As filed with the Securities and Exchange Commission on
May 30, 1995.
Registration No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
KIT Manufacturing Company
(Exact name of registrant as specified in its charter)
___________________
California 95-1525261
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
530 East Wardlow Road, Long Beach, California 90801
(Address of principal executive offices)
KIT MANUFACTURING COMPANY 1994 STOCK OPTION PLAN
(Full title of the plan)
Marlyce A. Faldetta
Corporate Secretary
530 East Wardlow Road, Long Beach, California 90801
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service: (310) 595-7451
___________________
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
Common Stock, 150,000(1) $11.125(2) $1,668,750(2) $575.43(2)
without par shares
value(1)
(1)
This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, options
and other rights to purchase the shares of Common Stock
covered by the Prospectus and, pursuant to Rule 416, an
additional indeterminate number of shares which by reason
of certain events specified in the Plan may become
subject to the Plan.
(2)
Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon the average of the high and low
prices of the Common Stock on May 24, 1995, as reported
in the American Stock Exchange, Inc. and published in the
Western Edition of the Wall Street Journal.
The Exhibit Index for this Registration Statement is at
page 9.
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PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant
information) will be sent or given to employees as specified
by Rule 428(b)(1) of the Securities Act of 1933, as amended
(the "Act"). Such documents need not be filed with the
Securities and Exchange Commission either as part of this
Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424 of the Act. These documents,
which include the statement of availability required by Item
2 of Form S-8, and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Form S-8
(Part II hereof), taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of KIT Manufacturing Company
(the "Company") filed with the Securities and Exchange
Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K for the Company's fiscal
year ended October 31, 1994; and
(b) Quarterly Report on Form 10-Q for the Company's
quarterly period ended January 31, 1995.
All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into the prospectus
and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document,
all or a portion of which is 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
amended, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Company's capital stock is registered pursuant to
Section 12 of the Exchange Act. The authorized capital stock of the
Company consists of 5,000,000 shares of Common Stock, without par value
(the "Common Stock"), and 1,000,000 shares of Preferred Stock,
$1.00 par value per share (the "Preferred Stock"). There are
currently 1,110,934 shares of Common Stock and no shares of
Preferred Stock outstanding.
COMMON STOCK
Holders of Common Stock are entitled to receive such
dividends as may from time to time be declared by the Board of
Directors of the Company out of funds legally available
therefor. Holders of Common Stock are entitled to one vote
per share on all matters on which the holders of Common Stock
are entitled to vote other than the election of directors, in
which event, every holder entitled to vote may cumulate votes
after complying with certain procedures. Holders of Common
Stock have no preemptive, conversion, redemption or sinking
fund rights. In the event of a liquidation, dissolution or
winding-up of the Company, holders of Common Stock are
entitled to share equally and ratably in the assets of the
Company, if any, remaining after the payment of all debts and
liabilities of the Company and the liquidation preference of
any outstanding Preferred Stock. The outstanding shares of
Common Stock are fully paid and nonassessable. The rights,
preferences and privileges of holders of Common Stock are
subject to any series of Preferred Stock that the Company may
issue in the future.
PREFERRED STOCK
The Board of Directors is authorized to provide for the
issuance of Preferred Stock in one or more series and to fix
or alter the dividend rights, dividend rate, conversion
rights, voting rights, rights and terms of redemption
(including sinking fund provisions), the redemption price or
prices, and the liquidation preferences of any wholly unissued
series of shares of Preferred Stock, and to fix the number of
shares to be included in any such series. Any Preferred Stock
so issued may rank senior to the Common Stock with respect to
the payment of dividends or amounts upon liquidation,
dissolution or winding-up, or both. In addition, any such
shares of Preferred Stock may have class or series voting
rights.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock
is First Interstate Bank of California.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation contain no
provisions regarding indemnification for liability of
directors and officers. The General Corporation Law of
California (the "Law"), however, (i) eliminates the liability
of directors for monetary damages in an action brought by a
shareholder in the right of the Company (referred to herein as
a "derivative action") or by the Company for breach of a
director's duties to the Company and its shareholders and
(ii) authorizes the Company to indemnify directors and
officers for monetary damages for all acts or omissions
committed by them in their respective capacities; provided,
however, that liability is not limited nor may indemnification
be provided for (a) acts or omissions that involve intentional
misconduct or knowing and culpable violation of law, (b) for
acts or omissions that a director or officer believes to be
contrary to the best interests of the Company or its
shareholders or that involve the absence of good faith on the
part of a director or officer seeking indemnification, (c) for
any transaction from which a director or officer derives an
improper personal benefit, (d) for acts or omissions that show
a reckless disregard for the director's or officer's duty to
the Company or its shareholders in circumstances in which such
person was aware, or should have been aware, in the ordinary
course of performing his duties, of a risk of serious injury
to the Company or its shareholders, (e) for acts or omissions
that constitute an unexcused pattern of inattention that
amounts to an abdication of the director's or officer's duty
to the Company or its shareholders, and (f) for liabilities
arising under Section 310 (contracts in which a director has
material financial interest) and 316 (certain unlawful
dividends, distributions, loans and guarantees) of the Law.
In addition, the Company may not indemnify directors and
officers in circumstances in which indemnification is
expressly prohibited by Section 317 of the Law.
The Bylaws of the Company provide for indemnification
for liability of directors and officers under certain
circumstances. The Company has entered into indemnification
agreements with its directors and selected officers which
require that the Company indemnify such directors and officers
in all cases to the fullest extent permitted by applicable
provisions of the Law. The Company also maintains a
directors' and officers' liability insurance policy insuring
directors and officers of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index.
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, as amended (the "Securities Act");
(ii) To reflect in the prospectus
any facts or events arising after the effective
date of the Registration Statement (or the most
recent post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the Registration Statement; and
(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 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") that are incorporated by reference in the
Registration Statement;
(2) That, for the purpose of determining any
liability under the Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any 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 Act,
each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) 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 above, 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 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 City of Long Beach, State
of California, on May 22, 1995.
By: /s/ Dan Pocapalia
Dan Pocapalia
Its: Chairman of the Board,
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below
constitutes and appoints Dan Pocapalia and Dale J. Gonzalez,
his true and lawful attorneys-in-fact and agents, each
acting alone, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and 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, each acting alone, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, each acting alone,
or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement has been signed below
by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
/s/ Dan Pocapalia Chairman of the Board, May 22, 1995
Dan Pocapalia President and Chief Executive
Officer (Principal Executive
Officer)
/s/ Frank S. Chan Director* May 22, 1995
Frank S. Chan
___________________ Director ______, 1995
Fred W. Chel
/s/ John W.H. Hinrichs Director* May 22, 1995
John W.H. Hinrichs
/s/ John F. Zaccaro Director* May 22, 1995
John F. Zaccaro
/s/ Dale J. Gonzalez Senior Vice President and May 22, 1995
Dale J. Gonzalez Treasurer (Principal Financial
Officer)
/s/ Bruce Skinner Controller (Principal May 22, 1995
Bruce Skinner Accounting Officer)
_________________________________
*Member of Compensation Committee
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EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
4.1 KIT Manufacturing Company 1994 Stock
Option Plan.
4.2 Form of Employee Nonqualified Stock Option
Agreement.
4.3 Form of Employee Incentive Stock Option
Agreement.
4.4 Form of Special Employee Incentive Stock
Option Agreement.
5. Opinion of O'Melveny & Myers (opinion re
legality).
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of O'Melveny & Myers (included in
Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under "Signatures").
<PAGE>
KIT MANUFACTURING COMPANY
1994 STOCK OPTION PLAN
I. THE PLAN
1.1 Purpose.
The purpose of this Plan is to promote the success
of the Company by providing an additional means through the
grant of Options to attract, motivate, retain and reward key
employees, including officers, whether or not directors, of
the Company with awards and incentives for high levels of
individual performance and improved financial performance of
the Company. Capitalized terms are defined in Article IV.
1.2 Administration and Authorization; Power and
Procedure.
(a) Committee. This Plan shall be administered by
and all Options to Eligible Employees shall be authorized by
the Committee. Action of the Committee with respect to the
administration of this Plan shall be taken pursuant to a
majority vote or by written consent of its members.
(b) Options; Interpretation; Powers of Committee.
Subject to the express provisions of this Plan, the
Committee shall have the authority:
(i) to determine from among those persons
eligible the particular Eligible Employees who will
receive any Options;
(ii) to grant Options to Eligible Employees,
determine the price at which securities will be offered
and the amount of securities to be offered to any of
such persons, and determine the other specific terms
and conditions of such Options consistent with the
express limits of this Plan, and establish the
installments (if any) in which such Options shall
become exercisable, or determine that no delayed
exercisability is required, and establish the events of
termination of such Options;
(iii) to approve the forms of Option Agreements
(which need not be identical either as to type of award
or among Eligible Employees);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the
Company and Eligible Employees under this Plan, further
define the terms used in this Plan, and prescribe,
amend and rescind rules and regulations relating to the
administration of this Plan;
(v) to cancel, modify, or waive the Corporation's
rights with respect to, or modify, discontinue,
suspend, or terminate any or all outstanding Options
held by Eligible Employees, subject to any required
consent under Section 3.6;
(vi) to accelerate or extend the exercisability or
extend the term of any or all such outstanding Options
within the maximum ten-year term of Options under
Section 1.6; and
(vii) to make all other determinations and take
such other action as contemplated by this Plan or as
may be necessary or advisable for the administration of
this Plan and the effectuation of its purposes.
(c) Binding Determinations. Any action taken by,
or inaction of, the Corporation, any Subsidiary, the Board
or the Committee relating or pursuant to this Plan shall be
within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member
of the Board or Committee, or officer of the Corporation or
any Subsidiary, shall be liable for any such action or
inaction of the entity or body, of another person or, except
in circumstances involving bad faith, of himself or herself.
Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this
Plan.
(d) Reliance on Experts. In making any
determination or in taking or not taking any action under
this Plan, the Committee or the Board, as the case may be,
may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No
director, officer or agent of the Company shall be liable
for any such action or determination taken or made or
omitted in good faith.
(e) Delegation. The Committee may delegate
ministerial, non-discretionary functions to individuals who
are officers or employees of the Company.
1.3 Participation.
Options may be granted by the Committee only to
those persons that the Committee determines to be Eligible
Employees. An Eligible Employee who has been granted an
Option may, if otherwise eligible, be granted additional
Options if the Committee shall so determine. Non-Employee
Directors shall not be eligible to receive any Options.
1.4 Shares Available for Options; Share Limits.
(a) Shares Available. Subject to the provisions
of Section 3.2, the capital stock that may be delivered
under this Plan shall be shares of the Corporation's
authorized but unissued Common Stock and any shares of its
Common Stock held as treasury shares. The shares may be
delivered for any lawful consideration.
(b) Share Limits. The maximum number of shares
of Common Stock that may be delivered pursuant to Options
granted to Eligible Employees under this Plan shall not
exceed 150,000 shares. The maximum number of shares of
Common Stock that may be delivered pursuant to options
qualified as Incentive Stock Options granted under this Plan
is 150,000 shares. The maximum number of shares of Common
Stock subject to Options granted during any calendar year to
any individual under this Plan shall not exceed 70,000
shares. Each of the foregoing numerical limits shall be
subject to adjustment as contemplated by this Section 1.4
and 3.2.
(c) Calculation of Available Shares and
Replenishment. Shares subject to outstanding Options shall
be reserved for issuance. If any Option to acquire shares
of Common Stock shall expire or be cancelled or terminated
without having been exercised in full, the unpurchased,
unvested or undelivered shares subject thereto shall again
be available for the purposes of the Plan, subject to any
applicable limitations under Rule 16b-3. If the Corporation
withholds shares of Common Stock pursuant to Section 3.5,
the number of shares that would have been deliverable with
respect to an Option but that are withheld pursuant to the
provisions of Section 3.5 may in effect not be issued, but
the aggregate number of shares issuable with respect to the
applicable Option and under the Plan shall be reduced by the
number of shares withheld and such shares shall not be
available for additional Options under this Plan.
1.5 Grant of Options.
Subject to the express provisions of this Plan,
the Committee shall determine the number of shares of Common
Stock subject to each Option, and the price to be paid for
the shares. Each Option shall be evidenced by an Option
Agreement signed by the Corporation and, if required by the
Committee, by the Eligible Employee.
1.6 Option Period.
Each Option and all executory rights or
obligations under the related Option Agreement shall expire
on such date (if any) as shall be determined by the
Committee, but not later than ten (10) years after the
Option Date.
1.7 Limitations on Exercise of Options.
(a) Provisions for Exercise. Unless the
Committee otherwise provides, no Option shall be exercisable
until at least six months after the initial Option Date, and
once exercisable an Option shall remain exercisable until
the expiration or earlier termination of the Option.
(b) Procedure. Any exercisable Option shall be
deemed to be exercised when the Secretary of the Corporation
receives written notice of such exercise from the Eligible
Employee, together with any required payment made in
accordance with Section 2.2(a).
(c) Fractional Shares/Minimum Issue. Fractional
share interests shall be disregarded, but may be
accumulated. The Committee, however, may determine that
cash, other securities, or other property will be paid or
transferred in lieu of any fractional share interests. No
fewer than 100 shares may be purchased on exercise of any
Option at one time unless the number purchased is the total
number at the time available for purchase under the Option.
1.8 Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's
approval, accept one or more notes from any Eligible
Employee in connection with the exercise or receipt of any
outstanding Option; provided that any such note shall be
subject to the following terms and conditions:
(a) The principal of the note shall not exceed
the amount required to be paid to the Corporation upon
the exercise or receipt of one or more Options under
the Plan and the note shall be delivered directly to
the Corporation in consideration of such exercise or
receipt.
(b) The initial term of the note shall be
determined by the Committee; provided that the term of
the note, including extensions, shall not exceed a
period of 10 years.
(c) The note shall provide for full recourse to
the Eligible Employee and shall bear interest at a rate
determined by the Committee but not less than the
applicable imputed interest rate specified by the Code.
(d) If the employment of the Eligible Employee
terminates, the unpaid principal balance of the note
shall become due and payable on the 10th business day
after such termination; provided, however, that if a
sale of such shares would cause such Eligible Employee
to incur liability under Section 16(b) of the Exchange
Act, the unpaid balance shall become due and payable on
the 10th business day after the first day on which a
sale of such shares could have been made without
incurring such liability assuming for these purposes
that there are no other transactions by the Eligible
Employee subsequent to such termination.
(e) If required by the Committee or by applicable
law, the note shall be secured by a pledge of any
shares or rights financed thereby in compliance with
applicable law.
(f) The terms, repayment provisions, and
collateral release provisions of the note and the
pledge securing the note shall conform with applicable
rules and regulations of the Federal Reserve Board as
then in effect.
1.9 No Transferability.
(a) Limit on Exercise. The Committee may permit
Options to be exercised by and paid to certain persons or
entities related to the Eligible Employee who are
transferees of the Eligible Employee without consideration
pursuant to such conditions and procedures as the Committee
may establish and (for Options intended to satisfy the
conditions of Rule 16b-3) as may be permitted under Rule
16b-3.
(b) Limit on Transfer. No Option shall be
transferrable by the Eligible Employee or shall be subject
in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge (other than to the
Corporation), except (i) by will or the laws of descent and
distribution or pursuant to a QDRO, (ii) pursuant to another
exception to transfer restrictions expressly permitted by
the Committee and set forth in the Option Agreement (or an
amendment thereto), (iii) in the case of Options intended to
satisfy conditions of Rule 16b-3 as permitted by Rule 16b-3,
and (iv) in the case of Incentive Stock Options, as
permitted by the Code. Any attempted transfer in violation
of these provisions shall be void and the Corporation shall
disregard any attempt at transfer, assignment or other
alienation prohibited hereby.
(c) Designation of Beneficiary. The designation
of a Beneficiary hereunder shall not constitute a transfer
for these purposes.
(d) Exceptions. The restrictions on exercise and
transfer above shall not be deemed to prohibit the
authorization by the Committee of "cashless exercise"
procedures with unaffiliated third parties who provide
financing for the purpose of exercise of Options consistent
with applicable legal restrictions and Rule 16b-3, nor to
the extent permitted by the Committee, transfers for estate
and financial planning purposes, notwithstanding that the
inclusion of such features may render the particular Options
ineligible for the benefits of Rule 16b-3, nor, in the case
of Participants who are not Section 16 persons, transfers to
such other persons or in such other circumstances as the
Committee may in the Option Agreement or other writing
expressly permit.
II. OPTIONS.
2.1 Grants.
One or more Options may be granted under this
Article to any Eligible Employee. Each Option granted may
be either an Option intended to be an Incentive Stock
Option, or not so intended, and such intent shall be
indicated in the applicable Option Agreement.
2.2 Option Price.
(a) Pricing Limits. The purchase price per share
of the Common Stock covered by each Option shall be
determined by the Committee at the time of the grant of the
Option, but in the case of Incentive Stock Options shall not
be less than 100% (110% in the case of an Eligible Employee
who owns or is deemed to own under Section 424(d) of the
Code more than 10% of the total combined voting power of all
classes of stock of the Corporation) of the Fair Market
Value of the Common Stock on the date of grant.
(b) Payment Provisions. The purchase price of any
shares purchased on exercise of an Option granted under this
Article shall be paid in full at the time of each purchase
in one or a combination of the following methods: (i) in
cash or by electronic funds transfer; (ii) by check payable
to the order of the Corporation; (iii) if authorized by the
Committee or specified in the applicable Option Agreement,
by a promissory note of the Eligible Employee consistent
with the requirements of Section 1.8; (iv) by notice and
third party payment in such manner as may be authorized by
the Committee; or (v) by the delivery of shares of Common
Stock of the Corporation already owned by the Eligible
Employee, provided, however, that the Committee may in its
absolute discretion limit the Eligible Employee's ability to
exercise an Option by delivering such shares. Shares of
Common Stock used to satisfy the exercise price of an Option
shall be valued at their Fair Market Value on the date of
exercise.
2.3 Limitations on Grant and Terms of Incentive Stock
Options.
(a) $100,000 Limit. To the extent that the
aggregate "fair market value" of stock with respect to which
Incentive Stock Options first become exercisable by an
Eligible Employee in any calendar year exceeds $100,000,
taking into account both Common Stock subject to Incentive
Stock Options under this Plan and stock subject to incentive
stock options under all other plans of the Company or any
parent corporation, such options shall be treated as
nonqualified stock options. For this purpose, the "fair
market value" of the stock subject to options shall be
determined as of the date the options were awarded. In
reducing the number of options treated as incentive stock
options to meet the $100,000 limit, the most recently
granted options shall be reduced first. To the extent a
reduction of simultaneously granted options is necessary to
meet the $100,000 limit, the Committee may, in the manner
and to the extent permitted by law, designate which shares
of Common Stock are to be treated as shares acquired
pursuant to the exercise of an Incentive Stock Option.
(b) Option Period. Each Option and all rights
thereunder shall expire no later than ten years after the
Option Date.
(c) Other Code Limits. There shall be imposed in
any Option Agreement relating to Incentive Stock Options
such terms and conditions as from time to time are required
in order that the Option be an "incentive stock option" as
that term is defined in Section 422 of the Code.
2.4 Limits on 10% Holders.
Notwithstanding the foregoing, no Incentive Stock
Option may be granted to any person who, at the time the
Option is granted, owns (or is deemed to own under Section
424(d) of the Code) shares of outstanding Common Stock
possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation, unless the
exercise price of such Option is at least 110% of the Fair
Market Value of the stock subject to the Option and such
Option by its terms is not exercisable after the expiration
of five years from the date such Option is granted.
2.5 Option Repricing/Cancellation and Regrant/Waiver
of Restrictions.
Subject to Section 1.4 and Section 3.6 and the
specific limitations on Options contained in this Plan, the
Committee from time to time may authorize, generally or in
specific cases only, for the benefit of any Eligible
Employee any adjustment in the exercise or purchase price,
the number of shares subject to, the restrictions upon or
the term of, an Option granted under this Article by
cancellation of an outstanding Option and a subsequent
regranting of an Option, by amendment, by substitution of an
outstanding Option, by waiver or by other legally valid
means. Such amendment or other action may result among
other changes in an exercise or purchase price which is
higher or lower than the exercise or purchase price of the
original or prior Option, provide for a greater or lesser
number of shares subject to the Option, or provide for a
longer or shorter vesting or exercise period.
III. OTHER PROVISIONS.
3.1 Rights of Eligible Employees and Beneficiaries.
(a) Employment Status. Status as an Eligible
Employee shall not be construed as a commitment that any
Option will be made under this Plan to an Eligible Employee
or to Eligible Employees generally.
(b) No Employment Contract. Nothing contained in
this Plan (or in any other documents related to this Plan or
to any Option) shall confer upon any Eligible Employee any
right to continue in the employ or other service of the
Company or constitute any contract or agreement of
employment or other service, nor shall interfere in any way
with the right of the Company to change such person's
compensation or other benefits or to terminate the
employment of such person, with or without cause, but
nothing contained in this Plan or any document related
hereto shall adversely affect any independent contractual
right of such person without his or her consent thereto.
(c) Plan Not Funded. Options payable under this
Plan shall be payable in shares of the Corporation, and
(except as provided in Section 1.4(b)) no special or
separate reserve, fund or deposit shall be made to assure
payment of such Options. No Eligible Employee, Beneficiary
or other person shall have any right, title or interest in
any fund or in any specific asset (including shares of
Common Stock, except as expressly otherwise provided) of the
Company by reason of any Option hereunder. Neither the
provisions of this Plan (or of any related documents), nor
the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be
construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Eligible Employee,
Beneficiary or other person. To the extent that an Eligible
Employee, Beneficiary or other person acquires a right to
receive payment pursuant to any Option hereunder, such right
shall be no greater than the right of any unsecured general
creditor of the Company.
3.2 Adjustments; Acceleration.
(a) Adjustments. If there shall occur any
extraordinary dividend or other extraordinary distribution
in respect of the Common Stock (whether in the form of cash,
Common Stock, other securities, or other property), or any
recapitalization, stock split (including a stock split in
the form of a stock dividend), reverse stock split,
reorganization, merger, combination, consolidation, split-
up, spin-off, combination, repurchase, or exchange of Common
Stock or other securities of the Corporation, or there shall
occur any other like corporate transaction or event in
respect of the Common Stock or a sale of substantially all
the assets of the Corporation as an entirety, then the
Committee shall, in such manner and to such extent (if any)
as it deems appropriate and equitable (1) proportionately
adjust any or all of (a) the number and type of shares of
Common Stock (or other securities) which thereafter may be
made the subject of Options (including the specific maxima
and numbers of shares set forth elsewhere in this Plan), (b)
the number, amount and type of shares of Common Stock (or
other securities or property) subject to any or all
outstanding Options, (c) the grant or exercise price of any
or all outstanding Options, (d) the securities deliverable
upon exercise of any outstanding Options, or (2) in the case
of an extraordinary dividend or other distribution, merger,
reorganization, consolidation, combination, sale of assets,
split up, exchange, or spin off, make provision for a cash
payment or for the substitution or exchange of any or all
outstanding Options or securities deliverable to the holder
of any or all outstanding Options based upon the
distribution or consideration payable to holders of the
Common Stock of the Corporation upon or in respect of such
event; provided, however, in each case, that with respect to
Incentive Stock Options, no such adjustment shall be made
which would cause the Plan to violate Section 424 of the
Code or any successor provisions thereto.
(b) Acceleration of Options Upon Change in
Control. As to any Eligible Employee, unless prior to a
Change in Control Event the Committee determines that, upon
its occurrence, there shall be no acceleration of benefits
under Options or determines that only certain or limited
benefits under Options shall be accelerated and the extent
to which they shall be accelerated, and/or establishes a
different time in respect of such Change in Control Event
for such acceleration, then upon the occurrence of a Change
in Control Event each Option shall become immediately
exercisable. The Committee may override the limitations on
acceleration in this Section 3.2(b) by express provision in
the Option Agreement and may accord any Eligible Employee a
right to refuse any acceleration, whether pursuant to the
Option Agreement or otherwise, in such circumstances as the
Committee may approve. Any acceleration of Options shall
comply with applicable regulatory requirements, including
without limitation Section 422 of the Code.
(c) Possible Early Termination of Accelerated
Options. If any Option or other right to acquire Common
Stock under this Plan has been fully accelerated as
permitted by Section 3.2(b) but is not exercised prior to
(i) a dissolution of the Corporation, or (ii) a
reorganization event described in Section 3.2(a) that the
Corporation does not survive, or (iii) the consummation of
reorganization event described in Section 3.2(a) that
results in a change of control approved by the Board, and no
provision has been made for the survival, substitution,
exchange or other settlement of such Option or right, such
Option or right shall thereupon terminate.
3.3 Effect of Termination of Employment. The
Committee shall establish in respect of each Option granted
to an Eligible Employee the effect of a termination of
employment on the rights and benefits thereunder and in so
doing may make distinctions based upon the cause of
termination.
3.4 Compliance with Laws.
This Plan, the granting and vesting of Options
under this Plan and the issuance and delivery of shares of
Common Stock and/or the payment of money under this Plan or
under Options granted hereunder are subject to compliance
with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal
securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall
be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Corporation,
provide such assurances and representations to the
Corporation as the Corporation may deem necessary or
desirable to assure compliance with all applicable legal
requirements.
3.5 Tax Withholding.
Upon exercise of any Option, the Company shall
have the right at its option to (i) require the Eligible
Employee (or Personal Representative or Beneficiary, as the
case may be) to pay or provide for payment of the amount of
any taxes which the Company may be required to withhold with
respect to such transaction or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company
may be required to withhold with respect to such cash
amount. In any case where a tax is required to be withheld
in connection with the delivery of shares of Common Stock
under this Plan, the Committee may grant (either at the time
of the Option or thereafter) to the Eligible Employee the
right to elect, pursuant to such rules and subject to such
conditions as the Committee may establish, to have the
Corporation reduce the number of shares to be delivered by
(or otherwise reacquire) the appropriate number of shares
valued at their then Fair Market Value, to satisfy such
withholding obligation.
3.6 Plan Amendment, Termination and Suspension.
(a) Board Authorization. The Board may, at any
time, terminate or, from time to time, amend, modify or
suspend this Plan, in whole or in part. No Options may be
granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain
jurisdiction as to Options then outstanding in accordance
with the terms of this Plan.
(b) Shareholder Approval. If any amendment would
(i) materially increase the benefits accruing to Eligible
Employees under this Plan, (ii) materially increase the
aggregate number of securities that may be issued under this
Plan, or (iii) materially modify the requirements as to
eligibility for participation in this Plan, then to the
extent then required by Rule 16b-3 to secure benefits
thereunder or to avoid liability under Section 16 of the
Exchange Act (and Rules thereunder) or required under
Section 425 of the Code or any other applicable law, or
deemed necessary or advisable by the Board, such amendment
shall be subject to shareholder approval.
(c) Amendments to Options. Without limiting any
other express authority of the Committee under but subject
to the express limits of this Plan, the Committee by
agreement or resolution may waive conditions of or
limitations on Options to Eligible Employees that the
Committee in the prior exercise of its discretion has
imposed, without the consent of an Eligible Employee, and
may make other changes to the terms and conditions of
Options that do not affect in any manner materially adverse
to the Eligible Employee, his or her rights and benefits
under an Option.
(d) Limitations on Amendments to Plan and
Options. No amendment, suspension or termination of the
Plan or change of or affecting any outstanding Option shall,
without written consent of the Eligible Employee, affect in
any manner materially adverse to the Eligible Employee any
rights or benefits of the Eligible Employee or obligations
of the Corporation under any Option granted under this Plan
prior to the effective date of such change. Changes
contemplated by Section 3.2 shall not be deemed to
constitute changes or amendments for purposes of this
Section 3.6.
3.7 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the
Committee or this Plan, an Eligible Employee shall not be
entitled to any privilege of stock ownership as to any
shares of Common Stock not actually delivered to and held of
record by him or her. No adjustment will be made for
dividends or other rights as a shareholders for which a
record date is prior to such date of delivery.
3.8 Effective Date of the Plan.
This Plan shall be effective as of June 7, 1994,
the date of Board approval, subject to shareholder approval
within 12 months thereafter.
3.9 Term of the Plan.
No Option shall be granted more than ten years
after the effective date of this Plan (the "termination
date"). Unless otherwise expressly provided in this Plan or
in an applicable Option Agreement, any Option theretofore
granted may extend beyond such date, and all authority of
the Committee with respect to Options hereunder shall
continue during any suspension of this Plan and in respect
of outstanding Options on such termination date.
3.10 Governing Law/Construction/Severability.
(a) Choice of Law. This Plan, the Options, all
documents evidencing Options and all other related documents
shall be governed by, and construed in accordance with the
laws of the state of incorporation of the Corporation.
(b) Severability. If any provision shall be held
by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions of this Plan shall
continue in effect.
(c) Plan Construction.
(1) Rule 16b-3. It is the intent of the
Corporation that this Plan and Options hereunder
satisfy and be interpreted in a manner that in the case
of Eligible Employees who are or may be subject to
Section 16 of the Exchange Act satisfies the applicable
requirements of Rule 16b-3 so that such persons (unless
they otherwise agree) will be entitled to the benefits
of Rule 16b-3 or other exemptive rules under Section 16
of the Exchange Act and will not be subjected to
avoidable liability thereunder. If any provision of
this Plan or any Option would otherwise frustrate or
conflict with the intent expressed above, that
provision to the extent possible shall be interpreted
and deemed amended so as to avoid such conflict, but to
the extent of any remaining irreconcilable conflict
with such intent as to such persons in the
circumstances, such provision shall be disregarded.
(2) Section 162(m). It is the further
intent of the Corporation that Options with an exercise
or base price of not less than Fair Market Value on the
date of grant qualify as performance-based compensation
under Section 162(m) of the Code, and this Plan shall
be interpreted consistent with such intent. Any
provision, application or interpretation of this Plan
inconsistent with this intent to satisfy the standards
in Section 162(m) of the Code shall be disregarded.
3.11 Captions.
Captions and headings are given to the sections
and subsections of this Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
3.12 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Option
hereunder, if an entity ceases to be a Subsidiary a
termination of employment shall be deemed to have occurred
with respect to each employee of such Subsidiary who does
not continue as an employee of another entity within the
Company.
3.13 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to
limit the authority of the Board or the Committee to grant
awards or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or
authority.
IV. DEFINITIONS.
4.1 Definitions.
(a) "Beneficiary" shall mean the person, persons,
trust or trusts entitled by will or the laws of descent and
distribution to receive the benefits specified in the Option
Agreement and under this Plan in the event of an Eligible
Employee's death, and shall mean the Eligible Employee's
executor or administrator if no other Beneficiary is
identified and able to act under the circumstances.
(b) "Board" shall mean the Board of Directors of
the Corporation.
(c) "Change in Control Event" shall mean any of
the following:
(1) Approval by the shareholders of the
Corporation of the dissolution or liquidation of the
Corporation;
(2) Approval by the shareholders of the
Corporation of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or more entities
that are not Subsidiaries, as a result of which less
than 50% of the outstanding voting securities of the
surviving or resulting entity immediately after the
reorganization are, or will be, owned by shareholders
of the Corporation immediately before such
reorganization (assuming for purposes of such
determination that there is no change in the record
ownership of the Corporation's securities from the
record date for such approval until such reorganization
and that such record owners hold no securities of the
other parties to such reorganization);
(3) Approval by the shareholders of the
Corporation of the sale of substantially all of the
Corporation's business and/or assets to a person or
entity which is not a Subsidiary;
(4) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act but
excluding any person described in and satisfying the
conditions of Rule 13d-1(b)(1) thereunder), other than
a person having such ownership at the time of adoption
of this Plan, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation
representing more than 50% of the combined voting power
of the Corporation's then outstanding securities
entitled to then vote generally in the election of
directors of the Corporation; or
(5) During any period not longer than two
consecutive years, individuals who at the beginning of
such period constituted the Board cease to constitute
at least a majority thereof, unless the election, or
the nomination for election by the Corporation's
shareholders, of each new Board member was approved by
a vote of at least three-fourths of the Board members
then still in office who were Board members at the
beginning of such period (including for these purposes,
new members whose election or nomination was so
approved).
(d) "Code" shall mean the Internal Revenue Code
of 1986, as amended from time to time.
(e) "Commission" shall mean the Securities and
Exchange Commission.
(f) "Committee" shall mean a committee appointed
by the Board to administer this Plan, which committee shall
be comprised only of two or more directors or such greater
number of directors as may be required under applicable law,
each of whom, during such time as one or more Eligible
Employees may be subject to Section 16 of the Exchange Act,
shall be Disinterested.
(g) "Common Stock" shall mean the Common Stock
of the Corporation and such other securities or property as
may become the subject of Options, or become subject to
Options, pursuant to an adjustment made under Section 3.2 of
this Plan.
(h) "Company" shall mean, collectively, the
Corporation and its Subsidiaries.
(i) "Corporation" shall mean Kit Manufacturing
Company and its successors.
(j) "Disinterested" shall mean disinterested
within the meaning of any applicable regulatory
requirements, including Rule 16b-3.
(k) "Eligible Employee" shall mean an officer
(whether or not a director) or key executive,
administrative, managerial, production, marketing or sales
employee of the Company.
(l) "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended.
(m) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended from time to time.
(n) "Fair Market Value" shall mean the closing
price of the Common Stock on the Composite Tape, as
published in the Western Edition of The Wall Street Journal,
of the principal national securities exchange on which the
Common Stock is so listed or admitted to trade, on such
date, or, if there is no trading of the stock on such date,
then the closing price of the stock as quoted on such
Composite Tape on the next preceding date on which there was
trading in such shares.
(o) "Incentive Stock Option" shall mean an Option
which is designated as an incentive stock option within the
meaning of Section 422 of the Code, the award of which
contains such provisions as are necessary to comply with
that section.
(p) "Nonqualified Stock Option" shall mean an
Option that is designated as a Nonqualified Stock Option
and shall include any Option intended as an Incentive Stock
Option that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not
designated as an Incentive Stock Option shall be deemed to
be designated a Nonqualified Stock Option under this Plan.
(q) "Non-Employee Director" shall mean a member
of the Board of Directors of the Corporation who is not an
officer or employee of the Company.
(r) "Option" shall mean an option to purchase
Common Stock under this Plan. The Committee shall designate
any Option granted to an Eligible Employee as a Nonqualified
Stock Option or an Incentive Stock Option.
(s) "Option Agreement" shall mean any writing
setting forth the terms of an Option that has been
authorized by the Committee.
(t) "Option Date" shall mean the date upon which
the Committee took the action granting an Option or such
later date as the Committee designates as the Option Date at
the time of the Option.
(u) "Option Period" shall mean the period
beginning on an Option Date and ending on the expiration
date of such Option.
(v) "Personal Representative" shall mean the
person or persons who, upon the disability or incompetence
of a Eligible Employee, shall have acquired on behalf of the
Eligible Employee, by legal proceeding or otherwise, the
power to exercise the rights or receive benefits under this
Plan and who shall have become the legal representative of
the Eligible Employee.
(w) "Plan" shall mean this 1994 Stock Option
Plan, as amended from time to time.
(x) "QDRO" shall mean a qualified domestic
relations order as defined in Section 414(p) of the Code or
Title I, Section 206(d)(3) of ERISA (to the same extent as
if this Plan were subject thereto), or the applicable rules
thereunder.
(y) "Rule 16b-3" shall mean Rule 16b-3 as
promulgated by the Commission pursuant to the Exchange Act,
as amended from time to time.
(z) "Section 16 Person" shall mean a person
subject to Section 16(a) of the Exchange Act.
(aa) "Securities Act" shall mean the Securities
Act of 1933, as amended from time to time.
(bb) "Subsidiary" shall mean any corporation or
other entity a majority of whose outstanding voting stock or
voting power is beneficially owned directly or indirectly by
the Corporation.
(cc) "Total Disability" shall mean a "permanent
and total disability" within the meaning of Section 22(e)(3)
of the Code and such other disabilities, infirmities,
afflictions or conditions as the Committee by rule may
include.
<PAGE>
<PAGE>
KIT MANUFACTURING COMPANY
1994 STOCK OPTION PLAN
TABLE OF CONTENTS
Page
I. THE PLAN . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and
Procedure . . . . . . . . . . . . . . . . . . . 1
1.3 Participation . . . . . . . . . . . . . . . . . 2
1.4 Shares Available for Options; Share Limits. . . 3
1.5 Grant of Options. . . . . . . . . . . . . . . . 3
1.6 Option Period . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise of Options. . . . . . . 4
1.8 Acceptance of Notes to Finance Exercise . . . . 4
1.9 No Transferability. . . . . . . . . . . . . . . 5
II. OPTIONS. . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Grants. . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price. . . . . . . . . . . . . . . . . . 6
2.3 Limitations on Grant and Terms of Incentive
Stock Options . . . . . . . . . . . . . . . . . 7
2.4 Limits on 10% Holders . . . . . . . . . . . . . 7
2.5 Option Repricing/Cancellation and
Regrant/Waiver of Restrictions. . . . . . . . . 8
III. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . 8
3.1 Rights of Eligible Employees and
Beneficiaries . . . . . . . . . . . . . . . . . 8
3.2 Adjustments; Acceleration . . . . . . . . . . . 9
3.3 Effect of Termination of Employment . . . . . . 10
3.4 Compliance with Laws. . . . . . . . . . . . . . 10
3.5 Tax Withholding . . . . . . . . . . . . . . . . 11
3.6 Plan Amendment, Termination and Suspension. . . 11
3.7 Privileges of Stock Ownership . . . . . . . . . 12
3.8 Effective Date of the Plan. . . . . . . . . . . 12
3.9 Term of the Plan. . . . . . . . . . . . . . . . 12
3.10 Governing Law/Construction/Severability . . . . 12
3.11 Captions. . . . . . . . . . . . . . . . . . . . 13
3.12 Effect of Change of Subsidiary Status . . . . . 13
IV. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 14
4.1 Definitions . . . . . . . . . . . . . . . . . . 14
<PAGE>
KIT MANUFACTURING COMPANY
EMPLOYEE NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ___ day of ____ 199_,
between KIT Manufacturing Company (the "Corporation"), and
_____________ (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the KIT Manufacturing Company 1994
Stock Option Plan (the "Plan"), the Corporation has granted to
the Employee effective as of the ___ day of ____, 199_ (the
"Award Date") a nonqualified stock option to purchase all or any
part of ______ authorized but unissued or treasury shares of
Common Stock, no par value, of the Corporation upon the terms and
conditions set forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises
and covenants made herein and the mutual benefits to be derived
herefrom, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and
not otherwise defined herein shall have the meaning assigned to
such terms in the Plan.
2. Grant of Option. This Agreement evidences the
Corporation's grant to the Employee of the right and option to
purchase, on the terms and conditions set forth herein and in the
Plan, all or any part of an aggregate of ______ shares of the
Common Stock at the price of $_____ per share (the "Option"),
exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day
before the seventh anniversary of the Award Date (the "Expiration
Date"). Such price equals the Fair Market Value of the
Corporation's Common Stock as of the Award Date.
3. Exercisability of Option. Except as earlier
permitted by or pursuant to the Plan or by resolution of the
Committee adopted after the date hereof, no shares may be
purchased by exercise of the Option until the expiration of six
months after the Award Date. The Option may be exercised in
installments as to 25% of the aggregate number of shares set
forth in Section 2 hereof (subject to adjustment) on and after
the first anniversary of the Award Date and as to an additional
25% of such aggregate number of such shares (subject to
adjustment) on and after each of the second, third and fourth
anniversaries of the Award Date.
To the extent the Employee does not in any year
purchase all or any part of the shares to which the Employee is
entitled, the Employee has the right cumulatively thereafter to
purchase any shares not so purchased and such right shall
continue until the Option terminates or expires. Fractional
share interests shall be disregarded, but may be cumulated. No
fewer than 100 shares may be purchased at any one time, unless
the number purchased is the total number at the time available
for purchase under the Option.
4. Method of Exercise of Option. The Option shall be
exercisable by the delivery to the Corporation of a written
notice stating the number of shares to be purchased pursuant to
the Option and accompanied by payment made in accordance with and
in a form permitted in Section 2.2(b) of the Plan for the full
purchase price of the shares to be purchased, subject to such
further limitations and rules or procedures as the Committee may
from time to time establish as to any non-cash payment and as to
the tax withholding requirements of Section 3.5 of the Plan.
Shares delivered in payment of the exercise price must have been
owned by Employee for at least six months prior to the exercise.
In addition, the Employee (or the Employee's Beneficiary or
Personal Representative) shall furnish any written statements
required pursuant to Section 3.4 of the Plan.
5. Effect of Termination of Employment or Death;
Change in Subsidiary Status. The Option and all other rights
hereunder, to the extent not exercised, shall terminate and
become null and void at such time as the Employee ceases to be
employed by either the Corporation or any Subsidiary, except
that:
(a) if the Employee terminates by reason other
than by death, Total Disability or for cause (as determined
by the Committee in its sole discretion), the Employee may
at any time within a period of three months after such
termination exercise the Option to the extent the Option was
exercisable at the date of such termination;
(b) if the Employee terminates by reason of Total
Disability, or if the Employee becomes Totally Disabled
within three months after a termination described in
subsection (a), then the Option may be exercised within a
period of one year after the date Employee becomes Totally
Disabled (or, if earlier, the Employee's termination from
employment), to the extent that the Option was exercisable
on such date; and
(c) if the Employee dies prior to a termination
of employment, or within three months after a termination of
employment under subsection (a) or (b) above, then the
Option may be exercised within a period of one year after
the Employee's termination of employment, to the extent that
the Option was exercisable on such date;
provided, however, that in no event may the Option be exercised
by anyone under this Section or otherwise after the Expiration
Date. If Employee is employed by an entity which ceases to be a
Subsidiary, such event shall be deemed for purposes of this
Section 5 to be a termination of employment described in
subsection (a) in respect of Employee.
6. Consideration to Corporation. In consideration of
the granting of this Option by the Corporation, Employee agrees
to render faithful and efficient services to the Corporation or
its subsidiaries, with such duties and responsibilities as the
Corporation or its subsidiaries shall from time to time
prescribe, for a period of at least one (1) year from the date
this Option is granted.
7. Termination of Option Under Certain Events. As
permitted by Section 3.2(c) of the Plan, the Committee retains
the right to terminate the Option to the extent not previously
exercised upon an event or transaction which the Corporation does
not survive.
8. Non-Transferability of Option. The Option and any
other rights of the Employee under this Agreement or the Plan are
nontransferable as provided in Section 1.9 of the Plan.
9. Notices. Any notice to be given under the terms
of this Agreement shall be in writing and addressed to the
Corporation at its principal office located at 530 East Wardlow
Road, Long Beach, California 90801, to the attention of the
Corporate Treasurer and to the Employee at the address given
beneath the Employee's signature hereto, or at such other address
as either party may hereafter designate in writing to the other.
10. Plan. The Option and all rights of Employee
thereunder are subject to, and the Employee agrees to be bound
by, all of the terms and conditions of the provisions of the
Plan, incorporated herein by this reference. The Employee
acknowledges receipt of a copy of the Plan, which is made a part
hereof by this reference, and agrees to be bound by the terms
thereof. Unless otherwise expressly provided in other Sections
of this Agreement, provisions of the Plan that confer
discretionary authority on the Committee do not (and shall not be
deemed to) create any rights in the Employee unless such rights
are expressly set forth herein or are otherwise in the sole
discretion of the Committee so conferred by appropriate action of
the Committee under the Plan after the date hereof.
11. Shareholder Approval. The Option, this Agreement
and all rights hereunder are subject to approval of the Plan by
the shareholders of the Corporation as provided therein.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be executed on its behalf by a duly authorized
officer and the Employee has hereunto set his or her hand.
KIT MANUFACTURING COMPANY
___________________________
By_________________________
Title______________________
EMPLOYEE
___________________________
(Signature)
___________________________
(Print Name)
___________________________
(Address)
___________________________
(City, State, Zip Code)
<PAGE>
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Nonqualified Stock Option Agreement by KIT Manufacturing Company,
I, ___________________________, the spouse of the Employee herein
named, do hereby join with my spouse in executing the foregoing
Nonqualified Stock Option Agreement and do hereby agree to be
bound by all of the terms and provisions thereof and of the Plan.
DATED: ______________________, 19__. ________________________
Signature of Spouse
<PAGE>
KIT MANUFACTURING COMPANY
EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the ___ day of ____ 199_,
between Kit Manufacturing Company (the "Corporation"), and
________________ (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Kit Manufacturing Company 1994
Stock Option Plan (the "Plan"), the Corporation has granted to
the Employee effective as of the ___ day of ____, 199_ (the
"Award Date") an option to purchase all or any part of _____
authorized but unissued or treasury shares of Common Stock, no
par value, of the Corporation upon the terms and conditions set
forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises
and covenants made herein and the mutual benefits to be derived
herefrom, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and
not otherwise defined herein shall have the meaning assigned to
such terms in the Plan.
2. Grant of Option. This Agreement evidences the
Corporation's grant to the Employee of the right and option to
purchase, on the terms and conditions set forth herein and in the
Plan, all or any part of an aggregate of _____ shares of the
Common Stock at the price of $_____ per share (the "Option"),
exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day
before the seventh anniversary of the Award Date (the "Expiration
Date"). Such price equals the Fair Market Value of the
Corporation's Common Stock as of the Award Date. It is the
intent of the Corporation that this Option constitute an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
3. Exercisability of Option. Except as earlier
permitted by or pursuant to the Plan or by resolution of the
Committee adopted after the date hereof, no shares may be
purchased by exercise of the Option until the expiration of six
months after the Award Date. The Option may be exercised in
installments as to 25% of the aggregate number of shares set
forth in Section 2 hereof (subject to adjustment) on and after
the first anniversary of the Award Date and as to an additional
25% of such aggregate number of such shares (subject to
adjustment) on and after each of the second, third and fourth
anniversaries of the Award Date.
To the extent the Employee does not in any year
purchase all or any part of the shares to which the Employee is
entitled, the Employee has the right cumulatively thereafter to
purchase any shares not so purchased and such right shall
continue until the Option terminates or expires. Fractional
share interests shall be disregarded, but may be cumulated. No
fewer than 100 shares may be purchased at any one time, unless
the number purchased is the total number at the time available
for purchase under the Option.
4. Limitation on Exercise of Option. In the event
the Employee is granted incentive stock options (whether under
this Option Agreement or any other incentive stock option
agreement) and the aggregate fair market value (determined as of
the respective dates of grant of such options) of the Common
Stock with respect to which such options are first exercisable in
any calendar year exceeds $100,000, the most recently granted
options shall be treated as nonqualified stock options to the
extent of the excess. In addition, in the case of simultaneously
granted options, the Corporation may, in the manner and to the
extent permitted by law, designate which shares are to be treated
as stock acquired pursuant to the exercise of an incentive stock
option.
5. Method of Exercise of Option. The Option shall be
exercisable by the delivery to the Corporation of a written
notice stating the number of shares to be purchased pursuant to
the Option and accompanied by payment made in accordance with and
in a form permitted in Section 2.2(b) of the Plan for the full
purchase price of the shares to be purchased, subject to such
further limitations and rules or procedures as the Committee may
from time to time establish as to any non-cash payment. Shares
delivered in payment of the exercise price must have been owned
by Employee for at least six months prior to the exercise. In
addition, the Employee (or the Employee's Beneficiary or Personal
Representative) shall furnish any written statements required
pursuant to Section 3.4 of the Plan.
6. Effect of Termination of Employment or Death;
Change in Subsidiary Status. The Option and all other rights
hereunder, to the extent not exercised, shall terminate and
become null and void at such time as the Employee ceases to be
employed by either the Corporation or any Subsidiary, except
that:
(a) if the Employee terminates by reason other
than by death, Total Disability or for cause (as determined
by the Committee in its sole discretion), the Employee may
at any time within a period of three months after such
termination exercise the Option to the extent the Option was
exercisable at the date of such termination;
(b) if the Employee terminates by reason of Total
Disability, or if the Employee becomes Totally Disabled
within three months after a termination described in
subsection (a), then the Option may be exercised within a
period of one year after the date Employee becomes Totally
Disabled (or, if earlier, the Employee's termination from
employment), to the extent that the Option was exercisable
on such date; and
(c) if the Employee dies prior to a termination
of employment, or within three months after a termination of
employment under subsection (a) or (b) above, then the
Option may be exercised within a period of one year after
the Employee's termination from employment, to the extent
that the Option was exercisable on such date;
provided, however, that in no event may the Option be exercised
by anyone under this Section or otherwise after the Expiration
Date. If Employee is employed by an entity which ceases to be a
Subsidiary, such event shall be deemed for purposes of this
Section 6 to be a termination of employment described in
subsection (a) in respect of Employee.
7. Consideration to Corporation. In consideration of
the granting of this Option by the Corporation, Employee agrees
to render faithful and efficient services to the Corporation or
its subsidiaries, with such duties and responsibilities as the
Corporation or its subsidiaries shall from time to time
prescribe, for a period of at least one (1) year from the date
this Option is granted.
8. Termination of Option Under Certain Events. As
permitted by Section 3.2(c) of the Plan, the Committee retains
the right to terminate the Option to the extent not previously
exercised upon an event or transaction which the Corporation does
not survive.
9. Non-Transferability of Option. The Option and any
other rights of the Employee under this Agreement or the Plan are
nontransferable as provided in Section 1.9 of the Plan.
10. Notices. Any notice to be given under the terms
of this Agreement shall be in writing and addressed to the
Corporation at its principal office located at 530 East Wardlow
Road, Long Beach, California, 90807, to the attention of the
Corporate Treasurer and to the Employee at the address given
beneath the Employee's signature hereto, or at such other address
as either party may hereafter designate in writing to the other.
11. Plan. The Option and all rights of Employee
thereunder are subject to, and the Employee agrees to be bound
by, all of the terms and conditions of the provisions of the
Plan, incorporated herein by this reference. The Employee
acknowledges receipt of a copy of the Plan, which is made a part
hereof by this reference, and agrees to be bound by the terms
thereof. Unless otherwise expressly provided in other Sections
of this Agreement, provisions of the Plan that confer
discretionary authority on the Committee do not (and shall not be
deemed to) create any rights in the Employee unless such rights
are expressly set forth herein or are otherwise in the sole
discretion of the Committee so conferred by appropriate action of
the Committee under the Plan after the date hereof.
12. Notice of Disposition. The Employee agrees to
notify the Corporation of any sale or other disposition of any
shares of Common Stock received upon exercise of the Option, if
such sale or disposition occurs within two years after the Award
Date or within one year after the date of such exercise.
13. Shareholder Approval. The Option, this Agreement
and all rights hereunder are subject to approval of the Plan by
the shareholders of the Corporation as provided therein.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be executed on its behalf by a duly authorized
officer and the Employee has hereunto set his or her hand.
KIT MANUFACTURING COMPANY
___________________________
By_________________________
Title______________________
EMPLOYEE
___________________________
(Signature)
___________________________
(Print Name)
___________________________
(Address)
___________________________
(City, State, Zip Code)
<PAGE>
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Incentive Stock Option Agreement by Kit Manufacturing Company, I,
___________________________, the spouse of the Employee herein
named, do hereby join with my spouse in executing the foregoing
Incentive Stock Option Agreement and do hereby agree to be bound
by all of the terms and provisions thereof and of the Plan.
DATED: ______________________, 19__. ________________________
Signature of Spouse
<PAGE>
KIT MANUFACTURING COMPANY
SPECIAL EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT
(10% SHAREHOLDER)
THIS AGREEMENT dated as of the ____ day of _________
199___, between Kit Manufacturing Company (the "Corporation"),
and ________________________ (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Kit Manufacturing Company 1994
Stock Option Plan (the "Plan"), the Corporation has granted to
the Employee effective as of the ___ day of _________, 199__
(the "Award Date") an option to purchase all or any part of
___________ authorized but unissued or treasury shares of
Common Stock, $___ par value, of the Corporation upon the terms
and conditions set forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual promises
and covenants made herein and the mutual benefits to be derived
herefrom, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein and
not otherwise defined herein shall have the meaning assigned to
such terms in the Plan.
2. Grant of Option. This Agreement evidences the
Corporation's grant to the Employee of the right and option to
purchase, on the terms and conditions set forth herein and in the
Plan, all or any part of an aggregate of _______ shares of the
Common Stock at the price of $______ per share (the "Option"),
exercisable from time to time, subject to the provisions of this
Agreement and the Plan, prior to the close of business on the day
before the fifth anniversary of the Award Date (the "Expiration
Date"). Such price equals 110% of the Fair Market Value of the
Corporation's Common Stock as of the Award Date. It is the
intent of the Corporation that this Option constitute an
incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended ("Code"), and that this
Option satisfy the additional requirements of Section 422(c)(5)
of the Code.
3. Exercisability of Option. Except as earlier
permitted by or pursuant to the Plan or by resolution of the
Committee adopted after the date hereof, no shares may be
purchased by exercise of the Option until the expiration of six
months after the Award Date. The Option may be exercised in
installments as to 25% of the aggregate number of shares set
forth in Section 2 hereof (subject to adjustment) on and after
the first anniversary of the Award Date and as to an additional
25% of such aggregate number of such shares (subject to
adjustment) on and after each of the second, third and fourth
anniversaries of the Award Date.
To the extent the Employee does not in any year
purchase all or any part of the shares to which the Employee is
entitled, the Employee has the right cumulatively thereafter to
purchase any shares not so purchased and such right shall
continue until the Option terminates or expires. Fractional
share interests shall be disregarded, but may be cumulated. No
fewer than 100 shares may be purchased at any one time, unless
the number purchased is the total number at the time available
for purchase under the Option.
4. Limitation on Exercise of Option. In the event
the Employee is granted incentive stock options (whether under
this Option Agreement or any other incentive stock option
agreement) and the aggregate fair market value (determined as of
the respective dates of grant of such options) of the Common
Stock with respect to which such options are first exercisable in
any calendar year exceeds $100,000, the most recently granted
options shall be treated as nonqualified stock options to the
extent of the excess. In addition, in the case of simultaneously
granted options, the Corporation may, in the manner and to the
extent permitted by law, designate which shares are to be treated
as stock acquired pursuant to the exercise of an incentive stock
option.
5. Method of Exercise of Option. The Option shall be
exercisable by the delivery to the Corporation of a written
notice stating the number of shares to be purchased pursuant to
the Option and accompanied by payment made in accordance with and
in a form permitted in Section 2.2(b) of the Plan for the full
purchase price of the shares to be purchased, subject to such
further limitations and rules or procedures as the Committee may
from time to time establish as to any non-cash payment. Shares
delivered in payment of the exercise price must have been owned
by Employee for at least six months prior to the exercise. In
addition, the Employee (or the Employee's Beneficiary or Personal
Representative) shall furnish any written statements required
pursuant to Section 3.4 of the Plan.
6. Effect of Termination of Employment or Death;
Change in Subsidiary Status. The Option and all other rights
hereunder, to the extent not exercised, shall terminate and
become null and void at such time as the Employee ceases to be
employed by either the Corporation or any Subsidiary, except that
(a) if the Employee terminates by reason other
than by death, Total Disability or for cause (as determined
by the Committee in its sole discretion), the Employee may
at any time within a period of three months after such
termination exercise the Option to the extent the Option was
exercisable at the date of such termination;
(b) if the Employee terminates by reason of Total
Disability, or if the Employee becomes Totally Disabled
within three months after a termination described in
subsection (a), then the Option may be exercised within a
period of one year after the date Employee becomes Totally
Disabled (or, if earlier, the Employee's termination from
employment), to the extent that the Option was exercisable
on such date; and
(c) if the Employee dies prior to a termination
of employment, or within three months after a termination of
employment under subsection (a) or (b) above, then the
Option may be exercised within a period of one year after
the Employee's termination from employment, to the extent
that the Option was exercisable on such date;
provided, however, that in no event may the Option be exercised
by anyone under this Section or otherwise after the Expiration
Date. If Employee is employed by an entity which ceases to be a
Subsidiary, such event shall be deemed for purposes of this
Section 6 to be a termination of employment described in
subsection (a) in respect of Employee.
7. Consideration to Corporation. In consideration of
the granting of this Option by the Corporation, Employee agrees
to render faithful and efficient services to the Corporation or
its subsidiaries, with such duties and responsibilities as the
Corporation or its subsidiaries shall from time to time
prescribe, for a period of at least one (1) year from the date
this Option is granted.
8. Termination of Option Under Certain Events. As
permitted by Section 3.2(c) of the Plan, the Committee retains
the right to terminate the Option to the extent not previously
exercised upon an event or transaction which the Corporation does
not survive.
9. Non-Transferability of Option. The Option and any
other rights of the Employee under this Agreement or the Plan are
nontransferable as provided in Section 1.9 of the Plan.
10. Notices. Any notice to be given under the terms
of this Agreement shall be in writing and addressed to the
Corporation at its principal office located at 530 East Wardlow
Road, Long Beach, California, 90807, to the attention of the
Corporate Treasurer and to the Employee at the address given
beneath the Employee's signature hereto, or at such other address
as either party may hereafter designate in writing to the other.
11. Plan. The Option and all rights of Employee
thereunder are subject to, and the Employee agrees to be bound
by, all of the terms and conditions of the provisions of the
Plan, incorporated herein by this reference. The Employee
acknowledges receipt of a copy of the Plan, which is made a part
hereof by this reference, and agrees to be bound by the terms
thereof. Unless otherwise expressly provided in other Sections
of this Agreement, provisions of the Plan that confer
discretionary authority on the Committee do not (and shall not be
deemed to) create any rights in the Employee unless such rights
are expressly set forth herein or are otherwise in the sole
discretion of the Committee so conferred by appropriate action of
the Committee under the Plan after the date hereof.
12. Notice of Disposition. The Employee agrees to
notify the Corporation of any sale or other disposition of any
shares of Common Stock received upon exercise of the Option, if
such sale or disposition occurs within two years after the Award
Date or within one year after the date of such exercise.
13. Stockholder Approval. The Option, this Agreement
and all rights hereunder are subject to approval of the Plan by
the stockholders of the Corporation as provided therein.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be executed on its behalf by a duly authorized
officer and the Employee has hereunto set his or her hand.
KIT MANUFACTURING COMPANY
By_________________________
Title____________________
EMPLOYEE
__________________________
(Signature)
__________________________
(Print Name)
__________________________
(Address)
__________________________
(City, State, Zip Code)
<PAGE>
<PAGE>
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Special Incentive Stock Option Agreement by Kit Manufacturing
Company, I, ___________________________, the spouse of the
Employee herein named, do hereby join with my spouse in executing
the foregoing Incentive Stock Option Agreement and do hereby
agree to be bound by all of the terms and provisions thereof and
of the Plan.
DATED: ______________________, 19__. ________________________
Signature of Spouse
<PAGE>
May
25th
1 9 9 5
460,070-999
NB1-222918.V1
KIT Manufacturing Company
530 East Wardlow Road
Long Beach, California 90801
Re: Registration on Form S-8 of KIT Manufacturing
Company (the "Company")
Ladies and Gentlemen:
You have advised us that you propose to file a
Registration Statement on Form S-8 with the Securities and
Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of 150,000 shares (the
"Shares") of Common Stock, without par value of the Company (the
"Common Stock"), to be issued pursuant to the KIT Manufacturing
Company 1994 Stock Option Plan (the "Plan"). At your request, we
have examined the proceedings heretofore taken and to be taken in
connection with the authorization of the Plan and the Common
Stock to be issued pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of
fact and law as we have deemed relevant, we are of the opinion
that the Shares have been duly authorized by all necessary
corporate action on the part of the Company and, when issued in
accordance with such authorization and appropriate Committee
action under the Plan, the provisions of the Plan and relevant
agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable
shares of Common Stock.
We consent to the use of this opinion as an exhibit to
the Registration Statement.
Respectfully submitted,
/s/ O'MELVENY & MYERS
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 and related prospectus of our reports dated
December 14, 1994 on our audits of the financial statements and
the financial statement schedules of KIT Manufacturing Company
for the year ended October 31, 1994.
/s/ COOPERS & LYBRAND L.L.P.
Newport Beach, California
May 25, 1995
