<PAGE>
As filed with the Securities and Exchange Commission on December 24, 1998
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------------------
American Science and Engineering, Inc.
--------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-2440991
------------------------------- -----------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification. No.)
829 Middlesex Turnpike, Billerica, MA 01821
-----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
---------------
AMERICAN SCIENCE AND ENGINEERING, INC.
1998 Non-Qualified Stock Option Plan
----------------------------------------
(Full Title of the Plan)
Jeffrey A. Bernfeld, Esquire
American Science and Engineering, Inc.
829 Middlesex Turnpike
Billerica, Massachusetts 01821
---------------------------------------
(Name and Address of Agent for Service)
(978) 262-8700
--------------------
(Telephone Number, Including Area Code, of Agent for Service)
---------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------- ------------------- ------------------ -------------------- ------------------------
Proposed Proposed
Amount Maximum Maximum Aggregate
Title of Each Class of to be Offering Price Offering Price (1) Amount of
Securities to be Registered Registered Per Share (1) Registration Fee
- ------------------------------- ------------------- ------------------ -------------------- ------------------------
<S> <C> <C> <C> <C>
Common Stock, 300,000(2) $10.32(3) $3,096,000(3) $860.69
$.66 2/3 par value
Rights to Purchase 300,000 0(5) 0(5) 0(5)
Common Stock (4)
- ------------------------------- ------------------- ------------------ -------------------- ------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of determining the registration
fee pursuant to Rule 457 under the Securities Act of 1933, as amended.
(2) Such presently indeterminable number of additional shares of
Common Stock are also registered hereunder as may be issued in the event of a
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split or other similar change in Common Stock.
(3) Based upon the average high and low prices for the Registrant's
Common Stock, $.66 2/3 par value (the "Common Stock"), on December 22, 1998 as
reported by the American Stock Exchange.
<PAGE>
(4) On April 9, 1998, the Board of Directors of the Registrant
declared a dividend distribution of one right (the "Rights") for each
outstanding share of Common Stock. The 300,000 Rights registered hereby consist
of 300,000 Rights which may be issued with shares of Common Stock issuable upon
exercise of options granted or to be granted under the Registrant's 1998
Non-Qualified Stock Option Plan.
(5) The Rights are not separately transferable apart from the Common
Stock, nor are they exercisable until the occurrence of certain events.
Accordingly, no independent value has been attributed to the Rights.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are hereby incorporated by reference into this
Registration Statement:
(a) The Registrant's latest Annual Report filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or either the Registrant's:
(i) latest prospectus filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"),
that contains audited financial statements for the
Registrant's latest fiscal year for which such statements have
been filed; or (ii) effective Registration Statement on Form
10 filed under the Exchange Act containing audited financial
statements for the Registrant's latest fiscal year;
(b) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
year covered by the Registrant's documents referred to in (a)
above; and
(c) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A (File No.
1-06549) filed under the Exchange Act with the Securities and
Exchange Commission ("Commission") including any amendment or
report filed for the purposes of updating such description.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock to be issued in accordance
with the American Science and Engineering, Inc. 1998 Non-Qualified Stock Option
Plan has been passed upon for the Registrant by Brown, Rudnick, Freed & Gesmer,
One Financial Center, Boston, Massachusetts 02111.
Item 6. Indemnification of Directors and Officers.
Section 67 of Chapter 156B of the Massachusetts General Laws permits the
indemnification of directors and officers to the extent authorized by the
Articles of Organization or By-Laws of a corporation or by a vote of the
stockholders. Except as otherwise provided by the Articles of Organization or
By-Laws, indemnification of persons who are not directors of a corporation may
be provided to the extent authorized by the directors. No indemnification may
3
<PAGE>
be provided for any person with respect to any matter as to which he shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that his action was in the best interest of the corporation.
Article VI of the Registrant's By-Laws provides, in substance, that the
Registrant shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit, by
reason of the fact that he is or was serving as a director or officer of the
Registrant or is or was serving at the request of the Registrant as a director,
trustee or officer of another corporation or entity. The indemnification
provisions apply to expenses actually incurred by such person in connection with
any civil action, suit or proceeding to which such person may be made a party,
or by which such person shall be threatened, by reason of any alleged act or
failure to act in his present or former capacity as a director or officer of the
Registrant or as a director, trustee or officer of such affiliated corporation
or entity. No person, however, has the right to indemnification in relation to
any matter as to which such person shall have been finally adjudged in any legal
proceeding not to have acted in good faith and the reasonable belief that the
person's action was in the best interest of the Registrant. In the event of any
settlement of any action, suit or proceeding, the right to indemnification is
limited to matters as to which the Registrant is advised by counsel that such
settlement is reasonable and that such person has acted in good faith and the
reasonable belief that his action was in the best interest of the Registrant.
The right of indemnification contained in the Registrant's By-Laws is
non-exclusive and is in addition to any other rights such person may have.
The Registrant has also entered into indemnification agreements with
all of its directors and executive officers (the "Indemnitees"). In general,
these agreements provide that the Registrant will indemnify and advance expenses
to the Indemnitees to the fullest extent permitted by law. More specifically,
the Registrant must indemnify the Indemnitees if, by reason of the Indemnitee's
corporate status, the Indemnitee is, or is threatened to be made, a party to or
is otherwise involved in any legal proceeding brought by: (1) persons other than
the Registrant; or (2) or in the right of the Registrant. The Indemnitee will
only be indemnified, however, if the Indemnitee acted in good faith and is
adjudged not to have received an improper personal benefit. In a claim brought
by or on behalf of the Registrant, no indemnification will be made if the
Indemnitee is adjudged to be liable to the Registrant unless a court deciding
the matter decides otherwise. Finally, notwithstanding the foregoing discussion,
if an Indemnitee is successful on the merits of a proceeding, the Indemnitee
will be indemnified to the maximum extent permitted by law from all expenses,
judgments, penalties, fines and amounts paid in settlement, actually and
reasonably incurred.
Item 7. Exemption From Registration Claimed.
Not Applicable.
4
<PAGE>
Item 8. Exhibits.
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1 Restated Articles of Organization of the Registrant, as
amended by: (a) Articles of Amendment dated October 29,
1976; (b) Articles of Amendment dated May 17, 1976;
(c) Articles of Amendment dated March 28, 1973;
(d) Articles of Amendment dated November 5, 1996 (filed
as Exhibit 4.1 to the Registrant's Registration Statement
on Form S-8 filed May 28, 1997 with respect to the
Registrant's Executive Incentive Plan and incorporated
herein by reference); and (e) Certificate of Vote of
Directors Establishing a Class or Series of Stock dated
April 14, 1998.
4.2 By-Laws of the Registrant, as amended (filed as Exhibit
2(a)(iii) to the Registrant's Registration Statement on
Form S-7 (Registration No. 2-56452) (the "Form S-7"), and
incorporated herein by reference).
4.3 Specimen Certificate of Common Stock (filed as Exhibit
2(a)(i) to the Form S-7 and incorporated herein by
reference).
4.4 Common Stock Purchase Warrant dated July 18, 1995, issued
in the name of Grayson & Associates (filed as Exhibit 4.6
to the Registrant's Registration Statement on Form S-3
(Registration No. 33-61903) (the "Form S-3") and
incorporated herein by reference).
4.5 Subscription Agreement dated July 8, 1995, between the
Registrant and Samuel International Investors, L.D.C.
(filed as Exhibit 4.7 to the Form S-3 and incorporated
herein by reference).
4.6 Common Stock Purchase Warrant in the form issued to certain
of the Registrant's lenders, with schedule of lenders,
exercise prices and share amounts attached (filed as
Exhibit 4.8 to the Registrant's Form S-3 and incorporated
herein by reference).
4.7 Shareholder Rights Agreement (the "Rights Agreement") dated
as of April 17, 1998 between Registrant and American Stock
Transfer & Trust Co., Inc., as Rights Agent (filed as
Exhibit 4 to the Current Report on Form 8-K of the
Registrant filed on April 15, 1998).
5 Legal Opinion of Brown, Rudnick, Freed & Gesmer.
23.1 Consent of Brown, Rudnick, Freed & Gesmer (contained within
its legal opinion filed as Exhibit 5 hereof).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on the Signature Page of this
Registration Statement).
5
<PAGE>
99 American Science and Engineering, Inc. 1998 Non-Qualified
Stock Option Plan.
6
<PAGE>
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii)
shall not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
7
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described under
"Item 6 --- Indemnification of Directors and Officers" 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 Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
8
<PAGE>
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Billerica, Commonwealth of Massachusetts, on
December 23, 1998.
American Science and Engineering, Inc.
(Registrant)
/s/Ralph S. Sheridan
-------------------------------------
By: Ralph S. Sheridan, President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ralph S. Sheridan, Lee C. Steele and
Jeffrey A. Bernfeld, and each of them (with full power to each of them to act
alone), his and true and lawful attorneys-in-fact and agents, with full power of
substitution and re-substitution, 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, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Capacity Date
- ---- -------- ----
<S> <C> <C>
/s/Ralph S. Sheridan President, Chief Executive December 23, 1998
- ---------------------------
Ralph S. Sheridan Officer and Director
(Principal Executive
Officer)
9
<PAGE>
/s/Lee C. Steele Vice President, Chief Financial December 23, 1998
- --------------------------- Officer and Treasurer (Principal
Lee C. Steele Financial Officer)
/s/Herman Feshbach Director December 23, 1998
- ---------------------------
Herman Feshbach
/s/Al Gladen Director December 23, 1998
- ---------------------------
Al Gladen
/s/Hamilton W. Helmer Director December 23, 1998
- ---------------------------
Hamilton W. Helmer
/s/Donald J. McCarren Director December 23, 1998
- ---------------------------
Donald J. McCarren
/s/William E. Odom Director December 23, 1998
- ---------------------------
William E. Odom
/s/Carl W. Vogt Director December 23, 1998
- ---------------------------
Carl W. Vogt
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Number Exhibit Description of Exhibit Page
- -------------- ---------------------- ----
<S> <C> <C>
4.1 Restated Articles of Organization of the Registrant, as
amended by: (a) Articles of Amendment dated October 29, 1976;
(b) Articles of Amendment dated May 17, 1976; (c) Articles of
Amendment dated March 28, 1973; (d) Articles of Amendment
dated November 5, 1996* (filed as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8 filed
May 28, 1997 with respect to the Registrant's Equity
Incentive Plan); and (e) Certificate of Vote of Directors
Establishing a Class or Series of Stock dated April 14, 1998. 13
4.2 By-Laws of the Registrant, as amended (filed as Exhibit 2(a)(iii)
to Registrant's Registration Statement on Form S-7 (Registration
No. 2-56452 (the "Form S-7"). *
4.3 Specimen Certificate of Common Stock (filed as Exhibit 2(a)(i)
to the Form S-7). *
4.4 Common Stock Purchase Warrant dated July 18, 1995 issued in
the name of Grayson & Associates (filed as Exhibit 4.6 to the
Registrant's Registration Statement on Form S-3) (Registration
No. 33-61903). *
4.5 Subscription Agreement dated July 8, 1995 between the
Registrant and Samuel International Investors, L.D.C. (filed
as Exhibit 4.7 to the Form S-3). *
4.6 Common Stock Purchase Warrant in the form issued to certain of
the Registrant's lenders, with schedule of lenders, exercise
prices and share amounts attached (filed as Exhibit 4.8 to the
Form S-3). *
4.7 Shareholder Rights Agreement (the "Rights Agreement") dated as
of April 17, 1998 between Registrant and American Stock
Transfer & Trust Co., Inc., as Rights Agent (filed as Exhibit
4 to the Current Report on Form 8-K filed on April 15, 1998). *
5 Legal Opinion of Brown, Rudnick, Freed & Gesmer. 23
23.1 Consent of Brown, Rudnick, Freed & Gesmer. **
23.2 Consent of Arthur Andersen LLP. 27
24 Power of Attorney. ***
99 American Science and Engineering, Inc. 1998 Non-Qualified
Stock Option Plan 28
</TABLE>
- ---------------------------------------------------
* Not filed herewith. In accordance with Rule 411(c) promulgated pursuant
to the Securities Act of 1933, as amended, reference is made to the
documents previously filed with the Securities and Exchange Commission
which documents are hereby incorporated by reference.
11
<PAGE>
** Contained in Exhibit 5.
*** Included on Signature Page of this Registration Statement.
12
<PAGE>
EXHIBIT 4.1
FEDERAL IDENTIFICATION
NO. 04-2240991
-------------------------
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A CLASS OR SERIES OF STOCK
(General Laws, Chapter 156B, Section 26)
We Ralph S. Sheridan , *President
------------------------------------------------
and Jeffrey A. Bernfeld , *Clerk
------------------------------------------------
of American Science and Engineering, Inc.
- -------------------------------------------------------------------------------
(Exact name of corporation)
located at: 829 Middlesex Turnpike, Billerica, MA 01820
- -------------------------------------------------------------------------------
(Street Address of corporation in Massachusetts)
do hereby certify that at a meeting of the directors of the corporation held
on April 9, 1998, the following vote establishing and designating a class
or series of stock and determining the relative rights and preferences was
duly adopted:
See Attachment A.
*Delete the inapplicable words
Note: Votes for which the space provided above is not sufficient should be
provided on one side of separate 8 1/2 X 11 sheets of white paper, numbered
2A, 2B, etc. with a left margin of at least 1 inch.
<PAGE>
ATTACHMENT A
VOTED: That pursuant to authority conferred upon and vested in the
Board of Directors by the Restated Articles of Organization, as amended as of
the date hereof (the "Articles of Organization"), of American Science and
Engineering, Inc. (the "Corporation"), the Board of Directors hereby establishes
and designates a series of Preferred Stock of the Corporation and hereby fixes
and determines the preferences, voting powers, qualifications and special and
relative rights of the shares of such series, in addition to those set forth in
the Articles of Organization, as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as "Series A Junior
Participating Cumulative Preferred Stock" (the "Series A Preferred Stock"), and
the number of shares initially constituting such series shall be Ten Thousand
(10,000) provided, however, that if more than a total of Ten Thousand (10,000)
shares of Series A Preferred Stock shall be issuable upon the exercise of Rights
(the "Rights") issued pursuant to the Shareholder Rights Agreement dated as of
April 17, 1998, between the Corporation and American Stock Transfer & Trust Co.,
as Rights Agent (the "Rights Agreement"), the Board of Directors of the
Corporation, pursuant to Section 26 of the Massachusetts Business Corporation
Law, shall direct by resolution or resolutions that a certificate be properly
executed, acknowledged, filed and recorded, in accordance with the provisions of
said law, providing for the total number of shares of Series A Preferred Stock
authorized to be issued to be increased (to the extent that the Articles of
Organization then permits) to the largest number of whole shares (rounded up to
the nearest whole number) issuable upon exercise of such Rights.
Section 2. Dividends and Distributions.
(A) (i) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of Common Stock
and of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to herein as
a Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provisions for
adjustment hereinafter set forth, 1000 times the aggregate per share amount of
all cash dividends, and 1000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly
<PAGE>
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. The multiple of cash and non-cash dividends
declared on the Common Stock to which holders of the Series A Preferred Stock
are entitled, which shall be one thousand initially but which shall be adjusted
from time to time as hereinafter provided, is hereinafter referred to as the
"Dividend Multiple." In the event the Corporation shall at any time after April
17, 1998 (the "Rights Declaration Date") (i) declare or pay any dividend on
Common Stock payable in shares of Common Stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the Dividend Multiple thereafter applicable to the determination of
the amount of dividends which holders of shares of Series A Preferred Stock
shall be entitled to receive shall be the Dividend Multiple applicable
immediately prior to such event multiplied by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(ii) Notwithstanding anything else contained in this paragraph
(A), the Corporation shall, out of funds legally available for that purpose,
declare a dividend or distribution on the Series A Preferred Stock as provided
in this paragraph (A) immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix in
accordance with applicable law a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than such
number of days prior to the date fixed for the payment thereof as may be allowed
by applicable law.
2
<PAGE>
Section 3. Voting Rights.
In addition to any other voting rights required by law or the Articles
of Organization, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to one
thousand votes on all matters submitted to a vote of the stockholders of the
Corporation. The number of votes which a holder of a share of Series A Preferred
Stock is entitled to cast, which shall initially be one thousand but which may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Vote Multiple." In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
Vote Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series A Preferred Stock shall be
entitled shall be the Vote Multiple immediately prior to such event multiplied
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, by law or by the Articles of
Organization, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and the holders of shares of any other capital stock
of this Corporation having general voting rights, shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as otherwise required by applicable law, by the Articles of
Organization or as set forth herein, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or
3
<PAGE>
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) except as permitted in subsection 4 (A) (iv) below, redeem,
purchase or otherwise acquire for consideration shares of any
stock ranking on parity (either as to dividends or upon
liquidation dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of any stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under subsection (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein and in the Articles of Organization.
4
<PAGE>
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made (x) to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an amount equal to
the greater of (1) $1,000 per share or (2) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of Common
Stock, or (y) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (x) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Neither the consolidation nor merging of the Corporation with or
into any other corporation or corporations, nor the sale or other transfer of
all or substantially all of the assets of the Corporation, shall be deemed to be
a liquidation, dissolution or winding up of the Corporation within the meaning
of this Section 6.
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Preferred Stock shall at
the same time be similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 1000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged, plus accrued and unpaid dividends, if any, payable with
respect to the Series A Preferred Stock. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any dividend on
Common Stock payable in shares of Common Stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of
5
<PAGE>
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 8. Redemption.
The shares of Series A Preferred Stock shall not be redeemable.
Section 9. Ranking.
Unless otherwise provided in the Articles of Organization or a
Certificate of Designation Establishing a Class of Stock relating to a
subsequently-designated series of Preferred Stock of the Corporation, the Series
A Preferred Stock shall rank junior to any other series of the Corporation's
Preferred Stock subsequently issued, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and shall rank
senior to the Common Stock.
Section 10. Amendment.
The Articles of Organization and this Certificate of Designation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares.
Series A Preferred Stock may be issued in whole shares or in any
fraction of a share that is one one-thousandth of a share or any integral
multiple of such fraction, which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock. In lieu of fractional shares, the
Corporation may elect to make a cash payment as provided in the Rights Agreement
for fractions of a share other than one one-thousandth of a share or any
integral multiple thereof. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the issuance of
fractions of a share of Series A Preferred Stock in multiples of one-thousandth
of a share shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the
6
<PAGE>
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7
<PAGE>
SIGNED UNDER THE PENALTIES OF PERJURY, this 14th day of April, 1998.
/s/ Ralph S. Sheridan *President
- -----------------------------------------
Ralph S. Sheridan
/s/ Jeffrey A. Bernfeld *Clerk
- -----------------------------------------
Jeffrey A. Bernfeld
*Delete the inapplicable words
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A SERIES OF A CLASS OF STOCK
(General Laws, Chapter 156B, Section 26)
--------------------------------------
--------------------------------------
I hereby approve the within Certificate of Vote of Directors and, the filing
fee in the amount of $100 having been paid said certificate is deemed to have
been filed with me this 17th day of April, 1998.
Effective date
---------------------------
/s/ William Francis Galvin
--------------------------
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
Stamp
TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:
Steven R. London
------------------
Brown, Rudnick, Freed & Gesmer
------------------------------
One Financial Center
------------------------------
Boston, MA 02111
Telephone: 617-856-8200
----------------------------
<PAGE>
EXHIBIT (5)
OPINION OF BROWN, RUDNICK, FREED & GESMER
December 23, 1998
American Science and Engineering, Inc.
829 Middlesex Turnpike
Billerica, MA 01821
Re: American Science and Engineering, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as legal counsel to American Science and Engineering,
Inc., a Massachusetts corporation (the "Company"), in connection with the
preparation and filing of a Registration Statement on Form S-8 (the
"Registration Statement") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), relating to 300,000 shares of
the Company's Common Stock (the "Common Stock"), $.66 2/3 par value (the
"Shares"), and 300,000 Rights (as defined below).
The Shares are to be issued upon exercise of options granted pursuant
to the American Science and Engineering, Inc. 1998 Non-Qualified Stock Option
Plan (the "Plan"). The Rights are issuable pursuant to that certain Shareholder
Rights Agreement dated as of April 17, 1998 between the Company and American
Stock Transfer and Trust Co., Inc. (the "Rights Agreement") providing for the
delivery of a right (a "Right") to purchase one one-thousandth of a share of
Series A Junior Participating Preferred Stock, no par value, of the Company,
along with each share of Common Stock issued by the Company pursuant to, among
other things, the Plan.
In connection with this Opinion Letter, we have examined the documents
listed on SCHEDULE A attached hereto (collectively, the "Documents").
We have, without independent investigation, relied upon the
representations and warranties of the various parties as to matters of objective
fact contained in the Documents.
We have not made any independent review or investigation of orders,
judgments, rules or other regulations or decrees by which the Company or any of
its property may be bound, nor have we made any independent investigation as to
the existence of actions, suits, investigations or proceedings, if any, pending
or threatened against the Company.
With your concurrence, the opinion hereafter expressed, whether or not
qualified by language such as "to our knowledge," is based solely upon: (i) our
review of the Documents; (ii) discussions with those of our attorneys who have
given substantive legal representation to the
<PAGE>
December 23, 1998
Page 2
Company in connection with the Registration Statement; and (iii) such review of
published sources of law as we have deemed necessary.
This firm, in rendering legal opinions, customarily makes certain
assumptions which are described in SCHEDULE B hereto. In the course of our
representation of the Company in connection with the Registration Statement,
nothing has come to our attention which causes us to believe reliance upon any
of those assumptions is inappropriate, and, with your concurrence, the opinion
hereafter expressed is based upon those assumptions. For purposes of those
assumptions, the Enumerated Party referred to in SCHEDULE B is the Company.
Our opinion hereafter expressed is limited to the laws of the
Commonwealth of Massachusetts and Federal law. We express no legal opinion upon
any matter other than as explicitly addressed in numbered paragraph 1 below, and
our express opinion therein contained shall not be interpreted to be implied
opinions upon any other matter.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Shares have been duly authorized for issuance, and when issued
and paid for in accordance with the terms of the Plan, will be validly issued,
fully paid and nonassessable.
2. The Rights have been duly authorized for issuance, and when issued
in accordance with the Rights Agreement, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to this firm wherever it appears in
the Registration Statement.
Very truly yours,
BROWN, RUDNICK, FREED & GESMER
By: Brown, Rudnick, Freed & Gesmer, P.C.
a partner
By: /s/ Steven R. London
-------------------------------------
Steven R. London, duly authorized
SRL/JGN/TDL
<PAGE>
SCHEDULE A
LIST OF DOCUMENTS
In connection with the Opinion Letter to which this Schedule A is
attached, we have reviewed the following Documents. However, except as otherwise
expressly indicated, we have not reviewed any documents, instruments or
agreements referred to in or listed upon any of the following Documents:
(i) a copy of the Restated Articles of Organization of the Company, as
amended, as certified by the Secretary of State of the Commonwealth of
Massachusetts and a certificate of the Clerk of the Company that there have been
no further amendments thereto;
(ii) a copy of the By-Laws of the Company, as amended, certified by the
Clerk of the Company as presently being in effect;
(iii) the proceedings of the stockholders and directors of the Company
pertaining to the Plan and the Rights Agreement and a certificate of the Clerk
of the Company as to certain resolutions of the directors of the Company;
(iv) a certificate dated as of December 18, 1998 of the Secretary of
State of the Commonwealth of Massachusetts as to the good standing of the
Company;
(v) a letter dated December 22, 1998 from the Company's Transfer Agent
as to the issued and outstanding Common Stock of the Company;
(vi) the Plan;
(vii) the Rights Agreement; and
(viii) the Registration Statement.
<PAGE>
SCHEDULE B
BROWN, RUDNICK, FREED & GESMER
STANDARD ASSUMPTIONS
In rendering legal opinions in third party transactions, Brown,
Rudnick, Freed & Gesmer makes certain customary assumptions described below:
1. Each natural person executing any of the Documents has
sufficient legal capacity to enter into such Documents.
2. Each person, other than the Enumerated party, has all
requisite power and authority and has taken all necessary
corporate or other action to enter into the Documents to which
it is a party, or by which it is bound, to the extent
necessary to make the Documents enforceable against it.
3. Each person other than the Enumerated Party has complied with
all legal requirements pertaining to its status as such status
relates to its rights to enforce the Documents against the
Enumerated Party.
4. Each Document is accurate, complete and authentic, each
original is authentic, each copy conforms to an authentic
original and all signatures are genuine.
5. All official public records are accurate, complete and
properly indexed and filed.
6. There has not been any mutual mistake of fact or
misunderstanding, fraud, duress, or undue influence by or
among any of the parties to the Documents.
7. The conduct of the parties to the Documents has complied in
the past and will comply in the future with any requirement of
good faith, fair dealing and conscionability.
8. The Enumerated Party will obtain all permits and governmental
approvals required in the future and take all actions
similarly required relevant to its performance of its
obligations under the Documents.
9. All parties to or bound by the Documents will act in
accordance with, and will refrain from taking any action that
is forbidden by, the terms and conditions of the Documents.
10. There are no agreements or understandings among the parties to
or bound by the Documents not reflected in the Documents, and
there is no usage of trade or course of prior dealing among
such parties, that would define, modify, waive, or qualify the
terms of any of the Documents.
<PAGE>
EXHIBIT (23.2)
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8
pertaining to the American Science and Engineering, Inc. 1998 Non-Qualified
Stock Option Plan, of our report dated May 14, 1998 included in American Science
and Engineering, Inc.'s Annual Report on Form 10-K for the fiscal year ended
March 31, 1998 filed with the Securities and Exchange Commission and to all
references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Boston, Massachusetts
December 18, 1998
<PAGE>
EXHIBIT (99)
AMERICAN SCIENCE AND ENGINEERING, INC.
1998 NON-QUALIFIED STOCK OPTION PLAN
Section I. Purpose of the Plan.
The purposes of this American Science and Engineering, Inc. 1998
Non-Qualified Stock Option Plan (the "1998 Plan") are (i) to provide long-term
incentives and rewards to those key employees (the "Employee Participants") of
American Science and Engineering, Inc. (the "Corporation") and its subsidiaries
(if any), and any other persons (the "Non-employee Participants") who are in a
position to contribute to the long-term success and growth of the Corporation
and its subsidiaries, (ii) to assist the Corporation in retaining and attracting
executives and key employees with requisite experience and ability, and (iii) to
associate more closely the interests of such executives and key employees with
those of the Corporation's stockholders.
Section II. Definitions.
"Common Stock" is the $.66 2/3 par value common stock of the
Corporation.
"Committee" is defined in Section III, paragraph (a).
"Corporation" is defined in Section I.
"Employee Participants" is defined in Section I.
"Fair Market Value" of any property is the value of the property
as reasonably determined by the Committee.
"1998 Plan" is defined in Section I.
"Non-employee Participants" is defined in Section I.
"Non-qualified Option" is a Stock Option which does not qualify as an
Incentive Stock Option or for which the Committee provides, in the terms
of such option and at the time such option is granted, that the option
shall not be treated as an Incentive Stock Option.
"Parent Corporation" has the meaning provided in Section 424(e)of the
Code.
<PAGE>
"Participants" are all persons who are either Employee Participants
or Non-employee Participants.
"Permanent and Total Disability" has the meaning provided in Section
22(e)(3) of the Code.
"Rule 16b-3" means Securities and Exchange Commission Rule 16b-3.
"Section 16" means Section 16 of the Securities Exchange Act of 1934,
as amended, or any similar or successor statute, and any rules,
regulations, or policies adopted or applied thereunder.
"Stock Options" are rights granted pursuant to this 1998 Plan to
purchase shares of Common Stock at a fixed price.
"Subsidiary Corporation" has the meaning provided in Section 424(f)
of the Code.
Section III. Administration.
(a) The Committee. This 1998 Plan shall be administered by the Board of
Directors or by a compensation committee consisting solely of two or more
"non-employee directors", as defined in Rule 16b-3, who shall be designated by
the Board of Directors of the Corporation (the administering body is hereafter
referred to as the "Committee"). The Committee shall serve at the pleasure of
the Board of Directors, which may from time to time, and in its sole discretion,
discharge any member, appoint additional new members in substitution for those
previously appointed and/or fill vacancies however caused. A majority of the
Committee shall constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present shall be deemed the action
of the Committee. No person shall be eligible to be a member of the Committee if
that person's membership would prevent the plan from complying with Section 16,
if applicable to the Corporation.
(b) Authority and Discretion of the Committee. Subject to the express
provisions of this 1998 Plan and provided that all actions taken shall be
consistent with the purposes of this 1998 Plan, and subject to ratification by
the Board of Directors only if required by applicable law, the Committee shall
have full and complete authority and the sole discretion to: (i) determine those
persons who shall constitute key employees eligible to be Employee Participants;
(ii) select the Participants to whom Stock Options shall be granted under this
1998 Plan; (iii) determine the size and the form of the Stock Options, if any,
to be granted to any Participant; (iv) determine the time or times such Stock
Options shall be granted including the
<PAGE>
grant of Stock Options in connection with other awards made, or compensation
paid, to the Participant; (v) establish the terms and conditions upon which such
Stock Options may be exercised and/or transferred, including the exercise of
Stock Options in connection with other awards made, or compensation paid, to the
Participant; (vi) make or alter any restrictions and conditions upon such Stock
Options and the Stock received on exercise thereof, including, but not limited
to, providing for limitations on the Participant's right to keep any Stock
received on termination of employment; (vii) determine whether the Participant
or the Corporation has achieved any goals or otherwise satisfied any conditions
or requirements that may be imposed on or related to the exercise of Stock
Options; and (viii) adopt such rules and regulations, establish, define and/or
interpret these and any other terms and conditions, and make all determinations
(which may be on a case-by-case basis) deemed necessary or desirable for the
administration of this 1998 Plan.
(c) Applicable Law. This 1998 Plan and all Stock Options shall be governed
by the law of the state in which the Corporation is incorporated.
Section IV. Terms of Stock Options.
(a) Agreements. Stock Options shall be evidenced by a written agreement
between the Corporation and the Participant awarded the Stock Option. This
agreement shall be in such form, and contain such terms and conditions (not
inconsistent with this 1998 Plan) as the Committee may determine. The agreement
shall include the following or a similar statement: "This stock option is not
intended to be an Incentive Stock Option, as that term is described in Section
422 of the Internal Revenue Code of 1986, as amended."
(b) Term. Stock Options shall be for such periods as may be determined by
the Committee.
(c) Purchase Price. The purchase price of shares purchased pursuant to any
Stock Option shall be determined by the Committee, and shall be paid by the
Participant or other person permitted to exercise the Stock Option in full upon
exercise, (i) in cash, (ii) by delivery of shares of Common Stock (valued at
their Fair Market Value on the date of such exercise), (iii) any other property
(valued at its Fair Market Value on the date of such exercise), or (iv) any
combination of cash, stock and other property, with any payment made pursuant to
subparagraphs (ii), (iii) or (iv) only as permitted by the Committee, in its
sole discretion. In no event will the purchase price of Common Stock be less
than the par value of the Common Stock.
(d) Restrictions. At the discretion of the Committee, the Common Stock
issued pursuant to the Stock Options granted hereunder may be subject to
restrictions on vesting or transferability. For the purposes of this limitation,
options shall be taken into account in the order granted.
<PAGE>
(e) Withholding of Taxes. Pursuant to applicable federal, state, local or
foreign laws, the Corporation may be required to collect income or other taxes
upon the grant of a Stock Option to, or exercise of a Stock Option by, a holder.
The Corporation may require, as a condition to the exercise of a Stock Option,
or demand, at such other time as it may consider appropriate, that the
Participant pay the Corporation the amount of any taxes which the Corporation
may determine is required to be withheld or collected, and the Participant shall
comply with the requirement or demand of the Corporation. In its discretion, the
Corporation may withhold shares to be received upon exercise of a Stock Option
if it deems this an appropriate method for withholding or collecting taxes.
(f) Securities Law Compliance. Upon exercise (or partial exercise) of a
Stock Option, the Participant or other holder of the Stock Option shall make
such representations and furnish such information as may, in the opinion of
counsel for the Corporation, be appropriate to permit the Corporation to issue
or transfer Stock in compliance with the provisions of applicable federal or
state securities laws. The Corporation, in its discretion, may postpone the
issuance and delivery of Stock upon any exercise of this Option until completion
of such registration or other qualification of such shares under any federal or
state laws, or stock exchange listing, as the Corporation may consider
appropriate. Furthermore, the Corporation is not obligated to register or
qualify the shares of Common Stock to be issued upon exercise of a Stock Option
under federal or state securities laws (or to register or qualify them at any
time thereafter), and it may refuse to issue such shares if, in its sole
discretion, registration or exemption from registration is not practical or
available. The Corporation may require that prior to the issuance or transfer of
Stock upon exercise of a Stock Option, the Participant enter into a written
agreement to comply with any restrictions on subsequent disposition that the
Corporation deems necessary or advisable under any applicable federal and state
securities laws. Certificates of Stock issued hereunder shall bear a legend
reflecting such restrictions.
(g) Right to Stock Option. No employee of the Corporation or any other
person shall have any claim or right to be a participant in this 1998 Plan or to
be granted a Stock Option hereunder. Neither this 1998 Plan nor any action taken
hereunder shall be construed as giving any person any right to be retained in
the employ of the Corporation. Nothing contained hereunder shall be construed as
giving any person any equity or interest of any kind in any assets of the
Corporation or creating a trust of any kind or a fiduciary relationship of any
kind between the Corporation and any such person. As to any claim for any unpaid
amounts under this 1998 Plan, any person having a claim for payments shall be an
unsecured creditor.
(h) Indemnity. Neither the Board of Directors nor the Committee, nor any
members of either, nor any employees of the Corporation or any parent,
subsidiary, or other affiliate, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in
<PAGE>
connection with their responsibilities with respect to this 1998 Plan, and the
Corporation hereby agrees to indemnify the members of the Board of Directors,
the members of the Committee, and the employees of the Corporation and its
parent or subsidiaries in respect of any claim, loss, damage, or expense
(including reasonable counsel fees) arising from any such act, omission,
interpretation, construction or determination to the full extent permitted by
law.
(i) Participation by Foreigners. Without amending this 1998 Plan, the
Committee may modify grants made to participants who are foreign nationals or
employed outside the United States so as to recognize differences in local law,
tax policy, or custom.
Section V. Amendment and Termination: Adjustments Upon Changes in Stock.
The Board of Directors of the Corporation may at any time, and from time to
time, amend, suspend or terminate this 1998 Plan or any portion thereof,
provided that no amendment shall be made without approval of the Corporation's
stockholders if such approval is necessary to comply with any applicable rules
or regulations of the Securities and Exchange Commission, including Rule 16b-3
(or any successor rule thereunder), or the rules and regulations of any exchange
or stock market on which the Corporation's securities are listed or quoted.
Except as provided herein, no amendment, suspension or termination of this 1998
Plan may affect the rights of a Participant to whom a Stock Option has been
granted without such Participant's consent. If there shall be any change in the
Common Stock or to any Stock Option granted under this 1998 Plan through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split or
other change in the corporate structure of the Corporation, appropriate
adjustments may be made by the Committee (or if the Corporation is not the
surviving corporation in any such transaction, the Board of Directors of the
surviving corporation, or its designee) in the aggregate number and kind of
shares subject to this 1998 Plan, and the number and kind of shares and the
price per share subject to outstanding options. In connection with the
foregoing, the Committee may issue new Stock Options in exchange for outstanding
Stock Options.
Section VI. Shares of Stock Subject to the Plan.
The number of shares of Common Stock that may be the subject of awards
under this 1998 Plan shall not exceed an aggregate of 300,000 shares. Shares to
be delivered under this 1998 Plan may be either authorized but unissued shares
of Common Stock or treasury shares. Any shares subject to an option hereunder
which for any reason terminates, is cancelled or otherwise expires unexercised,
and any shares reacquired by the Corporation due to restrictions imposed on the
shares, shares returned because payment is made hereunder in stock of equivalent
value rather than in cash, and/or shares reacquired from a recipient for any
other reason shall, at such time, no longer count towards the aggregate number
of shares which have been the subject of Stock Options issued hereunder, and
such number of shares shall be subject to further awards
<PAGE>
under this 1998 Plan, provided, first, that the total number of shares then
eligible for award under this 1998 Plan may not exceed the total specified in
the first sentence of this Section VI, and second, that the number of shares
subject to further awards shall not be increased in any way that would cause
this 1998 Plan or any Stock Option to not comply with Section 16, if applicable
to the Corporation.
Section VII. Effective Date and Term of this Plan.
The effective date of this 1998 Plan is November 20, 1997 (the "Effective
Date") and awards under this 1998 Plan may be made for a period of ten years
commencing on the Effective Date. The period during which a Stock Option may be
exercised may extend beyond that time as provided herein.
DATE OF APPROVAL BY STOCKHOLDERS: N/A
- --------------------------------
DATE OF APPROVAL BY BOARD OF DIRECTORS: May 28, 1998
- --------------------------------------
