As filed with the Securities and Exchange Commission on March 11, 1998.
Registration No. 333-_____________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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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)
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RESEARCH, INCORPORATED
1991 STOCK PLAN
(Full title of the Plan)
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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)
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CALCULATION OF REGISTRATION FEE
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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
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Common Stock, 100,000 shares(2) $5.125(1) $512,500(1) $152.00
no par value,
to be issued pursuant
to Research, Incorporated
1991 Stock Plan
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(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 March 9, 1998.
(2) 110,000 shares were initially registered on Form S-8 (File No.
33-45170) on January 21, 1992, 100,000 additional shares were
registered on February 14, 1994 (File No. 33-75256) and 100,000 shares
are being registered herewith.
<PAGE>
INCORPORATION OF CONTENTS OF REGISTRATION STATEMENT
BY REFERENCE
A Registration Statement on Form S-8 (File No. 33-45170) was filed with
the Securities and Exchange Commission ("SEC") on January 21, 1992 covering the
registration of 110,000 shares initially authorized for issuance under the
Company's 1991 Stock Plan (the "Plan"). A Registration Statement on Form S-8
(File No. 33-75256) was filed with the SEC on February 14, 1994 covering the
registration of an additional 100,000 shares. Pursuant to General Instruction E
of Form S-8 and Rule 429, this Registration Statement is being filed to register
an additional 100,000 shares authorized under the Plan. An amendment to the Plan
to increase the reserved and authorized number of shares under the Plan by
100,000 was authorized by the Company's Board of Directors on November 5, 1997
and such amendment was approved by the Company's shareholders on January 15,
1998. This Registration Statement should also be considered a post-effective
amendment to the prior Registration Statements. The contents of the prior
Registration Statements are incorporated herein by reference.
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, 1997.
(b) The Quarterly Report of the Company on Form 10-Q for the
quarter ended December 31, 1997.
(c) The Definitive Proxy Statement dated December 12, 1997 for the
Annual Meeting of Shareholders held on January 15, 1998.
(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.
<PAGE>
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 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
4.1 Research, Incorporated 1991 Stock Plan, as amended
5.1 Opinion of Lindquist & Vennum P.L.L.P
23.1 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP, independent public accountants
24.1 Power of Attorney (included on signature page hereof)
<PAGE>
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
(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,
<PAGE>
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 March 11, 1998.
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
March 11, 1998 in the capacities indicated.
Signature
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/s/ Claude C. Johnson
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Claude C. Johnson, President, Chief Executive
Officer (Principal Executive Officer) and Director
/s/ Richard L. Grose
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Richard L. Grose, Treasurer (Chief Financial
Officer)
/s/ Gerald E. Magnuson
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Gerald E. Magnuson, Secretary
and Director
/s/ Charles G. Schiefelbein
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Charles G. Schiefelbein, Director
<PAGE>
/s/ Edward L. Lundstrom
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Edward L. Lundstrom, Director
/s/ John G. Colwell, Jr.
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John G. Colwell, Jr., Director
EXHIBIT 4.1
RESEARCH, INCORPORATED
1991 STOCK PLAN, AS AMENDED
<PAGE>
SECTION CONTENTS PAGE
- ------- -------- ----
1. General Purpose of Plan; Definitions 1
2. Administration 3
3. Stock Subject to Plan 4
4. Eligibility 4
5. Stock Options 4
6. Restricted Stock 8
7. Transfer, Leave of Absence, etc. 9
8. Amendments and Termination 10
9. Unfunded Status of Plan 10
10. General Provisions 11
11. Effective Date of Plan 12
<PAGE>
RESEARCH, INCORPORATED
1991 STOCK PLAN
SECTION 1. General Purpose of Plan; Definitions.
The name of this plan is the Research, Incorporated 1991 Stock Plan
(the "Plan"). The purpose of the Plan is to enable Research, Incorporated (the
"Company") and its Subsidiaries to retain and attract executives and other key
employees and non-employee directors who contribute to the Company's success by
their ability, ingenuity and industry, and to enable such individuals to
participate in the long-term success and growth of the Company by giving them a
proprietary interest in the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Board" means the Board of Directors of the Company.
b. "Cause" means a felony conviction of a participant or the
failure of a participant to contest prosecution for a felony,
or a participant's willful misconduct or dishonesty, any of
which is directly and materially harmful to the business or
reputation of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended.
d. "Committee" means a Committee with the membership referred to
in Section 2 of the Plan or the Board.
e. "Company" means the Research, Incorporated, a corporation
organized under the laws of the State of Minnesota (or any
successor corporation).
f. "Disability" means permanent and total disability as
determined by the Committee.
g. "Disinterested Director" means a "non-employee director" as
defined in Rule 16b- 3(b)(3)(i) as promulgated by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, or any successor definitions adopted by
the Commission.
h. "Early Retirement" means retirement, with consent of the
Committee at the time of retirement, from active employment
with the Company and any Subsidiary or Parent Corporation of
the Company.
i. "Fair Market Value" means the value of the Stock on a given
date as determined by the Committee in accordance with the
applicable Treasury Department
<PAGE>
regulations under Section 422 of the Code with respect to
"incentive stock options."
j. "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
k. "Non-Employee Director" means any member of the Board who is
not an employee of the Company, any Parent Corporation or
Subsidiary.
l. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option, and is intended to be and is
designated as a "Non-Qualified Stock Option."
m. "Normal Retirement" means retirement from active employment
with the Company and any Subsidiary or Parent Corporation of
the Company on or after age 65.
n. "Parent Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the
Company if each of the corporations (other than the Company)
owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations
in the chain.
o. "Restricted Stock" means an award of shares of Stock that are
subject to restrictions under Section 6 below.
p. "Retirement" means Normal Retirement or Early Retirement.
q. "Stock" means the Common Stock, $.50 par value per share, of
the Company.
r. "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 below.
s. "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company
if each of the corporations (other than the last corporation
in the unbroken chain) owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one
of the other corporations in the chain.
<PAGE>
SECTION 2. Administration.
The Plan shall be administered by the Board of Directors or by a
Committee of not less than three Disinterested Directors, who shall be appointed
by the Board of Directors of the Company and who shall serve at the pleasure of
the Board.
The Committee shall have the power and authority to grant to eligible
employees, pursuant to the terms of the Plan: (i) Stock Options, or (ii)
Restricted Stock.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the Company
and its Subsidiaries to whom Stock Options and/or Restricted
Stock may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options or Restricted Stock, or a
combination of the foregoing, are to be granted hereunder;
(iii) to determine the number of shares to be covered by each such
award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder
(including, but not limited to, any restriction on any Stock
Option or other award and/or the shares of Stock relating
thereto); and
(v) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to
an award under this Plan shall be deferred either
automatically or at the election of the participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate its authority to officers of the Company for the purpose of selecting
employees who are not officers of the Company for purposes of (i) above.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and Plan
participants.
<PAGE>
SECTION 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 362,500. Such shares may consist, in whole
or in part, of authorized and unissued shares.
If any shares that have been optioned ceased to be subject to Options,
or if any shares subject to any Restricted Stock award granted hereunder are
forfeited or such award otherwise terminates without a payment being made to the
participant, such shares shall again be available for distribution in connection
with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding options granted under the Plan, and in the number of
shares subject to Restricted Stock granted under the Plan as may be determined
to be appropriate by the Committee, in its sole discretion, provided that the
number of shares subject to any award shall always be a whole number.
SECTION 4. Eligibility.
Officers, other key employees of the Company or its Subsidiaries,
Non-Employee Directors and consultants and other persons having a contractual
relationship with the Company or its Subsidiaries are eligible to be granted
Stock Options and Restricted Stock under the Plan. The optionees and
participants under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of shares covered by each
award.
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock
Options shall be granted under the Plan after November 6, 2001.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options. To the
extent that any option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or
<PAGE>
authority granted under the Plan be so exercised, so as to disqualify either the
Plan or any Incentive Stock Option under Section 422 of the Code. The preceding
sentence shall not preclude any modification or amendment to an outstanding
Incentive Stock Option, whether or not such modification or amendment results in
disqualification of such Option as an Incentive Stock Option, provided the
optionee consents in writing to the modification or amendment.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee at the time of grant and
may, except as provided in this paragraph, be less than the Fair Market Value of
the Stock on the date of the grant of the Option. In no event shall the option
price per share of Stock purchasable under an Incentive Stock Option be less
than 100% of the Fair Market Value of the Stock on the date of the grant of the
option. If an employee owns or is deemed to own (by reason of the attribution
rules applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Parent Corporation or
Subsidiary and an Incentive Stock Option is granted to such employee, the option
price shall be no less than 110% of the Fair Market Value of the Stock on the
date the option is granted.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is deemed to
own (by reason of the attribution rules of Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or any
Parent Corporation or Subsidiary and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.
(c) Exercisability. Stock Options shall be exercisable at such time or
times as determined by the Committee at or after grant; provided, however, that
no option shall be exercisable during the six (6) month period commencing on the
date of grant. If the Committee provides, in its discretion, that any option is
exercisable only in installments, the Committee may waive such installment
exercise provisions at any time. Notwithstanding the foregoing, unless the Stock
Option Agreement provides otherwise, any Stock Option granted under this Plan
shall be exercisable in full, without regard to any installment exercise
provisions, for a period specified by the Company, but not to exceed sixty (60)
days, prior to the occurrence of any of the following events: (i) dissolution or
liquidation of the Company other than in conjunction with a bankruptcy of the
Company or any similar occurrence, (ii) any merger, consolidation, acquisition,
separation, reorganization, or similar occurrence, where the Company will not be
the surviving entity or (iii) the transfer of substantially all of the assets of
the Company or the acquisition of beneficial ownership of more than 50% of any
class of equity security of the Company or its subsidiaries.
<PAGE>
(d) Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price, either by
certified or bank check, or by any other form of legal consideration deemed
sufficient by the Committee and consistent with the Plan's purpose and
applicable law, including promissory notes or a properly executed exercise
notice together with irrevocable instructions to a broker acceptable to the
Company to promptly deliver to the Company the amount of sale or loan proceeds
to pay the exercise price. Payment in full or in part may also be made in the
form of unrestricted Stock already owned by the optionee or, in the case of the
exercise of a Non-Qualified Stock Option, Restricted Stock (based, in each case,
on the Fair Market Value of the Stock on the date the option is exercised, as
determined by the Committee), provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares may be authorized only at the time the option is granted, and provided
further that in the event payment is made in the form of shares of Restricted
Stock, the optionee will receive a portion of the option shares in the form of,
and in an amount equal to, the Restricted Stock tendered as payment by the
optionee. The Committee, in its discretion, may permit an optionee to elect to
pay all or part of the option exercise price by having the Company withhold from
the shares of Stock that would otherwise be issued upon exercise that number of
shares of Stock having a Fair Market Value equal to the aggregate option
exercise price for the shares with respect to which such election is made. No
shares of Stock shall be issued until full payment therefor has been made. An
optionee shall generally have the rights to dividends and other rights of a
shareholder with respect to shares subject to the option when the optionee has
given written notice of exercise, has paid in full for such shares, and, if
requested, has given the representation described in paragraph (a) of Section
10.
(e) Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(f) Termination by Death. If an optionee's employment by the Company
and any Subsidiary or Parent Corporation terminates by reason of death, the
Stock Option may thereafter be immediately exercised, to the extent then
exercisable (or on such accelerated basis as the Committee shall determine at or
after grant), by the legal representative of the estate or by the legatee of the
optionee under the will of the optionee, for a period of three years (or such
shorter period as the Committee shall specify at grant) from the date of such
death or until the expiration of the stated term of the option, whichever period
is shorter.
(g) Termination by Reason of Disability. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Disability
(or on such accelerated basis as the Committee shall determine at or after
grant), but may not be exercised after three years (or such shorter period as
the Committee shall specify at grant) from the date of such termination of
employment or the
<PAGE>
expiration of the stated term of the option, whichever period is the shorter. In
the event of termination of employment by reason of Disability, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, the option will thereafter be
treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised
to the extent it was exercisable at the time of such Retirement, but may not be
exercised after three years (or such shorter period as Committee shall specify
at grant) from the date of such termination of employment or the expiration of
the stated term of the option, whichever period is the shorter. In the event of
termination of employment by reason of Retirement, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, the option will thereafter be treated as a
Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee, if
an optionee's employment by the Company and any Subsidiary or Parent Corporation
terminates for any reason other than death, Disability or Retirement, the Stock
Option shall thereupon terminate, except that the option may be exercised to the
extent it was exercisable at such termination for the lesser of three months or
the balance of the option's term if the optionee is involuntarily terminated
without Cause by the Company and any Subsidiary or Parent Corporation.
(j) Annual Limit on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Option is granted) of the Common Stock with
respect to which an Incentive Stock Option under this Plan or any other plan of
the Company and any Subsidiary or Parent Corporation is exercisable for the
first time by an optionee during any calendar year shall not exceed $100,000.
(k) Non-Employee Directors. Each Non-Employee Director who on and after
the date this Plan is approved by shareholders of the Company (i) is elected or
reelected as a director of the Company at any annual meeting of holders of the
Stock of the Company or (ii) is elected as a Director of the Company at any
special meeting of holders of Stock of the Company, shall as of the date of such
election, reelection, or annual or special meeting automatically be granted an
Option to purchase 500 shares of Stock at an option price per share equal to
100% of the Fair Market Value of a share of Stock on such date. In the case of
an annual meeting, the action of the holders of Stock of the Company in electing
or re-electing a Non-Employee Director who qualifies for -an Option according to
this paragraph (k) shall constitute the granting of the Option to such director;
and the date when the holders shall take such action shall be the date of grant
of the Option. All such Options shall be designated as Non-Qualified Options and
shall be subject to the same terms and provisions as are then in effect with
respect to granting of Non-Qualified Options to officers and key employees of
the Company, except that (i) the term of each such Option shall be equal to five
(5) years, subject to earlier termination in all events one (1) year after
termination of service as a director and (ii) the Option shall become
exercisable as to all or any
<PAGE>
part of the shares subject to the Option beginning the date the Option is
granted. Subject to the foregoing, all provisions of this Plan not inconsistent
with the foregoing shall apply to Options granted to Non-Employee Directors.
SECTION 6. Restricted Stock.
(a) Administration. Shares of Restricted Stock may be issued either
alone or in addition to other awards granted under the Plan. The Committee shall
determine the officers and key employees of the Company and Subsidiaries to
whom, and the time or times at which, grants of Restricted Stock will be made,
the number of shares to be awarded, the time or times within which such awards
may be subject to forfeiture, and all other conditions of the awards. The
provisions of Restricted Stock awards need not be the same with respect to each
recipient.
(b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.
(i) Each participant shall be issued a stock certificate in
respect of shares of Restricted Stock awarded under the Plan. Such
certificate shall be registered in the name of the participant, and
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such award, substantially in the
following form:
"The transferability of this certificate and the
shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of
the Research, Incorporated 1991 Stock Plan and an
Agreement entered into between the registered owner
and Research, Incorporated. Copies of such Plan and
Agreement are on file in the offices of Research,
Incorporated, P.O. Box 24064, Minneapolis, Minnesota
55424."
(ii) The Committee may require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock award, the participant shall have delivered a stock
power, endorsed in blank, relating to the Stock Covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the
date of such award (the "Restriction Period"), the participant shall
not be permitted to sell, transfer, pledge or assign shares of
<PAGE>
Restricted Stock awarded under the Plan. In no event shall the
Restriction Period be less than one (1) year. Within these limits, the
Committee may provide for the lapse of such restrictions in
installments where deemed appropriate.
(ii) Except as provided in paragraph (c)(i) of this Section 6,
the participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a shareholder of the Company, including the
right to vote the shares and the right to receive any cash dividends.
The Committee, in its sole discretion, may permit or require the
payment of cash dividends to be deferred and, if the Committee so
determines, reinvested in additional shares of Restricted Stock (to the
extent shares are available under Section 3 and subject to paragraph
(f) of Section 10). Certificates for shares of unrestricted Stock shall
be delivered to the grantee promptly after, and only after, the period
of forfeiture shall have expired without forfeiture in respect of such
shares of Restricted Stock.
(iii) Subject to the provisions of the award agreement and
paragraph (c)(iv) of this Section 6, upon termination of employment for
any reason during the Restriction Period, all shares still subject to
restriction shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other than for Cause),
including death, Disability or Retirement, or in the event of an
unforeseeable emergency of a participant still in service, the
Committee may, in its sole discretion, when it finds that a waiver
would be in the best interest of the Company, waive in whole or in part
any or all remaining restrictions with respect to such participant's
shares of Restricted Stock.
(v) Notwithstanding the foregoing, all restrictions with
respect to any participant's shares of Restricted Stock shall lapse, on
the date determined by the Committee, prior to, but in no event more
than sixty (60) days prior to, the occurrence of any of the following
events: (i) dissolution or liquidation of the Company, other than in
conjunction with a bankruptcy of the Company or any similar occurrence,
(ii) any merger, consolidation, acquisition, separation,
reorganization, or similar occurrence, where the Company will not be
the surviving entity or (iii) the transfer of substantially all of the
assets of the Company or the acquisition of beneficial ownership of
more than 50% of any class of equity security of the Company or its
subsidiaries.
SECTION 7. Transfer, Leave of Absence, etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer of an employee from the Company to a Parent Corporation
or Subsidiary, or from a Parent Corporation or Subsidiary to the Company, or
from one Subsidiary to another;
<PAGE>
(b) a leave of absence, approved in writing by the Committee, for
military service or sickness, or for any other purpose approved by the Company
if the period of such leave does not exceed ninety (90) days (or such longer
period as the Committee may approve, in its sole discretion); and
(c) a leave of absence in excess of ninety (90) days, approved in
writing by the Committee, but only if the employee's right to reemployment is
guaranteed either by a statute or by contract, and provided that, in the case of
any leave of absence, the employee returns to work within 30 days after the end
of such leave.
SECTION 8. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option, Restricted Stock or other
Stock-based award theretofore granted, without the optionee's or participant's
consent, or (ii) which without the approval of the stockholders of the Company
would cause the Plan to no longer comply with Rule 16b-3 under the Securities
Exchange Act of 1934, Section 422 of the Code or any other regulatory
requirements which may then be applicable to the Company.
The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively, but, subject to Section 3 above, no
such amendment shall impair the rights of any holder without his consent. The
Committee may also substitute new Stock Options for previously granted options,
including previously granted options having higher option prices.
SECTION 9. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
SECTION 10. General Provisions.
(a) The Committee may require each person purchasing shares pursuant to
a Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
<PAGE>
All certificates for shares of Stock delivered under the Plan pursuant
to any Restricted Stock or other Stock-based award shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable
under the rates, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Stock is then listed, and
any applicable Federal or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(b) Subject to paragraph (d) below, recipients of awards under the Plan
(other than Stock Options) are not required to make any payment or provide
consideration other than the rendering of services.
(c) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any Subsidiary
any right to continued employment with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its employees at any time.
(d) Each participant shall, no later than the date as of which any part
of the value of an award first becomes includable as compensation in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company and Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the participant. With respect to
any award under the Plan, a participant may elect by written notice to the
Company to satisfy part or all of the withholding tax requirements associated
with the award by (i) authorizing the Company to retain from the number of
shares of Stock that would otherwise be deliverable to the participant, or (ii)
delivering to the Company from shares of Stock already owned by the participant,
that number of shares having an aggregate Fair Market Value equal to part or all
of the tax payable by the participant under this Section 10(d). Any such
election shall be in accordance with, and subject to, applicable tax and
securities laws, regulations and rulings.
(e) At the time of grant, the Committee may provide in connection with
any grant made under this Plan that the shares of Stock received as a result of
such grant shall be subject to a repurchase right in favor of the Company,
pursuant to which the participant shall be required to offer to the Company upon
termination of employment for any reason any shares that the participant
acquired under the Plan, with the price being the then Fair Market Value of the
Stock or, in the case of a termination for Cause, an amount equal to the cash
consideration paid for the Stock, subject to such other terms and conditions as
the Committee may specify at the time of grant. The Committee may, at the time
of the grant of an award under the Plan, provide the
<PAGE>
Company with the right to repurchase, or require the forfeiture of, shares of
Stock acquired pursuant to the Plan by any participant who, at any time within
two years after termination of employment with the Company, directly or
indirectly competes with, or is employed by a competitor of, the Company.
(f) The reinvestment of dividends in additional Restricted Stock (or in
other types of Plan awards) at the time of any dividend payment shall only be
permissible if the Committee (or the Company's chief financial officer)
certifies in writing that under Section 3 sufficient shares are available for
such reinvestment (taking into account then outstanding Stock Options and other
Plan awards).
SECTION 11. Effective Date of Plan.
The Plan shall be effective on the date it is approved by a vote of the
holders of a majority of the Stock present and entitled to vote at a meeting of
the Company's shareholders.
EXHIBIT 5.1
March 11, 1998
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 1991 Stock 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
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 27, 1997
included in Research, Incorporated's Form 10-K for the year ended September 30,
1997 and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Minneapolis, Minnesota
March 11, 1998
