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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 1998 REGISTRATION NO. ____________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HMI INDUSTRIES INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 36-1202810
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
3631 PERKINS
CLEVELAND, OHIO 44114
(216) 432-1990
(Address of principal executive offices)
HEALTH-MOR INC.
1992 OMNIBUS LONG-TERM COMPENSATION PLAN
(Full Title of Plan)
Mark A. Kirk, President
3631 Perkins
Cleveland, Ohio 44114
(216) 432-1990
(Name, address, including zip code
& telephone number, including
area code of agent for service)
With a copy to:
Carolyn J. Buller, Esq.
Squire, Sanders & Dempsey L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114-1304
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title Of Maximum Maximum Amount Of
Securities To Amount To Be Offering Aggregate Registration
Be Registered Registered Price Per Share (1) Offering Price (1) Fee (2)
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Common Stock 500,000 $4.125 $2,062,500 $608.44
par value $1.00
per share
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of calculating the registration fee and, pursuant to Rule 457(h), based on the average of
high and low sale prices of HMI Industries Inc.'s Common Shares on the NASDAQ National Market System on February 23, 1998.
(2) Computed in accordance with Rule 457(h) of the Securities Act of 1933.
</FN>
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
The documents containing the information specified in this Item 1 will
be given to participants in the Health-Mor Inc. 1992 Omnibus Long-Term
Compensation Plan (the "Plan") as specified by Rule 428(b)(1). In accordance
with the rules and regulations of the Securities and Exchange Commission (the
"Commission") and the instructions to Form S-8, such documents are not being
filed with the Commission either as part of this Registration Statement or as a
prospectus pursuant to Rule 424.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN
ANNUAL INFORMATION
The documents containing the information specified in this Item 2 will
be given to participants in the Plan as specified in Rule 428(b)(1). In
accordance with the rules and regulations of the Commission and the instructions
to Form S-8, such documents are not being filed with the Commission either as
part of this Registration Statement or as a prospectus pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are incorporated herein by reference and made a part hereof:
1. The Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1997.
2. The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1997.
3. All other documents 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 annual report referred to in
(1) above.
All documents subsequently filed with the Commission by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered herein have been
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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.
Subject to preferences that may be applicable to any preferred stock
outstanding at the time, the holders of outstanding shares of Common Stock are
entitled to receive dividends out of assets legally available therefor at such
times and in such amounts as the Board of Directors may from time to time
determine. Each stockholder is entitled to one vote for each share of Common
Stock held on all matters submitted to a vote of the stockholders. Cumulative
voting for the election of directors is not provided for in the Company's
Certificate of Incorporation, which means that the holders of a majority of the
shares voted can elect all of the directors then standing for election. The
Common Stock is not entitled to preemptive rights and is not subject to
conversion or redemption. Upon liquidation, dissolution or winding-up of the
Company, the assets legally available for distribution to stockholders are
distributable ratably among the holders of the Common Stock and any
participating preferred stock outstanding at that time after payment of
liquidation preferences, if any, on any outstanding preferred stock and payment
of other claims of creditors.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
A legal opinion has been rendered by Squire, Sanders & Dempsey L.L.P.
to the effect that when issued in accordance with the Plan, Registrant's shares
of Common Stock will be duly issued and outstanding and fully paid and
non-assessable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
("Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or threatened to be made, parties to any threatened, pending or completed
legal action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person is or was an officer or director of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorney fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, for criminal proceedings,
had no reasonable cause
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to believe his conduct was illegal. A Delaware corporation may indemnify
officers and directors in an action by or in the right of the corporation under
the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation in the performance of his duty. Where an officer or director is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against expenses that such officer or
director actually and reasonably incurred.
In Accordance with Delaware Law, Article Fifteenth of the Registrant's
Certificate of Incorporation contains a provision limiting the personal
liability of the Registrant's directors for violations of their fiduciary duty.
Such provision states that no director of the Registrant will be personally
liable to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law; (iii) under Section 174 of the Delaware General
Corporation Law relating to unlawful payment of a dividend or unlawful stock
purchase or redemption; or (iv) for any transaction which the director derived
an improper personal benefit.
Article Fifteenth of the Registrant's Certificate of Incorporation
and Article VII of the Registrant's By-Laws provide for indemnification of the
Registrant's officers and directors to the fullest extent permitted by
applicable law.
The Registrant maintains insurance policies that insure the
Registrant's directors and officers against certain liabilities which might be
incurred by reasons of their positions as directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
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ITEM 8. EXHIBITS
The following is a complete list of exhibits filed as a part of or
incorporated by reference in this Registration Statement:
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Exhibit No. Description of Exhibit
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4.1 Certificate of Incorporation of the Registrant (reference is
made to Exhibit 3.1 of the Registrant's Annual Report on
Form 10-K for the year ended September 30, 1995, which
exhibit is incorporated herein by reference)
4.2 By-Laws of the Registrant (reference is made to Exhibit 3.2
of the Registrant's Annual Report on Form 10-K for the year
ended September 30, 1995, which exhibit is incorporated
herein by reference)
4.3 Amended and Restated Credit Agreement among the
Registrant and Bliss Manufacturing Company as borrowers
and Star Bank, N.A. as lender dated as of June 6, 1997
(reference is made to Exhibit 10.09 of the Registrant's Annual
Report of Form 10-K for the year ended September 30, 1997,
which exhibit is incorporated herein by reference)
4.4 Waiver and Amendment No. 1 to the Amended and Restated
Credit Agreement dated as of December 5, 1997 (reference
is made to Exhibit 10.10(a) of the Registrant's Annual Report
of Form 10-K for the year ended September 30, 1997, which
exhibit is incorporated herein by reference)
4.5 Amendment No. 2 to Amended and Restated Credit
Agreement dated as of December 24, 1997 (reference is
made to Exhibit 10.10(b) of the Registrant's Annual Report of
Form 10-K for the year ended September 30, 1997, which
exhibit is incorporated herein by reference)
5 Opinion of Squire, Sanders & Dempsey L.L.P.
regarding legality
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Squire, Sanders & Dempsey L.L.P. (contained in
opinion filed as Exhibit 5)
99 Health-Mor Inc. 1992 Omnibus Long Term Compensation Plan
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ITEM 9. UNDERTAKINGS
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: (a) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933; (b) to reflect in the
prospectus any facts or events arising after the effective
date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum offering
price set forth in the "Calculation of Registration Fee" table
in the effective Registration Statement; (c) to include any
material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement;
provided, however, that paragraphs (1)(a) and (1)(b) of this section do
not apply if the Registration Statement is on Form S-3, Form S-8 or
Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to 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.
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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleveland, State of Ohio, on the 24th day of
February, 1998.
HMI INDUSTRIES INC.
By:/s/ James R. Malone
-------------------------------------
James R. Malone,
Chairman of the Board and Chief
Executive Officer
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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.
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/s/ James R. Malone February 24, 1998
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James R. Malone, Chairman of the Date
Board and Chief Executive Officer
/s/ Michael Harper February 24, 1998
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Michael Harper Date
Vice President, Corporate Controller and
Chief Accounting Officer
/s/ Robert J. Abrahams February 24, 1998
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Robert J. Abrahams, Director Date
/s/ Donald L. Baker February 24, 1998
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Donald L. Baker, Director Date
/s/ Moffat Dunlap February 24, 1998
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Moffat Dunlap, Director Date
/s/ Mark A. Kirk February 24, 1998
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Mark A. Kirk, Director Date
/s/ Grace McCarthy February 24, 1998
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Grace McCarthy, Director Date
/s/ John S. Meany February 24, 1998
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John S. Meany, Jr., Director Date
/s/ Barry L. Needler February 24, 1998
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Barry L. Needler, Director Date
/s/ Frank Rasmussen February 24, 1998
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Frank Rasmussen, Director Date
/s/ Ivan Winfield February 24, 1998
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Ivan Winfield, Director Date
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EXHIBIT INDEX
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Exhibit No. Description of Exhibit
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5 Opinion of Squire, Sanders & Dempsey L.L.P.
regarding legality
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Squire, Sanders & Dempsey L.L.P. (contained in opinion
filed as Exhibit 5)
99 Health-Mor Inc. 1992 Omnibus Long-Term Compensation Plan
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EXHIBIT 5
February 23, 1998
HMI Industries, Inc.
3631 Perkins
Cleveland, Ohio 44114
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
Reference is made to your Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on February 27, 1998 with respect to
500,000 shares of Common Stock, par value $1.00 per share ("Common Stock"), of
HMI Industries Inc. to be offered pursuant to the Health-Mor Inc. 1992 Omnibus
Long-Term Compensation Plan (the "Plan"). We are familiar with the Plan, and we
have examined such documents and certificates and considered such matters of law
as we deemed necessary for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that the shares of
Common Stock to be offered pursuant to the Plan, when issued in accordance with
the provisions of the Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Respectfully Submitted,
/s/ Squire, Sanders & Dempsey L.L.P.
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Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this registration
statement of HMI Industries Inc. (the "Company") on Form S-8 with respect to
500,000 shares of the Company's Common Stock issuable under the Health-Mor Inc.
1992 Omnibus Long-Term Compensation Plan of our report dated December 29, 1997,
on our audits of the consolidated financial statements and financial statement
schedule of the Company, as of September 30, 1997 and 1996, and for each of the
three years in the period ended September 30, 1997, included in the Annual
Report of HMI Industries on Form 10-K, as amended, for the period ended
September 30, 1997 as filed with the Securities and Exchange Commission.
/s/ COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
February 26, 1998
<PAGE> 1
EXHIBIT 99
HEALTH-MOR INC. 1992 OMNIBUS
LONG-TERM COMPENSATION PLAN
1. PURPOSE
The purpose of the Plan is to advance the long-term interests of
Health-Mor Inc. by (i) motivating executive personnel by means of long-term
incentive compensation, (ii) furthering the identity of interests of
participants with those of the shareholders of the Corporation through the
ownership and performance of the Common Stock of the Corporation and (iii)
permitting the Corporation to attract and retain directors and executive
personnel upon whose judgment the successful conduct of the business of the
Corporation largely depends. Toward this objective, the Committee may grant
stock options, stock appreciation rights, restricted stock awards, phantom stock
and/or performance shares to Key Employees of the Corporation and its
Subsidiaries, and shall grant stock options to non-employee directors of the
Corporation, on the terms and subject to the conditions set forth in the Plan.
2. DEFINITIONS
2.1 "Administrative Policies" means the administrative policies and
procedures adopted and amended from time to time by the Committee to administer
the Plan.
2.2 "Award" means any form of stock option, stock appreciation right,
restricted stock award, phantom stock or performance share granted under the
Plan, whether singly, in combination, or in tandem, to a Participant by the
Committee pursuant to such terms, conditions, restrictions and limitations, if
any, as the Committee may establish by the Award Agreement or otherwise.
2.3 "Award Agreement" means a written agreement with respect to an Award
between the Corporation and a Participant establishing the terms, conditions,
restrictions and limitations applicable to an Award. To the extent an Award
Agreement is inconsistent with the terms of the Plan, the Plan shall govern the
rights of the Participant thereunder.
2.4 "Board" means the Board of Directors of the Corporation.
2.5 "Change In Control" means a change in control of the Corporation of
a nature that would be required to be reported (assuming such event has not been
"previously reported") in response to Item 6(e) of schedule 14A of Regulation
14A promulgated under the Exchange Act; provided that, without limitation, a
Change In Control shall be deemed to have occurred at such time after January 1,
1992 as (i) any "person" within the meaning of section 14(d) of the Exchange
Act, becomes the beneficial owner, directly or indirectly, of securities of the
Corporation representing 50% or more of the combined voting power of the
Corporation's then outstanding securities, or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by the Corporation's
shareholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.
2.6 "Change in Control Price" means the higher of (i) the mean of the
high and low trading prices for the Corporation's Common Stock on the Stock
Exchange on the date of determination of the Change in Control or (ii) the
highest price per share actually paid for the Common Stock in connection with
the Change in Control of the Corporation.
2.7 "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
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2.8 "Committee" means the Compensation Committee of the Board, or such
other committee designated by the Board, authorized to administer the Plan under
Section 3 hereof.
2.9 "Common Stock" means Common Stock, par value $1.00, of the
Corporation.
2.10 "Corporation" means Health-Mor Inc.
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
2.12 "Key Employee" means an employee of the Corporation or a Subsidiary
who holds a position of responsibility in a managerial, administrative or
professional capacity, and whose performance, as determined by the Committee in
the exercise of its sole and absolute discretion, can have a significant effect
on the growth, profitability and success of the Corporation.
2.13 "Participant" means any individual to whom an Award has been
granted by the Committee under this Plan.
2.14 "Plan" means the Health-Mor Inc. 1992 Omnibus Long-Term
Compensation Plan.
2.15 "Stock Exchange" means the American Stock Exchange or, if the
Common Stock is no longer traded on the American Stock Exchange, then such other
market price reporting system on which the Common Stock is traded or quoted
designated by the Committee after it determines that such other exchange is both
reliable and reasonably accessible.
2.16 "Subsidiary" means a corporation or other business entity in which
the Corporation directly or indirectly has an ownership interest of fifty-one
percent or more.
3. ADMINISTRATION
The Plan shall be administered under the supervision of the Committee
composed of not less than three directors each of whom shall be deemed to be "a
disinterested person" under Rule 16b-3 of the Exchange Act or any subsequent
rule or act.
Members of the Committee shall serve at the pleasure of the Board of
Directors, and may resign by written notice filed with the Chief Executive
Officer or the Secretary of the Corporation. A vacancy in the membership of the
Committee shall be filled by the appointment of a successor member by the Board
of Directors. Until such vacancy is filled, the remaining members shall
constitute a quorum and the action at any meeting of a majority of the entire
Committee, or an action unanimously approved in writing, shall constitute action
of the Committee. Subject to the express provisions of this Plan, the Committee
shall have conclusive authority to construe and interpret the Plan, any Award
Agreement entered into hereunder and to establish, amend and rescind
Administrative Policies for the administration of this Plan and shall have such
additional authority as the Board of Directors may from time to time determine
to be necessary or desirable.
In addition, in order to enable Key Employees who are foreign nationals
or employed outside the United States, or both, to receive Awards under the
Plan, the Committee may adopt such amendments, Administrative Policies, subplans
and the like as are necessary or advisable, in the opinion of the Committee, to
effectuate the purposes of the Plan.
4. ELIGIBILITY
Any Key Employee is eligible to become a Participant in the Plan.
Directors of the Corporation other than directors who are employees of the
Corporation shall be eligible only to receive stock options pursuant to Section
13 hereof.
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5. SHARES AVAILABLE
(a) Shares of Common Stock available for issuance under the Plan may be
authorized and unissued shares or treasury shares. Subject to the adjustments
provided for in Sections 18 and 19 hereof, the maximum number of shares of
Common Stock available for grant of Awards under the Plan during any calendar
year shall be equal to the sum of:
(i) Five percent of the total number of issued and outstanding
shares of Common Stock of the Corporation as of the December 31st of the
immediately preceding calendar year (the "5% Limit");
(ii) Any unused portion of the 5% Limit from prior calendar
years during the term of the Plan; and
(iii) Any shares of Common Stock related to Awards which
terminated during prior calendar years during the term of the Plan by
expiration, forfeiture, cancellation or otherwise without the issuance of such
shares or cash in lieu thereof;
Notwithstanding the foregoing, not more than one million shares of
Common Stock shall be available for the award of incentive stock options under
the Plan.
Notwithstanding the foregoing, at no time shall the number of shares
deemed to be available for grant in any calendar year exceed ten percent of the
total number of issued and outstanding shares of Common Stock of the
Corporation.
(b) For purposes of calculating the number of shares of Common Stock
deemed to be granted hereunder during any calendar year, each Award, whether
denominated in stock options, stock appreciation rights, restricted stock,
performance shares or phantom stock, shall be deemed to be a grant of a number
of shares of Common Stock equal to the number of shares represented by the stock
options, shares of restricted stock, performance shares, shares of phantom stock
or stock appreciation rights set forth in the Award, provided however
(i) in the case of any Award as to which the exercise of one
right nullifies the exercisability of another (including, by way of illustration
the grant of a stock option with Tandem SARs (as hereinafter defined)), the
number of shares deemed to have been granted shall be the maximum number of
shares (and/or cash equivalents) that could have been acquired upon the maximum
exercise or settlement of the Award; and
(ii) in the case of performance share awards providing for
payments in excess of 100% of the number of shares set forth in the Award
Agreement, the number of shares granted shall be deemed to be the maximum number
of shares (and/or the cash equivalent thereof) issuable under the Award at the
highest level of performance.
(c) For purposes of calculating the number of shares available for
regrant in any year, the portion of any Award that has been settled by the
payment of cash or the issuance of shares of Common Stock, or a combination
thereof, shall not be available for re-grant under the Plan, irrespective of the
value of the settlement or the method of its payment. The settlement of an Award
shall not be deemed to be the grant of an Award hereunder.
6. TERM
The Plan shall become effective as of January 1, 1992 subject to
approval of the Plan by the Corporation's stockholders at the 1992 annual
meeting. No Awards shall be exercisable or payable before approval of the Plan
has been obtained from the Corporation's stockholders.
7. PARTICIPATION
The Committee shall select, from time to time, Participants from those
Key Employees who, in the opinion of the Committee, can further the Plan's
purposes and the Committee shall
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determine the type or types of Awards to be made to the Participant. In
addition, all non-employee Directors shall participate in the Plan solely in the
manner specified in Section 13 hereof. The terms, conditions and restrictions of
each Award shall be set forth in an Award Agreement.
8. STOCK OPTIONS
(a) Grants. Awards may be granted in the form of stock options. Stock
options may be incentive stock options within the meaning of section 422 of the
Code or non-statutory stock options (i.e., stock options which are not incentive
stock options), or a combination of both, or any particular type of tax
advantage option authorized by the Code from time to time.
(b) Terms and Conditions of Options. An option shall be exercisable in
whole or in such installments and at such times as may be determined by the
Committee; provided, however, that no stock option shall be exercisable more
than ten years after the date of grant thereof. The option exercise price shall
be established by the Committee, but such price shall not be less than the per
share fair market value of the Common Stock, as determined by the Committee, on
the date of the stock option's grant subject to adjustment as provided in
Sections 18 or 19 hereof.
(c) Restrictions Relating to Incentive Stock Options. Stock options
issued in the form of incentive stock options shall, in addition to being
subject to all applicable terms, conditions, restrictions and/or limitations
established by the Committee, comply with section 422 of the Code. Incentive
Stock Options shall be granted only to full time employees of the Corporation
and its subsidiaries within the meaning of Section 425 of the Code. The
aggregate fair market value (determined as of the date the option is granted) of
shares with respect to which incentive stock options are exercisable for the
first time by an individual during any calendar year (under this Plan or any
other plan of the Corporation or any Subsidiary which provides for the granting
of incentive stock options) may not exceed $100,000 or such other number as may
be applicable under the Code from time to time. Any incentive stock option that
is granted to any employee who is, at the time the option is granted, deemed for
purposes of section 422 of the Code, or any successor provision, to own shares
of the Corporation possessing more than ten percent of the total combined voting
power of all classes of shares of the Corporation or of a parent or subsidiary
of the Corporation, shall have an option exercise price that is at least one
hundred ten percent of the fair market value of the shares at the date of grant
and shall not be exercisable after the expiration of five years from the date it
is granted.
(d) Additional Terms and Conditions. The Committee may, by way of the
Award Agreement or otherwise, establish such other terms, conditions,
restrictions and/or limitations, if any, on any stock option Award, provided
they are not inconsistent with the Plan.
(e) Payment. Upon exercise, a participant may pay the option exercise
price of a stock option in cash or shares of Common Stock, Stock Appreciation
Rights or a combination of the foregoing, or such other consideration as the
Committee may deem appropriate. The Committee shall establish appropriate
methods for accepting Common Stock and may impose such conditions as it deems
appropriate on the use of such Common Stock to exercise a stock option.
9. STOCK APPRECIATION RIGHTS
(a) Grants. Awards may be granted in the form of stock appreciation
rights ("SARs"). SARs shall entitle the recipient to receive a payment equal to
the appreciation in market value of a stated number of shares of Common Stock
from the price stated in the Award Agreement to the market value of the Common
Stock on the date of exercise or surrender. An SAR may be granted in tandem with
all or a portion of a related stock option under the Plan ("Tandem SARs"), or
may be granted separately ("Freestanding SARs") provided, however, that
Freestanding SARs shall be granted only to Key Employees who are foreign
nationals or are employed outside of the United States, or both, and as to whom
the Committee determines the
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interests of the Corporation could not as conveniently be served by the grant of
other forms of Awards under the Plan. A Tandem SAR may be granted either at the
time of the grant of the related stock option or at any time thereafter during
the term of the stock option. An SAR may be exercised no sooner than six months
after it is granted. In the case of SARs granted in tandem with stock options
granted prior to the grant of such SARs, the appreciation in value shall be
appreciation from the option exercise price of such related stock option to the
market value of the Common Stock on the date of exercise.
(b) Terms and Conditions of Tandem SARs. Subject to limitations
contained in the preceding paragraph, a Tandem SAR shall be exercisable to the
extent, and only to the extent, that the related stock option is exercisable.
Upon exercise of a Tandem SAR as to some or all of the shares covered by an
Award, the related stock option shall be cancelled automatically to the extent
of the number of SARs exercised, and such shares shall not thereafter be
eligible for grant under Section 5 hereof.
(c) Terms and Conditions of Freestanding SARs. Freestanding SARs shall
be exercisable in whole or in such installments and at such times as may be
determined by the Committee. The base price of a Freestanding SAR shall also be
determined by the Committee; provided, however, that such price shall not be
less that the fair market value of the Common Stock, as determined by the
Committee, on the date of the award of the Freestanding SAR.
(d) Deemed Exercise. The Committee may provide that an SAR shall be
deemed to be exercised at the close of business on the scheduled expiration date
of such SAR, if at such time the SAR by its terms is otherwise exercisable and,
if so exercised, would result in a payment to the participant.
(e) Additional Terms and Conditions. The Committee may, consistent with
the Plan, by way of the Award Agreement or otherwise, determine such other
terms, conditions, restrictions and/or limitations, if any, on any SAR Award,
including but not limited to determining the manner in which payment of the
appreciation in value shall be made.
10. RESTRICTED STOCK AWARDS
(a) Grants. Awards may be granted in the form of Restricted Stock
Awards. Restricted Stock Awards shall be awarded in such numbers and at such
times as the Committee shall determine.
(b) Award Restrictions. Restricted Stock Awards shall be subject to
such terms, conditions, restrictions, or limitations as the Committee deems
appropriate including, by way of illustration but not by way of limitation,
restrictions on transferability, requirements of continued employment or
individual performance or the financial performance of the Corporation. The
Committee may modify, or accelerate the termination of, the restrictions
applicable to a Restricted Stock Award under such circumstances as it deems
appropriate.
(c) Rights as Shareholders. During the period in which any restricted
shares of Common Stock are subject to the restrictions imposed under the
preceding paragraph, the Committee may, in its discretion, grant to the
Participant to whom such restricted shares have been awarded, all or any of the
rights of a shareholder with respect to such shares, including, by way of
illustration but not by way of limitation, the right to vote such shares and to
receive dividends.
(d) Evidence of Award. Any Restricted Stock Award granted under the Plan
may be evidenced in such manner as the Committee deems appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates.
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11. PHANTOM STOCK
(a) Grants. Awards may be granted in the form of Phantom Stock Awards.
Phantom Stock Awards shall entitle the Participant to receive the market value
or the appreciation in value of an equivalent number of shares of Common Stock
on a settlement date determined by the Committee.
(b) Restrictions on the Grant of Phantom Stock Awards. Phantom Stock
Awards shall be granted only to Key Employees who are foreign nationals or are
employed outside of the United States, or both, and as to whom the Committee
determines the interests of the Corporation could not as conveniently be served
by the grant of other forms of Awards under the Plan.
(c) Additional Terms and Conditions. The Committee may, consistent with
the plan, by way of Award Agreement or otherwise, determine such other terms,
conditions, restrictions or limitations, if any, on any Award of Phantom Stock.
12. PERFORMANCE SHARES
(a) Grants. Awards may be granted in the form of performance shares.
"Performance Shares" means interests the entitlement to which is based upon the
attainment of pre-determined Performance Targets as hereinafter defined during a
Performance Period as hereinafter defined. At the end of the Performance Period,
Performance Shares shall be converted into Common Stock (or Common Stock and
cash, as determined by the Award Agreement) and distributed to Participants
based upon such entitlement.
(b) Performance Criteria. The Committee may grant an Award of
Performance Shares to Participants as of the first day of each Performance
Period. As used herein, the term "Performance Period" means the period during
which a Performance Target is measured and the term "Performance Target" means
the predetermined goals established by the Committee. A Performance Target will
be established at the beginning of each Performance Period. If at the end of the
Performance Period, the Performance Target is fully met, the Performance Shares
will be converted 100% into shares of Common Stock (or the cash equivalent
thereof, as determined by the Award Agreement) and issued to the Participant.
Award payments in excess of 100% shall be permitted based upon an attainment in
excess of 100% of the Performance Target. If the Performance Target has not been
fully met, Performance Shares will be converted and delivered only to the
extent, if any, provided at the time of the grant of such Award for conversion
based upon partial attainment of the Performance Target and the balance of the
Performance Shares will be forfeited to the Corporation and available for
reissuance pursuant to Section 5 hereof. Award payments made in cash rather than
the issuance of Common Stock shall not, by reason of such payment in cash,
result in additional shares being available for reissuance pursuant to Section 5
hereof.
(c) Additional Terms and Conditions. The Committee may, consistent with
the terms of this Plan, by way of the Award Agreement or otherwise, determine
the manner of payment of Awards of Performance Shares and other terms,
conditions, restrictions or limitations, if any, on any Award of Performance
Shares.
13. DIRECTORS' STOCK OPTIONS
(a) Grants. Awards may be granted to non-employee Directors only in the
form of stock options satisfying the requirements of this Section 13. On the
first business day in January, 1992, there shall be granted to each non-employee
Director an option to purchase 4,000 shares of Common Stock. Thereafter, subject
to Section 18 hereof, on the first business day of each calendar year there
shall be granted to each non-employee Director, the option to purchase 4,000
shares of Common Stock. Notwithstanding the foregoing, no stock options shall be
granted
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to a Director whose normal retirement under a plan or policy of the Corporation
would occur within 12 months of the applicable grant date.
(b) Option Exercise Price. The option exercise price of such Awards
shall be the per share fair market value of the outstanding shares of the Common
Stock on the date such options are granted. The Committee shall be authorized to
compute the price per share on the date of grant. Payment of the option exercise
price may be made in cash or in shares of Common Stock or a combination of cash
and Common Stock.
(c) Administration. The Plan shall be administered by the Committee.
Subject to the express provisions of this Section 13, the Committee shall have
conclusive authority to construe and interpret any Stock Option Award granted
under this Section 13 and to adopt Administrative Policies with respect thereto
provided, however, that no action shall be taken which will prevent the options
granted under this Section 13 or any Award granted under the Plan from meeting
the requirements for exemption from Section 16(b) of the Exchange Act, or
subsequent comparable statute, as set forth in Rule 16b-3 of the Exchange Act or
any subsequent comparable rule.
(d) Option Agreement. The options granted hereunder shall be evidenced
by an option agreement, dated as of the date of the grant, which agreement shall
be in such form, consistent with the terms and requirements of this Section 13,
as shall be approved by the Committee from time to time and executed on behalf
of the Corporation by the Chief Executive Officer. The Option Agreement shall
require the optionee to refrain from selling or otherwise disposing of shares so
acquired for at least 120 days following the exercise of such option.
(e) Option Period. Options granted under this Section 13 shall not be
exercisable later than 5 years from the date of grant.
(f) Transferability. No option shall be transferable by the non-employee
Director except by will or the laws of descent and distribution, and during the
Director's lifetime options may be exercised only by him or his guardian or
legal representative.
(g) Limitations on Exercise. Directors' Stock Options shall become
exercisable to the extent of 25% of the optioned shares after the first
anniversary of the date of grant, 50% after the second anniversary, 75% after
the third anniversary and 100% after the fourth anniversary of the date of
grant. To the extent an option is not otherwise exercisable at the date of the
Director's retirement under a retirement plan or policy of the Corporation, it
shall become fully exercisable upon such retirement provided, however, that
Director Stock Options shall not become exercisable under this sentence prior to
the expiration of six months from the date of grant. Upon such retirement such
options shall be exercisable for a period of three years, subject to the
original term thereof. Options not otherwise exercisable at the time of the
death of a Director during continued service with the Corporation shall become
fully exercisable upon his death. Upon the death of a Director while in service
as a director, such options shall remain exercisable for a period of one year
after the date of death. To the extent an option is exercisable on the date a
Director ceases to be a director (other than by reason of death, the option
shall continue to be exercisable (subject to the original term of the option)
for a period of ninety (90) days thereafter.
14. PAYMENT OF AWARDS
Except as otherwise provided herein Award Agreements may provide that,
at the discretion of the Committee, payment of Awards may be made in cash,
Common Stock, a combination of cash and Common Stock, or any other form of
property as the Committee shall determine. Further, the terms of Award
Agreements may provide for payment of Awards in the form of a lump sum or
installments, as determined by the Committee.
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15. DIVIDENDS AND DIVIDEND EQUIVALENTS
If an Award is granted in the form of a Restricted Stock Award, Phantom
Stock Award or a Freestanding SAR, the Committee may choose, at the time of the
grant of the Award, to include as part of such Award an entitlement to receive
dividends or dividend equivalents, subject to such terms, conditions,
restrictions or limitations, if any, as the Committee may establish. Dividends
and dividend equivalents shall be paid in such form and manner and at such time
as the Committee shall determine. All dividends or dividend equivalents which
are not paid currently may, at the Committee's discretion, accrue interest or be
reinvested into additional shares of Common Stock.
16. TERMINATION OF EMPLOYMENT
The Committee shall adopt Administrative Policies determining the
entitlement of Participants who cease to be employed by either the Corporation
or Subsidiary whether because of death, disability, resignation, termination or
retirement pursuant to an established retirement plan or policy of the
Corporation or of its applicable Subsidiary.
17. ASSIGNMENT AND TRANSFER
The rights and interests of a Participant under the Plan may not be
assigned, encumbered or transferred except, in the event of the death of a
Participant, by will or the laws of descent and distribution.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any change in the outstanding shares of Common Stock by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
shares issuable pursuant to then outstanding Awards shall be appropriately
adjusted by the Committee whose determination shall be final.
19. EXTRAORDINARY DISTRIBUTIONS AND PRO-RATA REPURCHASES
In the event the Corporation shall at any time when an Award is
outstanding make an Extraordinary Distribution (as hereinafter defined) in
respect of Common Stock or effect a Pro-Rata Repurchase of Common Stock (as
hereinafter defined), the Committee shall consider the economic impact of the
Extraordinary Distribution or Pro-Rata Repurchase on Participants and make such
adjustments as it deems equitable under the circumstances. The determination of
the Committee shall, subject to revision by the Board of Directors, be final and
binding upon all Participants.
(a) As used herein, the term "Extraordinary Distribution" means any
dividend or other distribution of
(x) cash, where the aggregate amount of such cash dividend or
distribution together with the amount of all cash dividends and
distributions made during the preceding twelve months, when combined
with the aggregate amount of all Pro-Rata Repurchases (for this purpose,
including only that portion of the aggregate purchase price of such
Pro-Rata Repurchases which is in excess of the Fair Market Value of the
Common Stock repurchased during such twelve month period), exceeds ten
percent (10%) of the aggregate Fair Market Value of all shares of Common
Stock outstanding on the record date for determining the shareholders
entitled to receive such Extraordinary Distribution or
(y) any shares of capital stock of the Corporation (other than
shares of Common Stock), other securities of the Corporation, evidences
of indebtedness of the Corporation or
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any other person or any other property (including shares of any
Subsidiary of the Corporation), or any combination thereof.
(b) As used herein "Pro-Rata Repurchase" means any purchase of shares of
Common Stock by the Corporation or any Subsidiary thereof, pursuant to any
tender offer or exchange offer subject to Section 13(e) of the Exchange Act or
any successor provision of law, or pursuant to any other offer available to
substantially all holders of Common Stock; provided, however, that no purchase
of shares of the Corporation or any Subsidiary thereof made in open market
transactions shall be deemed a Pro-Rata Repurchase.
20. WITHHOLDING TAXES
The Corporation or the applicable Subsidiary shall be entitled to deduct
from any payment under the Plan, regardless of the form of such payment, the
amount of all applicable income and employment tax required by law to be
withheld with respect to such payment or may require the Participant to pay to
it such tax prior to and as a condition of the making of such payment. In
accordance with any applicable Administrative Policies it establishes, the
Committee may allow a Participant to pay the amount of taxes required by law to
be withheld from an Award by withholding from any payment of Common Stock due as
a result of such Award, or by permitting the Participant to deliver to the
Corporation shares of Common Stock having a fair market value, as determined by
the Committee, equal to the amount of such required withholding taxes.
21. NONCOMPETITION PROVISION
Unless the Award Agreement specifies otherwise, a Participant shall
forfeit all unexercised or unearned Awards if, (i) in the opinion of the
Committee, the Participant, without the written consent of the Corporation,
engages directly or indirectly in any manner or capacity as principal, agent,
partner, officer, director, employee, or otherwise, in any business or activity
competitive with the business conducted by the Corporation or any Subsidiary; or
(ii) the Participant performs any act or engages in any activity which in the
opinion of the Committee is inimical to the best interests of the Corporation.
22. REGULATORY APPROVALS AND LISTINGS
Notwithstanding anything contained in this Plan to the contrary, the
Corporation shall have no obligation to issue or deliver certificates of Common
Stock evidencing Restricted Stock Awards or any other Award payable in Common
Stock prior to (a) the obtaining of any approval from any governmental agency
which the Corporation shall, in its sole discretion, determine to be necessary
or advisable, (b) the admission of such shares to listing on the Stock Exchange
and (c) the completion of any registration or other qualification of said shares
under any state or federal law or ruling of any governmental body which the
Corporation shall, in its sole discretion, determine to be necessary or
advisable.
23. NO RIGHT TO CONTINUED EMPLOYMENT OR GRANTS
Participation in the Plan shall not give any Key Employee any right to
remain in the employ of the Corporation or any Subsidiary. The Corporation or,
in the case of employment with a Subsidiary, the Subsidiary, reserves the right
to terminate the employment of any Key Employee at any time. The adoption of
this Plan shall not be deemed to give any Key Employee or any other individual
any right to be selected as a Participant, to be granted any Awards hereunder or
if granted an Award in any year, to receive Awards in any subsequent year.
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24. AMENDMENT
The Committee may suspend or terminate the Plan at any time provided,
however, that the provisions of Section 13 shall not be amended more that once
every six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act or the rules and regulations under either of
them. In addition, the Committee may, from time to time, amend the Plan in any
manner, but may not without shareholder approval adopt any amendment which would
(a) materially increase the benefits accruing to Participants under the Plan (b)
materially increase the number of shares of Common Stock which may be issued
under the Plan (except as specified in Section 18), or (c) materially modify the
requirements as to eligibility for participation in the Plan.
25. GOVERNING LAW
The Plan shall be governed by and construed in accordance with the laws
of the State of Ohio, except as preempted by applicable Federal law.
26. CHANGE IN CONTROL
(a) Stock Options. In the event of a Change in Control options not
otherwise exercisable at the time of a Change in Control shall become fully
exercisable upon such Change in Control; provided, however, that options shall
not become exercisable under this provision prior to the expiration of six
months from the date of grant.
(b) Stock Appreciation Rights. In the event of a Change in Control,
Tandem SARs not otherwise exercisable upon a Change In Control shall become
exercisable to the extent that the related Stock Option is exercisable.
Freestanding SARs not otherwise exercisable upon a Change In Control shall also
become fully exercisable upon such Change In Control.
(i) The Corporation shall make payment to Participants with respect to
SARs in cash in an amount equal to the appreciation in the value of the SAR from
the base price specified in the Award Agreement to the Change In Control Price.
(ii) Such cash payments to Participants shall be due and payable, and
shall be paid by the Corporation, immediately upon the occurrence of such Change
In Control; and
(iii) After the payment provided for in (ii) above, Participants shall
have no further rights under SARs outstanding at the time of such Change In
Control.
(c) Restricted Stock Awards. In the event of a Change In Control, all
restrictions previously established with respect to Restricted Stock Awards will
conclusively be deemed to have been satisfied. Participants shall be entitled to
have issued to them the shares of Common Stock described in the applicable Award
Agreements, free and clear of any restriction or restrictive legend, except that
if upon the advice of counsel to the Corporation, shares of Common Stock cannot
lawfully be issued without restriction, then the Corporation shall make payment
to Participants in cash in an amount equal to the Change In Control Price of the
Common Stock that otherwise would have been issued;
(i) Such cash payments to Participants shall be due and payable, and
shall be paid by the Corporation, immediately upon the occurrence of such Change
In Control; and
(ii) After the payment provided for in (i) above, Participants shall
have no further rights under Restricted Stock Awards outstanding at the time of
such Change In Control of the Corporation.
(d) Phantom Stock. In the event of a Change In Control,
(i) all restrictions and conditions, if any, previously established with
respect to Phantom Stock Awards will conclusively be deemed to have been
satisfied and fulfilled. Participants shall
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be entitled to receive Common Stock in satisfaction of their rights under
Phantom Stock Awards in accordance with the amounts otherwise payable by the
Corporation pursuant to the Award Agreement.
(ii) Such Common Stock shall be issued to Participants by the
Corporation immediately upon the occurrence of such Change In Control; and
(iii) After the payment provided for in (ii) above, the Participants
shall have no further rights under Phantom Stock Awards outstanding at the time
of such change of control of the Corporation.
(e) Performance Shares. In the event of a Change In Control:
(i) All previously established Performance Targets will be conclusively
deemed to have been met. Participants shall be entitled to a pro-rata proportion
of the shares of Common Stock which would have been issued to them upon
conversion of any outstanding Performance Shares at the end of the Performance
Period (based upon the applicable Performance Targets which are conclusively
deemed to have been met by reason of the Change In Control), payable in the
manner specified in subsection (ii) hereof. The pro-rata proportion of the
shares of Common Stock to be issued shall be equal to a fraction, the numerator
of which is the duration of the Performance Period prior to such Change In
Control and the denominator of which is the original length of the Performance
Period;
(ii) In lieu of issuing shares of Common Stock upon such conversion of
Performance Shares, the Corporation shall make payment to Participants in cash
in an amount equal to the Change In Control Price of the shares of Common Stock
that would have been issued under paragraph (i) above;
(iii) Such cash payments to Participants shall be due and payable, and
shall be paid by the Corporation, immediately upon the occurrence of such Change
In Control; and
(iv) After the payment provided for in (ii) above, the Participants
shall have no further rights under awards of Performance Shares outstanding at
the time of such Change In Control of the Corporation.
(f) Directors' Stock Options. Directors' Stock Options not otherwise
exercisable at the time of a Change In Control shall become fully exercisable
upon such Change In Control; provided, however, that options shall not become
exercisable under this provision prior to the expiration of six months from the
date of grant.
(i) The Corporation shall make payment to Directors with respect to
Options in cash in an amount equal to the appreciation in the value of the
Option from the option exercise price specified in the Award Agreement to the
Change In Control Price.
(ii) Such cash payments to Directors shall be due and payable, and shall
be paid by the Corporation, immediately upon the occurrence of such Change In
Control; and
(iii) After the payment provided for in (i) above, Participants shall
have no further rights under Options outstanding at the time of such Change In
Control.
(g) Miscellaneous. Upon a Change In Control, no action shall be taken
which would adversely affect the rights of any Participant or the operation of
the Plan with respect to any Award to which the Participant may have become
entitled hereunder on or prior to the date of the Change In Control or to which
he may become entitled as a result of such Change In Control.
27. NO RIGHT, TITLE, OR INTEREST IN CORPORATION ASSETS
No Participant shall have any rights as a shareholder as a result of
participation in the Plan until the date of issuance of a stock certificate in
his name except, in the case of Restricted Stock
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Awards, to the extent such rights are granted to the Participant under Section
10(c) hereof. To the extent any person acquires a right to receive payments from
the Corporation under this Plan, such rights shall be no greater than the rights
of an unsecured creditor of the Corporation.
28. PAYMENT BY SUBSIDIARIES
Settlement of Awards to employees of Subsidiaries shall be made by and
at the expense of such Subsidiary. Except as prohibited by law, if any portion
of an Award is to be settled in shares of Common Stock, the Corporation shall
sell and transfer to the Subsidiary, and the Subsidiary shall purchase, the
number of shares necessary to settle such portion of the Award.
29. GENDER
Throughout this Plan, the masculine gender shall include the feminine.
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