<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1998
================================================================================
Securities and Exchange Commission
Washington, D.C. 20549
-------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------
SUMMA INDUSTRIES
(Exact name of registrant as specified in its charter)
DELAWARE 95-1240978
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
21250 HAWTHORNE BOULEVARD, SUITE 500, TORRANCE, CALIFORNIA 90503
(Address of Principal Executive Office, including Zip Code)
1999 STOCK OPTION PLAN
(Full title of the plan)
TRYGVE M. THORESEN, ESQ.
21250 HAWTHORNE BOULEVARD, SUITE 500
TORRANCE, CALIFORNIA 90503
(Name and address of agent for service)
(310) 792-7024
(Telephone number, including area code, of agent for service)
-------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered(1) per share(2) offering price(2) fee
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 500,000 shares $9.9375 $4,968,750.00 $1,490.63
$.001 par value
============================================================================================
</TABLE>
(1) There is also being registered hereunder such additional undetermined number
of shares of Common Stock that may be issued from time to time as a result of
the anti-dilution provisions of the Plan.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) and based on
the average of the high and low prices of the Common Stock as reported on
December 10, 1998 on The Nasdaq National Market.
===========================================================================
<PAGE> 2
INTRODUCTION
This Registration Statement on Form S-8 is filed by Summa Industries, a
Delaware corporation (the "Company"), relating to 500,000 shares of the
Company's common stock, par value $.001 per share (the "Common Stock"), issuable
to eligible employees of the Company under the Company's 1999 Stock Option Plan
(the "Plan").
PART I
INFORMATION REQUIRED IN THE
SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I (plan
information and registrant information) will be sent or given to participants as
specified by Rule 428(b)(1). Such documents need not be filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424. These documents and the documents incorporated by reference in this
Registration Statement pursuant to Item 3 of Part II of this Form S-8, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents previously filed by the Company with the
Commission are incorporated herein by reference and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1998; and
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Registration
Statement and prior to the filing of a post-effective amendment hereto which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference into the prospectus and to be a part hereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the shares of Common Stock offered hereby has been
passed upon for the Company by Trygve M. Thoresen, Vice President, General
Counsel & Secretary of the Company. Mr. Thoresen beneficially owns 1,250 shares
of the Company's Common Stock and, under stock option plans of the Company,
holds options to purchase 77,907 shares of Common Stock at varying prices,
64,615 of which are vested as of the filing date hereof.
2
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company is a Delaware corporation. Section 145(a) of the Delaware
General Corporation Law (the "GCL") provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Company) by reason of the fact that such person is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
Section 145(b) of the GCL provides that a Delaware corporation may
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 or in the right of the
Company to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if he or she
acted under similar standards, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Company unless and only to the extent that the
court in which such action or suit was brought shall determine that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to be indemnified for such expenses
which the court shall deem proper.
Section 145 of the GCL further provides that (i) to the extent a
director or officer of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) or in the
defense of any claim, issue or matter therein, such officer or director shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith, (ii) expenses (including
attorneys' fees) incurred by a director or officer in defending any such action
may be paid in advance of the final disposition of such action upon receipt of
an undertaking to repay such amounts if it is ultimately determined that such
director or officer was not entitled to indemnification, (iii) indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled, and (iv) the Company may purchase
and maintain insurance on behalf of a director or officer of the Company against
any liability asserted against such officer or director and incurred by him or
her in any such capacity or arising out of his or her status as such, whether or
not the Company would have the power to indemnify him or her against such
liabilities under Section 145.
The Company's Certificate of Incorporation requires that a director of
the Company shall not be personally liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the GCL, or (iv) for any transaction from which the director derived any
improper personal benefit. If the GCL is amended to authorize, with the approval
of a corporation's stockholders, further reductions in the liability of the
directors of a corporation for breach of fiduciary duty, then a director of the
Company shall not be liable for any such breach to the fullest extent permitted
by the GCL as so amended. Any repeal or modification of the foregoing provisions
by the stockholders of the Company will not adversely affect any right or
protection of a director of the Company existing at the time of such repeal or
modification.
The Company's Bylaws require that the Company shall, to the fullest
extent authorized under the laws of the State of Delaware, as those laws may be
amended and supplemented from time to time, indemnify any director made, or
threatened to be made, a party to an action or proceeding, whether criminal,
civil, administrative or investigative, by reason of being a director of the
Company or a predecessor corporation or, at the Company's request a director or
officer of another corporation, provided, however, that the Company shall
indemnify any such agent in connection with a proceeding initiated by such agent
only if such proceeding was authorized by the Board of Directors of the Company.
3
<PAGE> 4
The indemnification in the Bylaws shall (i) not be deemed exclusive of any other
rights to which those indemnified may be entitled under any bylaw, agreement or
vote of stockholders or disinterested directors or otherwise, both as to action
in their official capacities and as to action in another capacity while holding
such office, (ii) continue as to a person who has ceased to be a director, and
(iii) inure to the benefit of the heirs, executors and administrators of such a
person. The Company 's obligation to provide indemnification shall be offset to
the extent of any other source of indemnification or any otherwise applicable
insurance coverage under a policy maintained by the Company or any other person.
Under the Bylaws, expenses incurred by a director of the Company in
defending a civil or criminal action, suit or proceeding by reason of the fact
that he is or was a director of the Company (or was serving at the Company's
request as a director or officer of another entity) shall be paid by the Company
in advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the Company as authorized by the GCL. Notwithstanding the foregoing, the
Company shall not be required to advance such expenses to an agent who is a
party to an action, suit or proceeding brought by the Company and approved by a
majority of the Board of Directors which alleges willful misappropriation of
corporate assets by such agent, disclosure of confidential information in
violation of such agent's fiduciary or contractual obligations to the Company or
any other willful and deliberate breach in bad faith of such agent's duty to the
Company or its stockholders.
The Bylaws further provide that its indemnification provisions shall be
deemed to be a contract between the Company and each director who serves in such
capacity at any time while the provisions are in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any action,
suit or proceeding theretofore or thereafter brought based in whole or in part
upon any such state of facts. The Board of Directors, in its discretion, shall
have power to indemnify any person, other than a director, made a party to any
action, suit or proceeding by reason of the fact that he, his testator or
intestate, is or was an officer or employee of the Company.
The Bylaws also state that Section 145 of the GCL shall be interpreted
as follows: an "other enterprise" shall be deemed to include an employee benefit
plan, including without limitation, any plan of the Company which is governed by
the Act of Congress entitled "Employee Retirement Income Security Act of 1974,"
as amended from time to time; the Company shall be deemed to have requested a
person to serve an employee benefit plan where the performance by such person of
his duties to the Company also imposes duties on, or otherwise involves services
by, such person to the plan or participants or beneficiaries of the plan; excise
taxes assessed on a person with respect to an employee benefit plan pursuant to
such Act of Congress shall be deemed "fines."
The Company also maintains directors and officers liability insurance
covering the costs of defense, settlement or payment of a judgment under certain
circumstances.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index appearing at page 7 below.
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;
4
<PAGE> 5
(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;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8
and 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
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against pubic 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 Securities Act and will be governed by the final
adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Torrance, State of California, on December 10, 1998.
SUMMA INDUSTRIES
By: /s/ Trygve M. Thoresen
-----------------------------
Trygve M. Thoresen,
Vice President,
General Counsel & Secretary
Each person whose signature appears below constitutes and appoints
James R. Swartwout and Trygve M. Thoresen his true and lawful attorneys-in-fact
and agents, each acting alone, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone,
with full powers and authority, to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as full to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming that all said attorneys-in-fact and agents, each acting alone, or his
substitutes or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James R. Swartwout Chairman of the Board, President December 10, 1998
- ------------------------------- & Chief Financial Officer
James R. Swartwout (Principal Executive and Financial
Officer)
/s/ Coalson C. Morris Director December 10, 1998
- -------------------------------
Coalson C. Morris
/s/ Michael L. Horst Director December 10, 1998
- -------------------------------
Michael L. Horst
/s/ William R. Zimmerman Director December 10, 1998
- -------------------------------
William R. Zimmerman
/s/ David McConaughy Director December 10, 1998
- -------------------------------
David McConaughy
/s/ Byron C. Roth Director December 10, 1998
- -------------------------------
Byron C. Roth
/s/ Josh T. Barnes Director December 10, 1998
- -------------------------------
Josh T. Barnes
/s/ Paul A. Walbrun Vice President & Controller December 10, 1998
- ------------------------------- (Principal Accounting Officer)
Paul A. Walbrun
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Certificate of Incorporation of the Company(1)
4.2 Bylaws of the Company(1)
5.1 Opinion of Trygve M. Thoresen, Esq.
10.1 1999 Stock Option Plan
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Trygve M. Thoresen, Esq.
(included in Exhibit 5.1)
24.1 Power of Attorney (contained in signature page hereof)
- ------------------
(1) Incorporated by reference from the appendices to the Company's definitive
Proxy Statement on Schedule 14A, file no. 001-07755, for the Annual Meeting of
Shareholders held on January 26, 1998.
<PAGE> 1
EXHIBIT 5.1
-----------
[Summa Industries letterhead]
December 14, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I am the General Counsel of Summa Industries, a Delaware corporation
(the "Company"), and have acted as counsel for the Company in connection with
the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") filed with the Securities and Exchange Commission under the
Securities Act of 1933 pertaining to the issuance and sale of up to an aggregate
of 500,000 shares of the Company's Common Stock, par value $.001 per share (the
"Shares") issuable under the Company's 1999 Stock Option Plan (the "Plan").
For the purpose of rendering this opinion, I have examined and relied
upon such records, documents, certificates and other instruments and made such
legal and factual examinations and inquiries as I have deemed necessary or
appropriate. On the basis of such examinations and inquiries, and relying
thereon, I am of the opinion that the Shares are duly authorized and, when
issued and sold upon exercise of options granted under the Plan on the terms and
conditions set forth therein, will be validly issued, fully paid and
nonassessable under the laws of the State of Delaware.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to my name under Item 5 of Part II
of the Registration Statement.
Very truly yours,
/s/ Trygve M. Thoresen
Trygve M. Thoresen, Esq.
General Counsel
<PAGE> 1
EXHIBIT 10.1
------------
SUMMA INDUSTRIES
1999 STOCK OPTION PLAN
1. PURPOSE. This Plan is intended to provide incentive to key employees
and non-employee directors of, and key consultants, vendors, customers, and
others expected to provide significant services to, the Corporation and/or its
Subsidiaries, to encourage proprietary interest in the Corporation, to encourage
key employees to remain in the employ of the Corporation and its Subsidiaries,
to attract new employees with outstanding qualifications, and to afford
additional incentives to consultants, vendors, customers and others to increase
their efforts in providing significant services to the Corporation and/or its
Subsidiaries.
2. DEFINITIONS.
(a) "BOARD" shall mean the Board of Directors of the Corporation.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "COMMITTEE" shall mean the committee, if any, appointed by
the Board in accordance with Section 4 of the Plan.
(d) "COMMON STOCK" shall mean the Common Stock, par value $.001
per share, of the Corporation.
(e) "CORPORATION" shall mean Summa Industries, a Delaware
corporation.
(f) "DISABILITY" shall mean the condition of an Employee who is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months.
(g) "EMPLOYEE" shall mean an individual who is employed (within
the meaning of Code Section 3401 and the regulations thereunder) by the
Corporation or a Subsidiary.
(h) "EXERCISE PRICE" shall mean the price per Share of Common
Stock, determined by the Board or the Committee, at which an Option may
exercised.
(i) "FAIR MARKET VALUE" shall mean the value of one (1) Share of
Stock as determined by the price at which the Shares traded at the close of
business on the date of valuation, or if not listed on an exchange, the fair
market value as determined by the Board or the Committee in good faith. Such
determination shall be conclusive and binding on all persons.
(j) "INCENTIVE STOCK OPTION" shall mean an option described in
Section 422 of the Code.
(k) "NONSTATUTORY STOCK OPTION" shall mean an option not
described in Section 422(b), 422A(b), 423(b) or 424(b) of the Code.
(l) "OPTION" shall mean any stock option granted pursuant to the
Plan.
(m) "OPTIONEE" shall mean a person who has been granted an
Option.
(n) "PLAN" shall mean this 1999 Stock Option Plan, as may be
amended from time to time.
<PAGE> 2
(o) "PURCHASE PRICE" shall mean the Exercise Price times the
number of Shares with respect to which an Option is exercised.
(p) "RETIREMENT" shall mean the voluntary termination of
employment by an Employee upon the attainment of age sixty-five (65) and the
completion of not less than twenty (20) years of service with the Corporation or
a Subsidiary.
(q) "SHARE" shall mean one (1) share of Common Stock, adjusted in
accordance with Section 10 of the Plan (if applicable).
(r) "SUBSIDIARY" shall mean any corporation or limited liability
company at least fifty percent (50%) of the total combined voting power of which
is owned by the Corporation or by another Subsidiary.
3. EFFECTIVE DATE. The Plan has been adopted by the Board and is
effective as of September 1, 1998, subject to approval by the stockholders of
the Corporation at the Company's Annual Meeting of Stockholders to be held in
December 1998 or as soon thereafter as practicable.
4. ADMINISTRATION. The Plan shall be administered by the Board, or by a
committee appointed by the Board which shall consist of two (2) or more
non-employee directors of the Corporation (the "Committee"). The Board shall
appoint one of the members of the Committee, if there be one, as Chairman of the
Committee. If a Committee has been appointed, the Committee shall hold meetings
at such times and places as it may determine. Acts of a majority of the
Committee at which a quorum is present, or acts reduced to or approved in
writing by a majority of the members of the Committee, shall be the valid acts
of the Committee. The Board, or the Committee if there be one, shall from time
to time at its discretion select the Employees, directors, vendors and
consultants who are to be granted Options, determine the number of Shares to be
optioned to each Optionee and designate such Options such as Incentive Stock
Options or Nonstatutory Stock Options, except that no Incentive Stock Option may
be granted to anyone other than an Employee. Notwithstanding the foregoing, no
Incentive Stock Options may be granted under the Plan unless and until the Plan
has been approved by the Corporation's stockholders. A member of the Board or a
Committee member shall in no event participate in any determination relating to
Options held by or to be granted to such Board or Committee member. The
interpretation and construction by the Board, or by the Committee if there be
one, of any provision of the Plan or of any Option granted thereunder shall be
final. No member of the Board or of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Option
granted thereunder.
5. PARTICIPATION.
(a) Eligibility. The Optionees shall be such persons as the
Board, or the Committee if there be one, may select from among the following
classes of persons, subject to the terms and conditions of subsection (b) below:
(i) Employees of the Corporation or a Subsidiary (who may be officers and/or
directors); (ii) non-employee directors of the Corporation or a Subsidiary; and
(iii) consultants, vendors, customers and others expected to provide significant
services to the Corporation or a Subsidiary.
For purposes of this Plan, an Optionee who is a non-employee
director or a consultant, vendor, customer, or other provider of significant
services to the Corporation or a Subsidiary shall be deemed to be an Employee,
and service as a director, consultant, vendor, customer or other provider of
significant services to the Corporation or a Subsidiary shall be deemed to be
employment, except that no Incentive Stock Option may be granted to a
non-employee director or non-employee consultant, vendor, customer or other
provider of significant services to the Corporation or a Subsidiary, and except
that no Nonstatutory Stock Option may be granted to a non-employee director or
non-employee consultant, vendor, customer or other provider of significant
services to the Corporation or a Subsidiary other than upon a finding by the
Board, or the Committee if there be one, that the value of the services rendered
or to be rendered to the Corporation or a Subsidiary by such non-employee
director or non-employee consultant, vendor, customer or other provider of
services is at least equal to the value of the option or options granted.
<PAGE> 3
(b) Ten-Percent Stockholders. An Employee who owns more than ten
percent (10%) of the total combined voting power of all classes of outstanding
stock of the Corporation, its parent or any of its Subsidiaries shall not be
eligible to receive an Incentive Stock Option unless (i) the Exercise Price of
the Shares subject to such Option is at least one hundred ten percent (110%) of
the Fair Market Value of such Shares on the date of grant and (ii) such Option
by its terms is not exercisable after the expiration of five (5) years from the
date of grant.
(c) Stock Ownership. For purposes of subsection (b) above, in
determining stock ownership an Employee shall be considered as owning the stock
owned, directly or indirectly, by or for his brothers, sisters, spouses,
ancestors and lineal descendants. Stock owned, directly or indirectly, by or for
a corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its stockholders, partners or beneficiaries. Stock
with respect to which such Employee holds an Option shall not be counted.
(d) Outstanding Stock. For purposes of subsection (b) above,
"outstanding stock" shall include all stock actually issued and outstanding
immediately after the grant of the Option to the Optionee. "Outstanding stock"
shall not include shares authorized for issue under outstanding Options held by
the Optionee or by any other person.
6. STOCK. The stock subject to Options granted under the Plan shall be
Shares of the Corporation's authorized but unissued or reacquired Common Stock.
The aggregate number of Shares which may be issued upon exercise of Options
under the Plan shall not exceed 500,000 shares. The number of Shares subject to
Options outstanding at any time shall not exceed the number of Shares remaining
available for issuance under the Plan. In the event that any outstanding Option
for any reason expires or is terminated, the Shares allocable to the unexercised
portion of such Option may again be made subject to any Option. The limitations
established by this Section 6 shall be subject to adjustment in the manner
provided in Section 10 hereof upon the occurrence of an event specified therein.
7. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreements. Options shall be evidenced by
written stock option agreements in such form as the Board, or the Committee if
there be one, shall from time to time determine. Such agreements shall comply
with and be subject to the terms and conditions set forth below.
(b) Number of Shares. Each Option shall state the number of
Shares to which it pertains and shall provide for the adjustment thereof in
accordance with the provisions of Section 10 hereof.
(c) Exercise Price. Each Option shall state the Exercise Price.
The Exercise Price in the case of any Incentive Stock Option shall not be less
than the Fair Market Value on the date of grant and, in the case of any
Incentive Stock Option granted to an Optionee described in Section 5(b) hereof,
shall not be less than one hundred ten percent (110%) of the Fair Market Value
on the date of grant. The Exercise Price in the case of any Nonstatutory Stock
Option shall not be less than 85 % of the Fair Market Value on the date of
grant.
(d) Medium and Time of Payment. The Purchase Price shall be
payable in full upon the exercise of an Option (i) in United States dollars,
(ii) by the surrender of Shares in good form for transfer, owned by the person
exercising the Option and having a Fair Market Value on the date of exercise
equal to the Purchase Price, (iii) in any combination of cash and Shares, as
long as the sum of the cash so paid and the Fair Market Value of the Shares so
surrendered equal the Purchase Price, or (iv) in such other consideration as the
Board or the Committee may from time to time in the exercise of its discretion
deem acceptable in a particular instance. In addition, an Option may be
exercised through a broker-assisted or similar transaction in which the full
Purchase Price is not received by the Corporation until promptly after such
exercise (a "Cashless Exercise"). In the event the Corporation determines that
it is required to withhold state or Federal income tax as a result of the
exercise of an Option, as a condition to the exercise thereof, an Employee may
be required to make arrangements satisfactory to the Corporation to enable it to
satisfy such withholding requirements. The Corporation shall be entitled to a
<PAGE> 4
tax deduction upon exercise of any Nonstatutory Stock Option and shall report
related taxable income to Optionee.
(e) Term and Nontransferability of Options. Each Option shall
state the time or times, and the conditions upon which, all or part thereof
becomes exercisable. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted, and no Incentive Stock Option granted
to an Optionee described in Section 5(b) hereof shall be exercisable after the
expiration of five (5) years from the date it was granted. During the lifetime
of the Optionee, the Option shall be exercisable only by the Optionee and shall
not be assignable or transferable. In the event of the Optionee's death, the
Option shall not be transferable by the Optionee other than by will or the laws
of descent and distribution.
(f) Termination of Employment. Except by death, Disability or
Retirement, if an Optionee ceases to be an Employee for any reason other than
his or her death, Disability or Retirement, such Optionee shall have the right,
subject to the restrictions of subsection (e) above, to exercise the Option at
any time within three months after termination of employment, but only to the
extent that, at the date of termination of employment, the Optionee's right to
exercise such Option had accrued pursuant to the terms of the applicable option
agreement and had not previously been exercised; provided, however, that if the
Optionee was terminated for cause, any Option not exercised in full prior to
such termination shall be canceled. For this purpose, the employment
relationship shall be treated as continuing intact while the Optionee is on
military leave, sick leave or other bona fide leave of absence (to be determined
in the sole discretion of the Committee). The foregoing notwithstanding, (i) in
the case of an Incentive Stock Option, employment shall not be deemed to
continue beyond the ninetieth (90th) day after the Optionee's reemployment
rights are guaranteed by statute or by contract, and (ii) in the case of a
Nonstatutory Stock Option, the Board, or the Committee if there be one, may
extend or otherwise modify the period of time specified herein during which the
Option may be exercised following termination of Optionee's employment.
(g) Death of Optionee. If an Optionee dies while an Employee or
vendor, or after ceasing to be an Employee or vendor but during the period while
he or she could have exercised the Option under this Section 7, and has not
fully exercised the Option, then the Option may be exercised in full, subject to
the restrictions of subsection (e) above, at any time within twelve (12) months
after the Optionee's death, by the executors or administrators of his or her
estate or by any person or persons who have acquired the Option directly from
the Optionee by bequest or inheritance, but only to the extent that, at the date
of death, the Optionee's right to exercise such Option had accrued and had not
been forfeited pursuant to the terms of the applicable stock option agreement
and had not previously been exercised. The foregoing notwithstanding, in the
case of a Nonstatutory Stock Option, the Board, or the Committee if there be
one, may extend or otherwise modify the period of time specified herein during
which the Option may be exercised following termination of Optionee's
employment.
(h) Disability of Optionee. If an Optionee ceases to be an
Employee or vendor by reason of Disability, such Optionee shall have the right,
subject to the restrictions of subsection (e) above, to exercise the Option at
any time within twelve (12) months after termination of employment or status as
a vendor, but only to the extent that, at the date of termination of employment
or status as a vendor, the Optionee's right to exercise such Option had accrued
pursuant to the terms of the applicable option agreement and had not previously
been exercised. The foregoing notwithstanding, in the case of a Nonstatutory
Stock Option, the Board, or the Committee if there be one, may extend or
otherwise modify the period of time specified herein during which the Option may
be exercised following termination of Optionee's employment or status as a
vendor.
(i) Retirement of Optionee. If an Optionee ceases to be an
Employee or vendor by reason of Retirement, such Optionee shall have the right,
subject to the restrictions of subsection (e) above, to exercise the Option at
any time within three (3) months after termination of employment or status as a
vendor, but only to the extent that, at the date of termination of employment or
status as a vendor, the Optionee's right to exercise such Option had accrued
pursuant to the terms of the applicable option agreement and had not previously
been exercised. The foregoing notwithstanding, in the case of a Nonstatutory
Stock Option, the Board, or the Committee if there be one, may extend or
otherwise modify
<PAGE> 5
the period of time specified herein during which the Option may be exercised
following termination of Optionee's employment or status as a vendor.
(j) Rights as a Stockholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her Option until the date of the issuance of a stock
certificate for such Shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 10 hereof.
(k) Modification, Extension and Renewal of Option. Within the
limitations of the Plan, the Board, or the Committee, if there be one, may
modify, extend or renew outstanding Options or accept the cancellation of
outstanding Options (to the extent not previously exercised) for the granting of
new Options in substitution therefor. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option previously granted.
(l) Other Provisions. The stock option agreements authorized
under the Plan may contain such other provisions not inconsistent with the terms
of the Plan (including, without limitation, restrictions upon the exercise of
the Option) as the Board, or the Committee, if there be one, shall deem
advisable.
8. LIMITATION ON VALUE OF EXERCISABLE SHARES. In the case of Incentive
Stock Options granted hereunder, the aggregate Fair Market Value (determined as
of the date of the grant thereof) of the Shares with respect to which Incentive
Stock Options become exercisable by any employee of the Company for the first
time during any calendar year (under this Plan and all other plans maintained by
the Corporation, its parent or its Subsidiaries) shall not exceed $100,000.
9. TERM OF PLAN. Options may be granted pursuant to the Plan until the
expiration of ten (10) years from the effective date of the Plan.
10. RECAPITALIZATIONS. Subject to any required action by stockholders,
the number of Shares covered by the Plan as provided in Section 6 hereof, the
number of Shares covered by each outstanding Option and the Exercise Price
thereof shall be proportionately adjusted for any increase of decrease in the
number of issued Shares resulting from a subdivision or consolidation of Shares
or the payment of a stock dividend (but only of Common Stock) or any other
increase or decrease in the number of issued Shares effected without receipt of
consideration by the Corporation. Subject to any required action by
stockholders, if the Corporation is the surviving corporation in any merger or
consolidation, each outstanding Option shall pertain and apply to the securities
to which a holder of the number of Shares subject to the Option would have been
entitled. In the event of a Change in Control (as defined below) of the
Corporation, the date of exercisability of each and every outstanding Option
shall automatically accelerate to a date and time immediately prior to such
Change in Control. For purposes of the Plan, a "Change in Control" of the
Corporation shall be deemed to have occurred if (i) there shall have be
consummated (x) any consolidation or merger of the Corporation in which the
Corporation is not the continuing or surviving corporation or pursuant to which
shares of the Corporation's Common Stock are converted into cash, securities or
other property, other than a merger of the Corporation in which the holders of
the Corporation's Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger (including a reincorporation), or (y) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Corporation, or (ii) the
stockholders of the Corporation shall approve any plan or proposal for the
liquidation or dissolution of the Corporation, or (iii) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 30% or more of the
Corporation's outstanding Common Stock (excluding the Corporation's ESOP and
401(k) Plan from the definition of "person"), or (iv) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the entire Board of Directors shall cease for any reason to constitute a
majority thereof unless the election, or the nomination for election by the
Corporation's stockholders, of each new director was approved by a vote of at
least a majority of the directors then still in office who were directors at the
beginning of the period. To
<PAGE> 6
the extent that the foregoing adjustments relate to securities of the
Corporation, such adjustments shall be made by the Board, or the Committee, if
there be one, whose determination shall be conclusive and binding on all
persons. Except as expressly provided in this Section 10, the Optionee shall
have no rights by reason of subdivision or consolidation of shares of stock of
any class, the payment of any stock dividend or any other increase or decrease
in the number of shares of stock of any class or by reason of any dissolution,
liquidation, merger or consolidation or spin-off of assets or stock of another
corporation, and any issue by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power to the Corporation to
make adjustments, reclassifications, reorganizations or changes of its capital
or business structure, to merge or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business assets.
11. SECURITIES LAW REQUIREMENTS.
(a) Legality of Issuance. The issuance of any Shares upon the
exercise of any Option and the grant of any Option shall be contingent upon the
following:
(i) the Corporation and the Optionee shall have taken
all actions required to register the Shares under the Securities Act of 1933, as
amended (the "Act"), and to qualify the Option and the Shares under any and all
applicable state securities or "blue sky" laws or regulations, or to perfect an
exemption from the respective registration and qualification requirements
thereof;
(ii) any applicable listing requirement of any stock
exchange on which the Common Stock is listed shall have been satisfied; and
(iii) any other applicable provision of state or Federal
law shall have been satisfied.
(b) Restrictions on Transfer. Regardless of whether the offering
and sale of Shares under the Plan has been registered under the Act or has been
registered or qualified under the securities laws of any state, the Corporation
may impose restrictions on the sale, pledge or other transfer of such Shares
(including the placement of appropriate legends on stock certificates) if, in
the judgment of the Corporation and its counsel, such restrictions are necessary
or desirable in order to achieve compliance with the provisions of the Act, the
securities laws of any state or any other law. In the event that the sale of
Shares under the Plan is not registered under the Act but an exemption is
available which required an investment representation or other representation,
each Optionee shall be required to represent that such Shares are being acquired
for investment, and not with a view to the sale or distribution thereof, and to
make such other representations as are deemed necessary or appropriate by the
Corporation and its counsel. Any determination by the Corporation and its
counsel in connection with any of the matters set forth in this Section 11 shall
be conclusive and binding on all persons. Stock certificates evidencing Shares
acquired under the Plan pursuant to an unregistered transaction shall bear the
following restrictive legend and such other restrictive legends as are required
or deemed advisable under the provisions of any applicable law:
"THE SALE OF THE SECURITIES REPRESENTED HEREBY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). ANY TRANSFER OF SUCH
SECURITIES WILL BE INVALID UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN
EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE ISSUER SUCH
REGISTRATION IS UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT."
(c) Registration or Qualification of Securities. The Corporation
may, but shall not be obligated to register or qualify the issuance of Options
and/or the sale of Shares under the Act or any other applicable law. The
Corporation shall not be obligated to take any affirmative action in order to
cause the issuance of Options or the sale of Shares under the plan to comply
with any law.
<PAGE> 7
(d) Exchange of Certificates. If, in the opinion of the
Corporation and its counsel, any legend placed on a stock certificate
representing shares sold under the Plan is no longer required, the holder of
such certificate shall be entitled to exchange such certificate for a
certificate representing the same number of Shares but lacking such legend.
12. AMENDMENT OF THE PLAN. The Board may from time to time, with respect
to any Shares at the time not subject to Options, suspend or discontinue the
Plan or revise or amend it in any respect whatsoever except that, without the
approval of the Corporation's stockholders if they have previously approved the
Plan, no such revision or amendment shall:
(a) Increase the number of Shares subject to the Plan;
(b) Change the designation in Section 5 hereof with respect to
the class of persons eligible to receive Options; or
(c) Amend this Section 12 to defeat its purpose.
13. EMPLOYMENT RIGHTS. No provision of the Plan or any stock option
agreement entered into in connection with the Plan shall (a) confer upon an
Optionee any right to continue in the employ of the Corporation or any
Subsidiary, (b) affect the right of the Corporation or any Subsidiary to
terminate the employment of an Optionee, with or without cause, or (c) confer
upon an Optionee any right to participate in any employee welfare or benefit
plan or other program with the Corporation or any Subsidiary other than the Plan
pursuant to a stock option agreement.
14. APPLICATION OF FUNDS. The proceeds received by the Corporation from
the sale of Common Stock pursuant to the exercise of an Option will be used for
general corporate purposes.
15. EXECUTION. To record the adoption of the Plan in the form set forth
above by the Board effective as of September 1, 1998, the Corporation has caused
this Plan to be executed in the name and on behalf of the Corporation where
provided below by an officer of the Corporation hereunto duly authorized.
SUMMA INDUSTRIES
By: /s/ Trygve M. Thoresen
------------------------------
Trygve M. Thoresen
Vice President & Secretary
<PAGE> 1
EXHIBIT 23.1
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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 of our
reports dated October 6, 1998 included in Summa Industries' Form 10-K for the
year ended August 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Los Angeles, California
December 14, 1998
