<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 1998
REGISTRATION NO.333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------
DANIEL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1547355
(State or other jurisdiction (I.R.S Employer
incorporation or organization) Identification No.)
9753 PINE LAKE DRIVE
HOUSTON, TEXAS 77055
(Address of Principal Executive Offices)
DANIEL INDUSTRIES, INC.
1997 STOCK OPTION PLAN
DANIEL INDUSTRIES, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(Full title of the plan)
JAMES M. TIDWELL
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
DANIEL INDUSTRIES, INC.
9753 PINE LAKE DRIVE
HOUSTON, TEXAS 77055
(Name and address of agent for service)
(713) 467-6000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
TITLE OF SECURITIES TO AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF REGISTRATION
BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING PRICE FEE
UNIT (1) (1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock $1.25 par value 850,000 shares (2) $20.25 $17,212,500 $5,078
===============================================================================================================================
</TABLE>
(1) Estimated, pursuant to Rule 457(h), solely for the purpose of calculating
the registration fee and based upon the average of the high and low sale
prices of a share of Common Stock as reported by the New York Stock
Exchange on May 28, 1998.
(2) Includes (i) an indeterminable number of shares of Common Stock issuable as
a result of the anti-dilution provisions of the Employee Stock Option Plan
and the Non-Employee Director Stock Option Plan and (ii) the Common Stock
purchase rights associated with the shares of Common Stock being registered
(the "Rights").
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
The following documents previously filed by Daniel Industries, Inc.
(the "Company") with the Securities and Exchange Commission (the "Commission")
are incorporated by reference herein:
(a) Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(c) The description of the Company's Common Stock contained in its
Registration of Securities of Certain Successor Issuers on Form 8-B dated May 5,
1988; and
The description of the Company's Preferred Share Purchase Rights
contained in its Registration Statement on Form 8-A filed June 5, 1990.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after
the date of the filing of this Registration Statement and before the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. Description of Securities
Not applicable
ITEM 5. Interests of Named Experts and Legal Counsel
Certain legal matters in connection with the securities offered hereby
are being passed upon for the Registrant by Katie-Pat Bowman, General Counsel to
the Company. Ms. Bowman owns 2,000 shares of Common Stock, subject to forfeiture
in the event she does not continue in the Company's employ in accordance with
the vesting restriction of her award under the Company's Stock Award Plan, and
holds options to purchase 25,000 shares of Common Stock, none which are
currently exercisable.
ITEM 6. Indemnification of Directors and Officer
The Company's Certificate of Incorporation contains a provision that
eliminates the personal liability of a director to the Company and its
stockholders for monetary damages for breach of his fiduciary duty as a
director, except liability (i) for any breach of the duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payment of an improper dividend or improper repurchase of the Company's stock
under Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. Except
as set forth above, if a director were to breach his fiduciary duty in
performing his duties as a director, neither the Company nor its stockholders
could recover monetary damages from the director, and the only course of action
available to the
II-2
<PAGE> 3
Company's stockholders would be equitable remedies, such as an action to enjoin
or rescind a transaction involving a breach of fiduciary duty. To the extent
certain claims against directors are limited to equitable remedies, the
provision in the Company's Certificate of Incorporation may reduce the
likelihood of derivative litigation and may discourage stockholders or
management from initiating litigation against directors for breach of their
fiduciary duty. Additionally, equitable remedies may not be effective in many
situations. If a stockholder's only remedy is to enjoin the completion of the
Board of Directors' action, this remedy may be ineffective if the stockholder
does not become aware of a transaction or event until after it has been
completed. In such a situation, it is possible that the stockholders and the
Company would have no effective remedy against the directors. The Company's
Certificate of Incorporation further provides that, if the Delaware General
Corporation Law is amended to allow the further elimination or limitation of the
liability of directors, then the liability of the Company's directors shall be
limited or eliminated to the fullest extent permitted by the amended Delaware
General Corporation Law.
Article IX of the Company's By-laws provides that each person who is or
was a director or officer of the Company, or who serves or served any other
enterprise or organization as such at the request of the Company, shall be
indemnified by the Company to the fullest extent permitted by the Delaware
General Corporation Law.
Delaware corporations also are authorized to obtain insurance to
protect officers and directors from certain liabilities, including liabilities
against which the corporation cannot indemnify its directors and officers. The
Company currently has in effect a directors' and officers' liability insurance
policy, which provides coverage in the amount of $10,000,000, subject to a
deductible of $175,000 per loss for securities activities ($75,000 deductible
per loss for all other activities not specifically excluded) and excludes
coverage for dishonest, fraudulent or criminal acts and situations where the
officer or director gained a personal advantage or profit.
ITEM 7. Exemption from Registration Claimed
Not applicable
ITEM 8. Exhibits
4.1 Purchase Agreement dated as of December 5, 1988, between the Company
and The Variable Annuity Life Insurance Company, The Mutual Benefit
Life Insurance Company, MONY Life Insurance Company of America and MONY
Legacy Life Insurance Company (including the form of the Company's
Senior Notes in the aggregate in the principal amount of $20,000,000)
(filed as Exhibit 4.3 to the Company's Annual Report on Form 10-K for
the year ended September 30, 1988, and hereby incorporated by reference
herein).
4.2 Certificate of Incorporation of the Company (filed as Exhibit 3.1 to
the Company's Registration of Securities of Certain Successor Issuers
on Form 8-B dated May 5, 1988, and hereby incorporated by reference
herein).
4.3 Amendment to Certificate of Incorporation of the Company (filed as
Exhibit 4.1 to the Company's Current Report on Form 8-K dated December
12, 1996, and hereby incorporated by reference herein).
II-3
<PAGE> 4
4.4 By-laws of the Company, as amended through June 1, 1997 (filed as
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, and incorporated by reference
herein).
4.5 Certificate of Designation, Powers, Preferences and Rights of Series A
Junior Participating Preferred Stock (filed as Exhibit 3.3 on Daniel's
Form 8 amending its Annual Report on Form 10-K for the year ended
September 30, 1990, and hereby incorporated by reference herein).
4.6 Rights Agreement dated as of May 31, 1990, between the Company and
Wachovia Bank and Trust Company, N.A., as Rights Agent (filed as
Exhibit 1 to the Company's Registration of Certain Classes of
Securities on Form 8-A filed June 5, 1990, and hereby incorporated by
reference herein).
4.7 Daniel Industries, Inc. 1997 Stock Option Plan (including standard form
of Incentive Stock Option Agreement used in connection therewith).
4.8 Daniel Industries, Inc. 1997 Non-Employee Director Stock Option Plan
(including standard form of Stock Option Agreement used in connection
therewith).
5.1 Opinion of Katie-Pat Bowman, regarding legality of securities.
23.1 Consent of Katie-Pat Bowman (included in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1 Powers of Attorney (contained on page II-5 and II-6 hereof).
ITEM 22. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement 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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Securities Act"), each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to section 15(d) of
the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 5
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Houston, Texas, on the 15th day of May, 1998.
DANIEL INDUSTRIES, INC.
By /s/ Alex Newton
------------------------------
Alex Newton
President and Chief
Operating Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints James M. Tidwell his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to file the same and all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent 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 he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Ronald C. Lassiter Chief Executive Officer and Chairman of May 26, 1998
- --------------------------------------- the Board (Principal Executive Officer)
Ronald C. Lassiter
/s/ James M. Tidwell Executive Vice President and Chief May 26, 1998
- --------------------------------------- Financial Officer (Principal Financial
James M. Tidwell Officer)
/s/ Wilfred M. Krenek Controller (Principal Accounting Officer) May 26, 1998
- ---------------------------------------
Wilfred M. Krenek
/s/ Nathan M. Avery Director May 14, 1998
- ---------------------------------------
Nathan M. Avery
</TABLE>
II-6
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Michael M. Carroll Director May 26, 1998
- ---------------------------------------
Michael M. Carroll
Director May __, 1998
- ---------------------------------------
Ralph F. Cox
/s/ Gibson Gayle, Jr. Director May 26, 1998
- ---------------------------------------
Gibson Gayle, Jr.
Chairman Emeritus and a Director May __, 1998
- ---------------------------------------
W.A. Griffin
/s/ Thomas J. Keefe Director May 26, 1998
- ---------------------------------------
Thomas J. Keefe
/s/ Leo E. Linbeck, Jr. Director May 26, 1998
- ---------------------------------------
Leo E. Linbeck, Jr.
/s/ Brian E. O'Neill Director May 26, 1998
- ---------------------------------------
Brian E. O'Neill
</TABLE>
II-7
<PAGE> 8
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
4.1 Purchase Agreement dated as of December 5, 1988, between the Company
and The Variable Annuity Life Insurance Company, The Mutual Benefit
Life Insurance Company, MONY Life Insurance Company of America and MONY
Legacy Life Insurance Company (including the form of the Company's
Senior Notes in the aggregate in the principal amount of $20,000,000)
(filed as Exhibit 4.3 to the Company's Annual Report on Form 10-K for
the year ended September 30, 1988, and hereby incorporated by reference
herein).
4.2 Certificate of Incorporation of the Company (filed as Exhibit 3.1 to
the Company's Registration of Securities of Certain Successor Issuers
on Form 8-B dated May 5, 1988, and hereby incorporated by reference
herein).
4.3 Amendment to Certificate of Incorporation of the Company (filed as
Exhibit 4.1 to the Company's Current Report on Form 8-K dated December
12, 1996, and hereby incorporated by reference herein).
4.4 By-laws of the Company, as amended through June 1, 1997 (filed as
Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, and incorporated by reference
herein).
4.5 Certificate of Designation, Powers, Preferences and Rights of Series A
Junior Participating Preferred Stock (filed as Exhibit 3.3 on Daniel's
Form 8 amending its Annual Report on Form 10-K for the year ended
September 30, 1990, and hereby incorporated by reference herein).
4.6 Rights Agreement dated as of May 31, 1990, between the Company and
Wachovia Bank and Trust Company, N.A., as Rights Agent (filed as
Exhibit 1 to the Company's Registration of Certain Classes of
Securities on Form 8-A filed June 5, 1990, and hereby incorporated by
reference herein).
4.7 Daniel Industries, Inc. 1997 Stock Option Plan (including standard form
of Incentive Stock Option Agreement used in connection therewith).
4.8 Daniel Industries, Inc. 1997 Non-Employee Director Stock Option Plan
(including standard form of Stock Option Agreement used in connection
therewith).
5.1 Opinion of Katie-Pat Bowman, regarding legality of securities.
23.1 Consent of Katie-Pat Bowman (included in Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
24.1 Powers of Attorney (contained on page II-6 and II-7 hereof).
<PAGE> 1
EXHIBIT 4.7
DANIEL INDUSTRIES, INC.
1997 STOCK OPTION PLAN
<PAGE> 2
DANIEL INDUSTRIES, INC.
1997 STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section
ARTICLE I - PLAN
<S> <C>
Purpose................................................................................................1.1
Effective Date of Plan.................................................................................1.2
ARTICLE II - DEFINITIONS
Affiliate..............................................................................................2.1
Board of Directors.....................................................................................2.2
Code...................................................................................................2.3
Committee..............................................................................................2.4
Company................................................................................................2.5
Employee...............................................................................................2.6
Fair Market Value......................................................................................2.7
Incentive Option.......................................................................................2.8
Non-Employee Director..................................................................................2.9
Nonqualified Option...................................................................................2.10
Option................................................................................................2.11
Option Agreement......................................................................................2.12
Optionee..............................................................................................2.13
Outside Director......................................................................................2.14
Plan..................................................................................................2.15
Stock.................................................................................................2.16
10% Stockholder.......................................................................................2.17
ARTICLE III - ELIGIBILITY
ARTICLE IV - GENERAL PROVISIONS RELATING TO OPTIONS
Authority to Grant Options ............................................................................4.1
Dedicated Shares.......................................................................................4.2
Non-Transferability....................................................................................4.3
Requirements of Law....................................................................................4.4
Changes in the Company's Capital Structure.............................................................4.5
ARTICLE V - OPTIONS
Type of Option.........................................................................................5.1
Option Price...........................................................................................5.2
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Duration of Options....................................................................................5.3
Amount Exercisable.....................................................................................5.4
Exercise of Options....................................................................................5.5
Substitution Options...................................................................................5.6
No Rights as Stockholder...............................................................................5.7
ARTICLE VI - ADMINISTRATION
ARTICLE VII - AMENDMENT OR TERMINATION OF PLAN
ARTICLE VIII - MISCELLANEOUS
No Employment Obligation...............................................................................8.1
Tax Withholding........................................................................................8.2
Written Agreement......................................................................................8.3
Indemnification of the Committee and the Board of Directors............................................8.4
Gender.................................................................................................8.5
Headings...............................................................................................8.6
Other Compensation Plans...............................................................................8.7
Other Options..........................................................................................8.8
Arbitration of Disputes................................................................................8.9
Governing Law.........................................................................................8.10
</TABLE>
<PAGE> 4
ARTICLE I
PLAN
I.1 PURPOSE. This Plan is a plan for employees, consultants and
advisors of the Company and its Affiliates and is intended to advance the best
interests of the Company, its Affiliates, and its stockholders by providing
those persons who have substantial responsibility for the management and growth
of the Company and its Affiliates with additional incentives and an opportunity
to obtain or increase their proprietary interest in the Company, thereby
encouraging them to continue in the employ of the Company or any of its
Affiliates.
I.2 EFFECTIVE DATE OF PLAN. This Plan is effective June 17, 1997,
if within one year of that date it shall have been approved by at least a
majority vote of stockholders voting in person or by proxy at a duly held
stockholders' meeting, or if the provisions of the corporate charter, by-laws or
applicable state law prescribe a greater degree of stockholder approval for this
action, the approval by the holders of that percentage, at a duly held meeting
of stockholders. No Option shall be granted pursuant to this Plan after June 16,
2007.
I-1
<PAGE> 5
ARTICLE II
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout this Plan, unless the context in which
any such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
II.1 "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time of the action or transaction, each of the corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain. The term
"subsidiary corporation" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of the
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
II.2 "BOARD OF DIRECTORS" means the board of directors of the
Company.
II.3 "CODE" means the Internal Revenue Code of 1986, as amended.
II.4 "COMMITTEE" means the committee designated by the Board of
Directors. The Committee shall be comprised solely of at least two members who
are both Outside Directors and Non-Employee Directors.
II.5 "COMPANY" means Daniel Industries, Inc., a Delaware
corporation.
II.6 "EMPLOYEE" means a person employed by the Company or any
Affiliate.
II.7 "FAIR MARKET VALUE" of the Stock as of any date means (a) the
average of the high and low sale prices of the Stock on that date (or, if there
was no sale on such date, the next preceding date on which there was such a
sale) on the principal securities exchange on which the Stock is listed; or (b)
if the Stock is not listed on a securities exchange, an amount as determined by
the Committee in its sole discretion.
II.8 "INCENTIVE OPTION" means an Option granted under this Plan
which is designated as an "Incentive Option" and satisfies the requirements of
section 422 of the Code.
II.9 "NON-EMPLOYEE DIRECTOR" means a "non-employee director" as
that term is defined in Rule 16b-3 of the Securities Exchange Act of 1934.
II.10 "NONQUALIFIED OPTION" means an Option granted under this Plan
other than an Incentive Option.
II-1
<PAGE> 6
II.11 "OPTION" means either an Incentive Option or a Nonqualified
Option granted under this Plan to purchase shares of Stock.
II.12 "OPTION AGREEMENT" means the written agreement which sets out
the terms of an Option.
II.13 "OPTIONEE" means a person who is granted an Option under this
Plan.
II.14 "OUTSIDE DIRECTOR" means a member of the Board of Directors
serving on the Committee who satisfies the criteria of section 162(m) of the
Code.
II.15 "PLAN" means the Daniel Industries, Inc. 1997 Stock Option
Plan, as set out in this document and as it may be amended from time to time.
II.16 "STOCK" means the common stock of the Company, $1.25 par
value, or, in the event that the outstanding shares of common stock are later
changed into or exchanged for a different class of stock or securities of the
Company or another corporation, that other stock or security.
II.17 "10% STOCKHOLDER" means an individual who, at the time the
Option is granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any Affiliate. An
individual shall be considered as owning the stock owned, directly or
indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants; and stock owned, directly or
indirectly, by or for a corporation, partnership, estate, or trust, shall be
considered as being owned proportionately by or for its stockholders, partners,
or beneficiaries.
II-2
<PAGE> 7
ARTICLE III
ELIGIBILITY
The individuals who shall be eligible to receive Incentive Options
shall be those key Employees as the Committee shall determine from time to time.
The individuals who shall be eligible to receive Nonqualified Options shall be
those key Employees, consultants and advisors of the Company or any of its
Affiliates as the Committee shall determine from time to time. However, no
member of the Committee shall be eligible to receive any Option or to receive
stock, stock options, or stock appreciation rights under any other plan of the
Company or any of its Affiliates, if to do so would cause the individual not to
be an Outside Director or a Non-Employee Director. The Board of Directors may
designate one or more individuals who shall not be eligible to receive any
Option under this Plan or under other similar plans of the Company.
III-1
<PAGE> 8
ARTICLE IV
GENERAL PROVISIONS RELATING TO OPTIONS
IV.1 AUTHORITY TO GRANT OPTIONS. The Committee may grant Options to
those individuals as it shall from time to time determine under the terms and
conditions of this Plan. Subject only to any applicable limitations set out in
this Plan, the number of shares of Stock to be covered by any Option shall be as
determined by the Committee.
IV.2 DEDICATED SHARES. The total number of shares of Stock with
respect to which Options may be granted under the Plan shall be 730,000 shares.
The shares may be treasury shares or authorized but unissued shares. The total
number of shares of Stock with respect to which Incentive Options may be granted
under the Plan shall be 730,000 shares. The maximum number of shares subject to
Options which may be issued to any Optionee under the Plan during any period of
three consecutive years is 365,000 shares. The number of shares stated in this
Section 4.2 shall be subject to adjustment in accordance with the provisions of
Section 4.5.
If any outstanding Option expires or terminates for any reason or any
Option is surrendered, the shares of Stock allocable to the unexercised portion
of that Option may again be subject to an Option under the Plan.
IV.3 NON-TRANSFERABILITY. Options shall not be transferable by the
Optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during the Optionee's lifetime, only by him.
IV.4 REQUIREMENTS OF LAW. The Company shall not be required to sell
or issue any Stock under any Option if issuing that Stock would constitute or
result in a violation by the Optionee or the Company of any provision of any
law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option, the Company shall not
be required to issue any Stock unless the Committee has received evidence
satisfactory to it to the effect that the holder of that Option will not
transfer the Stock except in accordance with applicable law, including receipt
of an opinion of counsel satisfactory to the Company to the effect that any
proposed transfer complies with applicable law. The determination by the
Committee on this matter shall be final, binding and conclusive. The Company
may, but shall in no event be obligated to, register any Stock covered by this
Plan pursuant to applicable securities laws of any country or any political
subdivision. In the event the Stock issuable on exercise of an Option is not
registered, the Company may imprint on the certificate evidencing the Stock any
legend that counsel for the Company considers necessary or advisable to comply
with applicable law. The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of an Option and the issuance
of shares thereunder, to comply with any law or regulation of any governmental
authority.
IV.5 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
IV-1
<PAGE> 9
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or its rights, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation for it in money, services or property, then (a) the number, class,
and per share price of shares of Stock subject to outstanding Options under this
Plan shall be appropriately adjusted in such a manner as to entitle an Optionee
to receive upon exercise of an Option, for the same aggregate cash
consideration, the equivalent total number and class of shares he would have
received had he exercised his Option in full immediately prior to the event
requiring the adjustment; and (b) the number and class of shares of Stock then
reserved to be issued under the Plan shall be adjusted by substituting for the
total number and class of shares of Stock then reserved, that number and class
of shares of Stock that would have been received by the owner of an equal number
of outstanding shares of such class of Stock as the result of the event
requiring the adjustment.
If the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, after the effective date of the
merger, consolidation, liquidation, sale or other disposition, as the case may
be, each holder of an outstanding Option shall be entitled, upon exercise of the
Option, to receive, in lieu of shares of Stock, the number and class or classes
of shares of stock or other securities or property to which the holder would
have been entitled if, immediately prior to the merger, consolidation,
liquidation, sale or other disposition, the holder had been the holder of record
of a number of shares of Stock equal to the number of shares as to which the
Option shall be so exercised; and (b) the Committee shall waive any limitations
set out in or imposed under this Plan so that, from and after the effective date
of the merger, consolidation, liquidation, sale or other disposition, as the
case may be, all Options shall be exercisable in full. However, no Option will
vest under the preceding sentence to the extent that such vesting could result
in a diminution of any compensation that would otherwise be payable to the
Optionee.
The issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Options.
IV-2
<PAGE> 10
ARTICLE V
OPTIONS
V.1 TYPE OF OPTION. The Committee shall specify whether a given
Option shall constitute any Incentive Option or a Nonqualified Option.
V.2 OPTION PRICE. The price at which Stock may be purchased under
an Option shall not be less than the greater of: (a) 100% of the Fair Market
Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted. In
the case of any 10% Stockholder, the price at which shares of Stock may be
purchased under an Incentive Option shall not be less than 110% of the Fair
Market Value of the Stock on the date the Incentive Option is granted.
V.3 DURATION OF OPTIONS. No Option shall be exercisable after the
earlier of (a) 10 years from the date the Option is granted or (b) 30 days after
the severance of the employment relationship between the Optionee and the
Company and all Affiliates for any reason other than death. In the case of a 10%
Stockholder, no Incentive Option shall be exercisable after the earlier of (a)
five years from the date the Incentive Option is granted or (b) 30 days after
the severance of the employment relationship between the Optionee and the
Company and all Affiliates.
V.4 AMOUNT EXERCISABLE. Each Option may be exercised from time to
time, in whole or in part, in the manner and subject to the conditions the
Committee, in its sole discretion, may provide in the Option Agreement, as long
as the Option is valid and outstanding. To the extent that the aggregate Fair
Market Value (determined as of the time an Incentive Option is granted) of the
Stock with respect to which Incentive Options first become exercisable by the
Optionee during any calendar year (under this Plan and any other incentive stock
option plan(s) of the Company or any Affiliate) exceeds $100,000, the Incentive
Options shall be treated as Nonqualified Options. In making this determination,
Incentive Options shall be taken into account in the order in which they were
granted.
V.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Stock with respect to which the Option is to be exercised, together with: (a)
cash, check, bank draft, or postal or express money order payable to the order
of the Company for an amount equal to the option price of the shares, or (b)
Stock at its Fair Market Value on the date of exercise, and/or any other form of
payment which is acceptable to such committee, and specifying the address to
which the certificates for the shares are to be mailed. Subject to Section 8.3,
as promptly as practicable after receipt of written notification and payment,
the Company shall deliver to the Optionee certificates for the number of shares
with
V-1
<PAGE> 11
respect to which the Option has been exercised, issued in the Optionee's name.
If shares of Stock are used in payment of the exercise price, the aggregate Fair
Market Value of the shares of Stock tendered must be equal to or less than the
aggregate exercise price of the shares being purchased upon exercise of the
Option, and any difference must be paid by cash, check, bank draft, or postal or
express money order payable to the Company. Delivery of the shares shall be
deemed effected for all purposes when a stock transfer agent of the Company
shall have deposited the certificates in the United States mail, addressed to
the Optionee, at the address specified by the Optionee.
Whenever an Option is exercised by exchanging shares of Stock owned by
the Optionee, the Optionee shall deliver to the Company certificates registered
in the name of the Optionee representing a number of shares of Stock legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition of an Option.
V.6 SUBSTITUTION OPTIONS. Options may be granted under this Plan
from time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the Company
or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company
or any Affiliate of the assets of the employing corporation, or the acquisition
by the Company or any Affiliate of stock of the employing corporation as the
result of which it becomes an Affiliate of the Company. The terms and conditions
of the substitute Options granted may vary from the terms and conditions set out
in this Plan to the extent the Committee, at the time of grant, may deem
appropriate to conform, in whole or in part, to the provisions of the stock
options in substitution for which they are granted.
V.7 NO RIGHTS AS STOCKHOLDER. No Optionee shall have any rights as
a stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.
V-2
<PAGE> 12
ARTICLE VI
ADMINISTRATION
This Plan shall be administered by the Committee. All questions of
interpretation and application of this Plan and Options shall be subject to the
determination of the Committee. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be as effective as if it had been made
by a majority vote at a meeting properly called and held. This Plan shall be
administered in such a manner as to permit the Options granted under it which
are designated to be Incentive Options to qualify as Incentive Options. In
carrying out its authority under this Plan, the Committee shall have full and
final authority and discretion, including but not limited to the following
rights, powers and authorities, to:
(a) determine the persons to whom and the time or times at
which Options will be made,
(b) determine the number of shares and the purchase price of
Stock covered in each Option, subject to the terms of the Plan,
(c) determine the terms, provisions and conditions of each
Option, which need not be identical,
(d) accelerate the time at which any outstanding Option
may be exercised,
(e) define the effect, if any, on an Option of the death,
disability, or retirement of the Optionee,
(f) prescribe, amend and rescind rules and regulations
relating to administration of this Plan, and
(g) make all other determinations and take all other actions
deemed necessary, appropriate, or advisable for the proper
administration of this Plan.
The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive and
binding on all parties.
VI-1
<PAGE> 13
ARTICLE VII
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or suspend
this Plan at any time, in its sole and absolute discretion; provided, however,
that to the extent required to maintain the status of any Incentive Option under
the Code, no amendment that would (a) change the aggregate number of shares of
Stock which may be issued under Incentive Options, (b) change the class of
employees eligible to receive Incentive Options, or (c) decrease the exercise
price for Incentive Options below the Fair Market Value of the Stock at the time
it is granted, shall be made without the approval of the Company's stockholders.
Subject to the preceding sentence, the Board shall have the power to make any
changes in this Plan and in the regulations and administrative provisions under
it or in any outstanding Incentive Option as in the opinion of counsel for the
Company may be necessary or appropriate from time to time to enable any
Incentive Option granted under this Plan to continue to qualify as an incentive
stock option or such other stock option as may be defined under the Code so as
to receive preferential Federal income tax treatment.
VII-1
<PAGE> 14
ARTICLE VIII
MISCELLANEOUS
VIII.1 NO EMPLOYMENT OBLIGATION. The granting of any Option shall not
constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Optionee. The right of the Company or any Affiliate to terminate the employment
of any person shall not be diminished or affected by reason of the fact that an
Option has been granted to him.
VIII.2 TAX WITHHOLDING. The Company or any Affiliate shall be entitled
to deduct from other compensation payable to each Optionee any sums required by
federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option. In the alternative, the Company may require the Optionee
(or other person exercising the Option) to pay the sum directly to the Company
or an Affiliate. If the Optionee (or other person exercising the Option) is
required to pay the sum directly, payment in cash or by check of such sums for
taxes shall be made on the date of exercise. The Company shall have no
obligation upon exercise of any Option until payment has been received, unless
withholding (or offset against a cash payment) as of or prior to the date of
exercise is sufficient to cover all sums due with respect to that exercise. The
Company and its Affiliates shall not be obligated to advise an Optionee of the
existence of the tax or the amount which the employer corporation will be
required to withhold.
VIII.3 WRITTEN AGREEMENT. Each Option shall be embodied in a written
Option Agreement which shall be subject to the terms and conditions of this Plan
and shall be signed by the Optionee and by a member of the Committee on behalf
of the Committee and the Company. The Option Agreement may contain any other
provisions that the Committee in its discretion shall deem advisable which are
not inconsistent with the terms of this Plan.
VIII.4 INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS.
With respect to administration of this Plan, the Company shall indemnify each
present and future member of the Committee and the Board of Directors against,
and each member of the Committee and the Board of Directors shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of the
Committee and/or the Board of Directors at the time of incurring the
expenses--including, without limitation, matters as to which he shall be finally
adjudged in any action, suit or proceeding to have been found to have been
negligent in the performance of his duty as a member of the Committee or of the
Board of Directors. However, this indemnity shall not include any expenses
incurred by any member of the Committee and/or the Board of Directors in
VIII-1
<PAGE> 15
respect of matters as to which he shall be finally adjudged in any action, suit
or proceeding to have been guilty of gross negligence or willful misconduct in
the performance of his duty as a member of the Committee or the Board of
Directors. In addition, no right of indemnification under this Plan shall be
available to or enforceable by any member of the Committee or the Board of
Directors unless, within 60 days after institution of any action, suit or
proceeding, he shall have offered the Company, in writing, the opportunity to
handle and defend same at its own expense. This right of indemnification shall
inure to the benefit of the heirs, executors or administrators of each member of
the Committee and the Board of Directors and shall be in addition to all other
rights to which a member of the Committee and the Board of Directors may be
entitled as a matter of law, contract, or otherwise.
VIII.5 GENDER. If the context requires, words of one gender when used
in this Plan shall include the others and words used in the singular or plural
shall include the other.
VIII.6 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of this Plan and shall
not be used in construing the terms of this Plan.
VIII.7 OTHER COMPENSATION PLANS. The adoption of this Plan shall not
affect any other stock option, incentive or other compensation or benefit plans
in effect for the Company or any Affiliate, nor shall this Plan preclude the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate.
VIII.8 OTHER OPTIONS. The grant of an Option shall not confer upon an
Optionee the right to receive any future or other Options under this Plan,
whether or not Options may be granted to similarly situated Optionees, or the
right to receive future Options upon the same terms or conditions as previously
granted.
VIII.9 ARBITRATION OF DISPUTES. Any controversy arising out of or
relating to the Plan or an Option Agreement shall be resolved by arbitration
conducted pursuant to the arbitration rules of the American Arbitration
Association. The arbitration shall be final and binding on the parties.
VIII.10 GOVERNING LAW. The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.
VIII-2
<PAGE> 16
INCENTIVE STOCK OPTION AGREEMENT
DANIEL INDUSTRIES, INC.
1997 STOCK OPTION PLAN
This STOCK OPTION AGREEMENT (the "Agreement") is made between DANIEL
INDUSTRIES, INC., a Delaware corporation (the "Company"), and___________________
(the "Employee"). The Board of Directors of the Company has adopted the Daniel
Industries, Inc. 1997 Stock Option Plan (the "Plan"), a copy of which is
attached hereto and incorporated by reference herein. The Company considers that
its interests will be served by granting the Employee an option to purchase
shares of common stock of the Company as an inducement for his continued and
effective performance of services for the Company or an affiliate of the Company
as defined in the Plan (an "Affiliate").
IT IS AGREED:
1. Subject to the terms of the Plan and this Agreement,
on __________, 1997 (the "Date of Grant"), the Company hereby grants to the
Employee an incentive stock option (the "Option") to purchase shares of the
common stock of the Company, $1.25 par value per share ("Stock"), at a price of
$__________ per share, subject to adjustment as provided in the Plan. The Option
is exercisable according to the following schedule:
(a) On the day after the first anniversary of the Date of
Grant, the Option may be exercised with respect to up to 1/3 of the
shares subject to the Option;
(b) after each succeeding anniversary of the Date of Grant,
the Option may be exercised with respect to up to an additional 1/3 of
the shares subject to the Option, so that after the expiration of the
third anniversary of the Date of Grant the Option shall be exercisable
in full; and
(c) to the extent not exercised, installments shall be
cumulative and may be exercised in whole or in part.
If the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all its assets while any portion of
this Option remains outstanding, from and after the effective date of the
merger, consolidation, liquidation, sale or other disposition, as the case may
be, the Option shall be exercisable in full. However, the Option will not vest
under the preceding sentence to the extent that such vesting could result in a
diminution of any compensation that would otherwise be payable to the Employee.
<PAGE> 17
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR THE PLAN TO
THE CONTRARY, NO PORTION OF THE OPTION SHALL BE EXERCISABLE BEFORE THE DATE ON
WHICH THE STOCKHOLDERS OF THE COMPANY HAVE APPROVED THE PLAN.
2. To the extent that the aggregate fair market value of Stock
with respect to which incentive stock options are exercisable for the first time
by the Employee during any calendar year (under the Plan or any other plan of
the Company or its Affiliates) exceeds $100,000, the options will be treated as
nonqualified stock options. For purposes of this rule, the fair market value of
the Stock is determined at the time the option for the Stock is granted.
3. The Option granted to the Employee under this Agreement shall
not be transferable or assignable by the Employee other than by will or the laws
of descent and distribution, and shall be exercisable during the Employee's
lifetime only by him.
4. The Option shall terminate and become null and void on the
earlier of (a) the last day of the ten year period commencing on the Date of
Grant or (b) 30 days after the severance of the employment relationship between
the Employee and the Company and all Affiliates.
In the event of the severance of the employment relationship between
the Employee and the Company and all Affiliates for any reason, the Option shall
not continue to vest after such severance of employment.
5. Upon the death of the Employee while in the employ of the
Company or its Affiliate, his executors, administrators or any person or persons
to whom his Option may be transferred by will or by the laws of descent and
distribution, shall have the right, at any time prior to the earlier of one year
from the date of the Employee's death or the expiration date of the Option to
exercise the Option with respect to the number of shares that the Employee would
have been entitled to exercise if he were still alive.
6. This Agreement may not be changed or terminated orally but
only by an agreement in writing signed by the party against whom enforcement of
any such change or termination is sought.
7. The Company shall not be deemed by the grant of the Option (as
distinguished from a separate employment agreement, if any) to be required to
employ the Employee for any period.
8. The Employee consents to the placing on the certificate for
any shares covered by the Option of an appropriate legend restricting resale or
other transfer of such shares except in accordance with the Securities Act of
1933 and all applicable rules thereunder.
9. The Employee shall not have any rights as a stockholder with
respect to any shares covered by the Option until the date of the issuance of
the stock certificate or certificates to him for such shares following his
exercise of the Option pursuant to its terms and conditions and payment for the
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such certificate or certificates are issued.
<PAGE> 18
10. In the event of any difference of opinion concerning the
meaning or effect of the Plan or this Agreement, such difference shall be
resolved by the committee referred to in the Plan.
11. The validity, construction and performance of this agreement
shall be governed by the laws of the State of Texas. Any invalidity of any
provision of this Agreement shall not affect the validity of any other
provision.
12. All offers, notices, demands, requests, acceptances or other
communications hereunder shall be in writing and shall be deemed to have been
duly made or given if mailed by registered or certified mail, return receipt
requested. Any such notice mailed to the Company shall be addressed to its
principal office, and any notice mailed to the Employee shall be addressed to
the Employee's residence address as it appears on the books and records of the
Company or to such other address as either party may hereafter designate in
writing to the other.
13. This Agreement shall, except as herein stated to the contrary,
inure to the benefit of and bind the legal representatives, successors and
assigns of the parties hereto.
14. This Option is an incentive stock option which is intended to
be governed by section 422 of the Internal Revenue Code of 1986, as amended.
15. In accepting this Option, the Employee accepts and agrees to
be bound by all the terms and conditions of the Plan which pertain to incentive
stock options granted under the Plan.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
to be effective as of the day and year first above written.
DANIEL INDUSTRIES, INC.
By:
------------------------------------
---------------------------------------
Employee
<PAGE> 1
EXHIBIT 4.8
DANIEL INDUSTRIES, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
<PAGE> 2
DANIEL INDUSTRIES, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section
--------
<S> <C>
ARTICLE I - DEFINITIONS
Board of Directors.....................................................................................1.1
Company................................................................................................1.2
Fair Market Value......................................................................................1.3
Non-Employee Director..................................................................................1.4
Option.................................................................................................1.5
Option Agreement.......................................................................................1.6
Optionee...............................................................................................1.7
Plan...................................................................................................1.8
Stock..................................................................................................1.9
ARTICLE II - GENERAL PROVISIONS RELATING TO OPTIONS
Dedicated Shares.......................................................................................2.1
Non-Transferability....................................................................................2.2
Requirements of Law....................................................................................2.3
Changes in the Company's Capital Structure.............................................................2.4
ARTICLE III - OPTIONS
Automatic Awards For Service on the
Board of Directors...................................................................................3.1
Option Price...........................................................................................3.2
Amount Exercisable.....................................................................................3.3
Duration of Options....................................................................................3.4
Exercise of Options....................................................................................3.5
Form of Options........................................................................................3.6
No Rights as Stockholder...............................................................................3.7
ARTICLE IV - AMENDMENT OR TERMINATION OF PLAN
ARTICLE V - MISCELLANEOUS
No Retention Obligation................................................................................5.1
Taxes..................................................................................................5.2
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Written Agreement......................................................................................5.3
Gender.................................................................................................5.4
Headings...............................................................................................5.5
Other Compensation.....................................................................................5.6
Other Options..........................................................................................5.7
Arbitration of Disputes................................................................................5.8
Governing Law..........................................................................................5.9
</TABLE>
<PAGE> 4
DANIEL INDUSTRIES, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
This Daniel Industries, Inc. 1997 Non-Employee Director Stock Option
Plan (the "Plan") is adopted, subject to stockholder approval, for the benefit
of the directors of Daniel Industries, Inc., a Delaware corporation (the
"Company") who at the time of their service are not employees of the Company or
any of its subsidiaries. The Plan is intended to advance the interest of the
Company by providing such directors with an additional incentive to serve the
Company by increasing their proprietary interest in the success of the Company.
<PAGE> 5
ARTICLE I
DEFINITIONS
The words and phrases defined in this Article shall have the meaning
set out in these definitions throughout this Plan, unless the context in which
any such word or phrase appears reasonably requires a broader, narrower, or
different meaning.
1.1 "BOARD OF DIRECTORS" means the board of directors of the
Company.
1.2 "COMPANY" means Daniel Industries, Inc., a Delaware
corporation.
1.3 "FAIR MARKET VALUE" of the Stock as of any date means (a) the
average of the high and low sale prices of the Stock on that date (or, if there
was no sale on such date, the next preceding date on which there was such a
sale) on the principal securities exchange on which the Stock is listed; or (b)
if the Stock is not listed on a securities exchange, an amount determined by the
Board of Directors in good faith in its sole discretion.
1.4 "NON-EMPLOYEE DIRECTOR" means a director of the Company who
while a director is not an employee of the Company, or a corporation, of which a
majority of voting securities is owned, directly or indirectly, by the Company.
1.5 "OPTION" means an option granted under this Plan to purchase
shares of Stock.
1.6 "OPTION AGREEMENT" means the written agreement which sets out
the terms of an Option.
1.7 "OPTIONEE" means a person who is granted an Option under this
Plan.
1.8 "PLAN" means the Daniel Industries, Inc. 1997 Non-Employee
Director Stock Option Plan, as set out in this document and as it may be amended
from time to time.
1.9 "STOCK" means the common stock of the Company, $1.25 par value, or,
in the event that the outstanding shares of common stock are later changed into
or exchanged for a different class of stock or securities of the Company or
another corporation, that other stock or security.
I-1
<PAGE> 6
ARTICLE II
GENERAL PROVISIONS RELATING TO OPTIONS
2.1 DEDICATED SHARES. The total number of shares of Stock with
respect to which Options may be granted under the Plan shall be 120,000 shares.
The shares may be treasury shares or authorized but unissued shares. The number
of shares stated in this Section 2.1 shall be subject to adjustment in
accordance with the provisions of Section 2.4.
If any outstanding Option expires or terminates for any reason or any
Option is surrendered, the shares of Stock allocable to the unexercised portion
of that Option may again be subject to an Option under the Plan.
2.2 NON-TRANSFERABILITY. Except as expressly provided otherwise in
an Optionee's Option Agreement, Options shall not be transferable by the
Optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during the Optionee's lifetime, only by him.
2.3 REQUIREMENTS OF LAW. The Company shall not be required to sell
or issue any Stock under any Option if issuing that Stock would constitute or
result in a violation by the Optionee or the Company of any provision of any
law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option, the Company shall not
be required to issue any Stock unless the Board of Directors has received
evidence satisfactory to it to the effect that the holder of that Option will
not transfer the Stock except in accordance with applicable law, including
receipt of an opinion of counsel satisfactory to the Company to the effect that
any proposed transfer complies with applicable law. The determination by the
Board of Directors on this matter shall be final, binding and conclusive. The
Company may, but shall in no event be obligated to, register any Stock covered
by this Plan pursuant to applicable securities laws of any country or any
political subdivision. In the event the Stock issuable on exercise of an Option
is not registered, the Company may imprint on the certificate evidencing the
Stock any legend that counsel for the Company considers necessary or advisable
to comply with applicable law. The Company shall not be obligated to take any
other affirmative action in order to cause the exercise of an Option and the
issuance of shares thereunder, to comply with any law or regulation of any
governmental authority.
2.4 CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or its rights, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares
II-1
<PAGE> 7
of the Stock outstanding, without receiving compensation for it in money,
services or property, then (a) the number, class, and per share price of shares
of Stock subject to outstanding Options under this Plan shall be appropriately
adjusted in such a manner as to entitle an Optionee to receive upon exercise of
an Option, for the same aggregate cash consideration, the equivalent total
number and class of shares he would have received had he exercised his Option in
full immediately prior to the event requiring the adjustment; and (b) the number
and class of shares of Stock then reserved to be issued under the Plan shall be
adjusted by substituting for the total number and class of shares of Stock then
reserved, that number and class of shares of Stock that would have been received
by the owner of an equal number of outstanding shares of such class of Stock as
the result of the event requiring the adjustment.
If the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or if the Company is liquidated or
sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under this Plan, after the effective date of the
merger, consolidation, liquidation, sale or other disposition, as the case may
be, each holder of an outstanding Option shall be entitled, upon exercise of the
Option, to receive, in lieu of shares of Stock, the number and class or classes
of shares of stock or other securities or property to which the holder would
have been entitled if, immediately prior to the merger, consolidation,
liquidation, sale or other disposition, the holder had been the holder of record
of a number of shares of Stock equal to the number of shares as to which the
Option shall be so exercised.
The issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Options.
II-2
<PAGE> 8
ARTICLE III
OPTIONS
3.1 AUTOMATIC AWARDS FOR SERVICE ON THE BOARD OF DIRECTORS. On the
date that this Plan is approved by the Board of Directors, each person who is a
Non-Employee Director on that date shall be granted an Option to purchase 5,000
shares of Stock. Thereafter, on the first day of each fiscal year of the Company
through and including the 2001 fiscal year of the Company, as long as shares are
available for the grant of Options hereunder, each person who is a Non-Employee
Director on that date shall be granted an Option to purchase 5,000 shares of
Stock.
3.2 OPTION PRICE. The price at which Stock may be purchased under
an Option shall be equal to 100% of the Fair Market Value of the shares of Stock
on the date the Option is granted.
3.3 AMOUNT EXERCISABLE.
Each Option Agreement evidencing the grant of an Option shall provide
that the Option is exercisable in full immediately upon the date of grant.
However, no Option will be exercisable before the stockholders of the Company
approve the Plan.
3.4 DURATION OF OPTIONS.
Each Option awarded, to the extent it shall not previously
have been exercised, shall terminate on the earliest of the following
dates:
(i) on the last day within the three-month period
commencing on the date on which the Optionee ceases to be a
member of the Board of Directors, for any reason other than
death, during which period the Optionee shall be entitled to
exercise his Option in respect of the number of shares that
the Optionee would have been entitled to purchase had the
Optionee exercised such Option on the date on which the
Optionee ceased to be a member of the Board of Directors;
(ii) on the last day within the one-year period
commencing on the date of the Optionee's death while serving
as a member of the Board of Directors, during which period the
executor or administrator of the Optionee's estate or the
person or persons to whom the Optionee's Option shall have
been transferred by will or the laws of descent or
distribution, shall be entitled to exercise such Option in
respect of the number of shares that the Optionee would have
been entitled to purchase had the Optionee exercised such
Option on the date of his death; or
(iii) ten years after the date of grant of such
Option.
III-1
<PAGE> 9
3.5 EXERCISE OF OPTIONS. Each Option shall be exercised by the
delivery of written notice to the Treasurer of the Company setting forth the
number of shares of Stock with respect to which the Option is to be exercised,
together with: (a) cash, check, bank draft, or postal or express money order
payable to the order of the Company for an amount equal to the option price of
the shares, or (b) Stock at its Fair Market Value on the date of exercise,
and/or any other form of payment which is acceptable to the Company, and
specifying the address to which the certificates for the shares are to be
mailed. As promptly as practicable after receipt of written notification and
payment, the Company shall deliver to the Optionee certificates for the number
of shares with respect to which the Option has been exercised, issued in the
Optionee's name. If shares of Stock are used in payment of the exercise price,
the aggregate Fair Market Value of the shares of Stock tendered must be equal to
or less than the aggregate exercise price of the shares being purchased upon
exercise of the Option, and any difference must be paid by cash, check, bank
draft, or postal or express money order payable to the Company. Delivery of the
shares shall be deemed effected for all purposes when a stock transfer agent of
the Company shall have deposited the certificates in the United States mail,
addressed to the Optionee, at the address specified by the Optionee.
Whenever an Option is exercised by exchanging shares of Stock owned by
the Optionee, the Optionee shall deliver to the Company certificates registered
in the name of the Optionee representing a number of shares of Stock legally and
beneficially owned by the Optionee, free of all liens, claims, and encumbrances
of every kind, accompanied by stock powers duly endorsed in blank by the record
holder of the shares represented by the certificates, (with signature guaranteed
by a commercial bank or trust company or by a brokerage firm having a membership
on a registered national stock exchange). The delivery of certificates upon the
exercise of Options is subject to the condition that the person exercising the
Option provide the Company with the information the Company might reasonably
request pertaining to exercise, sale or other disposition of an Option.
3.6 FORM OF OPTIONS. All Options granted under this Plan will be
nonqualified stock options that are not intended to qualify as incentive stock
options under section 422 of the Internal Revenue Code of 1986, as amended.
3.7 NO RIGHTS AS STOCKHOLDER. No Optionee shall have any rights as
a stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.
III-2
<PAGE> 10
ARTICLE IV
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Company may amend, terminate or suspend
this Plan at any time, in its sole and absolute discretion; provided, however,
that no amendment shall decrease the exercise price for Options below the Fair
Market Value of the Stock at the time it is granted.
IV-1
<PAGE> 11
ARTICLE V
MISCELLANEOUS
5.1 NO RETENTION OBLIGATION. The granting of any Option shall not
impose upon the Company any obligation to continue to retain the Optionee's
services as a director of the Company.
5.2 TAXES. The Company shall not be obligated to advise an
Optionee of the existence of any tax that may apply with respect to the grant or
exercise of an Option.
5.3 WRITTEN AGREEMENT. Each Option shall be embodied in a written
Option Agreement which shall be subject to the terms and conditions of this Plan
and shall be signed by the Optionee and by an officer of the Company.
5.4 GENDER. If the context requires, words of one gender when used
in this Plan shall include the other and words used in the singular or plural
shall include the other.
5.5 HEADINGS. Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of this Plan and shall
not be used in construing the terms of this Plan.
5.6 OTHER COMPENSATION. The adoption of this Plan shall not affect
any other compensation in effect for the Non-Employee Directors, nor shall this
Plan preclude the Company from establishing any other forms of compensation for
Non-Employee Directors.
5.7 OTHER OPTIONS. The grant of an Option shall not confer upon an
Optionee the right to receive any future or other Options under this Plan.
5.8 ARBITRATION OF DISPUTES. Any controversy arising out of or
relating to the Plan or an Option Agreement shall be resolved by arbitration
conducted pursuant to the arbitration rules of the American Arbitration
Association. The arbitration shall be final and binding on the parties.
5.9 GOVERNING LAW. The provisions of this Plan shall be
construed, administered, and governed under the laws of the State of Texas.
V-1
<PAGE> 12
NONQUALIFIED STOCK OPTION AGREEMENT
DANIEL INDUSTRIES, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
This STOCK OPTION AGREEMENT (the "Agreement") is made between DANIEL
INDUSTRIES, INC., a Delaware corporation (the "Company"), and___________________
(the "Optionee"). The Board of Directors of the Company has adopted the Daniel
Industries, Inc. 1997 Non-Employee Director Stock Option Plan (the "Plan"), a
copy of which is attached hereto and incorporated by reference herein. The
Company considers that its interests will be served by granting the Optionee an
option to purchase shares of common stock of the Company as an inducement for
his continued and effective performance of services for the Company.
IT IS AGREED:
1. Subject to the terms of the Plan and this Agreement, on
_______________, 1997 (the "Date of Grant"), the Company hereby grants to the
Optionee a nonqualified stock option (the "Option") to purchase 5,000 shares of
the common stock of the Company, $1.25 par value per share, at a price of
$_____________ per share, subject to adjustment as provided in the Plan. The
Option is immediately exercisable in full upon Date of Grant; provided, however
that NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR THE PLAN TO THE
CONTRARY, NO PORTION OF THE OPTION SHALL BE EXERCISABLE BEFORE THE DATE ON WHICH
THE STOCKHOLDERS OF THE COMPANY HAVE APPROVED THE PLAN.
2. The Option granted to the Optionee under this Agreement shall
[not] be transferable or assignable by the Optionee [other than by will or the
laws of descent and distribution, and shall be exercisable during the Optionee's
lifetime only by him].
3. The Option shall terminate and become null and void on the
earliest of the following dates:
(a) on the last day within the three month period commencing
on the date on which the Optionee ceases to be a member of the Board of
Directors, for any reason other than death, during which period the
Optionee shall be entitled to exercise his Option in respect of the
number of shares that the Optionee would have been entitled to purchase
had the Optionee exercised such Option on the date on which the
Optionee ceased to be a member of the Board of Directors;
(b) on the last day within the one-year period commencing on
the date of the Optionee's death while serving as a member of the Board
of Directors, during
<PAGE> 13
which period the executor or administrator of the Optionee's estate or
the person or persons to whom the Optionee's Option shall have been
transferred by will or the laws of descent or distribution, shall be
entitled to exercise such Option in respect of the number of shares
that the Optionee would have been entitled to purchase had the optionee
exercised such Option on the date of his death; or
(c) ten years after the date of grant of such Option.
4. This Agreement may not be changed or terminated orally but
only by an agreement in writing signed by the party against whom enforcement of
any such change or termination is sought.
5. The Company shall not be deemed by the grant of the Option (as
distinguished from a separate employment agreement or service contract, if any)
to be required to retain the services of the Optionee for any period.
6. The Optionee shall not have any rights as a stockholder with
respect to any shares covered by the Option until the date of the issuance of
the stock certificate or certificates to him for such shares following his
exercise of the Option pursuant to its terms and conditions and payment for the
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such certificate or certificates are issued.
7. The Optionee consents to the placing on the certificate for
any shares covered by the Option of an appropriate legend restricting resale or
other transfer of such shares except in accordance with the Securities Act of
1933 and all applicable rules thereunder.
8. The validity, construction and performance of this agreement
shall be governed by the laws of the State of Texas. Any invalidity of any
provision of this Agreement shall not affect the validity of any other
provision.
9. All offers, notices, demands, requests, acceptances or other
communications hereunder shall be in writing and shall be deemed to have been
duly made or given if mailed by registered or certified mail, return receipt
requested. Any such notice mailed to the Company shall be addressed to its
principal office, and any notice mailed to the Optionee shall be addressed to
the Optionee's residence address as it appears on the books and records of the
Company or to such other address as either party may hereafter designate in
writing to the other.
10. This Agreement shall, except as herein stated to the contrary,
inure to the benefit of and bind the legal representatives, successors and
assigns of the parties hereto.
11. This Option is a nonqualified stock option which is not
intended to be governed by section 422 of the Internal Revenue Code of 1986, as
amended.
-2-
<PAGE> 14
12. In accepting this Option, the Optionee accepts and agrees to
be bound by all the terms and conditions of the Plan.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
to be effective as of the day and year first above written.
DANIEL INDUSTRIES, INC.
By:
--------------------------------------
-----------------------------------------
Optionee
-3-
<PAGE> 1
EXHIBIT 5.1
LETTERHEAD OF DANIEL INDUSTRIES, INC.
May 28, 1998
Daniel Industries, Inc.
9753 Pine Lake Drive
Houston, Texas 77055
Attention: Michael R. Yellin
Gentlemen:
I have acted as counsel for Daniel Industries, Inc., a Delaware
corporation (the "Company"), in connection with its filing with the Securities
and Exchange Commission of a Registration Statement on Form S-8 (the
"Registration Statement") with respect to the registration under the Securities
Act of 1933, as amended, of 850,000 shares of the Company's common stock, $1.25
par value per share, including the preferred share purchase rights associated
therewith (collectively, the "Shares"), to be offered upon the terms and subject
to the conditions set forth in the Daniel Industries, Inc. 1997 Stock Option
Plan and the Daniel Industries, Inc. 1997 Non-Employee Directors Stock Option
Plan (collectively, the "Plans").
I have examined (i) the Certificate of Incorporation and By-Laws of the
Company, each as amended to date, (ii) the Plans, (iii) the Registration
Statement, and (iv) such certificates, statutes and other instruments and
documents as I considered appropriate for purposes of the opinions hereafter
expressed.
In connection with this opinion, I have assumed the authenticity and
completeness of all records, certificates and other instruments submitted to me
as originals, the conformity to original documents of all records, certificates
and other instruments submitted to me as copies, the authenticity and
completeness of the originals of those records, certificates and other
instruments, and the correctness of all statements of fact contained in all
records, certificates and other instruments that I have examined.
Based upon and subject to the foregoing, I am of the opinion that the
Shares have been duly authorized and, when issued in accordance with the terms
of the Plans, will be validly issued, fully paid and nonassessable.
<PAGE> 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the caption "Item 5.
Interests of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
Katie-Pat Bowman
<PAGE> 1
EXHIBIT NO. 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 27, 1998, appearing on page
21 of Daniel Industries, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1997.
PRICE WATERHOUSE LLP
Houston, Texas
May 29, 1998
