<PAGE>
As filed with the Securities and Exchange Commission on February 28, 1997.
File No. 33-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MLX Corp.
--------------------------------------------------
(Exact Name of Issuer as Specified in its Charter)
Georgia 38-0811650
(State or Other (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation or
Organization)
MLX Corp.
1000 Center Place
Norcross, Georgia 30093
(404) 798-0677
------------------------------------------------------------
(Address and Telephone Number of Issuer's Principal Executive
Offices)
MLX Corp. Stock Option and Incentive Award Plan
(Full Title of the Plan)
Mr. Thomas C. Waggoner
MLX Corporation
1000 Center Place
Norcross, Georgia 30093
(770) 798-0677
---------------------------------------------------------------------
(Name, Address and Telephone Number, Including Area Code, of Agent for
Service)
Copies to:
David A. Stockton, Esq.
KILPATRICK STOCKTON L.L.P.
1100 Peachtree Street, N.E.
Atlanta, Georgia 30309-4530
(404) 815-6500
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Amount to Offering Price Aggregate Amount of
be Registered Per Share Offering Price<F1> Registration Fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
125,000 $16.63 $2,078,750 $629.93
- -----------------------------------------------------------------------------------------------------------
<FN>
<F1> Determined in accordance with Rule 457(c) under the Securities Act of
1933, based on $16.63, the average of the bid and asked prices on the
Electronic Bulletin Board on February 21, 1997.
</FN>
/TABLE
<PAGE>
<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated by reference into this
Registration Statement and are deemed to be a part hereof from the date
of the filing of such documents:
(1) The Registrant's Annual Report on Form 10-K for its fiscal year
ended December 31, 1995.
(2) All reports filed by the Registrant pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since December 31, 1995.
(3) The description of Common Stock contained in the Registrant's
registration statement on Form 8-A, including all amendments or
reports filed for the purpose of updating such description.
(4) All other documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act prior to the filing of a post-effective amendment which
indicates that all securities offered pursuant to this
Registration Statement have been sold or which deregisters all
securities that remain unsold.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Attorneys of Kilpatrick Stockton LLP who work on this matter
beneficially owned 1,200 shares of the Common Stock of the
Registrant as of February 28, 1997.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As provided under Georgia law, the Registrant's Articles of
Incorporation provide that a director shall not be personally
liable to the Registrant or its shareholders for monetary
damages for breach of duty of care or any other duty owed to
the Registrant as a director, except that such provision shall
not eliminate or limit the liability of a director (a) for any
appropriation, in violation of his duties, of any business
opportunity of the Registrant, (b) for acts or omissions which
involve intentional misconduct or a knowing violation of law,
-2-<PAGE>
(c) for unlawful corporate distributions or (d) for any
transaction from which the director received an improper
benefit.
Under Article V of the Registrant's Bylaws, the Registrant is
required to indemnify its directors and officers to the fullest
extent permitted by Georgia law. The Georgia Business
Corporation Code provides that a corporation may indemnify its
directors, officers and agents against judgments, fines,
penalties, amounts paid in settlement, and expenses, including
attorneys' fees, resulting from various types of legal actions
or proceedings if the actions of the party being indemnified
meet the standards of conduct specified therein. The
determination concerning whether or not the applicable standard
of conduct has been met can be made by (a) a disinterested
majority of the Board of Directors, (b) a majority of a
committee of disinterested directors or (c) independent legal
counsel. No indemnification may be made to or on behalf of a
corporate director, officer, employee or agent (i) in
connection with a proceeding by or in the right of the
corporation in which such person was adjudged liable to the
corporation or (ii) in connection with any other proceeding in
which such person was adjudged liable on the basis that
personal benefit was improperly received by him.
In the event any payments are made to an officer or director by
way of indemnity, other than by court order, action of the
shareholders or by an insurance carrier, the Registrant must
notify its shareholders of such payment and all relevant
details in a timely manner and in no event later than the
notice of the next annual shareholders' meeting.
The Registrant's directors and officers are insured against
losses arising from any claim against them as such for wrongful
acts or omissions, subject to certain limitations.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The exhibits included as part of this Registration Statement are as
follows:
Exhibit Number Description
4(a) Articles of Incorporation of the
Registrant, as amended (included as Exhibit
3.1 to the Registrant's report on Form 10-Q
for the quarter ended June 30, 1993 and
incorporated herein by reference)
-3-<PAGE>
4(b) Bylaws of the Registrant (included as
Exhibit 3.2 to the Registrant's report on
Form 10-Q for the quarter ended June 30,
1993 and incorporated herein by reference)
5(a) & 23(a) Opinion and Consent of Counsel to
Registrant
23(b) Consent of Ernst & Young LLP
24(c) Power of Attorney (See signature page)
99(a) Stock Option and Incentive Award Plan
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, 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; (2) that, for the
purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; (3) to remove from registration by
means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security holders
that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is
not set forth in the prospectus, to deliver, or cause to be delivered to
each person to whom the prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the prospectus
to provide such interim financial information.
-4-<PAGE>
(d) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of such issue.
LEGAL MATTERS
Certain legal matters with respect to the validity of the
shares of Common Stock offered hereby have been passed upon by Kilpatrick
Stockton LLP, Atlanta, Georgia.
The consolidated financial statements of MLX Corp. included in
MLX Corp.'s Annual Report (Form 10-K) for the year ended December 31,
1995 have been audited by Ernst & Young LLP, independent auditors as set
forth in their report thereon included therein and incorporated by
reference herein. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on February 25, 1997.
MLX CORP.
/s/ Thomas C. Waggoner
By: Thomas C. Waggoner
Chief Executive Officer and
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas C. Waggoner as attorney-in-
fact, having the power of substitution, for him in any and all
capacities, to sign any amendments to this Registration Statement on Form
S-8 and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on February 25, 1997.
/s/ Alfred R. Glancy III Chairman
- ------------------------
ALFRED R. GLANCY III
/s/ Thomas C. Waggoner President and Chief
- --------------------- Executive Officer
THOMAS C. WAGGONER (Principal Executive, Financial
and Accounting Officer)
/s/ Theodore R. Kallgren Vice President,
- ------------------------ Secretary and
THEODORE R. KALLGREN Treasurer
/s/ Willem F.P. de Vogel Director
- ------------------------
WILLEM F.P. de VOGEL
/s/ S. Sterling McMillan, III Director
- -----------------------------
S. STERLING McMILLAN, III
-6-<PAGE>
/s/ Brian R. Esher Director
- -----------------------------
BRIAN R. ESHER
/s/ W. John Roberts Director
- -----------------------------
W. JOHN ROBERTS
/s/ J. William Uhrig Director
- -----------------------------
J. WILLIAM UHRIG
/s/ H. Whitney Wagner Director
- -----------------------------
H. WHITNEY WAGNER
-7-
<PAGE>
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
Exhibit Number Description
5(a) & 23(a) Opinion and Consent of Counsel to
Registrant
23(b) Consent of Ernst & Young LLP
24(a) Power of Attorney (See signature page)
99(a) Stock Option and Incentive Award Plan
<PAGE>
KILPATRICK STOCKTON LLP
Attorneys at Law
Suite 2800
1100 Peachtree Street
Atlanta, Georgia 30309-4530
Telephone: 404.815.6500
Facsimile: 404.815.6555
E-mail: [email protected]
February 28, 1997
Direct Dial: 404.815.6444
MLX Corporation
1000 Center Place
Norcross, Georgia 30093
Re: Form S-8 Registration Statement - - MLX Corp.
Stock Option and Incentive Award Plan
Gentlemen:
We have acted as counsel for MLX Corp., a Georgia
corporation (the "Company"), in the preparation of the Form S-8
Registration Statement relating to the Company's Stock Option and
Incentive Award Plan (the "Plan") and the proposed offer and sale
of up to 125,000 shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), pursuant thereto. In
connection with the preparation of said Registration Statement,
we have examined certificates of public officials and originals
or copies of such corporate records, documents and other
instruments relating to the authorization of the Plan and the
authorization and issuance of the shares of Common Stock as we
have deemed relevant under the circumstances.
On the basis of the foregoing, it is our opinion that:
The Company was duly organized and incorporated and is
validly existing under the laws of the State of Georgia, with an
authorized capitalization consisting of 30,000,000 shares of
Common Stock, par value $.01 per share, 500,000 shares of Series
A Preferred Stock, par value $30.00 per share, and 1,500,000
shares of Preferred Stock, no par value per share.
The Plan and the proposed offer and sale thereunder of
up to 125,000 shares of Common Stock have been duly authorized by
the Board of Directors of the Company, and the shares, when
issued in accordance with the terms and conditions of the Plan,
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to said Registration Statement.
Sincerely,
KILPATRICK STOCKTON LLP
By: /s/ David A. Stockson
David A. Stockton, a
partner
Exhibit 23(b)
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-8) pertaining to the Stock Option
and Incentive Award Plan of MLX Corp. and to the incorporation by
reference therein of our report dated March 7, 1996, with respect to the
consolidated financial statements of MLX Corp. included in its Annual
Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
February 25, 1997 Ernst & Young LLP
Atlanta, Georgia
<PAGE>
MLX CORP.
STOCK OPTION AND INCENTIVE
AWARD PLAN
<PAGE>
TABLE OF CONTENTS
ARTICLE 1. Establishment, Purpose, and Duration . . . . . . . 1
1.1 Establishment of the Plan . . . . . . . . . . . 1
1.2 Purpose of the Plan . . . . . . . . . . . . . . 1
1.3 Duration of the Plan . . . . . . . . . . . . . . 1
ARTICLE 2. Definitions . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 3. Administration . . . . . . . . . . . . . . . . . . 5
3.1 The Committee . . . . . . . . . . . . . . . . . 5
3.2 Authority of the Committee . . . . . . . . . . . 5
3.3 Decisions Binding . . . . . . . . . . . . . . . 5
ARTICLE 4. Shares Subject to the Plan . . . . . . . . . . . . 5
4.1 Number of Shares . . . . . . . . . . . . . . . . 6
4.2 Lapsed Awards . . . . . . . . . . . . . . . . . 6
4.3 Adjustments In Authorized Shares . . . . . . . . 6
ARTICLE 5. Eligibility and Participation . . . . . . . . . . . 7
ARTICLE 6. Stock Options . . . . . . . . . . . . . . . . . . . 7
6.1 Grant of Options . . . . . . . . . . . . . . . . 7
6.2 Award Agreement . . . . . . . . . . . . . . . . 7
6.3 Option Price . . . . . . . . . . . . . . . . . . 8
6.4 Duration of Options . . . . . . . . . . . . . . 8
6.5 Exercise of Options . . . . . . . . . . . . . . 8
6.6 Payment . . . . . . . . . . . . . . . . . . . . 8
6.7 Termination of Employment Due to Death,
Disability or Retirement . . . . . . . . . . . . 9
6.8 Termination of Employment for Other
Reasons . . . . . . . . . . . . . . . . . . . 10
6.9 Nontransferability of Options . . . . . . . . 11
ARTICLE 7. Restricted Stock; Stock Awards . . . . . . . . . 11
7.1 Grants . . . . . . . . . . . . . . . . . . . . 11
7.2 Restricted Period; Lapse of
Restrictions . . . . . . . . . . . . . . . . . 11
7.3 Rights of Holder; Limitations Thereon . . . . 12
7.4 Delivery of Unrestricted Shares . . . . . . . 13
7.5 Nonassignability of Restricted Stock . . . . . 13
ARTICLE 8. Beneficiary Designation . . . . . . . . . . . . . 13
ARTICLE 9. Deferrals . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 10. Rights of Employees . . . . . . . . . . . . . . 14
10.1 Employment . . . . . . . . . . . . . . . . . . 14
10.2 Participation . . . . . . . . . . . . . . . . 14
<PAGE>
ARTICLE 11. Change in Control . . . . . . . . . . . . . . . 14
11.1 Occurrence . . . . . . . . . . . . . . . . . . 14
11.2 Definition . . . . . . . . . . . . . . . . . . 15
ARTICLE 12. Amendment, Modification and Termination . . . . 17
12.1 Amendment, Modification and Termination . . . 17
12.2 Awards Previously Granted . . . . . . . . . . 17
12.3 Compliance With Code Section 162(m) . . . . . 17
ARTICLE 13. Withholding . . . . . . . . . . . . . . . . . . 18
13.1 Tax Withholding . . . . . . . . . . . . . . . 18
13.2 Share Withholding . . . . . . . . . . . . . . 18
ARTICLE 14. Indemnification . . . . . . . . . . . . . . . . 18
ARTICLE 15. Successors . . . . . . . . . . . . . . . . . . . 18
ARTICLE 16. Legal Construction . . . . . . . . . . . . . . . 19
16.1 Gender and Number . . . . . . . . . . . . . . 19
16.2 Severability . . . . . . . . . . . . . . . . . 19
16.3 Requirements of Law . . . . . . . . . . . . . 19
16.4 Regulatory Approvals and Listing . . . . . . . 19
16.5 Securities Law Compliance . . . . . . . . . . 19
16.6 Governing Law . . . . . . . . . . . . . . . . 19
<PAGE>
MLX CORP.
STOCK OPTION AND INCENTIVE AWARD PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan. MLX Corp., a Georgia
corporation (hereinafter referred to as the "Company"), hereby
establishes a stock option and incentive award plan known as the
"MLX Corp. Stock Option and Incentive Award Plan" (the "Plan"),
as set forth in this document. The Plan permits the grant of
Incentive Stock Options, Nonqualified Stock Options, Stock
Awards, and Restricted Stock.
The Plan shall become effective on the date it is approved
by the Company's shareholders (the "Effective Date") and shall
remain in effect as provided in Section 1.3.
1.2 Purpose of the Plan. The purpose of the Plan is to
secure for the Company and its shareholders the benefits of the
incentive inherent in stock ownership in the Company by key
employees, directors and other persons who are largely
responsible for its future growth and continued success. The
Plan promotes the success and enhances the value of the Company
by linking the personal interests of Participants (as defined
below) to those of the Company's shareholders, and by providing
Participants with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract and retain the
services of Participants upon whose judgment, interest and
special effort the successful conduct of its operation largely
depends.
1.3 Duration of the Plan. The Plan shall commence on the
Effective Date, and shall remain in effect, subject to the right
of the Board of Directors to amend or terminate the Plan at any
time pursuant to Article 12, until the day prior to the tenth
(10th) anniversary of the Effective Date.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have
the meanings set forth below:
(a) "Award" means, individually or collectively, a grant
under this Plan of Incentive Stock Options,
Nonqualified Stock Options, Stock Awards or Restricted
Stock.
<PAGE>
(b) "Award Agreement" means an agreement entered into by
each Participant and the Company, setting forth the
terms and provisions applicable to Awards granted to
Participants under this Plan.
(c) "Beneficial Owner" or "Beneficial Ownership" shall have
the meaning ascribed to such term in Rule 13d-3 of the
Exchange Act.
(d) "Board" or "Board of Directors" means the Board of
Directors of the Company.
(e) "Cause" means: (i) willful misconduct on the part of a
Participant that is materially detrimental to the
Company; or (ii) the conviction of a Participant for
the commission of a felony. The existence of "Cause"
under either (i) or (ii) shall be determined by the
Committee. Notwithstanding the foregoing, if the
Participant has entered into an employment agreement
that is binding as of the date of employment
termination, and if such employment agreement defines
"Cause," and/or provides a means of determining whether
"Cause" exists, such definition of "Cause" and means of
determining its existence shall apply to the
Participant.
(f) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(g) "Committee" means the committee appointed by the Board
to administer the Plan with respect to grants of
Awards, as specified in Article 3.
(h) "Company" means MLX Corp., a Georgia corporation, or
any successor thereto as provided in Article 15.
(i) "Director" means any individual who is a member of the
Board of Directors of the Company.
(j) "Disability" shall have the meaning ascribed to such
term in the Company's long-term disability plan
covering the Participant, or in the absence of such
plan, a meaning consistent with Section 22(e)(3) of the
Code.
(k) "Employee" means any full-time, salaried employee of
the Company, or the Company's Subsidiaries. Directors
who are not otherwise employed by the Company or the
Company's Subsidiaries shall not be considered
Employees eligible to receive Awards under this Plan.
(l) "Effective Date" shall have the meaning ascribed to
such term in Section 1.1.
-2-<PAGE>
(m) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor
act thereto.
(n) "Fair Market Value" shall be determined as follows:
(i) If, on the relevant date, the Shares are
traded on a national or regional securities
exchange or on The Nasdaq Stock Market
("Nasdaq") and closing sale prices for the
Shares are customarily quoted, on the basis
of the closing sale price on the principal
securities exchange on which the Shares may
then be traded or, if there is no such sale
on the relevant date, then on the
immediately preceding day on which a sale
was reported;
(ii) If, on the relevant date, the Shares are
not listed on any securities exchange or
traded on Nasdaq, but nevertheless are
publicly traded and reported on Nasdaq
without closing sale prices for the Shares
being customarily quoted, on the basis of
the mean between the closing bid and asked
quotations in such other over-the-counter
market as reported by Nasdaq; but, if there
are no bid and asked quotations in the
over-the-counter market as reported by
Nasdaq on that date, then the mean between
the closing bid and asked quotations in the
over-the-counter market as reported by
Nasdaq on the immediately preceding day
such bid and asked prices were quoted; and
(iii) If, on the relevant date, the Shares are
not publicly traded as described in (i) or
(ii), on the basis of the good faith
determination of the Committee.
(o) "Incentive Stock Option" or "ISO" means an option
to purchase Shares granted under Article 6 which
is designated as an Incentive Stock Option and is
intended to meet the requirements of Section 422
of the Code.
(p) "Insider" shall mean an Employee who is, on the
relevant date, an officer or a director, or a ten
percent (10%) beneficial owner of any class of
the Company's equity securities that is
registered pursuant to Section 12 of the Exchange
-3-<PAGE>
Act, all as defined under Section 16 of the
Exchange Act.
(q) "Named Executive Officer" means a Participant
who, as of the date of vesting and/or payout of
an Award is one of the group of "covered
employees," as defined in the regulations
promulgated under Code Section 162(m), or any
successor statute.
(r) "Nonqualified Stock Option" or "NQSO" means an
option to purchase Shares granted under Article
6, and which is not intended to meet the
requirements of Code Section 422.
(s) "Option" means an Incentive Stock Option or a
Nonqualified Stock Option.
(t) "Option Price" means the price at which a Share
may be purchased by a Participant pursuant to an
Option, as determined by the Committee.
(u) "Participant" means an Employee, director or
other person who has been granted an Award under
the Plan which is outstanding.
(v) "Person" shall have the meaning ascribed to such
term in Section 3(a)(9) of the Exchange Act and
used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d)
thereof.
(w) "Retirement" shall mean retiring from employment
with the Company or any Subsidiary upon attaining
the age of 65.
(x) "Restricted Stock" means an Award of restricted
Shares granted in accordance with the terms of
Article 7 and the other provisions of the Plan.
(y) "Shares" means the shares of Common Stock of the
Company, par value $0.01 per share.
(z) "Stock Award" means a grant of Shares under
Article 7 that is not generally subject to
restrictions and pursuant to which a certificate
for the Shares is transferred to the Employee.
(aa) "Subsidiary" means any corporation, partnership,
joint venture or other entity in which the
Company has a fifty percent (50%) or greater
voting interest.
-4-<PAGE>
ARTICLE 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the
Compensation Committee of the Board, or by any other Committee
appointed by the Board that is granted authority to administer
the Plan, with such Committee consisting of not less than three
(3) Directors who meet the "disinterested administration"
requirements of Rule 16b-3 or any successor thereto under the
Exchange Act. The members of the Committee shall be appointed
from time to time by, and shall serve at the discretion of, the
Board of Directors.
The Committee shall be comprised solely of Directors who are
eligible to administer the Plan pursuant to Rule 16b-3(c)(2) or
any successor thereto under the Exchange Act. However, if for
any reason any member of the Committee does not qualify to
administer the Plan, as contemplated by Rule 16b-3(c)(2) of the
Exchange Act, the Board of Directors may appoint a new Committee
member who complies with Rule 16b-3(c)(2).
3.2 Authority of the Committee. Subject to the provisions
of the Plan, the Committee shall have full power to select the
Employees and other Persons, who are responsible for the future
growth and success of the Company, who may include, without
limitation, consultants, independent contractors or other
providers of services to the Company, who shall participate in
the Plan (who may change from year to year); determine the size
and types of Awards; determine the terms and conditions of Awards
in a manner consistent with the Plan (including vesting
provisions and the duration of the Awards); construe and
interpret the Plan and any agreement or instrument entered into
under the Plan; establish, amend or waive rules and regulations
for the Plan's administration; and (subject to the provisions of
Article 12) amend the terms and conditions of any outstanding
Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan, including to
establish different terms and conditions relating to the effect
of the termination of employment or other services to the
Company. Further, the Committee shall make all other
determinations which may be necessary or advisable in the
Committee's opinion for the administration of the Plan. As
permitted by law, the Committee may delegate its authority under
this Plan.
3.3 Decisions Binding. All determinations and decisions
made by the Committee pursuant to the provisions of the Plan and
all related orders and resolutions of the Board shall be final,
conclusive and binding on all Persons, including the Company, the
shareholders, Employees, Participants and their estates and
beneficiaries.
-5-<PAGE>
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in
Section 4.3, the total number of Shares available for grant of
Awards under the Plan shall be an aggregate of one hundred twenty
five thousand (125,000) Shares. These Shares may, in the
discretion of the Company, be either authorized but unissued
Shares or Shares held as treasury shares, including Shares
purchased by the Company.
The following rules shall apply for purposes of the
determination of the number of Shares available for grant under
the Plan:
(a) While an Option, Stock Award or Restricted Stock
is outstanding, it shall be counted against the
authorized pool of Shares, regardless of its
vested status.
(b) The grant of an Option, Stock Award or Restricted
Stock shall reduce the Shares available for grant
under the Plan by the number of Shares subject to
such Award.
4.2 Lapsed Awards. If any Award granted under this
Plan is canceled, terminates, expires or lapses for any reason,
any Shares subject to such Award shall again be available for the
grant of an Award under the Plan. However, in the event that
prior to the Award's cancellation, termination, expiration or
lapse, the holder of the Award at any time received one or more
"benefits of ownership" pursuant to such Award (as defined by the
Securities and Exchange Commission, pursuant to any rule or
interpretation promulgated under Section 16 of the Exchange Act),
the Shares subject to such Award shall not again be made
available for regrant under the Plan.
4.3 Adjustments In Authorized Shares. In the event of any
change in corporate capitalization, such as a stock split, or a
corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock
or property of the Company, any reorganization (whether or not
such reorganization comes within the definition of such term in
Code Section 368) or any partial or complete liquidation of the
Company, such adjustment shall be made in the number and class of
Shares which may be delivered under the Plan, and in the number
and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, as may be determined to be appropriate
and equitable by the Committee, in its sole discretion, to
prevent dilution or enlargement of rights; provided, however,
that the number of Shares subject to any Award shall always be a
whole number and the Committee shall make such adjustments as are
necessary to insure Awards of whole Shares.
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ARTICLE 5. ELIGIBILITY AND PARTICIPATION
Any key Employee of the Company, or of any Subsidiary,
including any such Employee who is also a director of the
Company, or of any Subsidiary, or any other Person, including
consultants, independent contractors or other service providers,
whose judgment, initiative and efforts contribute or may be
expected to contribute materially to the successful performance
of the Company or any Subsidiary shall be eligible to receive an
Award under the Plan. In determining the Employees and other
Persons to whom such an Award shall be granted and the number of
Shares which may be granted pursuant to that Award, the Committee
shall take into account the duties of the respective Person,
their present and potential contributions to the success of the
Company or any Subsidiary, and such other factors as the
Committee shall deem relevant in connection with accomplishing
the purpose of the Plan.
No person who is a member of the Committee shall be eligible
to be granted any Award under the Plan while so serving.
ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions
of the Plan, Options may be granted to Employees or other Persons
at any time and from time to time as shall be determined by the
Committee. The Committee shall have discretion in determining
the number of Shares subject to Options granted to each
Participant; provided, however, that in the case of any ISO
granted under the Plan, only an Employee may receive such grant
and the aggregate Fair Market Value (determined at the time such
Option is granted) of the Shares to which ISOs are exercisable
for the first time by the Participant during any calendar year
(under the Plan and all other incentive stock option plans of the
Company and any Subsidiary) shall not exceed $100,000. The
Committee may grant a Participant ISOs, NQSOs or a combination
thereof, and may vary such Awards among Participants. The
maximum number of Options a Named Executive Officer can be
granted under the Plan during a 12-month period is 75,000
Options.
6.2 Award Agreement. Each Option grant shall be evidenced
by an Award Agreement that shall specify the Option Price, the
duration of the Option, the number of Shares to which the Option
pertains and such other provisions as the Committee shall
determine. The Option Agreement shall further specify whether
the Award is intended to be an ISO or an NQSO. Any portion of an
Option that is not designated as an ISO or otherwise fails or is
not qualified an as ISO (even if designated as an ISO) shall be a
NQSO.
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6.3 Option Price. The Option Price for each grant of an
ISO shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the date the ISO is granted. In no
event, however, shall any Participant who, at any time would
otherwise be granted an Option, owns (within the meaning of
Section 424(d) of the Code) stock of the Company possessing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company be eligible to receive an ISO at
an Option Price less than one hundred ten percent (110%) of the
Fair Market Value of a share on the date the ISO is granted. The
price at which each Share covered by each NQSO shall be purchased
by an Option holder shall be established by the Committee, but in
no event shall such price be less than eighty-five percent (85%)
of the Fair Market Value (or such lower percentage of Fair Market
Value as may be established by Internal Revenue Service rules or
regulations as the limit for granting discounted stock options
without causing immediate tax consequences to the Participant) of
a Share on the date the Option is granted.
6.4 Duration of Options. Each Option shall expire at such
time as the Committee shall determine at the time of grant;
provided, however, that no Option shall be exercisable later than
the tenth (10th) anniversary date of its grant; provided,
further, however, that any ISO granted to any Participant who at
such time owns (within the meaning of Section 424(d) of the Code)
stock of the Company possessing more than ten percent (10%) of
the total combined voting power of all classes of stock in the
Company, shall be exercisable not later than the fifth (5th)
anniversary date of its grant.
6.5 Exercise of Options. Options granted under the Plan
shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall in each
instance approve, which need not be the same for each grant or
for each Participant. Each Option shall be exercisable for such
number of Shares and at such time or times, including periodic
installments, as may be determined by the Committee at the time
of the grant. Except as otherwise provided in the Award
Agreement and Article 11, the right to purchase Shares that are
exercisable in periodic installments shall be cumulative so that
when the right to purchase any Shares has accrued, such Shares or
any part thereof may be purchased at any time thereafter until
the expiration or termination of the Option.
6.6 Payment. Options shall be exercised by the delivery of
a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares. The
Option Price upon exercise of any Option shall be payable to the
Company in full, either: (a) in cash, (b) if approved by the
Committee, by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the
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total Option Price (provided that the Shares which are tendered
must have been held by the Participant for the period required by
law, if any, prior to their tender to satisfy the Option Price),
or (c) by a combination of (a) and (b). The Committee also may
allow cashless exercises as permitted under Federal Reserve
Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and
applicable law.
As soon as practicable after receipt of a written
notification of exercise and full payment, the Company shall
deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).
6.7 Termination of Employment Due to Death, Disability or
Retirement. Unless otherwise provided by the Committee in the
Award Agreement, the following rules shall apply in the event of
the Participant's termination of employment due to death,
Disability or Retirement. With respect to a Participant that is
a non-employee director of the Company or otherwise is not an
Employee, the following references to employment shall be deemed
to be references to service as a director or in such other
capacity as is determined by the Committee:
(a) Termination by Death. In the event the
Participant dies while actively employed, all
outstanding Options granted to that Participant
shall immediately vest and shall remain
exercisable at any time prior to their expiration
date, or for one (1) year after the date of
death, whichever period is shorter, by (i) such
person(s) as shall have been named as the
Participant's beneficiary, (ii) such person(s)
that have acquired the Participant's rights under
such Options by will or by the laws of descent
and distribution, (iii) the Participant's estate
or representative of the Participant's estate, or
(iv) by a transferee of the Option who has
acquired the Option in a transaction that is
permitted by Section 6.9.
(b) Termination by Disability. In the event the
employment of a Participant is terminated by
reason of Disability, all outstanding Options
granted to that Participant shall immediately
vest as of the date the Committee determines the
definition of Disability to have been satisfied
and shall remain exercisable at any time prior to
their expiration date, or for one (1) year after
-9-<PAGE>
the date that the Committee determines the
definition of Disability to have been satisfied,
whichever period is shorter, by the Participant's
duly appointed guardian or other legal
representative.
(c) Termination by Retirement. In the event the
employment of a Participant is terminated by
reason of Retirement, all outstanding Options
granted to that Participant shall immediately
vest and shall remain exercisable at any time
prior to their expiration date, or for three (3)
months after the effective date of Retirement,
whichever period is shorter.
(d) Employment Termination Followed by Death. In the
event that a Participant's employment terminates
by reason of Disability or Retirement, and within
the exercise period following such termination
the Participant dies, then the remaining exercise
period for outstanding Options shall equal the
longer of: (i) one (1) year following death; or
(ii) the remaining portion of the exercise period
which was triggered by the employment
termination. Such Options shall be exercisable
by the persons specified in subsection (a) above.
6.8 Termination of Employment for Other Reasons. If the
employment of a Participant shall terminate for any reason other
than the reasons set forth in Section 6.7, all Options held by
the Participant which are not vested as of the effective date of
his employment termination shall be immediately forfeited to the
Company (and shall, subject to Section 4.2 hereof, once again
become available for grant under the Plan). However, the
Committee, in its sole discretion, shall have the right to
immediately vest all or any portion of such Options, subject to
such terms as the Committee, in its sole discretion, deems
appropriate.
In the event an Employee's employment is terminated by the
Company for Cause, or such Employee voluntarily terminates his
employment, the Option rights under any then vested outstanding
Options shall terminate immediately upon termination of
employment. If the Employee's employment is terminated by the
Company without Cause, any Options vested as of such Employee's
date of termination shall remain exercisable at any time prior to
their expiration date or for three (3) months after such
Employee's date of termination of employment, whichever period is
shorter.
-10-<PAGE>
6.9 Limited Transferability. A Participant may transfer an
Option granted hereunder to members of his or her Immediate
Family (as defined below), to one or more trusts for the benefit
of such Immediate Family members, or to one or more partnerships
where such Immediate Family members are the only partners, if (i)
the Award Agreement evidencing such Option expressly provides
that the Option may be transferred, and (ii) the Participant does
not receive any consideration in any form whatsoever for such
transfer. Any Option so transferred shall continue to be subject
to the same terms and conditions in the hands of the transferee
as were applicable to said Option immediately prior to the
transfer thereof. Any reference in any such Award Agreement to
the employment by or performance of services for the Company by
the Participant shall continue to refer to the employment of, or
performance by the transferring Participant. For purposes
hereof, "Immediate Family" shall mean the Participant and the
Participant's spouse, and their respective ancestors and
descendants. Any Option that is granted pursuant to any Award
Agreement that did not initially expressly allow the transfer of
said Option and that has not been amended to expressly permit
such transfer, shall not be transferable by the Participant
otherwise than by will or by the laws of descent and distribution
and such Option thus shall be exercisable in the Participant's
lifetime only by the Participant.
ARTICLE 7. RESTRICTED STOCK; STOCK AWARDS
7.1 Grants. The Committee may from time to time in its
discretion grant Restricted Stock and Stock Awards to Employees
and may determine the number of Shares of Restricted Stock or
Stock Awards to be granted. The Committee shall determine the
terms and conditions of, and the amount of payment, if any, to be
made by the Employee for, such Restricted Stock. A grant of
Restricted Stock may require the Employee to pay for such Shares
of Restricted Stock, but the Committee may establish a price
below Fair Market Value at which the Employee can purchase the
Shares of Restricted Stock. Each grant of Restricted Stock shall
be evidenced by an Award Agreement containing terms and
conditions not inconsistent with the Plan as the Committee shall
determine to be appropriate in its sole discretion.
7.2 Restricted Period; Lapse of Restrictions. At the time
a grant of Restricted Stock is made, the Committee shall
establish a period or periods of time (the "Restricted Period")
applicable to such grant which, unless the Committee otherwise
provides, shall not be less than one year. Subject to the other
provisions of this Section 7, at the end of the Restricted Period
all restrictions shall lapse and the Restricted Stock shall vest
in the Participant. At the time a grant is made, the Committee
may, in its discretion, prescribe conditions for the incremental
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lapse of restrictions during the Restricted Period and for the
lapse or termination of restrictions upon the occurrence of other
conditions in addition to or other than the expiration of the
Restricted Period with respect to all or any portion of the
Restricted Stock. Such conditions may, but need not, include
without limitation:
(a) The death, Disability or Retirement of the
Employee to whom Restricted Stock is granted, or
(b) The occurrence of a Change in Control (as defined
in Section 11.1).
The Committee may also, in its discretion, shorten or terminate
the Restricted Period, or waive any conditions for the lapse or
termination of restrictions with respect to all or any portion of
the Restricted Stock at any time after the date the grant is
made.
7.3 Rights of Holder; Limitations Thereon. Upon a grant of
Restricted Stock, a stock certificate (or certificates)
representing the number of Shares of Restricted Stock granted to
the Employee shall be registered in the Employee's name and shall
be held in custody by the Company or a bank selected by the
Committee for the Employee's account. Following such
registration, the Employee shall have the rights and privileges
of a shareholder as to such Restricted Stock, including the right
to receive dividends and to vote such Restricted Stock, except
that, the right to receive cash dividends shall be the right to
receive such dividends either in cash currently or by payment in
Restricted Stock, as the Committee shall determine, and except
further that, the following restrictions shall apply:
(a) The Employee shall not be entitled to delivery of
a certificate until the expiration or termination
of the Restricted Period for the Shares
represented by such certificate and the
satisfaction of any and all other conditions
prescribed by the Committee;
(b) None of the Shares of Restricted Stock may be
sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the
Restricted Period and until the satisfaction of
any and all other conditions prescribed by the
Committee; and
(c) All of the Shares of Restricted Stock that have
not vested shall be forfeited and all rights of
the Employee to such Shares of Restricted Stock
shall terminate without further obligation on the
part of the Company, unless the Employee has
remained a full-time employee of the Company or
any of its Subsidiaries, until the expiration or
termination of the Restricted Period and the
satisfaction of any and all other conditions
-12-<PAGE>
prescribed by the Committee applicable to such
Shares of Restricted Stock. Upon the forfeiture
of any shares of Restricted Stock, such forfeited
Shares shall be transferred to the Company
without further action by the Employee and shall,
in accordance with Section 4.2, again be
available for grant under the Plan.
With respect to any Shares received as a result of
adjustments under Section 4.3 hereof and any Shares received with
respect to cash dividends declared on Restricted Stock, the
Participant shall have the same rights and privileges, and be
subject to the same restrictions, as are set forth in this
Section 7.
7.4 Delivery of Unrestricted Shares. Upon the expiration
or termination of the Restricted Period for any Shares of
Restricted Stock and the satisfaction of any and all other
conditions prescribed by the Committee, the restrictions
applicable to such Shares of Restricted Stock shall lapse and a
stock certificate for the number of Shares of Restricted Stock
with respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions except any that may be
imposed by law, to the holder of the Restricted Stock. The
Company shall not be required to deliver any fractional Share but
will pay, in lieu thereof, the Fair Market Value (determined as
of the date the restrictions lapse) of such fractional share to
the holder thereof. Prior to or concurrently with the delivery
of a certificate for Restricted Stock, the holder shall be
required to pay an amount necessary to satisfy any applicable
federal, state and local tax requirements as set out in Article
13 below.
7.5 Nonassignability of Restricted Stock. Unless the
Committee provides otherwise in the Award Agreement, no grant of,
nor any right or interest of a Participant in or to, any
Restricted Stock, or in any instrument evidencing any grant of
Restricted Stock under the Plan, may be assigned, encumbered or
transferred except, in the event of the death of a Participant,
by will or the laws of descent and distribution.
ARTICLE 8. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name
any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all
of such benefit. Each such designation shall revoke all prior
designations by the same Participant, shall be in a form
prescribed by the Company and shall be effective only when filed
by the Participant, in writing, with the Company during the
Participant's lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be
paid to the Participant's estate.
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The spouse of a married Participant domiciled in a community
property jurisdiction shall join in any designation of
beneficiary or beneficiaries other than the spouse.
ARTICLE 9. DEFERRALS
The Committee may permit a Participant to defer to another
plan or program such Participant's receipt of Shares that would
otherwise be due to such Participant by virtue of the exercise of
an Option or the vesting of Restricted Stock. If any such
deferral election is required or permitted, the Committee shall,
in its sole discretion, establish rules and procedures for such
payment deferrals.
ARTICLE 10. RIGHTS OF EMPLOYEES
10.1 Employment. Nothing in the Plan shall interfere with
or limit in any way the right of the Company or a Subsidiary to
terminate any Participant's employment or engagement by the
Company at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or a Subsidiary.
For purpose of the Plan, transfer of employment of a Participant
between the Company and any one of its Subsidiaries (or between
Subsidiaries) shall not be deemed a termination of employment.
10.2 Participation. No Employee shall have the right to be
selected to receive an Award under this Plan, or, having been so
selected, to be selected to receive a future Award.
ARTICLE 11. CHANGE IN CONTROL
11.1 Occurrence. Upon the occurrence of a Change in
Control, except as provided in the Award Agreement or unless
otherwise specifically prohibited by the terms of Article 16
hereof:
(a) Any and all Options granted hereunder shall
become fully vested and immediately exercisable;
(b) To the extent provided by the Committee in the
Award, all restrictions on a grant of Restricted
Stock shall lapse and such Restricted Stock shall
be delivered to the Participant in accordance
with Section 7.4; provided, however, that there
shall not be an accelerated delivery with respect
to Restricted Stock which was granted less than
six (6) months prior to the effective date of the
Change in Control; and
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(c) Subject to Article 12 hereof, the Committee shall
have the authority to make any modifications to
the Awards as determined by the Committee to be
appropriate before the effective date of the
Change in Control.
11.2 Definition. For purposes of the Plan, a "Change in
Control" shall be deemed to have occurred if:
(a) An acquisition by any Person of Beneficial
Ownership of the shares of Common Stock of the
Company then outstanding (the "Company Common
Stock Outstanding") or the voting securities of
the Company then outstanding entitled to vote
generally in the election of directors (the
"Company Voting Securities Outstanding"), if such
acquisition of Beneficial Ownership results in
the Person's beneficially owning (within the
meaning of Rule 13d-3 promulgated under the
Exchange Act) twenty-five percent (25%) or more
of the Company Common Stock Outstanding or
twenty-five percent (25%) or more of the combined
voting power of the Company Voting Securities
Outstanding; provided, that immediately prior to
such acquisition such Person was not a direct or
indirect Beneficial Owner of twenty-five percent
(25%) or more of the Company Common Stock
Outstanding or twenty-five percent (25%) or more
of the combined voting power of Company Voting
Securities Outstanding, as the case may be; or
(b) The approval of the shareholders of the Company
of a reorganization, merger, consolidation,
complete liquidation or dissolution of the
Company, the sale or disposition of all or
substantially all of the assets of the Company or
similar corporate transaction (in each case
referred to in this Section 11.2 as a "Corporate
Transaction") or, if consummation of such
Corporate Transaction is subject, at the time of
such approval by shareholders, to the consent of
any government or governmental agency, the
obtaining of such consent (either explicitly or
implicitly); or
(c) A change in the composition of the Board such
that the individuals who, as of the Effective
Date, constitute the Board (such Board shall be
hereinafter referred to as the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, for
purposes of this Section 11.2 that any individual
who becomes a member of the Board subsequent to
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the Effective Date whose election, or nomination
for election by the Company's shareholders, was
approved by a vote of at least a majority of
those individuals who are members of the Board
and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso)
shall be considered as though such individual
were a member of the Incumbent Board; but,
provided, further, that any such individual whose
initial assumption of office occurs as a result
of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange
Act, including any successor to such Rule), or
other actual or threatened solicitation of
proxies or consents by or on behalf of a Person
other than the Board, shall not be so considered
as a member of the Incumbent Board.
Notwithstanding the provisions set forth in
subsections (a) and (b), the following shall not
constitute a Change in Control for purposes of
this Plan: (1) any acquisition of shares of
Common Stock by, or consummation of a Corporate
Transaction with, any Subsidiary or any employee
benefit plan (or related trust) sponsored or
maintained by the Company or an affiliate; (2)
any acquisition of shares of Common Stock, or
consummation of a Corporate Transaction,
following which more than fifty percent (50%) of,
respectively, the shares then outstanding of
common stock of the corporation resulting from
such acquisition or Corporate Transaction and the
combined voting power of the voting securities
then outstanding of such corporation entitled to
vote generally in the election of directors is
then beneficially owned, directly or indirectly,
by all or substantially all of the individuals
and entities who were Beneficial Owners,
respectively, of the Company Common Stock
Outstanding and Company Voting Securities
Outstanding immediately prior to such acquisition
or Corporate Transaction in substantially the
same proportions as their ownership, immediately
prior to such acquisition or Corporate
Transaction, of the Company Common Stock
Outstanding and Company Voting Securities
Outstanding, as the case may be; or (3) the sale
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of the outstanding capital stock of S.K. Wellman
Limited, Inc. to The Hawk Group of Companies,
Inc. pursuant to that certain Agreement for
Purchase and Sale of the Capital Stock of S.K.
Wellman Limited, Inc., dated as of April 10,
1995, by and among the Company, The Hawk Group of
Companies, Inc. and Hawk Corporation, and the
transactions contemplated therein, including the
grant of certain proxies by members of the
Company's board.
ARTICLE 12. AMENDMENT, MODIFICATION AND TERMINATION
12.1 Amendment, Modification and Termination. The Board
may, at any time and from time to time, alter, amend, suspend or
terminate the Plan in whole or in part; provided, that, unless
approved by the holders of a majority of the total number of
Shares of the Company represented and voted at a meeting at which
a quorum is present, no amendment shall be made to the Plan if
such amendment would (a) materially modify the eligibility
requirements provided in Article 5; (b) increase the total number
of Shares (except as provided in Section 4.3) which may be
granted under the Plan, as provided in Section 4.1; (c) extend
the term of the Plan; or (d) amend the Plan in any other manner
which the Board, in its discretion, determines should become
effective only if approved by the shareholders even though such
shareholder approval is not expressly required by the Plan or by
law. No amendment which requires shareholder approval in order
for the Plan to continue to comply with Rule 16b-3 under the
Exchange Act, including any successor to such Rule, shall be
effective unless such amendment shall be approved by the
requisite vote of shareholders.
12.2 Awards Previously Granted. No termination, amendment
or modification of the Plan shall adversely affect in any
material way any Award previously granted under the Plan, without
the written consent of the Participant holding such Award. The
Committee shall, with the written consent of the Participant
holding such Award, have the authority to cancel Awards
outstanding and grant replacement Awards therefor.
12.3 Compliance With Code Section 162(m). At all times when
the Committee determines that compliance with Code Section 162(m)
is desired, all Awards granted under this Plan shall comply with
the requirements of Code Section 162(m). In addition, in the
event that changes are made to Code Section 162(m) to permit
greater flexibility with respect to any Award or Awards under the
Plan, the Committee may, subject to this Article 12, make any
adjustments it deem appropriate.
ARTICLE 13. WITHHOLDING
13.1 Tax Withholding. The Company shall have the power and
the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal,
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state and local taxes (including the Participant's FICA
obligation) required by law to be withheld with respect to any
taxable event arising in connection with an Award under this
Plan.
13.2 Share Withholding. With respect to withholding
required upon the exercise of Options, or upon any other taxable
event arising as a result of Awards granted hereunder which are
to be paid in the form of Shares, Participants may elect, subject
to the approval of the Committee, to satisfy the withholding
requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could
be imposed on the transaction. All elections shall be
irrevocable, made in writing, signed by the Participant, and
elections by Insiders shall additionally comply with all legal
requirements applicable to Share transactions by such
Participants.
ARTICLE 14. INDEMNIFICATION
Each person who is or shall have been a member of the
Committee, or the Board, shall be indemnified and held harmless
by the Company against and from any loss, cost, liability or
expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit
or proceeding to which he or she may be a party or in which he or
she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid
by him or her in settlement thereof, with the Company's approval,
or paid by him in satisfaction of any judgment in any such
action, suit or proceeding against him, provided he shall give
the Company an opportunity, at its own expense, to handle and
defend the same before he undertakes to handle and defend it on
his own behalf. The foregoing right of indemnification shall be
in addition to any other rights of indemnification to which such
persons may be entitled under the Company's Articles of
Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them
harmless.
ARTICLE 15. SUCCESSORS
All obligations of the Company under the Plan, with respect
to Awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation or
otherwise, of all or substantially all of the business and/or
assets of the Company.
ARTICLE 16. LEGAL CONSTRUCTION
16.1 Gender and Number. Except where otherwise indicated by
the context, any masculine term used herein also shall include
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the feminine; the plural shall include the singular and the
singular shall include the plural.
16.2 Severability. In the event any provision of the Plan
shall be held illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining parts of the Plan,
and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.
16.3 Requirements of Law. The granting of Awards and the
issuance of Shares under the Plan shall be subject to all
applicable laws, rules and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may
be required.
16.4 Regulatory Approvals and Listing. The Company shall
not be required to issue any certificate or certificates for
Shares under the Plan prior to (i) obtaining any approval from
any governmental agency which the Company shall, in its
discretion, determine to be necessary or advisable, (ii) the
admission of such shares to listing on any national securities
exchange or Nasdaq on which the Company's Shares may be listed,
and (iii) the completion of any registration or other
qualification of such Shares under any state or federal law or
ruling or regulations of any governmental body which the Company
shall, in its sole discretion, determine to be necessary or
advisable.
Notwithstanding any other provision set forth in the Plan,
if required by the then-current Section 16 of the Exchange Act,
any "derivative security" or "equity security" offered pursuant
to the Plan to any Insider may not be sold or transferred for at
least six (6) months after the date of grant of such Award. The
terms "equity security" and "derivative security" shall have the
meanings ascribed to them in the then-current Rule 16(a) under
the Exchange Act.
16.5 Securities Law Compliance. With respect to Insiders,
transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provisions of the Plan or action
by the Committee fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the
Committee.
16.6 Governing Law. To the extent not preempted by Federal
law, the Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of
Georgia.
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