REGISTRATION NO. 33-____________
_________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
COMPUDYNE CORPORATION
______________________________________________________
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1408659
_______________________________ ______________________
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
120 Union Street
Willimantic, Connecticut 06226
________________________________________ ______________________
(Address of Principal Executive Offices) (Zip Code)
COMPUDYNE CORPORATION
1986 STOCK INCENTIVE COMPENSATION PLAN BENEFIT PLAN
________________________
(Full Title of the Plan)
Martin Roenigk, President
CompuDyne Corporation
120 Union Street
Willimantic, CT 06226
_______________________________________
(Name and address of agent for service)
(203) 456-0200
_____________________________________________________________
(telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
_________________________________________________________________________
<TABLE>
<S> <C> <C> <C> <C>
Proposed
Maximum Proposed
Title of Aggregate Maximum Amount of
Securities to Amount to be Price Aggregate Registration
be Registered Registered per Share* Offering Price* Fee
_____________ ____________ __________ ______________ ____________
Common Stock,
par value
$.75 per 100,000
share shares $1.625 $162,500 $100.00
</TABLE>
_________________________________________________________________________
* Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457 under the Securities Act of 1933 based on the
average of the bid and asked prices of the Common Stock reported on the
over the counter market on December 18, 1995, which was $1.625 per share, as
quoted on the over OTC Bulletin
Board.
_____________________________________
This registration statement shall become effective in accordance
with the provisions of Section 8(a) of the Securities Act of 1933 and
Rule 462 promulgated thereunder.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information required by Items 1 and 2 is not required to be
filed as part of this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by CompuDyne Corporation (the
"Company") with the Securities and Exchange Commission are incorporated
by reference in this Registration Statement:
(1) the latest annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), or the latest prospectus filed pursuant to Rule 424(b)
under the Securities Act of 1933 (the "Securities Act") that contains
audited financial statements for the Company's latest fiscal year for
which such statements have been filed;
(2) all other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the annual
report or prospectus referred to in (1) above.
(3) the description of the Company's Common Stock, par value $0.75
per share, contained in a registration statement filed under Section 12
of the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
In addition, all documents subsequently filed by the Company
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 hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in the Registration Statement and to be a part thereof from the
date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS BY THE REGISTRANT.
Pursuant to the Company's bylaws, and consistent with the
Pennsylvania statutes, any Director or officer (or former Director or
officer) of the Company who is or was a party or is threatened to be made
a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the corporation), or who
otherwise becomes involved in any legal proceedings (even though not
formally a party), by reason, at least in part, of the fact that he is or
was a director or officer of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent
(hereinafter "Representative") of another corporation, partnership, joint
venture, trust or other enterprise (hereinafter "Enterprise") is entitled
to indemnity from the Company for all expenses (including attorney's
fees), judgments, fines, penalties, costs, amounts paid in settlement and
other payments, actually and reasonably incurred in connection with such
threatened, pending or completed action, suit or proceeding. The
indemnity, however, applies only if the director or officer 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
proceeding, had no reasonable cause to believe his conduct was unlawful.
If a Director or officer, or a former Director or officer, is or was a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding not only in his capacity as a
shareholder or in any other capacity, and there is not a convenient way
to separate out expenses incurred in such separate capacities, all of
such expenses will be indemnified against by the Company. Additionally,
the Board of Directors of the Company may, in its discretion, provide
such indemnification for other persons who incur the above-described
costs by reason of the fact that they are or were employees or agents of
the Company as a Representative of another Enterprise.
These provisions are subject, generally, to the detailed provisions
of Title 15 of the Pennsylvania Consolidated Statutes, Sections 1741
through 1750. In particular, a director, officer, employee or agent of
the Company is entitled to indemnification to the extent he is successful
on the merits or otherwise in defense of the above-mentioned actions or
proceedings.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
No.
4.1 Certificate of Incorporation of CompuDyne Corporation (incorporated
by reference to Exhibits 3(A) through 3(E) of CompuDyne Corporation
Annual Report on Form 10-K for the period ending December 31, 1994).
4.2 By-Laws of CompuDyne Corporation (incorporated by reference to
Exhibit 3(F) of CompuDyne Corporation Annual Report on Form 10-K for the
period ending December 31, 1994).
5. Opinion of Connolly Epstein Chicco Foxman Engelmeyer & Ewing, dated
November 10, 1995, as to the legality of the original issuance of Common
Stock offered under this Registration Statement.
23.1 Consent of Coopers & Lybrand L.L.P., dated December 22, 1995.
23.2 Consent Connolly Epstein Chicco Forman Engelmeyer & Ewing of
(incorporated by reference to Exhibit 5 of this Registration Statement).
23.3 Consent of Harper & Whitfield, P.C., dated November 2, 1995.
99. CompuDyne Corporation 1986 Stock Incentive Compensation Plan Benefit
Plan adopted by its Board of Directors on November 26, 1986.
ITEM 9. UNDERTAKINGS.
(1) The undersigned small business issuer registrant hereby
undertakes:
(a) 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;
(ii) To reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) of the
Securities Act if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any additional or changed material information
on the plan of distribution; provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the registration statement is on Form S-3
or Form S-8 and the information required to be included in a post-
effective amendment by those paragraphs is incorporated by reference from
periodic reports filed by the registrant pursuant to Section 13 or 15(d)
of the Exchange Act.
(b) That, for the purpose of determining any liability under the
Securities Act, 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 bona fide offering thereof.
(c) 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.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 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 the
time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act 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 Act 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 Act
and will be governed by the final adjudication of such issue.
SIGNATURES
__________
The Registrant. 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 Willimantic,
State of Connecticut, on the 11th day of December, 1995.
COMPUDYNE CORPORATION
(Registrant)
/s/ Martin Roenigk
By_____________________________
Martin Roenigk
Its duly authorized President
and Chief Executive Officer
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.
SIGNATURES TITLE DATE
___________________________ ____________________ _____________
/s/ Martin Roenigk President, Chief
___________________________ Executive Officer,
Martin Roenigk Director December 11, 1995
/s/ Elaine Chen
___________________________ Principal Financial
Elaine Chen Officer and Controller December 11, 1955
/s/ Millard H. Pryor, Jr.
___________________________
Millard H. Pryor, Jr. Director December 11, 1995
/s/ David Clark, Jr.
___________________________
David Clark, Jr. Director December 11, 1995
/s/ Marjorie Morrissey
___________________________
Marjorie Morrissey Director December 11, 1995
/s/ Philip Blackmon
___________________________
Philip Blackmon Director December 11, 1995
/s/ Alan Markowitz
___________________________
Alan Markowitz Director December 11, 1995
EXHIBIT INDEX
_____________
4.1 Certificate of Incorporation of CompuDyne Corporation
(incorporated by reference to Exhibits 3(A) through 3(E) of CompuDyne
Corporation Annual Report on Form 10-K for the period ending December 31,
1994).
4.2 By-Laws of CompuDyne Corporation (incorporated by reference to
Exhibit 3(F) of CompuDyne Corporation Annual Report on Form 10-K for the
period ending December 31, 1994).
5. Opinion of Connolly Epstein Chicco Foxman Engelmeyer & Ewing,
dated November 10, 1995, as to the legality of the original issuance of
Common Stock offered under this Registration Statement.
23.1 Consent of Coopers & Lybrand L.L.P., dated December 22, 1995.
23.2 Consent Connolly Epstein Chicco Forman Engelmeyer & Ewing of
(incorporated by reference to Exhibit 5 of this Registration Statement).
23.3 Consent of Harper & Whitfield, P.C., dated November 2, 1995.
99. CompuDyne Corporation 1986 Stock Incentive Compensation Plan
Benefit Plan adopted by its Board of Directors on November 26, 1986.
CONNOLLY EPSTEIN CHICCO FOXMAN ENGELMYER & EWING
A Professional Corporation
Attorneys at Law
November 10, 1995
CompuDyne Corporation
10th Floor
90 State House Square
Hartford, CT 06226
Re: Common Stock to be Issued Pursuant to 1986
Incentive Compensation Plan
Gentlemen:
This firm has acted as special counsel to CompuDyne
Corporation (the "Company") in connection with its Registration
Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933 (the "Act"), relating to the offer and sale
of a maximum of 100,000 shares of the Company's Common Stock, par
value $.75 per share (the "Shares") pursuant to the Company's 1986
Incentive Compensation Plan (the "Plan"). In connection with the
Registration Statement, we have been requested to express an
opinion with respect to the legality of the Shares. Capitalized
terms used but not defined herein shall have the meanings given to
them in the Plan.
In this connection, we have examined the Company's Articles of
Incorporation, as amended, resolutions of the Company's Board of
Directors and Compensation and Stock Option Committee (the
"Committee"), certificates of representatives of the Company and
such other instruments, certificates, records and documents as we
have deemed necessary as the basis for the opinions set forth
below. In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity
of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies and
the authenticity of originals of such copies. In addition, we have
assumed that the documents listed above have not been and will not
be altered, amended, or supplemented in any respect material to our
opinions stated herein. We have conducted no independent factual
investigation but rather have relied solely upon the documents
listed above and the information set forth therein. For purposes
of the opinions set forth herein, we have also assumed that the
resolutions of the Committee issuing any of the Shares (other than
pursuant to Options) in any particular instance will set forth the
Committee's determination of the value of the consideration
received for the Shares or the manner in which such consideration
shall be determined, as required by Section 1524(a)(1) of the
Pennsylvania Business Corporation Law of 1988.
Based upon and subject to the foregoing, we are of the opinion
that (i) when and if issued in accordance with the terms of the
Plan, the Shares issued pursuant to Restricted Stock Awards under
the Plan and (ii) when and if issued upon exercise of Options
issued under the Plan, the shares issuable upon exercise of the
Options, will be duly authorized, legally and validly issued, fully
paid and non-assessable.
In giving the opinion as expressed above, we do not purport to
be experts in the laws of any jurisdiction other than the laws of
the Commonwealth of Pennsylvania, and the federal laws of the
United States. The opinions set forth herein are limited to the
date hereof and the applicable law on the date hereof, and we
undertake no responsibility to update these opinions.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement.
CONNOLLY EPSTEIN CHICCO FOXMAN
ENGELMYER & EWING
/s/ Gary A. Miller
By___________________________
Gary A. Miller
:bsm
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of CompuDyne Corporation (the Company) on Form S-8 of our
report, which includes an explanatory paragraph regarding the
expiration of a major contract which has generated a significant
portion of the Company's net sales, dated March 29, 1995, on our
audits of the consolidated financial statements of CompuDyne
Corporation and subsidiaries as of December 31, 1994 and 1993, and
for the years ended December 31, 1994, 1993 and 1992, which report
is included in the Company's Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
________________________________
Coopers & Lybrand L.L.P.
Washington, D.C.
December 22, 1995
HARPER & WHITFIELD, P.C.
Certified Public Accountants
314 Farmington Avenue
Farmington, Connecticut 06032
Consent of Independent Accountants
We hereby consent to the use of our report, dated September
25, 1995, on the balance sheets of MicroAssembly Systems, Inc. for
the years ended December 31, 1993 and 1994, the related statements
of income (loss) and accumulated deficit and cash flows for the
years then ended, and the statements of loss and accumulated
deficit and cash flows for the year ended December 31, 1992 in
Amendment No. 1 to each of the Current Reports on Form 8-K of
CompuDyne Corporation and Corcap, Inc., respectively, each of which
Current Reports was originally dated September 5, 1995.
We also hereby consent to the incorporation by reference in
the Registration Statement of CompuDyne Corporation on Form S-8
with respect to the CompuDyne Corporation 1986 Stock Incentive
Compensation Plan Benefit Plan of our report as it appears in the
above-mentioned Amendment No. 1 to the Current Report on Form 8-K
of CompuDyne Corporation.
/s/ Harper & Whitfield, P.C.
____________________________
Farmington, Connecticut
November 2, 1995
COMPUDYNE CORPORATION
1986 STOCK INCENTIVE COMPENSATION PLAN
1. PURPOSE
The purpose of the Plan is to further the growth and prosperity
of CompuDyne Corporation and it subsidiaries through
payment of incentive compensation in the form of Common Stock to officers
and key employees and by encouraging investment in the Company's Common
Stock by officers and other key employees who are in a position to
contribute materially to the Company's prosperity.
2. DEFINITIONS
Unless the context clearly indicates otherwise, the following
terms when used in this Plan, shall have the meanings set forth in this
Section 2.
"Appreciation" means in connection with an Option or Stock
Appreciation Right the amount by which the Fair Market Value of Common
Stock subject to such Option on the day prior to exercise thereof exceeds
the option price for such Common Stock determined as set forth in Section
7(b) hereof.
"Award Period" means for each Restricted Stock Award, the period
beginning with the date on which such Award is granted and ending on a date
specified by the Committee at the time of the granting of such Award. In
no event shall the Award Period be greater than ten (10) years.
"Board of Directors" or "Board" means the Board of Directors of the
Company.
"Committee" means the Compensation and Stock Option Committee of the
Board of Directors.
"Common Stock" means the common stock of the Company with a par value
of $.75 per share.
"Company" means CompuDyne Corporation.
"Fair Market Value" means the closing sale price per share on the
American Stock Exchange (or on whatever national exchange the shares of the
Company are traded) on the day before the award date or on the day before
the exercise date, as appropriate. If no trade occurred on the Exchange on
the day before the award date or on the day before the exercise date the
mean between the closing bid and ask price will be substituted for the last
sale price on that day.
"Incentive Award" means on Option, a Stock Appreciation Right, a
Restricted Stock Award or a combination of them.
"Incentive Stock Option" means an Option which meets the requirements
of Section 422A of the Internal Revenue Code.
"Option" means a regular stock option or Incentive Stock Option
granted under this Plan to purchase shares of Common Stock.
"Plan" means the CompuDyne Corporation 1986 Stock Incentive
Compensation Plan as amended.
"Restricted Stock Award" means the right to receive a specified number
of shares of Common Stock in annual installments over a designated Award
Period.
"Stock Appreciation Right" means a right granted by the Committee in
connection with or as an amendment to an Option which entitles the holder
of the Option to receive the appreciation in value of the stock subject to
such Option without payment to the Company.
"Subsidiary" or "Subsidiaries" means a corporation or other form of
business entity more than 50% of the voting interest of which is owned or
controlled, directly or indirectly, by the
Company.
"Unused Limit Carryover means one-half the amount by which $100,000
exceeds the aggregate Fair Market Value (determined as of the time the
Option is granted) of stock for which an employee was granted Incentive
Stock Options by the Company in any calendar year during which the employee
was employed by the Company or a Subsidiary carried over to the three
succeeding years.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph (c) of this Section
3 and Section 9, the total number of shares of Common Stock which may be
issued or transferred under this Plan upon exercise of stock options, Stock
Appreciation Rights and when an employee becomes entitled to receive shares
of stock under the terms of a Restricted Stock Award shall not exceed
100,000 shares.
(b) Shares to be transferred to employees will be made
available, at the discretion of the Board of Directors, either from
authorized but unissued shares of Common Stock or from shares of Common
Stock held by the Company as treasury shares, including shares purchased in
the open market.
(c) If any share of Common Stock transferable under an Incentive
Award is not transferred and ceases to be issuable or transferable because
of the lapse, in whole or in part, of such Incentive Award, or, by reason
of the provisions of paragraph (b) of Section 6, and paragraphs (d) and (e)
of Section 7, or as a result of an employee's election to exercise a Stock
Appreciation Right as set forth in paragraph (f) of Section 8, or for any
other reason, the shares not so issued or transferred shall no longer be
charged against the limitation provided for in paragraph (a) of this
Section 3 and may again be used for Incentive Awards.
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation and Stock
Option Committee which shall consist of three members who are not eligible
to receive Incentive Awards and who have not been eligible, at any time
within one year prior to appointment to the Committee, for selection as a
person to whom stock may be allocated or to whom Options or Restricted
Stock awards may be granted pursuant to the Plan or any other plan of the
Company or any of its affiliates entitling the participants therein to
acquire stock of the Company or any of its affiliates. The Committee
shall have authority, in its discretion and after receiving the
recommendations of the President of the Company, to determine the employees
to whom, and the time or times at which Incentive Awards will be granted
and the number of shares to be subject to each Incentive Award, and in the
case of Options whether or not such Options shall be accompanied by the
grant of Stock Appreciation Rights. In making such determinations, the
nature of the services rendered by the respective employees, their present
and potential contributions to the Company's success and such other factors
deemed to be relevant will be taken into account. Subject to the express
provisions of the Plan, the Committee shall also have authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective
Incentive Award Agreements (which need not be identical) including the
determination of whether Options granted will be designated as Incentive
Stock Options and to make all other determinations necessary or advisable
for the administration of the Plan. The Committee will hold its meetings
at such time and place as it may determine. A majority of its members will
constitute a quorum, and all determinations of the Committee shall be made
by a majority of its members.
5. PARTICIPATION
(a) Incentive Awards may be granted only to salaried officers or
key employees of the Company and its Subsidiaries.
(b) From time to time the President of the Company will
determine and recommend to the Committee employees of the Company and of
its Subsidiaries who should be granted Incentive Awards, the type of
Incentive Award to be granted, and the number of shares subject to each
Incentive Award. The Committee shall approve or disapprove such
recommendations.
(c) Incentive Awards may be granted in the following forms:
(i) A Restricted Stock Award, in accordance with Section 6;
(ii) An Option, in accordance with Section 7, which may be
designated as an Incentive Stock Option as that term is defined in Section
422A of the Internal Revenue Code;
(iii) An Option, accompanied by a Stock Appreciation Right
in accordance with Section 8; or
(iv) A combination of the foregoing.
6. RESTRICTED STOCK AWARDS
An Incentive Award in the form of a Restricted Stock Award shall
be subject to the following provisions:
(a) The Restricted Stock Agreement shall specify (i) a number of
shares of Common Stock to be transferred to the recipient over the Award
Period, and (ii) the times at which portions of those shares shall be
transferred to the recipient. Shares may not be transferred before one
year after the date of the Award, or later than ten years from such
date,excepting, however, that the Committee may waive any part of the one-
year period after the date of the Award during which the shares may not be
transferred.
(b) The Restricted Stock Award shall terminate if the holder,
with or without cause, shall cease to be an employee of the Company or any
of its Subsidiaries and any installments of shares of Common Stock which
have not yet become transferable to such holder shall be forfeited upon
cessation of employment; provided, however, in the event that an employee's
employment shall terminate as a result of death or disability the foregoing
provision of this paragraph (b) shall not apply and all shares of stock
subject to Restricted Stock Awards shall immediately become vested.
(c) At the time an installment of shares of Common Stock is
transferred to the holder of a Restricted Stock award, an additional
payment shall be made to such holder, either in cash or shares of Common
Stock as the Committee shall determine in its sole discretion, in an amount
equal to the cash dividends which may have been payable to the holder of
the Restricted Stock Award in respect to the shares transferred to the
holder at the time the Restricted Stock Award was granted.
(d) Each Restricted Stock Award shall be evidenced by a written
instrument containing terms and conditions determined by the Committee,
consistent with the terms of the Plan.
7. OPTIONS
An Incentive Award in the form of an Option shall be subject to
the following provisions:
(a) The Option shall specify (i) the number of shares of Common
Stock which may be purchased by the recipient over the term of the Option,
(ii) the times at which portions of such shares may be purchased by the
employee, (iii) whether the Option is accompanied by a Stock Appreciation
Right, and if so, the terms and conditions of such Stock Appreciation Right
as set forth in Section 8 and (iv) whether the Option is an Incentive Stock
Option. No Option shall be deemed to be an Incentive Stock Option unless
the Committee has so designated such Option and the Option states that it
is an Incentive Stock Option.
(b) The purchase price of each share of Common Stock under each
Option will be at least 100% of the Fair Market Value of a share of the
Common Stock at the time of grant.
(c) The Option must provide that it is not transferable and may
be exercised solely by the person to whom granted, except as provided in
paragraph (e) of this Section 7 in the event of such person's death.
(d) Each Option will be subject to the condition that it may be
exercised only if the optionee remains in the employ of the Company and/or
a Subsidiary for at least one year after the date of the granting of the
Option. An Option may be exercised at the times and in the amounts
determined by the Committee. In no event, however, shall an Option or a
Stock Appreciation Right relating to such Option be exercisable after ten
years from the granting of the Option.
(e) The Option (and any related Stock Appreciation Right) shall
terminate if and when the optionee shall cease to be an employee of the
Company and its Subsidiaries, except as follows:
(i) If an optionee dies while employed by the Company or a
Subsidiary, or within thirty (30) days after his/her retirement or the
termination of his/her employment where such termination was not for cause,
the option theretofore granted to him/her or any related Stock Appreciation
Right may be exercised (for not more than the number of shares for which
the optionee might have exercised his/her Option or Stock Appreciation
Right at the time of termination of employment) by the beneficiary
designated pursuant to paragraph (g) of Section 10 except in the case of an
Incentive Stock Option, or in the absence of such designation or if no such
beneficiary survives the optionee or if the Option is an Incentive Stock
Option, by such person or persons as shall have acquired the optionee's
rights under the Option by will or by the laws of descent and distribution,
but only within six (6) months from the date of death, and in no event
after ten years from the granting of the Option.
(ii) If an optionee retires or if his/her employment with
the Company or a Subsidiary is terminated for any reason (other than by
death) subsequent to one year from the date of grant of any Option, such
Option or any related Stock Appreciation Right may be exercised (for not
more than the number of shares for which the optionee might have exercised
his/her Option on the date of his/her retirement or the date on which
his/her employment was terminated) only within thirty (30) days from the
date of such retirement or termination of employment, but in no event after
ten years from the granting of the Option; provided, however, that if an
optionee is dismissed for cause, of which the Committee shall be the sole
judge, his/her Option and any related Stock Appreciation Right shall expire
forthwith. The Committee may determine that, for the purpose of the Plan,
an employee who is on a leave of absence will be considered as still in the
employ of the Company, provided that an Option shall be exercisable during
a leave of absence only as to the number of shares which were exercisable
at the commencement of such leave of absence.
(f) A person electing to exercise an Option will give written
notice to the Company of such election and of the number of shares he/she
has elected to purchase and the date on which he/she wishes to exercise the
Option. Any person exercising an Option shall tender the full purchase
price of the shares he/she has elected to purchase on the date specified by
him/her for completion of such purchase.
(g) A person electing to exercise a Stock Appreciation Right in
lieu of exercising all or part of an Option will give written notice to the
Company of such election, the number of shares subject to the Option which
will be taken in the form of Stock Appreciation Rights and whether the
payment of the Appreciation will be entirely in Common Stock or partially
in Common Stock and partially in cash as provided in Section 8 hereof.
(h) The Committee shall have the power to add a Stock
Appreciation Right to any outstanding Option. Such addition shall be made
by amending the outstanding Option to include a Stock Appreciation Right
(with the written approval of the holder thereof). Any such amendment
shall not be considered the grant of a new Option but shall be deemed to be
a continuation of the Option with respect to which such Stock Appreciation
Right is granted.
(i) Any Option which is an Incentive Stock Option shall provide
that it is not exercisable while there is outstanding (within the meaning
of Section 422A(c)(7) of the Internal Revenue Code) any Incentive Stock
Option which was granted to the Optionee before the granting of such
Option.
(j) The Option agreements or Option grants authorized by the
Plan may contain such other provisions, consistent with the terms of the
Plan, as the Committee shall consider advisable.
(k) Incentive Stock Options may not be issued to any person who
at the time of grant owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company or any
of its subsidiaries.
(l) No employee shall receive in any calendar year under this
Plan and any other plan of the Company Incentive Stock Options to purchase
Common Stock the aggregate Fair Market Value of which (determined as of the
time of grant) exceeds $100,000 plus any Unused Limit Carryover to such
year.
8. STOCK APPRECIATION RIGHTS
A Stock Appreciation Right may be granted to a key employee in
connection with (and only in connection with) any Option granted pursuant
to this Plan subject to the following provisions:
(a) Each Stock Appreciation Right shall relate to a specific
Option granted under the Plan and shall be granted to the employee either
concurrently with the grant of the Option or at such later time as
determined by the Committee.
(b) The Stock Appreciation Right shall entitle the holder of an
Opt ion to surrender the unexercised Option (or a portion thereof) within
the period specified for the exercise of such Option and receive in
exchange a payment in cash and/or Common Stock of the Company having an
aggregate value equal to the amount by which the Fair Market Value of the
Common Stock subject to the Option (or portion thereof which is exercised)
exceeds the Option price for such Common Stock (referred to as the
Appreciation); provided that the holder of the Option shall be entitled to
receive no more than 50% of the Appreciation in cash.
(c) Each Stock Appreciation Right granted hereunder shall be
subject to the same terms and conditions as the related Option. It shall
be exercisable only to the extent such Option is exercisable and shall
terminate or lapse and cease to be exercisable when the related Option
terminates or lapses.
(d) The holder of the Option shall have the sole discretion to
elect in each case whether any payment of a Stock Appreciation Right shall
be entirely in the form of Common Stock of the Company or partially in
Common Stock of the Company and partially in cash provided, however, the
holder cannot elect to receive more than 50% of the Appreciation in the
form of cash. The number of shares of Common Stock to be received by a
holder upon exercise of a Stock Appreciation Right will be determined by
dividing the portion of the Appreciation in respect of which he/she has
elected to receive Common Stock by the Fair Market Value of the Common
Stock on the day preceding the date of exercise of the Stock Appreciation
Right. Any remaining Appreciation (not to exceed 50% of the total) will be
paid in cash.
(e) Payments to be made, in whole or in part, in cash upon
exercise of Stock Appreciation Rights by any officer of the Company shall
be made in accordance with the provisions relating to the exercise of Stock
Appreciation Rights of Rule 16b-3 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect at the time of such
exercise, or any law, rule, regulation or other provision that may replace
such Rule.
(f) Upon the exercise of a Stock Appreciation Right, the total
number of shares subject to the related Option shall automatically be
reduced by the number of shares of Common Stock with respect to which the
Stock Appreciation Right is exercised. Any shares transferred upon exercise
of a Stock Appreciation Right shall be charged against the maximum
limitation upon the grant of shares of Common Stock set forth in Section 3
of the Plan. Any shares not transferred which are no longer subject to
Option due to surrender of the Option or a portion thereof upon exercise of
the Stock Appreciation Right shall not be charged against such maximum
limitation and shall again be available for grant pursuant to Incentive
Awards.
9. ADJUSTMENT PROVISIONS
Except as otherwise provided herein, the following provisions
shall apply to all Common Stock authorized for issuance, and optioned,
granted or awarded under the Plan:
(a) Stock Dividends, Splits, etc. In the event of a stock
dividend, stock split, or other subdivision or combination of the Common
Stock, the number of shares of Common Stock authorized under the Plan will
be adjusted proportionately. Similarly, in any such event there will be a
proportionate adjustment in the number of shares of Common Stock subject to
unexercised Options (but without adjustment to the aggregate option price)
and in the number of shares of Common Stock then subject to Restricted
Stock Awards.
(b) Merger, Exchange or Reorganization. In the event that the
outstanding shares of Common Stock are changed or converted into, exchanged
or exchangeable for, a different number or kind of shares or other
securities of the Company or of another corporation, by reason of a
reorganization, merger, consolidation, reclassification or combination,
appropriate adjustment shall be made by the Committee in the number of
shares and kind of Common Stock for which Incentive Awards and Stock
Payments may be or may have been awarded under the Plan, to the end that
the proportionate interests of participants shall be maintained as before
the occurrence of such event. However, that in the event of any
contemplated transaction which the Committee determines to be a change in
control of the Company, the Committee, with the approval of a majority of
the members of the Board of Directors who are not then participants, may
modify any and all outstanding Incentive Awards and Stock Payments so as to
accelerate, as a consequence of or in connection with such transaction, the
vesting of any employee's right to exercise any Incentive Awards or the
unqualified ownership of Common Stock subject to Incentive Awards.
(c) Adjustments under this Section 9 shall be made by the Board
of Directors, whose determination as to what adjustments shall be made, and
the extent thereof, shall be final, binding and conclusive. No fractional
shares of Common Stock shall be issued under the Plan on account of any
such adjustments.
10. GENERAL PROVISIONS
(a) With respect to any shares of Common Stock issued or
transferred under the provisions of this Plan, such shares may be issued or
transferred subject to such conditions, in addition to those specifically
provided in the Plan, as the Board of Directors or Committee may direct.
(b) Nothing in the Plan or in any instrument executed pursuant
thereto will confer upon any employee any right to continue in the employ
of the Company or a Subsidiary or will affect the right of the Company or
of a Subsidiary to terminate the employment of any employee with or without
cause.
(c) No shares of Common Stock will be issued or transferred
pursuant to an Incentive Award unless and until all legal requirements
applicable to the issuance or transfer of such shares have, in the opinion
of counsel to the Company, been complied with. In connection with any such
issuance or transfer, the person acquiring the shares will, if requested by
the Company, give written assurances satisfactory to counsel to the Company
that the shares are being acquired for investment and not with a view to
resale or distribution thereof and assurances in respect of such other
matters as the Company or a Subsidiary may consider desirable to assure
compliance with all applicable legal requirements.
(d) No employee (individually or as a member of a group), and no
beneficiary or other person claiming under or through him/her, will have
any right, title or interest in any shares of Common Stock allocated or
reserved for the purposes of the Plan or subject to any Incentive Award
except as to such shares of Common Stock, if any, as shall have been issued
or transferred to him/her and except as otherwise provided in Section 11
(a).
(e) In the case of any employee of a Subsidiary, the Committee
may direct the Company to issue or transfer the shares covered by the
Incentive Award to the Subsidiary for such lawful consideration as the
Committee may specify upon the condition that the Subsidiary will transfer
the shares to the employee in accordance with the terms of the Incentive
Award. Notwithstanding any other provision in this Plan, an Incentive
Award may be issued by and in the name of the Subsidiary and shall be
considered granted on the date it is approved by the Committee, on the date
it is delivered by the Subsidiary, or on such other date between such two
dates, as the Committee shall specify.
(f) The Company or a Subsidiary may make such provisions as it
may consider appropriate for the withholding of any taxes which the Company
or Subsidiary determines it is required to withhold in connection with any
Incentive Award.
(g) No Incentive Award and no rights under the Plan, contingent
or otherwise, shall be assignable, transferable or subject to any
encumbrance, pledge or charge of any nature; provided that, under such
rules and regulations as the Committee may establish pursuant to the terms
of the Plan, a beneficiary may be designated in respect to an Incentive
Award in the event of the death of the holder of such Incentive Award and
provided, also, that if such beneficiary shall be the executor or
administrator of the estate of the holder of such Incentive Award, any
rights in respect of such Incentive Award may be transferred to the person
or persons or entity (including a trust) entitled thereto under the will of
the holder of such Incentive Award or, in case of intestacy, under the laws
relating to intestacy.
(h) Nothing in the Plan is intended to be a substitute for, or
shall preclude or limit the establishment or continuation of, any other
plan, practice or arrangement for the payment of compensation or fringe
benefits to employees generally, or to any class or group of employees,
which the Company or any Subsidiary now has or may hereafter lawfully put
into effect, including, without limitation, any retirement, pension,
insurance, stock purchase, incentive compensation or bonus plan.
(i) The place of administration of the Plan will
conclusively be deemed to be within the State of Pennsylvania and the
validity, construction, interpretation and administration of the Plan and
any rules and regulations or determinations or decisions made thereunder,
will be governed by, and determined exclusively and solely in accordance
with, the laws of the State of Pennsylvania. Without limiting the
generality of the foregoing, the period within which any action arising
under or in connection with the Plan, or any payment or Award made or
purportedly made under or in connection therewith, must be commenced and
will be governed by the laws of the State of Pennsylvania, irrespective of
the place where the act or omission complained of took place and of the
residence of any party to such action and irrespective of the place where
the action may be brought.
11. AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
(a) The Board of Directors may at any time terminate, suspend or
amend the Plan, provided, however, that no such amendment will, without
approval of the shareholders of the Company, except as provided in Section
9 hereof, (i) increase the aggregate number of shares which may be issued
in connection with Incentive Awards; (ii) change the minimum Option
exercise price; (iii) increase the maximum period during which Options may
be exercised, or Restricted Stock Awards transferred; (iv) extend the
effective period of this Plan; or (v) materially modify the requirements as
to eligibility for participation in the Plan. No such amendment will
permit the granting of Incentive Awards to members of the Committee who are
not employees.
(b) The Committee may, with the consent of the person by whom a
Restricted Stock Award or an Option is held, modify or change the terms of
any Option or Restricted Stock Award in a manner which does not conflict
with the provisions of the Plan.
12. EFFECTIVE DATE AND DURATION OF PLAN
The effective date of the Plan is November 26, 1985 (subject to
approval by the shareholders of the Company on or before November 25,
1986), the date on which the Plan was adopted by the Board of Directors.
Any amendment to this Plan will become effective upon approval by Board of
Directors, unless shareholder approval is deemed necessary in which case
such amendment shall become effective upon approval by the shareholders.
Unless previously terminated by the Board of Directors, this Plan shall
terminate at the close of business on November 25, 1996 and no Restricted
Stock Award, Option, or Stock Appreciation Right may be granted under it
thereafter, but such termination shall not affect any Incentive Award
theretofore granted.
