<PAGE> 1
As filed with the Securities and Exchange Commission on October 26, 1995.
Registration No. 33-_______
================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------------------
THE HALLWOOD GROUP INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 51-0261339
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3710 RAWLINS, SUITE 1500
DALLAS, TEXAS 75219
(Address of principal executive offices) (Zip code)
------------------------------
1995 STOCK OPTION PLAN
FOR
THE HALLWOOD GROUP INCORPORATED
(Full title of the plan)
------------------------------
MELVIN J. MELLE
VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND SECRETARY
THE HALLWOOD GROUP INCORPORATED
3710 RAWLINS, SUITE 1500
DALLAS, TEXAS 75219
(Name and address of agent for service)
(214) 528-5588
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Amount Proposed maximum Proposed maximum
Title of securities to be offering price aggregate Amount of
to be registered registered(1) per share(2) offering price(2) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.10 per share 68,000 shares $ 10.25 $ 697,000 $ 241
====================================================================================================================================
</TABLE>
(1) Consists of 68,000 shares of Common Stock reserved for issuance to
directors, employees and consultants of The Hallwood Group
Incorporated and its subsidiaries pursuant to the 1995 Stock Option
Plan for The Hallwood Group Incorporated.
(2) Estimated pursuant to Rule 457(c) and (h) solely for the purposes of
computing the registration fee based upon the average of the high and
low prices for the Common Stock quoted on the New York Stock Exchange,
Inc. on October 23, 1995 under the Securities Act of 1933, as amended.
- --------------------------------------------------------------------------------
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
_________________
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 of the Securities Act of 1933, as amended, and the Note
to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The Hallwood Group Incorporated (the "Corporation") hereby
incorporates by reference in this Registration Statement the following
documents previously filed with the Securities and Exchange Commission (the
"Commission"):
(1) The Corporation's Annual Report on Form 10-K for the year
ended July 31, 1994;
(2) The Corporation's Quarterly Reports on Form 10-Q for the
quarters ended October 31, 1994, January 31, 1995 and April 30, 1995;
(3) The description of common stock of the Corporation, par value
$0.10 per share (the "Common Stock") set forth in the registration statement on
Form 8-B, dated January 28, 1982, including any amendment or report filed for
the purpose of updating such description.
All documents subsequently filed by the Corporation with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
thereof from the date of filing of such documents.
Any statement contained in this Registration Statement, in an
amendment hereto or in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein, in any subsequently filed
amendment to this Registration Statement or in any document that also is
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
None.
II-1
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Corporation has authority under Section 145 of the Delaware
General Corporation Law (the "Delaware Code") to indemnify its directors and
officers. The Corporation's Second Restated Certificate of Incorporation
provides that the Corporation shall indemnify its directors and officers to the
full extent permitted by the Delaware Code or other provisions of the laws of
Delaware. The Corporation's Bylaws provide for indemnification of directors
and officers in connection with third party suits and derivative actions,
provided, however, that directors and officers shall not be entitled to
indemnification with respect to derivative claims where such director or
officer is adjudged to be liable for negligence or misconduct in the
performance of his duties to the Corporation unless a court determines that
despite such an adjudication of liability, such director or officer is entitled
to indemnity for fair and reasonable expenses. The Corporation's Bylaws
further provide that where a director or officer successfully defends a third
party or derivative action such director or officer shall be entitled to
indemnification of expenses actually and reasonably incurred in connection
therewith.
The Corporation's Bylaws permit the Corporation to advance litigation
expenses in the case of shareholder derivative actions or other actions,
provided the Corporation receives an undertaking by the indemnified party to
repay such advances unless it is ultimately determined that the indemnified
party is entitled to indemnification. The Corporation's Bylaws further permit
the Corporation to purchase and maintain liability, indemnification and/or
other similar insurance.
The Second Restated Certificate of Incorporation of the Corporation
provides that no director shall be personally liable to the Corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director
except as such director (a) shall be liable under Section 174 of the Delaware
Code or (b) shall be liable by reason that, in addition to any and all other
requirements for such liability he, (i) shall have breached his duty of loyalty
to the Corporation or the stockholders, (ii) shall not have acted in good faith
or, in failing to act, shall not have acted in good faith, (iii) shall have
acted in a manner involving intentional misconduct or a knowing violation of
the law, or failing to act, shall act in a manner involving intentional
misconduct or a knowing violation of the law, or (iv) shall have derived an
improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following documents are filed as a part of this Registration
Statement.
Exhibit Description
------- -----------
4.1* 1995 Stock Option Plan For The Hallwood Group
Incorporated
4.2* Second Restated Certificate of Incorporation of The
Hallwood Group Incorporated
4.3 Restated Bylaws of The Hallwood Group Incorporated
(incorporated by reference from Exhibit 3.4 to the
Form 10-K of The Hallwood Group Incorporated for the
fiscal year ended July 31, 1992)
5.1* Opinion of Jenkens & Gilchrist, a Professional
Corporation
23.1* Consent of Jenkens & Gilchrist, a Professional
Corporation (included in Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP
24.1* Power of Attorney (see signature page of this
Registration Statement)
_________________
* Filed herewith.
II-2
<PAGE> 4
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 to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to section 13(a) or 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 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-3
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all 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 Dallas, Texas, on October 23, 1995:
THE HALLWOOD GROUP INCORPORATED
By: /s/ MELVIN J. MELLE
-------------------------------
Melvin J. Melle
Vice President, Chief Financial
Officer and Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Melvin J. Melle and Anthony J.
Gumbiner, and each of them, each with full power to act without the other, his
true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, and to file the same with all exhibits thereto and other documents
in connection therewith, with the Commission, granting unto each of said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person hereby ratifying and confirming that each of said attorneys-in-fact and
agents or his substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates included:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
/s/ Anthony J. Gumbiner Chairman of the Board of Directors October 23, 1995
- ----------------------------------- and Chief Executive Officer
Anthony J. Gumbiner
/s/ Melvin J. Melle Vice President, Chief Financial October 23, 1995
- ----------------------------------- Officer and Secretary
Melvin J. Melle
/s/ Robert L. Lynch Vice Chairman and Director October 23, 1995
- -----------------------------------
Robert L. Lynch
/s/ Brian M. Troup President, Chief Operating Officer October 23, 1995
- ----------------------------------- and Director
Brian M. Troup
/s/ Charles A. Crocco, Jr. Director October 23, 1995
- -----------------------------------
Charles A. Crocco, Jr.
/s/ J. Thomas Talbot Director October 23, 1995
- -----------------------------------
J. Thomas Talbot
</TABLE>
II-4
<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Numbering
Exhibit Description Page No.
------- ----------- ----------
<S> <C>
4.1* 1995 Stock Option Plan For The Hallwood Group Incorporated
4.2* Second Restated Certificate of Incorporation of The Hallwood Group
Incorporated
4.3 Restated Bylaws of The Hallwood Group Incorporated (incorporated by
reference from Exhibit 3.4 to the Form 10-K of The Hallwood Group
Incorporated for the fiscal year ended July 31, 1992)
5.1* Opinion of Jenkens & Gilchrist, a Professional Corporation
23.1* Consent of Jenkens & Gilchrist, a Professional Corporation
(included in Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP
24.1* Power of Attorney (see signature page of this Registration
Statement)
</TABLE>
________________
* Filed herewith.
II-5
<PAGE> 1
EXHIBIT 4.1
1995 STOCK OPTION PLAN
FOR
THE HALLWOOD GROUP INCORPORATED
SECTION 1. PURPOSE. The purpose of this 1995 Stock Option Plan
For The Hallwood Group Incorporated is to advance the interests of The Hallwood
Group Incorporated, a Delaware corporation (the "CORPORATION"), by providing an
additional incentive to attract and retain qualified and competent directors,
employees and consultants for the Corporation and its subsidiaries, upon whose
efforts and judgment the success of the Corporation is largely dependent,
through the encouragement of ownership in the Corporation by such persons.
SECTION 2. DEFINITIONS. As used herein, the following terms
shall have the meaning indicated:
(a) "ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(b) "BOARD" shall mean the Board of Directors of the
Corporation.
(c) "BUSINESS DAY" shall mean (i) if the Shares trade on
a national securities exchange, any day that the national securities
exchange on which the Shares trade is open or (ii) if the Shares do
not trade on a national securities exchange, any day that commercial
banks in the City of New York are open.
(d) "COMMITTEE" shall mean the Compensation Committee of
the Board or other committee, if any, appointed by the Board pursuant
to SECTION 13 hereof.
(e) "CONTINUING DIRECTOR" shall mean (i) any member of
the Board on the effective date of this Plan and (ii) any person who
subsequently becomes a member of the Board if such person's nomination
for election or election to the Board is recommended or approved by a
majority of the Continuing Directors.
(f) "CORPORATION" shall mean The Hallwood Group
Incorporated, a Delaware corporation.
(g) "DATE OF GRANT" shall mean the date on which the
Committee takes formal action to grant an Option to an Eligible
Person, provided it is followed, as soon as reasonably possible, by
written notice to the Eligible Person of the grant.
(h) "DIRECTOR" shall mean a member of the Board.
<PAGE> 2
(i) "ELIGIBLE PERSON(S)" shall mean those persons who are
Directors or are employees of, or consultants to, the Corporation or
any Subsidiary.
(j) "EFFECTIVE DATE" shall mean June 27, 1995.
(k) "FAIR MARKET VALUE" of a Share on any date of
reference shall mean the Closing Price on the business day immediately
preceding such date, unless the Committee in its sole discretion shall
determine fair market value otherwise in a fair and uniform manner.
For this purpose, the Closing Price of the Shares on any business day
shall be: (i) if the Shares are listed or admitted for trading on any
United States national securities exchange or included in the National
Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the last reported sale price of
Shares on such exchange or system, as reported in any newspaper of
general circulation; (ii) if Shares are quoted on NASDAQ, or any
similar system of automated dissemination of quotations of securities
prices in common use, the mean between the closing high bid and low
asked quotations for such day of Shares on such system; (iii) if
neither clause (i) nor (ii) is applicable, the mean between the high
bid and low asked quotations for Shares as reported by the National
Quotation Bureau, Incorporated if at least two securities dealers have
inserted both bid and asked quotations for Shares on at least five of
the ten preceding days; or, (iv) in lieu of the above, if actual
transactions in the Shares are reported on a consolidated transaction
reporting system, the last sale price of the Shares for such day and
on such system.
(l) "NONQUALIFIED OPTION" shall mean an option that is
not an incentive stock option as defined in Section 422 of the
Internal Revenue Code.
(m) "OPTION" (when capitalized) shall mean any option
granted under this Plan.
(n) "OPTIONEE" shall mean a person to whom an Option is
granted or any successor to the rights of such Option under this Plan.
(o) "PERSON shall mean any individual, corporation,
limited liability company, partnership, joint venture or other legal
entity.
(p) "PLAN" shall mean this 1995 Stock Option Plan for The
Hallwood Group Incorporated.
(q) "SAR" shall mean a stock appreciation right as
defined in Section 9 hereof.
(r) "SHARE(S)" shall mean shares of the common stock, par
value $.10 per share, of the Corporation (meaning such Shares after
giving effect to the one-for-four reverse stock split approved by the
stockholders of the Corporation as of the Effective Date).
2
<PAGE> 3
(s) "SUBSIDIARY" shall mean (i) any corporation of which
a majority of the outstanding stock having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation, irrespective of whether at the time stock of any other
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency, is at the time,
directly or indirectly, owned or controlled by the Corporation or by
one or more Subsidiaries, or by the Corporation and one or more
Subsidiaries or (ii) any partnership, joint venture or limited
liability company of which at least a majority of the equity
ownership, whether in the form of membership, general, special or
limited partnership interests or otherwise, is directly or indirectly
owned or controlled by the Corporation or by one or more Subsidiaries
or by the Corporation and one or more Subsidiaries.
SECTION 3. SHARES AND OPTIONS. The Corporation may grant to
Eligible Persons from time to time Options to purchase an aggregate of up to
Sixty-Eight Thousand (68,000) Shares, (being equivalent to 272,000 shares of
the Company's common stock existing before the reverse stock split). If any
Option granted under the Plan shall terminate, expire, or be cancelled or
surrendered as to any Shares, new Options may thereafter be granted covering
such Shares. An Option granted hereunder shall be a Nonqualified Option.
SECTION 4. CONDITIONS FOR GRANT OF OPTIONS.
(a) Each Option shall be evidenced by an option agreement that may
contain any term deemed necessary or desirable by the Committee, provided such
terms are not inconsistent with this Plan or any applicable law. Optionees
shall be those persons selected by the Committee from Eligible Persons. Any
Person who files with the Committee, in a form satisfactory to the Committee, a
written waiver of eligibility to receive any Option under this Plan shall not
be eligible to receive any Option under this Plan for the duration of such
waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution the Person has made or may make to the success
of the Corporation or its Subsidiaries and such other factors as the Committee
shall determine. The Committee shall also have the authority to consult with
and receive recommendations from officers and other personnel of the
Corporation and any Subsidiary with regard to these matters. The Committee may
from time to time in granting Options under the Plan prescribe such other terms
and conditions concerning such Options as it deems appropriate, including,
without limitation, relating an Option to achievement of specific goals
established by the Committee or the continued employment of the Optionee for a
specified period of time, provided that such terms and conditions are not more
favorable to an Optionee than those expressly permitted herein.
(c) The Committee in its sole discretion shall determine in each
case whether periods of military or government service shall constitute a
continuation of employment for the purposes of this Plan or any Option.
SECTION 5. EXERCISE PRICE. The exercise price per Share of any
Option shall be any price determined by the Committee.
3
<PAGE> 4
SECTION 6. EXERCISE OF OPTIONS. An Option shall be deemed
exercised when (i) the Corporation has received written notice of such exercise
in accordance with the terms of the Option, (ii) full payment of the aggregate
exercise price of the Shares as to which the Option is exercised has been made,
and (iii) arrangements that are satisfactory to the Committee in its sole
discretion have been made for the Optionee's payment to the Corporation of the
amount, if any, that the Committee determines to be necessary for the employer
of the Optionee to withhold in accordance with applicable federal or state
income tax withholding requirements. Unless further limited by the Committee
in any Option, the option price of any Shares purchased shall be paid in cash,
by certified or cashier's check, by money order, with Shares (provided that at
the time of exercise the Committee in its sole discretion does not prohibit the
exercise of Options through the delivery of already-owned Shares) or by a
combination of the above; provided, however, that the Committee in its sole
discretion may accept a personal check in full or partial payment of any
Shares. If the exercise price is paid in whole or in part with Shares, the
value of the Shares surrendered shall be their Fair Market Value. The
Corporation in its sole discretion, and on such terms as it may determine, may
lend money to an Optionee, guarantee a loan to an Optionee, or otherwise assist
an Optionee to obtain the cash necessary to exercise all or a portion of an
Option granted hereunder or to pay any tax liability of the Optionee
attributable to such exercise.
SECTION 7. EXERCISABILITY OF OPTIONS.
(a) Any Option shall become exercisable in such amounts and at such
intervals as the Committee shall provide in any Option, except as otherwise
provided in this SECTION 7; provided in each case that the Option has not
expired on the date of exercise.
(b) The expiration date of an Option shall be determined by the
Committee at the Date of Grant, but in no event shall an Option be exercisable
after the expiration of ten (10) years from the Date of Grant.
(c) The Committee may in its sole discretion accelerate the date
on which any Option may be exercised.
(d) Unless otherwise provided in any Option, each outstanding
Option shall become fully exercisable immediately upon any of the following
dates unless, in each case, the applicable transaction is approved in advance
by Continuing Directors:
(i) ten (10) days prior to the date of any
transaction (which shall include a series of transactions
occurring within 60 days or occurring pursuant to a plan),
which has the result that stockholders of the Corporation
immediately before such transaction would cease to own at
least 66 2/3% of the voting ownership interests of the
Corporation or of any entity that results from the
participation of the Corporation in a reorganization,
consolidation, merger, liquidation, dissolution or any other
comparable form of transaction;
4
<PAGE> 5
(ii) ten (10) days preceding the record date for
the approval by the stockholders of the Corporation of a plan
of reorganization, consolidation, merger, liquidation,
dissolution or other comparable form of transaction in which
the Corporation does not survive or as a result of which the
stockholders of the Corporation immediately before such
transaction would cease to own at least 66 2/3% of the voting
ownership interests of the Corporation;
(iii) ten (10) days preceding the record date for
the approval by the stockholders of the Corporation of a plan
for the sale, lease, exchange or other disposition of 50% or
more of the property and assets of the Corporation;
(iv) ten (10) days preceding the record date for
the approval by the stockholders of the Corporation of the
removal of or a change in a majority of the members of the
Board; or
(v) the date any tender offer or exchange offer
is made by any person, which, if successfully completed, would
result in such person beneficially owning (within the meaning
of Rule 13d-3 promulgated under the Act) either 33 1/3% or
more of the Corporation's outstanding Shares or interests in
the Corporation having 33 1/3% or more of the combined voting
power of the Corporation's then outstanding voting interests.
(e) Notwithstanding any provisions hereof to the contrary, if any
Option is accelerated under SUBSECTION 7(c) or (d), the portion of such Option
that may be exercised to acquire Shares that the Optionee would not be entitled
to acquire but for such acceleration (the "ACCELERATION SHARES"), is limited to
that number of Acceleration Shares that can be acquired without causing the
Optionee to have an "excess parachute payment" under Section 280G of the
Internal Revenue Code, determined by taking into account all of the Optionee's
"parachute payments" determined under Section 280G of the Code. If as a result
of this SUBSECTION 7(e), the Optionee may not acquire all of the Acceleration
Shares, then the Acceleration Shares that the Optionee may acquire shall be the
last Shares that the Optionee would have been entitled to acquire had this
Option not been accelerated.
SECTION 8. TERMINATION OF OPTION PERIOD.
(a) Unless otherwise provided in any Option, the unexercised portion
of an Option shall automatically and without notice terminate and become null
and void at the time of the earliest to occur of the following:
(i) the date on which the Optionee's employment
by the Corporation or a Subsidiary is terminated for any
reason other than by reason of: (A) retirement (which, for
purposes of this Plan, shall mean any termination of
employment after an Optionee has reached the age of sixty-five
(65)); (B) a mental or physical disability as determined by a
medical doctor satisfactory to the
5
<PAGE> 6
Committee; (C) death; or (D) termination resulting from any
transaction described in SECTION 7(d) hereof;
(ii) three (3) months after the date on which the
Optionee's employment by the Corporation or a Subsidiary is
terminated by reason of retirement;
(iii) twelve (12) months after the date on which
the Optionee's employment by the Corporation or a Subsidiary
is terminated by reason of a mental or physical disability as
determined by a medical doctor satisfactory to the Committee;
(iv) ten (10) years after the date of grant of
such Option;
(v) (A) twelve (12) months after the date of
termination of the Optionee's employment by the Corporation or
a Subsidiary by reason of death of the Optionee; (B) three (3)
months after the date on which the Optionee shall die if such
death shall occur during the three-month period specified in
SECTION 8(a)(ii) hereof or the twelve-month period specified
in SECTION 8(a)(iii) hereof; or (C) three (3) years after the
termination of the employee's employment by the Corporation or
a Subsidiary by reason of a transaction specified in SECTION
7(d) hereof.
(b) If provided in an Option, the Committee in its sole
discretion shall have the power to cancel, effective upon the date
determined by the Committee in its sole discretion, all or any portion
of any Option that is then exercisable (whether or not accelerated by
the Committee) upon payment to the Optionee of cash in an amount that,
in the absolute discretion of the Committee, is determined to be equal
to the excess of (i) the aggregate Fair Market Value of the Shares
subject to such Option on the effective date of the cancellation over
(ii) the aggregate exercise price of such Option.
9. STOCK APPRECIATION RIGHTS AND LIMITED STOCK APPRECIATION
RIGHTS. (a) The Board shall have authority to grant an SAR or a Limited SAR
with respect to all or some of the Shares covered by any Option ("RELATED
OPTION"). An SAR or Limited SAR may be granted on or after the Date of Grant
of such Related Option.
(b) For the purposes of this SECTION 9, the following definitions
shall apply:
(i) The term "OFFER" shall mean any tender offer or
exchange offer for twenty-five percent (25%) or more of the
outstanding Shares of the Corporation, other than one made by the
Corporation; provided that the corporation, person or other entity
making the Offer acquires Shares pursuant to such Offer.
(ii) The term "OFFER PRICE PER SHARE" shall mean the
highest price per Share paid in any Offer that is in effect at any
time during the period beginning on the 60th day
6
<PAGE> 7
prior to the date that a Limited SAR is exercised and ending on the
date that the Limited SAR is exercised. Any securities or properties
that are a part or all of the consideration paid or to be paid for
Shares in the Offer shall be valued in determining the Offer Price Per
Share at the higher of (1) the valuation placed on such securities or
properties by the person making such Offer, or (2) the valuation
placed on such securities or properties by the Board.
(iii) The term "LIMITED SAR" shall mean a right granted
under this Plan that shall entitle the Holder to an amount in cash
equal to the Offer Spread in the event an Offer is made.
(iv) The term "OFFER SPREAD" shall mean, with respect to
each Limited SAR, an amount equal to the product obtained by
multiplying (1) the excess of (A) the Offer Price Per Share
immediately preceding the date of exercise over (B) the Option Price
per Share of the Related Option multiplied by (2) the number of Shares
with respect to which such Limited SAR is being exercised.
(v) The term "SAR" shall mean a right granted under this
Plan that shall entitle the Holder thereof to an amount in cash equal
to the SAR Spread.
(vi) The term "SAR SPREAD" shall mean with respect to each
SAR an amount equal to the product of (1) the excess of (A) the Fair
Market Value per Share on the date of exercise over (B) the Option
Price per Share of the Related Option multiplied by (2) the number of
Shares with respect to which such SAR is being exercised.
(c) To exercise the SAR or Limited SAR, the Holder shall:
(i) Give written notice thereof to the Corporation,
specifying the SAR or Limited SAR being exercised and the number or
Shares with respect to which such SAR or Limited SAR is being
exercised, and
(ii) If requested by the Corporation, deliver within a
reasonable time the agreement evidencing the SAR or Limited SAR being
exercised, and the Related Option agreement to the Secretary of the
Corporation who shall endorse or cause to be endorsed thereon a
notation of such exercise and return all agreements to the Holder.
(d) As soon as practicable after the exercise of an SAR or Limited
SAR, the Corporation shall pay to the Holder (i) cash, (ii) at the request of
the Holder and the approval of the Board, or in accordance with the terms of
the Related Option, Shares, or (iii) a combination of cash and Shares, having a
Fair Market Value equal to either the SAR Spread, or to the Offer Spread, as
the case may be; provided, however, that the Corporation may, in its sole
discretion, withhold from such payment any amount necessary to satisfy the
Corporation's or a Subsidiary's obligation for federal and state withholding
taxes with respect to such exercise.
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<PAGE> 8
(e) An SAR or Limited SAR may be exercised only if and to the
extent that the Related Option is eligible to be exercised; provided, however,
a Limited SAR may be exercised only during the period beginning on the first
day following the date of expiration of the Offer and ending on the 30th day
following such date.
(f) Upon the exercise of an SAR or Limited SAR, the Shares under
the Related Option to that such exercised SAR or Limited SAR relate shall be
released, but such released Shares shall never again be Shares available for
grant.
(g) Upon the exercise or termination of a Related Option, the SAR
or Limited SAR with respect to such Related Option likewise shall terminate.
(h) An SAR or Limited SAR shall be transferable only to the
extent, if any, that the Related Option is transferable, and under the same
conditions.
(i) Each SAR or Limited SAR shall be on such terms and conditions
not inconsistent with this Plan as the Board may determine and shall be
evidenced by a written agreement.
(j) The Holder shall have no rights as a stockholder with respect
to the related Shares as a result of the grant of an SAR or Limited SAR.
SECTION 10. ADJUSTMENT OF SHARES.
(a) If at any time while the Plan is in effect or unexercised Options
are outstanding, there shall be any increase or decrease in the number of
issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split-up, combination or
exchange of Shares, then and in such event.
(i) appropriate adjustment shall be made in the
maximum number of Shares then subject to being optioned under the
Plan, so that the same proportion of the Corporation's issued and
outstanding Shares shall continue to be subject to being so optioned;
and
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject
to outstanding Options, so that the same proportion of the
Corporation's issued and outstanding Shares shall remain subject to
purchase at the same aggregate exercise price.
(b) The Committee may change the terms of Options outstanding
under this Plan, with respect to the exercise price or the number of Shares
subject to the Options, or both, when, in the Committee's sole discretion, such
adjustments become appropriate by reason of any transaction.
(c) Except as otherwise expressly provided herein, the issuance by
the Corporation of any class, or securities convertible into ownership
interests of any class, either in connection
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<PAGE> 9
with direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Corporation
convertible into such ownership interests or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to the
number of Shares reserved for issuance under the Plan or the number of or
exercise price of Shares then subject to outstanding Options granted under the
Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under the Plan shall not affect in any
manner the right or power of the Corporation to make, authorize or consummate
(1) any or all adjustments, recapitalizations, reorganizations or other changes
in the Corporation's capital structure or its business; (2) any merger or
consolidation of the Corporation; (3) any issue by the Corporation of debt
securities, or partnership interests that would rank above the Shares subject
to outstanding Options; (4) the dissolution or liquidation of the Corporation;
(5) any sale, transfer or assignment of all or any part of the assets or
business of the Corporation; or (6) any other partnership act or proceeding,
whether of a similar character or otherwise.
SECTION 11. TRANSFERABILITY OF OPTIONS. Each Option may provide
that such Option may be transferrable by the Optionee in the Optionee's
discretion.
SECTION 12. ISSUANCE OF SHARES. No person shall be, or have any
of the rights or privileges of, a stockholder of the Corporation with respect
to any of the Shares subject to an Option unless and until certificates
representing such Shares shall have been issued and delivered to such person.
As a condition of any transfer of the certificate for Shares, the Committee may
obtain such agreements or undertakings, if any, as it may deem necessary or
advisable to assure compliance with any provision of the Plan, the agreement
evidencing the Option or any law or regulation including, but not limited to,
the following:
(i) A representation, warranty or agreement by
the Optionee to the Corporation at the time any Option is exercised
that he or she is acquiring the Shares to be issued to him or her for
investment and not with a view to, or for sale in connection with, the
distribution of any such Shares; and
(ii) A representation, warranty or agreement to be
bound by any legends that are, in the opinion of the Committee,
necessary or appropriate to comply with the provisions of any
securities laws deemed by the Committee to be applicable to the
issuance of the Shares and that are endorsed upon the Share
certificates.
SECTION 13. ADMINISTRATION OF THE PLAN.
(a) The Plan may be administered by the Compensation Committee of the
Board or other committee thereof as appointed by the Board (herein called the
"COMMITTEE"); or, if the Board so determines, by the Board and in such case
all references to the Committee shall be deemed to be references to the Board.
Except for the powers set forth in SECTION 16, the Committee shall have all of
the powers of the Board with respect to the Plan. Any member of the Committee
may be removed at any time, with or without cause, by resolution of the Board
and
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any vacancy occurring in the membership of the Committee may be filled by
appointment by the Board.
(b) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan. The determinations and
the interpretation and construction of any provision of the Plan by the
Committee shall be final and conclusive.
(c) Any and all decisions or determinations of the Committee shall
be made either (i) by a majority vote of the members of the Committee at a
meeting or (ii) without a meeting by the written approval of a majority of the
members of the Committee.
(d) Subject to the express provisions of this Plan, the Committee
shall have the authority, in its sole and absolute discretion (i) to adopt,
amend, and rescind administrative and interpretive rules and regulations
relating to this Plan or any Option; (ii) to construe the terms of this Plan or
any Option; (iii) as provided in SUBSECTION 10(a), upon certain events to make
appropriate adjustments to the exercise price and number of Shares subject to
this Plan and Option; and (iv) to make all other determinations and perform all
other acts necessary or advisable for administering this Plan, including the
delegation of such ministerial acts and responsibilities as the Committee deems
appropriate. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or any Option in the manner and to the
extent it shall deem expedient to carry it into effect, and it shall be the
sole and final judge of such expediency. The Committee shall have full
discretion to make all determinations on the matters referred to in this
SUBSECTION 13(d), and such determinations shall be final, binding and
conclusive.
SECTION 14. GOVERNMENT REGULATIONS.
This Plan, Options and the obligations of the Corporation to sell and
deliver Shares under any Options, shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
SECTION 15. MISCELLANEOUS.
(a) The grant of an Option shall be in addition to any other
compensation paid to the Optionee or other employee benefit plans of the
Corporation or a Subsidiary or other benefits with respect to Optionee's
position with the Corporation or a Subsidiary. The grant of an Option shall
not confer upon the Optionee the right to continue in the Optionee's employment
position, or interfere in any way with the rights of the Optionee's employer to
terminate his or her status as an employee.
(b) Neither the members of the Board nor any member of the
Committee shall be liable for any act, omission, or determination taken or made
in good faith with respect to this Plan or any Option, and members of the Board
and the Committee shall, in addition to all other rights of indemnification and
reimbursement, be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees,
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the costs of settling any suit, provided such settlement is approved by
independent legal counsel selected by the Corporation, and amounts paid in
satisfaction of a judgment, except a judgment based on a finding of bad faith)
arising from such claim, loss, damage, or expense to the full extent permitted
by law and under any directors' and officers' liability or similar insurance
coverage that may from time to time be in effect.
(c) Any issuance or transfer of Shares to an Optionee, or to his
legal representative, heir, legatee, distributee or assignee, in accordance
with the provisions of this Plan or the applicable Option, shall, to the extent
thereof, be in full satisfaction of all claims of such persons under the Plan.
The Committee may require any Optionee, legal representative, heir, legatee,
distributee or assignee as a condition precedent to such payment or issuance or
transfer of Shares, to execute a release and receipt for such payment or
issuance or transfer of Shares in such form as it shall determine.
(d) Neither the Committee nor the Corporation guarantees Shares
from loss or depreciation.
(e) All expenses incident to the administration, termination, or
protection of this Plan or any Option, including, but not limited to, legal and
accounting fees, shall be paid by the Corporation; provided, however, the
Corporation may recover any and all damages, fees, expenses and costs arising
out of any actions taken by the Corporation to enforce its rights under this
Plan or any Option.
(f) Records of the Corporation shall be conclusive for all
purposes under this Plan or any Option, unless determined by the Committee to
be incorrect.
(g) The Corporation shall, upon request or as may be specifically
required under this Plan or any Option, furnish or cause to be furnished all of
the information or documentation that is necessary or required by the Committee
to perform its duties and functions under this Plan or any Option.
(h) The Corporation assumes no liability to any Optionee or his
legal representatives, heirs, legatees or distributees for any act of, or
failure to act on the part of, the Committee.
(i) If any provision of this Plan or any Option is held to be
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions of this Plan or any Option, but such provision
shall be fully severable, and the Plan or Option, as applicable, shall be
construed and enforced as if the illegal or invalid provision had never been
included in the Plan or Option, as applicable.
(j) Whenever any notice is required or permitted under this Plan,
such notice must be in writing and personally delivered or sent by mail or
delivery by a nationally recognized courier service. Any notice required or
permitted to be delivered under this Plan shall be deemed to be delivered on
the date on which it is personally delivered, or, if mailed, whether actually
received or not, on the third Business Day after it is deposited in the United
States mail,
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certified or registered, postage prepaid, addressed to the person who is to
receive it at the address that such person has previously specified by written
notice delivered in accordance with this SUBSECTION 15(j) or, if by courier,
seventy-two (72) hours after it is sent, addressed as described in this
SUBSECTION 15(j). The Corporation or the Optionee may change, at any time and
from time to time, by written notice to the other, the address that it or he
had previously specified for receiving notices. Until changed in accordance
with this Plan, the address of the Corporation is 3710 Rawlins, Suite 1500,
Dallas, Texas 75219-4236 and the address of the Optionee is the Optionee's
address in the records of the Optionee's employer.
(k) Any person entitled to notice under this Plan may waive such
notice.
(l) Each Option shall be binding upon the Optionee, his legal
representatives, heirs, legatees and distributees and upon the Corporation, its
successors, and assigns, and upon the Board, the Committee and its successors.
(m) The titles and headings of Sections are included for
convenience of reference only and are not to be considered in construction of
this Plan's provisions.
(n) Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Plan dictates, the plural shall be
read as the singular and the singular as the plural.
SECTION 16. AMENDMENT AND DISCONTINUATION OF THE PLAN. The
Committee may from time to time amend the Plan or any Option; provided,
however, that, except to the extent provided in SECTION 8, no amendment or
suspension of the Plan or any Option issued hereunder shall, except as
specifically permitted in any Option, substantially impair any Option
previously granted to any Optionee without the consent of such Optionee.
SECTION 17. EFFECTIVE DATE AND TERMINATION DATE. The Effective
Date of the Plan is June 27, 1995, which is the date the Board adopted this
Plan. The Plan shall terminate on the tenth anniversary of the Effective Date.
Executed to evidence the 1995 Stock Option Plan of The Hallwood Group
Incorporated adopted by the Board on June 27, 1995.
THE HALLWOOD GROUP INCORPORATED
By: /s/ Melvin J. Melle
-------------------------------
Name: Melvin J. Melle
Title: Vice President, Chief Financial
Officer and Secretary
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EXHIBIT 4.2
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
THE HALLWOOD GROUP INCORPORATED
The undersigned does hereby certify that this Second Restated
Certification of Incorporation of The Hallwood Group Incorporated (the
"Restated Certificate") is duly adopted in accordance with Section 245 of the
General Corporation Law of the State of Delaware and only restates and
integrates and does not further amend the provisions the Certificate of
Incorporation of The Hallwood Group Incorporated as theretofore amended or
supplemented, and that there is no discrepancy between those provisions and the
provisions of this Restated Certificate. The Corporation was originally
incorporated on September 30, 1981 under the name Atlantic Metropolitan
Corporation.
FIRST: The name of the corporation is The Hallwood Group Incorporated.
SECOND: The address of the registered office of the corporation in
the State of Delaware is 1209 Orange Street, New Castle County, Wilmington,
Delaware 19801. The name of the registered agent of the corporation at such
address is The Corporation Trust Company.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of capital stock which the
corporation shall have authority to issue is 10,500,000 shares, consisting of
10,000,000 shares of common stock, par value $.10 per share (hereinafter
referred to as "Common Stock"), and 500,000 shares of preferred stock, par
value $.10 per share (hereinafter referred to as "Preferred Stock"). A
statement of the voting powers and of the designations, preferences and
relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, of each class of stock is
as follows:
1. Common Stock
(a) The Common Stock is subject to such powers,
rights, privileges, preferences and priorities of the
Preferred Stock as are stated and expressed herein or in any
resolution or resolutions adopted by the Board of Directors
pursuant to authority expressly granted to and vested in it by
the provisions of Section 2 of this Article Fourth.
(b) Each share of Common Stock shall entitle the
holder or holders thereof to one vote for such share upon all
matters upon which stockholders have the right to vote.
<PAGE> 2
(c) Restrictions on Transfer
(i) Until the earliest of July
31, 2009, such date as the Corporation shall no
longer have any unutilized federal income tax net
operating loss carryovers, capital loss carryovers or
tax credit carryovers, whether or not such carryovers
are currently in existence (the "Carryforwards") or
such date after which Section 382 of the Internal
Revenue Code of 1986, as amended (the "Code"), is
repealed or so substantially modified such that, in
the opinion of counsel to the Corporation, the
restrictions on transfer described herein are no
longer necessary to accomplish their intended
purpose: (A) any attempted sale, transfer, assignment
or other disposition (including the granting of any
option (within the meaning of Section 382 of the Code
and the Income Tax Regulations as now in effect or
hereafter promulgated pursuant thereto (the
"Regulations")) (any such option being referred to
hereinafter as an "Option") or entering into of any
agreement for the sale, transfer or other
disposition), whether voluntary or involuntary,
whether of record or beneficially and whether by
operation of law or otherwise (a "Transfer'), of any
share or shares of the Common Stock of the
Corporation or of any Option to acquire such stock,
to any person or entity or group of persons or
entities acting in concert (a "Transferee") who or
that owns or owned, directly, indirectly or by
application of the constructive ownership rules set
forth in Sections 382 and 318 of the Code and the
Regulations, or in any other manner representing
"ownership" under any circumstances for purposes of
Section 382 of the Code and the Regulations
(collectively, "Owns" or "Owned"), at any time during
the four-year period ending on the day of the
Transfer, an aggregate number of shares of the
Corporation's stock (taking into account for this
purpose all interests in the Corporation that are
treated as stock for purposes of Section 382(g)(1) of
the Code and no other interests in the Corporation
(any interest that is so treated being referred to
hereinafter as "Stock")) having a fair market value
equal to or greater than 4.75% of the fair market
value of the Corporation's then outstanding Stock
shall be void ab initio insofar as it purports to
transfer ownership to such Transferee of any shares
of Common Stock or any Option to acquire Common Stock
and (B) any attempted Transfer of any share or shares
of the Common Stock of the Corporation or of any
Option to acquire Common Stock to any Transferee not
described in clause (A) hereof who or that would Own,
as a result of the Transfer of any share or shares of
the Corporation's Stock or of any Option to acquire
the Corporation's Stock, an aggregate number of
shares of the Corporation's Stock having a fair
market value equal to or greater than 4.75% of the
aggregate fair market value of all of the
Corporation's Stock then outstanding, shall, as to
the number of shares representing such excess over
4.75%, be void ab initio insofar as it purports to
transfer
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ownership to such Transferee of any shares of Common
Stock or any Option to acquire Common Stock.
(ii) The restrictions contained
in subparagraph (i) of this Paragraph 1(c) of this
Article Fourth have been included herein for the
purpose of reducing the risk of occurrence of an
"ownership change" within the meaning of Section
382(g) of the Code and the Regulations that would
result in the disallowance or limitation of the
Corporation's utilization of the Carryforwards and to
maintain the tax advantage of the Corporation
associated with the Carryforwards.
(iii) Neither clause (A) nor
clause (B) of subparagraph (i) of this Paragraph 1(c)
of this Article Fourth shall restrict any Transfer of
Common Stock of the Corporation if (A) the prior
written approval of the Board of Directors of the
Corporation (based on a majority vote of the Board of
Directors) shall have been obtained with respect to
such Transfer and (B) if so requested by the Board of
Directors, counsel to the Corporation shall have
delivered its opinion that such Transfer would not
result in an "ownership change" within the meaning of
Section 382(g) of the Code and the Regulations that
would result in the elimination or limitation of the
Corporation's utilization of the Carryforwards. The
Board of Directors shall have the authority, in its
sole discretion, to adopt procedures for the orderly
and effective administration and implementation of
this Paragraph (c) and, in deciding whether to
approve any proposed Transfer of Common Stock of the
Corporation, the Corporation acting through any
officer may request all relevant information, as well
as an opinion of counsel in form and substance
reasonably satisfactory to the Board of Directors.
No employee or agent of the Corporation shall be
permitted to record any attempted or purported
Transfer of Common Stock of the Corporation made in
violation of this Article Fourth and no Transferee of
Common Stock of the Corporation attempted to be
Transferred in violation of this Article Fourth shall
be deemed to have acquired ownership of Common Stock
for any purpose. Such intended Transferee shall not
be entitled to any rights as a shareholder of the
Corporation with respect to such Common Stock
including, but not limited to, the right to vote such
Common Stock or to receive any distributions in
respect thereof, whether as dividends or in
liquidation.
(iv) If the procedures adopted by
the Board of Directors so require, the Corporation's
transfer agent shall not issue any certificates
effecting the Transfer, assignment or disposition or
purported Transfer, assignment or other disposition
of legal ownership of any shares of Common Stock
unless the transfer agent receives from the proposed
Transferee, in addition to any other information
requested by it, a certificate signed under penalty
of perjury attesting to the fact that the
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<PAGE> 4
Transferee does not, and will not as a result of the
proposed Transfer, assignment or other disposition,
own an aggregate number of shares of the
Corporation's outstanding Stock having a fair market
value equal to or greater than 4.75% of the aggregate
fair market value of all of the Corporation's
outstanding Stock. If at any time the Corporation's
transfer agent receives a request to make a change in
record ownership of shares of Common Stock of the
Corporation that, if effected, would appear to the
transfer agent on the basis of information in its
possession to constitute a violation of this Article
Fourth, then, prior to registering such change in
ownership on the books of the Corporation, the
transfer agent shall notify the Corporation. If the
Board of Directors or an officer of the Corporation
designated by the Board of Directors determines that
the proposed change in ownership would violate this
Article Fourth, then the Corporation shall so advise
the transfer agent and the transfer agent shall not
make such change in ownership on the books of the
Corporation and shall return the stock certificates
representing such shares to an agent designated by
the Corporation (the "Agent").
(v) Unless approval of the Board
of Directors is obtained as provided in subparagraph
(iii) above, any attempted Transfer of shares of
Common Stock of the Corporation or any Option to
acquire shares of Common Stock of the Corporation in
excess of the shares that could be Transferred to the
Transferee without restriction under subparagraph (i)
above shall not be effective to Transfer ownership of
such excess shares or Options (the "Prohibited
Shares") to the purported acquiror thereof (the
"Purported Acquiror"), who shall not be entitled to
any rights as a shareholder of the Corporation with
respect to the Prohibited Shares (including, without
limitation, the right to vote or to receive dividends
with respect thereto). All rights with respect to
the Prohibited Shares shall be the property of the
Agent until such time as the Prohibited Shares are
resold as set forth in subparagraph (A) or
subparagraph (B) below. The Purported Acquiror, by
acquiring ownership of shares of Common Stock of the
Corporation that are not Prohibited Shares, shall be
deemed to have consented to all of the provisions of
this Paragraph (1)(c) and to have agreed to act as
provided in the following subparagraph (A).
(A) Upon demand by the Corporation,
the Purported Acquiror shall transfer any
certificate, or other evidence of purported ownership
of the Prohibited Shares within the Purported
Acquiror's possession or control, along with any
dividends or other distributions paid by the
Corporation with respect to the Prohibited Shares
that were received by the Purported Acquiror (the
"Prohibited Distributions"), to the Agent designated
by the Corporation. If the Purported Acquiror has
sold the Prohibited Shares to an unrelated party in
any arm's-length transaction
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after purportedly acquiring them, the Purported
Acquiror shall be deemed to have sold the Prohibited
Shares as agent for the Agent, and in lieu of
transferring the Prohibited Shares and Prohibited
Distributions to the Agent shall transfer to the
Agent the Prohibited Distributions and the proceeds
of such sale (the "Resale Proceeds") except to the
extent that the Agent grants written permission to
the Purported Acquiror to retain a portion of the
Resale Proceeds not exceeding the amount that would
have been payable by the Agent to the Purported
Acquiror pursuant to the following subparagraph (B)
if the Prohibited Shares had been sold by the Agent
rather than by the Purported Acquiror. Any purported
transfer of the Prohibited Shares by the Purported
Acquiror other than a transfer described in one of
the two preceding sentences shall not be effective to
transfer any ownership of the Prohibited Shares.
(B) The Agent shall sell in an
arm's-length transaction (through a stock exchange,
if any, on which the Common Stock is traded, if
possible) any Prohibited Shares transferred to the
Agent by the Purported Acquiror, and the proceeds of
such sale (the "Sales Proceeds"), or the Resale
Proceeds, if applicable, shall be allocated to the
Purported Acquiror up to the following amount: (i)
where applicable, the purported purchase price paid
or value of consideration surrendered by the
Purported Acquiror for the Prohibited Shares, and
(ii) where the purported Transfer of the Prohibited
Shares to the Purported Acquiror was by gift,
inheritance, or any similar purported transfer, the
fair market value of the Prohibited Shares at the
time of such purported Transfer. Subject to the
succeeding provisions of this subparagraph, any
Resale Proceeds or Sales Proceeds in excess of the
amount allocable to the Purported Acquiror pursuant
to the preceding sentence, together with any
Prohibited Distributions, shall be paid over to a
court or governmental agency, if applicable law
permits, or otherwise shall be transferred to any
entity designated by the Corporation that is
described in Section 501(c)(3) of the Code. In no
event shall any such amount inure to the benefit of
the Corporation or the Agent, but said amounts may be
used to cover expenses incurred by the Agent.
(C) Within thirty (30) business
days of learning of a purported Transfer of
Prohibited Shares to a Purported Acquiror, the
Corporation through its Secretary shall demand that
the Purported Acquiror surrender to the Agent the
certificates representing the Prohibited Shares, or
any Resale Proceeds, and any Prohibited
Distributions, and if such surrender is not made by
the Purported Acquiror within thirty (30) business
days from the date of such demand, the Corporation
shall institute legal proceedings to compel such
transfer; provided, however, that nothing in this
subparagraph shall preclude the Corporation in its
discretion from immediately bringing legal
proceedings
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<PAGE> 6
without a prior demand, and also provided that
failure of the Corporation to act within the time
periods set out in this subparagraph shall not
constitute a waiver of any right of the Corporation
to compel any transfer required by this Paragraph
(1)(c).
(D) For a period of ninety (90)
days after learning of an attempted or purported
Transfer or unpermitted registration of shares in
violation of this Paragraph 1(c), the Corporation may
elect to acquire such shares at the same purchase
price agreed to be paid by the intended Transferee,
in which case the Corporation shall be obligated to
pay to the intended Transferee of such shares the
amount of any payments made by such intended
Transferee to the transferor for such shares; such
amounts shall be payable to the intended Transferee
in three equal installments, without interest. The
first such installment shall be payable within ten
days after the Corporation exercises such right and
the remaining installments shall be payable on the
first and second anniversaries, respectively, of such
exercise. The Corporation may exercise such election
by giving written notice thereof to the intended
Transferee.
(E) Upon a determination by the
Board of Directors that there has been or is
threatened a purported Transfer of Prohibited Shares
to a Purported Acquiror, the Board of Directors may
take such action in addition to any action required
by the preceding subparagraph as it deems advisable
to give effect to the provisions of this Paragraph
(1)(c) including, without limitation, refusing to
give effect on the books of the Corporation to such
purported Transfer or instituting proceedings to
enjoin such purported Transfer.
(vi) Until the earliest of July
31, 2009, such date as the Corporation shall no
longer have any unutilized Carryforwards or such date
after which Section 382 of the Code is repealed or so
substantially modified such that, in the opinion of
counsel to the Corporation, the restrictions on
transfer described in this Paragraph (1)(c) of this
Article Fourth are no longer necessary to accomplish
their intended purpose, all certificates representing
shares of Common Stock shall conspicuously bear the
following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET
FORTH IN ARTICLE FOURTH OF THE CORPORATION'S
CERTIFICATE OF INCORPORATION, THE TEXT OF WHICH IS
SUMMARIZED ON THE REVERSE SIDE OF THIS CERTIFICATE.
ANY ATTEMPT TO ACQUIRE COMMON STOCK OF THE
CORPORATION IN VIOLATION OF SUCH RESTRICTIONS SHALL
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<PAGE> 7
BE NULL AND VOID AND MAY RESULT IN FINANCIAL LOSS TO
THE PERSON OR ENTITY ATTEMPTING SUCH ACQUISITION."
(vii) Nothing in this Article
Fourth shall preclude the settlement of any
transaction entered into through the facilities of
the New York Stock Exchange, Inc.
2. Preferred Stock
(a) The Board of Directors is expressly vested
with authority to issue the Preferred Stock from time to time
in one or more series of such distinctive serial designations
as may be stated or expressed in the resolution or resolutions
providing for the issue of such stock, and in such resolution
or resolutions providing for the issue of shares of each
particular series the Board of Directors is also expressly
vested with authority to fix:
(i) the number of shares to
constitute such series, provided that, unless
otherwise stated in any such resolution or
resolutions, such number of shares which are not
outstanding may be increased or decreased by the
Board of Directors;
(ii) the rate and times at which,
and the conditions under which, dividends shall be
payable on shares' of such series, and the status of
such dividends as cumulative or noncumulative and as
participating or nonparticipating and whether such
dividends shall be payable in preference to, or the
terms under which such dividends shall be payable in
relation to, the dividends payable on any other class
or classes of any other series of stock;
(iii) with respect to any series
of Preferred Stock which is to be redeemable, whether
shares of such series shall be redeemable at the
option of the holder thereof or the corporation or
upon the happening of a specified event, and the
cash, property or rights, including securities of any
other corporation, for which, the price or prices or
rate or rates, including any adjustments, at which,
and the time or times and/or terms or conditions, if
any, at or upon which, shares of such series shall be
redeemable;
(iv) with respect to any series
of Preferred Stock which is to be convertible or
exchangeable, whether shares of such series shall be
convertible or exchangeable at the option of the
holder thereof or the corporation or upon the
happening of a specified event, the other class or
classes of stock or other series of Preferred Stock
for which, the price or prices or rate or rates of
exchange, including any adjustments, at which,
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<PAGE> 8
and the time or times and/or conditions, if any, at
or upon which, shares of such series shall be
convertible or exchangeable;
(v) the terms of the sinking
funds or redemption or purchase account, if any, to
be provided for shares of such series, including the
extent to and manner in which such sinking fund or
redemption or purchase account shall be applied to
the purchase or redemption of the shares of such
series for retirement or for other corporate
purposes;
(vi) the rights of the holders of
shares of such series upon liquidation, dissolution
or winding up of the affairs of, or upon any
distribution of the assets of, the corporation;
(vii) limitations, if any,
applicable while such series is outstanding, on the
payment of dividends or making of distributions on,
or the acquisition of, or the use of monies for the
purchase or redemption of, the Common Stock or any
class of stock ranking, as to dividends or upon
liquidation, on a parity with or junior to the shares
of such series;
(viii) the full or limited voting
rights, if any, to be provided for shares of such
series; and
(ix) any other preferences and
relative, participating, optional or other such
special rights, and the qualifications, limitations
or restrictions thereof, of shares of such series;
so far as not inconsistent with the provisions of the
Certificate of Incorporation, as amended to the date of such
resolution or resolutions, and to the full extent now or
hereafter permitted by the laws of the State of Delaware. All
shares of Preferred Stock shall be identical and of equal rank
except in respect to the particulars that may be fixed by the
Board of Directors as provided above; provided, however, that
all shares of each series shall be identical and of equal rank
except as to the time from which cumulative dividends, if any,
thereon shall cumulate.
(b) The Board of Directors is also expressly
vested with authority to amend any of the provisions of any
resolution or resolutions providing for the issue of any
series of Preferred Stock, subject to any class voting rights
of the holders of any series of Preferred Stock contained in
the resolution or resolutions providing for the issue of such
series and subject to the requirements of the laws of the
State of Delaware.
(c) Shares of Preferred Stock which have been
issued and reacquired in any manner by the corporation
(excluding, until the corporation elects to retire
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<PAGE> 9
them, shares which are held as treasury shares but including
shares redeemed, shares purchased and retired, whether through
the operation of a retirement or sinking fund or otherwise,
and shares which, if convertible or exchangeable, have been
converted into or exchanged for shares of stock of any other
class or classes or series) shall, upon compliance with any
applicable provisions of the laws of the State of Delaware,
have the status of authorized and unissued shares of Preferred
Stock and may be reissued as a part of the series of which
they were originally a part (if the terms of such series do
not prohibit such reissue) or as part of a new series of
Preferred Stock to be created by resolution or resolutions of
the Board of Directors or as part of any other series of
Preferred Stock the terms of which do not prohibit such
reissue.
(d) Pursuant to this Article Fourth, the Board of
Directors fixes the designation and preferences and relative,
participating, optional and other special rights, and
qualifications, limitations and restrictions of a series of
Preferred Stock consisting of 250,000 shares designated as the
Series B Preferred Stock (referred to herein as the "Series B
Preferred Stock") which shall rank equally in all respects and
shall be subject to the following provisions:
(i) Rank. The Series B
Preferred Stock shall, with respect to dividend rights and
rights upon liquidation, winding up and dissolution, rank
prior to all classes of the Corporation's Common Stock.
(ii) Dividends.
(A) The holders of the Series B
Preferred Stock shall be entitled to receive out of
any funds legally available therefor, when and as
declared by the Board of Directors, dividends in cash
at a rate of $.20 per share per annum, provided,
however, that the Board of Directors shall declare a
dividend on the Series B Preferred Stock annually in
each of the first five years from and after July 20,
1995, the effective date of this Certificate of
Designations. Such dividends (a) shall accrue and be
cumulative from July 20, 1995 through the conclusion
of the fifth anniversary of such date, whether or not
earned or declared and whether or not funds are
legally available therefor, and (b) after the
conclusion of such fifth anniversary, shall not
accrue, accumulate or be payable, unless and until
declared by the Board of Directors.
(B) Dividends declared pursuant to
Section (ii)(A) above shall be payable annually, in
arrears, on March 1 of each year, to the holder of
record on such respective dates as may be fixed by
the Board of Directors in advance of payment of each
such dividend. Dividends payable on the Series B
Preferred Stock for any period less than a full year
shall be computed based on a 365-day year or 366-day
year, as the case may be, and the actual number of
days elapsed in the period for
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<PAGE> 10
which payable. Any accumulation of such dividends on
the Series B Preferred Stock not paid in full on the
date fixed by the Board of Directors for payment of
such dividends (the "Dividend Payment Date") shall
bear simple interest at a rate of 9.0% per annum from
the Dividend Payment Date until paid. All dividends
paid with respect to shares of Series B Preferred
Stock pursuant to Section (ii)(A) shall be paid pro
rata to the holders of the Series B Preferred Stock.
In the event that the funds of the Corporation
legally available for the payment of dividends shall
be insufficient for the payment of the entire amount
of dividends payable in any dividend period with
respect to the Series B Preferred Stock, the amount
of such legally available funds shall be allocated
for the payment of dividends with respect to the
Series B Preferred Stock pro rata based upon the
Liquidation Preference thereof (as defined in Section
(iv)(A) below). At any time and from time to time
thereafter when additional funds of the Corporation
become legally available for the payment of
dividends, such funds shall be used to pay the
balance of any accrued but unpaid dividends and any
interest thereon.
(C) So long as any shares of the
Series B Preferred Stock shall remain outstanding,
the Corporation will not declare or pay any cash
dividend, make a cash distribution, or purchase,
acquire, redeem, pay monies to the holders of, or set
aside or make monies available for a sinking fund for
the purchase or redemption of, any shares of Common
Stock unless all accrued and unpaid dividends and
interest in respect of the Series B Preferred Stock
have been paid or declared and duly provided for.
(iii) Redemption.
(A) Mandatory Redemption. On July
20, 2010, to the extent the Corporation shall have
legally available funds therefor, the Corporation
shall redeem the remaining outstanding shares of
Series B Preferred Stock, at a redemption price
(hereinafter the "Redemption Price") of 100% of the
Liquidation Preference per share, together with an
amount equal to the sum of all accrued and unpaid
dividends and interest thereon to such redemption
date, in cash, and in the manner provided in
subparagraphs (iii)(C)(1) through (iii)(C)(4)
below;provided, however, that if there are
insufficient legally available funds for redemption
under this Section (iii)(A) at the redemption date,
the Corporation shall redeem all or part of the
remainder of the shares of Series B Preferred Stock
subject to redemption from time to time or as soon as
the Corporation has sufficient funds which are
legally available therefor until all such shares of
Series B Preferred Stock have been redeemed.
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<PAGE> 11
(B) Optional Redemption. The
Corporation may redeem at any time, or from time to
time, from any source of funds legally available
therefor, in whole or in part, in the manner provided
in subparagraphs (iii)(C)(1) through (iii)(C)(4)
below, any and all shares of Series B Preferred Stock
at a redemption price of 100% of the Liquidation
Preference per share, together with an amount equal
to the sum of all accrued and unpaid dividends and
interest thereon to the date fixed for redemption.
(C) Procedure for Redemption.
(1) With respect to any
redemption of fewer than all the outstanding shares
of Series B Preferred Stock, the number of shares to
be redeemed shall be determined by the Board of
Directors and the shares to be redeemed shall be
selected by lot or pro rata as may be determined by
the Board of Directors.
(2) Not less than thirty
(30) nor more than ninety (90) days prior to the
redemption date, written notice of the time and place
of redemption (hereinafter, the "Redemption Notice")
shall be given to each holder of record of the Series
B Preferred Stock so to be redeemed, addressed to
such holder at his or its post office address as the
same shall appear upon the books of the Corporation.
The Redemption Notice shall state: (a) the
redemption date; (b) the number of shares to be
redeemed from such holder and the total number of
shares of Series B Preferred Stock to be redeemed;
(c) the Redemption Price; and (d) the place where
certificates for such shares are to be surrendered
for payment of the Redemption Price.
(3) On or before the
redemption date, each holder of shares of Series B
Preferred Stock to be redeemed shall present and
surrender his or its certificate or certificates
(endorsed in such manner as may be required by the
Corporation, or not endorsed if not required by the
Corporation) to the Corporation in the manner and at
the place designated in the Redemption Notice, and
thereupon the Redemption Price for such shares shall
be paid to or on the order of such holder.
(4) In the event less than
all the shares of Series B Preferred Stock
represented by any such surrendered certificate are
redeemed, a new certificate shall be issued by the
Corporation to the registered holder of such
surrendered certificate representing the unredeemed
shares.
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<PAGE> 12
(D) Effect of Redemption.
(1) The shares of Series
B Preferred Stock which have been redeemed shall not
be reissued and each surrendered certificate shall be
canceled. The Corporation shall from time to time
cause all such shares redeemed to be retired in the
manner provided by law. Such retired shares of
Series B Preferred Stock shall resume the status of
authorized but unissued and non-designated shares of
Preferred Stock of the Corporation.
(2) From and after the
date fixed for redemption, (a) the shares of Series B
Preferred Stock so designated for redemption shall no
longer be transferable on the books of the
Corporation (except with the consent of the
Corporation); (b) such shares shall not be deemed to
be outstanding for any purpose whatsoever (unless
default shall be made by the Corporation in payment
of the Redemption Price); (c) the holders thereof
shall cease to be stockholders with respect to such
shares and shall be entitled only to receive the
Redemption Price thereof and (d) dividends on the
shares of Series B Preferred Stock so called for
redemption shall cease to accrue. If the Corporation
shall default in making payment of the Redemption
Price, then such shares so called for redemption and
then unpaid shall continue to be outstanding as if no
such call for redemption had been made.
(iv) Rights on Liquidation,
Dissolution, etc..
(A) Upon any voluntary or
involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the holders of the
shares of Series B Preferred Stock then outstanding
shall be entitled to receive out of the assets of the
Corporation available for distribution to its
stockholders an amount in cash equal to $4.00 for
each share outstanding (the "Liquidation
Preference"), plus an amount in cash equal to any and
all accrued but unpaid dividends and interest thereon
to the date fixed for liquidation, before any payment
shall be made or any assets distributed to the
holders of any of the stock of the Corporation
ranking as to liquidation, dissolution or winding up
junior to the Series B Preferred Stock. If the
assets of the Corporation are not sufficient to pay
in full the liquidation payments payable to the
holders of outstanding shares of the Series B
Preferred Stock and outstanding shares of securities
("Parity Securities") of the Corporation ranking on a
parity with the Series B Preferred Stock as to
liquidation, then the holders of all such shares
shall share ratably in such distribution of assets in
accordance with the amount which would be payable on
such distribution if the amounts to which the holders
of outstanding shares of Series B Preferred Stock are
entitled were paid in full.
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<PAGE> 13
(B) The sale, conveyance, exchange
or transfer of all or substantially all of the
property and assets of the Corporation or the merger
or consolidation of the Corporation into or with any
other corporation, or the merger of any other
corporation into it, shall not be deemed a
dissolution, liquidation or winding up of the affairs
of the Corporation for purposes of this Section (iv).
(v) Voting; Consent.
(A) The holders of the shares of
Series B Preferred Stock shall not be entitled to
vote on matters which may be the subject of proper
action by stockholders of the Corporation except as
otherwise provided by law.
(B) In any vote by the holders of
Series B Preferred Stock as may be required by law,
each holder of Series B Preferred Stock shall be
entitled to one (1) vote for each share of Series B
Preferred Stock.
(C) No consent of holders of the
Series B Preferred Stock shall be required for (i)
the creation of any indebtedness of any kind of the
Corporation, (ii) the creation of any class of stock
of the Corporation subordinate, pari passu or senior
to the Series B Preferred Stock as to the payment of
dividends and upon liquidation of the Corporation, or
(iii) any increase or decrease in the amount of
authorized Common Stock or any increase, decrease or
change in the par value thereof.
(D) Except as expressly set forth
herein, the holders of the Series B Preferred Stock
shall have no other rights other than those provided
by applicable Delaware law.
3. General
(a) No dividend shall be declared or paid on any
capital stock of the corporation which shall impair the
capital of the corporation nor shall any distribution of
assets be made to any stockholder unless the value of the
assets of the corporation remaining after such payment or
distribution is at least equal to the aggregate of its debts,
liabilities and capital. A director shall be fully protected
in relying in good faith upon the books of account of the
corporation or statements prepared by any of its officers or
by independent public accountants as to the value and amount
of the assets, liabilities, net profits, capital stock and
surplus of the corporation, or any other facts pertinent to
the existence and amount of surplus or other funds from which
dividends might properly be declared and paid.
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<PAGE> 14
(b) No holder of any shares of capital stock of
the corporation of any class now or hereafter authorized shall
be entitled as a matter of right to purchase, subscribe for or
otherwise acquire any shares of capital stock of the
corporation of any class now or hereafter authorized or any
securities convertible into or exchangeable for any such
shares, or any warrants or other instruments (or securities
carrying such warrants or other instruments) evidencing rights
or options to subscribe for, purchase or otherwise acquire any
such shares, whether such shares, securities, warrants or
other instruments be unissued or issued and thereafter
acquired by the corporation; provided, however, that nothing
herein shall preclude or limit the Board of Directors from
granting any such rights in connection with the issuance of
shares of any class or series of capital stock of the
corporation.
(c) For the purposes of this Article Fourth, a
dividend shall be deemed to have been paid or a distribution
to have been made at such time as the corporation shall have
irrevocably deposited with any disbursing agent therefor or
otherwise irrevocably set aside for the payment or
distribution thereof cash or other property of the corporation
in an amount equal to such dividend or distribution.
FIFTH: The business and property of the corporation shall be managed
by a Board of Directors. The number of directors constituting the board shall
be such number not less than five nor more than fourteen as shall be determined
from time to time by resolution adopted by the affirmative vote of a majority
of the Board of Directors.
SIXTH: The Directors on the Board of Directors shall be classified
with respect to the time for which they shall severally hold office by dividing
them into three classes. If the total number of directors is evenly divisible
by three, then each class shall have one-third of the total number of
directors. If the total number of directors is not evenly divisible by three,
the Board of Directors shall by resolution determine the number of directors in
each class, which shall be, as nearly as possible, the same for each class.
All directors of the corporation shall hold office until their resignation or
removal or until their successors are duly elected and qualified. The
directors of the first class shall hold office until the first annual meeting
of the stockholders to be held after the Effective Date and until their
successors are duly elected and qualified; the directors of the second class
shall hold office until the second annual meeting of the stockholders to be
held after such date and until their successors are duly elected and qualified;
and the directors of the third class shall hold office until the third annual
meeting of the stockholders to be held after such date and until their
successors are duly elected and qualified. At each annual meeting of the
stockholders, the successors to the class of directors whose terms shall expire
in that year shall be elected, and said successors shall hold office until the
third following annual meeting of stockholders and until the election and
qualification of their respective successors. If successors to the class of
directors whose term shall expire at an annual meeting of stockholders are not
elected at such meeting or if such meeting is not held, directors may be
elected at a special meeting of stockholders as successors to that class of
directors.
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SEVENTH: Subject to the provisions of Article Fourth, this
Certificate of Incorporation may be amended by the vote of the holders of stock
having a majority of the voting power of the stock of the corporation entitled
to vote at any annual or special stockholders' meeting.
EIGHTH: The Bylaws of the corporation may be amended or repealed and
new Bylaws may be adopted by the vote of the holders of stock having a majority
of the voting power of the stock of the corporation entitled to vote at any
annual or special stockholders' meeting or by the vote of a majority of the
directors present at a duly called and held meeting of the Board of Directors
at which a quorum is present or by unanimous written consent of the directors
but such right of the directors cannot divest or limit such right of the
stockholders to adopt, amend or repeal by Bylaws.
NINTH: The corporation shall indemnify to the full extent permitted
by the laws of Delaware as from time to time in effect, the persons described
in Section 145 of the General Corporation Law of Delaware, or other provisions
of the laws of Delaware relating to the indemnification of officers, directors,
employees and agents, as from time to time in effect. The foregoing shall not
be construed to limit the powers of the Board of Directors to provide any other
rights of indemnity which it may deem appropriate.
TENTH: No director shall be personally liable to the corporation or
any stockholder for monetary damages for breach of fiduciary duty as a
director, except for any matter in respect of which such director shall be
liable under Section 174 of Title 8 of the Delaware Code (relating to the
Delaware General Corporation Law) or any amendment thereto or successor
provision thereto or shall be liable by reason that, in addition to any and all
other requirements for such liability, he (i) shall have breached his duty of
loyalty to the corporation or its stockholders, (ii) shall not have acted in
good faith or, in failing to act, shall not have acted in good faith, (iii)
shall have acted in a manner involving intentional misconduct or a knowing
violation of law or, in failing to act, shall have acted in a manner involving
intentional misconduct or a knowing violation of law, or (iv) shall have
derived an improper personal benefit. Neither the amendment nor repeal of this
Article Tenth nor the adoption of any provision of the certificate of
incorporation inconsistent with this Article Tenth, shall eliminate or reduce
the effect of this Article Tenth in respect of any matter occurring, or any
cause of action, suit or claim that, but for this Article Tenth would accrue or
arise, prior to such amendment, repeal or adoption of an inconsistent
provision.
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IN WITNESS WHEREOF, The Hallwood Group Incorporated has caused this
Restated Certificate to be signed by Melvin J. Melle, its Vice President, Chief
Financial Officer and Secretary, this 1st day of September, 1995.
THE HALLWOOD GROUP INCORPORATED
By: /s/ Melvin J. Melle
-----------------------------------
Melvin J. Melle
Vice President, Chief Financial
Officer and Secretary
16
<PAGE> 1
EXHIBIT 5.1
[JENKENS & GILCHRIST LETTERHEAD]
October 20, 1995
The Hallwood Group Incorporated
3710 Rawlins
Suite 1500
Dallas, Texas 75219
RE: THE HALLWOOD GROUP INCORPORATED
REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
This firm has acted as special counsel to The Hallwood Group
Incorporated, a Delaware corporation (the "Company"), in connection with the
preparation of the Company's Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended (the "Securities
Act"), relating to 68,000 shares (the "Shares") of common stock, $0.10 par
value per share (the "Common Stock") of the Company that may be issued by the
Company pursuant to the exercise of nonqualified stock options ("Options")
granted or that may be granted under the 1995 Stock Option Plan for the
Hallwood Group Incorporated included in the Registration Statement (the
"Plan").
You have requested the opinion of this firm with respect to certain
legal aspects of the proposed offering. In connection therewith, this firm has
examined and relied upon the original, or copies identified to its
satisfaction, of (1) the Certificate of Incorporation and the bylaws of the
Company, as amended; (2) minutes and records of the corporate proceedings of
the Company with respect to the establishment of the Plan and related matters;
(3) the Registration Statement and exhibits thereto, including the Plan; and
(4) such other documents and instruments as this firm has deemed necessary for
the expression of the opinions contained herein.
In making the foregoing examinations, this firm has assumed the
genuineness of all signatures and the authenticity of all documents submitted
to this firm as originals, and the conformity to original documents of all
documents submitted to this firm as certified or photostatic copies. As to
various questions of fact material to this opinion, and as to the content and
form of the Certificate of Incorporation, the bylaws, minutes, records,
resolutions and other documents or writings of the Company, this firm has
relied, to the extent it deems reasonably
<PAGE> 2
The Hallwood Group Incorporated
October 20, 1995
Page 2
appropriate, upon representations of officers or directors of the Company and
upon documents, records and instruments furnished to the firm by the Company,
without independent check or verification of their accuracy.
Based upon this firm's examination, consideration of, and reliance on
the documents and other matters described above, and subject to the assumptions
noted below, this firm is of the opinion that the Company presently has
available at least 68,000 shares of authorized but unissued and/or treasury
shares of Common Stock from which may be issued the 68,000 shares of Common
Stock proposed to be sold pursuant to the exercise of Options. Assuming that
(1) the outstanding Options are duly granted, and the
Options to be granted in the future will be duly granted in accordance
with the terms of the respective Plan;
(2) the Company maintains an adequate number of
authorized but unissued shares and/or treasury shares of Common Stock
available for issuance to those persons who exercise Options; and
(3) the consideration for shares of Common Stock issued
pursuant to the exercise of each Option is actually received by the
Company as provided in the respective Plan and exceeds the par value
of such shares;
then the 68,000 shares of Common Stock that may be issued in accordance with
the terms of the Plan pursuant to the exercise of Options will be, when and if
issued, duly and validly issued, fully paid and nonassessable.
This firm hereby consents to the filing of this opinion as an exhibit
to the Registration Statement and to references to this firm included in or
made a part of the Registration Statement.
<PAGE> 3
The Hallwood Group Incorporated
October 20, 1995
Page 3
In giving this consent, this firm does not admit that it comes within
the category of person whose consent is required under Section 7 of the
Securities Act or the Rules and Regulations of the Securities and Exchange
Commission thereunder.
Sincerely,
JENKENS & GILCHRIST,
a Professional Corporation
By: /s/ W. ALAN KAILER
---------------------------
W. Alan Kailer
Authorized Signatory
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Hallwood Group Incorporated on Form S-8 of our report dated October 18,
1994, appearing in the Annual Report on Form 10-K of The Hallwood Group
Incorporated for the year ended July 31, 1994 and of our report dated October
18, 1994 relating to the financial statement schedules also appearing in the
Annual Report on Form 10-K of The Hallwood Group Incorporated for the year
ended July 31, 1994.
/s/ DELOITTE & TOUCHE LLP
Dallas, Texas
October 19, 1995
