Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
AMERICAN MEDICAL ALERT CORP.
(Exact name of registrant as specified in its charter)
New York 11-2571221
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3265 Lawson Boulevard, Oceanside, New York 11572
(Address of Principal Executive Offices) (Zip Code)
AMERICAN MEDICAL ALERT CORP.
1997 STOCK OPTION PLAN
(Full title of the plan)
Mr. Corey Aronin, Chief Financial Officer
American Medical Alert Corporation
3265 Lawson Boulevard
Oceanside, New York 11572
(Name and address of agent for service)
(516) 536-5850
(Telephone number, including area code, of agent for service)
with a copy to:
James Alterbaum, Esq.
Parker Chapin Flattau & Klimpl, LLP
1211 Avenue of the Americas
New York, New York 10036
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE PRICE FEE
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 750,000 shares $3.4375(2) $2,578,125(2) $760.55
value $.01 per share
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</TABLE>
(1) Pursuant to Rule 416(b), there shall also be deemed covered hereby all
additional securities resulting from anti-dilution adjustments under the
1997 Stock Option Plan.
(2) Estimated solely for the purpose of calculating the registration fee on
the basis of, pursuant to Rule 457(c), the average of the high and low
sales prices per share of the registrant's Common Stock on the National
Association of Securities Dealers Automated Quotation System on May 8,
1998.
<PAGE>
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Company with the
Securities and Exchange Commission pursuant to Section 13(a) of the Securities
Exchange Act of 1934 (the "1934 Act") are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB, as amended, for
the fiscal year ended December 31, 1997; and
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on December 8, 1983,
including any amendment or report filed for the purpose of updating such
descriptions.
All documents filed subsequent to the date of this Registration
Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act 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 by reference in this
Registration Statement and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated herein by reference 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 other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Section 722 of the New York Business Corporation Law ("NYBCL")
permits, in general, a New York corporation to indemnify any person made, or
threatened to be made, a party to an action or proceeding by reason of the fact
that he or she was a director or officer of the corporation, or served another
entity in any capacity at the request of the corporation, against any judgment,
fines, amounts paid in settlement and reasonable expenses, including attorneys'
fees actually and necessarily incurred as a result of such action or proceeding,
or any appeal therein, if such person acted in good faith, for a purpose he or
she reasonably believed to be in, or, in the case of service for
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another entity, not opposed to, the best interests of the corporation and, in
criminal actions or proceedings, in addition had no reasonable cause to believe
that his or her conduct was unlawful. Section 723 of the NYBCL permits the
corporation to pay in advance of a final disposition of such action or
proceeding the expenses incurred in defending such action or proceeding upon
receipt of an undertaking by or on behalf of the director or officer to repay
such amount as, and to the extent, required by statute. Section 721 of the NYBCL
provides that indemnification and advancement of expense provisions contained in
the NYBCL shall not be deemed exclusive of any rights to which a director or
officer seeking indemnification or advancement of expenses may be entitled,
whether contained in the certificate of incorporation or the by-laws of the
corporation or, when authorized by such certificate of incorporation or by-laws,
(i) a resolution of shareholders, (ii) a resolution of directors or (iii) an
agreement, provided no indemnification may be made on behalf of any director or
officer if a judgment or other final adjudication adverse to the director or
officer establishes that his or her acts were committed in bad faith or were the
result of active or deliberate dishonesty and were material to the cause of
action so adjudicated, or that he or she personally gained in fact a financial
profit or other advantage to which he or she was not legally entitled.
(b) Article Seventh of the Company's Certificate of Incorporation
sets forth as follows:
"Except as may otherwise be specifically provided in this
Certificate of Incorporation, no provision of this Certificate of
Incorporation is intended by the corporation to be construed as
limiting, prohibiting, denying or abrogating any of the general or
specific powers or rights conferred under the Business Corporation
Law upon the corporation, upon its shareholders, bondholders, and
security holders, and upon its directors, officers, and other
corporate personnel, including, in particular, the power of the
corporation to furnish indemnification to directors and officers in
the capacities defined and prescribed by the Business Corporation
Law and the defined and prescribed rights of said persons to
indemnification as the same are conferred by the Business
Corporation Law."
(c) Article VI of the Company's Amended and Restated By-Laws sets
forth as follows:
"Each person who is made or threatened to be made a party in any
civil or criminal action or proceeding by reason of the fact that he
or she, his or her testator or intestate is or was a director or
officer of the Company or serves or served any other entity in any
capacity at the request of the Company shall be indemnified by the
Company to the maximum extent permitted by statute as amended from
time to time."
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
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ITEM 8. EXHIBITS.
Exhibit
Number Description
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4.01 Certificate of Incorporation of the Company, as amended.
(Incorporated by reference to Exhibits 3(a)(1) and 3(a)(2) to
the Company's Form 10-KSB, as amended, for the year ended
December 31, 1997 and Exhibit 3(a) to the Company's Form S-1
Registration Statement under the Securities Act of 1933, filed
on September 30, 1983, Commission File No. 2-86862).
4.02 Amended and Restated By-Laws of the Company. (Incorporated by
reference to Exhibit 4(b) to the Company's Form S-3
Registration Statement under the Securities Act of 1933,
Commission File No. 333-6159).
5.01* Opinion of Parker Chapin Flattau & Klimpl, LLP, counsel to the
registrant, as to the legality of the Common Stock being
offered.
23.1* Consent of Margolin, Winer & Evens LLP
23.2* Consent of Parker Chapin Flattau & Klimpl, LLP (contained in
Exhibit 5.01).
24.1* Powers of Attorney of certain officers and directors of the
registrant (included in signature page).
99.1* 1997 Stock Option Plan effective as of April 4, 1997.
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* Filed herewith.
ITEM 9. UNDERTAKINGS.
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 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 the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
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(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be
filed to include financial statements and information required by Section
10(a)(3) of the Act or Rule 3-19 of this chapter if such financial statements
and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Form F-3.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against 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
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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.
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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 County of Nassau, State of New York, on the 11th day of May,
1998.
AMERICAN MEDICAL ALERT CORP.
By: /S/ HOWARD M. SIEGEL
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Howard M. Siegel
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints Howard M. Siegel his true and lawful attorney-in-fact
and agent, for him and in his name, place and stead, in any and all capacities,
with full power to act alone, to sign any and all amendments to this
Registration Statement, and to file each such amendment to this Registration
Statement with all exhibits thereto, and any and all documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorney-in-fact and agent full power and authority to do and perform any
and all acts and things required and necessary to be done, as fully and to all
intents and purposes as, he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/S/ HOWARD M. SIEGEL Chairman of the Board, May 11, 1998
- -------------------------- President, Chief Executive
Howard M. Siegel Officer and Director
(Principal Executive Officer)
/S/ COREY M. ARONIN Chief Financial Officer May 11, 1998
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Corey M. Aronin
/S/ PETER BREITSTONE Director May 11, 1998
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Peter Breitstone
/S/ LEONARD HERZ Director May 11, 1998
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Leonard Herz
Director May 11, 1998
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Myron Segal, M.D.
May 11, 1998
American Medical Alert Corp.
3265 Lawson Boulevard
Oceanside, New York 11572
Gentlemen:
We have acted as counsel to American Medical Alert Corp. (the
"Registrant") in connection with its Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission relating to 750,000 shares of Common Stock, par value $.01 per share,
of the Registrant (the "Shares"), subject to the Registrant's 1997 Stock Option
Plan (the "Plan").
In connection with the foregoing, we have examined, among other
things, the Registration Statement and originals or copies, satisfactory to us,
of all such corporate records and of all such agreements, certificates and other
documents as we have deemed relevant and necessary as a basis for the opinion
hereinafter expressed. In such examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity with the original documents of documents submitted to us as
copies. As to any facts material to such opinion, we have, to the extent that
relevant facts were not independently established by us, relied on certificates
of public officials and certificates, oaths and declarations of officers or
other representatives of the Registrant.
Based upon and subject to the foregoing, we are of the opinion that
the Shares to be issued pursuant to the exercise of options granted or to be
granted under the Plan will be, when issued pursuant to the provisions of the
Plan, validly issued, fully paid and non-assessable.
We hereby consent to the filing of a copy of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
/s/ Parker Chapin Flattau & Klimpl, LLP
PARKER CHAPIN FLATTAU & KLIMPL, LLP
Independent Auditors' Consent
We consent to the incorporation by reference in the Registration Statement of
American Medical Alert Corp. on Form S-8 of our report dated February 20, 1998
appearing in the Annual Report on Form 10-KSB of American Medical Alert Corp.
for the year ended December 31, 1997.
/S/ MARGOLIN, WINER & EVENS LLP
Margolin, Winer & Evens LLP
Garden City, New York
May 11, 1998
1997 STOCK OPTION PLAN
of
AMERICAN MEDICAL ALERT CORP.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is designed to
provide an incentive to key employees (including directors and officers
who are key employees) and to consultants and directors who are not
employees of American Medical Alert Corp., a New York corporation (the
"Company"), or any of its Subsidiaries (as such term is defined in
Paragraph 19), and to offer an additional inducement in obtaining the
services of such individuals. The Plan provides for the grant of
"incentive stock options" ("ISOs") within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and
nonqualified stock options which do not qualify as ISOs ("NQSOs"). The
Company makes no representation or warranty, express or implied, as to the
qualification of any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12, the
aggregate number of shares of Common Stock, $.01 par value per share, of
the Company ("Common Stock") for which options may be granted under the
Plan shall not exceed 750,000. Such shares of Common Stock may, in the
discretion of the Board of Directors of the Company (the "Board of
Directors"), consist either in whole or in part of authorized but unissued
shares of Common Stock or shares of Common Stock held in the treasury of
the Company. Subject to the provisions of Paragraph 13, any shares of
Common Stock subject to an option which for any reason expires, is
canceled or is terminated unexercised or which ceases for any reason to be
exercisable shall again become available for the granting of options under
the Plan. The Company shall at all times during the term of the Plan
reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board of
Directors or a committee of the Board of Directors (the "Committee")
consisting of not less than three directors, each of whom shall be a
"non-employee director" within the meaning of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (as the same may be in
effect and interpreted from time to time, "Rule 16b-3"). Unless otherwise
provided in the By-Laws of the Company or by resolution of the Board of
Directors, a majority of the members of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting
at which a quorum is present, and any acts approved in writing by all
members without a meeting, shall be the acts of the Committee.
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Subject to the express provisions of the Plan, the Committee shall have
the authority, in its sole discretion, to determine the persons who shall
be granted options; the times when they shall receive options; whether an
option granted to an employee shall be an ISO or a NQSO; the number of
shares of Common Stock to be subject to each option; the term of each
option; the date each option shall become exercisable; whether an option
shall be exercisable in whole or in installments, and, if in installments,
the number of shares of Common Stock to be subject to each installment;
whether the installments shall be cumulative; the date each installment
shall become exercisable and the term of each installment; whether to
accelerate the date of exercise of any option or installment; whether
shares of Common Stock may be issued upon the exercise of an option as
partly paid, and, if so, the dates when future installments of the
exercise price shall become due and the amounts of such installments; the
exercise price of each option; the form of payment of the exercise price;
the fair market value of a share of Common Stock; whether and under what
conditions to restrict the sale or other disposition of the shares of
Common Stock acquired upon the exercise of an option and, if so, whether
and under what conditions to waive any such restriction; whether and under
what conditions to subject the exercise of all or any portion of an option
to the fulfillment of certain restrictions or contingencies as specified
in the contract referred to in Paragraph 11 (the "Contract"), including
without limitation, restrictions or contingencies relating to entering
into a covenant not to compete with the Company, its Parent (as such term
is defined in Paragraph 19) and Subsidiaries, to financial objectives for
the Company, any of its Subsidiaries, a division, a product line or other
category, and/or the period of continued employment of the optionee with
the Company or any of its Subsidiaries, and to determine whether such
restrictions or contingencies have been met; the amount, if any, necessary
to satisfy the obligation of the Company, any of its Subsidiaries or a
Parent to withhold taxes or other amounts; whether an optionee is Disabled
(as such term is defined in Paragraph 19); with the consent of the
optionee, to cancel or modify an option, PROVIDED that the modified
provision is permitted to be included in an option granted under the Plan
on the date of the modification, and PROVIDED FURTHER, that in the case of
a modification (within the meaning of Section 424(h) of the Code) of an
ISO, such option as modified would be permitted to be granted on the date
of such modification under the terms of the Plan; to construe the
respective Contracts and the Plan; to prescribe, amend and rescind rules
and regulations relating to the Plan; to approve any provision of the Plan
or any option granted under the Plan or any amendment to either which,
under Rule 16b-3, requires the approval of the Board of Directors, a
committee of non-employee directors or the shareholders to be exempt
(unless otherwise specifically provided herein); and to make all other
determinations necessary or advisable for administering the Plan. Any
controversy or claim arising out of or relating to the Plan, any option
granted under the Plan or any Contract shall be determined unilaterally by
the Committee in its sole discretion. The determinations of the Committee
on the matters referred to in this Paragraph 3 shall be conclusive and
binding on the parties.
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No member or former member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any option
granted hereunder. In addition, each member and former member of the
Committee shall be indemnified and held harmless by the Company from and
against any liability, claim for damages and expenses in connection
therewith by reason of any action or failure to act under or in connection
with the Plan, any option granted hereunder or any Contract to the fullest
extent permitted with respect to directors under the Company's certificate
of incorporation, By-Laws and applicable law.
4. ELIGIBILITY. The Committee may from time to time, consistent with the
purposes of the Plan, grant options to such key employees (including
officers and directors who are key employees) of, or consultants to, the
Company or any of its Subsidiaries, and to such directors of the Company
who, at the time of grant, are not common law employees of the Company or
of any of its Subsidiaries, as the Committee may determine in its sole
discretion. Such options granted shall cover such number of shares of
Common Stock as the Committee may determine in its sole discretion;
PROVIDED, HOWEVER, that the maximum number of shares subject to options
that may be granted to any employee during any calendar year under the
Plan shall be 250,000 shares; and PROVIDED FURTHER that the aggregate
market value (determined at the time the option is granted) of the shares
of Common Stock for which any eligible employee may be granted ISOs under
the Plan or any other plan of the Company, or of a Parent or a Subsidiary
of the Company, which are exercisable for the first time by such optionee
during any calendar year shall not exceed $100,000. The $100,000 ISO
limitation shall be applied by taking ISOs into account in the order in
which they were granted. Any option (or the portion thereof) granted in
excess of such ISO limitation amount shall be treated as a NQSO to the
extent of such excess.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock under
each option shall be determined by the Committee in its sole discretion;
PROVIDED, HOWEVER, that the exercise price of an ISO shall not be less
than the fair market value of the Common Stock subject to such option on
the date of grant; and PROVIDED FURTHER that if, at the time an ISO is
granted, the optionee owns (or is deemed to own under Section 424(d) of
the Code) stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company, of any of its Subsidiaries
or of a Parent, the exercise price of such ISO shall not be less than 110%
of the fair market value of the Common Stock subject to such ISO on the
date of grant.
The fair market value of a share of Common Stock on any day shall be (a)
if the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per share of
the Common Stock on such day as reported by such exchange or on a
consolidated tape reflecting transactions on such exchange, (b) if the
principal market for the Common Stock is not a national securities
exchange and the Common Stock is quoted on the Nasdaq
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Stock Market ("Nasdaq"), and (i) if actual sales price information is
available with respect to the Common Stock, the average of the highest and
lowest sales prices per share of the Common Stock on such day on Nasdaq,
or (ii) if such information is not available, the average of the highest
bid and the lowest asked prices per share for the Common Stock on such day
on Nasdaq, or (c) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is not quoted on Nasdaq,
the average of the highest bid and lowest asked prices per share for the
Common Stock on such day as reported on the OTC Bulletin Board Service or
by National Quotation Bureau, Incorporated or a comparable service;
PROVIDED that if clauses (a), (b) and (c) of this Paragraph are all
inapplicable, or if no trades have been made or no quotes are available
for such day, the fair market value of a share of Common Stock shall be
determined by the Committee by any method consistent with applicable
regulations adopted by the Treasury Department relating to stock options.
6. TERM. Each option granted pursuant to the Plan shall be for such term as
is established by the Committee, in its sole discretion, at or before the
time such option is granted; PROVIDED, HOWEVER, that the term of each ISO
granted pursuant to the Plan shall be for a period not exceeding 10 years
from the date of grant thereof, and PROVIDED FURTHER that if, at the time
an ISO is granted, the optionee owns (or is deemed to own under Section
424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, of any of its
Subsidiaries or of a Parent, the term of the ISO shall be for a period not
exceeding five years from the date of grant. Options shall be subject to
earlier termination as hereinafter provided.
7. EXERCISE. An option (or any installment thereof), to the extent then
exercisable, shall be exercised by giving written notice to the Company at
its principal office stating which option is being exercised, specifying
the number of shares of Common Stock as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise
price therefor (or the amount due on exercise if the applicable Contract
permits installment payments) (a) in cash and/or by certified check or (b)
with the authorization of the Committee, with cash, a certified check
and/or with previously acquired shares of Common Stock, having an
aggregate fair market value (determined in accordance with Paragraph 5),
on the date of exercise, equal to the aggregate exercise price of all
options being exercised; PROVIDED, HOWEVER, that in no case may shares be
tendered if such tender would require the Company to incur a charge
against its earnings for financial accounting purposes.
The Committee may, in its sole discretion, permit payment of the exercise
price of an option by delivery by the optionee of a properly executed
notice, together with a copy of his irrevocable instructions to a broker
acceptable to the Committee to deliver promptly to the Company the amount
of sale or loan proceeds sufficient to pay such exercise price. In
connection therewith, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
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An optionee shall not have the rights of a shareholder with respect to
such shares of Common Stock to be received upon the exercise of an option
until the date of issuance of a stock certificate to him for such shares
or, in the case of uncertificated shares, until the date an entry is made
on the books of the Company's transfer agent representing such shares;
PROVIDED, HOWEVER, that until such stock certificate is issued or until
such book entry is made, any optionee using previously acquired shares of
Common Stock in payment of an option exercise price shall continue to have
the rights of a shareholder with respect to such previously acquired
shares.
In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be expressly provided
in the applicable Contract, any optionee whose employment or consulting
relationship with the Company (and its Parent and Subsidiaries) has
terminated for any reason other than the death or Disability of the
optionee may exercise any option granted to him as an employee or
consultant, to the extent exercisable on the date of such termination, at
any time within three months after the date of termination, but not
thereafter and in no event after the date the option would otherwise have
expired; PROVIDED, HOWEVER, that if such relationship is terminated either
(a) for cause, or (b) without the consent of the Company, such option
shall terminate immediately. Except as may otherwise be expressly provided
in the applicable Contract, options granted under the Plan to an employee
or consultant of the Company or any of its Subsidiaries shall not be
affected by any change in the status of the holder so long as he continues
to be an employee or a consultant of the Company, its Parent or any of the
Subsidiaries (regardless of a change in status from one to the other or
having been transferred from one corporation to another).
For the purposes of the Plan, an employment relationship shall be deemed
to exist between an individual and a corporation if, at the time of the
determination, the individual was an employee of such corporation for
purposes of Section 422(a) of the Code. As a result, an individual on
military, sick leave or other bona fide leave of absence shall continue to
be considered an employee for purposes of the Plan during such leave if
the period of the leave does not exceed 90 days, or, if longer, so long as
the individual's right to reemployment with the corporation, any of its
Subsidiaries or a Parent is guaranteed either by statute or by contract.
If the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such
leave.
Except as may otherwise be expressly provided in the applicable Contract,
an optionee whose directorship with the Company has terminated for any
reason other than his death or Disability may exercise the options granted
to him as a director who was not an employee of or consultant to the
Company or any of its
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Subsidiaries, to the extent exercisable on the date of such termination,
at any time within three months after the date of termination, but not
thereafter and in no event after the date the option would otherwise have
expired; PROVIDED, HOWEVER, that if his directorship is terminated for
cause, such option shall terminate immediately.
Nothing in the Plan or in any option granted under the Plan shall confer
on any person any right to continue in the employ or as a consultant of
the Company, its Parent or any of its Subsidiaries, or as a director of
the Company, or interfere in any way with any right of the Company, its
Parent or any of its Subsidiaries to terminate such relationship at any
time for any reason whatsoever without liability to the Company, its
Parent or any of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise be expressly
provided in the applicable Contract, if an optionee dies (a) while he is
employed by, or a consultant to, the Company, its Parent or any of its
Subsidiaries, (b) within three months after the termination of his
employment or consulting relationship with the Company, its Parent and its
Subsidiaries (unless such termination was for cause or without the consent
of the Company) or (c) within one year following the termination of such
employment or consulting relationship by reason of his Disability, the
options granted to him as an employee of, or consultant to, the Company or
any of its Subsidiaries, may be exercised, to the extent exercisable on
the date of his death, by his Legal Representative (as such term is
defined in Paragraph 19), at any time within one year after death, but not
thereafter and in no event after the date the option would otherwise have
expired. Except as may otherwise be expressly provided in the applicable
Contract, any optionee whose employment or consulting relationship with
the Company, its Parent and its Subsidiaries has terminated by reason of
his Disability may exercise such options, to the extent exercisable upon
the effective date of such termination, at any time within one year after
such date, but not thereafter and in no event after the date the option
would otherwise have expired.
Except as may otherwise be expressly provided in the applicable Contract,
if an optionee dies (a) while he is a director of the Company, (b) within
three months after the termination of his directorship with the Company
(unless such termination was for cause) or (c) within one year after the
termination of his directorship by reason of his Disability, the options
granted to him as a director who was not an employee of or consultant to
the Company or any of its Subsidiaries, may be exercised, to the extent
exercisable on the date of his death, by his Legal Representative at any
time within one year after death, but not thereafter and in no event after
the date the option would otherwise have expired. Except as may otherwise
be expressly provided in the applicable Contract, an optionee whose
directorship with the Company has terminated by reason of Disability, may
exercise such options, to the extent exercisable on the effective date of
such termination, at any time within one year after such date, but not
thereafter and in no event after the date the option would otherwise have
expired.
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10. COMPLIANCE WITH SECURITIES LAWS. It is a condition to the exercise of any
option that either (a) a Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of
Common Stock to be issued upon such exercise shall be effective and
current at the time of exercise, or (b) there is an exemption from
registration under the Securities Act for the issuance of the shares of
Common Stock upon such exercise. Nothing herein shall be construed as
requiring the Company to register shares subject to any option under the
Securities Act or to keep any Registration Statement effective or current.
The Committee may require, in its sole discretion, as a condition to the
grant or exercise of an option, that the optionee execute and deliver to
the Company his representations and warranties, in form, substance and
scope satisfactory to the Committee, which the Committee determines is
necessary or convenient to facilitate the perfection of an exemption from
the registration requirements of the Securities Act, applicable state
securities laws or other legal requirement, including without limitation,
that (a) the shares of Common Stock to be issued upon exercise of the
option are being acquired by the optionee for his own account, for
investment only and not with a view to the resale or distribution thereof,
and (b) any subsequent resale or distribution of shares of Common Stock by
such optionee will be made only pursuant to (i) a Registration Statement
under the Securities Act which is effective and current with respect to
the shares of Common Stock being sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption, the optionee, prior to any offer of sale or sale of such shares
of Common Stock, shall provide the Company with a favorable written
opinion of counsel satisfactory to the Company, in form, substance and
scope satisfactory to the Company, as to the applicability of such
exemption to the proposed sale or distribution.
In addition, if at any time the Committee shall determine that the listing
or qualification of the shares of Common Stock subject to such option on
any securities exchange, Nasdaq or under any applicable law, or that the
consent or approval of any governmental agency or regulatory body, is
necessary or desirable as a condition to, or in connection with, the
granting of an option or the issuance of shares of Common Stock
thereunder, such option may not be granted or exercised in whole or in
part, as the case may be, unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an appropriate
Contract which shall be duly executed by the Company and the optionee.
Such Contract shall contain such terms, provisions and conditions not
inconsistent herewith as may be determined by the Committee in its sole
discretion. The terms of each option and Contract need not be identical.
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12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, merger in
which the Company is the surviving corporation, spinoff, split-up,
combination or exchange of shares or the like which results in a change in
the number or kind of shares of Common Stock which is outstanding
immediately prior to such event, the aggregate number and kind of shares
subject to the Plan, the aggregate number and kind of shares subject to
each outstanding option and the exercise price thereof, and the maximum
number of shares subject to options that may be granted to any employee in
any calendar year, shall be appropriately adjusted by the Board of
Directors, whose determination shall be conclusive and binding on all
parties thereto. Such adjustment may provide for the elimination of
fractional shares that might otherwise be subject to options without
payment therefor.
In the event of (a) the liquidation or dissolution of the Company, (b) a
merger in which the Company is not the surviving corporation or a
consolidation, or (c) any transaction (or series of related transactions)
in which (i) more than 50% of the outstanding Common Stock is transferred
or exchanged for other consideration or (ii) shares of Common Stock in
excess of the number of shares of Common Stock outstanding immediately
preceding the transaction are issued (other than to shareholders of the
Company with respect to their shares of stock in the Company), any
outstanding options shall terminate upon the earliest of any such event,
unless other provision is made therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the Board
of Directors on April 4, 1997. No option may be granted under the Plan
after April 3, 2007. The Board of Directors, without further approval of
the Company's shareholders, may at any time suspend or terminate the Plan,
in whole or in part, or amend it from time to time in such respects as it
may deem advisable, including without limitation, in order that ISOs
granted hereunder meet the requirements for "incentive stock options"
under the Code, to comply with the provisions of Rule 16b-3 promulgated
the Exchange Act or Section 162(m) of the Code or any change in applicable
law or regulation, ruling or interpretation of any governmental agency or
regulatory body; PROVIDED, HOWEVER, that no amendment -------- -------
shall be effective without the requisite prior or subsequent shareholder
approval which would (a) except as contemplated in Paragraph 12, increase
the maximum number of shares of Common Stock for which options may be
granted under the Plan or change the maximum number of shares for which
options may be granted to employees in any calendar year, (b) change the
eligibility requirements for individuals entitled to receive options
hereunder or (c) make any change for which applicable law or any
governmental agency or regulatory body requires shareholder approval. No
termination, suspension or amendment of the Plan shall adversely affect
the rights of an optionee under any option granted under the Plan without
such optionee's consent. The power of the Committee to construe and
administer any option granted under the Plan prior to the termination or
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suspension of the Plan shall continue after such termination or during
such suspension.
14. NON TRANSFERABILITY OF OPTIONS. No option granted under the Plan shall be
transferable other than by will or the laws of descent and distribution,
and options may be exercised, during the lifetime of the optionee, only by
the optionee or his Legal Representatives. Except to the extent provided
above, options may not be assigned, transferred, pledged, hypothecated or
disposed of in any way (whether by operation of law or otherwise) and
shall not be subject to execution, attachment or similar process, and any
such attempted assignment, transfer, pledge, hypothecation or disposition
shall be null and void AB INITIO and of no force or effect.
15. WITHHOLDING TAXES. The Company, or its Subsidiary or Parent, as
applicable, may withhold (a) cash or (b) with the consent of the
Committee, shares of Common Stock to be issued upon exercise of an option
or a combination of cash and shares, having an aggregate fair market value
(determined in accordance with Paragraph 5) equal to the amount which the
Committee determines is necessary to satisfy the obligation of the
Company, a Subsidiary or Parent to withhold Federal, state and local
income taxes or other amounts incurred by reason of the grant, vesting,
exercise or disposition of an option or the disposition of the underlying
shares of Common Stock. Alternatively, the Company may require the
optionee to pay to the Company such amount, in cash, promptly upon demand.
The Company shall not be required to issue any shares of Common Stock
pursuant to any such option until all required payments have been made.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend or
legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it
determines, in its sole discretion, to be necessary or appropriate to (a)
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, applicable state securities laws or
other legal requirements, (b) implement the provisions of the Plan or any
agreement between the Company and the optionee with respect to such shares
of Common Stock, or (c) permit the Company to determine the occurrence of
a "disqualifying disposition," as described in Section 421(b) of the Code,
of the shares of Common Stock transferred upon the exercise of an ISO
granted under the Plan.
The Company shall pay all issuance taxes with respect to the issuance of
shares of Common Stock upon the exercise of an option granted under the
Plan, as well as all fees and expenses incurred by the Company in
connection with such issuance.
17. USE OF PROCEEDS. The cash proceeds to be received upon the exercise of an
option under the Plan shall be added to the general funds of the Company
and used
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for such corporate purposes as the Board of Directors may determine, in
its sole discretion.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the
Board of Directors may, without further approval by the shareholders,
substitute new options for prior options of a Constituent Corporation (as
such term is defined in Paragraph 19) or assume the prior options of such
Constituent Corporation.
19. DEFINITIONS.
a. "Constituent Corporation" shall mean any corporation
which engages with the Company, its Parent or any Subsidiary in a transaction to
which Section 424(a) of the Code applies (or would apply if the option assumed
or substituted were an ISO), or any Parent or any Subsidiary of such
corporation.
b. "Disability" shall mean a permanent and total disability
within the meaning of Section 22(e)(3) of the Code.
c. "Legal Representative" shall mean the executor,
administrator or other person who at the time is entitled by law to exercise the
rights of a deceased or incapacitated optionee with respect to an option granted
under the Plan.
d. "Parent" shall have the same definition as "parent
corporation" in Section 424(e) of the Code.
e. "Subsidiary" shall have the same definition as
"subsidiary corporation" in Section 424(f) of the Code.
20. GOVERNING LAW. The Plan, such options as may be granted hereunder, the
Contracts and all related matters shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to
conflict of law provisions that would defer to the substantive laws of
another jurisdiction.
Neither the Plan nor any Contract shall be construed or interpreted with
any presumption against the Company by reason of the Company causing the
Plan or Contract to be drafted. Whenever from the context it appears
appropriate, any term stated in either the singular or plural shall
include the singular and plural, and any term stated in the masculine,
feminine or neuter gender shall include the masculine, feminine and
neuter.
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21. PARTIAL INVALIDITY. The invalidity, illegality or unenforceability of any
provision in the Plan, any option or Contract shall not affect the
validity, legality or enforceability of any other provision, all of which
shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
22. SHAREHOLDER APPROVAL. The Plan shall be subject to approval by a majority
of the votes of all outstanding shares entitled to vote hereon at the next
duly held meeting of the Company's shareholders at which a quorum is
present. No options granted hereunder may be exercised prior to such
approval, PROVIDED that the date of grant of any option shall be
determined as if the Plan had not been subject to such approval.
Notwithstanding the foregoing, if the Plan is not approved by a vote of
the shareholders of the Company on or before March 25, 1998, the Plan and
any options granted hereunder shall terminate.
