FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HERLEY INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 23-2413500
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 Industry Drive, Lancaster, Pennsylvania 17603
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(Address of Principal Executive Offices) (Zip Code)
1996 STOCK OPTION PLAN
1992 NON-QUALIFIED STOCK OPTION PLAN
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(Full title of the plan)
LEE N. BLATT, CHAIRMAN
HERLEY INDUSTRIES, INC.
10 Industry Drive
Lancaster, Pennsylvania 17603
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(Name and address of agent for service)
717-397-2777
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(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Minimum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities To Be Price Per Offering Registration
To be Registered Registered Security (1) Price (1) Fee
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Common Stock, par 500,000 shs.(2) $13.00 $ 6,500,000 $ 1,970
value $.001 per
share 1,000,000 shs.(2) $13.00 $13,000,000 $ 3,939
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933, based upon the average of
the high and low closing price reported in the consolidated reporting system on
December 4, 1996. (2) The Registration Statement also covers an indeterminate
number of additional shares of Common Stock which may become issuable to
anti-dilution and adjustment provisions of the Plan.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference into this Registration
Statement the documents listed in (a) through (c) below:
(a) The Registrant's latest annual report filed pursuant to
Section 13 (a) or 15 (d) of the Securities Exchange Act of
1934, or either (I) the latest prospectus filed pursuant to
Rule 424 (b) under the Securities Act of 1933 that contains
audited financial statements for the Registrant's latest
fiscal year for which such statements have been filed or (II)
the Registrant's effective registration statement on Form 10
filed under the Securities Exchange Act of 1934 containing
audited financial statements for the Registrant's latest
fiscal year;
(b) All other reports filed pursuant to Section 13 (a) or 15 (d)
of the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the Registrant's documents referred to
in (a) above;
(c) The description of the class of securities to be offered which
is contained in a registration statement filed under Section
12 of the Securities Exchange Act of 1934, including any
amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13 (a), 13 (c), 14 and 15 (d) of the Securities Exchange Act of 1934, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all such 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.
David H. Lieberman, a member of the law firm of Blau, Kramer, Wactlar &
Lieberman, P.C., is a director of the Registrant. Mr. Lieberman owns 6,600 share
of common stock of the Registrant and owns warrants to purchase 10,000 shares of
common stock of the Registrant.
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Item 6. Indemnification of Directors and Officers.
Under provisions of the Certificate of Incorporation and By-Laws of
Registrant, each person who is or was a director or officer of Registrant shall
be indemnified by Registrant as of right to the full extent permitted or
authorized by the General Corporation Law of Delaware.
Under such law, to the extent that such person is successful on the
merits of defense of a suit or proceeding brought against him by reason of the
fact that he is a director or officer of Registrant, he shall be indemnified
against expenses (including attorneys' fees) reasonably incurred in connection
with such action.
If unsuccessful in defense of a third-party civil suit or a criminal
suit is settled, such a person shall be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgments, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of Registrant, and with
respect to any criminal action, had no reasonable cause to believe his conduct
was unlawful.
If unsuccessful in defense of a suit brought by or in the right of
Registrant, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of
Registrant except that if such a person is adjudicated to be liable in such suit
for negligence or misconduct in the performance of his duty to Registrant, he
cannot be made whole even for expenses unless the court determines that he is
fairly and reasonably entitled to be indemnified for such expenses.
The officers and directors of the Company are covered by officers' and
directors' liability insurance. The policy coverage is $3,000,000, which
includes reimbursement for costs and fees. There is a maximum aggregate
deductible for each loss under the policy of $200,000. The Company has entered
into Indemnification Agreements with each of its officers and directors. The
Agreements provide for reimbursement for all direct and indirect costs of any
type or nature whatsoever (including attorneys' fees and related disbursements)
actually and reasonably incurred in connection with either the investigation,
defense or appeal of a Proceeding, as defined, including amounts paid in
settlement by or on behalf of an Indemnitee.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4 (a) 1996 Stock Option Plan.
(b) 1992 Non-Qualified Stock Option Plan.
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5.1 Opinion and consent of Blau, Kramer, Wactlar & Lieberman, P.C.
relating to the legality of securities under the 1996 Stock Option
Plan and 1992 Non-Qualified Stock Option Plan.
23.1 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. - included in
their opinion filed as Exhibit 5.
23.2 Consent of Independent Public Accountants.
24 Power of Attorney (included on the signature page of this
Registration Statement).
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post- effective amendment to this Registration Statement:
(I) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post- effective amendment
thereof) which, individually or in the aggregate,
represents a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum 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 aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii)To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement. Provided,
however, that paragraphs (a)(1)(I) and (a)(1)(ii) do
not apply if the 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 of Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purposes 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.
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(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.
(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 (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 the 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 of 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 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
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 Lancaster, Pennsylvania on the 5th day of December, 1996.
HERLEY INDUSTRIES, INC.
BY: /S/ Lee N. Blatt
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Lee N. Blatt
Chairman of the Board
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POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on December 5, 1996 by the following
persons in the capacities indicated. Each person whose signature appears below
constitutes and appoints Lee N. Blatt, with full power of substitution, our true
and lawful attorney and agent to do any and all acts and things in our name and
on our behalf in our capacities indicated below which we may deem necessary or
advisable to enable Herley Industries, Inc. to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements of the Securities
and Exchange Commission, in connection with this Registration Statement
including specifically, but not limited to, power and authority to sign for us
or any of us in our names in the capacities stated below, any and all amendments
(including post-effective amendments) thereto; and we do hereby ratify and
confirm all that we shall do or cause to be done by virtue thereof.
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Signature Title
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By: /S/ Lee N. Blatt Chairman of the Board
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Lee N. Blatt (Principal Executive Officer)
By: /S/ Myron Levy President and Director
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Myron Levy
By: /S/ Gerald I. Klein Chief Technical Officer
------------------------- and Director
Gerald I. Klein
By: /S/ Anello C. Garefino Vice President Finance/CFO
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Anello C. Garefino (Principal Financial Officer)
By: /S/ David H. Lieberman Director
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David H. Lieberman
By: /S/ Thomas J. Allshouse Director
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Thomas J. Allshouse
By: /S/ John A. Thonet Director
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John A. Thonet
7
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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HERLEY INDUSTRIES, INC.
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Form S-8 Registration Statement
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E X H I B I T I N D E X
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Page No. In Sequential
Exhibit Numbering of all pages,
Number Exhibit Description including Exhibit Pages
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4 (a) 1996 Stock Option Plan 9 of 23
(b) 1992 Non-Qualified Stock Option Plan 17 of 23
5.1 Opinion and Consent of counsel 22 of 23
23.1 Consent of Counsel See Exhibit 5
23.2 Consent of Independent Public Accountants 23 of 23
24 Power of Attorney Included on the signature
page of this Registration
Statement.
8
Exhibit 4 (a)
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HERLEY INDUSTRIES, INC.
1996 STOCK OPTION PLAN
SECTION 1. GENERAL PROVISIONS
1.1. Name and General Purpose
The name of this plan is the Herley Industries, Inc. 1996 Stock Option Plan
(hereinafter called the "Plan"). The purpose of the Plan is to enable Herley
Industries, Inc. (the "Company") and its subsidiaries and affiliates to foster
and promote the interests of the Company by attracting and retaining officers
and employees of the Company who contribute to the Company's success by their
ability, ingenuity and industry, to enable such officers and employees of the
Company to participate in the long-term success and growth of the Company by
giving them a proprietary interest in the Company and to provide incentive
compensation opportunities competitive with those of competing corporations.
1.2 Definitions
a. "Affiliate" means any person or entity controlled by or under common
control with the Company, by virtue of the ownership of voting
securities, by contract or otherwise.
b. "Board" means the Board of Directors of the Company.
c. "Change in Control" means a change of control of the Company, or in any
person directly or indirectly controlling the Company, which shall mean:
(a) a change in control as such term is presently defined in Regulation
240.12b-(f) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); or
(b) if any "person" (as such term is used in Section 13(d) and 14(d) of
the Exchange Act) other than the Company or any "person" who on the
date of this Agreement is a director or officer of the Company,
becomes the "beneficial owner" (as defined in Rule 13(d)-3 under the
Exchange Act) directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the voting power of the
Company's then outstanding securities; or
(c) if during any period of two (2) consecutive years during the term of
this Plan, individuals who at the beginning of such period
constitute the Board of Directors, cease for any reason to
constitute at least a majority thereof.
d. "Code" means the Internal Revenue Code of 1986, as amended.
e. "Committee" means the Committee referred to in Section 1.3 of the
Plan.
f. "Common Stock" means shares of the Common Stock, par value $.10 per
share, of the Company.
4(a)-1
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g. "Company" means Herley Industries, Inc., a corporation organized
under the laws of the State of Delaware (or any successor
corporation).
h. "Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2) as promulgated by the Securities and Exchange Commission
(the "Commission"); provided, that such person is also an "outside
director" as set forth in Section 162(m) of the Code and the
regulations promulgated thereunder.
i. "Fair Market Value" means the market price of the Common Stock on
the National Association of Securities Dealers Automated Quotation
("NASDAQ") system on the date of the grant or on any other date on
which the Common Stock is to be valued hereunder. If no sale shall
have been reported on NASDAQ on such date, Fair Market Value shall
be determined by the Committee in accordance with the Treasury
Regulations applicable to incentive stock options under Section 422
of the Code.
j. "Incentive Stock Option" means an Incentive Stock Option as
described in Section 2.1 of the Plan.
k. "Non-Qualified Stock Option" means a Non-Qualified Stock Option as
described in Section 2.1 of the Plan.
l. "Option" means any option to purchase Common Stock under Section 2
of the plan.
m. "Participant" means any officer or employee of the Company, a
Subsidiary or an Affiliate who is selected by the Committee to
participate in the Plan.
n. "Subsidiary" means any corporation in which the Company possesses
directly or indirectly 50% or more of the combined voting power of
all classes of stock of such corporation.
o. "Total Disability" means accidental bodily injury or sickness which
wholly and continuously disabled an optionee. The Committee, whose
decisions shall be final, shall make a determination of Total
Disability.
1.3 Administration of the Plan
The Plan shall be administered by the Committee appointed by the Board
consisting of two or more members of the Board all of whom shall be
Disinterested Persons. The Committee shall serve at the pleasure of the Board
and shall have such powers as the Board may, from time to time, confer upon it.
Subject to this Section 1.3, the Committee shall have sole and complete
authority to adopt, alter, amend or revoke such administrative rules, guidelines
and practices governing the operation of the Plan as it shall, from time to
time, deem advisable, and to interpret the terms and provisions of the Plan.
The Committee shall keep minutes of its meetings and of action taken by it
without a meeting. A majority of the Committee shall constitute a quorum, and
4(a)-2
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the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by all of the members of the Committee
without a meeting, shall constitute the acts of the Committee.
1.4 Eligibility
Stock options may be granted only to regular full-time and part-time
employees of the Company or a Subsidiary or Affiliate. Subject to Section 2.3,
any person who has been granted any Option may, if he is otherwise eligible, be
granted an additional Option or Options. Those directors who are not regular
employees are not eligible.
1.5 Shares
The aggregate number of shares reserved for issuance pursuant to the Plan
shall be 500,000 shares of Common Stock, or the number and kind of shares of
stock or other securities which shall be substituted for such shares or to which
such shares shall be adjusted as provided in Section 1.6.
Such number of shares may be set aside out of the authorized but unissued
shares of Common Stock or out of issued shares of Common Stock acquired for and
held in the Treasury of the Company, not reserved for any other purpose. Shares
subject to, but not sold or issued under, any Option terminating or expiring for
any reason prior to its exercise in full will again be available for Options
thereafter granted during the balance of the term of the Plan.
1.6 Adjustments Due to Stock Splits, Mergers, Consolidation, Etc.
If, at any time, the Company shall take any action, whether by stock
dividend, stock split, combination of shares or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved for
issuance under the Plan and the number of shares which, at such time, are
subject to Options shall, to the extent deemed appropriate by the Committee, be
increased or decreased in the same proportion, provided, however, that the
Company shall not be obligated to issue fractional shares.
Likewise, in the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common Stock or other securities which are
reserved for issuance under the Plan and the number of shares or other
securities which, at such time are subject to Options.
In the event of a Change in Control, (a) all options outstanding on the date
of such Change in Control shall, for a period of sixty (60) days following such
Change in Control, become immediately and fully exercisable, and (b) an optionee
will be permitted to surrender for cancellation within sixty (60) days after
such Change in Control any option or portion of an option which was granted more
than six (6) months prior to the date of such surrender, to the extent not yet
exercised, and to receive a cash payment in an amount equal to the excess, if
any, of the Fair Market Value (on the date of surrender) of the shares of Common
Stock subject to the option or portion thereof surrendered, over the aggregate
purchase price for such Shares under the option.
4(a)-3
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1.7 Non-Alienation of Benefits
Except as herein specifically provided, no right or unpaid benefit under the
Plan shall be subject to alienation, assignment, pledge or charge and any
attempt to alienate, assign, pledge or charge the same shall be void. If any
Participant or other person entitled to benefits hereunder should attempt to
alienate, assign, pledge or charge any benefit hereunder, then such benefit
shall, in the discretion of the Committee, cease.
1.8 Withholding or Deduction for Taxes
If, at any time, the Company or any Subsidiary or Affiliate is required,
under applicable laws and regulations, to withhold, or to make any deduction for
any taxes, or take any other action in connection with any Option exercise, the
Participant shall be required to pay to the Company or such Subsidiary or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company, the Company or such Subsidiary or Affiliate may
accept a sufficient number of shares of Common Stock to cover the amount
required to be withheld.
1.9 Administrative Expenses
The entire expense of administering the Plan shall be borne by the Company.
1.10 General Conditions
a. The Board or the Committee may, from time to time, amend, suspend or
terminate any or all of the provisions of the Plan, provided that,
without the Participant's approval, no change may be made which
would prevent an Incentive Stock Option granted under the Plan from
qualifying as an Incentive Stock Option under Section 422 of the
Code or result in a "modification" of the Incentive Stock Option
under Section 424(h) of the Code or otherwise alter or impair any
right theretofore granted to any Participant ; and further provided
that, without the consent and approval of the holders of a majority
of the outstanding shares of Common Stock of the Company present at
a meeting at which a quorum exists, neither the Board nor the
Committee may make any amendment which (I) changes the class of
persons eligible for options; (ii) increases (except as provided
under Section 1.6 above) the total number of shares or other
securities reserved for issuance under the Plan; (iii) decreases the
minimum option prices stated in Section 2.2 hereof (other than to
change the manner of determining Fair Market Value to conform to any
then applicable provision of the Code or any regulation thereunder);
(iv) extends the expiration date of the Plan, or the limit on the
maximum term of Options; or (v) withdraws the administration of the
Plan from a committee consisting of two or more members, each of
whom is a Disinterested Person.
b. With the consent of the Participant affected thereby, the Committee
may amend or modify any outstanding Option in any manner not
inconsistent with the terms of the Plan, including, without
limitation, and irrespective of the provisions of Sections 2.3(c)
and 2.4(b) below, to accelerate the date or dates as of which an
installment of an Option becomes exercisable.
c. Nothing contained in the Plan shall prohibit the Company or any
Subsidiary or Affiliate from establishing other additional incentive
compensation arrangements for employees of the Company or such
Subsidiary or Affiliate.
4(a)-4
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d. Nothing in the Plan shall be deemed to limit, in any way, the right
of the Company or any Subsidiary or Affiliate to terminate a
Participant's employment with the Company (or such Subsidiary or
Affiliate) at any time.
e. Any decision or action taken by the Board or the Committee arising
out of or in connection with the construction, administration,
interpretation and effect of the Plan shall be conclusive and
binding upon all Participants and any person claiming under or
through any Participant .
f. No member of the Board or of the Committee shall be liable for any
act or action, whether of commission or omission, (I) by such member
except in circumstances involving actual bad faith, nor (ii) by any
other member or by any officer, agent or employee.
1.11 Compliance with Applicable Law
Notwithstanding any other provision of the Plan, the Company shall not be
obligated to issue any shares of Common Stock, or grant any Option with respect
thereto, unless it is advised by counsel of its selection that it may do so
without violation of the applicable Federal and State laws pertaining to the
issuance of securities and the Company may require any stock certificate so
issued to bear a legend, may give its transfer agent instructions limiting the
transfer thereof, and may take such other steps, as in its judgment are
reasonably required to prevent any such violation.
1.12 Effective Dates
The Plan was adopted by the Board on October 17, 1995, subject to approval
by the stockholders of the Company. The Plan shall terminate on October 16,
2005.
Section 2. OPTION GRANTS
2.1 Authority of Committee
Subject to the provisions of the Plan, the Committee shall have the sole and
complete authority to determine (I) the Participants to whom Options shall be
granted; (ii) the number of shares to be covered by each Option; and (iii) the
conditions and limitations, if any, in addition to those set forth in Sections 2
and 3 hereof, applicable to the exercise of an Option, including without
limitation, the nature and duration of the restrictions, if any, to be imposed
upon the sale or other disposition of shares acquired upon exercise of an
Option.
Stock options granted under the Plan may be of two types: an incentive stock
option ("Incentive Stock Option"); and a non-qualified stock option
("Non-Qualified Stock Option").
It is intended that the Incentive Stock Options granted hereunder shall
constitute incentive stock options within the meaning of Section 422 of the Code
and shall be subject to the tax treatment described in Section 422 of the Code.
Anything in the Plan to the contrary notwithstanding, no provision of the
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or, without the consent of the
optionee, any Incentive Stock Option under Section 422 of the Code.
4(a)-5
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The Committee shall have the authority to grant Incentive Stock Options, or
to grant Non-Qualified Stock Options, or to grant both types of Options. To the
extent that any Option does not qualify as an Incentive Stock Option, in whole
or in part, it shall constitute a separate Non-Qualified Stock Option to the
extent of such disqualification.
2.2 Option Exercise Price
The price of stock purchased upon the exercise of Options granted pursuant
to the Plan shall be the Fair Market Value thereof at the time that the Option
is granted.
If an employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of the stock of the Company or any parent
corporation of the Company or Subsidiary and an Option granted to such employee
is intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code, the exercise price shall be no less than 110% of the
Fair Market Value of the Common Stock on the date the Option is granted. The
purchase price is to be paid in full in cash, certified or bank cashier's check
or, at the option of the Company, Common Stock valued at its Fair Market Value
on the date of exercise, or a combination thereof, when the Option is exercised
and stock certificates will be delivered only against such payment.
2.3 Incentive Stock Option Grants
Each Incentive Stock Option will be subject to the following provisions:
a. Term of Option
An Incentive Stock Option will be for a term of not more than ten years
from the date of grant, except in the case of an employee described in
the second paragraph of Section 2.2 above in which case an Incentive
Stock Option will be for a term of not more than five years from the
date of the grant.
b. Annual Limit
To the extent the aggregate Fair Market Value of the Common Stock
(determined as of the date of grant) with respect to which any options
granted hereunder are intended to be designated as Incentive Stock
Options under the Plan (or any other incentive stock option plan of the
Company or any Subsidiary) which may be exercisable for the first time
by the optionee in any calendar year exceeds $100,000, such options
shall not be considered incentive stock options.
c. Exercise
Subject to the power of the Committee under Section 1.10(b) above and
except in the manner described below upon the death of the optionee, an
Incentive Stock Option may be exercised for all of the subject shares on
and after the first such anniversary of the date of the grant of such
Option but in no event later than the expiration of the term of the
Option.
An Incentive Stock Option shall be exercisable during the optionee's
lifetime only by the optionee and shall not be exercisable by the
optionee unless, at all times since the date of grant and at the
4(a)-6
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time of exercise, such optionee is an employee of the Company, any
parent corporation of the Company or any Subsidiary, except that, upon
termination of all employment (other than by death or by Total
Disability followed by death in the circumstances provided below) with
the Company, any parent corporation of the Company and any Subsidiary or
Affiliate, the optionee may exercise an Incentive Stock Option at any
time within three months thereafter but only to the extent such Option
is exercisable on the date of such termination.
If termination of employment is the result of the optionee having
reached normal retirement age, option grants continue to be exercisable
for five years after retirement but in no event later than the
expiration of the term of the Option.
In the event of the death of an optionee (I) while an employee of the
Company, any parent corporation of the Company or any Subsidiary or
Affiliate, or (ii) within three months after termination of all
employment with the Company, any parent corporation of the Company and
any Subsidiary or Affiliate (other than for Total Disability) or (iii)
within three months after termination on account of Total Disability of
all employment with the Company, any parent corporation of the Company
and any Subsidiary, such optionee's estate or any person who acquires
the right to exercise such option by bequest or inheritance or by reason
of the death of the optionee may exercise such optionee's Option at any
time within the period of one year from the date of death. In the case
of clauses (I) and (iii) above, such Option shall be exercisable in full
for all the remaining shares covered thereby, but in the case of clause
(ii) such Option shall be exercisable only to the extent it was
exercisable on the date of such termination.
If an optionee's employment is terminated for deliberate, willful or
gross misconduct, all rights under an Option expire upon receipt by the
optionee of the notice of such termination.
Notwithstanding the foregoing provisions regarding the exercise of an
Option in the event of death, Total Disability or other termination of
employment, in no event shall an Option be exercisable in whole or in
part after the termination date provided in the Option.
d. Transferability
An Incentive Stock Option granted under the Plan shall not be
transferable otherwise than by will or by the laws of descent and
distribution.
2.4 Non-Qualified Stock Option Grants
Each Non-Qualified Stock Option will be subject to the following provisions:
a. Term of Option
A Non-Qualified Stock Option will be for a term of not more than ten
years from the date of grant.
4(a)-7
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b. Exercise
The exercise of a Non-Qualified Stock Option shall be subject to the
same terms and conditions as provided under Section 2.3(c) above.
c. Transferability
A Non-Qualified Stock Option granted under the Plan shall not be
transferable otherwise than by will or by the laws of descent and
distribution.
2.5 Agreements
In consideration of any Options granted to a Participant under the Plan,
each such Participant shall enter into an Option Agreement with the Company
providing, consistent with the Plan, such terms as the Committee may deem
advisable.
4(a)-8
Exhibit 4 (b)
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HERLEY INDUSTRIES, INC.
1992 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED
1. Purpose and Effect
(a) The purpose of this plan (the "Plan") is to induce officers, directors
and other senior executives and management and supervisory personnel of and
consultants to Herley Industries, Inc., a Delaware corporation ("Herley") and
its subsidiaries (Herley and its subsidiaries being hereinafter collectively
referred to as the "Company"), who are in a position to make material
contributions to the Company's success, to remain in the service of the Company,
to offer them incentives and rewards in recognition of their share in the
Company's progress, and to encourage them to continue to promote the best
interests of the Company through the grant to them of options (the "Options")
for the purchase of Common Stock, $.10 par value, of Herley (the "Common
Stock"). The Plan is also intended to aid the Company in competing with other
enterprises for the services of new senior executives needed to help insure
continued development. For purposes of this Plan, the term "subsidiaries" shall
include all corporations at least 50% of the voting stock of which is owned
directly or indirectly by Herley.
(b) In the event that this Plan is not approved by the stockholders of
Herley, this Plan and all Options granted and to be granted hereunder shall be
null and void, and the Company shall have no obligation of any nature whatsoever
to any employee, director or other person arising out of either Plan or any
Options granted or to be granted hereunder.
2. Administration
(a) The Plan shall be administered by the Board of Directors of Herley (the
"Board"), provided however, that the Board may, in the exercise of its
discretion, designate from among its members a Stock Option Committee (the
"Committee") consisting of no fewer than three directors, each of whom shall be
a "disinterested person" within the meaning of Rule 16b-3 (or any successor rule
or regulation) promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and may delegate to the Committee full power and authority,
subject to such orders or resolutions not inconsistent with the provisions of
the Plan as may from time to time be issued or adopted by the Board, to
interpret the provisions and supervise the administration of the Plan. Any
member of the Committee may be removed at any time either with or without cause
by resolution adopted by the Board, and any vacancy on the Committee may at any
time be filled by resolution
0182S
4(b)-1
<PAGE>
adopted by the Board. Any or all power and functions of the Committee may at any
time and from time to time be exercised by the Board; provided, however, that
with respect to the participation in the Plan of persons who are members of the
Board, such powers and functions of the Committee may be exercised by the Board
only if, at the time of such exercise, a majority of the members of the entire
Board and a majority of the directors acting in the particular matter are
"disinterested persons" within the meanings of Rule 16b-3 promulgated under the
Exchange Act.
(b) Each Option shall be evidenced by an Option Agreement that shall contain
such terms and conditions (consistent with the terms and conditions of this
Plan) as may be approved by the Board or the Committee, as the case may be, and
shall be signed by an officer of Herley and the optionee (the "Optionee").
(c) Subject to any applicable provisions of Herley's By-Laws, all decisions
made by the Board or the Committee pursuant to the provisions of the Plan and
related orders or resolutions of the Board shall be final, conclusive and
binding on all persons, including the Company, stockholders, employees and
Optionees.
3. Shares Subject to the Plan
(a) The shares of Common Stock to be delivered upon exercise of Options
granted under the Plan shall be made available, at the discretion of the Board,
either from the authorized but unissued shares of Common Stock or from shares of
Common Stock reacquired by Herley and held in treasury.
(b) Subject to adjustments made pursuant to the provisions of Paragraph (c)
of this Section 3, the aggregate number of shares to be delivered upon exercise
of all Options that may be granted under this Plan shall be 1,000,000 shares. If
an Option granted under the Plan shall expire or terminate for any reason during
the term of the Plan, the shares subject to but not delivered under such Option
shall be available for the grant of other Options.
(c) In the event of a merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, or other change in corporate
structure affecting the Common Stock, appropriate adjustments shall be made in
the aggregate number of shares subject to the Plan and in the number of shares
subject to unexercised Options previously granted under the Plan.
4. Eligibility and Participation
The persons eligible to receive Options shall consist of officers, directors
and other senior executives and management and supervisory personnel of and
consultants to the Company. Subject to the limitations of the Plan, the Board of
Directors or the Committee, as the case may be, shall select the person to be
granted Options, determine the number and exercise price of the shares subject
0182S
4(b)-2
<PAGE>
to each Option, and determine the time when each Option shall be granted. More
than one Option may be granted to the same person.
5. Term of Plan and Option Period
The term during which Options may be granted under this Plan shall commence
on December 19, 1992 and expire on December 18, 2003, provided, however, that if
the Plan is not approved by the stockholders of Herley all Options granted
hereunder shall become null and void. Subject to the provisions of the Plan with
respect to death, retirement and termination of employment, the maximum period
during which each Option may be exercised may be fixed by the Board or the
Committee, as the case may be, at the time such Option is granted but shall in
no event exceed ten (10) years.
6. Exercise Price
(a) The price at which shares of Common Stock may be purchased upon exercise
of a particular Option shall be one hundred percent (100%) of the fair market
value of such shares on date such Option is granted, as determined by the Board
or the Committee, as the case may be.
(b) For purposes of determining the fair market value of a share of Common
Stock on the date of grant, if the Common Stock (I) is then listed on any
national securities exchange, the fair market value shall be the closing price
per share of the Common Stock on such exchange at the close of the trading
session on the date of grant, (ii) is then listed on NASDAQ (but not on any
national securities exchange), the fair market value shall be the closing price
per share of the Common Stock on NASDAQ on the date of grant, or (iii) is then
traded on the over-the-counter market (but not on a national securities exchange
or NASDAQ), the fair market value shall be the average of the closing bid and
asked prices of the Common Stock as reported by the National Quotation Bureau,
Inc. or other entity then publishing bid and asked prices for the Common Stock
for the date of grant, or, if unavailable, then the last trading date on which
bid and asked quotations were published immediately preceding the date of grant.
7. Exercise of Options
(a) Each Option granted under this Plan may be exercised only during the
continuance of the Optionee's employment or service with the Company and only as
to such percentage of the shares covered thereby during such periods as may be
determined at the time of grant by the Board or the Committee, as the case may
be, but if no such percentage is specified, then each Option granted under this
Plan may be exercised as to 50% of the shares covered thereby one year after the
date of grant and as to an additional 50% of the shares covered thereby two
years after the date of grant (so that such Option may be exercised as to 100%
of the shares covered thereby beginning two (2) years after the date of grant),
except in case of death, retirement or termination of employment or service as
0182S
4(b)-3
<PAGE>
hereinafter provided. Subject to the foregoing limitations and the terms and
conditions of the option certificate, each Option shall be exercisable with
respect to such number of shares and during such periods as shall be fixed by
the Board or the Committee, as the case may be; provided, however that if the
Board or the Committee grants an Option or Options exercisable in more than one
installment, and if the employment or service of an Optionee holding such Option
is terminated, the Option shall be exercisable as to such number of shares as to
which the Optionee had the right to exercise on the date of termination of
employment or service.
(b) No shares of Common Stock shall be delivered pursuant to the exercise of
any Option, in whole or in part, until qualified for delivery under such laws
and regulations as may be deemed by the Board or the Committee, as the case may
be, to be applicable thereto and until payment in full of the exercise price
thereof is received by the Company.
(c) When exercising Options in whole or in part, Optionees may pay the
exercise price in cash, in shares of Common Stock or by means of any other
consideration acceptable to the Board or the Committee. For purposes of valuing
any share of Common Stock used to exercise any Option in whole or in part, such
shares shall be valued as provided in Section 6(b) hereof. Shares of Common
Stock used to exercise any Option granted hereunder shall be free and clear of
all liens, pledges, claims, encumbrances and restrictions of any kind or nature
whatsoever, other than restrictions imposed upon such shares pursuant to the
provisions of the Securities Act of 1933, as amended.
(d) No Optionee, or legal representative, legatee, or distributee of an
optionee, shall be deemed to be a holder of any shares subject to any Option
granted hereunder unless and until the certificate or certificates therefor have
been issued and delivered.
8. Non-Transferability of Options
An Option granted under the Plan may not be transferred except by will or
the laws of descent and distribution, and during the lifetime of the person to
whom granted, may be exercised only by such person.
9. Death, Retirement and Termination of Employment
Any Option, the period of which has not theretofore expired, shall terminate
at the time of death of the person to whom granted or at the time of retirement
or termination for any reason of such person's employment or service with the
Company, and no share of Common Stock may thereafter be delivered pursuant to
such Option, except that:
(a) upon retirement or termination of employment or service (other than by
death, disability, voluntary termination or termination for cause), an Optionee
may within two (2) months after the date of such retirement or termination,
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4(b)-4
<PAGE>
purchase all or part of the shares with respect to which such Optionee is
entitled to exercise such Option, in accordance with the provisions of Section 7
hereof, but in no event after the expiration of the term of the Option ("cause"
for purposes of this Plan shall mean (I) willful disregard of duties, (ii)
habitual absence from employment or service, (iii) intoxication, or (iv)
dishonesty);
(b) upon the "disability" of any Optionee, the Optionee may within six (6)
months after the date of such disability, but in no event after the expiration
of the term of the Option, purchase all or part of the shares with respect to
which such Optionee is entitled to exercise such Option, in accordance with the
provisions of Section 7 hereof. For purposes of the Plan the term "disability"
shall mean a physical or mental disability as defined in Section 105 of the
Internal Revenue Code of 1986, as amended; and
(c) upon the death of any Optionee while in active employment or service,
the person or persons to whom such Optionee's rights under the Option are
transferred by will or the laws of descent and distribution may, within six (6)
months after the date of such Optionee's death, but in no event after the
expiration of the term of the Option, purchase all or any part of the shares
with respect to which the Option was exercisable on the date of death in
accordance with the provisions of Section 7 hereof.
10. Amendments and Discontinuance
The Board may amend, suspend, or discontinue the Plan, but may not, without
the prior approval of Herley's stockholders, make any amendment that would (I)
make any material change in the class of eligible persons as defined in the
Plan, (ii) increase the total number of shares for which Options may be granted
under the Plan, (iii) extend the term of the Plan or the maximum option period,
(iv) decrease the minimum option price, or (v) permit adjustments in the number
and option price of shares granted under the Plan except as permitted by the
provisions of Paragraph (c) of Section 3 hereof.
0182S
4(b)-5
EXHIBIT 5.1
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December 5, 1996
Securities and Exchange Commission
450 Fifth Avenue
Washington, D. C. 20549
Re: Herley Industries, Inc.
Registration Statement on Form S-8
Gentlemen:
Reference is made to the filing by Herley Industries, Inc. (The "Company")
of a Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission pursuant to the provisions of the Securities
Act of 1933, as amended, covering the registration of 1,500,000 shares of Common
Stock of the Company, par value $.10 per share (the "Common Stock") in
connection with the Company's 1992 Non-Qualified Stock Option Plan and 1996
Stock Option Plan (the "Plans").
As counsel for the Company, we have examined its corporate records,
including its Certificate of Incorporation, By-Laws, its corporate minutes, the
form of its Common Stock certificate, the Plans and such other documents as we
have deemed necessary or relevant under the circumstances.
Based upon our examination, we are of the opinion that:
1. The Company is duly organized and validly existing under the laws of
the State of Delaware.
2. There have been reserved for issuance 1,500,000 shares of the
Company's Common Stock, $.10 par value per share. The shares of
Common Stock subject to the Registration Statement have been duly
authorized and, when issued pursuant to the Plans, will be validly
issued, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement and in the
prospectus which constitutes a part thereof as counsel to the Company, and we
hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration
Statement.
Very truly yours,
BLAU, KRAMER, WACTLAR
& LIEBERMAN, P.C.
Exhibit 23.2
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our report dated September
27, 1996, included in Herley Industries, Inc. Form 10-K for the year ended July
28, 1996.
ARTHUR ANDERSEN LLP
Lancaster, PA
November 27, 1996
