As filed with the Securities and Exchange Commission on August 5, 1999
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PSC INC.
(Exact name of Registrant as specified in its charter)
New York 16-0969362
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
675 Basket Road, Webster, New York 14580
(716) 265-1600
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)
PSC Inc.
1994 Stock Option Plan
(Full title of plan)
Robert C. Strandberg
President and Chief Executive Officer
PSC Inc.
675 Basket Road
Webster, NY 14580
Telephone: (716) 265-1600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Martin S. Weingarten, Esq.
Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP
2400 Chase Square
Rochester, NY 14604
Page 1 of 7 Pages
Exhibit Index at Page 6
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate
Securities to Amount to be Price Per Offering Amount of
be Registered Registered (1) Share (2) Price (2) Registration Fee
- ------------- ---------------- ----------- ---------- ----------------
<S> <C> <C> <C> <C>
Common Shares, 1,000,000 shares $9.53 $9,530,000 $2887.88
$.01 par value
</TABLE>
(1) The number of Common Shares to be registered may be adjusted in
accordance with the provisions of the 1994 Stock Option Plan in the event that,
during the period the 1994 Stock Option Plan is in effect, there is effected any
increase or decrease in the number of issued Common Shares resulting from a
subdivision or consolidation of shares or the payment of a stock dividend or any
other increase or decrease in the number of shares or the payment of a stock
dividend or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Registrant. Accordingly, this
Registration Statement covers, in addition to the number of Common Shares stated
above, an indeterminate number of shares which by reason of any such events may
be issued in accordance with the provisions of the 1994 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration
fee pursuant to Rules 457(c) and 457(h) under the Securities Act of 1933 and
based upon the average of the high and low sales prices of the Registrant's
Common Shares as reported on the Nasdaq National Market on August 2, 1999.
STATEMENT OF INCORPORATION BY REFERENCE
Pursuant to Instruction E of the General Instructions to Form S-8, this
Registration Statement on Form S-8 incorporates by reference the contents of the
Registration Statement on Form S-8, Registration No. 33-60389, filed by the
Registrant with the Securities and Exchange Commission on June 20, 1995 relating
to the Registrant's 1994 Stock Option Plan.
Upon this Registration Statement's effectiveness, there will be
2,750,000 shares registered under the 1994 PSC Inc. Stock Option Plan, 1,750,000
shares from Registration Statement No. 33-60389 and 1,000,000 shares from this
Registration Statement on Form S-8.
<PAGE>
PART II
Information Required in the Registration Statement
Item 5. Interests of Named Experts and Counsel.
Legal matters in connection with options under the 1994 Stock Option
Plan and the Common Shares offered thereunder will be passed upon by Messrs.
Boylan, Brown, Code, Fowler, Vigdor & Wilson, LLP, 2400 Chase Square, Rochester,
NY 14604. Justin L. Vigdor, a partner of this firm, is a director of the
Registrant, and Martin S. Weingarten, counsel to this firm, is Secretary of the
Registrant. Mr. Vigdor owns and has options to purchase Common Shares of the
Registrant.
Item 8. Exhibits
See Exhibit Index.
<PAGE>
SIGNATURES
Pursuant to the requirement 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 had duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the Town of Webster, State of New York on August 5, 1999.
PSC Inc.
By: /s/ Robert C. Strandberg
Robert C. Strandberg
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints each of Robert C. Strandberg and William J.
Woodard, acting alone or together, as such person's true and lawful
attorney-in-fact and agent with full powers of substitution and revocation, for
such person and in such person's name, place, and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, acting alone, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as such person might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, acting alone, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on August 5, 1999.
Signature Title
/s/ Robert C. Strandberg Director, President and
Robert C. Strandberg Chief Executive Officer
/s/ William J. Woodard Vice President, Chief Financial
William J. Woodard Officer and Treasurer
<PAGE>
/s/ Michael J. Stachura Vice President, Finance
Michael J. Stachura (Principal Accounting Officer)
/s/ Robert S. Ehrlich Director, Chairman of the Board
Robert S. Ehrlich
/s/ Jay M. Eastman Director
Jay M. Eastman
/s/ Donald K. Hess Director
Donald K. Hess
/s/ Thomas J. Morgan Director
Thomas J. Morgan
/s/ James C. O'Shea Director
James C. O'Shea
/s/ Jack E. Rosenfeld Director
Jack E. Rosenfeld
/s/ Justin L. Vigdor Director
Justin L. Vigdor
Director
Romano Volta
/s/ Bert W. Wasserman Director
Bert W. Wasserman
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description Location
------- ---------------------------------- -------------
4.1 PSC Inc. 1994 Stock Option *
Plan, as amended
5.1 Opinion and consent of Boylan, *
Brown, Code, Fowler, Vigdor &
Wilson, LLP, counsel for the
Registrant as to the legality of
the Common Shares being registered
23.1 Consent of Arthur Andersen LLP, *
Independent Public Accountants
23.2 Consent of Boylan, Brown, Code, Included in Exhibit
Fowler, Vigdor & Wilson, LLP 5.1 to this Registra-
tion Statement
* Included as part of the electronic submission of this Registration
Statement.
Exhibit 4.1
As Amended (5/12/99)
PSC INC.
1994 STOCK OPTION PLAN
1. Title and Purpose. The plan described herein shall be known as the "PSC
Inc. 1994 Stock Option Plan" (the "Plan"). The purpose of the Plan is to advance
the interests of PSC Inc. (the "Company") and its shareholders by strengthening
the Company's ability to attract and retain individuals of training, experience,
and ability as officers, key employees, directors and consultants and to furnish
additional incentive to such key individuals to promote the Company's financial
success by providing them with an equity ownership in the Company commensurate
with Company performance, as reflected in increased shareholder value. It is the
intent of the Company that such individuals be encouraged to obtain and retain
an equity interest in the Company and each Participant will be specifically
apprised of said intent.
2. Definitions. As used herein, the following words or terms have the
meaning set forth below.
2.1 "Award" means an award granted to any key employee, officer,
consultant, or Non-Employee Director in accordance with the provisions of the
Plan in the form of Options or Restricted Stock.
2.2 "Award Agreement" means the written agreement evidencing each Award of
Restricted Stock granted under the Plan.
<PAGE>
2.3 "Board" means the Board of Directors of the Company, except that,
whenever action is to be taken under the Plan with respect to a Reporting
Person, "Board" shall mean only such directors who are disinterested persons
within the meaning of Rule 16b-3 under the Exchange Act or any successor rule.
2.4 "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute.
2.5 "Committee" means the Compensation Committee of the Board or such other
committee as may be designated by the Board to administer the Plan. To the
extent that the Committee delegates its power to grant Options as permitted by
Section 4.2, all references in the Plan to the Committee's authority to grant
Options and determinations with respect thereto shall be deemed to include the
Committee's delegate or delegates.
2.6 "Common Stock" or "Stock" means the Company's $.01 par value Common
Shares.
2.7 "Company" means PSC Inc., a corporation established under the laws of
the State of New York, and its subsidiaries.
2.8 "Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Committee, to receive amounts due or
to exercise rights of the Participant in the event of the Participant's death.
In the absence of an effective designation by a Participant, Designated
Beneficiary shall mean the Participant's estate.
2.9 "Disability" means a physical or mental condition of such a nature that
it would qualify a Participant for benefits under the Company's long-term
disability insurance plan.
2.10 "Disinterested Person" shall have the same meaning as defined in Rule
16b-3(c)(2) promulgated by the Securities and Exchange Commission pursuant to
its authority under the Exchange Act.
<PAGE>
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
2.12 "Fair Market Value" in the case of a share of Common Stock on a
particular day, means the closing price per share of the Common Stock on the
Nasdaq National Market for that day, provided at least one sale of said Stock
took place on such exchange on such date, and, if not, then on the basis of the
closing price on the last preceding date on which at least one sale on such
exchange did occur. If the Stock of the Company is not admitted to trading on
any of the aforesaid dates for which closing prices of the Stock are to be
determined, then reference shall be made to the fair market value of the Stock
on that date, as determined on such basis as shall be established or specified
for the purpose by the Committee.
2.13 "Incentive Stock Option" ("ISO") means an Option which is intended to
satisfy the requirements of Section 422 of the Code or any successor provision.
2.14 "Non-Employee Director" means a member of the Board who is not an
employee of the Company or a management consultant to the Company.
2.15 "Non-Employee Director Stock Option" ("NEDSO") means a Nonstatutory
Stock Option granted to a Non-Employee Director of the Company.
2.16 "Nonstatutory Stock Option" ("NSO") means an Option which is not
intended to qualify as an Incentive Stock Option.
2.17 "Option" means any Option granted under the Plan and includes an
Incentive Stock Option, a Nonstatutory Stock Option and a Non-Employee Director
Stock Option.
2.18 "Option Agreement" means the written agreement evidencing each Option
granted under the Plan.
<PAGE>
2.19 "Option Price" means the purchase price per share of Common Stock upon
the exercise of an Option.
2.20 "Outside Director" shall have the same meaning as defined or
interpreted for purposes of Section 162(m) of the Code.
2.21 "Participant" means an individual who has been granted an Award under
the Plan.
2.22 "Reporting Person" means a person required to file reports under
Section 16(a) of the Exchange Act or any successor statute.
2.23 "Restricted Stock" means Stock awarded under Section 9 of the Plan
which is subject to certain forfeiture provisions or restrictions on transfer.
2.24 "Retirement" means termination of employment with the Company if such
termination of employment constitutes normal retirement, early retirement,
disability retirement or other retirement as provided for at the time of such
termination of employment under the applicable retirement program then
maintained by the Company, provided that the Participant does not continue in
the employment of the Company.
3. Shares Subject to the Plan. Subject to adjustment as provided in Section
12 below, an aggregate of 2,750,000 shares of Common Stock shall be available
for Awards under the Plan. Such shares may be authorized but previously unissued
shares or shares reacquired by the Company, including shares purchased in the
open market. In the event that any outstanding Option granted under the Plan for
any reason expires or is terminated without having been exercised in full, or
any shares of Restricted Stock are forfeited, the shares allocable to the
unexercised portion of such Option or the forfeited portion of such Restricted
Stock shall (unless the Plan shall have been terminated) become available for
subsequent Awards under the Plan; provided that in no event may the number of
shares issued hereunder exceed the total number of shares reserved for issuance.
<PAGE>
4. Administration of the Plan.
4.1 The Plan shall be administered by the Committee. No individual may be
appointed to the Committee who is not both a Disinterested Person and an Outside
Director. Grants of NEDSOs and the amounts and nature of such Options shall be
automatic as described in Section 8. Subject to the preceding sentence and the
provisions set forth herein, the Committee shall have full authority to
determine the time or times at which, and the officers and key employees of the
Company to whom, Awards shall be granted under the Plan, to determine the
provisions of Awards, to interpret the terms of the Plan and of Awards made
under the Plan, to adopt, amend and rescind rules and guidelines for the
administration of the Plan and for its own acts and proceedings and to decide
all questions and settle all controversies and disputes which may arise in
connection with the Plan. The Committee shall report any action taken by it to
the meeting of the Board next following such action.
4.2 To the extent permitted by applicable law, the Committee may delegate
to one or more executive officers who are also directors of the Company the
power to grant Options to Participants who are not Reporting Persons at the time
of such Options and all determinations under the Plan with respect thereto,
provided that the Committee shall fix the maximum amount of Options for such
Participants as a group. Such delegate or delegates shall report any action
taken by it or them to the meeting of the Committee next following such action.
4.3 The decision of the Committee on any matter as to which the Committee
is given authority shall be final and binding on all persons concerned. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Option granted under it.
<PAGE>
5. Indemnification of the Committee. In addition to such other rights of
indemnification as they may have as directors of the Company or as members of
the Committee or otherwise, the members of the Committee shall be indemnified by
the Company as and to the fullest extent permitted by law, including without
limitation, indemnification against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Awards
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such Committee member is liable
for negligence, bad faith or misconduct in the performance of his duties;
provided that within 60 days after institution of such action, suit or
proceeding a Committee member shall, in writing, offer the Company the
opportunity, at its own expense, to handle and defend the same.
6. Types of Awards Under the Plan. Awards under the Plan may be in the form
of any one or more of the following:
Incentive Stock Options (ISOs)
Nonstatutory Stock Options (NSOs)
Non-Employee Director Stock Options (NEDSOs)
Restricted Stock
<PAGE>
All Awards shall be subject to the terms and conditions set forth herein and to
such other terms and conditions as may be established by the Committee.
Determinations by the Committee under the Plan including without limitation,
determinations of the Participants, the form, amount and timing of Awards , the
terms and provisions of Awards, and the agreements evidencing Awards, need not
be uniform and may be made selectively among Participants who receive, or are
eligible to receive, Awards hereunder, whether or not such Participants are
similarly situated. Except as otherwise provided by the Plan or a particular
Award, any determination with respect to an Award may be made by the Committee
at the time of grant of the Award or any time thereafter.
7. Incentive Stock Options and Nonstatutory Stock Options.
7.1 Eligibility. Any officer or key employee of the Company shall be
eligible to receive an ISO or NSO under the Plan. In addition, any consultant to
the Company, who, in the opinion of the Committee, is in a position to have a
significant effect upon the Company's business, shall be eligible to receive a
NSO under the Plan. No ISO or NSO may be granted to an individual under this
Plan at a time when such individual is serving as a member of the Committee. An
employee owning stock possessing more than 10% of the total combined voting
power or value of all classes of stock of the Company or any parent or
subsidiary corporation ("Ten Percent Stockholder") is not eligible to receive an
ISO unless the option price is at least 110% of the Fair Market Value of the
Common Stock at the time the ISO is granted and the ISO option by its terms is
not exercisable more than five years from the date it is granted. Restricted
Stock and Common Stock which a grantee may purchase under outstanding Options
shall be treated as stock owned by such grantee for purposes of this
calculation. The Committee also may authorize the granting of ISOs and NSOs to
prospective employees. In the case of a prospective employee, the grant of an
ISO or NSO shall be on the condition of employment by the Company in a key
position, and the date of the grant of the ISO or NSO shall be the date such
employment begins or such later date as the Committee may have specified when
authorizing the grant.
<PAGE>
7.2 Grant of ISOs and NSOs
7.2.1 From time to time while the Plan is in effect, the Committee may, in
its absolute discretion, select from among persons eligible to receive ISOs and
NSOs (including persons to whom ISOs and NSOs were previously granted) those
persons to whom ISOs and NSOs are to be granted.
7.2.2 The Committee shall, in its absolute discretion, determine the number
of shares of Common Stock to be subject to each ISO and NSO made by it under the
Plan, provided, however, that the maximum number of shares of Common Stock with
respect to which ISOs and NSOs may be granted to any individual in any one
taxable year of the Company shall not exceed 525,000 shares (the "Maximum Annual
Grant").
7.2.3 The Committee shall determine at the time of each grant hereunder
whether the option is an ISO or NSO. The terms and conditions of ISOs shall be
subject to and comply with Section 422 of the Code or any successor provision,
and any regulations thereunder.
7.3 Option Price. The option price per share of Common Stock with respect
to each ISO and NSO, shall not be less than 100% of the Fair Market Value per
share at the time the ISO or NSO is granted.
7.4 Period of Options. An ISO and NSO shall be exercisable during such
period of time as the Committee may specify, subject, in the case of ISOs, to
any limitation required by the Code. No ISO or NSO shall be exercisable after
the expiration of 10 years from the date the ISO or NSO is granted.
<PAGE>
7.5 Vesting of Options. Each ISO and NSO shall be made exercisable at such
time or times as the Committee shall determine. In the case of an ISO or NSO
made exercisable in installments, the Committee may later determine to
accelerate the time at which one or more of such installments may be exercised.
The Committee may impose such conditions with respect to the exercise of ISOs
and NSOs, including conditions relating to the attainment of specific
pre-determined stock price goals or other performance criteria or conditions
relating to applicable federal or state tax or securities laws, as it considers
necessary or advisable and such conditions may differ with respect to each
Participant.
7.6 Limitation on Grant of ISOs. The aggregate Fair Market Value
(determined as of the time the ISO is granted) of the shares with respect to
which ISOs are exercisable for the first time by a grantee during any calendar
year (under all such plans of the Company) shall not exceed $100,000.
7.7 Options Non-Transferable. No ISO or NSO granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution. No
interest of a Participant under an ISO or NSO or the Plan shall be subject to
the attachment, execution, garnishment, sequestration, the laws of bankruptcy or
any other legal equitable process. During the lifetime of the Participant, ISOs
and NSOs shall be exercisable only by the Participant who received them.
<PAGE>
7.8 Termination of Employment.
7.8.1 Death During or After Employment. If a Participant dies during
employment or within three (3) months after terminating employment, and at a
time when the Participant is entitled to exercise an ISO or NSO, then at any
time or times within one year after death (or such greater or lesser period
after death as may be specified in the documentation evidencing the ISO or NSO)
such ISO or NSO may be exercised, but only as to any or all of those shares
which the Participant was entitled to purchase immediately prior to the
Participant's death (unless the Committee within thirty (30) days after the
Participant's death shall have accelerated the vesting of the ISO or NSO). ISOs
or NSOs exercisable after death may be exercised by the Participant's Designated
Beneficiary, and except as so exercised, shall expire at the end of the
specified post-death exercise period. In no event, however, may any ISO or NSO
granted under the Plan be exercised after the expiration of the ISO or NSO
exercise period established at the time of grant.
7.8.2 Retirement or Disability. In the event of a Participant's Retirement
or Disability at a time when the Participant is entitled to exercise an ISO or
NSO, then within three months after Retirement or one year after Disability (or
such greater or lesser period after Retirement or Disability as may be specified
in the documentation evidencing the ISO or NSO) the Participant may exercise
such ISO or NSO only as to those shares which the Participant was entitled to
purchase immediately prior to such Retirement or Disability (unless the
Committee within thirty (30) days after the Participant's Retirement or
Disability shall have accelerated the vesting of the ISO or NSO). If the
Participant dies within the specified post-Retirement or post-Disability
exercise period, the Participant's ISO or NSO may be exercised by the
Participant's Designated Beneficiary, to the same extent as if the deceased
Participant had survived, during the greater of one year from the date of his
death or, if a post-Retirement or post-Disability exercise period greater than
three months or one year was specified in the ISO or NSO documentation, the
remainder of such longer period.
<PAGE>
Except as exercised within the applicable period described above, each ISO
or NSO shall expire at the end of such period. In no event, however, may any ISO
or NSO granted under the Plan be exercised after the expiration of the ISO or
NSO exercise period established at the time of grant.
7.8.3 Other Terminations of Employment. If the employment of a Participant
is terminated for cause, the Participant's option rights, both accrued and
future, under any then outstanding ISO or NSO shall be forfeited and terminated
immediately and may not thereafter be exercised to any extent.
If the employment of a Participant is terminated for any reason other than
cause, death, Retirement or Disability at a time when the Participant is
entitled to exercise an ISO or NSO, then within three months after such
termination of employment (or such greater or lesser period after termination of
employment as may be specified in the documentation evidencing the ISO or NSO),
the Participant may exercise such ISO or NSO only as to those shares which the
Participant was entitled to purchase immediately prior to such termination of
employment (unless the Committee within thirty (30) days after the Participant's
termination of employment shall have accelerated the vesting of the ISO or NSO).
If the Participant dies within the specified post-termination of employment
exercise period, the Participant's ISO or NSO may be exercised by the
Participant's Designated Beneficiary, to the same extent as if the deceased
Participant had survived, during a period equal to the greater of one year from
the date of the Participant's death or the remainder of such specified
post-termination of employment exercise period.
If the Committee so decides, an ISO or NSO may provide that a leave of
absence granted by the Company is not a termination of employment for the
purpose of this subsection 7.8.3 and, in the absence of such a provision, the
Committee may, in any particular case, determine that such a leave of absence is
not a termination of employment for such purpose.
<PAGE>
8. Non-Employee Director Stock Options.
8.1 Eligibility. Each Non-Employee Director of the Board shall receive a
NEDSO as determined hereunder without further action by the Board or Committee.
8.2 Option Grant Dates. Subject to the approval of the Plan by the
shareholders at the 1995 Annual Meeting, a NEDSO shall be granted to each
Non-Employee Director automatically every year on the date of the Annual Meeting
of Shareholders, commencing on the date of the 1995 Annual Meeting of
Shareholders. Non-Employee Directors elected by the Board to fill vacancies and
newly created directorships in the interim between grant dates will receive a
pro rated NEDSO based upon the number of full months such Non-Employee Director
will serve between his election and the next grant date.
8.3 Option Formula. Each Non-Employee Director shall receive a NEDSO to
purchase 3,167 shares of Stock on each grant date, without further action by the
Board or Committee. Notwithstanding the foregoing sentence and without further
action by the Board or Committee, each Non-Employee Director shall receive a
NEDSO to purchase 6,500 shares of Stock on each grant date commencing on the
first grant date on which a Non-Employee Director does not receive a stock
option under the Company's 1987 Stock Option Plan.
8.4 Period of Options. Except as otherwise provided herein, each NEDSO will
be exercisable in full one year from the date of grant. All NEDSOs shall
terminate upon the expiration of five years from the date upon which such NEDSOs
were granted (subject to prior termination as hereinafter provided).
<PAGE>
8.5 Option Price. The price per share of Stock at which a NEDSO may be
exercised shall be equal to 100% of the Fair Market Value of the price per share
of Stock on the date the NEDSO is granted.
8.6 Options Non-Transferable. No NEDSO granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution. No
interest of a Non-Employee Director under a NEDSO or the Plan shall be subject
to attachment, execution, garnishment, sequestration, the laws of bankruptcy or
any other legal or equitable process. During the lifetime of the Non-Employee
Director, NEDSOs shall be exercisable only by the Non-Employee Director who
received them.
8.7 Death or Disability of Non-Employee Director. If a Non-Employee
Director shall terminate performance of services for the Company because of
death or Disability, or shall die after termination of performance of services
for the Company but while the Non-Employee Director could have exercised a
NEDSO, that NEDSO may be exercised, to the extent that the Non-Employee Director
was entitled to do so at the date of termination of performance of services, at
any time, or from time to time, within one year after the date of death or
termination of performance of services because of Disability, but in no event
later than the expiration date specified pursuant to Section 8.4. In the case of
death, exercise may be made by the Non-Employee Director's Designated
Beneficiary.
8.8 Termination of Services as Non-Employee Director. If a Non-Employee
Director's performance of services for the Company shall terminate for any
reason other than death or Disability, the Non-Employee Director must exercise
such NEDSO, to the extent the Non-Employee Director was entitled to do so at the
date of termination of performance of services, at any time, or from time to
time, within three months after the date of termination of performance of
services, but in no event later than the expiration date specified pursuant to
Section 8.4; provided, however, in the case of termination of performance of
services for cause, the NEDSO shall cease to be exercisable on the date of such
termination. Notwithstanding the foregoing sentence, the Committee may establish
such other provisions with respect to the exercise of a NEDSO by a Non-Employee
Director upon the termination of such person's services by reason of
resignation, retirement, completion of term or otherwise, as it, in its sole
discretion, deems advisable. The Committee shall have the sole power to
determine the date of any circumstances which shall constitute termination of
services as a Non-Employee Director and to determine whether such termination is
the result of death, Disability, cause or any other reason.
<PAGE>
9. General Provisions Applicable to All Options.
9.1 Exercise of Options; Payment of Option Price. Options may be exercised
(in full or in part) only by written notice of exercise delivered to the Company
at its principal executive office, accompanied by payment equal to the full
Option Price for the shares of Stock which are exercised. The Option Price of
each share of Common Stock purchased upon exercise of an Option shall be paid in
full in cash at the time of exercise, with shares of Common Stock owned by the
Participant, by delivering to the Company (i) irrevocable instructions to
deliver the stock certificates representing the shares of Stock for which the
Option is being exercised, directly to a broker, and (ii) instructions to the
broker to sell such shares of Stock and promptly deliver to the Company the
portion of the proceeds equal to the total Option Price, or in any combination
thereof. For purposes of making payment in shares of Common Stock, such shares
shall be valued at their Fair Market Value on the date of exercise of the Option
and shall have been held by the Participant for a period of at least six (6)
months.
9.2 Documentation of Options. Neither anything contained in the Plan nor in
any resolutions adopted or to be adopted by the Board or the Shareholders nor
any action taken by the Committee shall constitute the granting of any Option.
The granting of an Option shall take place only when a written Option Agreement
shall have been duly executed and delivered by the Company and the Participant.
Each Option Agreement shall specify the terms and conditions of the Option and
contain such other terms and conditions not inconsistent with the provisions of
the Plan as the Committee considers necessary or advisable to achieve the
purposes of the Plan or comply with applicable tax and regulatory laws and
accounting principles. The Option Agreement with respect to ISOs shall provide,
among other things, that the Participant shall advise the Company immediately
upon any sale or transfer of shares of Common Stock received upon exercise of
the Option to the extent such sale or transfer takes place prior to the later of
two (2) years from the date of grant or one (1) year from the date of exercise.
9.3 Tax Withholding. The Committee shall require, on such terms as it deems
necessary, that the Participant pay to the Company or make other satisfactory
provision for payment of, any federal, state or local taxes required by law to
be withheld in respect to Options under the Plan. In the Committee's discretion,
such tax obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the Option creating the tax obligation, valued at
their Fair Market Value on the date of delivery. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant.
9.4 Amendment of Options. The Committee may modify or amend any outstanding
Option if it determines, in its sole discretion, that amendment is necessary or
advisable in the light of any addition to or change in the Code or in the
regulations issued thereunder, or any federal or state securities laws or other
law or regulation, which change occurs after the date of grant of the Option and
by its terms applies to the Option. In addition, subject to the terms and
conditions and within the limitations of the Plan, the Committee may modify,
<PAGE>
amend, extend or renew outstanding Options granted under the Plan, or accept the
surrender of outstanding Options under the Plan or under any other stock option
plan of the Company (to the extent not theretofore exercised) and authorize the
granting of new Options under the Plan in substitution therefor (to the extent
not theretofore exercised). No amendment of an outstanding Option, however, may,
without the consent of the Participant, make any changes which would adversely
affect the rights of such Participant.
10. Financing. In the discretion of the Committee, the Company may
guarantee bank loans or make loans to a Participant to finance the Option Price
of the shares purchased upon the exercise of an Option and also to finance
payment by the Participant of income taxes incurred with such exercise upon the
following terms and conditions:
10.1 Term of Loan. Each loan or guaranty will extend for a period of not
more than five (5) years.
10.2 Promissory Note. Each loan will be evidenced by a promissory note
given by the Participant and for which the Participant shall have full personal
liability. Each such note shall bear interest at such rate per annum as
determined by the Committee which interest shall be not less than the rate in
effect for the Company's senior indebtedness to a financial institution and
shall be payable at such times as determined by the Committee but at least no
less frequently than annually. Payments of principal, or installments thereof,
need not be required by the terms of the notes, but may be required thereby if
so determined by the Committee. Principal and interest may be prepaid in whole
or in part, from time to time, without penalty. Each such note shall in all
events become due and payable without demand on the fifth anniversary of the
date of the note, or upon the Participant's failure to pay any installment of
principal and interest when due or within 30 days thereafter, or immediately
<PAGE>
upon the insolvency or bankruptcy of the Participant, or within 30 days from the
date of termination of the Participant's employment or directorship or office
for whatever cause, excepting only death, Disability and Retirement. In the
event of the death of a Participant, such note shall become due and payable
without demand nine months from the date of such death. In the event of the
Disability or Retirement of a Participant his note shall become due and payable
without demand three months from the date of such permanent disability or
approved retirement.
10.3 Pledge of Shares. Each note or guaranty will be secured by a pledge of
the shares purchased with the proceeds of the loan which shall be deposited with
the Company. Dividends paid on shares subject to the pledge shall be first
applied against interest charges due upon the bank loan, or the note secured,
with any balance applied to reduce the principal thereof. Regardless of any
other provision of this Plan, shares pledged to secure the guaranty or note may
not be withdrawn from the pledge unless the proportionate amount of the
guaranteed bank loan or the note secured thereby shall be immediately repaid.
10.4 Other Terms and Conditions. All such notes, guaranty and pledges may
contain such further terms and conditions consistent with this Plan, including
provisions for additional collateral security, as may be determined by the
Committee from time to time.
10.5 Approval by Shareholders. Approval and adoption of this Plan by the
shareholders of the Company shall constitute full and complete authorization for
any guaranty, loan, or interest reimbursement made to or on behalf of
Participant hereunder.
<PAGE>
10.6 Loans to Non-Employee Directors and Consultants. Notwithstanding
anything contained herein to the contrary, each note or guaranty representing a
loan or guaranty to a Non-Employee Director or Consultant shall be secured by a
pledge of shares equal to twice their maximum loan value as defined in Federal
Reserve Regulation G (12 CFR Part 207) or by such other or additional collateral
security as the Committee deems appropriate and in the best interests of the
Company.
11. Restricted Stock.
11.1 The Committee may, in its discretion, make Awards of Restricted Stock
to such officers and key employees as may be selected in the manner provided in
Section 6 of this Plan. Such Awards shall be evidenced by an Award Agreement in
such form, and containing such terms and conditions as are not inconsistent with
this Plan, as the Committee, shall, from time to time, determine. Restricted
Stock awarded hereunder shall be subject to such restrictions as may be
determined by the Committee and set out in the Award Agreement.
11.2 Restricted Stock shall be subject to a restriction period (after which
restrictions will lapse) which shall mean a period commencing on the date the
Award is granted and ending on such date as the Committee shall determine (the
"Restriction Period"). The Committee may provide for the lapse of restrictions
in installments where deemed appropriate.
11.3 Except when the Committee determines otherwise pursuant to Section
11.5, if a Participant terminates employment with the Company for any reason
before the expiration of the Restriction Period, all shares of Restricted Stock
still subject to the restriction shall be forfeited by the Participant and shall
be reacquired by the Company.
<PAGE>
11.4 Except as otherwise provided in this Section 11, no shares of
Restricted Stock received by a Participant shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period.
11.5 In cases of death, Disability or Retirement or in cases of special
circumstances, the Committee may, in its sole discretion when it finds that a
waiver would be in the best interests of the Company, elect to waive any or all
remaining restrictions with respect to such Participant's Restricted Stock.
11.6 The Committee may require, under such terms and conditions as it deems
appropriate or desirable, that the certificates of Stock delivered under the
Plan may be held in custody by a bank or other institution, or that the Company
may itself hold such shares in custody until the Restriction Period expires or
until restrictions thereon otherwise lapse, and may require, as a condition of
any Award of Restricted Stock that the Participant shall have delivered a stock
power endorsed in blank relating to the Restricted Stock.
11.7 Subject to Section 11.6, each Participant entitled to receive
Restricted Stock under the Plan shall be issued a certificate for the shares of
Stock. Such certificate shall be registered in the name of the Participant and
shall bear an appropriate legend reciting the terms, conditions and
restrictions, if any, applicable to such Award and shall be subject to
appropriate stop-transfer orders.
11.8 The restrictions imposed under this Section 11 shall apply as well to
all shares or other securities issued in respect of the Restricted Stock in
connection with any stock split, stock dividend, recapitalization,
reclassification, merger, consolidation or reorganization, but such restrictions
shall expire or terminate at such time or times as may be specified therefor in
the Award Agreement.
<PAGE>
12. Adjustment Upon Changes in Capitalization; Changes in Control.
12.1 If the outstanding shares of Stock of the Company as a whole are
increased, decreased, changed into, or exchanged for, a different number or kind
of shares or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate structure, or
amendment to the certificate of incorporation of the Company or otherwise, an
appropriate and proportionate adjustment, as determined by the Committee shall
be made to the number and kind of shares subject to this Plan, and to the
number, kind, and per share Option Price of shares subject to unexercised
Options granted prior to any such change. Any such adjustment shall be made
without a change in the aggregate purchase price of the shares of Stock subject
to the unexercised portion of any Option.
12.2 In the event of any tender offer or exchange offer (other than an
offer by the Company) for the Company's Stock, or a dissolution or liquidation
of the Company, or a merger or consolidation or similar transaction in which the
Company is not the surviving corporation, or a sale, exchange or other
disposition of all or substantially all of the Company assets, or a "change in
control" of the Company (as such term is defined in Section 12.3 hereinafter),
the Committee, in its sole discretion, may, as to any outstanding Options, make
such substitution or adjustment in the aggregate number of shares reserved for
issuance under the Plan and in the number and per share Option Price (if any) of
shares subject to such Options as it may determine, make outstanding Options
fully exercisable, or amend or terminate such Options upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of any Option, shall require payment or other consideration which
the Committee deems equitable in the circumstances).
<PAGE>
12.3 For the purposes of this Plan, a "change in control" of the Company
shall be deemed to have occurred if (i) any "person" (as that term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes the "beneficial
owner" (as that term is defined by the Securities and Exchange Commission for
purposes of Section 13(d) of the Exchange Act), directly or indirectly, of more
than 20% of the outstanding voting securities of the Company or its successors;
or (ii) during any period of two consecutive years a majority of the Board of
Directors no longer consists of individuals who were members of the Board of
Directors at the beginning of such period, unless the election of each director
who was not a director at the beginning of the period was approved by a vote of
at least two-thirds of the directors still in office who were directors at the
beginning of the period.
12.4 The restrictions applicable to Awards of Restricted Stock issued
pursuant to Section 11 shall lapse upon the occurrence of an event specified in
Section 12.2 and the Company shall issue stock certificates without a
restrictive legend.
13. Miscellaneous.
13.1 No Right to Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continued employment. The Company expressly reserves
the right at any time to terminate the employment of a Participant free from any
liability or claim under the Plan except as may be expressly provided in the
applicable Award.
13.2 No Right to Continue as a Director. The granting of a NEDSO shall not
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain a Non-Employee Director for any period of time.
<PAGE>
13.3 No Rights as Shareholder. Subject to the provisions of the applicable
Option, no Participant or Designated Beneficiary shall have any rights as a
shareholder with respect to any shares of Common Stock to be distributed under
the Plan until such person becomes the holder thereof.
13.4 No Fractional Shares. No fractional shares of Common Stock shall be
issued under the Plan, and cash shall be paid in lieu of any fractional shares
in settlement of Options granted under the Plan.
13.5 Unfunded Plan. The Plan shall be unfunded, shall not create (or be
construed to create) a trust or a separate fund or funds, and shall not
establish any fiduciary relationship between the Company and any Participant or
other person.
13.6 Successors and Assigns. The Plan shall be binding on all successors
and assigns of the Participant, including without limitation the Participant's
Designated Beneficiary or any receiver or trustee in bankruptcy or
representative of the Participant's creditors.
13.7 Compliance With Other Laws and Regulations. The Plan, the grant and
exercise of Awards under the Plan, and the obligation of the Company to transfer
shares under such Awards shall be subject to all applicable federal and state
laws, rules and regulations, including those related to disclosure of financial
and other information to Participants, and to any approvals by any government or
regulatory agency as may be required. The Company shall not be required to issue
or deliver any certificates for shares of Stock prior to (a) the listing of such
shares on any stock exchange on which the Stock may then be listed, where such
listing is required under the rules or regulations of such exchange, and (b) the
compliance with applicable federal and state securities laws and regulations
relating to the issuance and delivery of such certificates; provided, however,
that the Company shall make all reasonable efforts to so list such shares and to
comply with such laws and regulations.
<PAGE>
13.8 Compliance with Rule 16b-3. With respect to persons subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the Exchange
Act. To the extent any provision of the Plan or action by the Committee fails to
so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
13.9 Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, except that it may not amend the Plan
without shareholder approval where the absence of such approval would cause the
Plan to fail to comply with Rule 16b-3 under the Exchange Act, the
performance-based compensation requirements under Section 162(m) of the Code,
Section 422 of the Code, the requirements of any securities exchange on which
the shares of Common Stock are then listed, or any other requirement of
applicable law or regulation. The Board may not amend Section 8 more than once
every six months, other than to conform with changes in the Code or the rules
and regulations thereunder. The Committee may make non-material amendments to
the Plan. No amendment shall apply to adversely affect any Participant with
respect to whom an Award shall heretofore have been granted.
13.10 Governing Law. To the extent not superseded by federal law, the
provisions of the Plan shall be governed by and interpreted in accordance with
the laws of the State of New York.
14. Effective Date of Plan; Term of Plan. The Plan shall become effective
as of the date on which the Board adopts the Plan, subject, however, to the
approval by the shareholders at the 1995 Annual Meeting of Shareholders. The
Plan shall terminate on November 7, 2004 and no Awards shall be granted under
the Plan after that date, provided, however, that the Plan and all Awards
granted under the Plan prior to such date shall remain in effect until such
Awards have been satisfied or terminated in accordance with the Plan and the
terms of such Awards.
Date Plan adopted by Board of Directors: November 8, 1994
Date Plan approved by Shareholders: May 3, 1995
Date Amendment adopted by Board of Directors: February 2, 1999
Date Amendment approved by Shareholders: May 12, 1999
August 4, 1999
PSC Inc.
675 Basket Road
Webster, NY 14580
Re: Registration Statement on Form S-8
for the PSC Inc. 1994 Stock Option Plan
Ladies and Gentlemen:
We have acted as counsel to PSC Inc., a New York corporation (the
"Company"), in connection with the registration under the Securities Act of
1933, as amended, of 1,000,000 shares (the "Shares") of the Company's common
stock, $.01 par value per share, issuable under the PSC Inc. 1994 Stock Option
Plan (the "Plan"). The Shares are being registered pursuant to a registration
statement on Form S-8 to be filed with the Securities and Exchange Commission on
or about August 5, 1999 (the "Registration Statement").
We have examined the Certificate of Incorporation and By-Laws of the
Company and all amendments thereto and have examined and relied on the
originals, or copies certified to our satisfaction, of such records of meetings,
or resolutions adopted at meetings, of the directors of the Company and such
other documents and instruments as in our judgment are necessary or appropriate
to enable us to render the opinions expressed below.
In our examination of the foregoing documents, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such latter documents.
Based upon the foregoing, we are of the opinion that the Company has
duly authorized for issuance the Shares, and the Shares, when issued and paid
for in accordance with the terms of the Plan and at a price per share in excess
of the par value per share for such Shares, will be legally issued, fully-paid
and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the Registration Statement.
Very truly yours,
BOYLAN, BROWN, CODE,
FOWLER, VIGDOR & WILSON, LLP
By: /s/ Martin S. Weingarten
Martin S. Weingarten
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 29, 1999
included in PSC Inc.'s Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this registration statement.
/s/Arthur Andersen LLP
Rochester, New York,
August 5, 1999
