PAGE 1
As filed with the Securities and Exchange Commission on September
2, 1994
Registration
No. 33-
_________________________________________________________________
_____________
_________________________________________________________________
_____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WASHINGTON ENERGY COMPANY
(Exact name of registrant as specified in its
charter)
WASHINGTON
91-1005304
(State or Other Jurisdic- (I.R.S.
Employer Identifi-
tion of Incorporation or
cation No.)
Organization)
815 Mercer Street
Seattle, Washington 98109
(206) 662-6767
(Address, including zip code, and telephone number,
including
area code, of registrant's principal executive
offices)
_________________________
Washington Energy Company
Stock Option Plan
(Full Title of the Plan)
_________________________
James P. Torgerson
Senior Vice President-Finance,
Planning and Development
815 Mercer Street
Seattle, Washington 98109
(206) 662-6767
(Name, address, including zip code, and
telephone number,
including area code, of agent for
service)
_________________________
CALCULATION OF REGISTRATION
FEE
Title of Each Amount to Be Proposed Max- Proposed Max-
Amount of
Class of Se- Registered imum Offering imum Aggre-
Registration
curities to (1) Price Per gate Offering
Fee
Be Registered Share (2) Price (2)
$5.00 par 800,000 $15.00 $12,000,000
$4,138
value shares
Common Stock
(1) Plus (i) an indeterminate number of shares of Common
Stock that may
become issuable under the Plan as a result of the
adjustment provisions
therein, and (ii) if any interests in the Plan
constitutes separate
securities required to be registered under the Securities
Act of 1933,
then, pursuant to Rule 416(c), an indeterminate amount of
such interests
to be offered or sold pursuant to the Plan.
(2) Computed pursuant to Rule 457 based on an offering price
of $15.00 per
share (the average of the high and low sales prices
reported by the New
York Stock Exchange on August 30, 1994) for the 800,000
shares issuable
upon exercise of options, and/or stock appreciation
rights granted in
tandem with options, granted nor to be granted under the
Stock Option
Plan.
PAGE 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents are incorporated in this
Registration Statement
by reference:
i. The Registrant's Annual Report on Form 10-K
for the year
ended September 30, 1993;
ii. All other reports filed by the
Registrant with the
Commission pursuant to Section 13(a) or 15(d) of
the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), since
September 30,1993; and
iii. The description of the Registrant's
Common Stock set
forth in the Registration Statement on Form
8-A filed by
the Registrant with the Commission on July 27,
1992, under
Section 12(b) of the Exchange Act.
All documents filed by the Registrant with the Commission
after the date
of this Registration Statement pursuant to Sections 13(a), 13(c),
14 and 15(d)
of the Exchange Act, prior to the filing of a post-effective
amendment which
indicates that all securities offered pursuant to this
Registration Statement
have been sold or which deregisters all securities then
remaining unsold,
shall also be deemed to be incorporated by reference in this
Registration
Statement and to be part hereof from the respective dates of
filing of such
documents.
Any statement incorporated by reference herein shall be
deemed to be
modified or superseded for purposes of this Registration
Statement to the
extent that a statement contained herein or in any other
subsequently filed
document which also is or is deemed to be incorporated by
reference herein
modifies or supersedes such statement. Any statement so
modified or
superseded shall not be deemed, except as so modified or
superseded, to
constitute a part of this Registration Statement.
Item 4. Description of Securities
Not required.
Item 5. Interests of Named Experts and Counsel
None.
Item 6. Indemnification of Directors and Officers
The Washington Business Corporation Act (Title 23B
RCW, as revised
effective July 1, 1990, Chapter 165, Laws of 1989) (the "Act")
provides that
under certain circumstances a corporation may indemnify any
person for any
judgment, settlement, penalty, fine and reasonable
expenses (including
attorneys' fees) incurred in connection with a threatened,
pending or
completed action, suit or proceeding, whether civil, criminal,
administrative
or investigative in which such person is made, or threatened
to be made, a
defendant or respondent by reason of the fact that he or
she is or was a
director or officer of the corporation.
PAGE 3
Under Washington law, a corporation generally has the power
to indemnify
a director (or former director) if (a) he or she conducted
himself in good
faith and (1) in the case of conduct in his or her own official
capacity with
the corporation, he or she reasonably believed his or her conduct
to be in the
corporation's best interest, or (2) in all other cases, he or
she reasonably
believed his or her conduct to be at least not opposed to the
corporation's
best interests; and (b) in the case of any criminal proceeding,
he or she had
no reasonable cause to believe his or her conduct was
unlawful. The Act
further provides that a director shall not be indemnified in
connection with a
proceeding by or in the right of the corporation in which
he or she was
adjudged liable to the corporation, or with respect to any
proceeding, whether
or not involving action in his or her official capacity, in
which he or she
shall have been adjudged to be liable on the basis that he or
she improperly
received a personal benefit in money, property or services to
which he or she
was not legally entitled. In the case of a proceeding by or in
the right of
the corporation, indemnification is limited by the Act to
reasonable expenses
incurred in connection with the proceeding. The Act further
provides that no
indemnification of a director or former director shall be
made by the
corporation unless authorized in a specific case after a
determination that
indemnification of the director is permissible in the
circumstances because he
or she has met the standard of conduct set forth in the
applicable subsection.
This determination is to be made (a) by the board of directors
by a majority
vote of a quorum consisting of directors not at the time
parties to the
proceedings in question; (b) if such a quorum cannot be
obtained, then by a
majority vote of a committee of the board consisting solely
of two or more
directors not at the time parties to such proceeding; (c) in
the opinion of
special legal counsel; or (d) by the shareholders.
Under certain circumstances a court may order
indemnification of a
director by a corporation even though the standards set forth
above may not
have been met.
The Act further provides that a corporation has the power to
indemnify an
officer who is not a director (as well as employees and
agents of the
corporation who are not directors) to the same extent that it
may indemnify
directors and to such further extent, consistent with law, as
may be provided
by its articles of incorporation, bylaws, general or specific
action of its
board of directors, or contract. Therefore, indemnification of
officers who
are not directors under the Company's Bylaws is not
subject to the same
specific limitations and standards of conduct as set forth above
with respect
to indemnification of directors.
Article IX of the Company's Bylaws provides that the
Company shall
indemnify each person that was, is, or is threatened to be made a
party to, or
is otherwise involved in any actual or threatened proceeding by
reason of the
fact that he or she is or was a director or officer of the
Company, against
all expense, liability and loss (including attorneys' fees,
judgments, fines,
ERISA excise taxes and penalties and amounts to be paid
in settlement)
actually and reasonably incurred or suffered in
connection with such
participation or involvement, provided that no such
indemnification is
permitted if the Company is prohibited from paying such
indemnification by the
applicable provisions of the Act or any other applicable law
then in effect.
The Bylaws further provide that the right of indemnification
includes the
right to be paid by the Company for the expenses incurred in
defending any
proceeding in advance of its final disposition, provided that
(1) the person
seeking indemnification submits an agreement to repay all
amounts so advanced
if it shall be ultimately determined that he or she is not
entitled to be
indemnified, and (2) such person either delivers a written
affirmation that he
or she has met the standard of conduct necessary for
indemnification or a
determination that he or she has met such standard of
conduct, as may be
permitted or required by the Act or other applicable law.
PAGE 4
Any indemnification of a director in accordance with the
Act, including
a n y payment or reimbursement of expenses, shall be
reported to the
shareholders with the notice of the next shareholders meeting or
prior thereto
in a written report containing a brief description of
the proceedings
involving the director being indemnified and the nature and
extent of such
indemnification.
Officers and directors of the Company are covered by
a policy of
insurance maintained by the Company which (with certain
exceptions and within
certain limitations) indemnifies them against loss and
liabilities arising
from any alleged "wrongful act" including an alleged error or
misstatement or
misleading statement or wrongful act or omission or neglect or
breach of duty.
The Company's Restated Articles of Incorporation, as
amended, provide, as
permitted by the Act, that a director of the Company shall not
be personally
liable to the Company or its shareholders for monetary damages
for conduct as
a director, except for liability for (1) any acts or omissions
that involve
intentional misconduct by the director or a knowing violation
of law by the
director; (2) any conduct that violates Section 23B.08.310
(formerly Section
2 3 A . 08.450) of the Act (pertaining to unpermitted
distributions to
shareholders or loans to directors); or (3) any transaction
from which the
director will personally receive a benefit in money, property
or services to
which the director is not legally entitled.
Reference is made to the Registrant's Restated Articles of
Incorporation,
filed as Exhibit 4.1 to this Registration Statement, and the
Registrant's
Bylaws, filed as Exhibit 4.2 to this Registration Statement.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See Exhibit Index at page 7.
PAGE 5
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; and
(iii) To include any material information with
respect
to the plan of distribution not previously
disclosed in the
R e g istration 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 15(d) of the Exchange
Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under the
Securities Act of 1933, each such post-effective
amendment shall be
deemed to be a new Registration Statement relating to
the securities
offered therein, and the offering of the securities at that
time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective
amendment any of the securities being registered which
remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that,
for purposes of
determining any liability under the Securities Act of 1933, each
filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange
Act that is incorporated by reference in the Registration
Statement shall be
deemed to be a new Registration Statement relating to the
securities offered
therein, and the offering of such securities at that time shall
be deemed to
be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities
arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling
persons of the Registrant pursuant to the foregoing provisions,
or otherwise,
the Registrant has been advised that in the opinion of the
Securities and
Exchange Commission such indemnification is against public policy
as expressed
in the 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
s e t tled by controlling precedent, submit to a court of
appropriate
jurisdiction the question of 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.
PAGE 6
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the
Registrant certifies that it has reasonable grounds to believe
it meets all
the requirements for filing on FormS-8 and has duly caused this
Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly
authorized, in the City of Seattle, State of Washington, on
August 17, 1994.
WASHINGTON ENERGY COMPANY
By /s/ William P. Vititoe
William P. Vititoe
President and Chairman of the Board
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes
and appoints
William P. Vititoe, James P. Torgerson and Marion V. Larson and
each of them
severally, his true and lawful attorneys-in-fact and agents,
with full power
to act without the other and with full power of
substitution and
resubstitution, to execute in his name and on his behalf,
individually and in
each capacity stated below, any and all amendments and
post-effective
amendments to this Registration Statement, any and all
supplements hereto, and
any and all other instruments necessary or incidental in
connection herewith,
and to file the same with the Commission.
Pursuant to the requirements of the Securities Act
of 1933, this
Registration Statement has been signed by the following
persons in the
capacities and on the dates indicated below.
Signature Title
Date
/s/ William P. Vititoe Chairman of the Board
August 17, 1994
William P. Vititoe of the Board of
Directors (Principal
Executive Officer),
President and
Director
/s/ James P. Torgerson Senior Vice
August 17, 1994
James P. Torgerson President-Finance,
Planning and
Development (Prin-
cipal Financial
Officer)
/s/ Allyn P. Hebner Vice President and
August 17, 1994
Allyn P. Hebner Assistant Treasurer
(Principal Accounting
Officer)
/s/ Virginia Anderson Director
August 17, 1994
Virginia Anderson
Signature Title
Date
/s/ Robert F. Bailey Director
August 17, 1994
Robert F. Bailey
/s/ Donald J. Covey Director
August 17, 1994
Donald J. Covey
/s/ John W. Creighton, Director
August 17, 1994
Jr.
John W. Creighton, Jr.
/s/ Robert L. Dryden Director
August 17, 1994
Robert L. Dryden
/s/ Tomio Moriguchi Director
August 17, 1994
Tomio Moriguchi
/s/ Sally G. Narodick Director
August 17, 1994
Sally G. Narodick
PAGE 7
EXHIBIT INDEX
Certain of the following exhibits are filed herewith.
Certain other of
the following exhibits have heretofore been filed with the
Commission and are
incorporated herein by reference.
(*Filed herewith)
Exhibit
Number Description
4.1 Restated Articles of Incorporation of Washington
Energy Company (incorporated by reference to Exhibit
3-A Washington Energy Company Form 10-Q for the
quarter ended June 30, 1988, File No.0-8745)
4.2 Articles of Amendment to the Restated Articles of
Incorporation of Washington Energy Company, dated
March 6, 1990 (incorporated herein by reference to
Exhibit 3-A.1 Washington Energy Company Form 10-K for
the year ended September 30, 1990, File No.0-8745).
4.3 Articles of Amendment to the Restated Articles of
Incorporation of Washington Energy Company, dated June
14, 1991 (incorporated herein by reference to Exhibit
3-A.2 Washington Energy Company Form 10-K for the year
ended September 30, 1991, File No.0-8745).
4.4 Bylaws of Washington Energy Company (incorporated
herein by reference to Exhibit 3-B.1 Washington Energy
Company Form 10-K for the year ended September 30,
1990, File No.0-8745).
4.5 Amendment to Bylaws of Washington Energy Company dated
December 12, 1990 (incorporated herein by reference to
Exhibit 3-B.2 Washington Energy Company Form 10-K for
the year ended September 30, 1990, File No.0-8745).
5* Opinion of Riddell, Williams, Bullitt& Walkinshaw.
23.1* Consent of Arthur Andersen & Co., independent public
accountants.
23.2* Consent of Riddell, Williams, Bullitt& Walkinshaw
(included in opinion filed as Exhibit 5 to this
Registration Statement).
24* Powers of Attorney (included on signature pages)
99* Stock Option Plan
Exhibit 5
August 26, 1994
Washington Energy Company
815 Mercer Street
Seattle, Washington 98109
Re: Form S-8 Registration Statement
Ladies and Gentlemen:
We have acted as counsel to Washington Energy Company (the
"Company") in
connection with the preparation of a Registration Statement on
Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the
"Act"), which the Company will file with the Securities
and Exchange
Commission, with respect to the 800,000 shares of $5.00 par value
Common Stock
of the Company issuable upon exercise of options, and/or stock
appreciation
rights granted in tandem with options, granted or to be
granted under the
Washington Energy Company Stock Option Plan (the "Shares").
We have examined the Registration Statement and such other
documents and
records as we have deemed relevant and necessary for the
purpose of this
opinion.
Based upon and subject to the foregoing, we are of the
opinion that the
Shares will, upon due execution by the Company and the
registration by its
registrar of the certificates for the Shares and issuance
thereof by the
Company and receipt by the Company of the consideration therefor
in accordance
with the terms of the Stock Option Plan, be validly issued,
fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the
Registration Statement. In giving such consent, we do not
admit that we are
in the category of persons whose consent is required under
Section 7 of the
Act.
Very truly yours,
RIDDELL, WILLIAMS, BULLITT & WALKINSHAW
By /s/ Marion V. Larson
Marion V. Larson
Exhibit 23.1
Consent of Independent Auditors
As independent public accountants, we hereby consent to the
incorporation
by reference in this registration statement of our report dated
November 24,
1993 included in Washington Energy Company's Annual Report on
Form 10-K for
the year ended September 30, 1993 and to all references to our
firm included
in this registration statement.
Seattle, Washington
August 19, 1994
PAGE 1
Exhibit 99
WASHINGTON ENERGY COMPANY
STOCK OPTION PLAN
1. Purpose: The purpose of this Stock Option Plan (the
"Plan") is to
p r omote the interest of WASHINGTON ENERGY COMPANY,
a Washington
corporation (the "Company"), by providing a method whereby
executives and
other key employees of the Company or its subsidiary
corporations may be
encouraged to invest in the Company's Common Stock and
thereby increase
their proprietary interest in the Company's business,
encourage them to
remain in the employ of the Company or a subsidiary
corporation of the
Company, and increase their personal interest in the
continued success
and progress of the Company and its subsidiary
corporations. Options
issued under the Plan shall either be options designated
as incentive
stock options ("Incentive Stock Options") within the
meaning of Section
422 of the Internal Revenue Code of 1986, as amended
("IRC"), or options
designated as nonqualified stock options ("Nonqualified
Stock Options").
For purposes of this Plan, the terms "parent corporation"
and "subsidiary
corporation" shall be as defined in IRC Section
424(e) and Section
424(f), respectively.
2. Administration:
(a) This Plan shall be administered by the Compensation
and Benefits
Committee (the "Committee") of the Company's Board of
Directors (the
"Board of Directors"). All persons designated as
members of the
Committee shall be "disinterested persons" within
the meaning of
Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as
amended (the "Exchange Act"). The Board of Directors
shall appoint
the members of the Committee from time to time, and the
Committee or
any member thereof may be removed by the Board of
Directors with or
without cause.
(b) Any member of the Committee may resign at any time by
written notice
to the Board of Directors. Any action of the Committee
with respect
to the Plan shall be taken by majority vote at a
meeting of the
Committee or by written consent of a majority of the
members of the
Committee without a meeting.
(c) Subject to the provisions of the Plan and to
resolutions adopted by
the Board of Directors, the Committee shall have
authority in its
discretion:
(i) To construe and interpret the Plan and all
options granted
thereunder;
(ii) to prescribe, amend and rescind rules and
regulations
relating to the Plan;
(iii) to determine the individuals to whom
options shall be
granted, the time or times at which the
options shall be
granted, and the number of shares to be
subject to the
options so granted;
(iv) to determine the terms and provisions of
the options
granted under the Plan (which need not be
identical),
including but not limited to the exercise
prices and any
vesting provisions that the Committee deems
advisable; and
(v) to make all other determinations necessary or
advisable for the
administration of the Plan.
PAGE 2
All determinations and interpretations made by the
Committee shall
be binding and conclusive on all participants in
the Plan and on
their legal representatives and beneficiaries.
(d) Each option shall be evidence by a written
agreement, which shall
contain such terms and conditions (consistent with the
terms of this
Plan) as may be approved by the Committee and shall be
signed by an
officer of the Company and the employee receiving
such option. In
case of any inconsistency between any provision
of an option
agreement and the Plan, the provisions of the Plan in
effect at the
date of grant of the option shall be controlling.
(e) Exercise by the Committee of its authority under the
Plan shall be
consistent with the intent that (i) all Incentive
Stock Options
issued under the Plan be qualified under the terms
of IRC Section
422, and (ii) with respect to all persons who are
"officers" of the
Company within the meaning of Section 16(b) of the
Exchange Act, the
Plan be administered in a manner that satisfies the
conditions of
Rule 16b-3(c)(2)(i) under the Exchange Act so that
the grant of
options and stock appreciation rights under this
Plan, as well as
all other transactions with respect to the Plan,
to options and
stock appreciation rights granted hereunder and to any
Common Stock
acquired upon exercise of options and stock
appreciation rights
shall, to the extent possible, be exempt from the
operation of
Section 16(b) of the Exchange Act.
3. Eligibility: Options shall be granted only to executives
and other key
employees of the Company or its subsidiary
corporations who, in the
judgment of the Committee, are capable and desirous of
influencing the
growth and profits of the Company through their efforts.
For purposes of
this Plan, an optionee's employment shall not be
considered interrupted
in the case of sick leave, military leave or any other
leave of absence
approved by the Company.
4. Special Limitation for Ten Percent (10%) Shareholders:
Incentive Stock
Options shall not be granted hereunder to any individual
who, at the time
such option is granted, owns (directly or indirectly as
specified in IRC
Section 424(d)) stock possessing more than ten percent (10%)
of the total
combined voting power of all classes of stock of the
Company or of its
parent or subsidiary corporations unless, in addition to
the other terms
and restrictions for Incentive Stock Options specified
herein, the
exercise price is at least one hundred ten percent
(110%) of the Fair
Market Value (as defined below) of the Common Stock on the
date of grant,
and such option by its terms will terminate within five
(5) years from
the date such option is granted.
5. Shares Subject to the Plan:
(a) The Committee may, from time to time, provide for
the option and
sale under this Plan of up to 800,000 shares of the
Company's $5.00
par value Common Stock in the aggregate (subject
to adjustments
required by Section 13 of this Plan). Such shares may
be authorized
and unissued shares or shares previously acquired or
to be acquired
by the Company and held in treasury. If an option
ceases to be
exercisable, in whole or in part, the shares as to
which the option
may no longer be exercised shall thereafter be
available for
additional options under this Plan.
PAGE 3
(b) The Company shall not be required, upon the exercise
of any option,
to issue or deliver a stock certificate for any
shares of stock
prior to the completion of such registration or other
qualification
of such shares under any state or federal law, rule
or regulation,
and such listing with such stock exchanges, as the
Company shall
determine to be necessary or desirable.
6. Exercise Price:
(a) The exercise price of the Common Stock under each
option shall be
determined by the Committee but shall not be less
than the Fair
Market Value of the Common Stock on the date of grant
(as determined
in accordance with Section 17). The "Fair Market
Value" of the
Common Stock on any day shall mean the last sales
price of a share
of Common Stock as reported for that day (or, if that
day is not a
trading day, for the next preceding trading day) by
the principal
exchange on which the Common Stock is listed. If
the Fair Market
Value of the Common Stock is not determinable by
this means, the
Fair Market Value shall be determined in good faith by
the Committee
on the basis of such considerations as the
Committee deems
appropriate. The exercise price for any option
is subject to
adjustment as provided in Section 13 hereof, and
subject to the
special requirements described in Section 4.
(b) The exercise price under an option shall be paid in
full, in cash,
at the time of exercise, and a certificate
representing shares so
purchased shall be delivered to the person entitled
thereto subject
to the provisions of Section 5 hereof. Alternatively,
the Committee
in its sole discretion may permit the exercise price
to be paid in
full or in part with Common Stock previously
acquired by the
employee, but only if and to the extent permitted
by applicable
regulations and rulings of the Internal Revenue
Service. No
fractional share shall be issued upon the exercise
of options and
any amounts remaining after issuance of the nearest
number of whole
shares approved for issuance will be paid in cash.
7. Stock Appreciation Rights:
(a) At the discretion of the Committee, any option
granted under this
Plan may, at the time of such grant, include a stock
appreciation
right. The effectiveness of any such rights granted
with an Incen-
tive Stock Option shall be conditioned upon their
validity under IRC
Section 422. If such rights are ultimately
determined by the
Internal Revenue Service to be inconsistent with
Section 422, any
such rights shall terminate but Incentive Stock Options
with respect
to which such rights were granted shall otherwise
continue in effect
hereunder. The validity or invalidity of any such
rights shall have
no effect on the validity of the other provisions of
any option or
of this Plan. The Committee may impose conditions upon
the grant or
exercise of the stock appreciation right which
conditions may
include a condition that the stock appreciation
right may only be
exercised in accordance with rules and regulations
adopted by the
Committee from time to time. Such rules and
regulations may govern
the right to exercise a stock appreciation right
granted prior to
the adoption or amendment of such rules and
regulations as well as
stock appreciation rights granted thereafter.
PAGE 4
(b) A "stock appreciation right" is the right of an
optionee, without
payment to the Company (except for applicable
withholding taxes, if
any), to receive the excess of the Fair Market Value
per share on
the date on which a stock appreciation right is
exercised over the
exercise price per share as provided in the
related underlying
option. A stock appreciation right shall pertain to,
and be granted
only in conjunction with, a related underlying option
granted under
this Plan and shall be exercisable only to the
extent that the
related option is exercisable. The number of shares of
Common Stock
subject to the stock appreciation right shall be all
or part of the
shares subject to the related option, as
determined by the
Committee. The stock appreciation right shall either
become all or
partially nonexercisable and shall be all or partially
forfeited if
the exercisable portion, or any part thereof, of the
related option
is exercised and vice versa.
(c) Subject to any restrictions or conditions imposed by
the Committee,
a stock appreciation right may be exercised by the
optionee as to a
number of shares of Common Stock under its related
option upon the
surrender of a like number of shares of Common Stock
available under
the exercisable portion of the related option, but
only if the Fair
Market Value of the stock subject to the option exceeds
the option's
exercise price. Subject to Section 7(d), upon the
exercise of a
stock appreciation right and the surrender of
the exercisable
portion of the related option, the optionee shall be
awarded whole
shares of Common Stock. The award shall have a total
value equal to
the product obtained by multiplying (i) the
excess of the Fair
Market Value per share on the date on which the stock
appreciation
right is exercised over the exercise price per
share, by (ii) the
number of shares subject to the exercisable portion
of the related
option so surrendered. No fractional share shall be
issued upon the
exercise of a stock appreciation rights and any
amounts remaining
after issuance of the nearest number of whole shares
approved for
issuance will be paid in cash.
(d) An optionee may elect to receive cash in lieu of all
or part of the
shares that would otherwise be issued under
Section 7(c) upon
exercise of a stock appreciation right provided (i)
such election is
accepted and approved by the Committee in its sole
discretion, and
(ii) with respect to an election by a person who is an
"officer" of
the Company within the meaning of Section 16(b) of the
Exchange Act,
such election is made in the time and manner
required under Rule
16b-3 of the Exchange Act so that the election
is exempt from
Section 16(b) of the Exchange Act.
8. Duration of the Option and Stock Appreciation Rights: The
term of each
option shall be not more than ten (10) years from the date
the option is
granted, subject to earlier termination or limitations
as provided in
Sections 4, 9, 14 and 15 hereof.
9. Exercise of Options and Stock Appreciation Rights:
(a) Except as provided in Sections 10, 14 and 15 hereof
and subject to
any vesting provisions specified by the Committee,
each optionee
holding an option under this Plan who has
remained in the
continuous, full-time employment of the Company since
the grant of
the option may exercise the option to purchase any
or all of the
shares covered by the option at any time within the
term of such
option.
PAGE 5
(b) The exercise of an option for fewer than the total
number of shares
covered by the option shall not affect the
optionee's right to
exercise the option as to any remaining shares
available for
purchase at any time prior to the option's termination.
10. Nontransferability of Option and Stock Appreciation
Rights: Each option
(including any related stock appreciation right) granted
under this Plan
shall, by its terms, be nontransferable by the optionee
other than by
will or the laws of descent and distribution and shall
be exercisable
during the optionee's lifetime only by the optionee.
The option
(including any related stock appreciation right) and any
and all rights
granted thereunder and not theretofore effectively
and completely
exercised shall automatically terminate and expire
upon any sale,
transfer or pledge or any attempted sale, transfer or
pledge of such
rights or upon the bankruptcy or insolvency of the
optionee, or of any
person who shall become entitled thereto under the will
of, or the laws
of descent and distribution applicable to, the optionee.
11. Limitation on Amounts of Incentive Stock Options Granted
to Employees:
The aggregate Fair Market Value of the Common Stock
with respect to
which, during any calendar year, one or more Incentive
Stock Options
under this Plan (and/or one or more options under
any other plan
m a intained by the Company or any of its parent
and subsidiary
corporations for the granting of options intended to
qualify under IRC
Section 422) are exercisable for the first time by an
optionee shall not
exceed $100,000 (said value to be determined as of the
respective dates
on which such options are granted to the optionee). If
an option that
would otherwise qualify as an Incentive Stock Option
becomes exercisable
for the first time in any calendar year for shares of
Common Stock that
would cause such aggregate Fair Market Value to exceed
$100,000, then the
portion of the option in respect of such shares shall be
deemed to be a
Nonqualified Stock Option.
12. Other Terms and Conditions: The Committee shall have
power, subject to
the limitations contained herein, to fix any terms and
conditions for the
grant or exercise of any option under this Plan. Nothing
contained in
this Plan, nor in any option granted pursuant to this Plan,
shall confer
upon any optionee any right to continue in the employ of
the Company or
any of its subsidiary corporations, nor limit in any way the
right of the
Company or of any of its subsidiary corporations by which
the optionee is
employed, to terminate the optionee's employment at any
time.
13. Adjustment of Shares Subject to Option: If the Company
subdivides its
outstanding shares of Common Stock into a greater number
of shares of
Common Stock (by stock dividend, stock split,
reclassification or
otherwise) or combines its outstanding shares of Common
Stock into a
smaller number of shares of Common Stock (by reverse
stock split,
reclassification or otherwise), or if the Committee
determines, in its
sole discretion, that any stock dividend, extraordinary
cash dividend,
reclassification, recapitalization, reorganization,
split-up, spin-off,
combination, exchange of shares, warrants or rights
offering to purchase
Common Stock, or other similar corporate event
(including mergers or
consolidations) affects the Common Stock such that an
adjustment is
required in order to preserve the benefits or potential
benefits intended
to be made available under this Plan, then the Committee
shall, in its
sole discretion and in such manner as the Committee may
deem equitable
and appropriate, make adjustments to (a) the number and
kind of shares
with respect to which options may thereafter be granted
under this Plan;
(b) the number and kind of shares subject to outstanding
options, and (c)
the exercise price under outstanding options; provided,
however, that the
number of shares subject to an option shall be always a
whole number.
The Committee may, if deemed appropriate, provide for a
cash payment to
any optionee in connection with any adjustment made
pursuant to this
Section 13.
PAGE 6
14. Effect of Termination of Employment: If an optionee
under this Plan
shall cease to be regularly and continuously employed by
the Company or
by any of its subsidiary corporations for any reason
other than
retirement (as defined in the Company's Retirement
Plan), death, or
disability (as defined in IRC Section 22(e)(3)),
then, upon the
termination of the optionee's employment, all rights
under all options
held by the optionee under the Plan shall lapse and
terminate. If
termination of employment is caused by the optionee's
disability (as
defined in IRC Section 22(e)(3)), the optionee may, but
only within the
one (1) year period immediately following such termination
of employment
(subject to the earlier expiration of the options by
their terms),
exercise the options to the extent they were exercisable
at the date of
such termination. If termination of such employment is
caused by the
optionee's retirement pursuant to the Company's
Retirement Plan or any
other retirement or pension plan of the Company which
may then be in
effect, then, subject to Section 15, the optionee may,
but only within
three (3) months immediately following such termination
of employment
(subject to the earlier expiration of the options by
their terms),
exercise the options to the extent they were exercisable
at the date of
such termination. For purposes of this Plan, if an
optionee is employed
by a subsidiary of the Company that ceases to be a
"subsidiary
corporation" of the Company within the meaning of IRC
Section 424(f),
such event shall be deemed to constitute a termination of
the employment
of the optionee for a reason other than retirement (as
defined in the
Company's Retirement Plan), death, or disability (as
defined in IRC
Section 22(e)(3)).
15. Death of Optionee: If an optionee dies while regularly and
continuously
employed by the Company or by any of its subsidiary
corporations, or
within three (3) months after the termination of such
employment by
retirement pursuant to the Company's Retirement Plan
or any other
retirement or pension plan of the Company which may then
be in effect,
any options held by the optionee may, to the extent they
were exercisable
at the date of such death, be exercised within one (1)
year after the
date of death (subject to the earlier expiration of the
options by their
terms) by the optionee's executor or administrator or by
the person or
persons to whom the optionee's rights under the options
shall pass by
will or by the applicable laws of descent and distribution.
16. Amendment of Plan: The Board of Directors may from time
to time amend
the Plan in such respects as it shall deem advisable, so
long as such
amendment complies with all applicable laws, applicable
stock exchange
listing requirements, and applicable requirements for
exemption (to the
extent necessary) under Rule 16b-3 of the Exchange Act.
Notwithstanding
the foregoing, without further shareholder approval no
amendment to this
Plan shall increase the number of shares of Common Stock
subject to the
Plan (except as authorized by Section 13), change the
class of persons
eligible to receive options under the Plan, or
otherwise materially
increase the benefits accruing to participants under
the Plan. No
amendment of the Plan may, without the consent of the
optionee of any
option theretofore granted, adversely affect the rights of
the optionee
with respect to the option.
PAGE 7
17. Time of Granting Options: Unless otherwise specified by
the Committee,
the date of grant of an option under the Plan shall, for all
purposes, be
the date on which the Committee makes the determination of
granting such
option. Notice of the determination shall be given to
each employee to
whom an option is so granted within a reasonable time
after the date of
such grant.
18. Withholding: The Company's obligation to deliver shares of
Common Stock
upon exercise of an option shall be subject to any
applicable federal,
state and local tax withholding requirements. Federal,
state and local
withholding tax due at the time an option is
exercised may, in the
discretion of the Committee, be paid in shares of Common
Stock already
owned by the optionee or through the withholding of
shares otherwise
issuable to the optionee, upon such terms and conditions as
the Committee
shall determine. If the optionee shall fail to pay, or make
arrangements
satisfactory to the Committee for the payment of, all such
federal, state
and local taxes, then the Company shall, to the extent
permitted by law,
have the right to deduct from any payment of any kind
otherwise due to
the optionee an amount equal to any federal, state or local
taxes of any
kind required to be withheld by the Company with respect to
the option.
19. Effective Date and Termination of Plan:
(a) This Plan is adopted effective as of December 15,
1993; provided,
however, that the Plan shall be ratified and approved
within twelve
(12) months thereafter by the favorable vote of the
holders of a
majority of the Common Stock of the Company present, in
person or by
proxy, and entitled to vote at a meeting of such
shareholders. If
the Plan shall not be so ratified by the Company's
shareholders, the
Plan and any options granted thereunder shall be void.
(b) The Plan may be terminated at any time by the Board
of Directors
and, if not so terminated at an earlier date, the Plan
in any event
shall terminate once all the shares reserved under
the Plan have
been sold or on December 14, 2003, whichever is
earlier. Options
may be granted under this Plan at any time, and from
time to time,
prior to its termination. Any option outstanding
under the Plan at
the time of its termination shall remain in effect
until the option
shall have been exercised in full or shall have
expired or been
otherwise terminated.
20. Statutory References: Each reference in this Plan to a
statute or a
regulation promulgated thereunder shall be construed to
refer to such
statute or regulation as it may from time to time be
amended and to any
similar successor provisions thereto.
