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Registration Statement No. _________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
Registration Statement Under the Securities Act of 1933
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TRIDEX CORPORATION
(Exact name of issuer as specified in its charter)
Connecticut 06-0682273
(State or other jurisdic- (I.R.S. Employer
tion of incorporation) Identification No.)
61 Wilton Road
Westport, Connecticut 06880
(203) 226-1144
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
1998 Non-Executive Long Term Incentive Plan
(Full title of the Plan)
Daniel A. Bergeron
Tridex Corporation
61 Wilton Road
Westport, CT 06880
(203) 226-1144
(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)
Copy to:
Michael S. McSherry, Esq.
Hinckley, Allen & Snyder
28 State Street
Boston, Massachusetts 02109-1775
(617) 345-9000
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [x]
Approximate Date of Commencement of Proposed Sale to Public: From time to time
after the effective date of this Registration Statement.
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Exhibit Index on Page 10
2
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of
Each Class of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share(*) Offering Price Fee
- ---------- ---------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Common Stock 600,000 $7.59375 $4,556,250 $1,344.09
(no par value)
</TABLE>
(*) Computed pursuant to Rule 457(h) solely for the purpose of determining the
registration fee, based on the average of the high and low prices of the
Registrant's Common Stock as reported by NASDAQ on May 7, 1998. Of the 600,000
shares issuable under the 1998 Non-Executive Long Term Incentive Plan, some or
all of the shares may be subject to options granted with an exercise price that
is to be determined by a Committee of the Board of Directors but that shall in
no event be less than the fair mar ket value of such shares on the date of
grant; some or all of the shares may be issued as restricted stock which may be
purchased for a price which is equal to, greater than or less than such shares'
par value, and may be zero, as determined by the Committee; and some or all of
the shares may be subject to stock purchase rights, which may be purchased at a
price to be determined by the Committee.
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PART II
INFORMATION REQUIRED IN THE PROSPECTUS
Item 3. Incorporation of Certain Documents by Reference.
The following documents heretofore filed by Tridex Corporation (the
"Registrant") with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this Registration Statement:
(a) The Registrant's latest annual report on Form10-K or, if the financial
statements therein are more current, the Registrant's latest
prospectus, other than the prospectus of which this document is a
part, filed pursuant to Rule 424(b) under the Securities Act of 1933,
as amended (the "Securities Act").
(b) All other reports filed by the Registrant pursuant to Sections13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by
the annual report or the prospectus referred to in (a) above.
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement filed under Section 12 of the
Exchange Act, including any amendment or reports filed for the purpose
of updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
of the shares of Common Stock offered have been sold or which de-registers all
of such shares 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. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Regist ration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
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Item 6. Indemnification of Directors and Officers.
In general, Connecticut law provides that a corporation shall indemnify
any director who is wholly successful in the defense of any proceeding to which
he was a party because he was a director of the corporation against reasonable
expenses incurred in connection with such proceeding. In addition, the
corporation shall indemnify any individual who is a party to a proceeding
because he is a director against liability incurred in such proceeding if (1)
(A) he conducted himself in good faith, (B) he r easonably believed (i) in the
case of conduct in his official capacity, that his conduct was in the best
interests of the corporation, and (ii) in all other cases, that his conduct was
at least not opposed to the best interests of the corporation, and (C) in the
case of any criminal proceeding, he had no reasonable cause to believe that his
behavior was unlawful, or (2) he engaged in conduct for which broader
indemnification has been made permissible or obligatory under a provision of the
certificate of in corporation.
Connecticut law limits the general indemnification described above in
certain cases. The corporation shall not indemnify any director in connection
with a proceeding: (1) by or in the right of the corporation, except for
reasonable expenses incurred in connection with the proceeding if it is
determined that the director has met the standard of conduct whereby the
corporation may choose to indemnify him as provided above; or (2) with respect
to conduct for which he was adjudged liable on the basis t hat he received a
financial benefit to which he was not entitled, whether or not involving action
in his official capacity.
Connecticut law governing indemnification permits the corporation to
indemnify any officer of the corporation to the same extent as a director, and
any officer who is not also a director is entitled to mandatory indemnification
to the extent provided to a director.
The provisions of the Company's by-laws governing indemnification of
officers and directors are consistent with the above described provisions of
Connecticut law. The Company also maintains a directors and officers liability
insurance policy covering all of its directors and officers.
Other than as set forth above, the Company has made no provision for the
indemnification of persons controlling the Company. The directors, officers and
persons controlling the Company are not specifically indemnified by the Company
against liability arising under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
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Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
A list of the exhibits included as part of this Registration Statement
is set forth in the Exhibit Index which immediately precedes such exhibits and
is hereby incorporated by reference herein.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration
Statement (or the most recent post-effective amendment
thereof);
(iii) To include any material information with respect to the
plan of distribution not previously disclosed or any
material change to such information;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(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, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit
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plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered t herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 6, 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 Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
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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 Town of Westport, State of Connecticut, on
the 13th day of May, 1998.
TRIDEX CORPORATION
By: /s/ Seth M. Lukash
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Seth M. Lukash,
Chairman of the Board,
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Seth M. Lukash and Daniel A.
Bergeron each of them, with full power of substitution and full power to act
without the other, his true and lawful attorney-in-fact and agent for him in
his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration
Statement and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully, to all intents and purposes, as they or he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
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Signature Title Date
--------- ----- -----
/s/ Seth M. Lukash Chairman of the Board, May 13, 1998
- ------------------- President, Chief
Seth M. Lukash Executive Officer,
Chief Operating Officer
and Director
/s/ Paul J. Dunphy Director May 13, 1998
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Paul J. Dunphy
/s/ George T. Crandall Vice President, May 13, 1998
- ------------------- Treasurer, Controller
George T. Crandall (Principal Accounting
Officer)
/s/ Daniel A. Bergeron Vice President, Chief May 13, 1998
- ------------------- Financial Officer
Daniel A. Bergeron
/s/ Dennis J. Lewis Director May 13, 1998
- -------------------
Dennis J. Lewis
/s/ Graham Y. Tanaka Director May 13, 1998
- -------------------
Graham Y. Tanaka
/s/ Thomas R. Schwarz Director May 13, 1998
- -------------------
Thomas R. Schwartz
9
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<TABLE>
<CAPTION>
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
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<S> <C> <C>
4.1 By-laws of the Registrant, as
amended (filed as Exhibit3.5
to the Registrant's Annual
Report on Form 10-K dated
March 26, 1996, and by this
reference incorporated herein) N/A
4.2 1998 Non-Executive
Long Term Incentive Plan 11
5 Opinion of Hinckley, Allen &
Snyder 27
23.1 Consent of Price Waterhouse LLP 29
23.2 Consent of Hinckley, Allen &
Snyder (contained in their
opinion filed as Exhibit 5) N/A
24 Powers of Attorney
(included in the signature page
of this Registration Statement)
</TABLE>
10
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Exhibit 4.2
TRIDEX CORPORATION
1998 NON-EXECUTIVE LONG TERM INCENTIVE PLAN
SECTION 1. Purpose.
The purpose of Tridex Corporation's 1998 Non-Executive Long Term
Incentive Plan (the "Plan") is to promote the interests of the Company and its
subsidiaries, affiliates and shareholders by enabling Tridex Corporation (the
"Company") to attract, retain and reward employees, officers and directors of
the Company and its Subsidiaries and Affiliates, and strengthening the mutuality
of interests between such employees, officers and directors and the Company's
shareholders, by offering such employees, officers and directors
performance-based stock incentives and/or other equity interests or equity-based
incentives in the Company, as well as performance-based incentives payable in
cash.
Certain terms used herein are defined in Section 17 of the Plan.
SECTION 2. Stock Subject to the Plan.
The maximum aggregate number of shares of Stock reserved and available
for distribution under the Plan shall be 600,000 shares of Stock; provided,
however, that at no time may the aggregate number of Incentive Stock Options
issued hereunder exceed said maximum aggregate number of shares. Such shares may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.
Subject to Section 6(b)(iv) below, if any shares of Stock that have been
optioned under the 1989 Plan, or the Plan cease to be subject to a Stock Option,
or if any such shares of Stock that are subject to any Restricted Stock or
Deferred Stock award, Stock Purchase Right or Other Stock-Based Award granted
hereunder are forfeited or any such award otherwise terminates, without a
payment being made to the participant in the form of Stock, such shares shall be
available for distribution in connection with future awards under the Plan to
the extent permitted under Rule 16b-3 of the Exchange Act of 1934 (the "Exchange
Act"). Notwithstanding any other provision of the Plan, shares issued under the
Plan and later repurchased by the Company shall not become available for future
distribution under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, Stock dividend, Stock split or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, in the
number and option price of shares subject to outstanding Options granted under
the Plan, in the number and purchase price of shares subject to outstanding
Stock Purchase Rights under the Plan, and in the number of shares subject to
other outstanding awards granted under the Plan as may be determined to be
appropriate by the Committee, in its sole discretion, provided that the number
of shares subject to any award shall always be a whole number. Such adjusted
option price shall also be used to determine the amount payable by the Company
upon the exercise of any Stock Appreciation Right or Limited Stock Appreciation
Right associated with any Stock Option.
SECTION 3. Eligibility.
Employees of the Company and its Subsidiaries and Affiliates (but
excluding members of the Committee, any person who serves only as a director and
any person who serves as an officer of the Company) who are responsible for or
contribute to the management, growth and/or profitability of the business of the
Company and/or its Subsidiaries and Affiliates are eligible to be granted awards
under the Plan; provided, however, that only Employees of the Company and its
Subsidiaries are eligible to be grant ed Incentive Stock Options under the Plan.
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SECTION 4. Administration.
The Plan shall be administered by a Committee of not less than two (2)
Disinterested Persons, who shall be appointed by and shall be members of the
Board and who shall serve at the pleasure of the Board. If no Committee has been
appointed to administer the Plan, the functions of the Committee specified in
the Plan shall be exercised by the Board.
The Committee shall have full authority to grant, pursuant to the terms
of the Plan, to Employees eligible under Section 3: (i) Stock Options, (ii)
Stock Appreciation Rights, (iii)Limited Stock Appreciation Rights, (iv)
Restricted Stock, (v) Deferred Stock, (vi) Stock Purchase Rights and/or (vii)
Other Stock-Based Awards.
In particular, the Committee shall have the authority:
(i) to select the Employees of the Company and its Subsidiaries
and Affiliates to whom Stock Options, Stock Appreciation Rights, Limited Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase Rights
and/or Other Stock-Based Awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights, Limited Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase Rights
and/or Other Stock-Based Awards, or any combination thereof, are to be granted
hereunder to one or more eligible Employees;
(iii) to determine the number of shares to be covered by each such
award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but not
limited to, the share price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding any Stock Option or
other award;
(v) to determine whether and under what circumstances a Stock
Option may be settled in cash, Restricted Stock and/or Deferred Stock under
Sections 5(k) or (1), as applicable, instead of Stock;
(vi) to determine whether, to what extent and under what
circumstances grants and/or other awards under the Plan and/or other cash awards
made by the Company are to be made, and operate, on a tandem basis vis-a-vis
other awards under the Plan and/or cash awards made outside of the Plan, or on
an additive basis;
(vii) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award under
this Plan shall be deferred either automatically or at the election of the
participant (including providing for and determining the amount (if any) of any
deemed earnings on any deferred amount during any deferral period); and
(viii) to determine the terms and restrictions applicable to Stock
Purchase Rights and the Stock purchased by exercising such Rights.
The Committee shall have the authority to adopt, alter and repeal such
rules, guidelines and practices governing the Plan as it shall, from time to
time, deem advisable; to interrupt the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants.
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SECTION 5. Stock Options.
Stock Options may be granted alone, in addition to or in tandem with
other awards granted under the Plan and/or cash awards made outside of the Plan.
Each Stock Option granted under the Plan shall be in such form as the Committee
may from time to time approve.
Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options, and (ii) Non-Qualified Stock Options. The Committee shall have
the authority to grant to any optionee Incentive Stock Options, Non-Qualified
Stock Options, or both types of Stock Options (in each case with or without
Stock Appreciation Rights or Limited Stock Appreciation Rights).
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
a. Option Price. The option price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of
grant but shall not be less than one hundred percent (100%) of the Fair
Market Value of the Stock at the date of grant.
b. Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10) years
after the date the Option is granted.
c. Exercisability. Stock Options shall be exercisable in three (3)
equal annual installmentsat such time or times and subject to such terms and
conditions as shall be determined by the Committee at or after grant and the
Committee may accelerate the exercisability of an option at any time;
provided, however, that, except as provided in Sections 5(f), 5(g) and 11,
unless and otherwise determined by the Committee at or after grant, no Stock
Option shall be exercisable prior to the six-month anniversary date of the
granting of the Option. If the Committee provides, in its sole discretion,
that any Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time at or after grant in
whole or in part, based on such factors as the Committee shall determine in
its sole discretion.
d. Method of Exercise. Subject to whatever installment exercise
provisions apply under Section 5(c), Stock Options may be exercised in whole
or in part at any time during the option period, by giving written notice of
exercise to the Company specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the purchase
price, either by check, note or such other instrument as the Committee may
accept. As determined by the Committee, in its sole discretion, at or after
grant, payment in full or in part may also be made in the form of unrestricted
Stock already owned by the optionee or, in the case of the exercise of a
Non-Qualified Stock Option, payment in full or in part may be made in the form
of Restricted Stock or Deferred Stock subject to an award hereunder (based, in
each case, on the Fair Market Value of the Stock on the date the option is
exercised, as determined by the Committee).
If payment of the option exercise price of Non-Qualified Stock Option is
made in whole or in part in the form of Restricted Stock or Deferred Stock, such
Restricted Stock or Deferred Stock (and any replacement shares relating thereto)
shall remain (or be) restricted or deferred, as the case may be, in accordance
with the original terms of the Restricted Stock award or Deferred Stock award in
question, and any additional Stock received upon the exercise shall be subject
to the same forfeiture restri ctions or deferral limitations, unless otherwise
determined by the Committee, in its sole discretion, at or after grant.
No shares of Stock shall be issued until full payment therefor has been
made. Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer
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agent of the Company) of the stock certificate evidencing such Stock, and
compliance with the applicable requirements, if any, of Section 14(a), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to such Stock Option.
The Committee, in its sole discretion, may elect, in lieu of
accepting full payment from the Employee and delivering all or a portion of
the shares of Stock for which a Stock Option has been exercised, to pay the
Employee an amount in cash and/or shares of Stock equal in value to the
excess of the Fair Market Value of one share of Stock over the option price
per share specified in the related Stock Option multiplied by the number of
shares in respect of which the Stock Option shall have been exercised, with
the Committee having the right to determine the form of payment. When payment
is to be made in shares of Stock, the number of shares to be paid shall be
calculated on the basis of the average of the highest and lowest quoted
selling price, regular way, of the Stock on NASDAQ as of the date the Stock
Option is exercised. The Committee's election pursuant to this subparagraph
shall be made by giving written notice of such election to the employee (or
other person exercising the option).
e. Non-Transferability of Options. No Stock Option shall be transferable
by the optionee other than as provided below:
(i) Incentive Stock Options: Any Stock Option issued pursuant
to and intended to be an Incentive Stock Option under the Plan shall not be
transferable by the optionee other than by will or the laws of descent and
distribution.
(ii) Non-Qualified Stock Options: Any Stock Option issued
pursuant to the Plan which is not intended to qualify as an Incentive Stock
Option, shall not be transferable by the optionee other than by will or the laws
of descent and distribution; provided, however, that to the extent that
transferability pursuant to the following provisions would not adversely affect
the compliance of the Plan with Rule 16b-3, such Stock Option may also be
transferred, for no consideration, by the optionee t o the following transferees
("Transferee"):
(A) a member of the optionee's immediate family. For this
purpose, "immediate family" shall include only brothers and sisters (whether by
the whole or half blood) spouse, parents, and natural or adopted children;
(B) a trust for the benefit of members of the optionee's
immediate family; or
(C) a partnership whose only partners are members of the
Optionee's immediate family if the Transferee shall agree to be subject to the
same restrictions and conditions as relate to the optionee pursuant to the Plan.
f. Termination by Death. Subject to Section 5(j), if an optionee's
employment by the Company and any Subsidiary or Affiliate terminates by reason
of death, any Stock Option held by such optionee may thereafter be exercised,
to the extent such option was exercisable at the time of death or on such
accelerated basis as the Committee may determine at or after grant (or as may
be determined in accordance with procedures established by the Committee), by
the legal representative of the estate or by the legatee of the optionees under
the will of the optionee, for a period of one year (or such other period as the
Committee may specify at grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter.
g. Termination by Reason of Disability. Subject to Section 5(j), if an
optionee's employment by the Company and any Subsidiary or Affiliate terminates
by reason of Disability, any Stock Option held by such optionee may thereafter
be exercised by the optionee, to the extent it was exercisable at the time of
termination or on such accelerated basis as the Committee may determine at or
after grant (or as may be determined in accordance with procedures established
by the Committee), for a period of ninety (90) days (or such other period as
the Committee may specify at grant) from the date of such termination of
employment or until the expiration of the stated term of such Stock Option,
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whichever period is the shorter, provided, however, that, if the optionee dies
within such ninety (90) days period (or such other period as the Committee shall
specify at grant), any unexercised Stock Option held by such optionee shall
thereafter be exercisable to the extent to which it was exercisable at the time
of death for a period of twelve (12) months, from the date of such death or
until the expiration of the stated term of such Stock Option, whichever period
is the shorter. In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercisable after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option shall be treated as a Non-Qualified Stock Option.
h. Termination by Reason of Retirement. Subject to Section 5(j), if an
optionee's employment by the Company and any Subsidiary or Affiliate terminates
by reason of Normal or Early Retirement, any Stock Option held by such optionee
may thereafter be exercised by the optionee, to the extent it was exercisable at
the time of such Retirement or on such accelerated basis as the Committee may
determine at or after grant (or as may be determined in accordance with
procedures established by the Com mittee), for a period of ninety (90) days (or
such other period as Committee may specify at grant) from the date of such
termination of employment or the expiration of the stated term of such Stock
Option, whichever period is the shorter; provided, however, that, if the
optionee dies within such ninety-day period (or such other period as the
Committee may specify at grant), any unexercised Stock Option held by such
optionee shall thereafter be exercisable, to the extent to which it was
exercisable at the t ime of death, for a period of twelve (12) months from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. In the event of termination of
employment by reason of Retirement, if an Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, the option will thereafter by treated as a Non-Qualified Stock
Option.
i. Other Termination. Unless otherwise determined by the Committee (or
pursuant to procedures established by the Committee) at or after grant, if an
optionee's employment by the Company and any Subsidiary or Affiliate terminates
for any reason other than death, Disability or Normal or Early Retirement, the
Stock Option shall thereupon terminate, except that such Stock Option may be
exercised, to the extent otherwise then exercisable, for the lesser of ninety
(90) days or the balance of such Stock Option's term if the optionee is
involuntarily terminated without Cause by the Company and any Subsidiary or
Affiliate. For purposes of the Plan, "Cause" means a felony conviction of a
participant or the failure of a participant to contest prosecution for a
felony, or a participant's willful misconduct or dishonesty, any of which is
directly and materially harmful to the business or reputation of the Company or
any Subsidiary or Affiliate.
j. Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term of this 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 the Plan under
Section 422 of the Code, or, without the consent of the optionee(s) affected, to
disqualify any Incentive Stock Option under such Section 422. Incentive Stock
Options shall not be treated as "incentiv e stock options" to the extent that
the aggregate Fair Market Value (determined at the time the Incentive Stock
Option is granted) of Stock with respect to which Incentive Stock Options
meeting the requirements of Section 422(b) of the Code are exercisable for the
first time by any participant during any calendar year (under all plans of the
Company and its Subsidiaries) exceeds $100,000, and such excess shall be treated
as a Non-Qualified Stock Option.
To the extent permitted under Section 422 of the Code or the applicable
regulations thereunder or any applicable Internal Revenue Service pronouncement:
(i) if (x) a participant's employment is terminated by reason
of death, Disability or Normal or Early Retirement, and (y) the portion of
any Incentive Stock Option that is otherwise exercisable during the
post-termination period specified under Sections 5(f), (g) or (h) is greater
than the portion of such option that is immediately exercisable as an
"incentive stock option" during such post-termination period under Section
422, such excess shall be treated as a Non-Qualified Stock Option; and
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(ii) if the exercise of an Incentive Stock Option is
accelerated by reason of a Change in Control, any portion of such option that
is not exercisable as an Incentive Stock Option by reason of the $100,000
limitation contained in Section 422(d) of the Code shall be treated as a
Non-Qualified Stock Option.
k. Buyout Provisions. The Committee may at any time offer to
purchase an Option previously granted for a payment in cash, Stock, Deferred
Stock or Restricted Stock, based on such terms and conditions as the Committee
shall establish and communicate to the optionee at the time that such offer is
made.
l. Settlement Provisions. If the option agreement so provides at
grant or is amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part of the shares
to be issued with respect to the spread value of an exercised Option take the
form of Deferred or Restricted Stock, which shall be valued on the date of
exercise on the basis of the Fair Market Value (as determined by the
Committee) of such Deferred or Restricted Stock dete rmined without regard to
the deferral limitations and/or forfeiture restrictions involved.
SECTION 6. Stock Appreciation Rights.
a. Grant and Exercise. Stock Appreciation Rights may be granted
in conjunction with all or part of any Stock Option granted under the Plan. In
the case of a Non-Qualified Stock Option, such rights may be granted either at
or after the time of the grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of the grant of such
Stock Option. A Stock Appreciation Right or applicable portion thereof granted
with respect to a given Stock O ption shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option,
subject to such provisions as the Committee may specify at grant where a Stock
Appreciation Right is granted with respect to less than the full number of
shares covered by a related Stock Option.
A Stock Appreciation Right may be exercised by an optionee, subject to
Section 6(b), in accordance with the procedures established by the Committee for
such purpose. Upon such exercise, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b). Stock Options
relating to exercised Stock Appreciation Rights shall no longer be exercisable
to the extent that the related Stock Appreciation Rights have been exercised.
b. Terms and Conditions. Stock Appreciation Rights shall be
subject to such terms and conditions, not inconsistent with the provisions of
the Plan, as shall be determined from time to time by the Committee, including
the following:
(i) Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that Stock Options to which they relate shall
be exercisable in accordance with the provisions of Section 5 and this Section
6 of the Plan; provided, however, that any Stock Appreciation Right granted to
an optionee subject to Section 16(b) of the Exchange Act subsequent to the
grant of the related Stock Option shall not be exercisable during the first six
(6) months of its term unless the grant has been approved in accordance with
the approval requirements of Rule 16b-3(d)(1) or (2), except that this special
limitation shall not apply in the event of death or Disability of the optionee
prior to the expiration of the six-month period. The exercise of Stock
Appreciation Rights held by optionees who are subject to Section 16(b) of the
Exchange Act shall comply with Rule 16b-3 promulgated thereunder, to the extent
applicable.
(ii) Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive an amount in cash and/or shares of Stock
equal in value to the excess of the Fair Market Value of one share of Stock over
the option price per share specified in the related Stock Option multiplied by
the number of shares in respect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to determine the form of
payment. When payment is to be made in
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shares of Stock, the number of shares to be paid shall be calculated on the
basis of the average of the highest and lowest quoted selling price, regular
way, of the Stock on NASDAQ as of the date of exercise.
(iii) Stock Appreciation Rights shall be transferable
only when and to the extent that the underlying Stock Option would be
transferable under Section 5(e) of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right, the
Stock Option or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the limitation set
forth in Section 2 of the Plan on the number of shares of Stock to be issued
under the Plan, but only to the extent of the number of shares issued under the
Stock Appreciation Right at the time of exercise based on the value of the Stock
Appreciation Right at such time.
(v) In its sole discretion, the Committee may grant
"Limited" Stock Appreciation Rights under this Section 6, i.e., Stock
Appreciation Rights that become exercisable only in the event of a Change in
Control and/or a Potential Change in Control, subject to such terms and
conditions as the Committee may specify at grant. Such Limited Stock
Appreciation Rights shall be settled solely in cash.
(vi) The Committee, in its sole discretion, may also
provide that, in the event of a Change in Control and/or a Potential Change in
Control, the amount to be paid upon the exercise of a Stock Appreciation Right
or Limited Stock Appreciation Right shall be based on the Change of Control
Price, subject to such terms and conditions on the Committee may specify at
grant.
SECTION 7. Restricted Stock.
a. Administration. Shares of Restricted Stock may be issued
either alone, in addition to or in tandem with other awards granted under the
Plan and/or cash awards made outside the Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of Restricted
Stock will be made, the number of shares to be awarded, the price (if any) to be
paid by the recipient of Restricted Stock (subject to Section 7(b)), the time or
times within with such awards may be subject to forfeiture, and all other terms
and conditions of the awards.
The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals or such other factors as the Committee
may determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same with
respect to each recipient.
b. Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the applicable terms and conditions of such award.
(i) The purchase price for shares of Restricted Stock
shall be equal to, less than or greater than their par value and may be zero.
(ii) Awards of Restricted Stock must be accepted within a
period of sixty (60) days (or such shorter period as the Committee may specify
at grant) after the award date, by executing a Restricted Stock award agreement
and paying whatever price (if any) is required under Section 7(b)(i).
(iii) Each participant receiving a Restricted Stock award
shall be issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such participant, and
shall bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such award.
(iv) The Committee shall require that the stock
certificates evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a
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condition of any Restricted Stock award, the participant shall have delivered a
stock power, endorsed in blank, relating to the Stock covered by such award.
c. Restrictions and Conditions. The shares of Restricted Stock
awarded pursuant to this Section 7 shall be subject to the following
restrictions and conditions:
(i) Subject to the provisions of the Plan and the award
agreement, during a period set by the Committee commencing with the date of such
award (the "Restricted Period"), the participant shall not be permitted to sell,
transfer, pledge or assign shares of Restricted Stock awarded under the Plan.
Within these limits, the Committee, in its sole discretion, may provide for the
lapse of such restrictions in installments and may accelerate or waive such
restriction in whole or in part, ba sed on service, performance and/or such
other factors or criteria as the Committee may determine, in its sole
discretion.
(ii) Except as provided in this paragraph (ii) and Section
7(c)(i), the participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a shareholder of the Company, including the right to
vote the shares, and the right to receive any cash dividends. The Committee, in
its sole discretion, as determined at the time of award, may permit or require
the payment of cash dividends to be deferred and, if the Committee so
determines, reinvested, subject to Secti on 14(e), in additional Restricted
Stock to the extent shares are available under Section 2, or otherwise
reinvested. Pursuant to Section 2 above, Stock dividends issued with respect to
Restricted Stock shall be treated as additional shares of Restricted Stock that
are subject to the same restrictions and other terms and conditions that apply
to the shares with respect to which such dividends are issued.
(iii) Subject to the applicable provisions of the award
agreement and this Section 7, upon termination of a participant's employment
with the Company and any Subsidiary or Affiliate for any reason during the
Restriction Period, all shares still subject to restriction will vest, or be
forfeited, in accordance with the terms and conditions established by the
Committee at or after grant.
(iv) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock subject to such Restriction Periods,
certificates for an appropriate number of unrestricted shares shall be delivered
to the participant promptly.
d. Minimum Value Provision. In order to better ensure that award
payments actually reflect the performance of the Company and service of the
participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Restricted Stock award, subject to such
performance, future service deferral and other terms and conditions as may be
specified by the Committee.
SECTION 8. Deferred Stock.
a. Administration. Deferred Stock may be awarded either alone,
in additions to or in tandem with other awards granted under the Plan and/or
cash awards made outside the Plan. The Committee shall determine the eligible
persons to whom and the time or times at which Deferred Stock shall be awarded,
the number of shares of Deferred Stock to be awarded to any person, the duration
of period (the "Deferral Period") during which, and the conditions under which,
receipt of the Stock will be deferr ed, and the other terms and conditions of
the award in addition to those set forth in Section 8(b).
The Committee may condition the grant of Deferred Stock upon the
attainment of specified performance goals or such other factors or criteria as
the Committee shall determine, in its sole discretion.
The provisions of Deferred Stock awards need not be the same with
respect to each recipient.
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b. Terms and Conditions. The shares of Deferred Stock awarded
pursuant to this Section 8 shall be subject to the following terms and
conditions:
(i) Subject to the provisions of the Plan and the award
agreement referred to in Section 8(b)(vi) below, Deferred Stock awards may not
be sold, assigned, transferred, pledged or otherwise encumbered during the
Deferral Period. At the expiration of the Deferral Period (or the Elective
Deferral Period referred to in Section 8(b)(v), where applicable), share
certificates shall be delivered to the participant, or his legal representative,
in a number equal to the shares covered by the D eferred Stock award.
(ii) Unless otherwise determined by the Committee at
grant, amounts equal to any dividends declared during the Deferral Period with
respect to the number of shares covered by a Deferred Stock award will be paid
to the participant currently, or deferred and deemed to be reinvested in
additional Deferred Stock, or otherwise reinvested, all as determined at or
after the time of the award by the Committee, in its sole discretion.
(iii) Subject to the provision of the award agreement and
this Section 8, upon termination of a participant's employment with the Company
and any Subsidiary or Affiliate for any reason during the Deferral Period for a
given award, the Deferred Stock in question will vest, or be forfeited, in
accordance with the terms and conditions established by the Committee at or
after grant.
(iv) Based on service, performance and/or such other
factors or criteria as the Committee may determine, the Committee may, at or
after grant, accelerate the vesting of all or any part of any Deferred Stock
award and/or waive the deferral limitations for all or any part of such award.
(v) A participant may elect to further defer receipt of an
award (or an installment of an award) for a specified period or until a
specified event (the "Elective Deferral Period"), subject in each case to the
Committee's approval and to such terms as are determined by the Committee,
all in its sole discretion. Subject to any exceptions adopted by the
Committee, such election must generally be made at least twelve (12) months
prior to completion of the Deferral Period for such Deferr ed Stock award (or
such installment).
(vi) Each award shall be confirmed by, and subject to the terms
of, a Deferred Stock agreement executed by the Company and the participant.
c. Minimum Value Provisions. In order to better ensure that
award payments actually reflect the performance of the Company and service of
the participant, the Committee may provide, in its sole discretion, for a tandem
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Deferred Stock award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.
SECTION 9. Stock Purchase Rights.
a. Awards and Administration. Subject to Section 2 above, the
Committee may grant eligible participants Stock Purchase Rights which shall
enable such participants to purchase Stock (including Deferred Stock and
Restricted Stock):
(i) at its Fair Market Value on the date of grant;
(ii) at fifty percent (50%) of such Fair Market Value on such
date;
(iii) at an amount equal to Book Value on such date; or
(iv) at an amount equal to the par value of such Stock on such
date.
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The Committee shall also impose such deferral, forfeiture and/or other
terms and conditions as it shall determine, in its sole discretion, on such
Stock Purchase Rights or the exercise thereof.
The terms of Stock Purchase Rights awards need not be the same with
respect to each participant.
Each Stock Purchase Right award shall be confirmed by, and be subject to
the terms of, a Stock Purchase Rights Agreement.
b. Exercisability. Stock Purchase Rights shall generally be
exercisable for such period after grant as is determined by the Committee not to
exceed thirty (30) days. However, the Committee may provide, in its sole
discretion, that the Stock Purchase Rights of persons potentially subject to
Section 16(b) of the Exchange Act shall not become exercisable until six (6)
months and one (1) day after the grant date, and shall become exercisable for
ten (10) trading days at the purchase price spec ified by the Committee in
accordance with Section 9(a).
SECTION 10. Other Stock-Based Awards.
a. Administration. Other awards of Stock and other awards that are
valued in whole or in part by reference to, or are otherwise based on, Stock
("Other Stock-Based Awards"), including, without limitation, performance shares,
convertible preferred stock, convertible debentures, exchangeable securities and
Stock awards or options valued by reference to Book Value or Subsidiary
performance, may be granted alone, in addition to or in tandem with Stock
Options, Stock Appreciation Rights, Restric ted Stock, Deferred Stock or Stock
Purchase Rights granted under the Plan and/or cash awards made outside of the
Plan.
Subject to the provision of the Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which
such awards shall be made, the number of shares of Stock, or units in the
case of Other Stock-Based Awards, to be awarded pursuant to such awards, and
all other conditions of the awards. The Committee shall also have the
authority to provide for the payment of any such award upon the completion of
a specified performance period, in cash or Stock, or a combination of cash or
Stock.
The provisions of Other Stock-Based Awards need not be the same with
respect to each recipient.
b. Terms and Conditions. Other Stock-Based Awards made pursuant to
this Section 10 shall be subject to the following terms and conditions:
(i) Subject to the provisions of this Plan and the award
agreement referred to in Section 10(b)(v) below, shares subject to awards made
under this Section 10 may not be sold, assigned, transferred, pledged or
otherwise encumbered prior to the date on which the shares are issued, or, if
later, the date on which any applicable restriction, performance or deferral
period lapses.
(ii) Subject to the provisions of the Plan and the award
agreement and unless otherwise determined by the Committee at grant, the
recipient of an award under this Section 10 shall be entitled to receive,
currently or on a deferred basis, interest or dividends or interest or dividend
equivalents with respect to the number of shares covered by award, as
determined at the time of the award by the Committee, in its sole discretion,
and the Committee may provide that such amounts (if any) shall be deemed to
have been reinvested in additional Stock or otherwise reinvested.
(iii)Any award under Section 10 and any Stock covered by any
such award shall vest or be forfeited to the extent so provided in the award
agreements, as determined by the Committee, in its sole discretion.
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(iv) In the event of the participant's Retirement, Disability
or death, or in cases of special circumstances, the Committee may, in its sole
discretion, waive in whole or in part any or all of the remaining limitations
imposed hereunder (if any) with respect to any or all of an award under this
Section 10.
(v) Each award under this Section 10 shall be confirmed by,
and subject to the terms of, an agreement or other instrument by the Company and
by the participant.
(vi) Stock (including securities convertible into Stock)
issued on a bonus basis under this Section 10 may be issued for no cash
consideration. Stock (including securities convertible into Stock) purchased
pursuant to a purchase right awarded under this Section 10 shall be priced at
least fifty percent (50%) of the Fair Market Value of the Stock on the date of
grant.
SECTION 11. Change in Control Provisions.
a. Impact of Event. In the event of:
(1) a Change in Control; or
(2) a Potential Change in Control, but only if and to the
extent so determined by the Committee or the Board at or after grant (subject to
any right of approval expressly reserved by the Committee or the Board at the
time of such determination); the following acceleration and valuation provisions
shall apply:
(i) Any Stock Appreciation Rights (including, without
limitation, any Limited Appreciation Rights) outstanding for at least six (6)
months and any Stock Options awarded under the Plan not previously exercisable
and vested shall become fully exercisable and vested.
(ii) The restrictions and deferral limitations applicable
to any Restricted Stock, Deferred Stock, Stock Purchase Rights and Other
Stock-Based Awards, in each case to the extent not already vested under the
Plan, shall lapse and such shares shall be deemed fully vested.
(iii) The value of all outstanding Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Stock Purchase Rights and
Other Stock-Based Awards, in each case to the extent vested, shall, unless
otherwise determined by the Committee in its sole discretion at or after grant
but prior to any Change in Control, be cashed out on the basis of the Change in
Control Price as of the date such Change in Control or such Potential Change in
Control is determined to have occurred or such other date as the Committee may
determine prior to the Change in Control.
b. Definition of "Change in Control". For purposes of Section ll(a), a
"Change in Control" means the happening of any of the following:
(i) When any "person" as defined in Section 3(a)(9) of the Exchange
Act and as used in Section 13(d) and 14(d) thereof, other than Alvin Lukash,
Leslie Lukash, Mildred Lukash, Seth Lukash, Laura Lukash Knee or Samuel Knee and
their respective heirs (collectively, the "Lukash Group"), including a "group"
as defined in Section 13(d) of the Exchange Act but excluding the Company and
any Subsidiary and any employee benefit plan sponsored or maintained by the
Company or any Subsidiary (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13(d)-3 under the Exchange Act, of securities of the Company representing
twenty percent (20%) or more of the combined voting power of the Company's then
outstanding securities; or
(ii) When, during any period of twenty-four (24) consecutive
months during the existence of the Plan, the individuals who, at the beginning
of such period, constitute the Board (the "Incumbent Directors") cease for any
reason other than death to constitute at least a majority thereof,
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provided, however, that a director who was not a director at the beginning of
such twenty-four (24) month period shall be deemed to have satisfied such
twenty-four (24) month requirement (and be an Incu mbent Director) if such
director was elected by, or on the recommendations or with the approval of, at
least two-thirds of the directors who then qualified as Incumbent Directors
either actually (because they were directors at the beginning of such
twenty-four (24) month period) or by prior operations of this Section ll(b)(ii);
or (iii) The occurrence of a transaction requiring shareholder approval for the
acquisition of the Company by an entity other than the Company or a Subsidiary
through purchase of as sets, or by merger, or otherwise.
c. Definition of Potential Change in Control. For purposes of
Section ll(a), a "Potential Change in Control" means the happening of any one of
the following:
(i) The approval by shareholders of an agreement by the
Company, the consummation of which would result in a Change in Control of the
Company as defined in Section ll(b); or
(ii) The acquisition of beneficial ownership, directly or
indirectly, by an entity, person or group (other than the Company or a
Subsidiary or any Company employee benefit plan (including any trustee or such
plan acting as such trustee), any member or members of the Lukash Group or the
Lukash Group) or securities of the Company representing five percent (5%) or
more of the combined voting power of the Company's outstanding securities and
the adoption by the Board of Directors of a re solution to the effect that a
Potential Change in Control of the Company has occurred for the purposes of the
Plan.
d. Change in Control Price. For purposes of this Section 11, "Change
Control Price" means the highest price per share paid in any transaction
reported on the NASDAQAmerican Stock Exchange Composite Index, or paid or
offered in any bona fide transaction related to a potential or actual Change in
Control of the Company at any time during the sixty (60) day period immediately
preceding the occurrence of the Change in Control period immediately preceding
the occurrence of the Change in Control (or, where applicable, the occurrence of
the Potential Change in Control event), in each case as determined by the
Committee except that, in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Stock Options, such price shall be based only on
transactions reported for the date on which the optionee exercises such Stock
Appreciation Rights (or Limited Stock Appreciation Rights) or, where applicable,
the date on which a cashout occurs under Section ll(a)(ii).
SECTION 12. Amendment and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made which would impair the rights of an
optionee or participant under a Stock Option, Stock Appreciation Right, Limited
Stock Appreciation Right, Restricted or Deferred Stock award, Stock Purchase
Right or Other Stock-Based Award theretofore granted, without the optionee's or
participant's consent.
The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 2
above, no such amendment shall impair the rights of any holder without the
holder's consent. The Committee may also substitute new Stock Options for
previously granted Stock Options (on a one for one or other basis), including
previously granted Stock Options having higher option exercise prices.
Subject to the above provisions, the Board shall have broad authority to
amend the Plan to take into account changes in applicable securities and tax
laws and accounting rules, as well as other developments.
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SECTION 13. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that, unless the Committee determines otherwise
with the consent of the affected participant, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.
SECTION 14. General Provisions.
a. The Committee may require each person purchasing shares of
Stock pursuant to a Stock Option or other award under the Plan to represent to
and agree with the Company in writing that the optionee or participant is
acquiring the shares without a view to distribution thereof. The certificates
for such shares may include any legend, which the Committee deems appropriate to
reflect any restrictions on transfer.
All certificates for shares of Stock or other securities delivered under
the Plan shall be subject to compliance with such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Commission, any stock exchange upon
which the Stock is then listed, and any applicable Federal or state securities
law, and shall further be subject to the approval of counsel for the Company
with respect to such compliance. The Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to such
restrictions.
b. Nothing contained in this Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to shareholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases.
c. The adoption of the Plan shall not confer upon any employee
of the Company or any Subsidiary or Affiliate any right to continue employment
with the Company or a Subsidiary or Affiliate, as the case may be, nor shall it
interfere in any way with the right of the Company or a Subsidiary or Affiliate
to terminate the employment of any of its employees at any time.
d. No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Committee regarding the
payment of, any Federal, state, or local taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations may be settl ed with Stock, including Stock
that is part of the award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements and the Company and its Subsidiaries or Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment or any kind otherwise due to the participant.
e. The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Stock (or in Deferred Stock or other types
of Plan awards) at the time of any dividend payment shall only be permissible if
sufficient shares of Stock are available under Section 2 for such reinvestment
(taking into account then outstanding Stock Options, Stock Purchase Rights and
other Plan awards).
f. The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Connecticut.
SECTION 15. Effective Date of Plan.
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The Plan shall be effective as of March 25,1997, subject to the as of
April 9, 1998. However, approval of the Plan is required by the Internal Revenue
Code of 1986, as amended (the "Code"), in order for options granted under the
Plan to qualify as Incentive Stock Options. Any grants made under the Plan prior
to such approval shall be effective when made (unless otherwise specified by the
Committee at the time of grant), but shall be conditioned on, and subject to,
such approval of the Plan by such shareholders.
SECTION 16. Term of Plan.
No Stock Option, Stock Appreciation Right, Restricted Stock award,
Deferred Stock award, Stock Purchase Right or Other Stock-Based Award shall be
granted pursuant to the Plan on or after the tenth anniversary of the date of
shareholder approval, but awards granted prior to such tenth anniversary may
extend beyond that date.
SECTION 17. Definitions.
For purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating employer under
the Plan, provided that the Company directly or indirectly owns at least twenty
percent (20%) of the combined voting power of all classes of stock of such
entity or at least twenty percent (20%) of the ownership interests in such
entity.
b. "Board" means the Board of Directors of the Company.
c. "Book Value" means, as of any given date, on a per share
basis, (i) the shareholders' equity in the Company as of the end of the
immediately preceding fiscal year as reflected in the Company's consolidated
balance sheet, subject to such adjustments as the Committee shall specify at
or after grant, divided by (ii) the number of then outstanding shares of
Stock as of such year-end date (as adjusted by the Committee for subsequent
events).
d. "Cause" shall have the meaning set forth in Section 5(i).
e. "Change in Control" shall have the meaning set forth in Section
ll(b).
f. "Change in Control Price" shall have the meaning set forth in
Section ll(d).
g. "Code" means the Internal Revenue Code of 1986, as from time to
time amended.
h. "Commission" means the Securities and Exchange Commission.
i. "Committee" means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be in office, then the functions of
the Committee specified in the Plan shall be exercised by the Board.
j. "Company" means Tridex Corporation, a Connecticut corporation.
k. "Deferral Period" shall have the meaning set forth in Section 8(a).
l. "Deferred Stock" means an award made pursuant to Section 8 below
of the right to receive Stock at the end of a specified deferral period.
m. "Disability" means disability as determined under procedures
established by the Committee for purposes of the Plan.
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n. "Elective Deferral Period" shall have the meaning set forth in
Section 8(b)(v).
o. "Employee" means any person, excluding officers and directors,
employed by the Company or any Affiliate or Subsidiary of the Company.
p. "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
q. "Early Retirement" means retirement, with the express consent of the
Company at or before the time of such retirement, from active employment with
the Company and any Subsidiary or Affiliate pursuant to the early retirement
provisions of the applicable pension plan of such entity.
r. "Fair Market Value" means, as of any given date, unless otherwise
determined by the Committee in good faith, the closing price of the Stock on
NASDAQ or, if no such sale of Stock was made on NASDAQ on such date, the fair
market value of the Stock as determined by the Committee in good faith.
s. "Incentive Stock Option" means any Stock Option intended to qualify
as an "Incentive Stock Option" within the meaning of Section 422 of the Code.
t. "Incumbent Directors" shall have the meaning set forth in Section
ll(b)(ii).
u. "Limited Stock Appreciation Right" shall have the meaning set forth
in Section 6(b)(v).
v. "Non-Employee Director" shall have the meaning set forth in Rule
16b-3(b)(3)(i) as promulgated by the Commission under the Exchange Act, or any
successor definition adopted by the Commission.
w. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
x. "Normal Retirement" means retirement from active employment with the
Company and any Subsidiary or Affiliate on or after age 65.
y. "Other Stock-Based Award" means an award under Section 10 below that
is valued in whole or in part by reference to, or is otherwise based on, Stock.
z. "Plan" means this Tridex Corporation 1998 Non-Executive Long Term
Incentive Plan, as amended from time to time.
aa. "Potential Change in Control" shall have the meaning set forth in
Section ll(c).
bb. "Restricted Period" shall have the meaning set forth in Section
7(c)(i).
cc. "Restricted Stock" means an award of shares of Stock that is
subject to restrictions under Section 7.
dd. "Retirement" means Normal or Early Retirement.
ee. "Stock" means the common stock, no par value, of the Company.
ff. "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 to surrender to the Company all (or a portion) of a
Stock Option in exchange for an amount equal to the difference between (i) the
Fair Market Value, as of the date such Stock Option (or portion thereof) is
surrendered, of the shares of Stock covered by such Stock Option (or such
portion thereof), subject,
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where applicable, to the pricing provisions in Section 6(b)(ii), and (ii) the
aggregate exercise price of such Stock Option (or such portion thereof).
gg. "Stock Option" or "Option" means any option to purchase shares of
Stock (including Restricted Stock and Deferred Stock, if the Committee so
determines) granted pursuant to Section 5.
hh. "Stock Purchase Right" means the right to purchase Stock pursuant
to Section 9.
ii. "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 425(f) of the Code.
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Exhibit 5
May 11, 1998
Tridex Corporation
61 Wilton Road
Westport, Connecticut 06880
RE: Registration Statement on Form S-8 for 1998 Non-
Executive Long Term Incentive Plan
Gentlemen:
We have acted as counsel to Tridex Corporation, a Connecticut
corporation (the "Company"), in connection with the filing by the Company of a
Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission relating to 600,000 shares of the Company's
common stock, no par value per share (the "Common Stock"), issuable under the
Tridex Corporation 1998 Non-Executive Long Term Incentive Plan (the "Plan").
In connection with this opinion, we have examined the Company's Articles
of Incorporation, the bylaws of the Company, as amended, the Registration
Statement, corporate proceedings of the Company relating to the issuance of the
Common Stock, the Plan and such other instruments and documents as we have
deemed relevant under the circumstances.
In making the aforesaid examination, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies furnished
to us as original or photostatic copies.
Based upon and subject to the foregoing, we are of the opinion that the
Common Stock which may be issued under the Plan has been duly authorized and
when issued in accordance with the terms of the Plan will be validly issued,
fully paid and non-assessable.
We hereby consent to the use of our opinion as herein set forth as an
exhibit to the Registration Statement. This opinion is rendered to you in
connection with the Registration Statement, and except as consented to in the
preceding sentence, may not be relied upon or furnished to any other person in
any context. In
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giving such consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933
or the rules and regulat ions of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Hinckley, Allen & Snyder
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 for the Tridex Corporation 1998 Non-Executive Long Term
Incentive Plan of our report dated February 13, 1998, which appears on page
13 of Tridex Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997.
Price Waterhouse LLP
Hartford, Connecticut
May 12, 1998
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