<PAGE> 1
As filed with the Securities and Exchange Commission on May 29, 1997
Registration No. 333-___________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
COMMERCIAL METALS COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE 75-0725338
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7800 STEMMONS FREEWAY
DALLAS, TEXAS 75247
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(Address of Principal Executive Offices) (Zip Code)
COMMERCIAL METALS COMPANY 1996 LONG-TERM INCENTIVE PLAN
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(Full title of the Plan)
DAVID M. SUDBURY
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
7800 STEMMONS FREEWAY
DALLAS, TEXAS 75247
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(Name and address of agent for service)
(214) 689-4300
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(Telephone number, including area code, of agent for service)
With a copy to:
WILLIAM R. HAYS, III
ROBERT R. KIBBY
Haynes and Boone, LLP
901 Main Street
Suite 3100
Dallas, Texas 75202-3789
(214) 651-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount Offering Price Aggregate Registration
To Be Registered To Be Registered Per Share Offering Price Fee
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<S> <C> <C> <C> <C>
Common Stock
$5.00 par value . . . . 1,000,000 shares(1) $ 28.267(1) $ 28,266,765(1) $ 8,566(1)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) The 1,000,000 shares of Common Stock registered hereby represent (i) the
maximum number of shares (390,251) which could be purchased upon the
exercise of all stock options now outstanding under the Commercial
Metals Company 1996 Long-Term Incentive Plan (the "Plan") and (ii) the
maximum number of shares (609,749) that may hereafter be issued pursuant
to options granted or awards of Common Stock made after the date of this
Registration Statement under the Plan (including shares expected to be
added in subsequent years pursuant to the terms of such Plan). For
purposes of computing the aggregate offering price and the registration
fee, such computation has been made in accordance with paragraphs (c)
and (h) of Rule 457 on the basis of (i) the prices at which options
previously granted under the Plan may be exercised and (ii) the average
high and low sale prices for the Company's Common Stock on May 21, 1997,
as reported in New York Stock Exchange Composite transactions with
respect to Common stock that could be issued under the Plan in the
future pursuant to options and other awards that have not been granted
or made under the Plan as of the date of this Registration Statement.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Commercial Metals Company (the "Company") hereby incorporates by
reference the following documents filed with the Securities and Exchange
Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K for its fiscal year
ended August 31, 1996;
(b) The Company's Quarterly Report on Form 10-Q for its fiscal
quarter ended November 30, 1996;
(c) The Company's Quarterly Report on Form 10-Q for its fiscal
quarter ended February 28, 1997; and
(d) The description of Common Stock included in the Company's
Registration Statement on Form 8-A as filed with the Commission
on June 18, 1982 and amended on July 17, 1995.
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, as amended,
prior to the filing of a post-effective amendment that indicates that all
securities offered hereunder have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date such documents are filed.
Item 5. Interests of Named Experts and Counsel.
Legal Matters
The validity of the shares of Common Stock being sold in this offering
will be passed upon for the Company by David M. Sudbury, general counsel of the
Company.
Experts
The financial statements and the related financial statement schedules
incorporated in this registration statement by reference from the Company's
Annual Report on Form 10-K for the year ended August 31, 1996 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports,
which are incorporated herein by reference, and have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
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Item 6. Indemnification of Directors and Officers
The Company is a Delaware corporation. Section 145 of the Delaware
General Corporation Law generally provides that a corporation is empowered to
indemnify any person who is made a party to any threatened, pending or
completed action, suit or proceeding by reason of the fact that he is or was a
director, officer, employee or agent of the Company or is or was serving, at
the request of the Company, in any of such capacities of another corporation or
other enterprise, if such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 145 describes in detail the right of the Company to indemnify any such
person. The Certificate of Incorporation of the Company and indemnification
agreements between the Company and each of its officers and directors provide
generally for indemnification of all such directors, officers and agents to the
fullest extent permitted under law. The Company's Certificate of Incorporation
eliminates the liability of directors to the fullest extent permitted under
law. The Company's directors and officers currently are covered by directors'
and officers' liability insurance.
For the undertaking with respect to indemnification, see Item 9 herein.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<S> <C>
4.1 - Restated Certificate of Incorporation of Commercial Metals
Company, as amended, filed as Exhibit (3)(i) to the
Company's Form 10-K for the fiscal year ended August 31,
1993 and incorporated by reference herein.
4.2 - Bylaws of Commercial Metals Company, as amended, filed as
Exhibit (3)(ii) to the Company's Form 10-K for the fiscal
year ended August 31, 1993 and incorporated by reference
herein.
*4.3 - Commercial Metals Company 1996 Long-Term Incentive Plan.
*5.1 - Opinion of David M. Sudbury with respect to validity of
issuance of securities.
*23.1 - Consent of Deloitte & Touche LLP.
*23.2 - Consent of David M. Sudbury (included in Exhibit 5.1).
</TABLE>
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<TABLE>
<S> <C>
*24.1 - Power of Attorney (included on the signature page of the
Registration Statement)
</TABLE>
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* Filed herewith.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if 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 this
registration statement.
(2) that, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bonafide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report
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pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial
bonafide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
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SIGNATURES AND POWER OF ATTORNEY
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 Dallas, State of Texas, on the 21st day of May,
1997.
COMMERCIAL METALS COMPANY
By: /s/ Stanley A. Rabin
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Stanley A. Rabin
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Lawrence A. Engels and David M. Sudbury,
his or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign, execute and file with the
Securities and Exchange Commission and any state securities regulatory board or
commission any documents relating to the proposed issuance and registration of
the securities offered pursuant to this Registration Statement on Form S-8
under the Securities Act of 1933, including any amendment or amendments
relating thereto (and any additional Registration Statement related hereto
permitted by Rule 462(b) promulgated under the Securities Act of 1933,
including any amendment or amendments relating thereto), with all exhibits and
any and all documents required to be filed with respect thereto with any
regulatory authority, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as he or she might or
could do if personally present, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed by the following persons on
behalf of the Registrant in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ Albert A. Eisenstat Director May 21, 1997
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Albert A. Eisenstat
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ Moses Feldman Director May 21, 1997
- ----------------------------
Moses Feldman
/s/ Laurence E. Hirsch Director May 21, 1997
- ----------------------------
Laurence E. Hirsch
/s/ A. Leo Howell Vice President May 21, 1997
- ---------------------------- and Director
A. Leo Howell
/s/ Walter F. Kammann Director May 21, 1997
- ----------------------------
Walter F. Kammann
/s/ Ralph E. Loewenberg Director May 21, 1997
- ----------------------------
Ralph E. Loewenberg
/s/ Dorothy G. Owen Director May 21, 1997
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Dorothy G. Owen
/s/ Charles B. Peterson Director May 21, 1997
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Charles B. Peterson
/s/ Stanley A. Rabin President, Chief Executive May 21, 1997
- ---------------------------- Officer and Director
Stanley A. Rabin
/s/ Marvin Selig President - Steel Group May 21, 1997
- ---------------------------- and Director
Marvin Selig
/s/ Lawrence A. Engels Vice President and May 21, 1997
- ---------------------------- Chief Financial Officer
Lawrence A. Engels (Principal Financial Officer)
/s/ William B. Larson Controller (Principal May 21, 1997
- ---------------------------- Accounting Officer)
William B. Larson
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<S> <C>
4.1 - Restated Certificate of Incorporation of Commercial Metals
Company, as amended, filed as Exhibit (3)(i) to the
Company's Form 10-K for the fiscal year ended August 31,
1993 and incorporated by reference herein.
4.2 - Bylaws of Commercial Metals Company, as amended, filed as
Exhibit (3)(ii) to the Company's Form 10-K for the fiscal
year ended August 31, 1993 and incorporated by reference
herein.
*4.3 - Commercial Metals Company 1996 Long-Term Incentive Plan.
*5.1 - Opinion of David M. Sudbury with respect to validity of
issuance of securities.
*23.1 - Consent of Deloitte & Touche LLP.
*23.2 - Consent of David M. Sudbury (included in Exhibit 5.1).
*24.1 - Power of Attorney (included on the signature page of the
Registration Statement).
</TABLE>
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* Filed herewith.
<PAGE> 1
EXHIBIT 4.3
COMMERCIAL METALS COMPANY
1996 LONG-TERM INCENTIVE PLAN
The Commercial Metals Company 1996 Long-Term Incentive Plan (hereinafter
called the "Plan") was adopted by the Board of Directors of Commercial Metals
Company, a Delaware corporation (hereinafter called the "Company"), effective
as of December 9, 1996, and was approved by the Company's stockholders on
January 23, 1997.
ARTICLE 1
PURPOSE
The purpose of the Plan is to attract and retain the services of key
management employees of the Company and its Subsidiaries and to provide such
persons with a proprietary interest in the Company through the granting of
incentive stock options, non-qualified stock options, stock appreciation
rights, or restricted stock, whether granted singly, or in combination, or in
tandem, that will
(a) increase the interest of such persons in the Company's
welfare;
(b) furnish an incentive to such persons to continue their
services for the Company; and
(c) provide a means through which the Company may attract able
persons as employees.
With respect to Reporting Participants, the Plan and all transactions
under the Plan are intended to comply with all applicable conditions of Rule
16b-3 promulgated under the Securities Exchange Act of 1934 (the "1934 Act").
To the extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void ab initio, to the extent permitted by
law and deemed advisable by the Committee.
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ARTICLE 2
DEFINITIONS
For the purpose of the Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:
2.1 "Award" means the grant of any Incentive Stock Option, Non-
qualified Stock Option, Restricted Stock or SAR whether granted singly, in
combination or in tandem (each individually referred to herein as an
"Incentive").
2.2 "Award Agreement" means a written agreement between a Participant
and the Company which sets out the terms of the grant of an Award.
2.3 "Award Period" means the period during which one or more
Incentives granted under an Award may be exercised.
2.4 "Board" means the board of directors of the Company.
2.5 "Change of Control" means any of the following: (i) any
consolidation, merger or share exchange of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or other
property, other than a consolidation, merger or share exchange of the Company
in which the holders of the Company's Common Stock immediately prior to such
transaction have the same proportionate ownership of Common Stock of the
surviving corporation immediately after such transaction; (ii) any sale, lease,
exchange or other transfer (excluding transfer by way of pledge or
hypothecation) in one transaction or a series of related transactions, of all
or substantially all of the assets of the Company; (iii) the stockholders of
the Company approve any plan or proposal for the liquidation or dissolution of
the Company; (iv) the cessation of control (by virtue of their not constituting
a majority of directors) of the Board by the individuals (the "Continuing
Directors") who (x) at the date of this Plan were directors or (y) become
directors after the date of this Plan and whose election or nomination for
election by the Company's stockholders, was approved by a vote of at least two-
thirds of the directors then in office who were directors at the date of this
Plan or whose election or nomination for election was previously so approved;
(v) the acquisition of beneficial ownership (within the meaning of Rule 13d-3
under the 1934 Act) of an aggregate of 20% of the voting power of the Company's
outstanding voting securities by any person or group (as such term is used in
Rule 13d-5 under the 1934 Act) who beneficially owned less than 15% of the
voting power of the Company's outstanding voting securities on the date of this
Plan, or the acquisition of beneficial ownership of an additional 5% of the
voting power of the Company's outstanding voting securities by any person or
group who beneficially owned at least 15% of the voting power of the Company's
outstanding voting securities on the date of this Plan, provided, however, that
notwithstanding the foregoing, an acquisition shall not constitute a Change of
Control hereunder if the acquiror is (x) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company and acting in such
capacity, (y) a Subsidiary of the Company or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions
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as their ownership of voting securities of the Company or (z) any other person
whose acquisition of shares of voting securities is approved in advance by a
majority of the Continuing Directors; or (vi) in a Title 11 bankruptcy
proceeding, the appointment of a trustee or the conversion of a case involving
the Company to a case under Chapter 7.
2.6 "Code" means the Internal Revenue Code of 1986, as amended.
2.7 "Committee" means the committee appointed or designated by the
Board to administer the Plan in accordance with Article 3 of this Plan.
2.8 "Common Stock" means the common stock, par value $5.00 per share,
which the Company is currently authorized to issue or may in the future be
authorized to issue.
2.9 "Company" means Commercial Metals Company, a Delaware
corporation, and any successor entity.
2.10 "Date of Grant" means the effective date on which an Award is
made to a Participant as set forth in the applicable Award Agreement; provided,
however, that solely for purposes of Section 16 of the 1934 Act and the rules
and regulations promulgated thereunder, the Date of Grant of an Award shall be
the date of stockholder approval of the Plan if such date is later than the
effective date of such Award as set forth in the Award Agreement.
2.11 "Employee" means common law employee (as defined in accordance
with the Regulations and Revenue Rulings then applicable under Section 3401(c)
of the Code) of the Company or any Subsidiary of the Company.
2.12 "Fair Market Value" of a share of Common Stock is the mean of the
highest and lowest prices per share on the New York Stock Exchange Consolidated
Tape, or such reporting service as the Committee may select, on the appropriate
date, or in the absence of reported sales on such day, the most recent previous
day for which sales were reported.
2.13 "Incentive Stock Option" or "ISO" means an incentive stock option
within the meaning of Section 422 of the Code, granted pursuant to this Plan.
2.14 "Non-employee Director" means a member of the Board who is not an
Employee and who satisfies the requirements of Rule 16b-3(b)(3) promulgated
under the 1934 Act or any successor provision.
2.15 "Non-qualified Stock Option" or "NQSO" means a non-qualified
stock option, granted pursuant to this Plan.
2.16 "Option Price" means the price which must be paid by a
Participant upon exercise of a Stock Option to purchase a share of Common
Stock.
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2.17 "Participant" shall mean an Employee of the Company or a
Subsidiary to whom an Award is granted under this Plan.
2.18 "Plan" means this Commercial Metals Company 1996 Long-Term
Incentive Plan, as amended from time to time.
2.19 "Reporting Participant" means a Participant who is subject to the
reporting requirements of Section 16 of the 1934 Act.
2.20 "Restricted Stock" means shares of Common Stock issued or
transferred to a Participant pursuant to Section 6.4 of this Plan which are
subject to restrictions or limitations set forth in this Plan and in the
related Award Agreement.
2.21 "Retirement" means any Termination of Service solely due to
retirement upon attainment of age 62, or permitted early retirement as
determined by the Committee.
2.22 "SAR" means the right to receive a payment, in cash and/or Common
Stock, equal to the excess of the Fair Market Value of a specified number of
shares of Common Stock on the date the SAR is exercised over the SAR Price for
such shares.
2.23 "SAR Price" means the Fair Market Value of each share of Common
Stock covered by an SAR, determined on the Date of Grant of the SAR.
2.24 "Stock Option" means a Non-qualified Stock Option or an Incentive
Stock Option.
2.25 "Subsidiary" means (i) any corporation 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 a majority of
the total combined voting power of all classes of stock in one of the other
corporations in the chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the general
partnership interest and a majority of the limited partnership interests
entitled to vote on the removal and replacement of the general partner, and
(iii) any partnership or limited liability company, if the partners or members
thereof are composed only of the Company, any corporation listed in item (i)
above or any limited partnership listed in item (ii) above. "Subsidiaries"
means more than one of any such corporations, limited partnerships,
partnerships or limited liability companies.
2.26 "Termination of Service" occurs when a Participant who is an
Employee of the Company or any Subsidiary shall cease to serve as an Employee
of the Company and its Subsidiaries, for any reason.
2.27 "Total and Permanent Disability" means a Participant is qualified
for long-term disability benefits under the Company's disability plan or
insurance policy; or, if no such plan or policy is then in existence, that the
Participant, because of ill health, physical or mental disability or any other
reason beyond his or her control, is unable to perform his or her duties
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of employment for a period of six (6) continuous months, as determined in good
faith by the Committee; provided that, with respect to any Incentive Stock
Option, Total and Permanent Disability shall have the meaning given it under
the rules governing Incentive Stock Options under the Code.
ARTICLE 3
ADMINISTRATION
The Plan shall be administered by a committee appointed by the Board
(the "Committee"). The Committee shall consist of not fewer than two persons.
Any member of the Committee may be removed at any time, with or without cause,
by resolution of the Board. Any vacancy occurring in the membership of the
Committee may be filled by appointment by the Board.
Membership on the Committee shall be limited to those members of the
Board who are Non-employee Directors and who are "outside directors" under
Section 162(m) of the Code. The Committee shall select one of its members to
act as its Chairman. A majority of the Committee shall constitute a quorum, and
the act of a majority of the members of the Committee present at a meeting at
which a quorum is present shall be the act of the Committee.
The Committee shall determine and designate from time to time the
eligible persons to whom Awards will be granted and shall set forth in each
related Award Agreement the Award Period, the Date of Grant, and such other
terms, provisions, limitations, and performance requirements, as are approved
by the Committee, but not inconsistent with the Plan. The Committee shall
determine whether an Award shall include one type of Incentive, two or more
Incentives granted in combination, or two or more Incentives granted in tandem
(that is, a joint grant where exercise of one Incentive results in cancellation
of all or a portion of the other Incentive).
The Committee, in its discretion, shall (i) interpret the Plan, (ii)
prescribe, amend, and rescind any rules and regulations necessary or
appropriate for the administration of the Plan, and (iii) make such other
determinations and take such other action as it deems necessary or advisable in
the administration of the Plan. Any interpretation, determination, or other
action made or taken by the Committee shall be final, binding, and conclusive
on all interested parties.
With respect to restrictions in the Plan that are based on the
requirements of Rule 16b-3 promulgated under the 1934 Act, Section 422 of the
Code, Section 162(m) of the Code, the rules of any exchange or inter-dealer
quotation system upon which the Company's securities are listed or quoted, or
any other applicable law, rule or restriction (collectively, "applicable law"),
to the extent that any such restrictions are no longer required by applicable
law, the Committee shall have the sole discretion and authority to grant Awards
that are not subject to such mandated restrictions and/or to waive any such
mandated restrictions with respect to outstanding Awards.
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ARTICLE 4
ELIGIBILITY
Any Employee (including an Employee who is also a director or an
officer) whose judgment, initiative, and efforts contributed or may be expected
to contribute to the successful performance of the Company is eligible to
participate in the Plan; provided that only Employees shall be eligible to
receive Incentive Stock Options. The Committee, upon its own action, may grant,
but shall not be required to grant, an Award to any Employee of the Company or
any Subsidiary. Awards may be granted by the Committee at any time and from
time to time to new Participants, or to then Participants, or to a greater or
lesser number of Participants, and may include or exclude previous
Participants, as the Committee shall determine. Except as required by this
Plan, Awards granted at different times need not contain similar provisions.
The Committee's determinations under the Plan (including without limitation
determinations of which Employees, if any, are to receive Awards, the form,
amount and timing of such Awards, the terms and provisions of such Awards and
the agreements evidencing same) need not be uniform and may be made by it
selectively among Employees who receive, or are eligible to receive, Awards
under the Plan.
ARTICLE 5
SHARES SUBJECT TO PLAN
Subject to adjustment as provided in Articles 13 and 14, the maximum
number of shares of Common Stock that may be delivered pursuant to Awards
granted under the Plan is (a) Seven Hundred Fifty Thousand (750,000) shares;
plus (b) shares of Common Stock previously subject to Awards which are
forfeited, terminated, settled in cash in lieu of Common Stock, or exchanged
for Awards that do not involve Common Stock, or expired unexercised; plus (c)
without duplication for shares counted under the immediately preceding clause,
a number of shares of Common Stock equal to the number of shares repurchased by
the Company in the open market or otherwise and having an aggregate repurchase
price no greater than the amount of cash proceeds received by the Company from
the sale of shares of Common Stock under the Plan; plus (d) any shares of
Common Stock surrendered to the Company in payment of the exercise price of
options issued under the Plan.
Shares to be issued may be made available from authorized but unissued
Common Stock, Common Stock held by the Company in its treasury, or Common Stock
purchased by the Company on the open market or otherwise. During the term of
this Plan, the Company will at all times reserve and keep available the number
of shares of Common Stock that shall be sufficient to satisfy the requirements
of this Plan.
ARTICLE 6
GRANT OF AWARDS
6.1 IN GENERAL. The grant of an Award shall be authorized by the
Committee and shall be evidenced by an Award Agreement setting forth the
Incentive or Incentives being granted, the total number of shares of Common
Stock subject to the Incentive(s), the Option Price
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(if applicable), the Award Period, the Date of Grant, and such other terms,
provisions, limitations, and performance objectives, as are approved by the
Committee, but not inconsistent with the Plan. The Company shall execute an
Award Agreement with a Participant after the Committee approves the issuance of
an Award. Any Award granted pursuant to this Plan must be granted within ten
(10) years of the date of adoption of this Plan. The Plan shall be submitted to
the Company's stockholders for approval; however, the Committee may grant
Awards under the Plan prior to the time of stockholder approval. Any such Award
granted prior to such stockholder approval shall be made subject to such
stockholder approval. The grant of an Award to a Participant shall not be
deemed either to entitle the Participant to, or to disqualify the Participant
from, receipt of any other Award under the Plan.
If the Committee establishes a purchase price for an Award, the
Participant must accept such Award within a period of 30 days (or such shorter
period as the Committee may specify) after the Date of Grant by executing the
applicable Award Agreement and paying such purchase price.
6.2 MAXIMUM ISO GRANTS. The Committee may not grant Incentive Stock
Options under the Plan to any Employee which would permit the aggregate Fair
Market Value (determined on the Date of Grant) of the Common Stock with respect
to which Incentive Stock Options (under this and any other plan of the Company
and its Subsidiaries) are exercisable for the first time by such Employee
during any calendar year to exceed $100,000. To the extent any Stock Option
granted under this Plan which is designated as an Incentive Stock Option
exceeds this limit or otherwise fails to qualify as an Incentive Stock Option,
such Stock Option shall be a Non-qualified Stock Option.
6.3 MAXIMUM INDIVIDUAL GRANTS. No Participant may receive during any
fiscal year of the Company Awards covering an aggregate of more than One
Hundred Thousand (100,000) shares of Common Stock.
6.4 RESTRICTED STOCK. If Restricted Stock is granted to a Participant
under an Award, the Committee shall set forth in the related Award Agreement:
(i) the number of shares of Common Stock awarded, (ii) the price, if any, to be
paid by the Participant for such Restricted Stock, (iii) the time or times
within which such Award may be subject to forfeiture, (iv) specified
performance goals of the Company, a Subsidiary, any division thereof or any
group of Employees of the Company, or other criteria, which the Committee
determines must be met in order to remove any restrictions (including vesting)
on such Award, and (v) all other terms, limitations, restrictions, and
conditions of the Restricted Stock, which shall be consistent with this Plan.
The provisions of Restricted Stock need not be the same with respect to each
Participant.
(a) LEGEND ON SHARES. Each Participant who is awarded Restricted
Stock shall be issued a stock certificate or certificates in respect of such
shares of Common Stock. Such certificate(s) 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 Restricted Stock, substantially
as provided in Section 17.9 of the Plan. The Committee may require that the
stock certificates evidencing shares of Restricted Stock be held in custody by
the Company until
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the restrictions thereon shall have lapsed, and that the Participant deliver to
the Committee a stock power or stock powers, endorsed in blank, relating to the
shares of Restricted Stock.
(b) RESTRICTIONS AND CONDITIONS. Shares of Restricted Stock shall be
subject to the following restrictions and conditions:
(i) Subject to the other provisions of this Plan and the terms
of the particular Award Agreements, during such period as may be
determined by the Committee commencing on the Date of Grant (the
"Restriction Period"), the Participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock. Except for these
limitations, the Committee may in its sole discretion, remove any or all
of the restrictions on such Restricted Stock whenever it may determine
that, by reason of changes in applicable laws or other changes in
circumstances arising after the date of the Award, such action is
appropriate.
(ii) Except as provided in sub-paragraph (i) above, the
Participant shall have, with respect to his or her Restricted Stock, all
of the rights of a stockholder of the Company, including the right to
vote the shares, and the right to receive any dividends thereon.
Certificates for shares of Common Stock free of restriction under this
Plan shall be delivered to the Participant promptly after, and only
after, the Restriction Period shall expire without forfeiture in respect
of such shares of Common Stock. Certificates for the shares of Common
Stock forfeited under the provisions of the Plan and the applicable
Award Agreement shall be promptly returned to the Company by the
forfeiting Participant. Each Award Agreement shall require that (x) each
Participant, by his or her acceptance of Restricted Stock, shall
irrevocably grant to the Company a power of attorney to transfer any
shares so forfeited to the Company and agrees to execute any documents
requested by the Company in connection with such forfeiture and
transfer, and (y) such provisions regarding returns and transfers of
stock certificates with respect to forfeited shares of Common Stock
shall be specifically performable by the Company in a court of equity or
law.
(iii) The Restriction Period of Restricted Stock shall commence
on the Date of Grant and, subject to Article 14 of the Plan, unless
otherwise established by the Committee in the Award Agreement setting
forth the terms of the Restricted Stock, shall expire upon satisfaction
of the conditions set forth in the Award Agreement; such conditions may
provide for vesting based on (i) length of continuous service, (ii)
achievement of specific business objectives, (iii) increases in
specified indices, (iv) attainment of specified growth rates, or (v)
other comparable measurements of Company performance, as may be
determined by the Committee in its sole discretion.
(iv) Subject to the provisions of the particular Award
Agreement, upon Termination of Service for any reason during the
Restriction Period, the nonvested shares of Restricted Stock shall be
forfeited by the Participant. In the event a Participant has paid any
consideration to the Company for such forfeited Restricted Stock, the
Company shall, as soon as practicable after the event causing forfeiture
(but in any event within 5
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business days), pay to the Participant, in cash, an amount equal to the
total consideration paid by the Participant for such forfeited shares.
Upon any forfeiture, all rights of a Participant with respect to the
forfeited shares of the Restricted Stock shall cease and terminate,
without any further obligation on the part of the Company.
6.5 SAR. An SAR shall entitle the Participant at his election to
surrender to the Company the SAR, or portion thereof, as the Participant shall
choose, and to receive from the Company in exchange therefor cash in an amount
equal to the excess (if any) of the Fair Market Value (as of the date of the
exercise of the SAR) per share over the SAR Price per share specified in such
SAR, multiplied by the total number of shares of the SAR being surrendered. In
the discretion of the Committee, the Company may satisfy its obligation upon
exercise of an SAR by the distribution of that number of shares of Common Stock
having an aggregate Fair Market Value (as of the date of the exercise of the
SAR) equal to the amount of cash otherwise payable to the Participant, with a
cash settlement to be made for any fractional share interests, or the Company
may settle such obligation in part with shares of Common Stock and in part with
cash.
6.6 TANDEM AWARDS. The Committee may grant two or more Incentives in
one Award in the form of a "tandem award," so that the right of the Participant
to exercise one Incentive shall be canceled if, and to the extent, the other
Incentive is exercised. For example, if a Stock Option and an SAR are issued in
a tandem Award, and the Participant exercises the SAR with respect to 100
shares of Common Stock, the right of the Participant to exercise the related
Stock Option shall be canceled to the extent of 100 shares of Common Stock.
ARTICLE 7
OPTION PRICE; SAR PRICE
The Option Price for any share of Common Stock which may be purchased
under a Stock Option and the SAR Price for any share of Common Stock subject to
an SAR shall be at least One Hundred Percent (100%) of the Fair Market Value of
the share on the Date of Grant. If an Incentive Stock Option is granted to an
Employee who 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 or Subsidiary), the Option Price
shall be at least 110% of the Fair Market Value of the Common Stock on the Date
of Grant.
ARTICLE 8
AWARD PERIOD; VESTING
8.1 AWARD PERIOD. Subject to the other provisions of this Plan, the
Committee may, in its discretion, provide that an Incentive may not be
exercised in whole or in part for any period or periods of time or beyond any
date specified in the Award Agreement. Except as provided in the Award
Agreement, an Incentive may be exercised in whole or in part at any time during
its term. The Award Period for an Incentive shall be reduced or terminated upon
Termination of Service in accordance with this Article 8 and Article 9. No
Incentive granted under the Plan may be exercised at any time after the end of
its Award Period. No portion of any Incentive may
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be exercised after the expiration of ten (10) years from its Date of Grant.
However, 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 or Subsidiary) and an
Incentive Stock Option is granted to such Employee, the term of such Incentive
Stock Option (to the extent required by the Code at the time of grant) shall be
no more than five (5) years from the Date of Grant.
8.2 VESTING. The Committee, in its sole discretion, may determine
that an Incentive will be immediately exercisable, in whole or in part, or that
all or any portion may not be exercised until a date, or dates, subsequent to
its Date of Grant, or until the occurrence of one or more specified events,
subject in any case to the terms of the Plan. If the Committee imposes
conditions upon exercise, then subsequent to the Date of Grant, the Committee
may, in its sole discretion, accelerate the date on which all or any portion of
the Incentive may be exercised.
ARTICLE 9
TERMINATION OF SERVICE
In the event of Termination of Service of a Participant, an Incentive
may only be exercised as determined by the Committee and provided in the Award
Agreement.
ARTICLE 10
EXERCISE OF INCENTIVE
10.1 IN GENERAL. A vested Incentive may be exercised during its Award
Period, subject to limitations and restrictions set forth therein and in
Article 9. A vested Incentive may be exercised at such times and in such
amounts as provided in this Plan and the applicable Award Agreement, subject to
the terms, conditions, and restrictions of the Plan.
In no event may an Incentive be exercised or shares of Common Stock be
issued pursuant to an Award if a necessary listing or quotation of the shares
of Common Stock on a stock exchange or inter-dealer quotation system or any
registration under state or federal securities laws required under the
circumstances has not been accomplished. No Incentive may be exercised for a
fractional share of Common Stock. The granting of an Incentive shall impose no
obligation upon the Participant to exercise that Incentive.
(a) STOCK OPTIONS. Subject to such administrative regulations as the
Committee may from time to time adopt, a Stock Option may be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Common Stock with respect to which the Stock Option is to be exercised and
the date of exercise thereof (the "Exercise Date") which shall be at least
three (3) days after giving such notice unless an earlier time shall have been
mutually agreed upon. On the Exercise Date, the Participant shall deliver to
the Company consideration with a value equal to the total Option Price of the
shares to be purchased, payable as follows: (a) cash, check, bank draft, or
money order payable to the order of the Company, (b) Common Stock (including
Restricted Stock) owned by the Participant on the Exercise Date, valued at its
Fair Market Value on the Exercise Date, (c) by delivery (including by FAX) to
the Company or
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its designated agent of an executed irrevocable option exercise form together
with irrevocable instructions from the Participant to a broker or dealer,
reasonably acceptable to the Company, to sell certain of the shares of Common
Stock purchased upon exercise of the Stock Option or to pledge such shares as
collateral for a loan and promptly deliver to the Company the amount of sale or
loan proceeds necessary to pay such purchase price, and/or (d) in any other
form of valid consideration that is acceptable to the Committee in its sole
discretion. In the event that shares of Restricted Stock are tendered as
consideration for the exercise of a Stock Option, a number of shares of Common
Stock issued upon the exercise of the Stock Option equal to the number of
shares of Restricted Stock used as consideration therefor shall be subject to
the same restrictions and provisions as the Restricted Stock so submitted.
Upon payment of all amounts due from the Participant, the Company shall
cause certificates for the Common Stock then being purchased to be delivered as
directed by the Participant (or the person exercising the Participant's Stock
Option in the event of his death) at its principal business office promptly
after the Exercise Date; provided that if the Participant has exercised an
Incentive Stock Option, the Company may at its option retain physical
possession of the certificate evidencing the shares acquired upon exercise
until the expiration of the holding periods described in Section 422(a)(1) of
the Code. The obligation of the Company to deliver shares of Common Stock
shall, however, be subject to the condition that if at any time the Committee
shall determine in its discretion that the listing, registration, or
qualification of the Stock Option or the Common Stock upon any securities
exchange or inter-dealer quotation system or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the Stock Option or the
issuance or purchase of shares of Common Stock thereunder, the Stock Option may
not be exercised in whole or in part unless such listing, registration,
qualification, consent, or approval shall have been effected or obtained free
of any conditions not acceptable to the Committee.
If the Participant fails to pay for any of the Common Stock specified in
such notice or fails to accept delivery thereof, the Participant's right to
purchase such Common Stock may be terminated by the Company.
(b) SARS. Subject to the conditions of this Section 10.1(b) and such
administrative regulations as the Committee may from time to time adopt, an SAR
may be exercised by the delivery (including by FAX) of written notice to the
Committee setting forth the number of shares of Common Stock with respect to
which the SAR is to be exercised and the date of exercise thereof (the
"Exercise Date") which shall be at least three (3) days after giving such
notice unless an earlier time shall have been mutually agreed upon. On the
Exercise Date, the Participant shall receive from the Company in exchange
therefor cash in an amount equal to the excess (if any) of the Fair Market
Value (as of the date of the exercise of the SAR) per share of Common Stock
over the SAR Price per share specified in such SAR, multiplied by the total
number of shares of Common Stock of the SAR being surrendered. In the
discretion of the Committee, the Company may satisfy its obligation upon
exercise of an SAR by the distribution of that number of shares of Common Stock
having an aggregate Fair Market Value (as of the date of the exercise of the
SAR) equal to the amount of cash otherwise payable to the Participant,
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with a cash settlement to be made for any fractional share interests, or the
Company may settle such obligation in part with shares of Common Stock and in
part with cash.
10.2 DISQUALIFYING DISPOSITION OF ISO. If shares of Common Stock
acquired upon exercise of an Incentive Stock Option are disposed of by a
Participant prior to the expiration of either two (2) years from the Date of
Grant of such Stock Option or one (1) year from the transfer of shares of
Common Stock to the Participant pursuant to the exercise of such Stock Option,
or in any other disqualifying disposition within the meaning of Section 422 of
the Code, such Participant shall notify the Company in writing of the date and
terms of such disposition. A disqualifying disposition by a Participant shall
not affect the status of any other Stock Option granted under the Plan as an
Incentive Stock Option within the meaning of Section 422 of the Code.
ARTICLE 11
AMENDMENT OR DISCONTINUANCE
Subject to the limitations set forth in this Article 11, the Board may
at any time and from time to time, without the consent of the Participants,
alter, amend, revise, suspend, or discontinue the Plan in whole or in part;
provided, however, that no amendment which requires stockholder approval in
order for the Plan and Incentives awarded under the Plan to continue to comply
with Section 162(m) of the Code, including any successors to such Section,
shall be effective unless such amendment shall be approved by the requisite
vote of the stockholders of the Company entitled to vote thereon. Any such
amendment shall, to the extent deemed necessary or advisable by the committee,
be applicable to any outstanding Incentives theretofore granted under the Plan,
notwithstanding any contrary provisions contained in any stock option
agreement. In the event of any such amendment to the Plan, the holder of any
Incentive outstanding under the Plan shall, upon request of the Committee and
as a condition to the exercisability thereof, execute a conforming amendment in
the form prescribed by the Committee to any Award Agreement relating thereto.
Notwithstanding anything contained in this Plan to the contrary, unless
required by law, no action contemplated or permitted by this Article 11 shall
adversely affect any rights of Participants or obligations of the Company to
Participants with respect to any Incentive theretofore granted under the Plan
without the consent of the affected Participant.
ARTICLE 12
TERM
The Plan shall be effective from the date that this Plan is approved by
the Board. Unless sooner terminated by action of the Board, the Plan will
terminate on December 9, 2006, but Incentives granted before that date will
continue to be effective in accordance with their terms and conditions.
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ARTICLE 13
CAPITAL ADJUSTMENTS
If at any time while the Plan is in effect, or Incentives are
outstanding, there shall be any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from (1) the declaration or
payment of a stock dividend, (2) any recapitalization resulting in a stock
split-up, combination, or exchange of shares of Common Stock, or (3) other
increase or decrease in such shares of Common Stock effected without receipt of
consideration by the Company, then and in such event:
(i) An appropriate adjustment shall be made in the maximum
number of shares of Common Stock then subject to being awarded under the
Plan and in the maximum number of shares of Common Stock that may be
awarded to a Participant to the end that the same proportion of the
Company's issued and outstanding shares of Common Stock shall continue
to be subject to being so awarded.
(ii) Appropriate adjustments shall be made in the number of
shares of Common Stock and the Option Price thereof then subject to
purchase pursuant to each such Stock Option previously granted and
unexercised, to the end that the same proportion of the Company's issued
and outstanding shares of Common Stock in each such instance shall
remain subject to purchase at the same aggregate Option Price.
(iii) Appropriate adjustments shall be made in the number of
SARs and the SAR Price thereof then subject to exercise pursuant to each
such SAR previously granted and unexercised, to the end that the same
proportion of the Company's issued and outstanding shares of Common
Stock in each instance shall remain subject to exercise at the same
aggregate SAR Price.
(iv) Appropriate adjustments shall be made in the number of
outstanding shares of Restricted Stock with respect to which
restrictions have not yet lapsed prior to any such change.
Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to (i) the number of or Option Price of shares of
Common Stock then subject to outstanding Stock Options granted under the Plan,
(ii) the number of or SAR Price or SARs then subject to outstanding SARs
granted under the Plan, or (iii) the number of outstanding shares of Restricted
Stock.
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Upon the occurrence of each event requiring an adjustment with respect
to any Incentive, the Company shall mail to each affected Participant its
computation of such adjustment which shall be conclusive and shall be binding
upon each such Participant.
ARTICLE 14
RECAPITALIZATION, MERGER AND
CONSOLIDATION; CHANGE IN CONTROL
(a) The existence of this Plan and Incentives granted
hereunder shall not affect in any way the right or power of the Company
or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company's
capital structure and its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference
stocks ranking prior to or otherwise affecting the Common Stock or the
rights thereof (or any rights, options, or warrants to purchase same),
or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
(b) Subject to any required action by the stockholders, if the
Company shall be the surviving or resulting corporation in any merger,
consolidation or share exchange, any Incentive granted hereunder shall
pertain to and apply to the securities or rights (including cash,
property, or assets) to which a holder of the number of shares of Common
Stock subject to the Incentive would have been entitled.
(c) In the event of any merger, consolidation or share
exchange pursuant to which the Company is not the surviving or resulting
corporation, there shall be substituted for each share of Common Stock
subject to the unexercised portions of such outstanding Incentives, that
number of shares of each class of stock or other securities or that
amount of cash, property, or assets of the surviving, resulting or
consolidated company which were distributed or distributable to the
stockholders of the Company in respect to each share of Common Stock
held by them, such outstanding Incentives to be thereafter exercisable
for such stock, securities, cash, or property in accordance with their
terms. Notwithstanding the foregoing, however, all such Incentives may
be canceled by the Company as of the effective date of any such
reorganization, merger, consolidation, share exchange or any dissolution
or liquidation of the Company by giving notice to each holder thereof or
his personal representative of its intention to do so and by permitting
the purchase during the thirty (30) day period next preceding such
effective date of all of the shares of Common Stock subject to such
outstanding Incentives.
(d) In the event of a Change of Control, then, notwithstanding
any other provision in this Plan to the contrary, all unmatured
installments of Incentives outstanding shall thereupon automatically be
accelerated and exercisable in full and all Restriction Periods
applicable to Awards of Restricted Stock shall automatically expire. The
determination of the Committee that any of the foregoing conditions has
been met shall be binding and conclusive on all parties.
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ARTICLE 15
LIQUIDATION OR DISSOLUTION
In case the Company shall, at any time while any Incentive under this
Plan shall be in force and remain unexpired, (i) sell all or substantially all
of its property, or (ii) dissolve, liquidate, or wind up its affairs, then each
Participant shall be thereafter entitled to receive, in lieu of each share of
Common Stock of the Company which such Participant would have been entitled to
receive under the Incentive, the same kind and amount of any securities or
assets as may be issuable, distributable, or payable upon any such sale,
dissolution, liquidation, or winding up with respect to each share of Common
Stock of the Company. If the Company shall, at any time prior to the expiration
of any Incentive, make any partial distribution of its assets, in the nature of
a partial liquidation, whether payable in cash or in kind (but excluding the
distribution of a cash dividend payable out of earned surplus and designated as
such) then in such event the Option Prices or SAR Prices then in effect with
respect to each Stock Option or SAR shall be reduced, on the payment date of
such distribution, in proportion to the percentage reduction in the tangible
book value of the shares of the Company's Common Stock (determined in
accordance with generally accepted accounting principles) resulting by reason
of such distribution.
ARTICLE 16
INCENTIVES IN SUBSTITUTION FOR
INCENTIVES GRANTED BY OTHER CORPORATIONS
Incentives may be granted under the Plan from time to time in
substitution for similar instruments held by employees of a corporation who
become or are about to become management Employees of the Company or any
Subsidiary as a result of a merger or consolidation of the employing
corporation with the Company or the acquisition by the Company of stock of the
employing corporation. The terms and conditions of the substitute Incentives so
granted may vary from the terms and conditions set forth in this Plan to such
extent as the Board at the time of grant may deem appropriate to conform, in
whole or in part, to the provisions of the Incentives stock appreciation right
in substitution for which they are granted.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.1 INVESTMENT INTENT. The Company may require that there be
presented to and filed with it by any Participant under the Plan, such evidence
as it may deem necessary to establish that the Incentives granted or the shares
of Common Stock to be purchased or transferred are being acquired for
investment and not with a view to their distribution.
17.2 NO RIGHT TO CONTINUED EMPLOYMENT. Neither the Plan nor any
Incentive granted under the Plan shall confer upon any Participant any right
with respect to continuance of employment by the Company or any Subsidiary.
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17.3 INDEMNIFICATION OF BOARD AND COMMITTEE. No member of the Board or
the Committee, nor any officer or Employee of the Company acting on behalf of
the Board or the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to
the Plan, and all members of the Board or the Committee and each and any
officer or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination, or interpretation.
17.4 EFFECT OF THE PLAN. Neither the adoption of this Plan nor any
action of the Board or the Committee shall be deemed to give any person any
right to be granted an Award or any other rights except as may be evidenced by
an Award Agreement, or any amendment thereto, duly authorized by the Committee
and executed on behalf of the Company, and then only to the extent and upon the
terms and conditions expressly set forth therein.
17.5 COMPLIANCE WITH OTHER LAWS AND REGULATIONS. Notwithstanding
anything contained herein to the contrary, the Company shall not be required to
sell or issue shares of Common Stock under any Incentive if the issuance
thereof would constitute a violation by the Participant or the Company of any
provisions of any law or regulation of any governmental authority or any
national securities exchange or inter-dealer quotation system or other forum in
which shares of Common Stock are quoted or traded (including without limitation
Section 16 of the 1934 Act and Section 162(m) of the Code); and, as a condition
of any sale or issuance of shares of Common Stock under an Incentive, the
Committee may require such agreements or undertakings, if any, as the Committee
may deem necessary or advisable to assure compliance with any such law or
regulation. The Plan, the grant and exercise of Incentives hereunder, and the
obligation of the Company to sell and deliver shares of Common Stock, shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required.
17.6 TAX REQUIREMENTS. The Company shall have the right to deduct from
all amounts hereunder paid in cash or other form, any Federal, state, or local
taxes required by law to be withheld with respect to such payments. The
Participant receiving shares of Common Stock issued under the Plan shall be
required to pay the Company the amount of any taxes which the Company is
required to withhold with respect to such shares of Common Stock.
Notwithstanding the foregoing, in the event of an assignment of a Non-qualified
Stock Option or SAR pursuant to Section 17.7, the Participant who assigns the
Non-qualified Stock Option or SAR shall remain subject to withholding taxes
upon exercise of the Non-qualified Stock Option or SAR by the transferee to the
extent required by the Code or the rules and regulations promulgated
thereunder. Such payments shall be required to be made prior to the delivery of
any certificate representing such shares of Common Stock. Such payment may be
made in cash, by check, or through the delivery of shares of Common Stock owned
by the Participant (which may be effected by the actual delivery of shares of
Common Stock by the Participant or by the Company's withholding a number of
shares to be issued upon the exercise of a Stock Option, if applicable), which
shares have an aggregate Fair Market Value equal to the required minimum
withholding payment, or any combination thereof.
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17.7 ASSIGNABILITY. Incentive Stock Options may not be transferred or
assigned other than by will or the laws of descent and distribution and may be
exercised during the lifetime of the Participant only by the Participant or the
Participant's legally authorized representative, and each Award Agreement in
respect of an Incentive Stock Option shall so provide. The designation by a
Participant of a beneficiary will not constitute a transfer of the Stock
Option. The Committee may waive or modify any limitation contained in the
preceding sentences of this Section 17.7 that is not required for compliance
with Section 422 of the Code. The Committee may, in its discretion, authorize
all or a portion of a Non-qualified Stock Option or SAR to be granted to a
Participant to be on terms which permit transfer by such Participant to (i) the
spouse, children or grandchildren of the Participant ("Immediate Family
Members"), (ii) a trust or trusts for the exclusive benefit of such Immediate
Family Members, or (iii) a partnership in which such Immediate Family Members
are the only partners, (iv) an entity exempt from federal income tax pursuant
to Section 501(c)(3) of the Code or any successor provision, or (v) a split
interest trust or pooled income fund described in Section 2522(c)(2) of the
Code or any successor provision, provided that (x) there shall be no
consideration for any such transfer, (y) the Award Agreement pursuant to which
such Non-qualified Stock Option or SAR is granted must be approved by the
Committee and must expressly provided for transferability in a manner
consistent with this Section, and (z) subsequent transfers of transferred Non-
qualified Stock Options or SARs shall be prohibited except those by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined in the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended. Following transfer, any such Non-qualified
Stock Option and SAR shall continue to be subject to the same terms and
conditions as were applicable immediately prior to transfer, provided that for
purposes of Articles 10, 11, 13, 15 and 17 hereof the term "Participant" shall
be deemed to include the transferee. The events of Termination of Service shall
continue to be applied with respect to the original Participant, following
which the Non-qualified Stock Options and SARs shall be exercisable by the
transferee only to the extent and for the periods specified in the Award
Agreement. The Committee and the Company shall have no obligation to inform any
transferee of a Non-qualified Stock Option or SAR of any expiration,
termination, lapse or acceleration of such Option. The Company shall have no
obligation to register with any federal or state securities commission or
agency any Common Stock issuable or issued under a Non-qualified Stock Option
or SAR that has been transferred by a Participant under this Section 17.7.
17.8 USE OF PROCEEDS. Proceeds from the sale of shares of Common Stock
pursuant to Incentives granted under this Plan shall constitute general funds
of the Company.
17.9 LEGEND. Each certificate representing shares of Restricted Stock
issued to a Participant shall bear the following legend, or a similar legend
deemed by the Company to constitute an appropriate notice of the provisions
hereof (any such certificate not having such legend shall be surrendered upon
demand by the Company and so endorsed):
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On the face of the certificate:
"Transfer of this stock is restricted in accordance with
conditions printed on the reverse of this certificate."
On the reverse:
"The shares of stock evidenced by this certificate are
subject to and transferrable only in accordance with that
certain Commercial Metals Company 1996 Long-Term Incentive
Plan, a copy of which is on file at the principal office
of the Company in Dallas, Texas. No transfer or pledge of
the shares evidenced hereby may be made except in
accordance with and subject to the provisions of said
Plan. By acceptance of this certificate, any holder,
transferee or pledgee hereof agrees to be bound by all of
the provisions of said Plan."
The following legend shall be inserted on a certificate evidencing
Common Stock issued under the Plan if the shares were not issued in a
transaction registered under the applicable federal and state securities laws:
"Shares of stock represented by this certificate have been
acquired by the holder for investment and not for resale,
transfer or distribution, have been issued pursuant to
exemptions from the registration requirements of
applicable state and federal securities laws, and may not
be offered for sale, sold or transferred other than
pursuant to effective registration under such laws, or in
transactions otherwise in compliance with such laws, and
upon evidence satisfactory to the Company of compliance
with such laws, as to which the Company may rely upon an
opinion of counsel satisfactory to the Company."
A copy of this Plan shall be kept on file in the principal office of the
Company in Dallas, Texas.
* * * * * * * * * * * * * * *
18
<PAGE> 19
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed as of December 9, 1996, by its President and Secretary pursuant to
prior action taken by the Board.
COMMERCIAL METALS COMPANY
By: /s/ Stanley A. Rabin
---------------------------------
President
Attest:
/s/ David M. Sudbury
- ----------------------------------
Secretary
19
<PAGE> 1
EXHIBIT 5.1
May 21, 1997
Commercial Metals Company
7800 Stemmons Freeway
Dallas, Texas 75247
Gentlemen:
I have acted as counsel to Commercial Metals Company, a Delaware
corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 (the "Registration Statement") filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the registration of 1,000,000 shares of Common Stock, par
value $5.00 per share (the "Common Stock"), of the Company that may be issued
in the future under the Commercial Metals Company 1996 Long-Term Incentive Plan
(the "Plan").
In connection therewith, I have examined (i) the Restated Certificate of
Incorporation and the Bylaws of the Company, each as amended; (ii) minutes and
records of the corporate proceedings of the Company with respect to the
adoption of the Plan and related matters; (iii) the Plan; (iv) the Registration
Statement and exhibits thereto; and (v) such other documents as I have deemed
necessary for the expression of the opinion contained herein.
Based upon the foregoing, and having due regard for such legal
considerations as I deem relevant, assuming that the cash consideration
received by the Company in exchange for the issuance of Common Stock under the
Plan equals or exceeds the par value of such Common Stock, I am of the opinion
that the shares of Common Stock covered by the Registration Statement that may
be issued from time to time in accordance with the terms of the Plan have been
duly authorized for issuance by the Company, and, when so issued in accordance
with the terms and conditions of the Plan, will be validly issued, fully paid
and nonassessable.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to me under "Item 5. Interests of Named Experts and Counsel."
Very truly yours,
/s/ David M. Sudbury
David M. Sudbury
General Counsel
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Commercial Metal Company on Form S-8 of our reports dated October
16, 1996, appearing in the Annual Report on Form 10-K of Commercial Metals
Company for the year ended August 31, 1996, and to the reference to us under the
heading "Experts" in such Prospectus.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
Deloitte & Touche LLP
Dallas, Texas
May 28, 1997
