Option, that all taxes required to
be withheld (if any) in connection with such exercise be paid to the Company.
16.5 Leaves of Absence and Disability. The Committee shall be
entitled to make such rules, regulations and determinations as it deems
appropriate under the Plan in respect of any leave of absence taken by, or
disability of, any Key Employee. Without limiting the generality of the
foregoing, the Committee shall be entitled to determine (i) whether or not any
such leave of absence shall constitute a termination of employment within the
meaning of the Plan, and (ii) the impact, if any, of any such leave of absence
on Incentive Stock Options granted under the Plan to any Key Employee who takes
such leave of absence.
16.6 Cause. For the purposes of Section 12.1, "cause" shall mean the
commission of an act of fraud or intentional misrepresentation or an act of
embezzlement, misappropriation or conversion of the assets or opportunities of
the Company.
16.7 Fair Market Value. Whenever the fair market value of Common
Stock is to be determined under the Plan as of a given date, such fair market
value shall be:
(a) If the Common Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
or other comparable quotation system and has been designated as a National
Market System ("NMS") security, the last sale price reported for the Common
Stock on such system on such given date;
(b) If the Common Stock is admitted to quotation on NASDAQ and
has not been designated a NMS security, the closing bid price for the Common
Stock at the close of trading on such given date;
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(c) If the Common Stock is listed on a national securities
exchange, the closing price of the Common Stock of the Composite Tape on such
given date; and
(d) If the Common Stock is neither admitted to quotation on
NASDAQ (or other comparable quotation system) nor listed on a national
securities exchange, such value as the Committee (or the Board in the case of
Company Director Stock Options) shall attribute to the Common Stock.
(e) Notwithstanding any provision in this Section 16.7 to the
contrary, the fair market value of Common Stock for the purposes of this Plan
shall in no event be less than $1.925 per share.
16.8 Payment Upon Exercise. Common Stock purchased pursuant to an
Option shall be paid for in full in cash or, unless the Committee (or the Board
in the case of Company Director Stock Options) determines otherwise at or prior
to the time of exercise, in Common Stock of the Company at fair market value (as
defined in Section 16.7 above) or a combination of such cash and Common Stock,
in an amount or having a combined value equal to the aggregate purchase price
for the shares subject to the Option or portion thereof being exercised. To the
extent permitted under the applicable laws and regulations under Section 16 of
the Act and the rules and regulations promulgated thereunder, and with the
consent of the Committee (or the Board in the case of Company Director Stock
Options), the Company agrees to cooperate in a "cashless exercise" of an Option.
The cashless exercise shall be effected by the Company Director or Key Employee
delivering to a registered securities broker acceptable to the Company
instructions to sell a sufficient number of shares of Common Stock to cover the
costs and expenses associated therewith.
16.9 Notices. Every direction, revocation or notice authorized or
required by the Plan shall be deemed delivered to the Company (1) on the date it
is personally delivered to the Secretary of the Company at its principal
executive offices, or (2) three business days after it is sent by registered or
certified mail, postage prepaid, addressed to the Secretary at such offices, and
shall be deemed delivered to an optionee (1) on the date it is personally
delivered to him or her, or (2) three business days after it is sent by
registered or certified mail, postage prepaid, addressed to him or her at the
last address shown for him or her on the records of the Company.
16.10 Applicable Law. All questions pertaining to the validity,
construction and administration of the Plan and Options granted hereunder shall
be determined in conformity with the laws of the Commonwealth of Virginia, to
the extent not inconsistent with the Act and Sections 83 and 422 of the Code and
regulations thereunder.
16.11 Elimination of Fractional Shares. If, under any provision of
the Plan which requires a computation of the number of shares of Common Stock
subject to an Option, the number so computed is not a whole number of shares of
Common Stock, such number of shares of Common Stock shall be rounded down to the
next whole number.
16.12 Applicability of Plan Provisions to Nonqualified Options.
Other than the provisions of the Plan that are explicitly required by Section
422 of the Code, all of the provisions of the Plan that apply to Incentive Stock
Options shall also apply to any Nonqualified Options granted under the Plan to
Key Employees.
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16.13 Compliance with Rule 16b-3. It is the intent of the Company
that this Plan and awards under the Plan comply in all respects with Rule 16b-3
under the Act in connection with any Option granted to a person who is subject
to Section 16 of the Act. Accordingly, if any provision of this Plan, any
Option, or any Option Agreement does not comply with the requirements of Rule
16b-3 as then applicable to any such person, such provision shall be construed
or deemed amended to the extent necessary to conform to such requirements with
respect to such person.
