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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1995
REGISTRATION NO. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ADVANCE ROSS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3878407
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
233 SOUTH WACKER DRIVE, SUITE 9700, CHICAGO, ILLINOIS 60606-6502
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES INCLUDING ZIP CODE)
ADVANCE ROSS CORPORATION 1995 DIRECTORS DEFERRAL PLAN
1993 ADVANCE ROSS CORPORATION STOCK OPTION PLAN
ADVANCE ROSS CORPORATION STOCK OPTION PLAN
ADVANCE ROSS / EUROPE TAX-FREE SHOPPING AB STOCK OPTION PLAN
(FULL TITLE OF THE PLANS)
HARVE A. FERRILL
ADVANCE ROSS CORPORATION
233 SOUTH WACKER DRIVE, SUITE 9700
CHICAGO, ILLINOIS 60606-6502
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(312) 382-1100
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH A COPY TO:
HERBERT S. WANDER, ESQ., P.C.
KATTEN MUCHIN & ZAVIS
525 WEST MONROE, SUITE 1600
CHICAGO, ILLINOIS 60661-3693
(312) 902-5200
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE(3)
------------------------ ------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value per share . . 100,000 $17.25 $1,725,000.00 $594.83
</TABLE>
(1) Includes an indeterminate number of shares of Advance Ross Corporation
Common Stock that may be issuable by reason of stock splits, stock
dividends or similar transactions.
(2) The amounts are based upon the average of the high and low sale prices of
Advance Ross Corporation common stock as reported on the NASDAQ National
Market System on October 2, 1995, and are used solely for the purpose of
calculating the registration fee pursuant to Rule 457(c) under the
Securities Act of 1933, as amended.
(3) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus contained herein includes 2,036,952 shares of Common Stock
covered by Registration Statement on Form S-8 (No. 33-59952), for which a
filing fee of $2,625.76 was paid and 626,740 shares of Common Stock covered
by Registration Statement on Form S-8 (No. 33-74620), for which a filing
fee of $1,897.78 was paid. The foregoing numbers of shares of Common Stock
covered by these Registration Statements have been adjusted to take into
account a two-for-one stock split of the Company's Common Stock effective
February 4, 1994, and a two-for-one stock split of the Company's Common
Stock effective September 8, 1995.
<PAGE> 2
The registrant has filed a Registration Statement on Form S-8 (No. 33-59952)
which first became effective on March 25, 1993, and a Registration Statement on
Form S-8 (No. 33-74620) which first became effective on January 27, 1994.
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus contained herein includes 2,036,952 shares of Common Stock covered
by Registration Statement No. 33-59952, of which 454,248 shares have been
issued and 626,740 shares of Common Stock covered by Registration Statement No.
33-74620, of which 5,348 shares have been issued. The foregoing numbers of
shares of Common Stock covered by these Registration Statements have been
adjusted to take into account a two-for-one stock split of the Company's Common
Stock effective February 4, 1994, and a two-for-one stock split of the
Company's Common Stock effective September 8, 1995.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE PROSPECTUS
The information called for in Part I of Form S-8 is not being filed with or
included in this Form S-8 in accordance with the rules and regulations of the
Securities and Exchange Commission (the "SEC").
The Form S-8 has one form of prospectus. The prospectus is to be used for
reoffers and resales of the Company's Common Stock acquired pursuant to the
exercise of options by affiliates of the Company who are participating in the
Advance Ross Corporation 1995 Directors Deferral Plan, 1993 Advance Ross
Corporation Stock Option Plan, the Advance Ross Corporation Stock Option Plan
and the Advance Ross/Europe Tax-Free Shopping AB Stock Option Plan. The
Prospectus has been prepared in accordance with the requirements of Form S-3,
as required by the conditions specified in General Instruction C to Form S-8.
The Company has filed a Registration Statement on Form S-8 (No. 33-59952)
which first became effective on March 25, 1993, and a Registration Statement on
Form S-8 (No. 33-74620) which first became effective on January 27, 1994, the
contents of which are herein incorporated by this reference.
<PAGE> 4
ADVANCE ROSS CORPORATION
1,164,388 SHARES OF COMMON STOCK
233 SOUTH WACKER DRIVE
SUITE 9700
CHICAGO, ILLINOIS 60606-6502
(312) 382-1100
This Prospectus relates to up to 1,164,388 shares of Common Stock ("Common
Stock" or the "Shares") of Advance Ross Corporation (the "Company"), which may
be offered by the Selling Security Holder (as hereinafter defined) listed
herein under the caption "Selling Security Holder." All 1,164,388 Shares may
be acquired upon the exercise of stock options granted to the Selling Security
Holder as a director, officer, employee or consultant of the Company. The
dates on which the options become exercisable, and the respective expiration
dates of the options, are described under the caption "Selling Security
Holder."
The 1,164,388 Shares covered by this Prospectus may be offered by the
Selling Security Holder from time to time in transactions on the NASDAQ
National Market System ("NASDAQ"), at prices and terms then obtainable, through
negotiated transactions at negotiated prices, or through underwriters,
broker-dealers or otherwise, however, there is no commitment to sell any of
these Shares. The amount of Shares offered will be determined from time to
time by each Selling Security Holder at his sole discretion. The Company will
not receive any part of the proceeds of any sales. Any brokers' commissions,
discounts, or other underwriters' compensation will be paid by the Selling
Security Holder.
The Selling Security Holder, and the broker-dealers through whom sales may
be made, may, the Company not so conceding, be deemed to be underwriters under
the Securities Act of 1933 (the "Securities Act"), and any commissions paid or
any discounts or concessions allowed to such broker-dealers may be underwriting
discounts and commissions under the Securities Act.
The Company's Common Stock is traded on NASDAQ. On October 2, 1995, the
closing ask price of the Common Stock on NASDAQ was $17.25 per Share. This
price per Share reflects a two-for-one stock split of the Company's Common
Stock effective September 8, 1995.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADE-
QUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is October 6, 1995
<PAGE> 5
TABLE OF CONTENTS
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PAGE
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<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Selling Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Description of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . 6
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any
sale made through its use shall imply that there has been no change in the
affairs of the Company since the date hereof.
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AVAILABLE INFORMATION
The Company is subject to certain of the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Such reports and other information
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and are also available for inspection and copying at the
following regional offices at the Commission: Room 1028, 75 Park Place, New
York, New York 10007; and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can also be
obtained at prescribed rates by mail addressed to the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549.
The Company has filed a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act with the Commission with
respect to the securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus omits certain information
contained in the Registration Statement. The Registration Statement, including
the exhibits and schedules thereto, may be inspected and copied in the manner
and at the sources described above.
SELLING SECURITY HOLDERS
Each of the Selling Security Holders identified below is the holder of
non-qualified stock options granted by the Company, and this Prospectus covers
the possible resale of the Common Stock issued or issuable upon the exercise of
these options. The amount of Shares issued or issuable upon the exercise of
the Selling Security Holders' options have been adjusted to take into account a
two-for-one stock split of the Company's Common Stock effective September 8,
1995.
HARVE A. FERRILL
Mr. Ferrill, Chairman of the Board, Chief Executive Officer and a
director of the Company, was granted non-qualified stock options pursuant to
the Advance Ross Corporation Stock Option Plan on October 26, 1992, to acquire
a total of 400,000 Shares at a price of $2.50 per Share that are covered by
this Prospectus. Options to acquire 200,000 Shares became exercisable on each
of April 26, 1993, and April 26, 1994. All of these options expire on October
26, 2002. Mr. Ferrill was also granted non-qualified stock options pursuant to
the 1993 Advance Ross Corporation Stock Option Plan on June 5, 1995, to acquire
a total of 50,000 Shares at a price of $12.50 per Share that are covered by
this Prospectus. Options to acquire 25,000 Shares will become exercisable on
each of June 5, 1996, and June 5, 1997. All of these options expire on June 5,
2005. Mr. Ferrill currently owns 142,600 shares of Common Stock.
PAUL G. YOVOVICH
Mr. Yovovich, President, Chief Operating Officer and a director of the
Company, was granted non-qualified stock options pursuant to the Advance Ross
Corporation Stock Option Plan on June 7, 1993, to acquire a total of 200,000
Shares at a price of $3.75 per Share that are covered by this Prospectus.
Options to acquire 100,000 Shares became exercisable on each of December 7,
1993, and December 7, 1994. All of these options expire on June 7, 2003. Mr.
Yovovich was also granted non-qualified stock options pursuant to the 1993
Advance Ross Corporation Stock Option Plan on June 15, 1993, to acquire a total
of 200,000 Shares at a price of $4.00 per Share that are also covered by this
Prospectus. Options to acquire 100,000 Shares became exercisable on each of
December 15, 1993, and December 15, 1994. All of these options expire on June
15, 2003. Mr. Yovovich was also granted
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<PAGE> 7
additional non-qualified stock options pursuant to the 1993 Advance Ross
Corporation Stock Option Plan on June 5, 1995, to acquire a total of 40,000
Shares at a price of $12.50 per Share that are covered by this Prospectus.
Options to acquire 20,000 Shares will become exercisable on each of June 5,
1996, and June 5, 1997. All of these options expire on June 5, 2005. Mr.
Yovovich currently owns 6,400 shares of Common Stock.
RANDY M. JOSEPH
Mr. Joseph, Vice President, Chief Financial Officer and Treasurer of
the Company, was granted non-qualified stock options pursuant to the 1993
Advance Ross Corporation Stock Option Plan on November 21, 1994, to acquire a
total of 10,000 Shares at a price of $10.13 per Share that are covered by this
Prospectus. Options to acquire 2,000 Shares will become exercisable on each of
November 21, 1995, November 21, 1996, November 21, 1997, November 21, 1998, and
November 21, 1999. All of these options expire on November 21, 2004. Mr.
Joseph was also granted non-qualified stock options pursuant to the 1993
Advance Ross Corporation Stock Option Plan on June 5, 1995, to acquire a total
of 15,000 Shares at a price of $12.50 per Share that are covered by this
Prospectus. Options to acquire 7,500 shares will become exercisable on each of
June 5, 1996, and June 5, 1997. All of these options expire on June 5, 2005.
Mr. Joseph currently owns 1,200 shares of Common Stock.
If either Mr. Ferrill or Mr. Yovovich incurs a termination of
employment prior to June 5, 1997, or Mr. Joseph incurs a termination of
employment prior to November 21, 1999, all or any portion of the options which
are not exercisable on the date immediately preceding the termination of
employment shall not be nor become exercisable at any time on or after the date
of termination of employment, except that if the Selling Security Holder's
termination of employment is due to death or disability, as determined by the
Advance Ross Stock Option Plan Committee, all outstanding options shall be
fully exercisable.
If the termination of employment is due to death, any unexercised and
unexpired options may be exercised at any time within the one year period
immediately following the date of the appointment of a representative. If the
termination of employment is due to cause, any unexercised and unexpired
options shall terminate simultaneously with the date of such termination of
employment. If the termination of employment is due to other than death or
cause, any unexercised and unexpired options shall terminate one year following
the date of such termination of employment.
Upon a "change in control" (as defined in the applicable plan) of the
Company, Mr. Ferrill, Mr. Yovovich and Mr. Joseph's unexercisable options shall
become fully exercisable in accordance with the plan under which they were
issued.
ROGER ANDERSON
Mr. Anderson, a consultant to and director of the Company, was granted
non-qualified stock options pursuant to the Advance Ross/Europe Tax-Free
Shopping AB Stock Option Plan in November 1992 to acquire a total of 334,236
Shares at a price of $3.13 per Share. Mr. Anderson has exercised options on
86,848 Shares, and has remaining options to acquire a total of 247,388 Shares,
all of which are covered by this Prospectus. Options to acquire 20 percent of
the total 334,236 Shares became exercisable on each of November 2, 1993, and
November 2, 1994, and will become exercisable on each of November 2, 1995,
November 2, 1996, and November 2, 1997. All of these options expire on
November 2, 1998. Mr. Anderson was also granted non-qualified stock options
pursuant to the Advance Ross Corporation 1995 Directors Deferral Plan on June
5, 1995, to acquire a total of 2,000 Shares at a price of $12.50 per Share that
are covered by this Prospectus. Options to acquire 100 percent of the total
2,000 Shares will become exercisable on the earlier of June 4, 1996, if Mr.
Anderson is still a director of the Company or the date Mr. Anderson ceases to
be a director of the Company because of his death or disability. All of these
options expire on June 5, 2005. Mr. Anderson currently owns 9,432 shares of
Common Stock.
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Upon a "change in control" (as defined in the applicable plan) of the
Company, Mr. Anderson's unexercisable options issued under the Advance Ross
Corporation 1995 Directors Deferral Plan shall be fully exercisable and in
certain circumstances be converted into cash all in accordance with
such plan and Mr. Anderson's unexercisable options issued under the Advance
Ross/Europe Tax-Free Shopping AB Stock Option Plan shall become fully
exercisable in accordance with such plan.
PLAN OF DISTRIBUTION
The Company will receive no proceeds from this offering. The
securities offered hereby may be sold by the Selling Security Holder acting as
principal for his own account through market transactions on NASDAQ, in one or
more negotiated transactions at negotiated prices, or otherwise. The sale of
securities may be offered to or through underwriters, brokers or dealers, and
such underwriters, brokers or dealers may receive compensation in the form of
underwriting discounts, commissions or concessions from the Selling Security
Holder and/or the purchasers of the securities for whom they act as agent. The
Selling Security Holder and any underwriters, brokers or dealers that
participate in the distribution of the securities may, the Company not so
conceding, be deemed to be underwriters and any compensation received by them
and any provided pursuant to the sale of the securities by them might be deemed
to be underwriting discounts and commissions under the Securities Act. In
order to comply with certain states' securities laws, if applicable, the
securities will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the securities may
not be sold unless the securities have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.
DESCRIPTION OF COMMON STOCK
The Company's authorized capital stock consists of 12,000,000 shares
of common stock, $.01 par value per share, and 1,200,000 shares of preferred
stock, divided into 1,000,000 shares of $1 par value preferred stock (the
"$1.00 Preferred Stock") and 200,000 shares of 5% cumulative preferred stock,
$25 par value per share (the "5% Preferred Stock"). The Company's Common Stock
and 5% Preferred Stock are registered under the Exchange Act.
COMMON STOCK
The authorized common stock of the Company consists of 12,000,000
shares of Common Stock, of which 7,075,370 were issued and outstanding as of
October 2, 1995. All shares of common stock currently outstanding are fully
paid and nonassessable, not subject to redemption and without preemptive or
other rights to subscribe for or purchase any proportionate part of any new or
additional issues of stock of any class or of securities convertible into stock
of any class.
Voting. Holders of Common Stock are entitled to one vote per share.
Conversion. The Common Stock has no conversion rights.
Dividends. Holders of Common Stock are entitled to receive, on a
cumulative basis, after the requirements with respect to the 5% Preferred Stock
have been met and subject to the rights and preferences of the $1.00 Preferred
Stock, their pro rata share of any cash dividend if and when declared by the
Board of Directors from funds legally available therefor.
5
<PAGE> 9
Liquidation. After distribution in full of the preferential amount to
be distributed to the holders of the 5% Preferred Stock then outstanding, the
holders of the Common Stock shall, subject to such rights and preferences of
the $1.00 Preferred Stock, be entitled to receive all of the remaining assets
of the corporation available for distribution to its stockholders outstanding
according to the number of shares of Common Stock held by them, respectively.
Transfer Agent. The Company's Transfer Agent and Registrar for the
Common Stock is Chemical Mellon Shareholder Services.
PREFERRED STOCK.
The authorized preferred stock consists of 1,200,000 shares, which
consists of $1.00 par value per share, 1,000,000 shares authorized, none
issued or outstanding and 5% Cumulative Preferred Stock, $25.00 par value per
share, 200,000 shares authorized and 18,775 issued and outstanding as of
October 2, 1995.
The $1.00 Preferred Stock may be issued by resolutions of the
Company's Board of Directors from time to time without any action of the
stockholders. Such resolutions may authorize issuances of the $1.00 Preferred
Stock, and may fix and determine dividend and liquidation preferences, voting
rights, conversion privileges, redemption terms, and other privileges and
rights of the stockholder of the $1.00 Preferred Stock so authorized. Such
$1.00 Preferred Stock shall not be preferred or prior to the 5% Preferred Stock
without the affirmative vote of at least two-thirds of the outstanding shares
of the 5% Preferred Stock.
Voting. The holders of the 5% Preferred Stock have no voting rights
whatsoever, except as set forth in the following sentence. If the Company
fails to make the payments due on the 5% Preferred Stock and such failure
continues for a period of 12 months, the holders of the 5% Preferred Stock
shall have the right, until all dividends accrued have been declared and paid,
voting separately as a class, to elect one-third of the total number of
directors of the Company, or if the number of directors of the Company is not a
multiple of three, the integer next larger than one-third of the entire Board
of Directors.
Conversion. The 5% Preferred Stock has no conversion rights.
Dividends. Holders of the 5% Preferred Stock are entitled to receive
dividends of $1.25 per share per annum in equal quarterly installments.
Liquidation. The holders of the 5% Preferred Stock are entitled to
receive, ratably and equally, a sum equal to all accumulated and accrued unpaid
dividends and $25 per share of 5% Preferred Stock if such distribution is
involuntary or $27.50 per share of 5% Preferred Stock if such distribution is
voluntary.
Redemption. The 5% Preferred Stock is subject to redemption in whole
or in part at the option of the Company upon payment of $27.50 per share plus
accumulated, accrued and unpaid dividends.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December
31, 1994, the Quarterly Reports on Form 10-Q for the quarters ended March 31,
1995, and June 30, 1995, and the Company's Reports on Form 10-C, dated June 30,
1995, and August 25, 1995 are hereby incorporated
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by reference in this Prospectus. All documents filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this Prospectus and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Copies of all documents incorporated herein by reference other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference herein) and of any other documents required to be delivered to
employees pursuant to Rule 428(b) of the Securities Act of 1933, as amended,
will be provided without charge to each person who receives a copy of this
Prospectus upon written or oral request to the Company's principal executive
offices at: 233 South Wacker Drive, Suite 9700, Chicago, Illinois 60606-6502,
Attention: Secretary (telephone: (312) 382-1100).
LEGAL MATTERS
Certain legal matters with respect to the validity of the Common Stock
offered hereby have been passed upon for the Company by Katten Muchin & Zavis,
a partnership including professional corporations, Chicago, Illinois. Herbert
S. Wander, a director of the Company, is a professional corporate member of
Katten Muchin & Zavis, which has and will continue to provide legal services to
the Company. As of September 11, 1995, Mr. Wander directly beneficially owned
20,000 shares of Common Stock and pursuant to the Advance Ross 1995 Directors
Deferral Plan was granted non-qualified stock options to acquire an additional
2,000 shares of Common Stock. Saul E. Rudo, a member of Katten Muchin & Zavis,
directly beneficially owned 600 shares of Common Stock as of October 2, 1995.
* * *
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the SEC are incorporated in this
Registration Statement by reference:
1. Advance Ross Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994.
2. Advance Ross Corporation's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1995, and June 30, 1995.
3. Advance Ross Corporation's Reports on Form 10-C, dated June 30,
1995, and August 25, 1995.
4. The description of the Advance Ross Corporation common stock (the
"Common Stock") which is contained in the Company's Registration
Statement filed pursuant to Section 12 of the Securities Exchange
Act of 1934 (the "Exchange Act") and all amendments thereto and
reports filed for the purpose of updating such description.
In addition, all documents filed by the Company or the Plan pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of
this registration statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all such securities then remaining unsold, shall be deemed to
be incorporated in this registration statement by reference and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be 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 subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
The Company hereby undertakes to provide without charge to each
person who has received a copy of the prospectus to which this registration
statement relates, upon the written or oral request of any such person, a copy
of any or all the documents that have been or may be incorporated by reference
into this registration statement, other than exhibits to such documents (unless
such exhibits are incorporated therein by reference). The Company hereby
further undertakes to deliver or cause to be delivered to all participants who
have an interest through the Plan in Common Stock (and any other participants
who request such information orally or in writing) who do not otherwise receive
such material, copies of all reports, proxy statements and other communications
distributed by the Company to its stockholders generally, no later than the
time such materials are first sent to its stockholders.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the shares offered hereby and legal matters in
connection with the interests in the Plan have been passed upon by Katten
Muchin & Zavis, a partnership including professional corporations. Herbert S.
Wander, a director of the Company, is a professional corporate member of Katten
Muchin & Zavis, which has and will continue to provide legal services to the
Company. As of September 11, 1995, Mr. Wander directly beneficially owned
20,000 shares of Common Stock and pursuant to the Advance Ross Corporation
Directors Deferral Plan was granted non-qualified Stock options to acquire an
additional 2,000 shares of Common Stock. Saul E. Rudo, a member of Katten
Muchin & Zavis directly beneficially owned 600 shares of Common Stock as of
October 2, 1995.
The consolidated financial statements and schedules of the Company
for the periods ended December 31, 1992, 1993 and 1994, included in the
Company's Annual Report on Form 10-K, which have been incorporated by reference
in this Registration Statement on Form S-8 by reference, have been audited by
Deloitte & Touche LLP, independent auditors, as indicated in their report with
respect thereto, and are incorporated herein in reliance upon the authority of
such firm as experts in accounting and auditing.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Fourteenth of the Company's Restated Certificate of
Incorporation as amended (the "Company Certificate") provides that the Company
shall indemnify its directors (former and present) and officers against certain
liabilities and expenses incurred as a result of their duties, and, along with
Article 12 of the By-Laws of the Company, defines the rights of the Company
directors and officers to indemnification by the Company in the event of
personal liability or expenses incurred by them as a result of certain
litigation against them.
The Delaware General Corporation Law (the "GCL") empowers the Company
to indemnify, subject to the standards therein prescribed, any person in
connection with any action, suit or proceeding brought or threatened by reason
of the fact that such person is or was a director, officer, employee or agent
of the Company or is or was serving as such with respect to another corporation
or other entity at the request of the Company. In addition, the GCL authorizes
corporations to limit or eliminate the personal liability of directors to
corporations and their stockholders for monetary damages for breach of
directors' fiduciary duty of care.
The directors and officers of the Company are covered by an insurance
policy, indemnifying them against certain civil liabilities, including certain
liabilities under the federal securities laws, which might be incurred by them
in such capacity. Further, the Company has entered into indemnification
agreements with each member of the board of directors which provide for
additional indemnification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 Advance Ross Corporation 1995 Directors Deferral Plan.
4.2 Form of Advance Ross Corporation 1995 Deferral Plan Option
Agreement.
4.3 1993 Advance Ross Corporation Stock Option Plan. Incorporated
by reference to Exhibit 4.1 of Form S-8 dated January 27, 1994
(File No. 33-74620).
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4.4 Form of Advance Ross/Europe Tax-Free Shopping AB Stock Option
Agreement. Incorporated by reference to Exhibit 4.1 of Form S-8
dated March 25, 1993 (File No. 33-59952).
4.5 Form of Stock Option Agreement by and between the partners of
Hamilton Capital Partners and Advance Ross Corporation.
Incorporated by reference to Item 7(c)(28.6) to Form 8-K, dated
November 2, 1992 (File No. 0-770).
4.6 Advance Ross Corporation Stock Option Plan. Incorporated by
reference to Exhibit 4.2 of Form S-8 dated March 25, 1993 (File
No. 33-59952).
4.7 Amendment to Advance Ross Corporation Stock Option Plan dated
June 8, 1995.
4.8 Form of Advance Ross Corporation Stock Option Agreement.
Incorporated by reference to Exhibit 4.3 of Form S-8 dated March
25, 1993 (File No. 33-59952).
4.9 Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Appendix B of Form S-4
filed on April 14, 1993 (File No. 0-21822).
4.10 Amendment to Amended and Restated Certificate of Incorporation
of the Company dated June 16, 1993.
4.11 Amendment to Amended and Restated Certificate of Incorporation
of the Company dated June 23, 1994.
4.12 By-laws of the Company. Incorporated by reference to Appendix C
of Form S-4 filed on April 14, 1993 (File No. 0-21822).
5 Opinion of Katten Muchin & Zavis as to the legality of the
shares of Common Stock being offered under the Plan.
23.1 Consent of Deloitte & Touche LLP with respect to their reports
on certain financial statements of the Company.
24.3 Consent of Katten Muchin & Zavis (see Exhibit 5).
25.1 Power of Attorney (included on the signature page of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
1. The Company 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 of 1933, as amended (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,
II-3
<PAGE> 14
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)(i) and (a)(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
Exchange Act that are incorporated by reference in the Registration
Statement.
(b) 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 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 Company hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment and each filing of the Company'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 that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers of the
Company and subsidiary companies pursuant to the foregoing provisions, or
otherwise, the Company has been informed that in the opinion of the SEC 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 Company
of expenses incurred or paid by a director, officer or controlling person of
the Company 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 Company 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.
II-4
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe 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 Chicago, and State of Illinois, on the 5th day of
October, 1995.
ADVANCE ROSS CORPORATION
By: /S/ HARVE A. FERRILL
---------------------------------
Harve A. Ferrill, Chief Executive
Officer
NOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Harve A. Ferrill, Randy M. Joseph and Herbert S.
Wander, and each of them, as his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities, to sign and file any and all
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents 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, as fully to all
intents and purposes as each might or could do in person, hereby ratifying and
confirming each act that said attorneys-in-fact and agents may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities, on the 5th day of October, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/S/ HARVE A. FERRILL Chairman of the Board, Chief Executive Officer, Principal
- -------------------------- Executive Officer and Director
Harve A. Ferrill
/S/ PAUL G. YOVOVICH President, Chief Operating Officer and Director
- --------------------------
Paul G. Yovovich
/S/ RANDY M. JOSEPH Vice President, Treasurer, Chief Financial Officer and
- -------------------------- Principal Accounting Officer
Randy M. Joseph
/S/ DUANE R. KULLBERG Director
- --------------------------
Duane R. Kullberg
/S/ HERBERT S. WANDER Director
- --------------------------
Herbert S. Wander
Director
- --------------------------
Thomas J. Peterson
/S/ HAROLD E. GUENTHER Director
- --------------------------
Harold E. Guenther
/S/ ROGER E. ANDERSON Director
- --------------------------
Roger E. Anderson
</TABLE>
II-5
<PAGE> 16
EXHIBIT INDEX
4.1 Advance Ross Corporation 1995 Directors Deferral Plan.
4.2 Form of Advance Ross Corporation 1995 Deferral Plan Option
Agreement.
4.3 1993 Advance Ross Corporation Stock Option Plan. Incorporated
by reference to Exhibit 4.1 of Form S-8 dated January 27, 1994
(File No. 33-74620).
4.4 Form of Advance Ross/Europe Tax-Free Shopping AB Stock Option
Agreement. Incorporated by reference to Exhibit 4.1 of Form S-8
dated March 25, 1993 (File No. 33-59952).
4.5 Form of Stock Option Agreement by and between the partners of
Hamilton Capital Partners and Advance Ross Corporation.
Incorporated by reference to Item 7(c)(28.6) to Form 8-K, dated
November 2, 1992 (File No. 0-770).
4.6 Advance Ross Corporation Stock Option Plan. Incorporated by
reference to Exhibit 4.2 of Form S-8 dated March 25, 1993 (File
No. 33-59952).
4.7 Amendment to Advance Ross Corporation Stock Option Plan dated
June 8, 1995.
4.8 Form of Advance Ross Corporation Stock Option Agreement.
Incorporated by reference to Exhibit 4.3 of Form S-8 dated March
25, 1993 (File No. 33-59952).
4.9 Amended and Restated Certificate of Incorporation of the
Company. Incorporated by reference to Appendix B of Form S-4
filed on April 14, 1993 (File No. 0-21822).
4.10 Amendment to Amended and Restated Certificate of Incorporation
of the Company dated June 16, 1993.
4.11 Amendment to Amended and Restated Certificate of Incorporation
of the Company dated June 23, 1994.
4.12 By-laws of the Company. Incorporated by reference to Appendix C
of Form S-4 filed on April 14, 1993 (File No. 0-21822).
5 Opinion of Katten Muchin & Zavis as to the legality of the
shares of Common Stock being offered under the Plan.
23.1 Consent of Deloitte & Touche LLP with respect to their reports
on certain financial statements of the Company.
24.3 Consent of Katten Muchin & Zavis (see Exhibit 5).
25.1 Power of Attorney (included on the signature page of this
Registration Statement).
II-6
<PAGE> 1
EXHIBIT 4.1
ADVANCE ROSS CORPORATION
1995 DIRECTORS DEFERRAL PLAN
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C> <C>
ARTICLE I ESTABLISHMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 "Agreement" or "Award Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 "Award" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 "Board of Directors" or "Board" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 "Change in Control" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 "Code" or "Internal Revenue Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8 "Commission" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 "Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 "Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11 "Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.12 "Deferral Election" or "Election" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.13 "Deferred Retainer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.14 "Deferred Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.15 "Director" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.16 "Disability" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.17 "Earnings Factor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.18 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.19 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.20 "Extraordinary Termination of Directorship" . . . . . . . . . . . . . . . . . . . . . . 6
2.21 "Fair Market Value" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.22 "Grant Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.23 "Notice Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.24 "Nonqualified Stock Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.25 "Option Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.26 "Option Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.27 "Participant" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.28 "Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.29 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.30 "Representative" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.31 "Retainer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.32 "Rule 16b-3" or "Rule 16a-1(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.33 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.34 "Stock Option" or "Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.35 "Termination of Directorship" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
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<PAGE> 3
<TABLE>
<CAPTION>
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----
<S> <C> <C>
2.36 "Trust" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.37 "Valuation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Committee Structure and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV SPECIAL PROVISIONS REGARDING STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Release of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Restrictions on Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Stockholder Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Best Efforts To Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Anti-Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8 Limited Transfer During Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Committee Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.10 No Company Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V DEFERRALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Deferral of Retainer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Election Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Full Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.5 Payment to a Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 Satisfaction of Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.8 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.9 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.10 Nontransferability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.2 Grant and Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Terms and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.4 Extraordinary Termination of Directorship . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Other Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 Amendments and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Unfunded Status of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.3 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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<PAGE> 4
<TABLE>
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<S> <C> <C>
7.4 Special Provisions Regarding a Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.5 Rights with Respect to Continuance as a Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.6 Awards in Substitution for Awards Granted by Other Corporations . . . . . . . . . . . . . . . . . . . . . 23
7.7 Procedure for Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.8 Procedure for Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.9 Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
(iii)
<PAGE> 5
ADVANCE ROSS CORPORATION
1995 DIRECTORS DEFERRAL PLAN
ARTICLE I
ESTABLISHMENT
1.1 Purpose.
The Advance Ross Corporation 1995 Directors Deferral Plan ("Plan") is
hereby established by Advance Ross Corporation ("Company") effective June 1,
1995. The purpose of the Plan is to provide for the deferred payment to the
non-employee directors of the Company of all or a portion of directors' fees in
cash or Common Stock, with the potential to further align the interests of the
directors with those of the stockholders of the Company and thereby promote the
long-term growth and performance of the Company. Except as expressly provided
herein, the Plan and the grant of Awards and the deferrals thereunder are
expressly conditioned upon the Plan's approval by the security holders of the
Company to the extent required by Rule 16b-3 of the Securities Exchange Act of
1934, as amended, and if such approval is not obtained, then the Plan and the
grant of Awards and all deferrals thereunder shall be null and void ab initio.
The Plan is adopted effective as of June 1, 1995.
ARTICLE II
DEFINITIONS
For purposes of the Plan, the following terms are defined as set forth
below:
2.1 "Account" means the record of an interest in this Plan with
respect to a Director's Deferred Retainer represented by his or her:
(a) "Cash Account" which means an interest in this Plan
composed of Deferred Retainers posted with a cash value to the credit
of the Director, plus all income and gains credited to and minus all
losses charged to such account, and minus all distributions charged to
such account.
(b) "Stock Account" which means an interest in this Plan
composed of Deferred Retainers posted with shares of Deferred Stock to
the credit of the Director, plus all income and gains credited to and
minus all losses charged to such account, and minus all distributions
charged to such account.
<PAGE> 6
The value of the Cash Account at any time, other than on a Valuation Date,
shall be the Cash Account accrued as of the immediately preceding Valuation
Date increased by the amount credited to the Cash Account since the previous
Valuation Date, and reduced by the value of any distributions from the Cash
Account. On the Valuation Date, the value shall be that as determined under
the preceding sentence increased by the product of the Cash Account and the
Earnings Factor and decreased by the value of losses (if any) for that
Valuation Date. On a Valuation Date, the Stock Account shall reflect the
number of shares of Common Stock or the value of Common Stock credited to the
Account as of the preceding Valuation Date increased by the number or value of
shares credited to the Stock Account since the previous Valuation Date, and
reduced by the number or value of any distributions from the Stock Account.
Each Account represents an unfunded commitment of the Company to pay in the
future the cash amounts or Deferred Stock credited thereunder, subject to all
of the terms and conditions of this Plan. The Committee may establish more
than one Account with respect to a Director, and the Plan shall apply
separately with respect to each Account.
2.2 "Affiliate" means any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated association or other
entity (other than the Company) that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, the Company including, without limitation, any member of an affiliated
group of which the Company is a common parent corporation as provided in
Section 1504 of the Code.
2.3 "Agreement" or "Award Agreement" means, individually or
collectively, any agreement entered into pursuant to this Plan pursuant to
which an Award is granted to a Participant.
2.4 "Award" means a Stock Option or the crediting of Deferred
Stock or the crediting of cash to the Account pursuant to the Plan.
2.5 "Board of Directors" or "Board" means the Board of Directors
of the Company.
2.6 "Change in Control" shall be deemed to have occurred on the
first to occur of any of the following events:
(a) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of twenty-five percent (25%) or more of
either (A) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting
securities of the
2
<PAGE> 7
Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change in Control of the Company: (1) any
acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion
privilege), (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (4) any acquisition by any
corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (1), (2)
and (3) of Section 2.6(c) are satisfied; or
(b) Individuals who, as of the effective date of
this Plan, constitute the Board of Directors of the Company
(the "Incumbent Board of the Company") cease for any reason to
constitute at least a majority of the Board of Directors of
the Company; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors
then comprising the Incumbent Board of the Company shall be
considered as though such individual were a member of the
Incumbent Board of the Company, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as contemplated by Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board of Directors of the Company;
or
(c) Approval by the shareholders of the Company
of a reorganization, merger or consolidation, in each case,
unless, following such reorganization, merger or
consolidation, (1) more than seventy-five percent (75%) of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2)
no Person (excluding the Company, any employee benefit plan
(or related
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trust) of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person
beneficially owning immediately prior to such reorganization,
merger or consolidation, directly or indirectly, twenty-five
percent (25%) or more of the Outstanding Company Common Stock
or Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty-five percent
(25%) or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting
power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors and (3) at least a majority of the members of the
board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the
Incumbent Board of the Company at the time of the execution of
the initial agreement providing for such reorganization,
merger or consolidation; or
(d) Approval by the shareholders of the Company
of the sale or other disposition of all or substantially all
of the assets of the Company, other than to a corporation,
with respect to which following such sale or other
disposition, (A) more than seventy-five percent (75%) of,
respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan (or related
trust) of the Company or such corporation and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, twenty-five percent (25%)
or more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities, as the case may be) beneficially
owns, directly or indirectly, twenty-five percent (25%) or
more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and
(3) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent
Board of the Company at the time of the execution of the
initial
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agreement or action of the Board providing for such sale or
other disposition of assets of the Company.
2.7 "Code" or "Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, final Treasury Regulations thereunder and any
subsequent Internal Revenue Code.
2.8 "Commission" means the Securities and Exchange Commission or
any successor agency.
2.9 "Committee" means the person or persons appointed by the Board
of Directors to administer the Plan, as further described in the Plan.
2.10 "Common Stock" means the shares of the regular voting Common
Stock, $.01 par value, whether presently or hereafter issued, and any other
stock or security resulting from adjustment thereof as described hereinafter or
the common stock of any successor to the Company which is designated for the
purpose of the Plan.
2.11 "Company" means Advance Ross Corporation, a Delaware
corporation, and includes any successor or assignee corporation or corporations
into which the Company may be merged, changed or consolidated; any corporation
for whose securities the securities of the Company shall be exchanged; and any
assignee of or successor to substantially all of the assets of the Company.
2.12 "Deferral Election" or "Election" means an election by a
Director to (a) either receive all of his or her Retainer on a current basis or
to reduce his or her Retainer by an amount or percentage specified in the
Election; and (b) to select whether the Deferred Retainer will be posted to the
Cash Account, the Stock Account, or a combination of the foregoing. The
Deferral Election with respect to Deferred Stock shall be effective only with
respect to a Notice Date that is at least six months prior to the transaction
to which the Election relates and is irrevocable with respect to that
transaction.
2.13 "Deferred Retainer" means the amount of the Retainer deferred
from time to time based upon the Participant's Deferral Election.
2.14 "Deferred Stock" means an award of Common Stock posted to the
Participant's Stock Account which will be distributed at a later date pursuant
to the Plan.
2.15 "Director" means each and any director who serves on the Board
and who is not an officer or employee of the Company or any of its Affiliates.
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2.16 "Disability" means a mental or physical illness that renders a
Participant totally and permanently incapable of performing the Participant's
duties for the Company or an Affiliate. The determination of Disability shall
be made by the Committee. The determination of Disability for purposes of the
Plan shall not be construed to be an admission of disability for any other
purpose.
2.17 "Earnings Factor" means the product of (a) the interest rate
in respect of one-year Treasury Bills selected by the Committee from time to
time (but reviewed at least once per year) and (b) a fraction, the numerator of
which is the number of full calendar months in the accounting period and the
denominator of which is 12. If the accounting period is other than one or more
full calendar months, the Committee shall appropriately modify the fraction
calculated under the preceding sentence.
2.18 "Effective Date" means June 1, 1995.
2.19 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
2.20 "Extraordinary Termination of Directorship" means the
Termination of Directorship of the Participant due to death or Disability.
2.21 "Fair Market Value" means the value determined on the basis of
the good faith determination of the Committee, without regard to whether the
Common Stock is restricted or represents a minority interest, pursuant to the
applicable method described below:
(a) if the Common Stock is listed on a national
securities exchange or quoted on the NASDAQ Stock Market ("NASDAQ"),
the closing price of the Common Stock on the relevant date (or, if
such date is not a business day or a day on which quotations are
reported, then on the immediately preceding date on which quotations
were reported), as reported by the principal national exchange on
which such shares are traded (in the case of an exchange) or by the
NASDAQ, as the case may be;
(b) if the Common Stock is not listed on a national
securities exchange or quoted on the NASDAQ, but is actively traded in
the over-the-counter market, the average of the closing bid and asked
prices for the Common Stock on the relevant date (or, if such date is
not a business day or a day on which quotations are reported, then on
the immediately preceding date on which quotations were reported); and
(c) if, on the relevant date, the Common Stock is not
publicly traded or reported as described in (a) or (b), the value
determined in good faith by the Committee.
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2.22 "Grant Date" means the date that as of which an Award is
granted pursuant to this Plan.
2.23 "Notice Date" means the date established by the Committee as
the deadline for it to receive a Deferral Election or any other notification
with respect to an administrative matter in order to be effective under this
Plan.
2.24 "Nonqualified Stock Option" means an Option to purchase Common
Stock in the Company granted under this Plan the taxation of which is pursuant
to Section 83 of the Code.
2.25 "Option Period" means the period during which the Option shall
be exercisable in accordance with the Agreement and Article VI.
2.26 "Option Price" means the price at which the Common Stock may
be purchased under an Option as provided in Section 6.3.
2.27 "Participant" means a Director to whom an Award has been
granted under the Plan, and in the event a Representative is appointed for a
Participant or another person becomes a Representative, then the term
"Participant" shall mean such appointed Representative. A person will cease to
be a Participant when the full value of his or her Award has been distributed
in full. The term shall also include a trust for the benefit of the
Participant, the Participant's parents, spouse or descendants; a partnership
the interests in which are for the benefit of the Participant, the
Participant's parents, spouse or descendants; or a custodian under a uniform
gifts to minors act or similar statute for the benefit of the Participant's
descendants, to the extent permitted by the Committee and not inconsistent with
an application of Rule 16b-3. Notwithstanding the foregoing, the term
"Termination of Directorship" shall mean the Termination of Directorship of the
Director.
2.28 "Payment Date" means, with respect to the distribution of a
Participant's Account, the first day of the month coincident with or next
following the earliest of (a) the date of the Participant's Termination of
Directorship, (b) the date elected by a Participant on a Deferral Election, and
(c) the date of a Change in Control or termination of the Plan, whichever
occurs first, unless waived by the Participant. Absent a Change in Control,
the Committee may, in its sole discretion, delay the distribution of the Stock
Account until the Plan is approved by stockholders.
2.29 "Plan" means the Advance Ross Corporation 1995 Directors
Deferral Plan, as herein set forth and as may be amended from time to time.
2.30 "Representative" means (a) the person or entity acting as the
executor or administrator of a Participant's estate pursuant to the last will
and testament of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the
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Participant's primary residence at the date of the Participant's death; (b) the
person or entity acting as the guardian or temporary guardian of a Participant;
(c) the person or entity which is the beneficiary of the Participant upon or
following the Participant's death; or (d) any person to whom an Award has been
permissibly transferred by the Committee; provided that only one of the
foregoing shall be the Representative at any point in time as determined under
applicable law and recognized by the Committee.
The Committee may, in its sole discretion, delay the distribution of
the Stock Account until the Plan is approved by shareholders.
2.31 "Retainer" means the retainer provided to the Participant for
services rendered as a Director, including attendance at meetings, but not the
reimbursement of expenses, in his or her capacity as a Director.
2.32 "Rule 16b-3" or "Rule 16a-1(c)(3) mean Rule 16b-3 and Rule
16a-1(c)(3), as promulgated under the Exchange Act, as amended from time to
time, or any successor thereto, in effect and applicable to the Plan and
Participants.
2.33 "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
2.34 "Stock Option" or "Option" means an option granted under
Article VI.
2.35 "Termination of Directorship" means the occurrence of any act
or event that actually or effectively causes or results in the person's
ceasing, for whatever reason, to be a Director of the Company or of any
Affiliate, including, without limitation, death, Disability, dismissal,
severance at the election of the Participant, retirement, or severance as a
result of the discontinuance, liquidation, sale or transfer by the Company or
its Affiliates of all businesses owned or operated by the Company or its
Affiliates. A person who becomes an employee or officer of the Company shall
not have incurred a Termination of Directorship.
2.36 "Trust" means any trust the Company may choose to adopt in
connection with the Plan.
2.37 "Valuation Date" means the date or dates designated by the
Committee for adjusting Accounts.
In addition, certain other terms used herein have definitions given to
them in the first place in which they are used.
ARTICLE III
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ADMINISTRATION
3.1 Committee Structure and Authority. The Plan shall be
administered by the Committee which, except as provided herein, shall be
comprised of one or more persons. The Committee shall be the Compensation
Committee of the Board of Directors, unless such committee does not exist or
the Board establishes another committee whose purpose is the administration of
the Plan. In the absence of an appointment, the Board shall be the Committee;
provided that only those members of the Compensation Committee of the Board who
participate in the decision relative to Awards under the Plan shall be deemed
to be part of the "Committee" for purposes of the Plan. A majority of the
Committee shall constitute a quorum at any meeting thereof (including telephone
conference) and the acts of a majority of the members present, or acts approved
in writing by a majority of the entire Committee without a meeting, shall be
the acts of the Committee for purposes of the Plan. The Committee may
authorize any one or more of its members or an officer of the Company to
execute and deliver documents on behalf of the Committee. A member of the
Committee shall not exercise any discretion respecting himself or herself under
the Plan. The Board shall have the authority to remove, replace or fill any
vacancy of any member of the Committee upon notice to the Committee and the
affected member. Any member of the Committee may resign upon notice to the
Board. The Committee may allocate among one or more of its members, or may
delegate to one or more of its agents, such duties and responsibilities as it
determines.
Among other things, the Committee shall have the authority, subject to
the terms of the Plan and the Company's intent that transactions be exempt
under Rule 16b-3:
(a) to determine the terms and conditions of any Award
hereunder;
(b) to determine the number of shares of Common Stock to
be allocated to the Stock Account;
(c) to determine the terms and conditions of any Award
granted hereunder (including, but not limited to, the Option Price,
the Option Period, any exercise restriction or limitation and any
exercise acceleration or forfeiture waiver regarding any Award and the
shares of Common Stock relating thereto);
(d) to provide for the forms of Agreement to be utilized
in connection with this Plan;
(e) to determine whether a Participant has a Disability
or retires;
(f) to determine what securities law requirements are
applicable to this Plan, Awards, and the issuance of shares of Common
Stock and to require
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of a Participant that appropriate action be taken with respect to such
requirements;
(g) to interpret and make a final determination with
respect to the remaining number of shares of Common Stock available
under this Plan;
(h) to determine the restrictions or limitations on the
transfer of Common Stock;
(i) to adjust the terms and conditions, at any time or
from time to time, of any Award, subject to the limitations of Section
4.4;
(j) to provide for any forms to be utilized in connection
with the Plan;
(k) to cancel, with the consent of the Participant or as
otherwise provided in the Plan, outstanding Awards;
(l) to require as a condition of the issuance or transfer
of a certificate of Common Stock, the withholding from a Participant
of the amount of any federal, state or local taxes as may be necessary
in order for the Company or any other entity to obtain a deduction or
as may be otherwise required by law;
(m) to determine whether and with what effect an
individual has incurred a Termination of Directorship;
(n) to determine whether the Company or any other person
has a right or obligation to purchase Common Stock from a Participant
and, if so, the terms and conditions on which such Common Stock is to
be purchased;
(o) to determine whether an Award is to be adjusted or
modified;
(p) to determine the permissible methods of affecting a
Deferral Election;
(q) to establish, maintain and adjust Accounts;
(r) to establish and determine the Earnings Factor, if
any;
(s) to direct and implement the payment of Accounts as of
the Payment Date;
(t) to adopt, amend and rescind such rules and
regulations as, in its opinion, may be advisable in the administration
of the Plan; and
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(u) to appoint and compensate agents, counsel, auditors
or other specialists to aid it in the discharge of its duties.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan and to otherwise supervise the
administration of the Plan. The Committee's policies and procedures may differ
with respect to Awards granted at different times or to different Participants.
Any determination made by the Committee pursuant to the provisions of
the Plan shall be made in its sole discretion. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding on
all persons, including the Company and Participants. Any determination shall
not be subject to de novo review if challenged in court.
ARTICLE IV
SPECIAL PROVISIONS REGARDING STOCK
4.1 Number of Shares. Subject to the adjustment under Section
4.6, the total number of shares of Common Stock reserved and available for
distribution pursuant to Awards under this Plan shall be 50,000 shares of
Common Stock authorized for issuance on the Effective Date. Such shares may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.
4.2 Release of Shares. If any shares of Common Stock that have
been optioned cease to be subject to an Award, if any shares of Common Stock
that are subject to any Award are forfeited, if any Award otherwise terminates
without issuance of shares of Common Stock being made to the Participant, or if
any shares (whether or not restricted) of Common Stock are received by the
Company in connection with the exercise of an Award including the satisfaction
of any tax withholding, such shares, in the discretion of the Committee, may
again be available for distribution in connection with Awards under this Plan.
If any shares could not again be available for Options to a particular
Participant under any applicable law, such shares shall be available
exclusively for Options to Participants who are not subject to such
limitations.
4.3 Restrictions on Shares. Shares of Common Stock issued upon
exercise or distribution of an Award shall be subject to the terms and
conditions specified herein and to such other terms, conditions and
restrictions as the Committee in its discretion may determine or provide. The
Company shall not be required to issue or deliver any certificates for shares
of Common Stock, cash or other property prior to
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(i) the listing of such shares on any stock exchange (or other public market)
on which the Common Stock may then be listed (or regularly traded), (ii) the
completion of any registration or qualification of such shares under federal or
state law, or any ruling or regulation of any government body which the
Committee determines to be necessary or advisable, and (iii) the satisfaction
of any applicable withholding obligation in order for the Company or an
Affiliate to obtain a deduction with respect to the distribution of an Award.
The Company may cause any certificate for any share of Common Stock to be
delivered to be properly marked with a legend or other notation reflecting the
limitations on transfer of such Common Stock as provided in the Plan or as the
Committee may otherwise require. The Committee may require any person
receiving the distribution of an Award to make such representations and furnish
such information as it may consider appropriate in connection with the issuance
or delivery of the shares of Common Stock in compliance with applicable law or
otherwise. Fractional shares shall not be delivered, but shall be rounded to
the next lower whole number of shares and any portion of the Stock Account less
than a whole share shall be posted in cash.
4.4 Stockholder Rights. No person shall have any rights of a
stockholder as to shares of Common Stock subject to an Award until, after
proper exercise of the Award or other action required, such shares shall have
been recorded on the Company's official stockholder records as having been
issued or transferred. Upon exercise of the Award or any portion thereof, the
Company will have thirty (30) days in which to issue the shares, and the
Participant will not be treated as a stockholder for any purpose whatsoever
prior to such issuance. No adjustment shall be made for cash dividends or
other rights for which the record date is prior to the date such shares are
recorded as issued and transferred in the Company's official stockholder
records, except as provided herein or in an Agreement.
4.5 Best Efforts To Register. The Company will register under the
Securities Act the Common Stock delivered or deliverable pursuant to Awards on
Commission Form S-8 if available to the Company for this purpose (or any
successor or alternate form that is substantially similar to that form to the
extent available to effect such registration), in accordance with the rules and
regulations governing such forms, as soon as such forms are available for
registration to the Company for this purpose. The Company will use its best
efforts to cause the registration statement to become effective as soon as
possible and will file such supplements and amendments to the registration
statement as may be necessary to keep the registration statement in effect
until the earliest of (a) one year following the expiration of the Option
Period of the last Option outstanding, (b) the date the Company is no longer a
reporting company under the Exchange Act and (c) the date all Participants have
disposed of all shares delivered pursuant to any Award. The Company may delay
the foregoing obligation if the Committee reasonably determines that any such
registration would materially and adversely affect the Company's interests or
if there is no material benefit to Participants.
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4.6 Anti-Dilution. In the event of any change in capitalization,
such as a stock dividend, stock split, combination or exchange of shares,
recapitalization or other change in the capital structure of the Company,
corporate separation or division of the Company (including, but not limited to,
a split-up, spin-off, split-off or distribution to Company stockholders other
than a normal cash dividend), sale by the Company of all or a substantial
portion of its assets (measured on either a stand-alone or consolidated basis),
reorganization, rights offering, a partial or complete liquidation, or any
other corporate transaction, Company share offering or event involving the
Company and having an effect similar to any of the foregoing, then the
Committee shall adjust or substitute, as the case may be, the number of shares
of Common Stock available for Awards under the Plan, the number of shares of
Common Stock covered by outstanding Awards, and any other characteristics or
terms of the Awards as the Committee shall deem necessary or appropriate to
reflect equitably the effects of such changes to the Participants; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated by rounding to the next lower whole number of shares with
appropriate payment for such fractional share as shall reasonably be determined
by the Committee.
4.7 Transfer of Shares. A Participant may at any time make a
transfer of shares of Common Stock received pursuant to the exercise of an
Award to his parents, spouse or descendants, to any trust for the benefit of
the foregoing or to a partnership the interests of which are principally for
the benefit of the Participant, his parents, spouse or descendants or to a
custodian under a uniform gifts to minors act or similar statute for the
benefit of any of the Participant's descendants. Any transfer of shares
received pursuant to the exercise of an Award shall not be permitted or valid
unless and until the transferee agrees to be bound by the provisions of this
Plan, and any provision respecting Common Stock under the Agreement, provided
that "Termination of Directorship" shall continue to refer to the Termination
of Directorship of the director.
4.8 Limited Transfer During Offering. In the event there is an
effective registration statement under the Securities Act pursuant to which
shares of Common Stock shall be offered for sale in an underwritten offering, a
Participant shall not, during the period requested by the underwriters
managing the registered public offering, effect any public sale or distribution
of shares received directly or indirectly pursuant to an exercise of an Award.
4.9 Committee Discretion. The Committee may in its sole
discretion include in any Agreement an obligation that the Company purchase a
Participant's shares of Common Stock received upon the exercise of an Award
(including the purchase of any unexercised Awards which have not expired), or
may obligate a Participant to sell shares of Common Stock to the Company upon
such terms and conditions as the Committee may determine and set forth in an
Agreement. The provisions of this
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Section shall be construed by the Committee and shall be subject to such other
terms and conditions as the Committee may from time to time determine.
4.10 No Company Obligation. None of the Company, an Affiliate or
the Committee shall have any duty or obligation to affirmatively disclose to a
record or beneficial holder of Common Stock or an Award, and such holder shall
have no right to be advised of any material information regarding the Company
or any Affiliate at any time prior to, upon or in connection with receipt or
the exercise of an Award or the Company's purchase of Common Stock or an Award
from such holder in accordance with the terms hereof.
ARTICLE V
DEFERRALS
5.1 Deferral of Retainer
(a) A Director who desires to have all or a portion of
his or her Deferred Retainer credited to an Account on his or her
behalf shall file a Deferral Election pursuant to the procedures of
the Committee specifying and authorizing an amount or percentage of
his or her Retainer otherwise payable to be reduced and to be
(1) posted to the Cash Account; or
(2) posted to the Stock Account; or
(3) a combination of any of the foregoing.
(b) For each period for which a Deferral Election is in
effect, the Company shall
(1) post to the Cash Account the amount reflected
in the Deferral Election to be so posted;
(2) post to the Stock Account the number of
shares of Common Stock equal to the amount of
the Deferred Retainer to be posted to the
Stock Account divided by the Fair Market
Value per share of the Common Stock on the
posting date; or
(3) a combination of the foregoing.
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(c) The Committee shall cause the Account for each
Participant to reflect transactions involving amounts posted to the
Account provided that unless otherwise specified by the Committee the
date for posting with respect to the Stock Account shall be the
fifteenth (15th) day of each month (or if such is not a business day,
the day next following the fifteenth day of the month that is a
business day). The posting date for shares of Common Stock shall be
not less than six (6) months after the effective date of the Election,
and the Committee shall credit the deferral to the Account in cash and
delay the posting date for shares until the date that is six months
after the effective date of the Election (with no interest credited to
such cash obligation). Account values shall be maintained in shares,
units or dollars. Cash dividends credited to the Participant's Stock
Account shall be deemed to be invested in additional shares of Common
Stock. Cash Accounts shall be credited from time to time with an
amount equal to the value of the Account multiplied by the Earnings
Factor. The Committee may correct any errors or omissions in the
administration of this Plan by restoring or charging any Participant's
Account with the amount that would be credited or charged to the
Account had no error or omission been made. A Participant who does
not elect a Deferred Retainer shall be deemed to have made an Election
to receive all of his or her Retainer on a current basis.
5.2 Election Procedures. If properly executed and received by the
Committee, a Deferral Election shall be effective only with respect to a
Retainer paid in the period to which the Deferral Election applies and only
with respect to a Retainer paid after the Notice Date for the Deferral
Election. The Deferral Election shall be effective only if received on or
prior to the Notice Date to which the Election relates and, unless the
Committee permits otherwise, is irrevocable with respect to any calendar year
that has commenced. An Election shall be deemed to be continuing and
applicable to calendar years after the year in respect of which the Election is
filed, and with respect to the Stock Account, shall be continuing for at least
six months after the Director revokes the election. A Change in Control shall
end all Deferral Elections. The Committee may establish rules and procedures
governing when a Deferral Election will be effective and what Retainer will be
subject to the Deferral Election.
5.3 Full Vesting. A Participant shall be fully vested and have a
nonforfeitable right to his or her Account (and in any cash awaiting posting)
at all times.
5.4 Distribution. A Participant shall be distributed the Account
in a single distribution on the Payment Date (in the case of a Payment Date
other than due to the death of the Participant). The Stock Account will be
distributed in the form of Common Stock on the Payment Date.
5.5 Payment to a Representative. Upon the death of a Participant
prior to a Payment Date, the Account shall be distributed to the Participant's
Beneficiary. The Stock Account will be distributed in the form of Common Stock
in a single distribution
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as soon as administratively possible after the Participant's Payment Date
(which is due to the death of the Participant), and the Cash Account will be
distributed in cash in a single sum distribution as soon as administratively
possible after the Participant's Payment Date (which is due to the death of the
Participant).
5.6 Dividends. Cash dividends on the Common Stock that is the
subject of the Deferred Stock Award shall be automatically deferred and
reinvested in additional shares of Deferred Stock, and dividends on the Common
Stock that is the subject of the Deferred Stock Award payable in stock shall be
paid in the form of Deferred Stock of the same class as the stock on which such
dividend was paid. Dividends shall be accounted for at the individual account
level by "posting" such returns to the Account of each affected Participant.
5.7 Satisfaction of Obligation. The Company's obligation to a
Participant with respect to an Award shall be satisfied by distributions to the
Participant or from the Company or if the Committee, in its sole discretion,
shall utilize the Trust, then from the Trust as directed by the Committee.
5.8 Trust. The Company may establish the Trust. The Company may
from time to time transfer to the Trustee to be held in a trust cash or Common
Stock equal to the amount of Deferred Retainer elected by a Director. The
Company may direct the Trustee to maintain records of a separate account under
the Trust for each Director. The Trust may be revocable or irrevocable.
5.9 Notice to Trustee. If the Company establishes the Trust and
if a payment required under the terms of this Plan has not been made to a
Participant, the Participant must notify the Trustee in writing of the amount
owed to him pursuant to this Plan and the date such amount was due and payable.
5.10 Nontransferability. No Account shall be pledged, hypothecated
or otherwise encumbered or subject to a lien, obligation or liability of a
Participant, or assigned or transferred by a Participant otherwise than by will
or the laws of descent and distribution or to a Representative upon the death
of the Participant.
ARTICLE VI
OPTIONS
6.1 Eligibility. Each Director shall be granted Options to
purchase shares of Common Stock as provided herein.
6.2 Grant and Exercise. Each Director who is a Director on the
Effective Date shall be granted an Option on such date to purchase 1,000 shares
of Common Stock
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<PAGE> 21
without further action by the Board or the Committee. On the date of each
regular annual shareholder meeting of the Company to occur after the Effective
Date, each person who is a Director on such date and is either continuing as a
Director subsequent to the meeting or is elected to serve as a Director at such
meeting shall be granted an Option to purchase 1,000 shares of Common Stock
without further action by the Board or the Committee. If the number of shares
of Common Stock available to grant under the Plan on a scheduled date of grant
is insufficient to make all automatic grants required to be made pursuant to
the Plan on such date, then each eligible Director shall receive an Option to
purchase a pro rata number of the remaining shares of Common Stock available
under the Plan; provided further, however, that if such proration results in
fractional shares of Common Stock, then such Option shall be rounded down to
the nearest number of whole shares of Common Stock. If there is no whole
number of shares remaining to be granted, then no grants shall be made under
the Plan. Each Option granted under the Plan shall be evidenced by an
Agreement, in a form approved by the Committee, which shall embody the terms
and conditions of such Option and which shall be subject to the express terms
and conditions set forth in the Plan. Such Agreement shall become effective
upon execution by the Participant.
6.3 Terms and Conditions. Stock Options shall be subject to the
following terms and conditions and to such terms and conditions as shall be
determined by the Committee, including the following:
(a) Option Period. The Option Period of each Stock Option shall
be fixed by the Committee; provided that no Option shall be exercisable more
than ten (10) years after the date the Stock Option is granted.
(b) Option Price. The Option Price per share of the Common Stock
purchasable under an Option shall be the Fair Market Value on the Grant Date.
(c) Exercisability. Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee. Except as provided in an Agreement, an Option shall not be
exercisable until the earlier of the day immediately preceding the date of the
first anniversary of the Grant Date, provided the Participant is a Director on
that date, and the date of the Participant's Extraordinary Termination of
Directorship. If the Committee provides that any Stock Option is exercisable
only in installments, the Committee may at any time waive such installment
exercise provisions, in whole or in part. In addition, the Committee may at
any time accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Article
VI, a Participant may exercise Stock Options, in whole or in part, at any time
during the Option Period by the Participant's giving written notice of exercise
on a form provided by the Committee (if available) to the Company specifying
the number of shares of
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<PAGE> 22
Common Stock subject to the Stock Option to be purchased. Such notice shall be
accompanied by payment in full of the purchase price by cash or check or such
other form of payment as the Company may accept. If approved by the Committee,
payment in full or in part may also be made (i) by delivering Common Stock
already owned by the Participant having a total Fair Market Value on the date
of such delivery equal to the Option Price; (ii) by the execution and delivery
of a note or other evidence of indebtedness (and any security agreement
thereunder) satisfactory to the Committee and permitted in accordance with
Section 6.3(e); (iii) by authorizing the Company to retain shares of Common
Stock which would otherwise be issuable upon exercise of the Option having a
total Fair Market Value on the date of delivery equal to the Option Price; (iv)
by the delivery of cash or the extension of credit by a broker-dealer to whom
the Participant has submitted a notice of exercise or otherwise indicated an
intent to exercise an Option (in accordance with Part 220, Chapter II, Title 12
of the Code of Federal Regulations, so-called "cashless" exercise); or (v) by
any combination of the foregoing. No shares of Common Stock shall be issued
until full payment therefor, as determined by the Committee, has been made. A
Participant shall have all of the rights of a stockholder of the Company
holding the class of Common Stock that is subject to such Stock Option
(including, if applicable, the right to vote the shares and the right to
receive dividends), when the Participant has given written notice of exercise,
has paid in full for such shares and such shares have been recorded on the
Company's official stockholder records as having been issued and transferred.
(e) Company Loan or Guarantee. Upon the exercise of any Option
and subject to the pertinent Agreement and the discretion of the Committee, the
Company may at the request of the Participant:
(i) lend to the Participant, with recourse, an amount
equal to such portion of the Option Price as the Committee may
determine; or
(ii) guarantee a loan obtained by the Participant from a
third-party for the purpose of tendering the Option Price.
The terms and conditions of any loan or guarantee, including the term, interest
rate, and any security interest thereunder, shall be determined by the
Committee, except that no extension of credit or guarantee shall obligate the
Company for an amount to exceed the least of the Option Price, the aggregate
Fair Market Value per share of the Common Stock on the date of exercise, less
the par value of the shares of Common Stock to be purchased upon the exercise
of the Award, or the amount permitted under applicable laws or the regulations
and rules of the Federal Reserve Board and any other governmental agency having
jurisdiction.
(f) Non-transferability of Options. Except as provided herein or
in an Agreement, no Stock Option or interest therein shall be transferable by
the Participant
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<PAGE> 23
other than by will or by the laws of descent and distribution, and all Stock
Options shall be exercisable during the Participant's lifetime only by the
Participant. If and to the extent transferability is permitted by Rule 16b-3
and except as otherwise provided herein or by an Agreement, every Option
granted hereunder shall be freely transferable, but only if such transfer does
not result in liability under Section 16 of the Exchange Act to the Participant
or other Participants and is consistent with registration of the Option and
sale of Common Stock on Form S-8 (or a successor form) or the Committee's
waiver of such condition.
6.4 Extraordinary Termination of Directorship. Unless otherwise
provided in an Agreement or determined by the Committee, if a Participant
incurs an Extraordinary Termination of Directorship, any unexpired and
unexercised Stock Option held by such Participant shall thereafter be fully
exercisable for a period of one (1) year (or such other period or no period as
the Committee may specify) immediately following the date of such Extraordinary
Termination of Directorship or until the expiration of the Option Period,
whichever period is the shorter.
6.5 Other Termination. Unless otherwise provided in an Agreement
or determined by the Committee, if a Participant incurs a Termination of
Directorship other than due to an Extraordinary Termination of Directorship,
any Stock Option held by such Participant shall thereupon terminate, except
that such Stock Option, to the extent then exercisable, may be exercised for
the lesser of the three-month period commencing with the date of such
Termination of Directorship or until the expiration of the Option Period. The
death or Disability of a Participant after a Termination of Directorship
otherwise provided herein shall not extend the exercisability of the time
permitted to exercise an Option.
6.6 Change in Control. Notwithstanding any other provision of
this Plan to the contrary, in the event of a Change in Control, any Stock
Options outstanding as of the date such Change in Control and not then
exercisable shall become fully exercisable.
ARTICLE VII
MISCELLANEOUS
7.1 Amendments and Termination. The Board may amend, alter, or
discontinue this Plan at any time, but no amendment, alteration or
discontinuation shall be made which would (a) impair the rights of a
Participant under an Award granted without the Participant's consent, except
such an amendment made to cause this Plan to qualify for the exemption provided
by Rule 16b-3 or (b) disqualify this Plan from the exemption provided by Rule
16b-3. In addition, no such amendment shall
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<PAGE> 24
be made without the approval of the Company's stockholders to the extent such
approval is required by law or agreement.
The Committee may amend this Plan at any time provided that (a) no
amendment shall impair the rights of any Participant under any Award
theretofore granted without the Participant's consent, (b) no amendment shall
disqualify this Plan from the exemption provided by Rule 16b-3, and (c) any
amendment shall be subject to the approval or rejection of the Board.
The Committee may amend the terms of any Award or other Award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any Participant without the Participant's consent,
except such an amendment made to cause this Plan or Award to qualify for the
exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have authority to
amend this Plan to take into account changes in law and tax and accounting
rules, as well as other developments and to grant Awards which qualify for
beneficial treatment under such rules without stockholder approval.
Notwithstanding the foregoing, if any right under this Plan would
cause an otherwise eligible transaction to be ineligible for pooling of
interest accounting treatment, the Committee may modify or adjust the right so
that pooling of interest accounting treatment shall be available.
7.2 Unfunded Status of Plan. The Accounts are maintained solely
for bookkeeping purposes. It is intended that the Plan be an "unfunded" plan
of deferred compensation. The Committee may authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments; provided, however, that, unless the Committee
otherwise determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan. The Participants do not
have rights with respect to specific property and are only unsecured creditors
of the Company.
7.3 General Provisions.
(a) Representation. The Committee may require each
person purchasing or receiving shares pursuant to an Award to
represent to and agree with the Company in writing that such person is
acquiring the shares without a view to the distribution thereof in
violation of the Securities Act. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect
any restrictions on transfer.
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<PAGE> 25
(b) No Additional Obligation. Nothing contained in the
Plan shall prevent the Company or an Affiliate from adopting other or
additional compensation arrangements.
(c) Withholding. If determined to be required to protect
the Company, no later than the date as of which an amount first
becomes includable in the gross income of the Participant for Federal
income tax purposes with respect to any Award, the Participant shall
pay to the Company (or other entity identified by the Committee), or
make arrangements satisfactory to the Company or other entity
identified by the Committee regarding the payment of, any Federal,
state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount required in order for the Company
or an Affiliate to obtain a current tax deduction. Unless otherwise
determined by the Committee, withholding obligations may be settled
with Common Stock, including Common Stock that is part of the Award
that gives rise to the withholding requirement provided that any
applicable requirements under Section 16 of the Exchange Act are
satisfied. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the
Participant.
(d) Representation. The Committee shall establish such
procedures as it deems appropriate for a Participant to designate a
Representative to whom any amounts payable in the event of the
Participant's death are to be paid.
(e) Controlling Law. The Plan and all Awards made and
actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of Delaware (other than its law
respecting choice of law). The Plan shall be construed to comply with
all applicable law, and to avoid liability to the Company, an
Affiliate or a Participant, including, without limitation, liability
under Section 16(b) of the Exchange Act.
(f) Offset. Any amounts owed to the Company or an
Affiliate by the Participant of whatever nature may be offset by the
Company from the value of any shares of Common Stock, cash or other
thing of value under the Plan to be transferred to the Participant,
and no shares of Common Stock, cash or other thing of value under the
Plan shall be transferred unless and until all disputes between the
Company and the Participant have been fully and finally resolved and
the Participant has waived all claims to such against the Company or
an Affiliate.
(g) Fail-Safe. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or
Rule 16a-1(c)(3). To the extent any
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<PAGE> 26
provision of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee. Moreover, in the event the Plan
does not include a provision required by Rule 16b-3 or Rule
16a-1(c)(3) to be stated therein, such provision (other than one
relating to eligibility requirements, or the price and amount of
Awards) shall be deemed to be incorporated by reference into the Plan
with respect to Participants subject to Section 16.
7.4 Special Provisions Regarding a Change in Control.
(a) In the event of a Change in Control, before the
Plan's approval by stockholders in accordance with Rule 16b-3, the
condition of the Plan's approval by stockholders shall be waived and
the Plan and grant of all Options and all Deferral Elections shall be
given effect without regard to such condition;
(b) In the event of a Change in Control, (i) a
Participant for whom a Deferral Election with respect to the Stock
Account has been in effect less than six months on the date of the
Change in Control, or (ii) a Participant for whom a Deferral Election
with respect to the Stock Account is in effect, but stockholder
approval of the Plan has not been obtained at the time of the Change
in Control, the Participant will receive a distribution of cash upon
his or her Termination of Directorship equal to the Deferred Retainer
(credited to the Stock Account), plus an amount equal to the
difference between the Deferred Retainer and the "Change in Control
Price" (as defined in Section (d)) per share of the Common Stock,
assuming the number of shares of Common Stock that would have been
purchased on the date the Deferred Retainer was credited to the Stock
Account had such Deferred Retainer been used to purchase Common Stock
(absent the Change in Control and the operation of this Section), plus
interest on such total amount at the prime rate as reported from time
to time in The Wall Street Journal (determined from time to time)
compounded annually;
(c) In the event of a Change in Control, if the Change in
Control is within six months of the Grant Date of an Option, such
Option shall be cancelled in exchange for a payment to the Participant
at the time of the Participant's Termination of Directorship equal to
the amount by which the "Change in Control Price" (as deferred in
Section (d)) per share of Common Stock exceeds the Option Price per
share of Common Stock, multiplied by the number of shares of Common
Stock granted under the Option to which this right applies, plus
interest on such amount at the prime rate as reported from time to
time in The Wall Street Journal, compounded annually and determined
from time to time;
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<PAGE> 27
(d) For purposes of this Section, "Change in Control
Price" means the higher of (i) the highest reported sales price of a
share of Common Stock in any transaction reported on the principal
exchange on which such shares are listed during the 60-day period
prior to and including the date of a Change in Control, or (ii) if the
Change in Control is the result of a tender or exchange offer or a
merger, consolidation, liquidation or sale of all or substantially all
of the assets of the Company (in each case a "Corporate Transaction"),
the highest price per share of Common Stock paid in such tender or
exchange offer or a Corporate Transaction. To the extent that the
consideration paid in any such transaction described above consists
all or in part of securities or other non-cash consideration, the
value of such securities or other non-cash consideration shall be
determined in the sole discretion of the Committee; and;
(e) Notwithstanding the foregoing, if any right under
this Plan would cause a transaction to be ineligible for pooling of
interest accounting that would, but for the right hereunder, be
eligible for such accounting treatment, the Committee may modify or
adjust the right so that pooling of interest accounting shall be
available, including the substitution of Common Stock having a Fair
Market Value equal to the cash otherwise payable hereunder for the
right which caused the transaction to be ineligible for pooling of
interest accounting.
7.5 Rights with Respect to Continuance as a Director. Nothing
contained herein shall be deemed to alter the relationship between the Company
or an Affiliate and a Participant, or the contractual relationship between a
Participant and the Company or an Affiliate if there is a written contract
regarding such relationship. Nothing contained herein shall be construed to
constitute a contract of employment between the Company or an Affiliate and a
Participant. The Company or an Affiliate and each of the Participants continue
to have the right to terminate the employment or service relationship at any
time for any reason, except as provided in a written contract. The Company or
an Affiliate shall have no obligation to retain the Participant in its employ
or service as a result of the Plan. There shall be no inference as to the
length of employment or service hereby, and the Company or an Affiliate
reserves the same rights to terminate the Participant's employment or service
as existed prior to the individual becoming a Participant in the Plan.
7.6 Awards in Substitution for Awards Granted by Other
Corporations. Awards may be granted under the Plan from time to time in
substitution for awards held by employees, directors or service providers of
other corporations who are about to become Directors of the Company or an
Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or an Affiliate, or the acquisition by the Company
or an Affiliate of the assets of the employing corporation, or the acquisition
by the Company or Affiliate of the stock of the employing corporation, as the
result of which it becomes a designated employer under the Plan.
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<PAGE> 28
The terms and conditions of the Awards so granted may vary from the terms and
conditions set forth in the Plan at the time of such grant as the majority of
the members of the Committee may deem appropriate to conform, in whole or in
part, to the provisions of the awards in substitution for which they are
granted.
7.7 Procedure for Adoption. Any Affiliate of the Company may by
resolution of such Affiliate's board of directors, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the
Board of Directors, adopt the Plan for the benefit of its directors as of the
date specified in the board resolution.
7.8 Procedure for Withdrawal. Any Affiliate which has adopted the
Plan may, by resolution of the board of directors of such direct or indirect
subsidiary, with the consent of the Board of Directors and subject to such
conditions as may be imposed by the Board of Directors, terminate its adoption
of the Plan.
7.9 Delay. If at the time, the Participant is subject to
"short-swing" liability under Section 16 of the Exchange Act, any time period
provided for under the Plan to the extent necessary to avoid the imposition of
liability shall be suspended and delayed during the period the Participant
would be subject to such liability.
7.10 Headings. The headings contained in the Plan are for
reference purposes only and shall not affect the meaning or interpretation of
the Plan.
7.11 Severability. If any provision of the Plan shall for any
reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not effect any other provision hereby, and the Plan
shall be construed as if such invalid or unenforceable provision were omitted.
7.12 Successors and Assigns. The Plan shall inure to the benefit
of and be binding upon each successor and assign of the Company. All
obligations imposed upon a Participant, and all rights granted to the Company
hereunder, shall be binding upon the Participant's heirs, legal representatives
and successors.
24
<PAGE> 29
7.13 Entire Agreement. The Plan and the Agreement constitute the
entire agreement with respect to the subject matter hereof and thereof,
provided that in the event of any inconsistency between the Plan and the
Agreement, the terms and conditions of the Plan shall control.
Executed on this 11th day of August, 1995.
ADVANCE ROSS CORPORATION
By: /S/ Randy M. Joseph
---------------------
Randy M. Joseph
25
<PAGE> 1
EXHIBIT 4.2
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR STOCK OPTIONS
GRANTED UNDER THE
ADVANCE ROSS CORPORATION
1995 DIRECTORS DEFERRAL PLAN
<PAGE> 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated as of June 5, 1995, is
between Advance Ross Corporation, a Delaware corporation (the
"Company"), and ______________________, a non-employee
director of the Company or one of its Affiliates (the
"Participant").
WHEREAS, the Company desires, by affording the Participant an
opportunity to purchase shares of the Company's Common Stock as hereinafter
provided, to carry out the purposes of the Advance Ross Corporation 1995
Directors Deferral Plan (the "Plan"); and
WHEREAS, the Committee has duly made all determinations necessary or
appropriate to the grants hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto have agreed, and do
hereby agree, as follows:
1. Grant of Option, Option Price and Term.
(a) The Company hereby grants to the Participant, as a matter of
separate agreement and not in lieu of any other compensation for services, the
right and option (the "Option") to purchase the number of shares of the Common
Stock of the Company ("Option Shares") set forth on the execution page hereof
on the terms and conditions herein set forth.
(b) For each of the Option Shares purchased, the Participant shall
pay to the Company the price per share set forth on the execution page hereof
(the "Option Price") for the aggregate Option Price to exercise all of the
Option as set forth on the execution page hereof.
(c) The term of this Option shall be a period of ten (10) years
(the "Option Period") from the date set forth on the execution page hereof
("Grant Date"). During the Option Period, the Option shall be exercisable on
and after the earlier of the day immediately preceding the date of the first
anniversary of the Grant Date if the Participant is a Director on such date or
the date of an Extraordinary Termination of Directorship, whichever occurs
first. If the Participant is not a Director on the day immediately preceding
the date of the first anniversary of the Grant Date and has not incurred an
Extraordinary Termination of Directorship, the Option is forfeited.
(d) The Option granted hereunder is designated as an option the
taxation of which is pursuant to Section 83 of the Code.
<PAGE> 3
(e) The Company shall not be required to issue any fractional Option
Shares.
2. Exercise.
The Option may only be exercised by the delivery to the Company of a
properly completed written notice, in form satisfactory to the Committee, which
notice shall specify the number of Option Shares to be purchased and the
aggregate Option Price for such shares, together with payment in full of such
aggregate Option Price. Payment shall only be made:
(a) in cash or by check;
(b) by the delivery to the Company of a valid and enforceable
stock certificate (or certificates) representing shares of Common Stock, which
is endorsed in blank or accompanied by an executed stock power (or powers) and
guaranteed in a manner acceptable to the Committee;
(c) by reducing the number of shares of Common Stock to be issued
and delivered to the Participant upon such exercise;
(d) in cash by a broker-dealer to whom the Participant has submitted
an irrevocable notice of exercise; or
(e) in any combination of (a), (b), (c) or (d).
If any part of the payment of the Option Price is made in shares of Common
Stock, such shares shall be valued by using their Fair Market Value as of their
date of delivery.
The Option shall not be exercised unless there has been compliance
with all the preceding provisions of this Paragraph 2, and, for all purposes of
this Stock Option Agreement, the date of the exercise of the Option shall be
the date upon which there is compliance with all such requirements.
3. Payment of Withholding Taxes.
If the Company is obligated to withhold an amount on account of any
tax imposed as a result of the exercise of the Option, the Participant shall be
required to pay such amount to the Company in cash or in Common Stock, as
provided in the Plan.
4. Requirements of Law; Registration and Transfer Requirements.
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<PAGE> 4
The Company shall not be required to sell or issue any shares under
the Option if the issuance of such shares shall constitute a violation of any
provision of any law or regulation of any governmental authority. This Option
and each and every obligation of the Company hereunder are subject to the
requirement that the Option may not be exercised or performed, in whole or in
part, unless and until the Option Shares are listed, registered or qualified,
properly marked with a legend or other notation, or otherwise restricted, as is
provided for in the Plan.
5. Adjustments/Change in Control.
In the event of a Change in Control, the Option hereunder shall be
fully exercisable provided the person is a Director on the date of such Change
in Control, or other corporate restructuring provided for in the Plan, the
Participant shall have such rights, and the Committee shall take such actions,
as are provided for in the Plan.
6. Nontransferability.
The Option and any interest in the Option may be transferred to a
trust or Partnership consistent with the Plan and the Participant's estate
planning intent but only if such transfer does not result in liability to the
Participant or any other Participant and is consistent with the use of Form S-8
or the Committee's waiver of such condition; otherwise, the Option must not be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
7. Plan.
Notwithstanding any other provision of this Stock Option Agreement,
the Option is granted pursuant to the Plan, as in effect on the date hereof,
and is subject to all the terms and conditions of the Plan, as the same may be
amended from time to time; provided, however, that no amendment to either the
Plan or this Stock Option Agreement shall deprive the Participant, without the
Participant's consent, of the Option or of any of Participant's rights under
this Stock Option Agreement. The interpretation and construction by the
Committee of the Plan, this Stock Option Agreement, the Option, and such rules
and regulations as may be adopted by the Committee for the purpose of
administering the Plan, shall be final and binding upon the Participant. Until
the Option shall expire, terminate or be exercised in full, the Company shall,
upon written request therefor, send a copy of the Plan, in its then-current
form, to the Participant or any other person or entity then entitled to
exercise the Option.
Participant hereby acknowledges receipt of a copy of the Plan.
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<PAGE> 5
8. Stockholder Rights.
Until the Option shall have been duly exercised to purchase such
Option Shares and such shares have been officially recorded as issued on the
Company's official stockholder records, no person or entity shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of any
Option Shares, and adjustments for dividends or otherwise shall be made only if
the record date therefor is subsequent to the date such shares are recorded and
after the date of exercise and without duplication of any adjustment.
9. Right to Service as a Director.
No provision of this Stock Option Agreement or of the Option granted
hereunder shall give the Participant any right to continue as a director of the
Company or any of its Affiliates, create any inference as to the length of such
service, affect the right of the Company or its Affiliates to Terminate the
Directorship of the Participant or give the Participant any right to
participate in any employee benefit plan or other program (other than the Plan)
of the Company or any of its Affiliates.
10. Disclosure Rights.
The Company shall have no duty or obligation to affirmatively disclose
to the Participant or a beneficiary, and the Participant or beneficiary shall
have no right to be advised of, any material information regarding the Company
or an Affiliate at any time prior to, upon or in connection with the exercise
of an Option or the Company's purchase of Common Stock in accordance with the
terms of this Stock Option Agreement.
11. Investment Representation and Agreement.
The Committee may require the Participant to furnish to the Company,
prior to the issuance of any shares of Common Stock upon the exercise of all or
any part of this Option, an agreement (in such form as such Committee may
specify) in which the Participant represents that the shares of Common Stock
acquired by him upon exercise are being acquired for investment and not with a
view to the sale or distribution thereof.
12. Governing Law.
This Stock Option Agreement and the Option granted hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware (other than its laws respecting choice of law).
13. Entire Agreement.
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<PAGE> 6
This Stock Option Agreement, together with the Plan, constitute the
entire obligation of the parties hereto with respect to the subject matter
hereof and shall supersede any prior expressions of intent or understanding
with respect to this transaction.
14. Definitions.
Wherever initial capitalization of a term is used in this Stock Option
Agreement, it shall have the same meaning as that given to it by the Plan,
except to the extent such meaning should conflict with any meaning afforded to
such term in this Stock Option Agreement.
15. Amendment.
Any amendment to this Stock Option Agreement shall be in writing and
signed by the Company. The Committee may amend this Agreement from time to
time to provide for grants on multiple Grant Dates.
16. Waiver; Cumulative Rights.
The failure or delay of either party to require performance by the
other party of any provision hereof shall not affect its right to require
performance of such provision unless and until such performance has been waived
in writing. Each and every right hereunder is cumulative and may be exercised
in part or in whole from time to time.
17. Counterparts.
This Stock Option Agreement may be signed in two counterparts, each of
which shall be an original, but both of which shall constitute but one and the
same instrument.
18. Notices.
Any notice which either party hereto may be required or permitted to
give the other shall be in writing and may be delivered personally or by mail,
postage prepaid, addressed to the Secretary of the Company, at its principal
place of business, and the Participant at his address as shown on the Company's
payroll records, or to such other address as the Participant, by notice to the
Company, may designate in writing from time to time.
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<PAGE> 7
19. Headings.
The headings contained in this Stock Option Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Stock Option Agreement.
20. Severability.
If any provision of this Stock Option Agreement shall for any reason
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not effect any other provision hereof, and this Stock Option Agreement
shall be construed as if such invalid or unenforceable provision were omitted.
21. Successors and Assigns.
This Stock Option Agreement shall inure to the benefit of and be
binding upon each successor and assign of the Company. All obligations imposed
upon the Participant or a beneficiary, and all rights granted to the Company
hereunder, shall be binding upon the Participant's or the beneficiary's heirs,
legal representatives and successors.
IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement
-7-
<PAGE> 8
to be duly executed by an officer thereunto duly authorized, and the
Participant has hereunto set his hand, all as of the day and year first above
written.
ADVANCE ROSS CORPORATION
By: _______________________________
_______________________________
Title
PARTICIPANT:
____________________________________
<TABLE>
<CAPTION>
Option Price Number of Aggregate
Grant Date Per Share Option Shares Option Price
- ---------- ------------ ------------- ------------
<S> <C> <C> <C>
</TABLE>
-8-
<PAGE> 1
EXHIBIT 4.7
FIRST AMENDMENT OF THE
1992 ADVANCE ROSS CORPORATION
STOCK OPTION PLAN
WHEREAS, the Company adopted the Advance Ross Corporation Stock Option
Plan effective October 26, 1992 ("1992 Plan");
WHEREAS, the Company, by action of its Board of Directors, reserved
the right to amend the 1992 Plan from time to time;
WHEREAS, the Company believes the inclusion of provisions permitting
participants to exercise options without the need to borrow or otherwise tender
cash is desirable;
NOW, THEREFORE, the Company amends the 1992 Plan, effective January 1,
1995 as follows:
Section 5.6 of the 1992 Plan be and hereby is amended as follows:
"Payment of Purchase Price Upon Exercise. Except as otherwise
provided in a Stock Option Agreement, the Option Price of the shares
of Common Stock as to which an Option shall be exercised shall be paid
in full to the Company at the time of exercise, by cash or check or
such other form of payment as the Company may accept. If approved by
the Committee, payment in full or in part may also be made (i) by
delivering Common Stock already owned by the Participant having a
total Fair Market Value on the date of such delivery equal to the
Option Price; (ii) by the execution and delivery of a note or other
evidence of indebtedness (and any security agreement thereunder)
satisfactory to the Committee and permitted in accordance with this
Agreement; (iii) by authorizing the Company to retain shares of Common
Stock which would otherwise be issuable upon exercise of the Option
having a total Fair Market Value on the date of delivery equal to the
Option Price; (iv) by the delivery of cash by a broker-dealer to whom
the Participant has submitted a notice of exercise (in accordance with
Part 220, Chapter II, Title 12 of the Code of Federal Regulations,
so-called "cashless" exercise); or (v) by any combination of the
foregoing. The Company shall not issue or transfer Common Stock upon
exercise of an Option until the Option Price is paid in full. The
Committee may, without obtaining shareholder approval, provide that a
Participant will be granted Options in number not to exceed the number
of shares of Common Stock tendered (actually or constructively) upon
exercise of an Option at a price to be determined by the Committee,
provided the Committee has determined that the grant of such right to
a Participant will not result in liability to any Participant under
Section 16 of the Exchange Act."
<PAGE> 2
* * *
Except as hereby amended, the 1992 Plan shall remain in full force and
effect.
Executed on this 8th day of June, 1995.
ADVANCE ROSS CORPORATION
By /s/ RANDY M. JOSEPH
----------------------
<PAGE> 1
EXHIBIT 4.10
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ADVANCE ROSS HOLDING CORPORATION
ADVANCE ROSS HOLDING CORPORATION (the "Corporation"), a corporation
organized and existing by virtue of the General Corporation Law of the State of
Delaware (the "Law") does hereby certify:
I. The Corporation has not issued any stock. The Corporation is
acting through its directors, who have been duly elected and qualified.
II. Pursuant to Section 241(b) of the Law, the directors of the
Corporation have adopted the following Amendment to the Corporation's Restated
Certificate of Incorporation:
Article FIRST of the Restated Certificate of Incorporation of
the Corporation is hereby amended to read in its entirety as follows:
"FIRST: The name of the Corporation is Advance Ross
Corporation."
IN WITNESS WHEREOF, said ADVANCE ROSS HOLDING CORPORATION has caused
this Certificate of Amendment of Restated Certificate of Incorporation to be
signed by HARVE A. FERRILL, its President, and attested by CONSTANCE SCHIRMER,
its Secretary, this 16 day of June, 1993.
----
ADVANCE ROSS HOLDING CORPORATION
By: /s/ HARVE A. FERRILL
----------------------------------
HARVE A. FERRILL, President
ATTEST:
By: /s/ CONSTANCE SCHIRMER
-------------------------------------
CONSTANCE SCHIRMER, Secretary
<PAGE> 1
EXHIBIT 4.11
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ADVANCE ROSS CORPORATION
ADVANCE ROSS CORPORATION (the "Corporation"), a corporation organized
and existing by virtue of the General Corporation Law of the State of Delaware
(the "Act") does hereby certify:
1. In accordance with the provisions of Section 242 of the Act,
an amendment to the Restated Certificate of Incorporation of
this Corporation has been duly adopted by the affirmative vote
of the holders of a majority of the Corporation's outstanding
common stock in accordance with Section 222 of the Act, said
amendment having been previously approved and deemed advisable
by the Board of Directors of the Corporation with the
direction that said amendment be considered at the next annual
meeting of the stockholders.
2. Said amendment amends the first paragraph of Article FOURTH of
the Restated Certificate of Incorporation of this Corporation
so that, as amended, said first paragraph of Article FOURTH in
its entirety, shall read as follows:
"FOURTH. The total number of shares of all classes of
stock which the Corporation shall have the authority
to issue is 13,200,000 shares, of which 200,000
shares shall be shares of 5% Cumulative Preferred
Stock of the par value of Twenty-Five Dollars
($25.00) each ("5% Cumulative Preferred Stock"),
1,000,000 shares shall be Preferred Stock of the par
value of One Dollar ($1.00) each ("Preferred Stock
$1.00 Par"), and 12,000,000 shares shall be shares of
Common Stock of the par value of One Cent ($.01) each
("Common Stock")."
IN WITNESS WHEREOF, said ADVANCE ROSS CORPORATION has caused this
Certificate of Amendment of Restated Certificate of Incorporation to be signed
by PAUL G. YOVOVICH, its President, and attested by CONSTANCE SCHIRMER, its
Secretary, this 23rd day of June, 1994.
-----
ADVANCE ROSS CORPORATION
By: /s/ PAUL G. YOVOVICH
-------------------------------
PAUL G. YOVOVICH, President
ATTEST:
By: /s/ CONSTANCE SCHIRMER
-------------------------------
CONSTANCE SCHIRMER, Secretary
<PAGE> 1
EXHIBIT 5
[KATTEN MUCHIN & ZAVIS LETTERHEAD]
October 6, 1995
Advance Ross Corporation
233 South Wacker Drive
Suite 9700
Chicago, Illinois 60606-6502
Gentlemen:
We have acted as counsel to Advance Ross Corporation, a Delaware
corporation (the "Company"), in connection with the filing by the Company of a
registration statement on Form S-8 (the "Registration Statement"), under the
Securities Act of 1933, as amended (the "Act"), registering for sale 100,000
shares of the Company's Common Stock ("Common Stock") which are issuable under
the Advance Ross Corporation 1995 Directors Deferral Plan, 1993 Advance Ross
Corporation Stock Option Plan, the Advance Ross Corporation Stock Option Plan
and the Advance Ross/Europe Tax-Free Shopping AB Stock Option Plan (the
"Plans").
In connection with this opinion, we have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
the following:
1. the Registration Statement;
2. the Plans;
3. the Restated Certificate of Incorporation, as amended, of the
Company;
5. the By-laws, as amended, of the Company;
6. copies of certain corporate records of the Company;
7. certificates of officers, representatives and agents of the
Company and resolutions of the Board of Directors of the
Company, and we have assumed that all of the representations
contained therein are accurate and complete; and
<PAGE> 2
Advance Ross Corporation
October 6, 1995
Page 2
8. such other instruments, documents, statements and records of
the Company and others as we have deemed relevant and
necessary to examine and rely upon for the purpose of this
opinion.
In connection with this opinion, we have assumed the accuracy and
completeness of all documents and records that we have reviewed, the
genuineness of all signatures, the authenticity of the documents submitted to
us as originals and the conformity to authentic original documents of all
documents submitted to us as certified, conformed or reproduced copies. We
have further assumed that all natural persons involved in the transactions
contemplated by the Registration Statement (the "Offering") have sufficient
legal capacity to enter into and perform their respective obligations and to
carry out their roles in the Offering.
Based upon the foregoing, we are of the opinion that the 100,000
shares of Common Stock issuable under the Plans, when issued and delivered by
the Company in accordance with the terms of the Plans, will be validly issued,
fully paid and nonassessable securities of the Company.
We are qualified to practice law in the State of Illinois, and we do
not purport to be experts in and do not express any opinion herein concerning
law other than the laws of the State of Illinois, the Delaware General
Corporation Law and the United States of America. We express no opinion herein
concerning any statutes, administrative decisions, rules or regulations of any
county, municipality or special political subdivision, whether created or
enabled through legislative action at the federal, state or regional level.
This opinion is given to you as of the date hereof, and we assume no obligation
to advise you of changes that may hereafter be brought to our attention. We
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement. This opinion is rendered solely for purposes of the Offering and
should not be relied upon for any other purpose.
Very truly yours,
/s/ KATTEN MUCHIN & ZAVIS
KATTEN MUCHIN & ZAVIS
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Advance Ross Corporation on Form S-8 of our report dated March 13, 1995,
appearing in the Annual Report on Form 10-K of Advance Ross Corporation for the
year ended December 31, 1994 and to the reference to us under the heading
"Interests of Named Experts and Counsel" in the Prospectus, which is part of
this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Chicago, Illinois
October 3, 1995
