As filed with the Securities and Exchange Commission on November 5, 1997.
Registration No. 333-_____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------------
RESEARCH, INCORPORATED
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0908058
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6425 FLYING CLOUD DRIVE
EDEN PRAIRIE, MINNESOTA 55344
(Address of Principal Executive Offices and zip code)
----------------------------
RESEARCH, INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan)
----------------------------
Copy to:
Claude C. Johnson Charles P. Moorse
Chief Executive Officer and President Kristin L. Johnson
6425 Flying Cloud Drive Lindquist & Vennum P.L.L.P.
Eden Prairie, Minnesota 55344 4200 IDS Center
(612) 941-3300 Minneapolis, MN 55402
(Name, address and telephone (612) 371-3211
number, including area code,
of agent for service)
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 100,000 shares $8.75(1) $875,000(1) $265.00
no par value,
to be issued pursuant
to Research, Incorporated
Employee Stock Purchase Plan
- --------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and (h) and based upon the average of the high
and low prices of the Company's Common Stock on the Nasdaq National
Market on November 3, 1997.
<PAGE>
PART I
Pursuant to Part I of Form S-8, the information required by Items 1 and
2 of Form S-8 is not filed as a part of this Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange
Commission are hereby incorporated by reference:
(a) The Annual Report of the Company on Form 10-K for the fiscal
year ended September 30, 1996.
(b) The Quarterly Reports of the Company on Form 10-Q for the
quarters ended December 31, 1997, March 31, 1997 and June 30,
1997.
(c) The Definitive Proxy Statement dated December 12, 1996 for the
Annual Meeting of Shareholders held on January 16, 1997.
(d) The description of the Company's Common Stock as set forth in
the Company's Form S-8 Registration Statement dated May 27,
1988 (Registration No. 33-22155), including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 prior to the
completion or termination of this offering of shares of Common Stock shall be
deemed to be incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Lindquist & Vennum P.L.L.P. is rendering its opinion as to the validity
of the shares being registered hereby. Gerald E. Magnuson, Of Counsel to
Lindquist & Vennum, is an officer, director and shareholder of the Company.
Item 6. Indemnification of Directors and Officers.
The Company's Bylaws provide that the Company shall indemnify its
officers, directors, employees and agents to the full extent permitted by the
laws of the State of Minnesota. Section 302A.521 of the Minnesota Business
Corporation Act provides that a corporation shall indemnify any person made or
threatened to be made a party to a proceeding by reason of acts or omissions
performed in their official capacity as an officer, director, employee or agent
of the corporation against judgments, penalties, fines, including without
limitation, excise taxes assessed against such person with respect to an
employee benefit
<PAGE>
plan, settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by such person in connection with the proceeding if,
with respect to the acts or omissions of such person complained of in the
proceeding, such person (i) has not been indemnified by another organization or
employee benefit plan for the same expenses with respect to the same acts or
omissions; (ii) acted in good faith; (iii) received no improper personal benefit
and Minnesota Statutes, Section 302A.255 (regarding conflicts of interest), if
applicable, has been satisfied; (iv) in the case of a criminal proceeding, has
no reasonable cause to believe the conduct was unlawful; and (v) in the case of
acts or omissions by persons in their official capacity for the corporation,
reasonably believed that the conduct was in the best interests of the
corporation, or in the case of acts or omissions by persons in their capacity
for other organization, reasonably believed that the conduct was not opposed to
the best interests of the corporation. In addition, Section 302A.521, subd. 3,
of the Minnesota Statutes requires payment or reimbursement by the corporation,
upon written request, of reasonable expenses (including attorneys' fees)
incurred by a person in advance of the final disposition of a proceeding in
certain instances if a decision as to required indemnification is made by a
disinterested majority of the Board of Directors present at a meeting at which a
disinterested quorum is present, or by a designated committee of the Board, by
special legal counsel, by the shareholders or by a court.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits. (Filed electronically herewith)
Exhibit
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4.1 Research, Incorporated Employee Stock Purchase Plan
5.1 Opinion of Lindquist & Vennum P.L.L.P
23.1 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP, independent public accountants
24.1 Power of Attorney (included on signature page hereof)
Item 9. Undertakings.
(a) The Company hereby undertakes to:
(1) File, during any period in which offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act of 1933 if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
<PAGE>
(iii) Include any additional or changed material information
on the plan of distribution.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(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) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the small
business issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Eden Prairie, State of Minnesota, on November 5,
1997.
RESEARCH, INCORPORATED
By \s\ Claude C. Johnson
--------------------------------------
Claude C. Johnson, President and
Chief Executive Officer
POWER OF ATTORNEY
The undersigned officers and directors of Research, Incorporated hereby
constitute and appoint Claude C. Johnson and Gerald E. Magnuson, or either of
them, with power to act one without the other, our true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for us and in our stead, in any and all capacities to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents relating thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing necessary or
advisable to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his or her substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons on
November 5, 1997 in the capacities indicated.
Signature
- ---------
/s/ Claude C. Johnson
- ------------------------------------------------
Claude C. Johnson, President, Chief Executive
Officer (Principal Executive Officer) and Director
/s/ Richard L. Grose
- ------------------------------------------------
Richard L. Grose, Treasurer (Chief Financial
Officer)
/s/ Gerald E. Magnuson
- ------------------------------------------------
Gerald E. Magnuson, Secretary
and Director
/s/ James R. Anderson
- ------------------------------------------------
James R. Anderson, Director
<PAGE>
/s/ Charles G. Schiefelbein
- ------------------------------------------------
Charles G. Schiefelbein, Director
/s/ Edward L. Lundstrom
- ------------------------------------------------
Edward L. Lundstrom, Director
/s/ John G. Colwell, Jr.
- ------------------------------------------------
John G. Colwell, Jr., Director
EXHIBIT 4.1
Effective August 1, 1997
RESEARCH INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
1. ESTABLISHMENT OF PLAN. RESEARCH INCORPORATED (hereinafter referred to as the
"Company") proposes to grant to certain employees of the Company the opportunity
to purchase common stock of the Company. Such common stock shall be purchased
pursuant to the plan herein set forth which shall be known as the "RESEARCH
INCORPORATED EMPLOYEE STOCK PURCHASE PLAN" (hereinafter referred to as the
"Plan"). The Company intends that the Plan shall qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended, and shall be construed in a manner consistent with the requirements of
said Section 423 and the regulations thereunder.
2. PURPOSE. The Plan is intended to encourage stock ownership by
employees of the Company and any of its Subsidiaries to which the Company and
such respective Subsidiaries by action of their Boards of Directors shall make
this Plan applicable. The Plan is further intended as an incentive to them to
remain in employment, improve operations, increase profits, and contribute more
significantly to the Company's success, and to permit the Company to compete
with other corporations offering similar plans in obtaining and retaining the
services of competent employees.
3. ADMINISTRATION.
(a) The Plan shall be administered by a stock purchase
committee (hereinafter referred to as the "Committee"), consisting of
two or more directors or employees of the Company, as designated by the
Board of Directors of the Company (hereinafter referred to as the
"Board of Directors"). The Board of Directors shall fill all vacancies
in the Committee and may remove any member of the Committee at any
time, with or without cause.
(b) Unless the Board of Directors limits the authority
delegated to the Committee in its appointment, the Committee shall be
vested with full authority to make, administer, and interpret such
rules and regulations as it deems necessary to administer the Plan. For
all purposes of this Plan other than this Paragraph 3(b), references to
the Committee shall also refer to the Board of Directors.
(c) The Committee shall select its own chairman and hold its
meetings at such times and places as it may determine. All
determinations of the Committee shall be made by a majority of its
members. Any decision which is made in writing and signed by a majority
of the members of the Committee shall be effective as fully as though
made by a majority vote at a meeting duly called and held.
(d) The determinations of the Committee shall be made in
accordance with its judgment as to the best interests of the Company,
its employees and its shareholders and in accordance with the purposes
of the Plan; provided, however, that the provisions of the Plan shall
be construed in a manner consistent with the requirements of Section
423 of the Internal
<PAGE>
Revenue Code, as amended. Such determinations shall be binding upon the
Company and the participants in the Plan unless otherwise determined by
the Board of Directors.
(e) The Company shall pay all expenses of administering the
Plan. 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 option granted under it. The Company shall indemnify
each member of the Committee against any and all claims, loss, damages,
expenses (including counsel fees approved by the Committee), and
liability (including any amounts paid in settlement with the
Committee's approval) arising from any loss or damage or depreciation
which may result in connection with the execution of his or her duties
or the exercise of his or her discretion, or from any other action or
failure to act hereunder, except when the same is judicially determined
to be due to gross negligence or willful misconduct of such member.
4. DURATION AND PHASES OF THE PLAN.
(a) The Plan will commence on August 1, 1997 or such later
date specified by the Committee, and will terminate February 1, 2003,
except that any Phase commenced prior to such termination shall, if
necessary, be allowed to continue beyond such termination until
completion. Notwithstanding the foregoing, this Plan shall be
considered of no force or effect and any options granted shall be
considered null and void unless the holders of a majority of all of the
issued and outstanding shares of the common stock of the Company
approve the Plan within twelve (12) months after the date of its
adoption by the Board of Directors.
(b) The Plan shall be carried out in one or more Phases, each
Phase being for a period of six months, or such shorter or longer
period of time (not to exceed 27 months) as may be determined by the
Committee prior to the commencement of a Phase. No Phase shall run
concurrently with any other Phase but a Phase may commence immediately
after the termination of the preceding Phase. The existence and date of
commencement of a Phase (the "Commencement Date") shall be determined
by the Committee and shall terminate on a date (the "Termination Date")
which is not more than 365 days from a Commencement Date, provided that
the commencement of the first Phase shall be within six months before
or twelve months after the date of approval of the Plan by the
shareholders of the Company. In the event all of the stock reserved for
grant of options hereunder is issued pursuant to the terms hereof prior
to the commencement of one or more Phases scheduled by the Committee or
the number of shares remaining is so small, in the opinion of the
Committee, as to render administration of any succeeding Phase
impracticable, such Phase or Phases shall be canceled. Phases shall be
numbered successively as Phase 1, Phase 2, Phase 3, etc.
(c) The Board of Directors may elect to accelerate the
Termination Date of any Phase effective on the date specified by the
Board of Directors in the event of (i) any consolidation or merger of
the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares would be converted into cash,
securities or other property, other than a merger of the Company in
which shareholders immediately prior to the merger have the same
proportionate ownership of stock in the surviving corporation
immediately after the merger; or (ii) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions)
of all or substantially all of the assets of the Company. Subject to
any required action by the shareholders, if the Company shall be
involved in any merger or consolidation, in which it is not the
surviving corporation, and if the Board of Directors does not
accelerate the Termination Date of the Phase, each outstanding option
shall
<PAGE>
pertain to and apply to the securities or other rights to which a
holder of the number of shares subject to the option would have been
entitled.
(d) A dissolution or liquidation of the Company shall cause
each outstanding option to terminate, provided in such event that,
immediately prior to such dissolution or liquidation, each Participant
shall be repaid the payroll deductions credited to his account without
interest.
5. ELIGIBILITY. All Employees, as defined in Paragraph 18 hereof who
have completed 1,000 or more hours of service for the Company prior to the
Commencement Date of a Phase shall be eligible to participate in such Phase. Any
Employee who is a member of the Board of Directors of the Company who satisfies
the above requirements shall be eligible to participate in the Plan.
6. PARTICIPATION. Participation in the Plan is voluntary. An eligible
Employee may elect to participate in the Plan, and thereby become a
"Participant" in the Plan, by completing the Enrollment Form provided by the
Company and delivering it to the Company or its designated representative at
least five days prior to an Enrollment Date and five days prior to the
Commencement Date of that Phase. The Enrollment Date shall be established by the
Committee, which shall be no less often than annual and shall coincide with one,
but need not coincide with each, Commencement Date. Payroll deductions for a
Participant shall commence on the first payday after the Commencement Date of
the Phase and shall terminate on the last payday immediately prior to or
coinciding with the Termination Date of that Phase unless sooner terminated by
the Participant as provided in Paragraph 9 hereof. A Participant who ceases to
be an eligible Employee, although still employed by the Company, thereupon shall
be deemed to discontinue his or her participation in the Plan and shall have the
rights provided in Section 9.
7. PAYROLL DEDUCTIONS.
(a) Upon enrollment, a Participant shall elect to make
contributions to the Plan by payroll deductions (in full dollar amounts
and in amounts calculated to be as uniform as practicable throughout
the period of the Phase), in the aggregate amount not in excess of 7%
of such Participant's Pay (as determined in accordance with Paragraph
18 hereof) for the term of the Phase (or such larger (but not to exceed
10%) or smaller percentage as may be determined by the Committee prior
to the commencement of a Phase). The minimum authorization shall be 2%
of a Participant's Pay per pay period.
(b) In the event that the Participant's compensation for any
pay period is terminated or reduced from the compensation rate for such
a period as of the Commencement Date of the Phase for any reason so
that the amount actually withheld on behalf of the Participant as of
the Termination Date of the Phase is less than the amount anticipated
to be withheld over the Phase as determined on the Commencement Date of
the Phase, then the extent to which the Participant may exercise his
option shall be based on the amount actually withheld on his behalf. In
the event of a change in the pay period of any Participant, such as
from bi-weekly to monthly, an appropriate adjustment shall be made to
the deduction in each new pay period so as to ensure the deduction of
the proper amount authorized by the Participant.
(c) A Participant may discontinue his participation in the
Phase and terminate his payroll deduction authorized at such times as
determined by the Committee and shall have the rights provided in
Section 9. No change can be made during a Phase of the Plan which would
either change the time or increase or decrease the rate of his payroll
deductions.
<PAGE>
(d) All payroll deductions made for Participants shall be
credited to their respective accounts under the Plan. A Participant may
not make any separate cash payments into such account.
8. OPTIONS.
(a) GRANT OF OPTION.
(i) A Participant who is employed by the Company as
of the Commencement Date of a Phase shall be granted an option
as of such date to purchase a number of full and fractional
shares of Company common stock to be determined by dividing
the total amount to be credited to that Participant's account
under Paragraph 7 hereof by the option price set forth in
Paragraph 8(a)(ii)(A) hereof, subject to the limitations of
Paragraph 10 hereof.
(ii) The option price for such shares of common stock
shall be the lower of:
A. Eighty-five percent (85%) of the Fair
Market Value of such shares of common stock on the
Commencement Date of the Phase; or
B. Eighty-five percent (85%) of the Fair
Market Value of such shares of common stock on the
Termination Date of the Phase.
(iii) Stock options granted pursuant to the Plan may
be evidenced by agreements in such form as the Committee shall
approve, provided that all Employees shall have the same
rights and privileges and provided further that such options
shall comply with and be subject to the terms and conditions
set forth herein. The Committee may conclude that agreements
are not necessary.
(iv) Anything herein to the contrary notwithstanding,
no Employee shall be granted an option hereunder:
A. Which permits his rights to purchase
stock under all employee stock purchase plans of the
Company, its Subsidiaries or its parent, if any, to
accrue at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) of the Fair Market Value of such
stock (determined at the time such option is granted)
for each calendar year in which such option is
outstanding at any time; or
B. If immediately after the grant such
Employee would own and/or hold outstanding options to
purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all
classes of stock of the Company, its parent, if any,
or of any subsidiary of the Company. For purposes of
determining stock ownership under this Paragraph, the
rules of Section 424(d) of the Internal Revenue Code,
as amended, shall apply.
(v) The grant of an option pursuant to this Plan
shall not affect in any way the right or power of the Company
to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge or to
<PAGE>
consolidate or to dissolve, liquidate or sell, or transfer all
or any part of its business or assets.
(b) EXERCISE OF OPTION.
(i) Unless a Participant gives written notice to the
Company pursuant to Paragraph 9 prior to the Termination Date
of a Phase, his option for the purchase of shares will be
exercised automatically for him as of such Termination Date
for the purchase of the number of full and fractional shares
of Company common stock which the accumulated payroll
deductions in his account at that time will purchase at the
applicable option price, but in no event shall the number of
full and fractional shares be greater than the number of full
and fractional shares to which a Participant would have been
eligible to purchase under Section 8(a)(i), and subject to the
limitations set forth in Paragraph 10 hereof.
(ii) The Company shall, in addition, return to the
Participant a cash payment equal to the balance, if any, in
his account which was not used for the purchase of common
stock, without interest, as promptly as practicable after the
Termination Date of any Phase.
(iii) The Committee may appoint a registered broker
dealer to act as agent for the Company in holding and
performing ministerial duties in connection with the Plan,
excluding, but not limited to, maintaining records of stock
ownership by Participants and holding stock in its own name
for the benefit of the Participants. No trust or escrow
arrangement shall be express or implied by the exercise of
such duties by the agent. A Participant may, at any time,
request of the agent that any shares allocated to the
Participant be registered in the name of the Participant or in
joint tenancy with the Participant, in which event the agent
shall issue a certificate for the whole number of shares in
the name of the Participant (and his joint tenant, if any) and
shall deliver to the Participant any cash for fractional
shares, based on the then Fair Market Value of the shares on
the date of issuance.
(c) DIVIDEND REINVESTMENT. Unless the Committee designates
otherwise, and except as provided in this section, dividends on a
Participant's shares will automatically be reinvested in additional
shares of stock of the Company. If a Participant desires to receive
dividends in the form of cash, he must request that a certificate for
such shares be issued in the name of the Participant by filing an
appropriate form with the Company. Any shares purchased through the
reinvestment of dividends may be issued from the shares authorized
under this Plan or purchased on the open market, as directed by the
Committee. If the shares are purchased directly from the Company, the
purchase price shall be the Fair Market Value of a share or the date
such dividends are paid. Otherwise, the purchase price may be an
average of shares purchased on the open market with the aggregate
amount of dividends.
9. WITHDRAWAL OR TERMINATION OF PARTICIPATION.
(a) A Participant may, at any time prior to the Termination
Date of a Phase, withdraw all payroll deductions then credited to his
account by giving written notice to the Company. Promptly upon receipt
of such notice of withdrawal, all payroll deductions credited to the
Participant's account will be paid to him without interest accrued
thereon and no further
<PAGE>
payroll deductions will be made during the Phase. In such event, the
option granted the Participant under that Phase of the Plan shall lapse
immediately. Partial withdrawals of payroll deductions hereunder may
not be made.
(b) Notwithstanding the provisions of Section 8(a) above, if a
Participant files reports pursuant to Section 16 of the Securities
Exchange Act of 1934 (at the Commencement Date of a Phase or becomes
obligated to file such reports during a Phase) then such a Participant
shall not have the right to withdraw all or a portion of the
accumulated payroll deductions except in accordance with Sections 8(c)
and (d) below.
(c) In the event of the death of a Participant, the person or
persons specified in Paragraph 14 may give notice to the Company within
sixty (60) days of the death of the Participant electing to purchase
the number of full shares which the accumulated payroll deductions in
the account of such deceased Participant will purchase at the option
price specified in Paragraph 8(a)(ii) and have the balance in the
account distributed in cash without interest accrued thereon to the
person or persons specified in Paragraph 14. If no such notice is
received by the Company within said sixty (60) days, the accumulated
payroll deductions will be distributed in full in cash without interest
accrued thereon to the person or persons specified in Paragraph 14.
(d) Upon termination of Participant's employment for any
reason other than death of the Participant, the payroll deductions
credited to his account, without interest, shall be returned to him.
(e) The Committee shall be entitled to make such rules,
regulations and determination as it deems appropriate under the Plan in
respect of any leave of absence taken by or disability of any
Participant. 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 for purposes of the
Plan; and
(ii) the impact, of any, of any such leave of absence
on options under the Plan theretofore granted to any
Participant who takes such leave of absence.
(f) A Participant who discontinues his participation during a
Phase shall not be permitted to recommence participation until the next
Enrollment Date. A Participant's withdrawal will not have any effect
upon his eligibility to participate in any succeeding Phase of the Plan
that commences after the next Enrollment Date or in any similar plan
which may hereafter be adopted by the Company.
10. STOCK RESERVED FOR OPTIONS.
(a) The maximum number of shares of the Company's common stock
to be issued upon the exercise of options to be granted under the Plan
shall be One Hundred Thousand (100,000). Such shares may, at the
election of the Board of Directors, be either treasury shares, shares
authorized but not issued or shares acquired in the open market by the
Company. Shares subject to the unexercised portion of any lapsed or
expired option may again be subject to option under the Plan.
<PAGE>
(b) If the total number of shares of the Company common stock
for which options are to be granted for a given Phase as specified in
Paragraph 8 exceeds the number of shares then remaining available under
the Plan (after deduction of all shares for which options have been
exercised or are then outstanding) and if the Committee does not elect
to cancel such Phase pursuant to Paragraph 4, the Committee shall make
a pro rata allocation of the shares remaining available in as uniform
and equitable a manner as it shall consider practicable. In such event,
the options to be granted and the payroll deductions to be made
pursuant to the Plan which would otherwise be effected may, in the
discretion of the Committee, be reduced accordingly. The Committee
shall give written notice of such reduction to each Participant
affected.
(c) The Participant (or a joint tenant named pursuant to
Paragraph 10(d) hereof) shall have no rights as a shareholder with
respect to any shares subject to the Participant's option until the
date of the issuance of a stock certificate evidencing such shares. No
adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property), distributions or other
rights for which the record date is prior to the date such stock
certificate is actually issued, except as otherwise provided in
Paragraph 12 hereof.
(d) The shares of the Company common stock to be delivered to
a Participant pursuant to the exercise of an option under the Plan will
be registered in the name of the Participant or, if the Participant so
directs by written notice to the Committee prior to the Termination
Date of that Phase of the Plan, in the names of the Participant and one
other person the Participant may designate as his joint tenant with
rights of survivorship, to the extent permitted by law.
11. ACCOUNTING AND USE OF FUNDS. Payroll deductions for each
Participant shall be credited to an account established for him under the Plan.
Such account shall be solely for bookkeeping purposes and no separate fund or
trust shall be established hereunder and the Company shall not be obligated to
segregate such funds. All funds from payroll deductions received or held by the
Company under the Plan may be used, without limitation, for any corporate
purpose by the Company.
12. ADJUSTMENT PROVISION.
(a) Subject to any required action by the shareholders of the
Company, the number of shares covered by each outstanding option, and
the price per share thereof in each such option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of the Company common stock resulting from a subdivision
or consolidation of shares or the payment of a share dividend (but only
on the shares) or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company.
(b) In the event of a change in the shares of the Company as
presently constituted, which is limited to a change of all its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the shares within the meaning of this
Plan.
(c) To the extent that the foregoing adjustments relate to
shares or securities of the Company, such adjustments shall be made by
the Committee, and its determination in that respect shall be final,
binding and conclusive, provided that each option granted pursuant to
this Plan shall not be adjusted in a manner that causes the option to
fail to continue to qualify as an
<PAGE>
option issued pursuant to an "employee stock purchase plan" within the
meaning of Section 423 of the Code.
(d) Except as hereinbefore expressly provided in this
Paragraph 12, the optionee shall have no right by reason of any
subdivision or consolidation of shares of any class or the payment of
any stock dividend or any other increase or decrease in the number of
shares of any class or by reason of any dissolution, liquidation,
merger, or consolidation or spin-off of assets or stock of another
corporation, and any issue by the Company of shares of any class, or
securities convertible into shares of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to the option.
13. NON-TRANSFERABILITY OF OPTIONS.
(a) Options granted under any Phase of the Plan shall not be
transferable except under the laws of descent and distribution and
shall be exercisable only by the Participant during his lifetime and
after his death only by his beneficiary of the representative of his
estate as provided in Paragraph 9(b) hereof.
(b) Neither payroll deductions credited to a Participant's
account, nor any rights with regard to the exercise of an option or to
receive common stock under any Phase of the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way by the
Participant. Any such attempted assignment, transfer, pledge or other
disposition shall be null and void and without effect, except that the
Company may, at its option, treat such act as an election to withdraw
funds in accordance with Paragraph 9.
14. DESIGNATION OF BENEFICIARY. A Participant may file a written
designation of a beneficiary who is to receive any cash to the Participant's
credit without interest thereon under any Phase of the Plan in the event of such
Participant's death prior to exercise of his option pursuant to Paragraph 9(b)
hereof, or to exercise his option and become entitled to any stock and/or cash
upon such exercise in the event of the Participant's death prior to exercise of
the option pursuant to Paragraph 9(b) hereof. The beneficiary designation may be
changed by the Participant at any time upon receipt of a written notice by the
Company.
Upon the death of a Participant and upon receipt by the Company of
proof deemed adequate by it of the identity and existence at the Participant's
death of a beneficiary validly designated under the Plan, the Company shall in
the event of the Participant's death under the circumstances described in
Paragraph 9(b) hereof, allow such beneficiary to exercise the Participant's
option pursuant to Paragraph 9(b) if such beneficiary is living on the
Termination Date of the Phase and deliver to such beneficiary the appropriate
stock and/or cash after exercise of the option. In the event there is not
validly designated beneficiary under the Plan who is living at the time of the
Participant's death under the circumstances described in Paragraph 9(b) or in
the event the option lapses, the Company shall deliver the cash credited to the
account of the Participant without interest to the executor or administrator of
the estate of the Participant, or if no such executor or administrator has been
appointed to the knowledge of the Company, it may, in its discretion, deliver
such cash to the spouse (or, if no surviving spouse, to any one or more children
of the Participant), or if no spouse or child is known to the Company, then to
such relatives of the Participant known to the Company as would be entitled to
such amounts, under the laws of intestacy in the deceased Participant's domicile
as though named as the designated beneficiary hereunder. The Company will not be
responsible for or be required to give effect to the disposition of any cash or
stock or the exercise of any option in accordance with any will or other
testamentary
<PAGE>
disposition made by such Participant or in accordance with the provision of any
law concerning intestacy, or otherwise. No designated beneficiary shall, prior
to the death of a Participant by whom he has been designated, acquire any
interest in any stock or in any option or in the cash credited to the
Participant under any Phase of the Plan.
15. AMENDMENT AND TERMINATION. The Plan may be terminated at any time
by the Board of Directors provided that, except as permitted in Paragraph 4(c)
with respect to an acceleration of the Termination Date of any Phase, no such
termination will take effect with respect to any options then outstanding. Also,
the Board may, from time to time, amend the Plan as it may deem proper and in
the best interests of the Company or as may be necessary to comply with Section
423 of the Internal Revenue Code of 1986, as amended, or other applicable laws
or regulations; provided, however, that no such amendment shall, without prior
approval of the shareholders of the Company (1) increase the total number of
shares for which options may be granted under the Plan (except as provided in
Paragraph 12 herein), (2) permit aggregate payroll deductions in excess of ten
percent (10%) of a Participant's compensation as of the Commencement Date of a
Phase, or (3) impair any outstanding option.
16. NOTICES. All notices or other communications in connection with the
Plan or any Phase thereof shall be in the form specified by the Committee and
shall be deemed to have been duly given when received by the Participant or his
designated personal representative or beneficiary or by the Company or its
designated representative, as the case may be.
17. PARTICIPATION OF SUBSIDIARIES. The Employees of any Subsidiary of
the Company shall be entitled to participate in the Plan on the same basis as
Employees of the Company, unless the Board of Directors determines otherwise.
Effective as of the date of coverage of any Subsidiary, any references herein to
the "Company" shall be interpreted as referring to such Subsidiary as well as to
RESEARCH INCORPORATED.
In the event that any Subsidiary which is covered under the Plan ceases
to be a Subsidiary of RESEARCH INCORPORATED, the employees of such Subsidiary
shall be considered to have terminated their employment for purposes of
Paragraph 9 hereof as of the date such Subsidiary ceases to be such a
Subsidiary.
18. DEFINITIONS.
(a) "Subsidiary" shall include any corporation defined as a
subsidiary of the Company in Section 424(f) of the Internal Revenue
Code of 1986, as amended.
(b) "Employee" shall mean any employee, including an officer,
of the Company who as of the day immediately preceding the Commencement
Date of a Phase is customarily employed by the Company for more than
twenty (20) hours per week and more than five (5) months in a calendar
year.
(c) "Fair Market Value" shall mean, if the common stock of the
Company is registered, the Fair Market Value of the shares shall be the
closing price of the stock on the applicable date or the nearest prior
business day on which trading occurred on the NASDAQ National Market.
If the common stock is not registered, the Fair Market Value of shares
of common stock of the Company shall be determined by the Committee for
each valuation date in a manner acceptable under Section 423 of the
Internal Revenue Code of 1986.
<PAGE>
(d) "Pay" is, for a salaried employee, the regular pay for
employment for each employee as annualized for a twelve (12) month
period, including salary reduction contributions by the Participant
under any plan of the Employer pursuant to Code ss.ss. 401(k) or 125,
but exclusive of overtime, commissions, bonuses, disability payments,
shift differentials, incentives and other similar payments, determined
as of the Commencement Date of each Phase. Pay is, for an hourly
employee, all pay or wages for employment paid to the employee,
including salary reduction contributions by the Participant under any
plan of the Employer pursuant to Code ss.ss. 401(k) or 125, and
anticipated overtime, but excluding bonuses, incentives, special
remuneration, or other similar payments, determined from time to time.
19. MISCELLANEOUS.
(a) No Employment Rights. The Plan shall not, directly or
indirectly, create any right for the benefit of any Employee or class
of Employees to purchase any shares under the Plan, or create in any
Employee or class of Employees any right with respect to continuation
of employment by the Company, and it shall not be deemed to interfere
in any way with the Company's right to terminate, or otherwise modify,
an Employee's employment at any time.
(b) Effect of Plan. The provisions of the Plan shall, in
accordance with its terms, be binding upon, and inure to the benefit
of, all successors of each Employee participating in the Plan,
including, without limitation, such Employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and
any receiver, trustee in bankruptcy, or representative of creditors of
such Employee.
(c) Governing Law. The law of the State of Minnesota will
govern all matters relating to this Plan except to the extent it is
superseded by the laws of the United States.
(d) Registration and Qualification of Shares. The offering of
the shares hereunder shall be subject to the effecting by the Company
of any registration or qualification of the shares under any federal or
state law or the obtaining of the consent or approval of any
governmental regulatory body which the Company shall determine, in its
sole discretion, is necessary or desirable as a condition to or in
connection with, the offering or the issue or purchase of the shares
covered thereby. The Company shall make every reasonable effort to
effect such registration or qualification or to obtain such consent or
approval.
(e) Plan Preconditions. The Plan is expressly made subject to
(i) the approval by shareholders of the Company, and (ii) at its
election, the receipt by the Company from the Internal Revenue Service
of a determination letter or ruling, in scope and content satisfactory
to counsel, respecting the qualification of the Plan within the meaning
of Section 423 of the Code. If the Plan is not so approved by the
shareholders and if, at the election of the Company, the aforesaid
determination letter or ruling from the Internal Revenue Service is not
received on or before one year after this Plan's adoption by the Board
of Directors, this Plan shall not come into effect. In such case, the
accumulated payroll deductions credited to the account of each
Participant shall forthwith be repaid to him without interest.
Approved by Board of Directors: May 1, 1997
Approved by Stockholders:_______________
EXHIBIT 5.1
November 5, 1997
Research, Incorporated
6425 Flying Cloud Drive
Eden Prairie, MN 55344
RE: OPINION OF COUNSEL AS TO LEGALITY OF 100,000 SHARES OF COMMON
STOCK TO BE REGISTERED UNDER THE SECURITIES ACT OF 1933
Ladies and Gentlemen:
This opinion is furnished in connection with the registration under the
Securities Act of 1933 on Form S-8 of 100,000 shares of Common Stock, no par
value per share, of Research, Incorporated (the "Company") offered pursuant to
the Research, Incorporated Employee Stock Purchase Plan (the "Plan").
As general counsel for the Company, we advise you that it is our
opinion, based on our familiarity with the affairs of the Company and upon our
examination of pertinent documents, that the 100,000 shares of Common Stock to
be offered by the Company under the Plan will, when paid for and issued, be
validly issued and lawfully outstanding, fully paid and nonassessable shares of
Common Stock of the Company.
The undersigned hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to the Registration Statement
with respect to said shares of Common Stock under the Securities Act of 1933.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
/s/ Lindquist & Vennum P.L.L.P.
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 25, 1996,
included in Research, Incorporated's Form 10-K for the year ended September 30,
1996 and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Minneapolis, Minnesota
November 5, 1997
