<PAGE> 1
As filed with the Securities and Exchange Commission on July 28 , 1999
Registration No. 333-_____________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
MCCLAIN INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENT)
MICHIGAN 38-1867649
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
_______________
6200 ELMRIDGE ROAD
STERLING HEIGHTS, MICHIGAN 48310
(Address of Principal Executive Offices)
1999 INCENTIVE STOCK PLAN
(Full title of the plan)
KENNETH D. MCCLAIN, PRESIDENT
MCCLAIN INDUSTRIES, INC.
6200 ELMRIDGE ROAD
STERLING HEIGHTS, MICHIGAN 48310
(810) 264-3611
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
Copies of all correspondence to:
ROBERT J. GORDON, ESQ.
JAFFE, RAITT, HEUER & WEISS, P.C.
ONE WOODWARD AVENUE
SUITE 2400
DETROIT, MICHIGAN 48226
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
============================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Per Aggregate Offering Registration Fee
- ------------------- ------------ ------------------ ------------------ ----------------
Share (1) Price (1)
--------- ---------
<S> <C> <C> <C> <C>
Common Stock, no par 1,000,000 $ 6.00 $ 6,000,000 $ 1,668.00
value
============================================================================================================
</TABLE>
(1) Computed in accordance with Rules 457(h) and 457(c) under the Securities
Act of 1933. The estimated exercise price of $6.00 per share was computed
in accordance with Rule 457 based upon the average of the high and low
prices of the Registrant's common stock on July 23, 1999 on the NASDAQ
National Market.
<PAGE> 2
PART I
ITEM 1. PLAN INFORMATION
The documents containing the information specified in this Item 1 will
be sent or given to employees, officers, directors or others as specified by
Rule 428(b)(1). In accordance with the rules and regulations of the Securities
and Exchange Commission (the "Commission") and the instructions to Form S-8,
such documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The documents containing the information specified in this Item 2 will
be sent or given to employees, officers, directors or others as specified by
Rule 428(b)(1). In accordance with the rules and regulations of the Commission
and the instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
1. McClain Industries, Inc.'s ("McClain") Annual Report on Form 10-K
for the year ended September 30, 1998, filed with the Commission
on December 23,1998.
2. McClain's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1998, filed with the Commission on February 12, 1999,
as amended by Form 10-Q/A filed with the Commission on March 19,
1999.
3. McClain's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, filed with the Commission on May 7, 1999.
4. McClain's Current Report on Form 8-K dated February 9, 1999, filed
with the Commission on February 10, 1999.
5. The description of the Common Stock contained in McClain's
Registration Statement on Form 8-A filed by McClain with the
Commission on May 3, 1974 under Section 12 of the Exchange Act.
In addition, all documents filed by McClain pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated herein
by reference and to be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement or in a document
incorporated, or deemed to be incorporated, by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein modifies or
supersedes such statement. Except as so modified or superseded, such statement
shall not be deemed to constitute a part of this Registration Statement.
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ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares of McClain Common Stock to be issued
pursuant to this registration statement will be passed upon by Jaffe, Raitt,
Heuer & Weiss, P.C. As of July 27, 1999, certain shareholders of Jaffe, Raitt,
Heuer & Weiss, P.C. beneficially owned approximately 8,689 shares of McClain
Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article X of McClain's Articles of Incorporation, as amended, limits
the liability of its directors to the fullest extent permitted by the Michigan
Business Corporation Act (the "MBCA"). Specifically, directors of McClain will
not be personally liable to McClain or its stockholders for monetary damages for
a breach of fiduciary duty as directors, except liability for:
(1) Any breach of the duty of loyalty to McClain or its
stockholders;
(2) Acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
(3) A violation of Section 551 of the MBCA;
(4) Any transaction from which the director derives an improper
personal benefit; and
(5) Any other act or omission as to which the MBCA does not
permit a director's liability to be so limited.
Section V of McClain's By-laws provides that McClain may indemnify
against expenses, including attorneys' fees, a person who is a party or is
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding, whether civil or criminal, administrative or investigative, or
formal or informal, by reason of their status as a present or former director,
officer, employee or agent of McClain, or who is or was serving at the request
of McClain (the "Indemnitee"). There shall be no indemnification, however, in
claims, issues or matters by McClain, or pursuant to McClain's rights in which a
person is found liable to McClain. Section 563 of the MBCA and Section V(c) of
the By-laws require McClain to indemnify an Indemnitee for expenses, including
attorneys' fees, incurred in an action, suit or proceeding in which the
Indemnitee is successful on the merits or in defense of such action, suit or
proceeding. To be entitled to indemnification, the Indemnitee's actions must
have been in good faith, and reasonably believed to be in, or not opposed to,
the best interests of McClain. Unless ordered by a court of law, indemnification
will be made only on a determination that the Indemnitee's actions have met the
standards set forth in the By-laws, and such determination shall be made by:
(i) A majority vote of a quorum of disinterested directors;
(ii) If no such quorum is obtainable, then by a majority vote of
committee of at least two (2) directors;
(iii)By independent legal counsel in a written opinion;
(iv) By a majority vote of the stockholders; or
(v) By a court.
Section V(f) of the By-laws authorizes McClain to purchase and maintain
insurance on behalf of any director, officer, employee or agent of McClain, or
who is serving as such at McClain's request, as protection from certain
liabilities, including liabilities against which McClain cannot provide
indemnification.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
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ITEM 8. EXHIBITS
The exhibits filed herewith are set forth on the exhibit index filed as
part of this Registration Statement.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10
(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in this registration statement. Notwithstanding
the foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering range may be reflected in the
form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table set forth in this
registration statement; and
(iii) to include any material information with respect
to the plan of distribution not previously
disclosed in this registration statement or any
material change to such information in this
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
McClain pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to section 13(a) or 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 Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of
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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.
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
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 Sterling Heights, State of Michigan, on
July 27, 1999.
McCLAIN INDUSTRIES, INC., a Michigan corporation
By: /s/ Kenneth D. McClain
---------------------------------------------
Kenneth D. McClain, Chairman of the Board
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 date indicted.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Kenneth D. McClain Chairman of the Board, Chief Executive July 27, 1999
- ---------------------------------- Officer, and President.
Kenneth D. McClain
/s/ Robert W. McClain Senior Vice President and Assistant July 27, 1999
- ---------------------------------- Secretary.
Robert W. McClain
/s/ Raymond Elliott Director. July 27, 1999
- ----------------------------------
Raymond Elliott
/s/ Walter J. Kirchberger Director. July 27, 1999
- ----------------------------------
Walter J. Kirchberger
/s/ Mark S. Mikelait Treasurer. July 27, 1999
- ----------------------------------
Mark S. Mikelait
/s/ Carl Jaworski Secretary. July 27, 1999
- ----------------------------------
Carl Jaworski
</TABLE>
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MCCLAIN INDUSTRIES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
------ ----------- ----------------
<S> <C> <C>
4.1 McClain Articles of Incorporation, as amended Incorporated by reference to McClain's
Registration Statement on Form S-2 (File No. 33-84562).
4.2 McClain By-laws, as amended Incorporated by reference to McClain's Annual Report
on Form 10-K for the year ended September 30, 1989.
4.3 McClain 1999 Incentive Stock Plan Filed herewith.
5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, P.C. Filed herewith.
with respect to the validity of the shares of
Common Stock being registered
23.1 Consent of Jaffe, Raitt, Heuer & Weiss, P.C. Filed herewith.
(included as part of Exhibit 5.1)
23.2 Consent of Rehmann Robson P.C., independent Filed herewith.
accountants
</TABLE>
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EXHIBIT 4.3
MCCLAIN INDUSTRIES, INC.
1999 INCENTIVE STOCK PLAN
ARTICLE I.
PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the McClain Industries, Inc. 1999
Incentive Stock Plan (the "Plan") is to provide certain employees, directors,
consultants and advisors of McClain Industries, Inc. (the "Company") with an
additional incentive to promote the Company's financial success and to provide
an incentive which the Company may use to induce able persons to enter into or
remain in service of the Company or a Subsidiary.
1.02 ADOPTION AND TERM. The Plan was approved by the Board on, and is
effective as of, February 8, 1999, subject to approval of the Company's
stockholders on or before February 7, 2000, and will remain in effect until all
shares authorized under the terms of the Plan have been issued, unless earlier
terminated or abandoned by action of the Board; provided, however, that no
Incentive Stock Option may be granted after February 7, 2009. Awards may be
granted under the Plan before it is approved by the Company's stockholders but
no award granted under the Plan may be exercised unless and until the Plan is
approved by the Company's stockholders.
ARTICLE II.
DEFINITIONS
2.01 ADMINISTRATOR means the group of persons having authority to
administer the Plan pursuant to Section 3.01.
2.02 AWARD means any one or combination of Non-Qualified Stock Options,
Performance Based Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Share Rights or any other award made under the terms of the Plan.
2.03 AWARD AGREEMENT means a written agreement between the Company and
Participant or a written acknowledgment from the Company specifically setting
forth the terms and conditions of an Award granted under the Plan.
2.04 AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified conditions set forth in
the Award Agreement must be satisfied.
2.05 BENEFICIARY means (a) an individual, trust or estate who or which,
by will or by operation of the laws of descent and distribution, succeeds to the
rights and obligations of the Participant under the Plan and Award Agreement
upon the Participant's death; or (b) an individual, who by designation of the
Participant, succeeds to the rights and obligations of the Participant under the
Plan and Award Agreement upon the Participant's death.
2.06 BOARD means the Board of Directors of the Company.
2.07 CHANGE OF CONTROL EVENT means (a) an event or series of events by
which any Person or other entity or group (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) of Persons or other entities acting in concert as
a partnership or other group (a "Group of Persons") (other than Persons who are,
or Groups of Persons entirely made up of, (i) management personnel of the
Company or (ii) any affiliates of any such management personnel) shall, as a
<PAGE> 2
result of a tender or exchange offer or offers, an open market purchase or
purchases, a privately negotiated purchase or purchases or otherwise, become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the combined voting power of the then outstanding
voting stock of the Company; (b) the Company consolidates with, or merges with
or into, another Person (other than a Subsidiary in a transaction which is not
otherwise a Change of Control Event), or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into the Company, in
any such event pursuant to a transaction in which the outstanding voting stock
of the Company is converted into or exchanged for cash, securities or other
property; (c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board (together with any new directors
whose election by such Board or whose nomination for election by the
stockholders of the Company, was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board then in office; or (d) any
liquidation or dissolution of the Company (other than a liquidation into a
Subsidiary that is not otherwise a Change of Control Event).
2.08 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes that section.
2.09 COMMON STOCK means the Common Stock of the Company, no par value.
2.10 COMPANY means McClain Industries, Inc., a Michigan corporation.
2.11 DATE OF GRANT means the date designated by the Administrator as
the date as of which it grants an Award, which shall not be earlier than the
date on which the Administrator approves the granting of such Award.
2.12 DIRECTOR means a member of the Board of Directors of the Company.
2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.14 EXERCISE PRICE means, with respect to a Stock Appreciation Right,
the amount established by the Administrator, in accordance with Section 7.03
hereunder, and set forth in the Award Agreement, which is to be subtracted from
the Fair Market Value on the date of exercise in order to determine the amount
of the Incremental Value to be paid to the Participant.
2.15 EXPIRATION DATE means the date specified in an Award Agreement as
the expiration date of such Award.
2.16 FAIR MARKET VALUE means, the last reported sale price per share of
Common Stock on such date or, in case no such sale takes place on such date, the
average of the closing bid and asked prices on such date, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on a national securities exchange or
included for quotation on the Nasdaq National Market, or if the Common Stock is
not so listed or admitted to trading or included for quotation, the average of
the highest bid and lowest asked prices for the Common Stock on such date as
reported on the NASDAQ OTC Bulletin Board Service or by the National Quotation
Bureau, Incorporated or any comparable service, or, if the Common Stock is not
quoted by any such organization, the fair
2
<PAGE> 3
market value of a share of Common Stock as determined in good faith by the
Administrator. If, as the case may be, the relevant date is not a Trading Day,
the determination shall be made as of the next preceding Trading Day.
2.17 INCENTIVE STOCK OPTION means a stock option described in Section
422 of the Code.
2.18 INCREMENTAL VALUE has the meaning given such term in Section 7.01
of the Plan.
2.19 NON-EMPLOYEE DIRECTOR PARTICIPANT means a Participant that is a
"non-employee director" of the Company within the meaning of Rule 16b-3.
2.20 NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.21 OFFICER means a president, vice president, treasurer, secretary,
controller, and any other person who performs functions corresponding to the
foregoing officers for the Company, any member of the Board or any person
performing similar functions with respect to the Company, and any other
participant who is deemed to be an officer or director of the Company for
purposes of Section 16 of the Exchange Act and the rules thereunder, as
currently in effect or as amended from time to time.
2.22 OPTIONS means all Non-Qualified Stock Options, Incentive Stock
Options and Performance Based Options granted at any time under the Plan.
2.23 PARTICIPANT shall have the meaning set forth in Article V.
2.24 PERFORMANCE BASED OPTION means a stock option which, upon exercise
or at any other time, would not result in or give rise to "applicable employee
remuneration" within the meaning of Section 162(m) of the Code.
2.25 PLAN means the McClain Industries, Inc. 1999 Incentive Stock Plan,
as described herein and as it may be amended from time to time.
2.26 PURCHASE PRICE, with respect to options, shall have the meaning
set forth in Section 6.02.
2.27 RESTRICTED SHARE RIGHT means a right to receive Common Stock
subject to restrictions imposed under the terms of an Award granted pursuant to
Article IX.
2.28 RULE 16B-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as currently in effect
and as it may be amended from time to time, and any successor rule.
2.29 STOCK APPRECIATION RIGHT means an Award granted in accordance with
Article VII.
2.30 SUBSIDIARY shall mean any corporation or other 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 outstanding voting equity interests.
2.31 TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company for any reason,
including death, disability,
3
<PAGE> 4
retirement or as the result of the divestiture of the Participant's employer or
any other similar transaction in which the Participant's employer ceases to be
the Company or a Subsidiary of the Company. Whether an authorized leave of
absence or absence on military or government service, absence due to disability,
or absence for any other reason shall constitute Termination of Employment shall
be determined in each case by the Administrator in its sole discretion.
2.32 TRADING DAY means a day on which public trading of securities
occurs and is reported in the principal consolidated reporting system referred
to in Section 2.16 above, or if the Common Stock is not listed or admitted to
trading on a national securities exchange or included for quotation on the
Nasdaq National Market, any business day.
ARTICLE III.
ADMINISTRATION
3.01 ADMINISTRATION. The Plan shall be administered by the Board or, to
the extent determined by the Board, a committee (the "Compensation Committee")
consisting of not less than two non-employee directors of the Company (within
the meaning of Rule 16b-3) to be appointed by, and to serve at the pleasure of,
the Board (in either case, the "Administrator"). It is the intention of the
Company that, with respect to Awards designated as Performance Based Options,
each of the members of the Compensation Committee shall also be "outside
directors" within the meaning of Section 162(m) of the Code. The Administrator
shall administer the Plan in accordance with this provision and shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, to cancel Awards (including those made
pursuant to other plans of the Company) and to substitute new options (including
options granted under other plans of the Company) with the consent of the
recipient, and to take such steps in connection with the Plan and Awards granted
thereunder as it may deem necessary or advisable. The Administrator may, with
respect to Participants who are not Officers or Directors, delegate such of its
powers and authority under the Plan as it deems appropriate to designated
officers or employees of the Company.
3.02 INDEMNIFICATION. Members of the Administrator shall be entitled to
indemnification and reimbursement from the Company for any action or any failure
to act in connection with service as Administrator to the full extent provided
for or permitted by the Company's articles of incorporation or bylaws or by any
insurance policy or other agreement intended for the benefit of the Company's
officers, directors or employees or by any applicable law.
ARTICLE IV.
COMMON STOCK ISSUABLE PURSUANT TO THE PLAN
4.01 SHARES ISSUABLE. Shares to be issued under the Plan may be
authorized and unissued shares or issued shares which have been reacquired by
the Company. Except as provided in Section 4.03, the Awards granted to any
Participant and to all Participants in the aggregate under the Plan shall be
limited so that the sum of the following shall never exceed one million
(1,000,000) shares of Common Stock: (i) all shares which shall be issued upon
the exercise of outstanding Options or other Awards granted under the Plan, (ii)
all shares for which payment of Incremental Value shall be made by reason of the
exercise of Stock Appreciation Rights at any time granted under the Plan, and
(iii) the number of shares otherwise issuable under an Award which are applied
by the Company to payment of the withholding or tax liability discussed in
Section 11.04.
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<PAGE> 5
4.02 SHARES SUBJECT TO TERMINATED AWARDS. In the event that any Award
at any time granted under the Plan shall be surrendered to the Company, be
terminated or expire before it shall have been fully exercised, or an award of
Stock Appreciation Rights is exercised for cash, then all shares formerly
subject to such Award as to which such Award shall not have been exercised shall
be available for any Award subsequently granted in accordance with the Plan.
Shares of Common Stock subject to Options, or portions thereof, which have been
surrendered in connection with the exercise of tandem Stock Appreciation Rights
shall not be available for subsequent Awards under the Plan, and shares of
Common Stock issued in payment of such Stock Appreciation Rights shall be
charged against the number of shares of Common Stock available for the grant of
Awards. Shares which are reacquired by the Company or shares issuable subject to
Restricted Share Rights which are forfeited pursuant to forfeiture provisions in
the Award Agreement shall be available for subsequently granted Awards only if
the forfeiting Participant received no benefits of ownership (such as dividends
actually paid to the Participant) other than voting rights of the forfeited
shares. Any shares of Common Stock issued by the Company pursuant to its
assumption or substitution of outstanding grants from acquired companies shall
not reduce the number of shares available for Awards under this Plan unless
issued under this Plan.
4.03 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares subject
to outstanding Awards, the Purchase Price or Exercise Price for such
shares, and the number and kind of shares available for Awards
subsequently granted under the Plan shall be appropriately adjusted to
reflect any stock dividend, stock split, combination or exchange of
shares, merger, reorganization, consolidation, split-up, spin-off or
other change in capitalization with a similar substantive effect upon
the Plan or the Awards granted under the Plan. The Administrator shall
have the power to determine the nature and amount of the adjustment to
be made in each case.
(b) SALE OR REORGANIZATION. After any reorganization,
merger or consolidation in which the Company is a surviving
corporation, each Participant shall, at no additional cost, be entitled
upon exercise of an Award to receive (subject to any required action by
stockholders), in lieu of the number of shares of Common Stock
receivable or exercisable pursuant to such Award, a number and class of
shares of stock or other securities to which such Participant would
have been entitled pursuant to the terms of the reorganization, merger
or consolidation if, at the time of such reorganization, merger or
consolidation, such Participant had been the holder of record of a
number of shares of Common Stock equal to the number of shares
receivable or exercisable pursuant to such Award. Comparable rights
shall accrue to each Participant in the event of successive
reorganizations, mergers or consolidations of the character described
above.
(c) OPTIONS TO PURCHASE STOCK OF ACQUIRED COMPANIES. After
any reorganization, merger or consolidation in which the Company or a
Subsidiary of the Company shall be a surviving corporation, the
Administrator may grant substituted Options under the provisions of the
Plan, pursuant to Section 424 of the Code, replacing old options
granted under a plan of another party to the reorganization, merger or
consolidation, where such party's stock may no longer be issued
following such merger or consolidation. The foregoing adjustments and
manner of application of the foregoing provisions shall be determined
by the Administrator in its sole discretion. Any adjustments may
provide for the elimination of any fractional shares which might
otherwise have become subject to any Awards.
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ARTICLE V.
PARTICIPATION
5.01 ELIGIBLE PARTICIPANTS. Participants in the Plan shall be the
employees, directors, consultants and advisors of the Company or any Subsidiary,
as determined and selected from time to time by the Administrator, in its sole
and absolute discretion. The Administrator's designation of a Participant in any
year shall not require the Administrator to designate such person to receive
Awards in any other year. The Administrator shall consider such factors as it
deems pertinent in selecting Participants and in determining the type and amount
of their respective Awards.
ARTICLE VI.
OPTION AWARDS
6.01 POWER TO GRANT OPTIONS. The Administrator may grant, to such
Participants as the Administrator may select, Options entitling the Participant
to purchase Common Stock from the Company at such price, in such quantity and on
such terms and subject to such conditions, not inconsistent with the terms of
this Plan, as may be established by the Administrator. The terms of any Option
granted under this Plan shall be set forth in an Award Agreement.
6.02 PURCHASE PRICE OF OPTIONS. Notwithstanding anything to the
contrary in Section 6.01 above, the Purchase Price of each share of Common Stock
which may be purchased upon exercise of any Option granted under the Plan shall
not be less than fifty percent (50%) of the Fair Market Value on the Date of
Grant; provided, however, that the Purchase Price for shares of Common Stock
purchased pursuant to Stock Options designated by the Administrator as Incentive
Stock Options shall be equal to or greater than the Fair Market Value on the
Date of Grant as required under Section 422 of the Code and provided further
that the Purchase Price for shares of Common Stock purchased pursuant to Stock
Options designated by the Administrator as Performance Based Options shall be
equal to or greater than the Fair Market Value on the Date of Grant.
6.03 DESIGNATION OF INCENTIVE STOCK OPTIONS. Except as otherwise
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is an Incentive Stock Option under Section 422 of
the Code.
(a) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant
may be granted Incentive Stock Options under the Plan (or any other
plans of the Company) which would result in stock with an aggregate
Fair Market Value (measured on the Date of Grant) of more than $100,000
first becoming exercisable in any one calendar year, or which would
entitle such Participant to purchase a number of shares greater than
the maximum number permitted by Section 422 of the Code as in effect on
the Date of Grant.
(b) OTHER INCENTIVE STOCK OPTION TERMS. Whenever possible, each
provision in the Plan and in every Option granted under this Plan
which is designated by the Administrator as an Incentive Stock Option
shall be interpreted in such a manner as to entitle the Option to the
tax treatment afforded by Section 422 of the Code. If any provision of
this Plan or any Option designated by the Administrator as an Incentive
Stock Option shall be held not to comply with requirements necessary to
entitle such Option to such tax treatment, then (i) such provision
shall be deemed to have contained from the outset such language as
shall be necessary to entitle the Option to the tax treatment afforded
under Section 422 of the Code, and (ii) all other provisions of this
Plan and the Award Agreement shall remain in full force and effect. If
any agreement covering an Option designated by the Administrator to be
an Incentive Stock Option under this Plan
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shall not explicitly include any terms required to entitle such
Incentive Stock Option to the tax treatment afforded by Section 422 of
the Code, all such terms shall be deemed implicit in the designation of
such Option and the Option shall be deemed to have been granted subject
to all such terms.
6.04 DESIGNATION OF PERFORMANCE BASED OPTIONS. Except as otherwise
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is a Performance Based Option. A Performance Based
Option shall have a Purchase Price not less than the Fair Market Value on the
Date of Grant and shall contain such other terms and conditions as the
Administrator may deem necessary so that, upon exercise or at any other time,
the Performance Based Option does not result in or give rise to "applicable
employee remuneration" within the meaning of Section 162(m) of the Code.
6.05 RIGHTS AS A STOCKHOLDER. The Participant or any transferee of an
Option pursuant to Section 8.02 or Section 11.05 shall have no rights as a
stockholder with respect to any shares of Common Stock covered by an Option
until the Participant or transferee shall have become the holder of record of
any such shares, and no adjustment shall be made for dividends and cash or other
property or distributions or other rights with respect to any such shares of
Common Stock for which the record date is prior to the date on which the
Participant or a transferee of the Option shall have become the holder of record
of any such shares covered by the Option.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.01 POWER TO GRANT STOCK APPRECIATION RIGHTS. The Administrator is
authorized to grant to any Participant, on such terms established by the
Administrator on or prior to the Date of Grant and subject to and not
inconsistent with the provisions of this Plan, the right to receive the payment
from the Company, payable as provided in Section 7.04, of an amount equal to the
Incremental Value of the Stock Appreciation Rights, which shall be an amount
equal to the remainder derived from subtracting (i) the Exercise Price for the
right established in the Award Agreement from (ii) the Fair Market Value of a
share of Common Stock on the date of exercise. The terms of any Stock
Appreciation Right granted under the Plan shall be set forth in an Award
Agreement.
7.02 TANDEM STOCK APPRECIATION RIGHTS. The Administrator may grant to
any Participant a Stock Appreciation Right consistent with the provisions of
this Plan covering any share of Common Stock which is, at the Date of Grant of
the Stock Appreciation Right, also covered by an Option granted to the same
Participant, either prior to or simultaneously with the grant to such
Participant of the Stock Appreciation Right, provided: (i) any Option covering
any share of Common Stock shall expire and not be exercisable upon the exercise
of any Stock Appreciation Right with respect to the same share; (ii) any Stock
Appreciation Right covering any share of Common Stock shall not be exercisable
upon the exercise of any related Option with respect to the same share; and
(iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously.
7.03 EXERCISE PRICE. The Exercise Price established under any Stock
Appreciation Right granted under this Plan shall be determined by the
Administrator and, in the case of a tandem Stock Appreciation Right, shall not
be less than the Purchase Price of the related Option. Upon exercise of the
Stock Appreciation Rights, the number of shares subject to exercise under a
related Option shall automatically be reduced by the number of shares of Common
Stock
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represented by the Option or portion thereof which is surrendered as a result of
the exercise of such Stock Appreciation Rights.
7.04 PAYMENT OF INCREMENTAL VALUE. Any payment which may become due
from the Company by reason of Participant's exercise of a Stock Appreciation
Right may be paid to the Participant as determined by the Administrator (i) all
in cash, (ii) all in Common Stock, or (iii) in any combination of cash and
Common Stock. In the event that all or a portion of the payment is made in
Common Stock, the number of shares of the Common Stock delivered in satisfaction
of such payment shall be determined by dividing the amount of the payment by the
Fair Market Value on the date of exercise. The Administrator may determine
whether payment upon exercise of a Stock Appreciation Right will be made in cash
or in stock, or a combination thereof, upon or at any time prior to the exercise
of such Stock Appreciation Right. No fractional share of Common Stock shall be
issued to make any payment; if any fractional shares would be issuable, the mix
of cash and Common Stock payable to the Participant shall be adjusted as
directed by the Administrator to avoid the issuance of any fractional share.
ARTICLE VIII.
TERMS OF OPTIONS AND STOCK APPRECIATION RIGHTS
8.01 DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and
Stock Appreciation Rights shall terminate after the first to occur of the
following events:
(a) Expiration Date of the Award as provided in the Award
Agreement; or
(b) Termination of the Award as provided in Section 8.02; or
(c) In the case of an Incentive Stock Option, ten years from the
Date of Grant; or
(d) Solely in the case of tandem Stock Appreciation Rights, upon
the Expiration Date of the related Option.
8.02 EXERCISE ON DEATH, TERMINATION OF EMPLOYMENT OR REMOVAL OF
DIRECTOR.
(a) Unless otherwise provided in the Award Agreement, in the
event of the death of a Participant while an employee of the Company or
a Subsidiary of the Company, the right to exercise all unexpired Awards
shall be accelerated and shall accrue as of the date of death, and the
Participant's Awards may be exercised by his Beneficiary at any time
within one year after the date of the Participant's death. Unless
otherwise provided in the Award Agreement, in the event of the death of
a Participant while a director of the Company or a Subsidiary of the
Company, the right to exercise all unexpired Awards shall be
accelerated and shall accrue as of the date of death, and the
Participant's Awards may be exercised by his Beneficiary at any time
within one year after the date of the Participant's death.
(b) Unless otherwise provided in the Award Agreement, in the
event of a Participant's Termination of Employment at any time for any
reason (including disability or retirement) other than death or for
"cause" (as defined in paragraph (d) below), an Award may be exercised,
but only to the extent it was otherwise exercisable, on the date of
Termination of Employment, within ninety days after the date of
Termination of Employment. In the event of the death of the Participant
within the ninety-day period following Termination of Employment, his
Award may be exercised by his Beneficiary within the one year period
provided in subparagraph (a) above. Unless otherwise provided
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in the Award Agreement, in the event that a Non-Employee Director
Participant no longer serves on the Board for any reason, an Award may
be exercised, but only to the extent it was otherwise exercisable, on
the date that such Non-Employee Director Participant ceases to be a
Director, within ninety days after the date such Non-Employee Director
Participant ceases to be a director. In the event of the death of the
Non-Employee Director Participant within the ninety-day period
following the date he ceases to be a Director, his Award may be
exercised by his Beneficiary within the one year period provided in
subparagraph (a) above.
(c) With respect to an Award which is intended to constitute an
Incentive Stock Option, upon Termination of Employment, such Award
shall be exercisable as provided in Section 422 of the Code.
(d) In the event that a Participant's Termination of Employment
is for "cause", all Awards shall terminate immediately upon Termination
of Employment. A Participant's employment shall be deemed to have been
terminated for "cause" if such termination is determined, in the sole
discretion of the Administrator, to have resulted from an act or
omission by the Participant constituting active and deliberate
dishonesty, as established by a final judgment or actual receipt of an
improper benefit or profit in money, property or services, or from the
Participant's continuous failure to perform his or her duties under any
employment agreement in effect between the Participant and the Company
in any material manner (or, in the absence of such an agreement, the
consistent failure or refusal of the Participant to perform according
to reasonable expectations and standards set by the Board and/or
management consistent with Participant's title and position) after
receipt of notice of such failure from the Company specifying how the
Participant has so failed to perform.
8.03 ACCELERATION OF EXERCISE TIME. The Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit purchase of shares under any Award prior to the time such Award would
otherwise become exercisable under the terms of the Award Agreement.
8.04 EXTENSION OF EXERCISE TIME. The Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit any Award granted under this Plan to be exercised after its Expiration
Date or after the ninety day period following Termination of Employment or
service on the Board, subject, however, to the limitations described in Section
8.01 (c) and (d).
8.05 CONDITIONS FOR EXERCISE. An Award Agreement may contain such
waiting periods, exercise dates and restrictions on exercise (including, but not
limited to, periodic installments which may be cumulative) as may be determined
by the Administrator at the Date of Grant. No Stock Appreciation Right may be
exercised prior to six months from the Date of Grant.
8.06 CHANGE OF CONTROL EVENT. Unless otherwise provided in the Award
Agreement, and subject to such other terms and conditions as the Administrator
may establish in the Award Agreement, upon the occurrence of a Change of Control
Event, irrespective of whether or not an Award is then exercisable, the
Participant shall have the right to exercise in full any unexpired Award to the
extent not theretofore exercised or terminated; provided, however, that any
Stock Appreciation Right so exercised must have a Date of Grant at least six
months prior to the date of exercise.
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8.07 EXERCISE PROCEDURES. Each Option and Stock Appreciation Right
granted under the Plan shall be exercised by written notice to the Company which
must be received by the officer of the Company designated in the Award Agreement
on or before the Expiration Date of the Award. The Purchase Price of shares
purchased upon exercise of an Option granted under the Plan shall be paid in
full in cash by the Participant pursuant to the Award Agreement; provided,
however, that the Administrator may (but need not) permit payment to be made by
delivery to the Company of either (a) shares of Common Stock (including shares
issuable to the Participant pursuant to the exercise of the Option), or (b) any
combination of cash and shares of Common Stock, or (c) such other consideration
as the Administrator deems appropriate and in compliance with applicable law
(including payment in accordance with a cashless exercise program under which,
if so instructed by the Participant, shares of Common Stock may be issued
directly to the Participant's broker or dealer upon receipt of the Purchase
Price in cash from the broker or dealer.) In the event that any Common Stock
shall be transferred to the Company to satisfy all or any part of the Purchase
Price, the part of the Purchase Price deemed to have been satisfied by such
transfer of Common Stock shall be equal to the product derived by multiplying
the Fair Market Value as of the date of exercise times the number of shares
transferred. The Participant may not transfer to the Company in satisfaction of
the Purchase Price (y) a number of shares which when multiplied times the Fair
Market Value as of the date of exercise would result in a product greater than
the Purchase Price or (z) any fractional share of Common Stock. Any part of the
Purchase Price paid in cash upon the exercise of any Option shall be added to
the general funds of the Company and used for any proper corporate purpose.
ARTICLE IX.
RESTRICTED STOCK AWARDS
9.01 RESTRICTED SHARE AWARDS. The Administrator may grant to any
Participant an Award of Restricted Share Rights entitling such person to receive
shares of Common Stock in such quantity, and on such terms, conditions and
restrictions (whether based on performance standards, periods of service or
otherwise) as the Administrator shall determine on or prior to the Date of
Grant. The terms of any Award of Restricted Share Rights granted under the Plan
shall be set forth in an Award Agreement.
9.02 DURATION OF RESTRICTED SHARE RIGHTS. In no event shall any
Restricted Share Rights granted entitle the holder to receive shares of Common
Stock free of all restrictions on transfer at any time prior to the expiration
of two years from the Date of Grant, and each Award Agreement shall provide that
the Participant shall remain employed by the Company or a Subsidiary for that
two year period (subject to the Company's or Subsidiary's right to terminate
such employment).
9.03 FORFEITURE OF RESTRICTED SHARE RIGHTS. Subject to Section 9.05,
all Restricted Share Rights shall be forfeited and all Restricted Share Awards
shall terminate unless the Participant continues in the service of the Company
or a Subsidiary until the expiration of the forfeiture and satisfies any other
conditions set forth in the Award Agreement. If the Award Agreement shall so
provide, in the case of death, disability or retirement (as defined in the Award
Agreement) of the Participant, all of the shares covered by the Restricted Share
Rights shall immediately vest and any restrictions shall lapse as of the date of
such death, disability or retirement.
9.04 DELIVERY OF SHARES UPON VESTING. Upon the lapse of the
restrictions established in the Award Agreement, the Participant shall be
entitled to receive, without payment of any cash or other consideration,
certificates for the number of shares covered by the Award.
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9.05 WAIVER OR MODIFICATION OF FORFEITURE PROVISIONS. The Administrator
has full power and authority to modify or waive any or all terms, conditions or
restrictions (other than the minimum restriction period set forth in Section
9.02) applicable to any Restricted Share Rights granted to a Participant under
the Plan; provided that no modification shall, without consent of the
Participant, adversely affect the Participant's rights thereunder and no
modification shall reduce the employment requirement to less than three years,
except in the case of death, disability or retirement.
9.06 RIGHTS AS A STOCKHOLDER. No person shall have any rights as a
stockholder with respect to any shares subject to Restricted Share Rights until
such time as the person shall have been issued a certificate for such shares.
ARTICLE X.
OTHER STOCK BASED AWARDS
10.01 GRANT OF OTHER AWARDS. Other Awards of Common Stock or other
securities of the Company and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, Common Stock ("Other Awards") may be
granted either alone or in addition to or in conjunction with Options or Stock
Appreciation Rights under the Plan. Subject to the provisions of the Plan, the
Administrator shall have the sole and complete authority to determine the
persons to whom and the time or times at which Other Awards shall be made, the
number of shares of Common Stock or other securities, if any, to be granted
pursuant to such Other Awards, and all other conditions of such Other Awards.
Any Other Award shall be confirmed by an Award Agreement executed by the
Administrator and the Participant, which agreement shall contain such provisions
as the Administrator determines to be necessary or appropriate to carry out the
intent of this Plan with respect to the Other Award.
10.02 TERMS OF OTHER AWARDS. In addition to the terms and conditions
specified in the Award Agreement, Other Awards made pursuant to this Article X
shall be subject to the following:
(a) Any shares of Common Stock subject to such Other Awards may
not be sold, assigned, transferred or otherwise encumbered prior to the
date on which the shares are issued, or, if later, the date on which
any applicable restriction, performance or deferral period lapses; and
(b) If specified by the Administrator and the Award Agreement,
the recipient of an Other Award shall be entitled to receive, currently
or on a deferred basis, interest or dividends or dividend equivalents
with respect to the Common Stock or other securities covered by the
Other Award; and
(c) The Award Agreement with respect to any Other Award shall
contain provisions providing for the disposition of such Other Award in
the event of Termination of Employment prior to the exercise,
realization or payment of such Other Award, with such provisions to
take account of the specific nature and purpose of the Other Award.
ARTICLE XI.
TERMS APPLICABLE TO ALL AWARDS
11.01 AWARD AGREEMENT. The grant and the terms and conditions of the
Award shall be set forth in an Award Agreement between the Company and the
Participant. No person shall have any rights under any Award granted under the
Plan unless and until the Administrator and
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the Participant to whom the Award is granted shall have executed and delivered
an Award Agreement expressly granting the Award to such person and setting forth
the terms of the Award.
11.02 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the
Administrator have the power to grant any Award under the Plan which is contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 4.03,
the terms of any Award granted under the Plan may not be changed after the
granting of such Award without the express approval of the Participant.
11.03 MODIFICATION OF AWARD AFTER GRANT. Each Award granted under the
Plan to a Participant other than an Officer may be modified after the date of
its grant by express written agreement between the Company and the Participant,
provided that such change (i) shall not be inconsistent with the terms of the
Plan and (ii) shall be approved by the Administrator.
11.04 TAXES. The Company shall be entitled, if the Administrator deems
it necessary or desirable, to withhold (or secure payment from the Participant
in lieu of withholding) the amount of any withholding or other tax required by
law to be withheld or paid by the Company with respect to any amount payable
and/or shares issuable under such Participant's Award, or with respect to any
income recognized upon a disqualifying disposition of shares received pursuant
to the exercise of an Incentive Stock Option, and the Company may defer payment
or issuance of the cash or stock upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for such tax. The amount
of such withholding or tax payment shall be determined by the Administrator and,
unless otherwise provided by the Administrator, shall be payable by the
Participant at the time of issuance or payment in accordance with the following
rules:
(a) A Participant shall have the right to elect to meet his or
her withholding requirement by: (1) having the Company withhold from
such Award the appropriate number of shares of Common Stock, rounded
out to the next whole number, the Fair Market Value of which is equal
to such amount, or, in the case of the cash payment, the amount of
cash, as is determined by the Company to be sufficient to satisfy
applicable tax withholding requirements; or (2) direct payment to the
Company in cash of the amount of any taxes required to be withheld with
respect to such Award.
(b) In the event that an Award or property received upon exercise
of an Award has already been transferred to the Participant on the date
upon which withholding requirements apply, the Participant shall pay
directly to the Company the cash amount determined by the Company to be
sufficient to satisfy applicable federal, state or local withholding
requirements. The Participant shall provide to the Company such
information as the Company shall require to determine the amounts to be
withheld and the time such withholding requirements become applicable.
(c) If permitted under applicable federal income tax laws, a
Participant may elect to be taxed in the year in which an Award is
exercised or received, even if it would not otherwise have become
taxable to the Participant. If the Participant makes such an election,
the Participant shall promptly notify the Company in writing and shall
provide the Company with a copy of the executed election form as filed
with the Internal Revenue Service no later than thirty days from the
date of exercise or receipt. Promptly following such notification, the
Participant shall pay directly to the Company the cash amount
determined by the Company to be sufficient to satisfy applicable
federal, state or local withholding tax requirements.
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11.05 LIMITATIONS ON TRANSFER. A Participant's rights and interest
under the Plan may not be assigned or transferred other than by will or the laws
of descent and distribution. Notwithstanding the foregoing, or any other
provision of this Plan, a Participant who holds Non-Qualified Stock Options may
transfer such Options to: (a) his or her spouse, children, grandchildren,
parents, brothers and/or sisters (collectively, "Immediate Family"), (b) a trust
or trusts for the exclusive benefit of such Participant's Immediate Family, (c)
a partnership or limited liability company in which such Participant's Immediate
Family are the only equity holders, or (d) such other persons or entities as
determined by the Administrator, in its sole and absolute discretion. Options so
transferred may thereafter be transferred only to the Participant who originally
received the Options or to an individual, trust or entity to whom the
Participant could have initially transferred the Option pursuant to this Section
11.05. Options which are transferred pursuant to this Section 11.05 shall be
exercisable by the transferee according to the same terms and conditions as
applied to the Participant.
11.06 SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Administrator
and Participant approve, including, but not limited to, terms which provide that
upon such surrender the Company will pay to the Participant cash or Common
Stock, or a combination of cash and Common Stock.
11.07 ADJUSTMENTS FOR POOLING-OF-INTERESTS ACCOUNTING. If the Company
enters into a transaction which is intended to be accounted for using the
pooling-of-interests method of accounting and it is determined by the Board that
any Award granted under the Plan could reasonably be expected to preclude such
accounting treatment, then the Board may modify (to the minimum extent required)
or revoke (if necessary) such Award(s) or any provision thereof to the extent
that the Board determines that such modification or revocation is necessary to
enable the transaction to qualify for pooling-of-interests accounting treatment.
ARTICLE XII.
GENERAL PROVISIONS
12.01 AMENDMENT AND TERMINATION OF PLAN.
(a) AMENDMENT. The Board shall have complete power and authority
to amend the Plan at any time and to add any other stock based Award or
other incentive compensation programs to the Plan as it deems necessary
or appropriate and no approval by the stockholders of the Company or by
any other person, committee or entity of any kind shall be required to
make any amendment; provided, however, that the Board shall not,
without the requisite affirmative approval of the stockholders of the
Company, make any amendment (i) which requires stockholder approval
under any applicable law, including Rule 16b-3 or the Code; or (ii)
which, unless approved by the requisite affirmative approval of
stockholders of the Company, would cause, result in or give rise to
"applicable employee remuneration" within the meaning of Section 162(m)
of the Code with respect to any Performance Based Option. No
termination or amendment of the Plan may, without the consent of the
Participant to whom any Award shall theretofore have been granted under
the Plan, adversely affect the right of such individual under such
Award. For the purposes of this section, an amendment to the Plan shall
be deemed to have the affirmative approval of the stockholders of the
Company if such amendment shall have been submitted for a vote by the
stockholders at a duly called meeting of such stockholders at which a
quorum was present and the majority of votes cast with respect to such
amendment at such meeting shall have been cast in favor of such
amendment, or if the holders of outstanding stock having not less than
a majority of the outstanding shares
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consent to such amendment in writing in the manner provided under the
Company's bylaws.
(b) TERMINATION. The Board shall have the right and the power to
terminate the Plan at any time. If the Plan is not earlier terminated,
the Plan shall terminate when all shares authorized under the Plan have
been issued. No Award shall be granted under the Plan after the
termination of the Plan, but the termination of the Plan shall not have
any other effect and any Award outstanding at the time of the
termination of the Plan may be exercised after termination of the Plan
at any time prior to the expiration date of such Award to the same
extent such award would have been exercisable if the Plan had not been
terminated.
12.02 NO RIGHT TO EMPLOYMENT OR TO CONTINUE AS DIRECTOR. No employee or
other person shall have any claim or right to be granted an Award under this
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Company or a
Subsidiary of the Company. Neither the Plan nor any action taken hereunder shall
be construed as giving any Director any right to be retained as a Director, or
to limit in any way the right of the stockholders of the Company to remove such
person as a Director.
12.03 COMPLIANCE WITH RULE 16B-3. It is intended that the Plan be
applied and administered in compliance with Rule 16b-3. If any provision of the
Plan would be in violation of Rule 16b-3 if applied as written, such provision
shall not have effect as written and shall be given effect so as to comply with
Rule 16b-3, as determined by the Administrator. The Board is authorized to amend
the Plan and to make any such modifications to Award Agreements to comply with
Rule 16b-3, as it may be amended from time to time, and to make any other such
amendments or modifications as it deems necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments made to Rule
16b-3.
12.04 SECURITIES LAW RESTRICTIONS. The shares of Common Stock issuable
pursuant to the terms of any Awards granted under the Plan may not be issued by
the Company without registration or qualification of such shares under the
Securities Act of 1933, as amended, and under various state securities laws or
without an exemption from such registration requirements. Unless the shares to
be issued under the Plan have been registered and/or qualified as appropriate,
the Company shall be under no obligation to issue shares of Common Stock upon
exercise of an Award unless and until such time as there is an appropriate
exemption available from the registration or qualification requirements of
federal and state law as determined by the Administrator in its sole discretion.
The Administrator may require any person who is granted an award hereunder to
agree with the Company to represent and agree in writing that if such shares are
issuable under an exemption from registration requirements, the shares will be
"restricted" securities which may be resold only in compliance with applicable
securities laws, and that such person is acquiring the shares issued upon
exercise of the Award for investment, and not with the view toward distribution.
12.05 NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock or stock options otherwise
than under the Plan.
12.06 CAPTIONS. The captions (i.e., all section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit,
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characterize or affect in any way any provisions of the Plan, and all provisions
of the Plan shall be construed as if no captions have been used in the Plan.
12.07 SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
12.08 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Administrator, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Administrator.
12.09 CHOICE OF LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Michigan, without regard to its
conflict of law provisions.
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EXHIBIT 5.1
[Letterhead of Jaffe, Raitt, Heuer & Weiss, P.C.]
July 27, 1999
McClain Industries, Inc.
6200 Elmridge Road
Sterling Heights, Michigan 48310
RE: MCCLAIN INDUSTRIES, INC. REGISTRATION STATEMENT ON FORM S-8
1999 INCENTIVE STOCK PLAN
Gentlemen:
We have acted as counsel to McClain Industries, Inc. (the "Company"), a
Michigan corporation, in connection with the registration by the Company of up
to 1,000,000 shares (the "Shares") of Common Stock, no par value, to be issued
and sold by the Company from time to time pursuant to the McClain Industries,
Inc. 1999 Incentive Stock Plan, as described in the Registration Statement on
Form S-8 to be filed with the Securities and Exchange Commission (together with
all amendments thereto, the "Registration Statement"). As your counsel in
connection with this transaction, we have examined the proceedings taken and are
familiar with the proceedings proposed to be taken by the Company in connection
with the sale and issuance of the Shares.
We do not purport to be experts on or to express any opinion in this
letter concerning any law other than the laws of the State of Michigan, and this
opinion is qualified accordingly. This opinion is limited to matters expressly
set forth in this letter, and no opinion is to be inferred or may be implied
beyond the matters expressly so stated. In rendering the opinion contained in
this letter, we have assumed without investigation that the information supplied
to us by the Company is accurate and complete.
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Based upon and subject to the foregoing, it is our opinion that the
Shares have been duly authorized, and upon the issuance and sale thereof in the
manner referred to in the Registration Statement, will be validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever it
appears in the Registration Statement.
Very truly yours,
JAFFE, RAITT, HEUER & WEISS
Professional Corporation
/s/ Jaffe, Raitt, Heuer & Weiss, P.C.
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EXHIBIT 23.2
CONSENT OF REHMANN ROBSON, P.C.
INDEPENDENT ACCOUNTANTS
McClain Industries, Inc. and Subsidiaries
We consent to the incorporation by reference in the Registration Statement of
McClain Industries, Inc. on Form S-8 pertaining to the Incentive Stock Plan of
our report dated December 7, 1998, on our audits of the consolidated financial
statements contained in the Annual Report of McClain Industries, Inc. on Form
10-k for the year ended September 30, 1998.
/s/ REHMANN ROBSON, P.C.
Farmington Hills, Michigan
July 27, 1999
