<PAGE> 1
As filed with the Securities and Exchange Commission on January 15, 1999.
Registration No.333-*****
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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VERITAS DGC INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0343152
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
3701 KIRBY DRIVE, SUITE 112
HOUSTON, TEXAS 77098-3982
(713) 512-8300
(Address, including Zip Code, of Registrant's Principal Executive Offices)
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VERITAS DGC INC.
THIRD AMENDED AND RESTATED 1992 EMPLOYEE NONQUALIFIED STOCK OPTION PLAN
VERITAS DGC INC.
SECOND AMENDED AND RESTATED 1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
VERITAS DGC INC. RESTRICTED STOCK PLAN
VERITAS DGC INC. KEY CONTRIBUTOR INCENTIVE PLAN
(AS AMENDED AND RESTATED DECEMBER 9, 1998)
(Full Title of Plan)
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Name, Address, and Telephone Copy of Communications to:
Number of Agent for Service:
T. WILLIAM PORTER
ANTHONY TRIPODO PORTER & HEDGES, L.L.P.
3701 KIRBY DRIVE, SUITE 112 700 LOUISIANA, 35TH FLOOR
HOUSTON, TEXAS 77098-3982 HOUSTON, TEXAS 77002-2764
(713) 512-8300 (713) 226-0600
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED
AMOUNT TO OFFERING MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER SHARE(1) OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 1,204,550 shs. $14.250 $17,164,837.50 $4,772.00
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</TABLE>
(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the anti-dilution
provisions of certain Plans.
(2) Pursuant to Rule 457(c), the registration fee is calculated on the basis of
the average of the high and low sale prices for the Common Stock on the New
York Stock Exchange on January 13, 1999, which was $14.250. Pursuant to
Rule 457(h), the registration fee is calculated with respect to the maximum
number of the registrant's securities issuable under the Plan.
THIS REGISTRATION STATEMENT ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRANT'S REGISTRATION STATEMENT NO. 333-65081, POST-EFFECTIVE AMENDMENT NO.
2 TO REGISTRANT'S REGISTRATION STATEMENT NO. 333-57603, POST-EFFECTIVE AMENDMENT
NO. 3 TO REGISTRANT'S REGISTRATION STATEMENT NO. 333-48953, POST-EFFECTIVE
AMENDMENT NO. 4 TO REGISTRANT'S REGISTRATION STATEMENT NO. 333-41829 AND
POST-EFFECTIVE AMENDMENT NO. 5 TO REGISTRANT'S REGISTRATION STATEMENT NO.
333-09679, WHICH RELATE TO AN AGGREGATE OF 2,946,050 SHARES OF COMMON STOCK. THE
$23,694.67 AGGREGATE REGISTRATION FEE WITH RESPECT TO SUCH 2,946,050 SHARES OF
COMMON STOCK PREVIOUSLY REGISTERED HAS BEEN PAID.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The contents of the following documents filed by Veritas DGC Inc., a
Delaware corporation (the "Company" or "Registrant"), with the Securities and
Exchange Commission ("Commission") are incorporated into this registration
statement ("Registration Statement") by reference:
(a) the Company's quarterly report on Form 10-Q for the fiscal
quarter ended October 31, 1998, filed with the Commission on
December 15, 1998;
(b) the Company's current report on Form 8-K for the event dated
November 10, 1998, filed with the Commission on November 12,
1998;
(c) the Company's annual report on Form 10-K for the fiscal year
ended July 31, 1998, filed with the Commission on October 7,
1998;
(d) the description of the Company's Common Stock set forth in the
Company's registration statement on Form 8-A filed with the
Commission on August 14, 1997, and any amendment or report
filed for the purpose of updating any such description.
All documents filed by the Company with the Commission pursuant to
Section 13(a) and 13(c), 14 and 15(d) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act") after the filing date of the Registration
Statement and before the filing of a post-effective amendment to the
Registration Statement 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 the Registration Statement and to be part
hereof from the date of filing such documents.
The Company will provide without charge to each participant in the
Company's Third Amended and Restated 1992 Employee Nonqualified Stock Option
Plan (as Amended and Restated December 9, 1998), upon written or oral request of
such persons, a copy (without exhibits, unless such exhibits are specifically
incorporated by reference) of any or all of the documents incorporated by
reference pursuant to this Item 3.
ITEM 4. DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 40,000,000 shares of Common Stock,
par value $.01 per share, and at November 30, 1998, there were 22,844,407 shares
outstanding, and 2,359,707 shares were reserved for issuance upon exercise of
any options or rights granted under the Company's various compensation plans.
Included in the shares outstanding are 1,506,863 Exchangeable Shares of Veritas
Energy Services, Inc., a wholly-owned subsidiary of the Company, which are
exchangeable for, and vote with the Common Stock, and are identical to, the
Common Stock in all material respects. Each share of Common Stock has one vote
on all matters presented to the stockholders. Subject to the rights and
preferences of any Preferred Stock (as defined below) which may be designated
and issued, the holders of Common Stock are entitled to receive dividends, if
and when declared by the board of directors, and are entitled on liquidation to
all assets remaining after the payment of liabilities. The Common Stock has no
preemptive or other subscription rights. Outstanding shares of Common Stock are
and the shares of Common Stock offered by the Company, when issued and paid for,
will be fully paid and nonassessable. Because the Common Stock does not have
cumulative voting rights, the holders of more than 50% of the shares may, if
they choose to do so, elect all of the directors and, in that event, the holders
of the remaining shares will not be able to elect any directors. ChaseMellon
Shareholder Services, L.L.C., Dallas, Texas, is the transfer agent and registrar
for the Common Stock.
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<PAGE> 3
PREFERRED STOCK
The board of directors of the Company, without any action by the
stockholders of the Company, is authorized to issue up to 1,000,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock"). Shares of
Preferred Stock may be issued in one or more series or classes, which will have
such designation, voting powers, preferences and relative, participating,
optional or other rights and such qualifications, limitations or restrictions
thereon, including voting rights, dividends, rights on liquidation, dissolution
or winding up, conversion or exchange rights and redemption provisions, as set
forth in the resolutions adopted by the Board of Directors providing for the
issuance of such stock and as permitted by the Delaware General Corporation Law
(the "DGCL"). A series of 400,000 shares of Preferred Stock has been designated
for use in connection with the Rights Plan (as defined below). Although the
Company has no other current plans for the possible issuance of Preferred Stock,
the issuance of shares of Preferred Stock, or the issuance of securities
convertible into or exchangeable for such shares, could be used to discourage an
unsolicited acquisition proposal that some or a majority of the stockholders
believe to be in their interests or in which stockholders are to receive a
premium for their stock over the then current market price. In addition, the
issuance of Preferred Stock could adversely affect the voting power of the
holders of Common Stock. The Board of Directors does not presently intend to
seek stockholder approval prior to any issuance of currently authorized stock,
unless otherwise required by law or stock exchange rules.
RIGHTS PLAN
Pursuant to a Rights Agreement between the Company and ChaseMellon
Shareholder Services, L.L.C., Dallas, Texas (the "Rights Plan"), each share of
Common Stock has attached to it one Right (the "Right"), represented by the
certificate which is also the certificate representing the Common Stock. Each
Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"), of the Company at a
purchase price of $100, subject to adjustment (the "Purchase Price").
The Rights will separate from the Company's Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days (or such
later date as the Board of Directors of the Company shall determine) following
the commencement of a tender or exchange offer which would result in a person or
group beneficially owning 15% or more of such outstanding shares of Common Stock
(the "Tender Offer Date"). Until the Distribution Date, the Rights will be
transferred with and only with the Common Stock certificates. The Rights are not
exercisable until the Distribution Date and, unless earlier redeemed by the
Company as described below, will expire at the close of business on May 15,
2007.
In the event that, among other things, (i) the Company is the surviving
corporation in a merger or other business combination with an Acquiring Person
or (ii) any person shall become the beneficial owner of more than 15% of the
outstanding shares of the Common Stock (except (A) pursuant to certain
consolidations or mergers involving the Company or sales or transfers of the
combined assets or earning power of the Company and its subsidiaries, or (B)
pursuant to an offer for all outstanding shares of the Common Stock at a price
and upon terms and conditions which a majority of the Continuing Directors (as
defined below) determines to be in the best interests of the Company and its
stockholders) each holder of a Right (other than the Acquiring Person, certain
related parties and transferees) will thereafter have the right to purchase,
upon exercise, a one-thousandth fractional share interest in Series A Preferred
Stock each of which is for all purposes essentially equivalent to a share of
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right. For example, at the exercise price of $100 per Right, each Right not
owned by an Acquiring Person (or by certain related parties and transferees)
following an event set forth above would entitle its holder to purchase $200
worth of Series A Preferred Stock (or other consideration, as noted above) for
$100. Assuming that the Series A Preferred Stock had a per share market price of
$40 at such time (with each one-thousandth share of Series A Preferred Stock
valued at one share of Common Stock), the holder of each valid Right would be
entitled to purchase 5 shares of the Series A Preferred Stock for $100. Rights
are not exercisable following the occurrence of any of the events described
above until the Rights are no longer redeemable by the Company as described
below. Notwithstanding any of the foregoing, following the occurrence of any of
the events described in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Plan) were, beneficially owned by any
Acquiring Person will be null and void.
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<PAGE> 4
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company is the surviving corporation in a consolidation or merger pursuant to
which all or part of the outstanding shares of Common Stock are changed into or
exchanged for stock or other securities of any other person or cash or any other
property or (iii) more than 50% of the combined assets or earning power of the
Company and its subsidiaries is sold or transferred (in each case other than
certain consolidations with, mergers with and into, or sales of assets or
earning power by or to subsidiaries of the Company as specified in the Rights
Agreement), each holder of a Right (except Rights that previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the exercise price of the Right. The events described in this paragraph
and in the immediately preceding paragraph are referred to as the "Triggering
Events."
At any time until any person becomes an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.001 per Right
(payable in cash, shares of Common Stock or other consideration deemed
appropriate by the Board of Directors). Rights may not be redeemed during the
180 day period after any person becomes an Acquiring Person unless the
redemption is approved by a majority of Continuing Directors. The term
"Continuing Director" means any member of the Board of Directors of the Company
who was a member of the Board prior to the date of the Rights Agreement, and any
person who is subsequently elected to the Board if such person is recommended or
approved by a majority of at least five Continuing Directors, but shall not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing persons.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights have certain anti-takeover effects. They may reduce or
eliminate (i) "two-tiered" or other partial offers that do not offer fair value
for all Common Stock; (ii) the accumulation by a third party of 15% or more of
the Common Stock in open-market or private purchases in order to influence or
control the business and affairs of the Company without paying an appropriate
premium for a controlling position in the Company; and (iii) the accumulation of
shares of Common Stock by third parties in market transactions for the primary
purpose of attempting to cause the Company to be sold. In addition, the Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company in a manner defined as a Triggering Event unless the offer is
conditioned on a substantial number of Rights being acquired. The Rights,
however, should not affect any prospective offeror willing to make an offer for
all outstanding shares of Common Stock and other voting securities at a price
and on other terms that are in the best interests of the Company and its
stockholders as determined by the Board of Directors or affect any prospective
offeror willing to negotiate with the Board of Directors because as part of any
negotiated transaction the Rights would either be redeemed or otherwise made
inapplicable to the transaction. The Rights should not interfere with any merger
or other business combination approved by the Board of Directors since the Board
of Directors may, at its option, at any time until ten business days following
the Stock Acquisition Date, redeem all, but not less than all, of the then
outstanding Rights at the $.001 redemption price.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the DGCL permits a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action.
In a suit brought to obtain a judgment in the corporation's favor,
whether by the corporation itself or derivatively by a stockholder, the
corporation may only indemnify for expenses, including attorney's fees, actually
and reasonably
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<PAGE> 5
incurred in connection with the defense or settlement of the case, and the
corporation may not indemnify for amounts paid in satisfaction of a judgment or
in settlement of the claim. In any such action, no indemnification may be paid
in respect of any claim, issue or matter as to which such persons shall have
been adjudged liable to the corporation except as otherwise provided by the
Delaware Court of Chancery or the court in which the claim was brought. In any
other type of proceeding, the indemnification may extend to judgments, fines and
amounts paid in settlement, actually and reasonably incurred in connection with
such other proceeding, as well as to expenses (including attorneys' fees).
The statute does not permit indemnification unless the person seeking
indemnification has acted in good faith and in a manner he reasonably believed
to be in, or not opposed to, the best interest of the corporation and, in the
case of criminal actions or proceedings, the person had no reasonable cause to
believe his conduct was unlawful. There are additional limitations applicable to
criminal actions and to actions brought by or in the name of the corporation.
The determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (i) by a majority vote of a quorum of
disinterested members of the board of directors, or (ii) by independent counsel
in a written opinion, if such a quorum does not exist or if the disinterested
directors so direct, or (iii) by the stockholders.
The Restated Certificate of Incorporation (with Amendments) and Bylaws
of the Company require the Company to indemnify the Company's directors and
officers to the fullest extent permitted under Delaware law. The Company's
Restated Certificate of Incorporation (with Amendments) limits the personal
liability of a director to the Company or its stockholders to damages for breach
of the director's fiduciary duty.
The Company has purchased insurance on behalf of its directors and
officers against certain liabilities that may be asserted against, or incurred
by, such persons in their capacities as directors or officers of the Registrant,
or that may arise out of their status as directors or officers of the
registrant, including liabilities under the federal and state securities laws.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
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<S> <C>
4.1 Restated Certificate of Incorporation (with Amendments) of Digicon Inc. dated August 30, 1996.
(Incorporated by reference to Exhibit 3.1 to Veritas DGC Inc.'s Current Report on Form 8-K dated
September 16, 1996).
4.2 Certificate of Ownership and Merger of New Digicon Inc. and Digicon Inc. (Incorporated by reference
to Exhibit 3-B to Digicon's Registration Statement No. 33-43873, dated November 12, 1991).
4.3 Bylaws of New Digicon Inc. dated June 24, 1991. (Incorporated by referenced to Exhibit 3-C to
Digicon's Registration Statement No. 33-43873, dated November 12, 1991).
4.4 Specimen Veritas DGC Inc. Common Stock certificate. (Incorporated by reference to Exhibit 4-C to
Veritas DGC Inc.'s Annual Report on Form 10-K for the year ended July 31, 1996).
4.5 Rights Agreement between Veritas DGC Inc. and ChaseMellon Shareholder Services, L.L.C. dated as
of May 15, 1997. (Incorporated by reference to Exhibit 4.1 of Veritas DGC Inc.'s Current Report on
Form 8-K filed May 27, 1997).
4.6* Third Amended and Restated 1992 Employee Nonqualified Stock Option Plan.
4.7* Second Amended and Restated 1992 Non-Employee Director Stock Option Plan.
4.8 Restricted Stock Plan. (Incorporated by reference to Exhibit 4.1 of Veritas DGC Inc.'s Registration
Statement No. 333-57603, dated June 24, 1998).
4.9* Key Contributor Incentive Plan (as Amended and Restated December 9, 1998).
5.1* Opinion of Porter & Hedges, L.L.P., with respect to the legality of the securities filed herewith.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of PricewaterhouseCoopers, Chartered Accountants.
23.3* Consent of Deloitte & Touche LLP.
23.4* Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1 Opinion).
24.1* Power of Attorney (included on signature page).
</TABLE>
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*Filed herewith.
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<PAGE> 6
ITEM 9. UNDERTAKINGS
A. Undertaking to Update
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to the Registration Statement to:
(i) include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or most recent
post-effective amendment thereof) which, individually or in the
aggregate represent a fundamental change in the information in the
Registration Statement; and
(iii) include any material information with respect to the
plan for distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. Undertaking With Respect to Documents Incorporated by
Reference
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
C. Undertaking With Respect to Indemnification
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 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.
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<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David B. Robson, Stephen J. Ludlow and
Anthony Tripodo, and each of them, either of whom may act without joinder of the
other, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and his name, place and stead, in any
and all capacities, to sign any or all pre- and post-effective amendments and
supplements to this Registration Statement, and to file the same, or caused to
be filed the same, with all exhibits thereto and all other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, and each of them, or the substitute or substitutes
of either of them, may lawfully do or cause to be done by virtue hereof.
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 the City of Houston, State of Texas on December 9, 1998.
VERITAS DGC INC.
By: /s/ David B. Robson
--------------------------------------
David B. Robson
Chairman of the Board,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the 9th day of December, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ David B. Robson Chairman of the Board,
- ------------------------------------- Chief Executive Officer and Director
David B. Robson
/s/ Stephen J. Ludlow President,
- ------------------------------------- Chief Operating Officer and Director
Stephen J. Ludlow
/s/ Lawrence C. Fichtner Executive Vice President,
- ------------------------------------- Corporate Communications and Director
Lawrence C. Fichtner
/s/ Anthony Tripodo Executive Vice President,
- ------------------------------------- Chief Financial Officer and Treasurer (principal
Anthony Tripodo financial and accounting officer)
/s/ Clayton P. Cormier Director
- -------------------------------------
Clayton P. Cormier
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Ralph M. Eeson Director
- --------------------------------------
Ralph M. Eeson
Director
/s/ James R. Gibbs
- --------------------------------------
James R. Gibbs
/s/ Steven J. Gilbert Director
- --------------------------------------
Steven J. Gilbert
/s/ Brian F. MacNeill Director
- --------------------------------------
Brian F. MacNeill
/s/ Jan Rask Director
- --------------------------------------
Jan Rask
/s/ Jack C. Threet Director
- --------------------------------------
Jack C. Threet
</TABLE>
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<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
- -------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation (with Amendments) of Digicon Inc. dated August 30, 1996.
(Incorporated by reference to Exhibit 3.1 to Veritas DGC Inc.'s Current Report on Form 8-K dated
September 16, 1996).
4.2 Certificate of Ownership and Merger of New Digicon Inc. and Digicon Inc. (Incorporated by reference
to Exhibit 3-B to Digicon's Registration Statement No. 33-43873, dated November 12, 1991).
4.3 Bylaws of New Digicon Inc. dated June 24, 1991. (Incorporated by referenced to Exhibit 3-C to
Digicon's Registration Statement No. 33-43873, dated November 12, 1991).
4.4 Specimen Veritas DGC Inc. Common Stock certificate. (Incorporated by reference to Exhibit 4-C to
Veritas DGC Inc.'s Annual Report on Form 10-K for the year ended July 31, 1996).
4.5 Rights Agreement between Veritas DGC Inc. and ChaseMellon Shareholder Services, L.L.C. dated as
of May 15, 1997. (Incorporated by reference to Exhibit 4.1 of Veritas DGC Inc.'s Current Report on
Form 8-K filed May 27, 1997).
4.6* Third Amended and Restated 1992 Employee Nonqualified Stock Option Plan.
4.7* Second Amended and Restated 1992 Non-Employee Director Stock Option Plan.
4.8 Restricted Stock Plan. (Incorporated by reference to Exhibit 4.1 of Veritas DGC Inc.'s Registration
Statement No. 333-57603, dated June 24, 1998).
4.9* Key Contributor Incentive Plan (as Amended and Restated December 9, 1998).
5.1* Opinion of Porter & Hedges, L.L.P., with respect to the legality of the securities filed herewith.
23.1* Consent of PricewaterhouseCoopers LLP.
23.2* Consent of PricewaterhouseCoopers, Chartered Accountants.
23.3* Consent of Deloitte & Touche LLP.
23.4* Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1 Opinion).
24.1* Power of Attorney (included on signature page).
</TABLE>
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*Filed herewith.
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<PAGE> 1
EXHIBIT 4.6
VERITAS DGC INC.
THIRD AMENDED AND RESTATED
1992 EMPLOYEE NONQUALIFIED STOCK OPTION PLAN
(AS AMENDED AND RESTATED DECEMBER 9, 1998)
1. PURPOSE.
The purpose of this 1992 Employee Nonqualified Stock Option Plan (the
"Plan") of Veritas DGC Inc. (the "Company") (formerly known as Digicon Inc.) is
to provide officers and other key employees with a continuing proprietary
interest in the Company. The Plan is intended to advance the interests of the
Company by enabling it (i) to increase the interest in the Company's welfare of
those employees who share the primary responsibility for the management, growth,
and protection of the business of the Company, (ii) to furnish an incentive to
such persons to continue their services to the Company, (iii) to provide a means
through which the Company may continue to induce able management and operating
personnel to enter its employ, and (iv) to provide a means through which the
Company may effectively compete with other organizations offering similar
incentive benefits in obtaining and retaining the services of competent
management and operating personnel.
2. STOCK SUBJECT TO THE PLAN.
The Company may grant from time to time options to purchase shares of
the Company's authorized but unissued common stock, par value $.01 per share, or
treasury shares of the common stock. Subject to adjustment as provided in
Section 11 hereof, the aggregate number of shares which may be issued or covered
by options pursuant to the Plan is 3,404,550 shares, as adjusted for the one for
three reverse stock split effective January 17, 1995. Shares of common stock
applicable to options which have expired unexercised or terminated for any
reason may again be subject to an option or options under the Plan.
<PAGE> 2
3. ADMINISTRATION.
(a) The Plan shall be administered by the Compensation Committee of the
Company's board of directors (the "Committee"). The board of directors may, from
time to time, remove members from or add members to the Committee. Vacancies in
the Committee, however caused, shall be filled by the board of directors. No
member of the Committee shall be eligible to receive options under the Plan. The
Committee shall select one of its members chairman and shall hold meetings at
such times and places as it may determine. The Committee may appoint a secretary
and, subject to the provisions of the Plan and to policies determined by the
board of directors, may make such rules and regulations for the conduct of its
business as it shall deem advisable. A majority of the Committee shall
constitute a quorum. All action of the Committee shall be taken by a majority of
its members. Any action may be taken by a written instrument signed by a
majority of the members, and action so taken shall be fully as effective as if
it had been taken by a vote of the majority of the members at a meeting duly
called and held.
(b) Subject to the express terms and conditions of the Plan, the
Committee shall have full power to construe or interpret the Plan, to prescribe,
amend, and rescind rules and regulations relating to it and to make all other
determinations necessary or advisable for its administration.
(c) Subject to the provisions of Sections 4 and 5 hereof, the Committee
may, from time to time, determine which employees of the Company or subsidiary
corporations shall be granted options under the Plan, the number of shares
subject to each option, and the time or times at which options shall be granted.
(d) The Committee shall report to the board of directors the names of
employees granted options, and the number of option shares subject to, and the
terms and conditions of, each option; provided, however that no option may be
granted to an otherwise eligible employee if, after giving effect to the
proposed grant, such employee would then hold options covering more than 500,000
shares of common stock under the Plan.
(e) No member of the board of directors or of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any option.
<PAGE> 3
4. ELIGIBILITY.
All full-time salaried employees of the Company and of its
majority-owned subsidiaries shall be eligible to participate in the Plan, and
options may be granted by the Committee to eligible employees designated by the
Committee, either at the Committee's own initiative or upon the recommendation
of management. In determining the employees to whom options shall be granted and
the number of shares to be covered by each option, the Committee may take into
account the nature of the services rendered by the respective employees, their
present and potential contributions to the success of the Company, and such
other factors as the Committee in its discretion shall deem relevant. The
Company shall effect the granting of options under the Plan in accordance with
the determination made by the Committee.
5. PRICE OF OPTIONS.
The option price per share shall be not less than the lesser of (i)
fair market value of the common stock on the date the option is granted or (ii)
the average fair market value for the common stock during the thirty trading
days ending on the trading day next preceding the date the option is granted.
Fair market value on any day shall be deemed to be the last reported sale price
of the common stock on the principal stock exchange on which the Company's
common stock is traded on that date. If no trading occurred on such date, or, if
at the time the common stock shall not be listed for trading, fair market value
shall be deemed to be the mean between the quoted bid and asked prices for the
common stock on such exchange or in the over-the-counter market, as the case may
be, on that date.
6. TERM OF OPTION.
No option shall be exercisable after the expiration of ten years from
the date the option is granted.
7. EXERCISE OF OPTIONS.
(a) General. Except as provided below, each option may be exercised at
such times and in such amounts as the Committee in its discretion may provide.
(b) Manner of Exercising Options. Shares of common stock purchased
under options shall at the time of purchase be paid for in full. To the extent
that the right to purchase shares has accrued hereunder, options may be
exercised from time to time by written notice to the Company stating the full
number of shares with respect to which the option is being exercised, and the
time of delivery thereof, which shall be at least 15 days after the giving of
such notice unless an earlier date shall have been mutually agreed upon. At such
time, the Company shall, without transfer or issue tax to the optionee (or other
person entitled to
<PAGE> 4
exercise the option) deliver to the optionee (or to such other person) at the
principal office of the Company, or such other place as shall be mutually
acceptable, a certificate or certificates for such shares against prior payment
of the option price in full on the date of notice of exercise for the number of
shares to be delivered by certified or official bank check or the equivalent
thereof acceptable to the Company; provided, however, that the time of such
issuance and delivery may be postponed by the Company for such period as may be
required for it with reasonable diligence to comply with any requirements of
law, the listing requirements of the New York Stock Exchange or any other
exchange on which the common stock may then be listed. If the optionee (or other
person entitled to exercise the option) fails to pay for all or any part of the
number of shares specified in such notice or to accept delivery of such shares
upon tender of delivery thereof, the right to exercise the option with respect
to such undelivered shares shall be terminated.
<PAGE> 5
8. NON-ASSIGNABILITY OF OPTION RIGHTS.
No option granted under the Plan shall be assignable or transferable
otherwise than by will or by the laws of descent and distribution. During the
lifetime of an optionee, the option shall be exercisable only by him.
9. TERMINATION OF EMPLOYMENT.
Except as otherwise provided in this paragraph, options shall terminate
90 days following the termination of the optionee's employment with the Company
for any reason, but shall be exercisable following termination only to the
extent that the option had become vested on the termination date. In the event
that the optionee retires from the Company (at or after age 65) the optionee
shall have the right, subject to the provisions of Section 6, to exercise his
option at any time within one year after such termination, to the extent that
such option had become vested on the termination date. If, however, the optionee
shall die in the employment of the Company, then for the lesser of the maximum
period during which such option might have been exercisable or one year after
the date of death, his estate, personal representative, or beneficiary shall
have the same right to exercise the option of such employee as he would have had
if he had survived and remained in the employment of the Company. For purposes
of this Section 9, employment by any majority-owned subsidiary corporation of
the Company shall be deemed employment by the Company.
In the discretion of the Committee, a leave of absence approved in
writing by the board of directors of the Company shall not be deemed a
termination of employment; however, no option may be exercised during such leave
of absence.
10. CHANGE OF CONTROL.
If, at any time, a person, entity or group (including, in each case,
all other persons, entities or groups controlling, controlled by, or under
common control with or acting in concert or concurrently with, such person,
entity or group) shall hold, purchase or acquire beneficial ownership (including
without limitation power to vote) of 50% or more of the then outstanding shares
of the Company's Common Stock, then any portion of the Options which have not
yet become exercisable shall thereupon become immediately exercisable.
11. ADJUSTMENT OF OPTIONS ON RECAPITALIZATION OR REORGANIZATION.
The aggregate number of shares of common stock on which options may be
granted to persons participating under the Plan, the aggregate number of shares
of common stock on which options may be granted to any one such person, the
number of shares thereof covered by each outstanding option, and the price per
share thereof in each such option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of common stock of the
Company resulting from the subdivision or combination of shares or other capital
adjustments, or the payment of a stock dividend
<PAGE> 6
after the effective date of this Plan, or other increase or decrease in such
shares effected without receipt of consideration by the Company; provided,
however, that no adjustment shall be made unless the aggregate effect of all
such increases and decreases occurring in any one fiscal year after the
effective date of this Plan will increase or decrease the number of issued
shares of common stock of the Company by 5% or more; and, provided, further,
that any options to purchase fractional shares resulting from any such
adjustment shall be eliminated.
Subject to any required action by the stockholders and to Section 10
hereof, if the Company shall be the surviving or resulting corporation in any
merger or consolidation, any option granted hereunder shall pertain to and apply
to the securities to which a holder of the number of shares of common stock
subject to option would have been entitled had such option been exercised
immediately preceding such merger or consolidation; but a dissolution or
liquidation of the Company, or a merger or consolidation in which the Company is
not the surviving or resulting corporation (except for a change in Control as
defined in Section 10 hereof in which case Section 10 shall govern then
outstanding options) shall cause every option outstanding hereunder to
terminate, except that the surviving or resulting corporation may, in its
absolute and uncontrolled discretion, tender an option or options to purchase
its shares on its terms and conditions, both as to the number of shares and
otherwise.
Adjustments under this Section shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive.
12. AGREEMENTS BY OPTIONEE.
Each individual optionee shall agree:
(a) If requested by the Company, at the time of exercise of
any option, to execute an agreement stating that he is purchasing the
shares subject to option for investment purposes and not with a view to
the resale or distribution thereof;
(b) To authorize the Company to withhold from his gross pay
any tax which it believes is required to be withheld with respect to
any benefit under the Plan, and to hold as security for the amount to
be withheld any property otherwise distributable to the optionee under
the Plan until the amounts required to be withheld have been so
withheld.
<PAGE> 7
13. RIGHTS AS A SHAREHOLDER.
The optionee shall have no rights as a stockholder with respect to any
shares of common stock of the Company held under option until the date of
issuance of the stock certificates to him for such shares.
14. EFFECTIVE DATE.
The Plan was effective as of September 1, 1992, upon approval by the
holders of a majority of the shares of outstanding capital stock present at the
December 17, 1992 annual meeting of the Company's stockholders. The Plan was
amended by the board of directors on August 29, 1997, and amended and restated
by the board of directors on March 10, 1997, and December 9, 1998.
15. AMENDMENTS.
(a) The board of directors may, from time to time, alter, suspend or
terminate the Plan, or alter or amend any and all option agreements granted
thereunder but only for one or more of the following purposes:
(1) To modify the administrative provisions of the Plan or options;
(2) To make any other amendment which does not materially
alter the intent or benefits of the Plan; or
(3) Increase the maximum number of shares as to which options
may be granted under the Plan either to all persons participating in
the Plan or to any one such person.
(b) It is expressly provided that no such action of the board of
directors may, without the approval of the stockholders, alter the provisions of
the Plan or option agreements granted thereunder so as to:
(1) Decrease the option price applicable to any options
granted under the Plan, provided, however, that the provisions
of this clause (1) shall not prevent the granting, to any
person holding an option under the Plan, of additional options
under the Plan exercisable at a lower option price; or
(2) alter any outstanding option agreement to the detriment of
the optionee, without his consent.
<PAGE> 8
16. EMPLOYMENT OBLIGATION.
The granting of any option under this Plan shall not impose upon the
Company any obligation whatsoever to employ or to continue to employ any
optionee, and the right of the Company to terminate the employment of any
officer or other employee shall not be diminished or affected by reason of the
fact that an option has been granted to him under the Plan.
17. VES OPTIONS.
In order to carry out the terms of (i) the Combination Agreement dated
May 10, 1996, between the Company and Veritas Energy Services Inc. ("VES") which
was approved by the Company's stockholders at a special meeting held on August
20, 1996 and (ii) the Plan of Arrangement under Part 15 of the Business
Corporations Act (Alberta) relating to the combination of the Company and VES
which, pursuant to an interim order of the Court of Queen's Bench of Alberta
date July 18, 1996, was approved at special meetings of VES optionholders and
shareholders held August 20, 1996, this Plan shall include under its terms each
of the options (the "VES Options") outstanding on the Effective Date (as defined
in the Combination Agreement) (which includes all outstanding options granted
under VES' Stock Option Plan for Directors, Officers and Key Employees (the "VES
Option Plan")) without any further action on the part of any holder thereof
(each a "VES Optionholder"). Effective as of the Effective Time, each VES Option
will be exercisable to purchase that number of shares of the Company's common
stock determined by multiplying the number of VES common shares (the "VES Common
Shares") subject to such VES Option at the Effective Time by the Exchange Ratio
(as defined in the Combination Agreement), at an exercise price per share of
such VES Option immediately prior to the Effective Time, divided by the Exchange
Ratio. On the Effective Date (as defined in the Combination Agreement), such
option price shall be converted into a United States dollar equivalent based on
the noon spot rate of exchange of the Bank of Canada on such date. If the
foregoing calculation results in an exchanged VES Option being exercisable for a
fractional share of the Company's common stock, then the number of shares of the
Company's common stock subject to such option will be rounded down to the
nearest whole number of shares and the total exercise price for the option will
be reduced by the exercise price of the fractional share. The term,
exercisability, vesting schedule and all other terms and conditions of the VES
Options will otherwise be unchanged and shall operate in accordance with their
terms, notwithstanding anything to the contrary contained herein.
<PAGE> 1
EXHIBIT 4.7
VERITAS DGC INC.
(FORMERLY DIGICON INC.)
1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
(AS AMENDED AND RESTATED DECEMBER 9, 1998)
1. Purpose of the Plan. The purpose of the Veritas DGC Inc. 1992 Non-Employee
Director Stock Option Plan ("Plan") is to attract the services of
experienced and knowledgeable non-employee directors and provide an
opportunity for ownership by such non-employee directors of the common
stock, $.01 par value ("Common Stock"), of Veritas DGC Inc., a Delaware
corporation ("Company").
2. Administration of the Plan. The Plan shall be administered by the Board of
Directors of the Company or any committee duly appointed thereby ("Board").
Subject to the terms of the Plan, the Board shall have the power to
interpret the provisions and supervise the administration of the Plan. All
decisions made by the Board pursuant to the provisions of the Plan shall be
made by a majority of its members at a duly held regular or special meeting
or by written consent in lieu of any such meeting.
3. Stock Reserved for the Plan. The maximum number of shares of Common Stock
which may at any time be subject to outstanding options issued under the
Plan is 600,000. The Company shall reserve for issuance pursuant to the
Plan such number of shares of Common Stock as may from time to time be
subject to options granted pursuant to the Plan. Should any option expire
or be canceled prior to its exercise in full, the shares theretofore
subject to such option may again be made subject to an option under the
Plan.
4. Grant of Options. Each director of the Company who is not otherwise an
employee of the Company or any of the Company's subsidiaries (as defined in
Section 425(f) of the Internal Revenue Code of 1986, as amended)
(hereinafter referred to as an "Eligible Director") and who is a member of
the Board after December 31, 1996 (the "Effective Date") shall be granted
on each Date of Grant (as defined below) (provided that on such Date of
Grant such Eligible Director is a member of the Board) one option to
acquire 5,000 shares of Common Stock (the "Option"). The exercise price per
share of Common Stock of the Option granted to an Eligible Director shall
be the Fair Market Value of the Common Stock on the Date of Grant.
Special Provision for Newly-Elected Directors. In the case of a director
who is initially elected or appointed to the Board between Dates of Grant,
the Board may in its discretion grant an option to such newly elected or
appointed director for a number of shares of Common Stock not to exceed
5,000; provided that any such option shall have an exercise price of at
least equal to the fair market value of the Common Stock on its date of
grant.
For the purposes of this paragraph 4, the following terms shall have the
following meanings:
Page 1
<PAGE> 2
(x) "Date of Grant" means March 11, 1997, and thereafter the
date of the first meeting of the Board in each year after the
Effective Date on which an Eligible Director is a member of
the Board.
(y) "Fair Market Value" of a share of Common Stock on any date
shall be (i) the closing sales price on the Date of Grant of a
share of Common Stock as reported on the principal securities
exchange on which shares of the Common Stock have been listed
or admitted to trading or (ii) if not so reported, the average
of the average closing bid and asked prices for a share of
Common Stock on the Date of Grant as quoted on the National
Association of Securities Dealers Automated Quotation System
("NASDAQ") or (iii) if not quoted on the NASDAQ, the average
of the average closing bid and asked prices for a share of
Common Stock on the Date of Grant as quoted by the National
Association of Securities Dealers' OTC Bulletin Board System.
If the price of a share of Common Stock shall not be so
reported, the Fair Market Value of a share of Common Stock
shall be determined by the Board in its absolute discretion.
5. Option Agreement. Each Option granted under the Plan shall be evidenced by
an agreement, in a form approved by the Board, which shall be subject to
the terms and conditions of the Plan. Any agreement may contain such other
terms, provisions and conditions as may be determined by the Board and that
are not inconsistent with the Plan.
6. Term of Options. Each Option granted will be exercisable as to 25% of the
shares of Common Stock covered by such Option at any time after the Date of
Grant and as to an additional 25% on each anniversary thereafter until the
third anniversary of the Date of Grant, following which the Option will be
exercisable in full; provided, however, that no Option shall be exercisable
after the expiration of ten years from the Date of Grant; and, provided
further, that each Option shall be subject to earlier termination,
expiration or cancellation as provided in the Plan.
7. Procedure for Exercise. Options shall be exercised by written notice to the
Company setting forth the number of shares of Common Stock with respect to
which the Option is to be exercised and specifying the address to which the
certificates for such shares are to be mailed. Such notice shall be
accompanied by cash or certified check, bank draft, or postal or express
money order payable to the order of the Company in an amount equal to the
product obtained by multiplying the Option exercise price times the number
of shares of the Common Stock with respect to which the Option is then
being exercised. As promptly as practicable after receipt of such written
notification and payment, the Company shall deliver to the optionee a
certificate or certificates for the number of shares with respect to which
such Option has been so exercised, issued in the optionee's name; provided,
however, that such delivery shall be deemed effected for all purposes when
a stock transfer agent of the Company shall have
Page 2
<PAGE> 3
deposited such certificates in the United States mail, addressed to the
optionee, at the address specified pursuant to this paragraph 7.
8. Assignability. An Option shall not be assignable or otherwise transferable
except by will, by the laws of descent and distribution or pursuant to a
qualified domestic relations order ("QDRO") as defined by the Internal
Revenue Code of 1986, as amended, and the rules and regulations in effect
from time to time thereunder and Title I of the Employee Retirement Income
Security Act, as amended, and the rules and regulations in effect from time
to time thereunder. During an optionee's lifetime an Option shall be
exercisable only by the optionee.
9. Effect of Termination.
i. In the event of the death of an optionee, the Options granted to
him may be exercised (to the extent he would have been entitled to
do so at the date of his death) at any time and from time to time
by the executor or administrator of his estate or by the person or
persons to whom his rights under the Options shall pass by will or
the laws of descent and distribution, but in no event may the
Option be exercised after the earlier of (i) one year from the
optionee's death or (ii) its expiration.
ii. If an optionee ceases to be a director of the Company, the Options
granted to him may be exercised (to the extent he would have been
entitled to do so at the date that he ceases to be a director) at
any time and from time to time thereafter prior to the earlier of
(i) one year from the optionee's cessation of service as a
director or (ii) expiration of the Option.
iii. No transfer of an Option by an optionee by will or by the laws of
descent and distribution or pursuant to a QDRO shall be effective
to bind the Company unless the Company shall have been furnished
with written notice of the same and an authenticated copy of the
will, the QDRO and such other evidence as the Board may deem
necessary to establish the validity of the transfer and the
acceptance of the transferee or transferees of the terms and
conditions of such Option and the terms and provisions of the
Plan.
10. No Rights as Stockholder. No optionee shall have any rights as a
stockholder with respect to shares covered by an Option until the date of
issuance of a stock certificate or certificates for such shares of Common
Stock.
11. Extraordinary Corporate Transactions. New options may be substituted for
the Options granted under the Plan, or the Company's duties as to Options
outstanding under the Plan may be assumed, by a corporation other than the
Company, or by a parent or subsidiary of the Company, or such corporation,
in connection with any merger, consolidation, acquisition, separation,
reorganization, liquidation or like occurrence in which the Company is
involved. Notwithstanding the foregoing or the provisions of paragraph 15
hereof, in the event such corporation, or parent or
Page 3
<PAGE> 4
subsidiary of the Company or such corporation, does not substitute new
Options for, and substantially equivalent to, the Options granted
hereunder, or assume the Options granted hereunder, the Options granted
hereunder shall be canceled, immediately prior to the effective date of
such event, and, in full consideration of such cancellation, and the
optionee to whom the Option was granted shall be paid an amount in cash
equal to the excess of (i) the value, as determined by the Board in its
absolute discretion, of the property (including cash) received by the
holder of a share of Common Stock as a result of such event less (ii) the
exercise price of the Option.
12. Change of Control. If, at any time, a person, entity or group (including,
in each case, all other persons, entities or groups controlling, controlled
by, or under common control with or acting in concert or concurrently with,
such person, entity or group) shall hold, purchase or acquire beneficial
ownership (including without limitation power to vote) of 50% or more of
the then outstanding shares of the Company's Common Stock, then any portion
of the Options which have not yet become exercisable shall thereupon become
immediately exercisable, and, except with respect to the limitations set
forth in paragraph 6 hereof, the limitations set forth above as to the
earliest date at which an option may be exercised shall thereupon become
null and void and of no further effect whatsoever.
13. Investment Representation. Each option agreement shall contain an agreement
that, upon demand by the Board for such a representation, the optionee (or
any person acting under paragraph (9(i)) shall deliver to the Company at
the time of any exercise of an option a written representation that the
shares to be acquired upon such exercise are to be acquired for investment
and not for resale or with a view to the distribution thereof or such other
representation as the Board deems advisable. Upon such demand, delivery of
such representation, prior to the delivery of any shares issued upon
exercise of an Option and prior to the expiration of the option period,
shall be a condition precedent to the right of the optionee or such other
person to purchase any shares.
14. Amendments or Termination. The Board may amend, alter or discontinue the
Plan; provided, however, that, without the approval of the Company's
stockholders, no amendment shall (i) increase the number of shares subject
to the Plan; (ii) modify the requirements as to eligibility for
participation in the Plan; or (iii) modify the number or time at which
Options may be granted.
15. Changes in 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 or all 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 issuance of Common Stock or any bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock
or the rights thereof, 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
reorganization or other corporate act or proceeding, whether of a similar
character or otherwise; provided, however, that if the
Page 4
<PAGE> 5
outstanding shares of Common Stock of the Company shall at any time be
changed or exchanged by declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of shares
then subject to any outstanding Option shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares without
changing the aggregate option price of any outstanding Option.
16. Compliance with Other Laws and Regulations. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Company to sell
and deliver shares under such Options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
governmental or regulatory agency or national securities exchange as may be
required. The Company shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of such shares under any federal or state
law, or any ruling or regulation of any government body or national
securities exchange which the Company shall, in its sole discretion,
determine to be necessary or advisable.
17. Effective Date and Term of the Plan. The Plan was adopted by the Board of
Directors on October 29, 1992, and approved by the stockholders of the
Company at the annual meeting on December 17, 1992, and amended and
restated by the Board on February 17, 1997, and on December 9, 1998.
Page 5
<PAGE> 1
EXHIBIT 4.8
VERITAS DGC INC.
KEY CONTRIBUTOR INCENTIVE PLAN
(AS AMENDED AND RESTATED DECEMBER 9, 1998)
A. PLAN OBJECTIVES
The overall objective of the Key Contributor Incentive Plan (herein after
referred to as the "Plan") is to provide short-term rewards paid as incentives
to designated Key Contributors. Key Contributors are those individuals who have
the responsibility of leading a diverse or complex team or function. The work
produced from that team or function significantly impacts the operations of the
Company up to and including bottom line results. Within the overall objectives,
the following are the specific goals of the Plan:
o Reward Key Contributors for achieving Veritas DGC Inc.'s business
strategies in the area of net income before taxes (NIBT)
o Focus participants on key business goals that they can directly impact
o Create payout opportunities that balance the appropriate return to the
Company with reward to the participants
B. ELIGIBILITY
Eligibility for participation in the Plan is recommended by managers and
approved by the respective division executive. Plan participants must meet the
following eligibility criteria:
o A minimum annual base salary of $50,000
o Job responsibilities that have a major impact on the accomplishment of
Veritas DGC Inc.'s business strategies
o Regular full-time employment with Veritas DGC Inc.
Variations from the guidelines may be made for individuals as recommended by
Corporate or Division executives and approved by the CEO.
C. PLAN YEAR
The Plan year for the Key Contributor Incentive Plan coincides with the Veritas
DGC Inc. fiscal year: August 1 through July 31.
<PAGE> 2
D. PERFORMANCE MEASURES AND PAYOUT TARGETS
PERFORMANCE MEASURES AND WEIGHTS
Seventy-five percent (75%) of the payment will be based upon attainment of net
income before taxes (hereinafter referred to as "NIBT"). NIBT is based on the
profit plan for VDGC Consolidated and for each division as approved by Veritas
DGC Inc.'s Board of Directors.
Twenty-five percent (25%) of the award will be based on equally weighted
strategic individual objectives as determined by the participant's immediate
supervisor. These individual objectives are to be in addition to the
participant's day-to-day responsibilities and shall present a challenge to the
participant.
The following incentive weights apply for both Corporate and Division
participants:
<TABLE>
<CAPTION>
VDGC CONSOLIDATED NIBT DIVISION NIBT INDIVIDUAL OBJECTIVES
---------------------- ------------- ---------------------
<S> <C> <C> <C>
Corporate 75% 25%
Division 25% 50% 25%
</TABLE>
The impact level of the participant's position determines incentive target
payout percentage as follows:
<TABLE>
<CAPTION>
IMPACT TARGET
BASE SALARY (IN THOUSANDS) LEVEL PAYOUT*
- ------------------------------------------ ------------ -----------
<S> <C> <C>
CEO -- 50%
$150+ (Corporate leadership and Division A 40%
Sr. Executive Mgt. Only)
$100+ B 30%
$75-$99 C 20%
$50-$74 D 10%
</TABLE>
*Target payout is the percentage of base salary that the Plan intends to pay to
the participant assuming that the profit and strategic individual objectives are
met for the corporation and his/her division.
A. AWARD CALCULATION
The actual incentive award calculation will be comprised of the following
components:
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<PAGE> 3
o FINANCIAL RESULTS: Incentive payouts will increase or decrease from target
as dictated by NIBT results without minimum or cap.
o INDIVIDUAL OBJECTIVES: This portion of the incentive award will be
increased or decreased from target as determined by financial results.
NOTE: If the annual NIBT plan as submitted to and approved by the Board (either
Veritas DGC Inc. or a division plan) generates an NIBT plan of $0 or less, the
following then applies:
a) If planned negative NIBT is attained, a maximum of target incentive will
be earned.
EMPLOYMENT STATUS
Participants must be actively employed on the dates that the award payments are
made; otherwise the award is forfeited. In addition, if the participant leaves
before the award payment date, all moneys previously paid will be retained by
the participant; however, no additional bonuses will be calculated or paid. The
CEO must approve any exceptions to this rule.
B. METHOD OF PAYMENT
Incentive awards will be paid in cash unless otherwise recommended by the
Compensation Committee of the Board of Directors.
STOCK IN LIEU OF INCENTIVE AWARD
Prior to payment of the year-end incentive, the Compensation Committee may offer
to some or all participants in the Plan the opportunity to receive all or a
portion of their year-end incentive award in shares of Veritas DGC common stock
Participants who elect to receive all or a specified portion of the year-end
incentive award in Common Stock rather than cash will receive their shares on a
date following the year-end incentive payment.
Numbers of shares will be calculated as follows:
Portion of incentive used to purchase stock ($) = # of shares
Fair market value per share ($)
For the purposes of this Plan, "fair market value" is the closing price for the
Common Stock on the New York Stock Exchange on the date of year-end incentive
payment.
Only treasury shares will be used for the payment of annual incentive
distributions in Common Stock. If the number of shares of treasury shares
necessary to fund the requests of electing Participants in any year exceeds the
number of shares then available, all stock awards will be pro-rated to the
extent necessary, and the balance of year end incentive distributions will be
made in cash.
Page 3
<PAGE> 4
C. AWARD FREQUENCY
Incentive awards will be made semi-annually. The mid-year award will be based
solely on the achievement of the applicable NIBT plan. The award at the end of
the fiscal year will be based on both achievement of applicable NIBT plan and
the attainment of individual objectives.
D. PLAN ADMINISTRATION
The Plan is administered by the CEO and Corporate Vice President of Human
Resources in accordance with the Key Contributor Incentive Plan Administration
Document.
Any exceptions to the Plan must be approved by the Board of Directors and/or the
Compensation Committee of the Board of Directors of Veritas DGC Inc. At any
time, the Board of Directors (and/or the Compensation Committee of the Board of
Directors) may, in its discretion, adjust, amend or terminate the plan.
This Plan is a voluntary incentive program and continuance of the Plan is not
assumed as an obligation of Veritas DGC Inc. Veritas DGC Inc. reserves the right
to terminate the Plan or to amend the Plan at any time and in any respect.
Participation in this Plan shall not impose upon the Company any obligation
whatsoever to employ or to continue to employ any Plan participant, and the
right of the Company to terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that the
employee is a Plan participant.
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<PAGE> 1
EXHIBIT 5.1
[PORTER & HEDGES, L.L.P. LETTERHEAD]
January 15, 1999
Veritas DGC Inc.
3701 Kirby Drive, Suite 112
Houston, Texas 77098
Re: VERITAS DGC INC. REGISTRATION STATEMENT ON FORM S-8:
THIRD AMENDED AND RESTATED 1992 EMPLOYEE
NONQUALIFIED STOCK OPTION PLAN (AS AMENDED AND
RESTATED DECEMBER 9, 1998)
Gentlemen:
We have acted as counsel to Veritas DGC Inc., a Delaware corporation
(the "Company"), in connection with the preparation for filing with the
Securities and Exchange Commission of a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended. The
Registration Statement relates, among other things, to an aggregate of 1,204,550
shares (the "Shares") of the Company's common stock, par value $.01 per share
(the "Common Stock"), to be transferred pursuant to the Third Amended and
Restated 1992 Employee Nonqualified Stock Option Plan (as Amended and Restated
December 9, 1998) between the Company and selected officers and other employees
to provide them with a continuing proprietary interest in the Company (the
"Plan").
We have examined the Plan and such corporate records, documents,
instruments and certificates of the Company, and have reviewed such questions of
law as we have deemed necessary, relevant or appropriate to enable us to render
the opinion expressed herein. In such examination, we have assumed without
independent investigation the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of all natural
persons, and the conformity of any documents submitted to us as copies to their
respective originals. As to certain questions of fact material to this opinion,
we have relied without independent investigation upon statements or certificates
of public officials and officers of the Company.
Based upon such examination and review, we are of the opinion that the
Shares will, upon transfer and delivery as contemplated by the Plan be validly
issued, fully paid and nonassessable outstanding shares of Common Stock.
This Firm consents to the filing of this opinion as an exhibit to the
Registration Statement.
This opinion is conditioned upon the Registration Statement being
declared effective and upon compliance by the Company with all applicable
provisions of the Securities Act of 1933, as amended, and such state securities
rules, regulations and laws as may be applicable.
Very truly yours,
/s/ Porter & Hedges, L.L.P.
PORTER & HEDGES, L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated October 1, 1998 appearing on page 15
of Veritas DGC Inc.'s Annual Report on Form 10-K for the year ended July 31,
1998.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
January 14, 1999
<PAGE> 1
EXHIBIT 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 September 20, 1996 appearing on page
17 of Veritas DGC Inc.'s Annual Report on Form 10-K for the year ended July 31,
1998.
/s/ PRICEWATERHOUSECOOPERS
PRICEWATERHOUSECOOPERS
Chartered Accountants
Calgary, Alberta
January 14, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated October 10, 1996, on the consolidated statements of
income, cash flows and changes in stockholders' equity for the year ended July
31, 1996, of Veritas DGC Inc. and subsidiaries (the "Company"), appearing in the
Company's Annual Report on Form 10-K for the year ended July 31, 1998.
DELOITTE & TOUCHE LLP
Houston, Texas
January 13, 1999
