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As filed with the Securities and Exchange Commission on September 16, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
COBRA ELECTRONICS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-2479991
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6500 WEST CORTLAND STREET 60707
CHICAGO, ILLINOIS (Zip Code)
(Address of principal executive offices)
COBRA ELECTRONICS CORPORATION
1998 STOCK OPTION PLAN
(Full title of the plan)
GERALD M. LAURES Copy to:
VICE PRESIDENT-FINANCE AND CORPORATE SECRETARY JIM L. KAPUT
COBRA ELECTRONICS CORPORATION SIDLEY & AUSTIN
6500 WEST CORTLAND STREET ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60707 CHICAGO, ILLINOIS 60603
(773) 889-8870 (312) 853-7000
(Name, address, and telephone number,
including area code, of agent for service)
----------------------------
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Amount maximum maximum
Title of to be offering aggregate Amount of
Securities to be registered(1) price per offering registration fee
registered share(2) price
- --------------------------------------------------------------------------------
Common Stock,
$.33 1/3 par value 310,000 shares $ 3.75 $1,162,500(2) $ 343
================================================================================
(1) This registration statement also covers an additional and indeterminate
number of shares as may become issuable because of the provisions of
the Plan relating to adjustments for changes resulting from stock
dividends, stock splits and similar changes.
(2) Estimated solely for the purpose of calculating the registration fee
and, pursuant to Rule 457(h) under the Securities Act of 1933, based
upon the average of the high and low sale prices of the Common Stock of
the Registrant on The Nasdaq Stock Market on September 10, 1998.
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PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by Cobra Electronics Corporation (the
"Company") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since December 31, 1997; and
(c) The description of the Common Stock, par value $.33 1/3, of the
Company which is contained in a registration statement filed under Section 12 of
the Exchange Act, including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the respective dates of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") empowers a
Delaware corporation to indemnify any person who was or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of such corporation) by reason of the fact that such person
is or was a director, officer, employee or agent of such corporation, or is or
was serving at the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding, provided that
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful. A Delaware corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the person is adjudged to be liable to
the corporation. Where a present or former director or officer of the
corporation is successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, the corporation must indemnify such person against expenses
(including attorneys' fees) actually and reasonably incurred.
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In accordance with Section 102(b)(7) of the DGCL, the Company's
Certificate of Incorporation, as amended, provides that a director shall not be
personally liable to the Company or its shareholders for monetary damages for
breach of fiduciary duty as a director except for liability (i) for any breach
of the director's duty of loyalty to the Company or its shareholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for certain transactions under Section 174 of
the DGLC (unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit. The effect of this provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any actions involving gross
negligence.
The Certificate of Incorporation, as amended, and the By-laws of the
Company provide for indemnification of the Company's directors, officers,
employees and agents to the fullest extent permitted by applicable law.
Pursuant to Section 145 of the DGCL and the Certificate of
Incorporation, as amended, and the By-laws of the Company, the Company maintains
directors' and officers' liability insurance coverage.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
4.1 Certificate of Incorporation, as amended, of the Company.
4.2 By-laws of the Company.
5 Opinion of Sidley & Austin.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Sidley & Austin (contained in Exhibit 5).
24 Powers of Attorney (included on signature page).
99.1 Cobra Electronics Corporation 1998 Stock Option Plan, as amended.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum
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<PAGE> 4
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of 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 remained unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
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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 Chicago, State of Illinois, on this 16th day of
September, 1998.
Cobra Electronics Corporation
By: /s/ Gerald M. Laures
-----------------------------------------
Gerald M. Laures
Vice President-Finance and Corporate Secretary
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Cobra Electronics
Corporation hereby severally constitute and appoint James R. Bazet and Gerald M.
Laures, and each of them singly, our true and lawful attorneys, with full power
to them and each of them singly, to sign for us in our names in the capacities
indicated below, all pre-effective and post-effective amendments to this
registration statement, and generally to do all things in our names and on our
behalf in such capacities to enable the Company to comply with the provisions of
the Securities Act of 1933, and all requirements of the Securities and Exchange
Commission.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
--------- -------- ----
<S> <C> <C>
/s/ James R. Bazet President and Chief Executive Officer
- ------------------------------ and Director (Principal Executive Officer) September 16, 1998
James R. Bazet
/s/ Gerald M. Laures Vice President-Finance and Corporate Secretary
- ------------------------------ and Director (Principal Financial and Accounting
Gerald M. Laures Officer) September 16, 1998
/s/ Carl Korn Chairman of the Board of Directors September 16, 1998
- ------------------------------ and Director
Carl Korn
/s/ Jerry Kalov Vice Chairman of the Board of Directors September 16, 1998
- ------------------------------ and Director
Jerry Kalov
/s/ William P. Carmichael Director September 16, 1998
- ------------------------------
William P. Carmichael
/s/ Samuel B. Horberg Director September 16, 1998
- ------------------------------
Samuel B. Horberg
/s/ Harold D. Schwartz Director September 16, 1998
- ------------------------------
Harold D. Schwartz
</TABLE>
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
4.1 Certificate of Incorporation, as amended, of the Company
(incorporated by reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 1990 (File No.
0-511), Exhibit 3-1).
4.2 By-laws of the Company (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1990 (File No. 0-511), Exhibit 3-2).
5* Opinion of Sidley & Austin.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Sidley & Austin (contained in Exhibit 5).
24* Powers of Attorney (included on signature page).
99.1* Cobra Electronics Corporation 1998 Stock Option Plan, as
amended.
- ------------------------
*Filed herewith
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EXHIBIT 5
September 16, 1998
Cobra Electronics Corporation
6500 West Cortland Street
Chicago, Illinois 60635
Re: Cobra Electronics Corporation
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel for Cobra Electronics Corporation, a
Delaware corporation (the "Company"), in connection with the filing of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), relating to the registration of 310,000 shares
of common stock, par value $.33 1/3, of the Company ("Common Stock") to be
offered to participants in the Company's 1998 Stock Option Plan (the "Plan").
We are familiar with the Certificate of Incorporation, as
amended, and the By-laws of the Company and all amendments thereto and
resolutions of the Board of Directors of the Company relating to the Plan and
the Registration Statement.
In this connection, we have examined originals, or copies of
originals certified or otherwise identified to our satisfaction, of such records
of the Company and other corporate documents, have examined such questions of
law and have satisfied ourselves as to such matters of fact as we have
considered relevant and necessary as a basis for the opinions set forth herein.
We have assumed 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 with the original documents of any copies thereof submitted to us
for our examination.
Based upon the foregoing, we are of the opinion that:
<PAGE> 2
Cobra Electronics Corporation
September 16, 1998
Page 2
1. The Company is duly incorporated and validly existing under
the laws of the State of Delaware.
2. If, pursuant to the authorization of the Company's Board of
Directors or a duly authorized committee thereof, the Company shall issue
authorized and unissued shares of Common Stock, or if the Company legally and
validly reacquires issued and outstanding shares of Common Stock and thereafter,
pursuant to the authorization by the Board of Directors or a duly authorized
committee thereof, resells such issued but not outstanding shares, such shares
will be legally issued, fully paid and non-assessable when (i) the Registration
Statement shall have become effective under the Act; (ii) such shares shall have
been duly issued and sold in the manner contemplated by the Plan; and (iii)
certificates representing such shares shall have been duly executed,
countersigned and registered and duly delivered against receipt by the Company
of the consideration (but, in the case of authorized and unissued shares of
Commmon Stock, not less than the par value thereof) provided in the Plan.
We do not find it necessary for the purposes of this opinion
letter to cover, and accordingly we express no opinion as to the application of
the securities or blue sky laws of the various states to the sale of shares of
Common Stock. We assume no obligation to update or supplement this opinion
letter to reflect any facts or circumstances which may hereafter come to our
attention with respect to the opinions expressed above, including any change in
applicable law.
This opinion letter is limited to the General Corporation Law
of the State of Delaware.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to all references to our firm included in or
made a part of the Registration Statement. In giving such consent, we do not
thereby admit that we are within the category of persons from whom consent is
required by Section 7 of the Securities Act or the related rules promulgated by
the Commission.
Very truly yours,
Sidley & Austin
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Cobra Electronics Corporation on Form S-8 of our report dated February 27,
1998, appearing in the Annual Report on Form 10-K of Cobra Electronics
Corporation for the year ended December 31, 1997.
Deloitte & Touche LLP
September 16, 1998
<PAGE> 1
EXHIBIT 99.1
COBRA ELECTRONICS CORPORATION
1998 STOCK OPTION PLAN
I. INTRODUCTION
1.1 PURPOSES. The purposes of the 1998 Stock Option Plan (the "Plan") of
Cobra Electronics Corporation (the "Company") and its subsidiaries from time to
time (individually a "Subsidiary" and collectively the "Subsidiaries") are to
align the interests of the Company's stockholders and the recipients of options
under this Plan by increasing the proprietary interest of such recipients in the
Company's growth and success and to advance the interests of the Company by
attracting and retaining officers and other employees. For purposes of this
Plan, references to employment by the Company shall also mean employment by a
Subsidiary.
1.2 ADMINISTRATION. This Plan shall be administered by a committee (the
"Committee") designated by the Board of Directors of the Company (the "Board")
consisting of at least two members of the Board, each of whom may be a
"Non-Employee Director" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an "outside director"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code").
The Committee shall, subject to the terms of this Plan, select eligible
persons for participation in this Plan and determine the number of shares of
common stock, $.33 1/3 par value, of the Company ("Common Stock") subject to
each option granted hereunder, the exercise price of such option, the time and
conditions of exercise of such option and all other terms and conditions of such
option, including, without limitation, the form of the option agreement. The
Committee shall, subject to the terms of this Plan, interpret this Plan and the
application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan and may impose, incidental to the
grant of an option, conditions with respect to the grant, such as limiting
competitive employment or other activities. All such interpretations, rules,
regulations and conditions shall be conclusive and binding on all parties. Each
option hereunder shall be evidenced by a written agreement (an "Agreement")
between the Company and the optionee setting forth the terms and conditions
applicable to such option.
A majority of the Committee shall constitute a quorum. The acts of the
Committee shall be either (i) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (ii) acts approved in
writing by all of the members of the Committee without a meeting.
1.3 ELIGIBILITY. Participants in this Plan shall consist of such officers
and other employees or persons who are expected to become employees of the
Company and its Subsidiaries as the Committee in its sole discretion may select
from time to time. The Committee's selection of a person to participate in this
Plan at any time shall not require the Committee to select such person to
participate in this Plan at any other time.
1.4 SHARES AVAILABLE. Subject to adjustment as provided in Section 3.7,
310,000 shares of Common Stock shall be available for grants of options under
this Plan. To the extent that shares of Common Stock subject to an outstanding
option are not issued or delivered by reason of the expiration, termination,
cancellation or forfeiture of such option or by reason of the delivery of shares
of Common Stock to pay all or a portion of the exercise price of such option or
to satisfy all or a portion of the tax withholding obligations relating to such
option, then such shares of Common Stock shall again be available under this
Plan.
Shares of Common Stock to be delivered under this Plan shall be made
available from authorized and unissued shares of Common Stock, or authorized and
issued shares of Common Stock reacquired and held as treasury shares or
otherwise, or a combination thereof.
To the extent required by Section 162(m) of the Code and the rules and
regulations thereunder, the maximum number of shares of Common Stock with
respect to which options may be granted during any calendar year to any person
shall be 150,000, subject to adjustment as provided in Section 3.7.
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II. STOCK OPTIONS
2.1 GRANTS OF STOCK OPTIONS. The Committee may, in its discretion, grant
options to purchase shares of Common Stock to such eligible persons as may be
selected by the Committee. Each option, or portion thereof, that is not an
incentive stock option, shall be a non-qualified stock option. An incentive
stock option shall mean an option to purchase shares of Common Stock that meets
the requirements of Section 422 of the Code, or any successor provision, which
is intended by the Committee to constitute an incentive stock option. Each
incentive stock option shall be granted within ten years of the effective date
of this Plan. To the extent that the aggregate Fair Market Value (determined as
of the date of grant) of shares of Common Stock with respect to which options
designated as incentive stock options are exercisable for the first time by a
participant during any calendar year (under this Plan or any other plan of the
Company, or any parent or Subsidiary) exceeds the amount (currently $100,000)
established by the Code, such options shall constitute non-qualified stock
options. "Fair Market Value" shall mean the closing price of a share of Common
Stock on The Nasdaq Stock Market on the date as of which such value is being
determined or, if there shall be no closing price on such date, on the next
preceding date for which a closing price was reported; provided, however, that
if Fair Market Value for any date cannot be determined as above provided, Fair
Market Value shall be determined by the Committee by whatever means or method as
the Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.
2.2 TERMS OF STOCK OPTIONS. Options shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem advisable:
(a) Number of Shares and Purchase Price. The number of shares of Common
Stock subject to an option and the purchase price per share of Common Stock
purchasable upon exercise of the option shall be determined by the Committee;
provided, however, that the purchase price per share of Common Stock purchasable
upon exercise of any stock option shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant of such option or, if
earlier, on the date on which the Company agreed to grant such option; provided
further, that if an incentive stock option shall be granted to any person who,
at the time such option is granted, owns capital stock possessing more than ten
percent of the total combined voting power of all classes of capital stock of
the Company (or of any parent or Subsidiary) (a "Ten Percent Holder"), the
purchase price per share of Common Stock shall be the price (currently 110% of
Fair Market Value) required by the Code in order to constitute an incentive
stock option.
(b) Option Period and Exercisability. The period during which an option may
be exercised shall be determined by the Committee; provided, however, that no
incentive stock option shall be exercised later than ten years after its date of
grant; provided further, that if an incentive stock option shall be granted to a
Ten Percent Holder, such option shall not be exercised later than five years
after its date of grant. The Committee may, in its discretion, establish
performance measures which shall be satisfied or met as a condition to the grant
of an option or to the exercisability of all or a portion of an option. The
Committee shall determine whether an option shall become exercisable in
cumulative or non-cumulative installments and in part or in full at any time. An
exercisable option, or portion thereof, may be exercised only with respect to
whole shares of Common Stock.
(c) Method of Exercise. An option may be exercised (i) by giving written
notice to the Company specifying the number of whole shares of Common Stock to
be purchased and accompanied by payment therefor in full (or arrangement made
for such payment to the Company's satisfaction) either (A) in cash, (B) by
delivery of previously owned whole shares of Common Stock (which the optionee
has held for at least six months prior to the delivery of such shares and for
which the optionee has good title, free and clear of all liens and encumbrances)
having a Fair Market Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (C) in cash by a
broker-dealer acceptable to the Company to whom the optionee has submitted an
irrevocable notice of exercise or (D) a combination of (A) and (B), in each case
to the extent set forth in the Agreement relating to the option and (ii) by
executing such documents as the Company may reasonably request. The Committee
shall have sole discretion to disapprove of an election pursuant to any of
clauses (B)-(D). Any fraction of a share of Common Stock
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<PAGE> 3
which would be required to pay such purchase price shall be disregarded and the
remaining amount due shall be paid in cash by the optionee. No certificate
representing Common Stock shall be delivered until the full purchase price
therefor has been paid.
2.3 TERMINATION OF EMPLOYMENT.
(a) Death. Subject to paragraph (d) below and unless otherwise specified in
the Agreement relating to an option, if an optionee's employment by the Company
terminates by reason of death, each option held by such optionee shall be
exercisable only to the extent that such option is exercisable on the date of
such optionee's death and may thereafter be exercised by such optionee's
executor, administrator, legal representative, beneficiary or similar person, as
the case may be, until and including the earliest to occur of (i) the date which
is one year (or such other period as set forth in the Agreement relating to such
option) after the date of death and (ii) the expiration date of the term of such
option.
(b) Other Termination. Subject to paragraph (d) below and unless otherwise
specified in the Agreement relating to an option, if an optionee's employment
with the Company terminates for any reason other than death, each option held by
such optionee shall be exercisable only to the extent that such option is
exercisable on the effective date of such optionee's termination of employment
and may thereafter be exercised by such optionee (or such optionee's legal
representative or similar person) until and including the earliest to occur of
(i) the date which is three months (or such other period as set forth in the
Agreement relating to such option) after the effective date of such optionee's
termination of employment and (ii) the expiration date of the term of such
option.
(c) Death Following Termination of Employment. Subject to paragraph (d)
below and unless otherwise specified in the Agreement relating to an option, if
an optionee dies during the three-month period (or such other period as set
forth in the Agreement relating to such option) following termination of
employment for any other reason other than death, each option held by such
optionee shall be exercisable only to the extent that such option is exercisable
on the date of such optionee's death and may thereafter be exercised by such
optionee's executor, administrator, legal representative, beneficiary or similar
person, as the case may be, until and including the earliest to occur of (i) the
date which is three months (or such other period as set forth in the Agreement
relating to such option) after the date of death and (ii) the expiration date of
the term of such option.
(d) Termination of Employment -- Incentive Stock Options. If the employment
with the Company of a holder of an incentive stock option terminates by reason
of death or Permanent and Total Disability (as defined in Section 22(e)(3) of
the Code), each incentive stock option held by such optionee shall be
exercisable only to the extent that such option is exercisable on the date of
such optionee's death or on the effective date of such optionee's termination of
employment by reason of Permanent and Total Disability, as the case may be, and
may thereafter be exercised by such optionee (or such optionee's executor,
administrator, legal representative, beneficiary or similar person) until and
including the earliest to occur of (i) the date which is one year (or such
shorter period as set forth in the Agreement relating to such option) after the
date of death or the effective date of such optionee's termination of employment
by reason of Permanent and Total Disability, as the case may be, and (ii) the
expiration date of the term of such option.
If the employment with the Company of a holder of an incentive stock option
terminates for any reason other than death or Permanent and Total Disability,
each incentive stock option held by such optionee shall be exercisable only to
the extent such option is exercisable on the effective date of such optionee's
termination of employment, and may thereafter be exercised by such optionee (or
such optionee's legal representative or similar person) until and including the
earliest to occur of (i) the date which is three months after the effective date
of such optionee's termination of employment and (ii) the expiration date of the
term of such option.
If the holder of an incentive stock option dies during the one-year period
following termination of employment by reason of Permanent and Total Disability
(or such shorter period as set forth in the Agreement relating to such option),
or if the holder of an incentive stock option dies during the three-month period
following termination of employment for any reason other than death or Permanent
and Total
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<PAGE> 4
Disability, each incentive stock option held by such optionee be exercisable
only to the extent such option is exercisable on the date of the optionee's
death and may thereafter be exercised by the optionee's executor, administrator,
legal representative, beneficiary or similar person, as the case may be, until
and including the earliest to occur of (i) the date which is six months (or such
shorter period as set forth in the Agreement relating to such option) after the
date of death and (ii) the expiration date of the term of such option.
III. GENERAL
3.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted to the
stockholders of the Company for approval and, if approved by the affirmative
vote of a majority of the shares of Common Stock present in person or
represented by proxy at the 1998 Annual Meeting of Stockholders, shall become
effective as of the date of approval by the Board. This Plan shall terminate ten
years after its effective date unless terminated earlier by the Board.
Termination of this Plan shall not affect the terms or conditions of any option
granted prior to termination.
Options may be granted hereunder at any time prior to the termination of
this Plan, provided that no option may be granted later than ten years after the
effective date of this Plan. In the event that this Plan is not approved by the
stockholders of the Company, this Plan and any options granted hereunder shall
be void and of no force or effect.
3.2 AMENDMENTS. The Board may amend this Plan as it shall deem advisable,
subject to any requirement of stockholder approval required by applicable law,
rule or regulation, including Section 162(m) of the Code; provided, however,
that no amendment shall be made without stockholder approval if such amendment
would (i) increase the number of shares of Common Stock available under the Plan
(other than by reason of Section 3.7), (ii) materially increase the benefits
available under the Plan or (iii) change the class or category of persons
eligible to participate in the Plan. No amendment may impair the rights of a
holder of an outstanding option without the consent of such holder.
3.3 AGREEMENT. No option shall be valid until an Agreement is executed by
the Company and the optionee and, upon execution by the Company and the optionee
and delivery of the Agreement to the Company, such option shall be effective as
of the effective date set forth in the Agreement.
3.4 NON-TRANSFERABILITY. No option shall be transferable other than (i) by
will or the laws of descent and distribution or pursuant to beneficiary
designation procedures approved by the Company or (ii) as set forth in the
Agreement relating to an option. Each option may be exercised during the
optionee's lifetime only by the optionee or the optionee's legal representative
or similar person. Except as permitted by the second preceding sentence, no
option shall be sold, transferred, assigned, pledged, hypothecated, encumbered
or otherwise disposed of (whether by operation of law or otherwise) or be
subject to execution, attachment or similar process. Upon any attempt to so
sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of
any option, such option and all rights thereunder shall immediately become null
and void.
3.5 TAX WITHHOLDING. The Company shall have the right to require, prior to
the issuance or delivery of any shares of Common Stock, payment by the optionee
of any Federal, state, local or other taxes which may be required to be withheld
or paid in connection with an option hereunder. An Agreement may provide that
the optionee may satisfy any obligation to withhold or pay taxes arising on any
date (the "Tax Date") in connection with the option in the amount necessary to
satisfy any such obligation by any of the following means: (A) a cash payment to
the Company, (B) delivery to the Company of previously owned whole shares of
Common Stock (which the optionee has held for at least six months prior to the
delivery of such shares and for which the optionee has good title, free and
clear of all liens and encumbrances) having an aggregate Fair Market Value,
determined as of the Tax Date, equal to the amount necessary to satisfy any such
obligation, (C) a cash payment by a broker-dealer acceptable to the Company to
whom the optionee has submitted an irrevocable notice of exercise or (D) a
combination of (A) and (B), in each case to the extent set forth in the
Agreement relating to the option; provided, however, that the Committee shall
have sole discretion to disapprove of an election pursuant to any of clauses
(B)-(D). An Agreement may provide for shares of Common Stock to be delivered
having an aggregate Fair Market Value in excess of the minimum amount required
to be withheld, but not in excess of the amount determined by applying the
optionee's maximum marginal tax rate. Any fraction of a share of Common Stock
which would be required to satisfy such an obligation shall be disregarded and
the remaining amount due shall be paid in cash by the optionee.
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3.6 RESTRICTIONS ON SHARES. Each option hereunder shall be subject to the
requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
option upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the delivery of shares
thereunder, such shares shall not be delivered unless such listing,
registration, qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company may require that certificates evidencing shares of Common Stock
delivered pursuant to any option bear a legend indicating that the sale,
transfer or other disposition thereof by the holder is prohibited except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
3.7 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination, exchange
of shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Common Stock other than a regular cash
dividend, the number and class of securities available under this Plan, the
number and class of securities subject to each outstanding option and the
purchase price per security shall be appropriately adjusted by the Committee,
such adjustments to be made in the case of outstanding options without an
increase in the aggregate purchase price. The decision of the Committee
regarding any such adjustment shall be final, binding and conclusive. If any
adjustment would result in a fractional security being (i) available under this
Plan, such fractional security shall be disregarded, or (ii) subject to an
option under this Plan, the Company shall pay the optionee, in connection with
the first exercise of the option in whole or in part, occurring after such
adjustment, an amount in cash determined by multiplying (A) the fraction of such
security (rounded to the nearest hundredth) by (B) the excess, if any, of (x)
the Fair Market Value on the exercise date over (y) the exercise price of the
option.
3.8 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have any right
to participate in this Plan. Neither this Plan nor any option granted hereunder
shall confer upon any person any right to continued employment by the Company,
any Subsidiary or any affiliate of the Company or affect in any manner the right
of the Company, any Subsidiary or any affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.
3.9 RIGHTS AS STOCKHOLDER. No person shall have any right as a stockholder
of the Company with respect to any shares of Common Stock which are subject to
an option hereunder until such person becomes a stockholder of record with
respect to such shares of Common Stock.
3.10 GOVERNING LAW. This Plan, each option hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto, to
the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware and construed in
accordance therewith without giving effect to principles of conflicts of laws.
ADOPTED BY THE BOARD OF DIRECTORS ON MARCH 12, 1998.
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