<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1995
REGISTRATION NO. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LUFKIN INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 750404410
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
601 SOUTH RAGUET
LUFKIN, TEXAS 75902
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
LUFKIN INDUSTRIES, INC.
1990 STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
DOUGLAS V. SMITH
PRESIDENT
601 SOUTH RAGUET
LUFKIN, TEXAS 75902
(409) 634-2211
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Offering Registration
to be Registered Registered (1) Per Share(2) Price(2) Fee
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, Par Value
$1.00 Per Share 500,000 $21.00 $10,500,000 $3,621
--------------------------------------------------------------------------------------
Common Share Purchase
Rights (3) -- -- -- --
======================================================================================
</TABLE>
(1) The number of shares of Common Stock registered herein is subject to
adjustment to prevent dilution from stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of calculating the registration fee, based
upon the average of the high and low prices of a share of the Company's
Common Stock on the NASDAQ National Market System on August 21, 1995
pursuant to Rule 457(c).
(3) Each share of Common Stock offered hereby includes one common share purchase
right which is exercisable upon the occurrence of certain specified events.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The Company incorporates herein by reference the following documents, or
portions of documents, as of their respective dates as filed with the Securities
and Exchange Commission (the "Commission"):
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994;
(2) The Company's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1995 and June 30, 1995;
(3) The description of the Company's common stock, par value $1.00 per
share (the "Common Stock"), contained in the Company's Registration
Statement on Form 8-A, dated August 15, 1966, filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (No.
0-2612); and
(4) The description of the Company's common share purchase rights
contained in the Company's Registration Statement on Form 8-A, dated May
14, 1987, filed pursuant to the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since each class of securities to be offered is
registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Company by Andrews & Kurth L.L.P., 4200 Texas
Commerce Tower, Houston, Texas 77002. On July 27, 1995, attorneys of Andrews &
Kurth L.L.P. owned an aggregate of 35,336 shares of Common Stock of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Bylaws contain provisions permitted by the Texas Business
Corporation Act (under which the Company is organized) which, in general terms,
provide that directors and officers will be indemnified by the Company, to the
full extent authorized or permitted by law, for all losses that may be incurred
by them in connection with any claim or legal action in which they may become
involved by reason of their service as a director or officer of the Company.
Such act provides that a company may indemnify an officer or director who was,
is or is threatened to be made a party to any suit or proceeding, whether civil,
criminal, administrative, arbitrative or investigative, because the person is or
was a director, officer, employee or agent of the company, or is or was serving
at the request of the company in the same or another capacity in another
corporation or business association, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred if it is determined that
the person: (i) conducted himself in good faith, (ii) reasonably believed that,
in the case of conduct in his official capacity, his conduct was in the best
interests of the company, and (iii) in
II-1
<PAGE>
the case of any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful; provided that, if the person is found liable to the
company or is found liable on the basis that personal benefit was improperly
received by the person, the indemnification (i) is limited to reasonable
expenses actually incurred by the person in connection with the proceeding and
(ii) will not be made in respect of any proceeding in which the person shall
have been found liable for willful or intentional misconduct in the performance
of his duty to the Company.
The directors and officers of the Company are insured (subject to
certain exception and deductions) against liabilities which they may incur in
their capacity as such under a liability insurance policy carried by the
Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement.
ITEM 8. EXHIBITS.
Exhibit
Number Description
------ -----------
4.1 Articles of Incorporation of the Company (included as Exhibit 3 to
the Company's Annual Report on Form 10-K for the year ended December
31, 1990, and incorporated herein by reference).
4.2 Bylaws of the Company (included as Exhibit 3 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1990, and
incorporated herein by reference).
4.3* Lufkin Industries, Inc. 1990 Stock Option Plan, as amended.
5.1* Opinion of Counsel.
23.1* Consent of Arthur Andersen LLP (included on Page II-6).
23.2* Consent of Counsel (included in Exhibit 5.1).
24.1* Power of Attorney (included on Page II-4).
_______________
*Filed herewith.
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;
(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;
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<PAGE>
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 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.
(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 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer 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.
II-3
<PAGE>
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 Lufkin, State of Texas, on August 23, 1995.
Lufkin Industries, Inc.
By: /s/ Douglas V. Smith
-----------------------
Douglas V. Smith
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Lufkin Industries, Inc. (the "Company") hereby constitutes and
appoints Douglas V. Smith and C. James Haley, Jr., or either of them (with full
power to each of them to act alone), his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and on his behalf and in his
name, place and stead, in any and all capacities, to sign, execute and file this
Registration Statement under the Securities Act of 1933, as amended, and any or
all amendments (including, without limitation, post-effective amendments), with
all exhibits and any and all documents required to be filed with respect
thereto, with the Securities and Exchange Commission or any regulatory
authority, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do if personally present, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
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>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Douglas V. Smith President and Chief August 23, 1995
-------------------------- Executive Officer and Director
Douglas V. Smith (Principal Executive Officer)
/s/ C. James Haley, Jr. Secretary-Treasurer August 23, 1995
-------------------------- (Principal Financial
C. James Haley, Jr. and Accounting Officer)
/s/ S. W. Henderson, III Director August 23, 1995
--------------------------
S. W. Henderson, III
/s/ L. R. Jalenak, Jr. Director August 23, 1995
--------------------------
L. R. Jalenak, Jr.
/s/ H. H. King Director August 23, 1995
---------------------------
H. H. King
/s/ M. E. Kurth, Jr. Director August 23, 1995
---------------------------
M. E. Kurth, Jr.
/s/ W. T. Little Director August 23, 1995
---------------------------
W. T. Little
/s/ B. H. O'Neal Director August 23, 1995
---------------------------
B. H. O'Neal
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ F. B. Stevenson Director August 23, 1995
----------------------------
F. B. Stevenson
/s/ H. J. Trout, Jr. Director August 23, 1995
----------------------------
H. J. Trout, Jr.
/s/ W. W. Trout, Jr. Director August 23, 1995
----------------------------
W. W. Trout, Jr.
/s/ T. E. Wiener Director August 23, 1995
----------------------------
T. E. Wiener
</TABLE>
II-5
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 14, 1995 included in the Lufkin Industries, Inc. Form 10-K for the year
ended December 31, 1994, and to all references to our firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
August 23, 1995
II-6
<PAGE>
EXHIBIT 4.3
LUFKIN INDUSTRIES, INC.
1990 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Lufkin Industries, Inc. 1990 Stock Option Plan (the "Plan")
is to advance the interests of Lufkin Industries, Inc. (the "Company") by
providing incentive awards and stock ownership opportunities to those key
employees (including officers and directors who are employees) who contribute
significantly to the performance of the Company ("Key Employees"). In addition,
the Plan is intended to enhance the ability of the Company to attract and retain
individuals of superior managerial ability and to motivate such individuals to
exert their best efforts towards future progress and profitability of the
Company.
2. ADMINISTRATION AND INTERPRETATION
a. Administration. The Plan shall be administered by a committee (the
"Committee") consisting of not less than three members of the Board of Directors
of the Company (the "Board") appointed by and serving at the pleasure of the
Board; provided that each member shall be a "disinterested person" within the
meaning of paragraph (d)(3) of Rule 16b-3 which has been adopted by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
such Rule or its equivalent is in effect from time to time. The Board may from
time to time appoint members of the Committee in substitution for or in addition
to members previously appointed and may fill vacancies, however caused, in the
Committee. The Committee may prescribe, amend and rescind rules and regulations
for the administration of the Plan and shall have the full power and authority
to construe and interpret the Plan. A majority of the members of the Committee
shall constitute a quorum and the acts of a majority of the members present at a
meeting or the acts of a majority of the members evidenced in writing shall be
the acts of the Committee. The Committee may correct any defect or any omission
or reconcile any inconsistency in the Plan or in any award or grant made
hereunder in the manner and to the extent it shall deem desirable.
The Committee shall have the full and exclusive right to grant all Options (as
defined below). In granting Options the Committee shall take into consideration
the contribution the employee has made or may make to the success of the Company
and such other considerations as the Committee shall determine. The Committee
shall also have the authority to consult with and receive recommendations from
officers and other employees of the Company with regard to these matters. In no
event shall any employee, his legal representatives, heirs, legatees,
distributees, or successors have any right to participate in the Plan, except to
such extent, if any, as the Committee shall determine.
The Committee may from time to time in granting Options under the Plan
prescribe such other terms and conditions concerning such Options as it deems
appropriate, provided that such terms and conditions are not more favorable to
the Key Employee than those expressly set forth in the Plan.
The day-to-day administration of the Plan may be carried out by such officers
and employees of the Company as shall be designated from time to time by the
Committee.
b. Interpretation. The interpretation and construction by the Committee of any
provisions of the Plan or of any award or grant under the Plan and any
determination by the Committee under any provision of the Plan or any such award
or grant shall be final and conclusive for all purposes.
c. Limitation on Liability. Neither the Committee nor any member thereof shall
be liable for any act, omission, interpretation, construction or determination
made in connection with the Plan in good faith, and the members of the Committee
shall be entitled to indemnification and reimbursement by the Company in respect
of any claim, loss, damage or expense (including counsel fees) arising therefrom
to the full extent permitted by law and under any directors and officers
liability insurance coverage that may be in effect from time to time.
<PAGE>
3. SHARES SUBJECT TO AWARDS UNDER THE PLAN
a. Limitations on Number of Shares. The shares subject to grants of Options
shall be shares of the Company's authorized but unissued common stock, par value
$1.00 per share, and shares, if any, of such common stock that are issued but
not outstanding and held as treasury stock by the Company ("Common Stock").
Subject to adjustment as hereinafter provided, the aggregate number of shares of
Common Stock as to which Options may be granted under the Plan shall not exceed
100,000 shares; provided, however, that, if the shareholders of the Company
approve an amendment to the Articles of Incorporation of the Company to increase
the authorized number of shares of Common Stock to 20,000,000 and following such
approval the proposed three-for-one share dividend is distributed to the
shareholders of the Company, the aggregate number of shares of Common Stock as
to which Options may be granted under the Plan shall not exceed 900,000 shares,
and; provided, however, (only if the Securities and Exchange Commission states
(either orally or written) that this provision complies with the provisions of
Rule 16b-3), that the aggregate number of shares of Common Stock as to which
Options may be granted shall not include, and shall not be reduced by, any
shares subject to Reload Options (as described below).
Shares of Common Stock ceasing to be subject to an Option because of the
exercise of such Option may no longer be subject to any further grant under the
Plan. If any outstanding Option in whole or in part, expires or terminates
unexercised or is cancelled for any reason prior to August 23, 2000, the shares
of Common Stock allocable to the unexercised, terminated, cancelled or forfeited
portion of such Option may again be made the subject of grants under the Plan.
b. Adjustments of Aggregate Number of Shares. The aggregate number of shares
of Common Stock stated in Section 3(a) shall be subject to appropriate
adjustment, from time to time, in accordance with the provisions of Section 6
hereof. In the event of a change in the Common Stock of the Company that is
limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or to a change in the par value thereof, or from par value
to no par value, without increase or decrease in the number of issued shares,
the shares resulting from any such change shall be deemed to be Common Stock
within the meaning of the Plan.
4. ELIGIBILITY
The individuals eligible to receive Options under the Plan shall be those Key
Employees as the Committee from time to time shall determine; provided, however,
no employee may receive in any calendar year a grant or grants of Options with
respect to more than 100,000 shares of Common Stock.
5. STOCK OPTIONS
a. Grants of Options.
(1) In General. Options granted under the Plan may be either "Incentive
Stock Options" or "Non-qualified Stock Options" (both as defined below and
collectively referred to as "Options"), or both. Options granted under the
Plan shall be of such type and for such number of shares of Common Stock,
subject to such terms and conditions as the Committee shall designate.
The Committee may grant Incentive Stock Options and/or Non-qualified Stock
Options to Key Employees at any time and from time to time before August 23,
2000.
(2) Incentive Stock Options. The term "Incentive Stock Option" shall mean
an Option, or portion thereof, that is intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
(3) Non-qualified Stock Options. The term "Non-qualified Stock Option"
shall mean any Option, or portion thereof, that is not an Incentive Stock
Option. Except as specifically provided herein, the provisions of this Plan
shall apply in the same manner to Incentive Stock Options and to Non-qualified
Stock Options.
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<PAGE>
(b) Terms of Options. Options granted pursuant to this Plan shall be evidenced
by stock option agreements (referred to herein as "agreements") that shall
comply with and be subject to the following terms and conditions and may contain
such other provisions, consistent with this Plan, as the Committee shall deem
advisable. Reference herein to agreements shall include, to the extent
applicable, any amendments to such agreements.
(1) Payment of Option Exercise Price. Upon exercise of an Option, the full
option exercise price for the shares with respect to which the Option is being
exercised shall be payable to the Company (i) in cash or by check payable and
acceptable to the Company or (ii) subject to the approval of the Committee, by
tendering to the Company shares of Common Stock owned by the optionee having
an aggregate Market Value Per Share (as defined below) as of the date of
exercise and tender that is not greater than the full option exercise price
for the shares with respect to which the Option is being exercised and by
paying any remaining amount of the option exercise price as provided in (i)
above (provided that the Committee may, upon confirming that the optionee owns
the number of shares being tendered, authorize the issuance of a new
certificate for the number of shares being acquired pursuant to the exercise
of the Option less the number of shares being tendered upon the exercise and
return to the optionee (or not require surrender of) the certificate for the
shares being tendered upon the exercise). Payment instruments will be received
subject to collection.
(2) Number of Shares. Each agreement shall state the total number of shares
of Common Stock that are subject to the Option.
(3) Exercise Price. The exercise price for each Option shall be fixed by
the Committee at the date of grant, but in no event may such exercise price
per share be less than the Market Value Per Share on the date of the grant of
the Option.
(4) Market Value Per Share. The Market Value Per Share as of any particular
date shall be determined by any fair and reasonable means determined by the
Committee.
(5) Term. The term of each Option shall be determined by the Committee at
the date of grant; provided, however, that each Option shall, notwithstanding
anything in the Plan or an agreement to the contrary, expire ten years from
the date the Option is granted or, if earlier, the date specified in the
agreement at the date of grant of such Option.
(6) Date of Exercise. In the discretion of the Committee, each agreement
may contain a provision not inconsistent with Section 8 hereof stating that
the Option granted therein may not be exercised in whole or in part for a
period or periods of time specified in such agreement, subject to Section 8,
and except as so specified therein, any Option may be exercised in whole at
any time or in part from time to time during its term. The Committee may,
however, at any time, in its sole discretion amend any outstanding Option to
accelerate the time that such Option shall be exercisable or to provide that
the time for exercising such Option shall be accelerated upon the occurrence
of a specified event.
(7) Termination of Employment. In the event that an individual's employment
with the Company shall terminate, for reasons other than (i) retirement with
the consent of the Company ("retirement"), (ii) permanent disability or (iii)
death, the individual's Options shall be exercisable by him, subject to
subsections (5) and (6) above, only within three months after such
termination, but only to the extent the Option was exercisable immediately
prior to such termination of employment.
If, however, any termination of employment is due to retirement or
permanent disability, the individual shall have the right after such
termination of employment, subject to the provisions of subsections (5) and
(6) above, to exercise any outstanding Option in full at any time during the
remaining term provided therefor in the related agreements. Whether any
termination of employment is due to retirement or permanent disability shall
be determined by the Committee.
If an individual shall die while entitled to exercise an Option, the
individual's estate, personal representative or beneficiary, as the case may
be, shall have the right, subject to the provisions of subsections (5) and (6)
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<PAGE>
above, to exercise such Option at any time within 12 months from the date of
the optionee's death, to the extent that the optionee was entitled to exercise
the same on the day immediately prior to the optionee's death.
(8) Reload Options. An option may, in the discretion of the Committee,
include the right to receive a reload stock option ("Reload Option"). An
option which contains the right to receive a Reload Option shall entitle the
optionee, upon the exercise of such option and payment of the appropriate
exercise price in shares of Common Stock that have been owned by such option
holder for at least six months prior to the date of exercise, to receive a
Reload Option. The Reload Option shall be the option to purchase, at the
Market Value Per Share on the date of grant of the Reload Option, the number
of shares of Common Stock equal to the sum of the number of whole shares
delivered by the optionee in payment of the exercise price of the original
option. Such Reload Option shall expire on the same date that the option it
was granted in conjunction with would have expired had it not been exercised.
6. RECAPITALIZATION
Except as set forth in Section 3a, the aggregate number of shares stated in
Section 3a, the number of shares of Common Stock to which each outstanding
Option relates, and the exercise price in respect of each such Option shall be
adjusted in an equitable manner determined by the Committee, in its sole
discretion and without liability to any person, in the event of (i) a
subdivision or consolidation of shares of Common Stock or other capital
adjustments, (ii) the payment of a stock dividend or a recapitalization or (iii)
a "corporate transaction," as such term is defined in Treasury Regulation (S)
1.425-1(a)(1)(iii), or any other transaction which, in the opinion of the
Committee, is similar to a "corporate transaction," as defined by the said
Treasury Regulations as in effect on August 23, 1990, including without
limitation any spin-off or other distribution to the security holders of the
Company of securities or property of the Company. The Committee may exercise its
discretion to make any such adjustments on an optionee-by-optionee basis and
with respect to all or only some of the Options held by an optionee.
7. MERGER OR CONSOLIDATION
Except as otherwise provided in Section 8 below, after a merger of one or more
entities into the Company in which the Company shall survive, or after a
consolidation of the Company and one or more entities, in which the resulting
entity remains, as an independent, publicly-owned entity, an optionee shall, at
the same cost, be entitled upon the exercise of an Option to receive (subject to
any required action by shareholders) such stock, cash and/or securities of the
surviving or resulting entity as the board of directors, or its equivalent, of
such entity, in its sole discretion and without liability to any person, shall
determine to be equivalent, as nearly as practicable, to the nearest whole
number and class of shares of Common Stock or other securities that were then
subject to such Option and such shares of stock or other securities shall, after
such merger or consolidation, be deemed to be shares of Common Stock for all
purposes of the Plan and any agreement.
8. CHANGE IN CONTROL
In the event of a Change in Control (as defined below), then, notwithstanding
any other term of this Plan or any agreement to the contrary, any and all
outstanding Options not fully vested shall automatically vest in full and,
except as provided below with respect to a person subject to Section 16 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), be immediately
exercisable. The date on which such accelerated vesting and immediate
exercisability shall occur (the "Acceleration Date") shall be the date of the
occurrence of the Change in Control.
A "Change in Control" shall be deemed to have occurred if:
(a) any "person," as such term is used in Section 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any company
owned, directly or indirectly, by the shareholders of the Company in
substantially the same
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<PAGE>
proportion as their ownership of stock of the Company) together with its
"Affiliates" and "Associates," as such term is defined in Rule 12b-2 of the
Exchange Act, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities;
(b) during any period of two consecutive years (not including any period
prior to the effective date of this Plan), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (a), (c) or (d) of this definition)
whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of the period
or whose election or nomination for election was previously so approved, cease
for any reason to constitute at least a majority thereof;
(c) the shareholders of the Company approve a merger or consolidation of
the Company with any other company other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 80% of the combined voting power of the voting securities of
the Company (or such surviving entity) outstanding immediately after such
merger or consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no "person" (as hereinabove defined) acquires more than 25% of the combined
voting power of the Company's then outstanding securities, or
(d) the shareholders of the Company adopt a plan of complete liquidation of
the Company or approve an agreement for the sale, exchange or disposition by
the Company of all or a significant portion of the Company's assets. For
purposes of this clause (d), the term "the sale, exchange or disposition by
the Company of all or a significant portion of the Company's assets" shall
mean a sale or other disposition transaction or series of related transactions
involving assets of the Company or any Subsidiary (as defined below)
(including the stock of any Subsidiary) in which the value of the assets or
stock being sold or otherwise disposed of (as measured by the purchase price
being paid therefor or by such other method as the Board determines is
appropriate in a case where there is no readily ascertainable purchase price)
constitutes more than 25% of the fair market value of the Company (as
hereinafter defined). For purposes of the preceding sentence, the "fair market
value of the Company" shall be the aggregate market value of the outstanding
shares of common stock of the Company (on a fully diluted basis) plus the
aggregate market value of the Company's other outstanding equity securities.
The aggregate market value of the shares of common stock of the Company shall
be determined by multiplying the number of shares of the Company's common
stock (on a fully diluted basis) outstanding on the date of the execution and
delivery of a definitive agreement with respect to the transaction or series
of related transactions (the "Transaction Date") by the Market Value Per Share
immediately preceding the Transaction Date or by such other method as the
Board shall determine is appropriate. The aggregate market value of any other
equity securities of the Company shall be determined in a manner similar to
that prescribed in the immediately preceding sentence for determining the
aggregate market value of the shares of common stock of the Company or by such
other method as the Board shall determine is appropriate.
Notwithstanding the foregoing however, a Change in Control shall not be deemed
to have occurred if, prior to the time a Change in Control would otherwise be
deemed to have occurred pursuant to the above provisions, the Board determines
otherwise.
If during the 60-day period following any such Acceleration Date or, with
respect to an Option granted to an officer or director subject to Section 16(b)
of the Exchange Act, the 60-day period following the earlier of the date that
Section 16(b) of the Exchange Act ceases to apply to such person or six months
following the date of grant of such Option (but not to exceed the remaining term
of such Option), a participant (or beneficiary thereof) elects to exercise an
Option, the holder shall receive in cash whichever of the following amounts is
applicable:
(i) with respect to an acquisition of Common Stock described in clause (a)
of the definition of Change in Control, an amount equal to the Acquisition
Spread (as defined below);
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(ii) with respect to a change in composition of the Board described in
clause (b) of the definition of Change in Control, an amount equal to the
Spread (as defined below); or
(iii) with respect to stockholder approval of an agreement or adoption of a
plan described in clause (c) or (d) of the definition of Change in Control, an
amount equal to the Merger Spread (as defined below).
Notwithstanding the foregoing provisions of this Section 8, in the case of an
exercise in respect of an Incentive Stock Option, the holder may not receive an
amount in excess of the maximum amount that will enable such option to continue
to qualify as an Incentive Stock Option.
As used in this Section 8, the following terms shall have the meaning
indicated:
(1) The term "Acquisition Price Per Share" shall mean the greater of (i)
the highest price paid by a person (or an Affiliate or Associate thereof) for
any share of Common Stock acquired prior to, but in connection with, a Change
in Control described in clause (a) of the definition of a Change in Control or
(ii) the highest Market Value Per Share for any day during the 60-day period
ending on the date the Option is exercised.
(2) The term "Acquisition Spread" shall mean an amount equal to the product
obtained by multiplying (i) the excess of (A) the Acquisition Price Per Share
over (B) the price per share of Common Stock at which the Option is
exercisable, by (ii) the number of shares of Common Stock with respect to
which such Option is being exercised.
(3) The term "Merger Price Per Share" shall mean the greater of (i) the
fixed or formula price for the acquisition of shares of Common Stock specified
in such agreement or adoption, if such fixed or formula price is determinable
on the date on which such Option is exercised, and (ii) the highest Market
Value Per Share for any day during the 60-day period ending on the date on
which such Option is exercised.
(4) The term "Merger Spread" shall mean an amount equal to the product
obtained by multiplying (i) the excess of (A) the Merger Price Per Share over
(B) the price per share of Common Stock at which the Option is exercisable, by
(ii) the number of shares of Common Stock with respect to which such Option is
being exercised.
(5) The term "Spread" shall mean an amount equal to the product obtained by
multiplying (i) the excess of (A) the highest Market Value Per Share for any
day during the 60-day period ending on the date the Option is exercised over
(B) the price per share of Common Stock at which the Option is exercisable, by
(ii) the number of shares of Common Stock with respect to which the Option is
being exercised.
(6) The term "Subsidiary" shall mean any entity in which the Company has a
direct or indirect ownership interest of 50% or more of the total combined
voting power of all classes of stock in such entity.
The Company intends that this Section 8 shall comply with the requirements of
Rule 16b-3 and any future rules promulgated in substitution therefor ("the
Rule") under the Exchange Act during the term of the Plan. Should any provision
of this Section 8 not be necessary to comply with the requirements of the Rule
or should any additional provisions be necessary for this Section 8 to comply
with the requirements of the Rule, the Board may amend the Plan to add to or
modify the provisions of the Plan accordingly.
9. EMPLOYEE'S AGREEMENT
If, at the time of the exercise of any Option, in the opinion of counsel for
the Company, it is necessary or desirable, in order to comply with any then
applicable laws or regulations relating to the sale of securities, for the
individual exercising the Option to agree to hold any shares issued to the
individual for investment and without intention to resell or distribute the same
and for the individual to agree to dispose of such shares only in compliance
with such laws and regulations, the individual will, upon the request of the
Company, execute and deliver to the Company a further agreement to such effect.
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10. WITHHOLDING FOR TAXES
Any cash payment under the Plan shall be reduced by any amounts required to be
withheld or paid with respect thereto under all present or future federal, state
and local tax and other laws and regulations that may be in effect as of the
date of each such payment ("Tax Amounts"). Any issuance of Common Stock pursuant
to the exercise of an Option or other distribution of Common Stock under the
Plan shall not be made until appropriate arrangements have been made for the
payment of any amounts that may be required to be withheld or paid with respect
thereto. Such arrangements may, at the discretion of the Committee, include
allowing the optionee to tender to the Company shares of Common Stock owned by
optionee, or to request the Company to withhold a portion of the shares of
Common Stock being acquired pursuant to the exercise or otherwise distributed to
optionee, which have a Market Value Per Share as of the date of such exercise,
tender or withholding that is not greater than the sum of all Tax Amounts,
together with payment of any remaining portion of all Tax Amounts in cash or by
check payable and acceptable to the Company in the manner and subject to the
requirements described in this Section 10.
(a) Grant of Right. The Committee may, in its sole discretion, grant to a
participant the right to satisfy, in whole or in part, any obligation of the
participant to pay to the Company any Tax Amount as a result of the exercise of
an Option by electing to require that the Company, upon any exercise of the
Option, withhold from the shares of Common Stock issuable to the participant
upon the exercise of the Option, up to that number of full shares of Common
Stock having a fair market value equal to the full amount (or portion of the
amount) necessary to satisfy such participant's Tax Amount arising from such
exercise; provided, however, such withholding shall not exceed the Participant's
marginal tax rate arising from such exercise or vesting (the "Withholding
Right"). The Withholding Right may be granted with respect to all or any portion
of the shares of Common Stock subject to an Option.
(b) Election to Have Shares Withheld. If the Committee grants to a participant
a Withholding Right with respect to an Option, the participant shall, subject to
the terms and conditions set forth below and the terms and conditions set forth
in the related agreement (including the provisions thereof relating to the
election and exercise of the Withholding Right), have the right at any time
thereafter to elect to require that the Company withhold shares of Common Stock
upon exercise of the Option, or any portion thereof, to which the Withholding
Right relates; and such election may, subject to such procedures and limitations
as the Committee may adopt, relate to all or any portion of the Withholding
Right granted to the participant.
(1) Any election pursuant to this paragraph 10(b) by a participant who at
the date of the making of the election is not a director or officer of the
Company within the meaning of Section 16(b) of the Exchange Act (a "Section
16(b) Person"), shall be subject to the following conditions and limitations:
(A) the election may only be made by delivery by a participant of written
notice of such election to the Committee on or prior to the date that the
amount of tax to be withheld is, under applicable federal income tax laws,
fixed and determined by the Company (the "Tax Date");
(B) unless disapproved by the Committee as provided in paragraph
10(b)(1)(C) below, the election once made shall be irrevocable; and
(C) no election shall be valid unless and until the Committee shall have
consented to the election; the Committee shall have the right and power, in
its sole and absolute discretion, with or without cause or reason therefor,
to consent to the election, to refuse to consent to the election or to
disapprove the election; and if the Committee shall not have consented to
the election on or prior to the Tax Date, the election shall be deemed
disapproved.
(2) Any election pursuant to this paragraph 10(b) by any person who at the
date of the making of the election is a Section 16(b) Person shall be subject
to the following conditions and limitations:
(A) no election may be made by any Section 16(b) Person during the period
commencing on the date of the grant by the Committee of the Option to which
such Withholding Right relates and terminating six calendar months
following that date; provided, however, that this paragraph (b)(2)(A) shall
not be applicable
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to any Section 16(b) Person at any time subsequent to the death or
"Permanent Disability" ("Permanent Disability" means that a participant is
totally disabled, whether due to physical or mental condition, so as to be
prevented from engaging in further employment by the Company and that such
disability is likely to remain permanent and continuous during the
remainder of his life, as determined by the Committee upon the basis of
medical evidence satisfactory to it) of the Section 16(b) Person;
(B) the election may only be made by delivery by the Section 16(b) Person
of written notice of such election to the Committee during any of the
following time periods: (x) that period which is not less than six calendar
months less one day prior to the Tax Date, or (y) any ten business day
period commencing on the third business day following the date on which the
quarterly or annual summary statements of sales or earnings of the Company
appear on a wire service, in a financial news service, in a newspaper of
general circulation, or are otherwise publicly made available and ending at
the closing of business on the twelfth business day following such date (a
"Window Period"); and
(C) no election shall be valid unless and until the Committee shall have
consented to the election; the Committee shall have the right and power, in
its sole and absolute discretion, with or without cause or reason therefor,
to consent to the election, refuse to consent to the election or to
disapprove the election; and if the Committee shall not have consented to
the election on or prior to the Tax Date, the election shall be deemed
disapproved.
(c) Exercise of Withholding Right and Option to Which It Relates. If the
Committee consents to an election of a participant's Withholding Right the
exercise of the Option (or any portion thereof) to which the Withholding Right
relates shall constitute an exercise of the Withholding Right, and the Committee
shall, in its discretion, allow the optionee to tender to the Company shares of
Common Stock owned by the optionee or shall cause the Company to withhold from
the shares otherwise issuable upon the exercise of the Option that number of
full shares of the Common Stock having an aggregate Market Value Per Share equal
to no less than the amount (or portion of the amount, as applicable) required to
be withheld under applicable federal and state income tax laws as a result of
the exercise and no greater than to the amount (or portion of the amount, as
applicable) necessary to satisfy the participant's federal, state and local tax
liability, including F.I.C.A. tax, arising from such exercise; provided,
however, such withholding shall not exceed the participant's marginal tax rate
arising from such exercise or vesting.
11. TERMINATION OF AUTHORITY TO GRANT AWARDS.
No Options may be granted pursuant to this Plan after August 22, 2000.
12. AMENDMENT AND TERMINATION
The Board may from time to time and at any time alter, amend, suspend
discontinue or terminate this Plan and any grants hereunder; provided, however,
that no such action of the Board may, without the approval of the shareholders
of the Company, alter the provisions of the Plan so as to (i) increase the
maximum number of shares of Common Stock that may be subject to grants and
distributed in the payment of exercises under the Plan (except as provided in
Section 3b); (ii) change the class of employees eligible to receive grants under
the Plan; or (iii) extend beyond ten years the maximum terms of Options granted
under the Plan or extend the term of the Plan unless, in each case, such
approval is not required to meet the requirements of the Rule.
13. PREEMPTION BY APPLICABLE LAWS AND REGULATIONS
Anything in the Plan or any agreement entered into pursuant to the Plan to the
contrary notwithstanding, if, at any time specified herein or therein for the
making of any determination, the issuance or other distribution of shares of
Common Stock any law, regulation or requirement of any governmental authority
having jurisdiction in the premises shall require either the Company or the
employee (or the employee's beneficiary), as the case may be, to
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take any action in connection with any such determination, the shares then to be
issued or distributed, or such payment, the issue or distribution of such shares
or the making of such determination or payment, as the case may be, shall be
deferred until such action shall have been taken.
14. CHANGE IN CONTROL LIMITATION
Notwithstanding any other provision in the Plan, to the extent that the
acceleration of exercisability of an Option under this Plan following a Change
in Control, when aggregated with other payments or benefits to the participant,
whether or not payable pursuant to this Plan, would, as determined by tax
counsel selected by the Company, result in "excess parachute payments" (as
defined in Section 280G of the Code) such parachute payments or benefits
provided to a participant under this Plan shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code, but only if, by reason of such reduction, the
participant's net after tax benefit shall exceed the net after tax benefit if
such reduction were not made. "Net after tax benefit" shall mean the sum of (i)
all payments and benefits which a participant receives or is then entitled to
receive that would constitute a "parachute payment" within the meaning of
Section 280G of the Code, less (ii) the amount of federal income taxes payable
with respect to the payments and benefits described in (i) above calculated at
the maximum marginal income tax rate for the year in which such payments and
benefits shall be paid to the participant (based upon the rate for such year as
set forth in the Code at the time of the first payment of the foregoing), less
(iii) the amount of excise taxes imposed with respect to the payments and
benefits described in (i) above by Section 4999 of the Code.
15. MISCELLANEOUS
a. No Employment Contract. Nothing contained in the Plan shall be construed as
conferring upon any employee the right to continue in the employ of the Company.
b. Employment with Subsidiaries. Employment by the Company for the purpose of
this Plan shall be deemed to include employment by, and to continue during any
period in which an employee is in the employment of, any Subsidiary.
c. No Rights as a Shareholder. A participant shall have no rights as a
shareholder with respect to shares covered by such participant's Option until
the date of the issuance of shares to the participant pursuant thereto. No
adjustment will be made for dividends or other distributions or rights for which
the record date is prior to the date of such issuance.
d. No Right to Corporate Assets. Nothing contained in the Plan shall be
construed as giving any participant, such participant's beneficiaries or any
other person, any equity or other interest of any kind, in any assets of the
Company or creating a trust of any kind or a fiduciary relationship of any kind
between the Company and any such person.
e. No Restriction on Corporate Action. Nothing contained in the Plan shall be
construed to prevent the Company from taking any corporate action that is deemed
by the Company to be appropriate or in its best interest, whether or not such
action would have an adverse effect on the Plan or any grant made under the
Plan. No participant, beneficiary or other person shall have any claim against
the Company as a result of any such action.
f. Non-assignability. A participant shall not have the power or right to sell,
exchange, pledge, transfer, assign or otherwise encumber or dispose of such
participant's interest in any grant under the Plan nor shall such interest be
subject to seizure for the payment of a participant's debts, judgments, alimony,
or separate maintenance or be transferable by operation of law in the event of a
participant's bankruptcy or insolvency and to the extent any such interest
arising under the Plan is awarded to a spouse pursuant to any divorce
proceeding, such interest shall be deemed to be terminated and forfeited
notwithstanding any vesting provisions or other terms herein or in the agreement
evidencing such award.
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g. Application of Funds. The proceeds received by the Company from the sale of
shares pursuant to the Plan will be used for general corporate purposes.
h. Sale of Subsidiary or Assets. In the event a Key Employee ceases to be
employed by the Company as a result of a sale or other disposition by the
Company of a Subsidiary or all or part of the business operations of the
Company, the Committee, in its sole discretion, may accelerate the
exercisability of any grant under the Plan, in whole or in part, as it deems
appropriate.
i. Governing Law; Construction. All rights and obligations under the Plan
shall be governed by, and the Plan shall be construed in accordance with, the
laws of the State of Texas without regard to the principles of conflicts of
laws. Titles and headings to Sections herein are for purposes of reference only,
and shall in no way limit, define or otherwise affect the meaning or
interpretation of any provisions of the Plan.
Effective Date: August 23, 1990.
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[ANDREWS & KURTH L.L.P. LETTERHEAD]
EXHIBIT 5.1
August 23, 1995
Board of Directors
Lufkin Industries, Inc.
601 S. Raguet
Lufkin, Texas 75902
Gentlemen:
We have acted as counsel to Lufkin Industries, Inc., a Texas corporation
(the "Company"), in connection with the Company's Registration Statement on Form
S-8 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended, of 500,000 shares of common stock, $1.00 par
value (the "Common Stock"), of the Company issuable under the Lufkin Industries,
Inc. 1990 Stock Option Plan (the "Plan").
In such capacity, we have examined such corporate records and documents,
certificates of corporate and public officials and such other instruments as we
have deemed necessary for the purposes of the opinions contained herein. As to
all matters of fact material to such opinions, we have relied upon the
representations of officers of the Company. We have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
and the conformity with the original of all documents submitted to us as copies.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the shares of
Common Stock to be issued by the Company pursuant to the Plan have been duly
authorized, and that the Common Stock, when issued in accordance with the terms
of the Plan, will be validly issued, fully paid and nonassessable.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement and to the reference to our name under Item 5 of the
Registration Statement.
Very truly yours,
Andrews & Kurth L.L.P.
1152/2325/2539
