<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------
ALPHA INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-2302115
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
20 SYLVAN ROAD, WOBURN, MASSACHUSETTS 01801 (781) 935-5150
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
----------
ALPHA INDUSTRIES, INC.
1997 NON-QUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
---------------------------------------------------------------
(Full Title of the Plan)
STEVEN R. LONDON, ESQUIRE
BROWN, RUDNICK, FREED & GESMER
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
(617) 856-8200
(Name, Address and Telephone Number,
Including Area Code, of Agent for Service)
----------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to Be Offering Price Aggregate Registration
Securities to Be Registered Registered Per Share(1) Offering Price(1) Fee(2)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $ .25 par value 100,000 Shares(2) $39.03125 $3,903,125 $1,085.07
=========================================================================================================
</TABLE>
(1) The registration fee has been calculated on the basis of the average of the
high and low reported price of the Common Stock of $39.03125 on the Nasdaq
National Market on January 20, 1999.
(2) Such presently indeterminable number of additional shares of Common Stock
are registered hereunder as may be issued in the event of the merger,
consolidation, reorganization, recapitalization, stock dividend, stock
split, stock combination or other similar changes in the Common Stock.
================================================================================
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are hereby incorporated by reference into this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended March 29, 1999 filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act");
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
year covered by the Registrant's Annual Report referred to in
(a) above; and
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A
(Registration No. 0-24357) filed under the Exchange Act with
the Securities and Exchange Commission.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date hereof and 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 hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Restated Certificate of Incorporation includes
provisions (i) to eliminate the personal liability of the Registrant's directors
to the Registrant or its stockholders for monetary damages resulting from
breaches of their fiduciary duty (subject to certain exceptions, such as breach
of duty of loyalty to the Registrant or its stockholders), and (ii) to permit
the Company to indemnify its directors and officers to the fullest extent
permitted by law. The Company's Amended and Restated By-Laws include provisions
for mandatory indemnification
<PAGE> 3
of its officers and directors provided certain conditions are met. The Company
has directors' and officers' liability insurance.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation to indemnify directors, officers, employees or agents
of the corporation in non-derivative suits if such party acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interest
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful, as determined in
accordance with the Delaware General Corporation Law. Section 145 further
provides that indemnification shall be provided if the party in question is
successful on the merits or otherwise.
The effect of these provisions would be to permit such indemnification
by the Company for liabilities arising under the Securities Act of 1933, as
amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
NUMBER DESCRIPTION
4(a)* Specimen Certificate of Common Stock (Filed as Exhibit 4(a) to the
Registration Statement on Form S-3 (Registration No. 33-63857)).
4(b)* Frederick County Industrial Development Revenue Bond, Deed of Trust,
Loan Agreement and Guaranty and Indemnification Agreement dated June
17, 1982 (Filed as Exhibit 4(g) to the Registration Statement on Form
S-8 filed July 29, 1982); and Bond and Loan Document Modification
Agreement dated January 9, 1993 (Filed as Exhibit 4(c) to the Quarterly
Report on Form 10-Q for the fiscal quarter ended January 26, 1993).
4(c)* Loan and Security Agreement dated January 15, 1993 between Trans-Tech,
Inc., and County Commissioners of Frederick County (Filed as Exhibit
4(h) to the Quarterly Report on Form 10-Q for the fiscal quarter ended
July 3, 1994).
4(d)* Stock Purchase Warrant for 50,000 shares of the Registrant's Common
Stock issued to Silicon Valley Bank as of April 1, 1994 (Filed as
Exhibit 4(i) to the Quarterly Report on Form 10-Q for the fiscal
quarter ended July 3, 1994).
4(e)* Amended and Restated Credit Agreement dated January 1, 1997 between
Alpha Industries, Inc., Trans-Tech Inc., Fleet Bank of Massachusetts,
N.A. and Silicon Valley Bank (Filed as Exhibit 4(f) to the Quarterly
Report on Form 10-Q for the fiscal quarter ended December 28, 1997).
<PAGE> 4
5 Legal Opinion of Brown, Rudnick, Freed & Gesmer.
23(a) Consent of Brown, Rudnick, Freed & Gesmer (contained in its opinion
filed as Exhibit 5).
23(b) Consent of KPMG Peat Marwick LLP.
24 Power of Attorney (included on the Signature Page of this Registration
Statement).
99 Alpha Industries, Inc. 1997 Non-Qualified Stock Option Plan for
Non-Employee Directors
- ----------
* Not filed herewith. In accordance with Rule 411 promulgated pursuant to
the Securities Act of 1933, as amended, reference is made to the
documents previously filed with the Commission, which are incorporated
by reference herein.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement
or any material change to such information in this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
<PAGE> 5
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Woburn, Commonwealth of Massachusetts, on
January 22, 1999.
ALPHA INDUSTRIES, INC.
By: /s/ Thomas C. Leonard
---------------------------------
THOMAS C. LEONARD
PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Thomas C. Leonard and James C. Nemiah, and each
of them (with full power to each of them to act alone), his true and lawful
attorneys-in-fact and agents, 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 (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ George S. Kariotis Chairman of the Board January 22, 1999
- ---------------------------
GEORGE S. KARIOTIS
/s/ Thomas C. Leonard President, Chief Executive January 22, 1999
- --------------------------- Officer and Director
THOMAS C. LEONARD (Principal Executive Officer)
<PAGE> 7
/s/ Paul E. Vincent Vice President, Chief January 22, 1999
- --------------------------- Financial Officer and Treasurer
PAUL E. VINCENT (Principal Financial Officer
and Principal Accounting
Officer)
/s/ Timothy R. Furey Director January 22, 1999
- ---------------------------
TIMOTHY R. FUREY
/s/ Arthur Pappas Director January 22, 1999
- ---------------------------
ARTHUR PAPPAS
/s/ Raymond Shamie Director January 22, 1999
- ---------------------------
RAYMOND SHAMIE
/s/ Sidney Topol Director January 22, 1999
- ---------------------------
SIDNEY TOPOL
<PAGE> 8
EXHIBIT INDEX
Exhibit Sequential
Number Page No.
- ------ --------
4(a) Specimen Certificate of Common Stock (Filed as Exhibit
4(a) to Registration Statement on Form S-3 *
(Registration No. 33-63857)).
4(b) Frederick County Industrial Development Revenue Bond,
Deed of Trust, Loan Agreement and Guaranty and *
Indemnification Agreement dated June 17, 1982 (Filed as
Exhibit 4(g) to the Registration Statement on Form S-8
filed July 29, 1982); and Bond and Loan Document
Modification Agreement dated January 9, 1993 (Filed as
Exhibit 4(c) to the Quarterly Report on Form 10-Q for
the fiscal quarter ended January 26, 1993).
4(c) Loan and Security Agreement dated January 15, 1993
between Trans-Tech, Inc., and County Commissioners of *
Frederick County (Filed as Exhibit 4(h) to the Quarterly
Report on Form 10-Q for the fiscal quarter ended July 3,
1994).
4(d) Stock Purchase Warrant for 50,000 shares of the
Registrant's Common Stock issued to Silicon Valley *
Bank as of April 1, 1994 (Filed as Exhibit 4(i) to the
Quarterly Report on Form 10-Q for the fiscal quarter
ended July 3, 1994).
4(e) Amended and Restated Credit Agreement dated January 1,
1997 between Alpha Industries, Inc., Trans-Tech Inc., *
Fleet Bank of Massachusetts, N.A. and Silicon Valley
Bank (Filed as Exhibit 4(f) to the Quarterly Report on
Form 10-Q for the fiscal quarter ended December 28,
1997).
5 Legal Opinion of Brown, Rudnick, Freed & Gesmer.
23(a) Consent of Brown, Rudnick, Freed & Gesmer (contained in
its opinion filed as Exhibit 5). **
23(b) Consent of KPMG Peat Marwick LLP.
24 Power of Attorney (included on the Signature Page of
this Registration Statement). ***
99 Alpha Industries, Inc. 1997 Non-Qualified Stock Option
Plan for Non-Employee Directors
- --------
* Not filed herewith. In accordance with Rule 411 promulgated pursuant to the
Securities Act of 1933, as amended, reference is made to the documents
previously filed with the Commission, which are incorporated by reference
herein.
** Contained in Exhibit 5.
*** Included on the Signature Page of this Registration Statement.
<PAGE> 1
EXHIBIT 5
January 22, 1999
Alpha Industries, Inc.
20 Sylvan Road
Woburn, MA 01801
Re: Alpha Industries, Inc.
Registration Statement on Form S-8
Gentlemen:
We are counsel for Alpha Industries, Inc. (the "Company"). We have been
asked to deliver this opinion in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-8 (this "Registration
Statement") relating to 100,000 shares of the Company's Common Stock, $.25 par
value per share (the "Shares"). This opinion letter, together with Schedule A
attached hereto (this "Opinion Letter"), is being rendered in connection with
the filing of the Registration Statement.
The 100,000 Shares covered by the Registration Statement are issuable
under the Company's 1997 Non-Qualified Stock Option Plan for Non-Employee
Directors (the "Plan").
In connection with this Opinion Letter, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of the following documents (collectively, the "Documents"):
1. a certificate from the Secretary of State of the State of
Delaware dated January 21, 1999 as to the legal existence and good standing of
the Company;
2. a copy of the Restated Certificate of Incorporation of the
Company, as amended to date, and a certificate of the Secretary that there have
been no further amendments thereto;
3. a copy of the By-laws of the Company, as amended to date,
certified by the Secretary of the Company as presently being in effect;
4. the corporate minute books or other records of the Company
pertaining to the proceedings of the stockholders and directors of the Company;
5. the Plan;
<PAGE> 2
6. a letter from the Company's transfer agent as to the issued
and outstanding shares of the Company's Common Stock, $.25 par value per share;
and
7. the Registration Statement.
We have assumed, for the purposes of our opinion herein, that any
conditions to the issuance of the Shares under the Plan have been or will be
satisfied in full.
We have, without independent investigation, relied upon the
representations and warranties of the various parties as to matters of objective
fact contained in the Documents.
In addition, this Firm, in rendering legal opinions, customarily makes
certain assumptions which are described in Schedule A hereto. In the course of
our representation of the Company in connection with the preparation of the
Registration Statement, nothing has come to our attention which causes us to
believe reliance upon any of these assumptions is inappropriate, and, with your
concurrence, the opinions hereafter expressed are based upon those assumptions.
The Enumerated Party referred to in Schedule A is the Company.
We have not made any independent review or investigation of orders,
judgments, rules or other regulations or decrees by which the Company or any of
its property may be bound, nor have we made any independent investigation as to
the existence of actions, suits, investigations or proceedings, if any, pending
or threatened against the Company.
With your concurrence, our opinion hereafter expressed is based solely
upon (1) our review of the Documents, (2) discussions with those of our
attorneys who have devoted substantive attention to the preparation of the
Registration Statement, and (3) such review of published sources of law as we
have deemed necessary.
Our opinions contained herein are limited to the laws of the
Commonwealth of Massachusetts, the General Corporation Law of the State of
Delaware and the Federal law of the United States of America.
We express no legal opinion upon any matter other than those explicitly
addressed below, and our express opinion therein contained shall not be
interpreted to be an implied opinion upon any other matter.
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and, when issued and paid for in accordance
with the terms and conditions of the Plan, the Shares will be validly issued,
fully paid, and non-assessable.
<PAGE> 3
We hereby consent to the reference to this firm in the Registration
Statement and to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
BROWN, RUDNICK, FREED & GESMER, P.C.
By: /s/ Steven R. London
---------------------------------------
Steven R. London, a Member
<PAGE> 4
SCHEDULE A
BROWN, RUDNICK, FREED & GESMER
STANDARD ASSUMPTIONS
In rendering legal opinions, Brown, Rudnick, Freed & Gesmer makes
certain customary assumptions described below:
1. Each natural person executing any of the Documents has sufficient legal
capacity to enter into such Documents.
2. Each Document is accurate, complete and authentic, each original is
authentic, each copy conforms to an authentic original and all
signatures are genuine.
3. All official public records are accurate, complete and properly indexed
and filed.
4. There has not been any mutual mistake of fact or misunderstanding,
fraud, duress, or undue influence by or among any of the parties to the
Documents.
5. The conduct of the parties to the Documents has complied in the past
and will comply in the future with any requirement of good faith, fair
dealing and conscionability.
6. The Enumerated Party will obtain all permits and governmental approvals
required in the future and take all actions similarly required relevant
to its performance of its obligations under the Documents.
7. All parties to or bound by the Documents will act in accordance with,
and will refrain from taking any action that is forbidden by, the terms
and conditions of the Documents.
8. There are no agreements or understandings among the parties to or bound
by the Documents, and there is no usage of trade or course of prior
dealing among such parties, that would define, modify, waive, or
qualify the terms of any of the Documents.
<PAGE> 1
EXHIBIT 23(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Alpha Industries, Inc.:
We consent to the incorporation by reference in this Registration
Statement on Form S-8 for the Alpha Industries, Inc. 1997 Non-Qualified Stock
Option Plan for Non-Employee Directors of our audit report dated May 6, 1998 on
the consolidated financial statements of Alpha Industries, Inc. and subsidiaries
as of March 29, 1998 and for each of the years in the three-year period then
ended and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG Peat Marwick LLP
- -------------------------
Boston, Massachusetts
January 21, 1999
<PAGE> 1
Exhibit 99
ALPHA INDUSTRIES, INC.
1997 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE. The appropriate purpose of this 1997 Non-Qualified
Stock Option Plan for Non-Employee Directors is to attract and retain the
services of experienced and knowledgeable independent directors of the
Corporation for the benefit of the Corporation and its stockholders and to
provide additional incentives for such independent directors to continue to work
for the best interests of the Corporation and its stockholders through
continuing ownership of its common stock.
2. DEFINITIONS. As used herein, each of the following terms has
the indicated meaning:
"Annual Meeting" means the Corporation's annual meeting of
stockholders or special meeting in lieu of annual meeting of stockholders at
which one or more directors are elected.
"Board" means the Board of Directors of the Corporation.
"Corporation" means Alpha Industries, Inc.
"Fair Market Value" means the closing sale price quoted on the
American Stock Exchange or such other national securities exchange or automated
quotation system on which the Shares may be traded or quoted on the date of the
granting of the Option.
"Non-Employee Director" means a person who, as of any
applicable date, is a member of the Board and (i) is not an officer of the
Corporation or a Subsidiary, or otherwise employed by the Corporation or a
Subsidiary, (ii) does not receive compensation, either directly or indirectly,
from the Corporation or a Subsidiary, for services rendered as a consultant or
in any capacity other than as a member of the Board, except for an amount that
does not exceed the dollar amount for which disclosure would be required
pursuant to Rule 404(a) of Regulation S-K ("Regulation S-K") promulgated
pursuant to the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended (the "1934 Act"), (iii) does not possess an interest in
any other transaction for which disclosure would be required pursuant to Rule
404(a) of Regulation S-K, and (iv) is not engaged in a business relationship for
which disclosure would be required pursuant to Rule 404(b) of Regulation S-K.
"Option" means the contractual right to purchase Shares upon
the specific terms set forth in this Plan.
"Option Exercise Period" means the period commencing one (1)
year after the date of grant of an Option pursuant to this Plan and ending ten
years from the date of grant.
"Plan" means this Alpha Industries, Inc. 1997 Non-Qualified
Stock Option Plan for Non-Employee Directors.
"Shares" means the Common Stock, $.25 par value per share, of
the Corporation.
<PAGE> 2
"Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Corporation if, at the time of grant of the
Option, each of the corporations other than the last in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
3. STOCK SUBJECT TO THE PLAN. The aggregate number of Shares that
may be issued and sold under the Plan shall be 100,000. The Shares to be issued
upon exercise of Options granted under this Plan shall be made available, at the
discretion of the Board, from (i) treasury Shares and Shares reacquired by the
Corporation for such purposes, including Shares purchased in the open market,
(ii) authorized but unissued Shares, and (iii) Shares previously reserved for
issuance upon exercise of Options which have expired or been terminated. If any
Option granted under this Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares covered thereby shall
become available for grant under additional Options under the Plan so long as it
shall remain in effect.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Board. The Board shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Option issued under the Plan (and any agreement relating thereto)
and to otherwise supervise the administration of the Plan.
5. ELIGIBILITY. Options shall be granted only to Non-Employee
Directors.
6. GRANT OF OPTIONS.
(a) On the effective date of this Plan, each Non-Employee Director
shall be granted an Option to purchase 15,000 Shares.
(b) Each year, immediately following the Corporation's Annual
Meeting, each then Non-Employee Director shall be granted an Option to purchase
5,000 Shares.
(c) Upon initial election by the stockholders or appointment by
the Board as a Non-Employee Director, immediately following the Annual Meeting
at which such Non-Employee Director is first elected by the stockholders or
immediately following the meeting of the Board at which such Non-Employee
Director is appointed by the Board, each Non-Employee Director shall be granted
an Option to purchase 15,000 Shares .
7. TERMS OF OPTIONS AND LIMITATIONS THEREON.
(a) OPTION AGREEMENT. Each Option granted under this Plan
shall be evidenced by an Option agreement between the Corporation and the Option
holder and shall be upon such terms and conditions, not inconsistent with this
Plan, as the Board may determine.
(b) PRICE. The price at which any Shares may be purchased
pursuant to the exercise of an Option shall be the greater of the Fair Market
Value of the Shares on the date of grant or par value.
(c) EXERCISE OF OPTION. Each Option granted under this
Plan may be exercised as follows:
<PAGE> 3
(i) beginning on the first anniversary of the date of
grant, for up to 20% of the Shares covered by the Option; and
(ii) beginning on each anniversary of the date of grant
thereafter, for up to an additional 20% of such Shares for each additional year,
until, on the fifth anniversary of the date of grant, the Option may be
exercised as to 100% of the Shares covered by the Option, until the expiration
of the Option Exercise Period.
Options may be exercised in whole or in part, from time to time, only
during the Option Exercise Period, by the giving of written notice, signed by
the holder of the Option, to the Corporation stating the number of Shares with
respect to which the Option is being exercised, accompanied by full payment for
such Shares pursuant to section 8(a) hereof; provided however, (i) if a person
to whom an Option has been granted ceases to be a Non-Employee Director during
the Option Exercise Period by reason of retirement, death or any reason, other
than termination for cause, such Option shall be exercisable by him or her or by
the executors, administrators, legatees or distributees of his or her estate
until the earlier of (A) the end of the Option Exercise Period or (B) 12 months
following his or her retirement or death or the date on which he or she ceased
to be a Non-Employee Director; and (ii) if a person to whom an Option has been
granted ceases to be a Non-Employee Director of the Corporation by reason of
termination for cause, such Option shall terminate as of the date such person
ceased to be a Non-Employee Director. Termination for cause shall be defined as
termination on account of any act of (i) fraud or intentional misrepresentation,
or (ii) embezzlement, misappropriation or conversion of assets or opportunities
of the Corporation or any Subsidiary.
(d) NON-ASSIGNABILITY. No Option, or right or interest in
an Option, shall be assignable or transferable by the holder, except by will,
the laws of descent and distribution or pursuant to a qualified domestic
relations order (as defined in the Internal Revenue Code of 1986, as amended, or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder), and during the lifetime of the holder shall be
exercisable only by him or her.
8. PAYMENT.
(a) The purchase price of Shares upon exercise of an
Option shall be paid by the Option holder in full upon exercise, and may be paid
(i) in cash, (ii) by delivery of Shares valued at Fair Market Value on the date
of exercise, including, to the extent permitted under the Rule 16b-3 as defined
in Paragraph 12(c), below, exempting certain transactions from the short swing
trading provisions of Section 16 of the 1934 Act, by way of so-called "cashless
exercise" and the netting of the number of Shares issuable upon exercise against
that number of Shares subject to the Option having an aggregate Fair Market
Value equal to the aggregate exercise price, or (iii) any combination of cash
and Shares, as the Board may determine.
(b) No Shares shall be granted under this Plan or issued
or transferred upon exercise of any Option under this Plan unless and until all
legal requirements applicable to the issuance or transfer of such Shares, and
such other requirements as are consistent with the Plan, have been complied with
to the satisfaction of the Board, including without limitation those described
in Paragraph 12 hereof.
9. STOCK ADJUSTMENTS.
(a) If the Corporation is a party to any merger or
consolidation, any purchase or acquisition of property or stock, or any
separation, reorganization or liquidation, the Board (or, if
<PAGE> 4
the Corporation is not the surviving corporation, the board of directors of the
surviving corporation) shall have the power to make arrangements, which shall be
binding upon the holders of unexpired Options, for the substitution of new
options for, or the assumption by another corporation of, any unexpired Options
then outstanding hereunder.
(b) If by reason of recapitalization, reclassification,
stock split, combination of shares, separation (including a spin-off) or
dividend on the stock payable in Shares, the outstanding Shares of the
Corporation are increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Corporation, the
Board shall conclusively determine the appropriate adjustment in the exercise
prices of outstanding Options and in the number and kind of shares as to which
outstanding Options shall be exercisable, in such manner as to result in the
Options being exercisable.
(c) In the event of a transaction of the type described
in paragraphs (a) and (b) above, the total number of Shares on which Options may
be granted under this Plan shall be appropriately adjusted by the Board.
10. CHANGE OF CONTROL PROVISIONS.
(a) Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change of Control, any Options outstanding as of
the date such Change of Control is determined to have occurred and not then
exercisable shall become fully exercisable to the full extent of the original
grant.
(b) A "Change of Control" shall mean:
(i) there shall have been consummated (a) any
consolidation or merger of the Corporation in which the Corporation is not the
continuing or surviving entity pursuant to which the Shares are converted into
cash, securities or other property, other than a merger of the Corporation in
which the ownership by the Corporation's stockholders of the securities in the
surviving entity is in the same proportion as the ownership by the Corporation's
stockholders of the stock in the Corporation immediately prior to the merger or
(b) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Corporation; or
(ii) the stockholders of the Corporation have
approved any plan or proposal for the liquidation or dissolution of the
Corporation; or
(iii) any person (as that term is used in Sections
13(d) and 14(d)(2) of the 1934 Act) has become the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the 1934 Act) of 30% or more of the
Corporation's outstanding Shares; or
(iv) that during any period of two consecutive
years, individuals who, at the beginning of such period, constitute the entire
Board shall cease, for any reason, to constitute a majority thereof, unless the
election, or the nomination for election by the Corporation's stockholders, of
each new director was approved by a vote of at least three-quarters of the
directors then still in office who were directors at the beginning of the
period.
11. NO RIGHTS OTHER THAN THOSE EXPRESSLY CREATED. No person
affiliated with the Corporation or any Subsidiary or other person shall have any
claim or right to be granted an Option hereunder. Neither this Plan nor any
action taken hereunder shall be construed as (i) giving any Option holder any
right to continue to be affiliated with the Corporation, (ii) giving
<PAGE> 5
any Option holder any equity or interest of any kind in any assets of the
Corporation, or (iii) creating a trust of any kind or a fiduciary relationship
of any kind between the Corporation and any such person. No Option holder shall
have any of the rights of a stockholder with respect to Shares covered by an
Option, until such time as the Option has been exercised and Shares have been
issued to such person.
12. MISCELLANEOUS.
(a) WITHHOLDING OF TAXES. Pursuant to applicable federal,
state, local or foreign laws, the Corporation may be required to collect income
or other taxes upon the grant of an Option to, or exercise of an Option by, a
holder. The Corporation may require, as a condition to the exercise of an
Option, that the recipient pay the Corporation, at such time as the Board
determines, the amount of any taxes which the Board may determine is required to
be withheld.
(b) SECURITIES LAW COMPLIANCE. Upon exercise of an
Option, the holder shall be required to make such representations and furnish
such information as may, in the opinion of counsel for the Corporation, be
appropriate to permit the Corporation to issue or transfer the Shares in
compliance with the provisions of applicable federal or state securities laws.
The Corporation, in its discretion, may postpone the issuance and delivery of
Shares, upon any exercise of an Option, until completion of such registration or
other qualification of such Shares under any federal or state laws, or stock
exchange listing, as the Corporation may consider appropriate. The Corporation
intends to register or qualify the Shares under federal and state securities
laws, but is not obligated to register or qualify the Shares under such laws and
may refuse to issue such Shares if neither registration nor exemption therefrom
is practical. The Board may require that prior to the issuance or transfer of
any Shares upon exercise of an Option, the recipient enter into a written
agreement to comply with any restrictions on subsequent disposition that the
Board or the Corporation deems necessary or advisable under any applicable
federal and state securities laws. Certificates representing the Shares issued
hereunder may contain a legend reflecting such restrictions.
(c) COMPLIANCE WITH RULE 16b-3. With respect to a person
subject to Section 16 of the 1934 Act, transactions under this Plan are intended
to comply with all applicable conditions of Rule 16b-3 or its successors ("Rule
16b-3") under the 1934 Act. To the extent any provision of the Plan or action by
the administrators of the Plan fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the administrators
of the Plan.
(d) INDEMNITY. The Board shall not be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with their responsibilities with respect to the Plan, and the
Corporation hereby agrees to indemnify the members of the Board, in respect of
any claim, loss, damage, or expense (including counsel fees) arising from any
such act, omission, interpretation, construction or determination, to the full
extent permitted by law.
(e) OPTIONS NOT DEEMED INCENTIVE STOCK OPTIONS. Options
granted under the Plan shall not be deemed incentive stock options as that term
is defined in Section 422 of the Internal Revenue Code of 1986, as amended.
13. EFFECTIVE DATE; AMENDMENT; TERMINATION.
(a) The effective date of this Plan shall be the date of the
approval of the Board.
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(b) The Board may at any time, and from time to time, amend,
suspend or terminate this Plan in whole or in part, provided, however, that the
provisions of this Plan relating to the amount and price of securities to be
awarded and the timing of such awards may not be amended more than once every
six months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder. However,
except as provided herein, no amendment, suspension or termination of this Plan
may affect the rights of any person to whom an Option has been granted without
such person's consent.
(d) This Plan shall terminate ten years from its effective date,
and no Option shall be granted under this Plan thereafter, but such termination
shall not affect the validity of Options granted prior to the date of
termination.
Date of Board of Directors Adoption: September 15, 1997
