<PAGE> 1
As filed with the Securities and Exchange Commission on June 10, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
ATRION CORPORATION
(Exact name of Registrant, as specified in its charter)
DELAWARE 63-0821819
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
ONE ALLENTOWN PARKWAY
ALLEN, TEXAS 75002
(972) 390-9800
(Address of principal executive offices)
------------------------------
ATRION CORPORATION
1997 STOCK INCENTIVE PLAN
(Full title of the plan)
------------------------------
JERRY A. HOWARD
ATRION CORPORATION
ONE ALLENTOWN PARKWAY
ALLEN, TEXAS 75002
(Name and address of agent for service)
(972) 390-9800
(Telephone number, including area code, of agent for service)
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) Per Share Price(2) Fee(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 500,000 shares (2) $5,736,004 $1,692
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents shares issuable under the Atrion Corporation 1997 Stock
Incentive Plan (the "Plan") and shares issuable upon the exercise of
options previously granted or available for grant under the Plan. In
addition to the 500,000 shares reserved for issuance under the Plan,
the Registrant hereby includes such indeterminate number of additional
shares as may be issued as the result of adjustments required by
certain antidilution provisions, in accordance with Rule 416(a) of the
Securities and Exchange Commission (the "Commission").
(2) The registration fee has been computed in accordance with Rule
457(h)(1) of the Commission, based upon, in the case of 255,900 shares
issuable upon exercise of options previously granted, the exercise
price of such options and, in the case of 244,100 shares issuable
pursuant to the Plan and issuable upon the exercise of options
available for grant under the Plan, the average of the high and low
prices for common stock of the Registrant on June 9, 1998 as reported
on The Nasdaq Stock Market.
Page 1 of 55 pages
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Atrion Corporation (the "Registrant") was formed in 1996 as a
wholly-owned subsidiary of ATRION Corporation, an Alabama corporation (the
"Predecessor Corporation"), as part of the Predecessor Corporation's plan to
reincorporate in Delaware. The proposal to approve such reincorporation was
approved at a special meeting of the shareholders of the Predecessor Corporation
on February 21, 1997 and the reincorporation was completed on February 25, 1997
through the merger of the Predecessor Corporation with and into the Registrant,
with the Registrant continuing as the surviving corporation and the successor to
the Predecessor Corporation. Accordingly, all references in this Registration
Statement to the Registrant and to documents filed with the Commission by the
Registrant prior to February 25, 1997 shall mean the Predecessor Corporation and
documents filed with the Commission by the Predecessor Corporation.
The following documents filed by the Registrant pursuant to the
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") are
incorporated by reference into this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997, filed on March 31, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998, filed on May 15, 1998;
(c) The Registrant's Current Report on Form 8-K filed on February 17,
1998, as amended by Form 8-K/A filed April 15, 1998; and
(d) The description of securities contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission under the Exchange
Act on February 15, 1990.
All documents subsequently filed by the Registrant pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment indicating that all securities offered by this
Registration Statement have been sold or that deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference into this
Registration Statement and to be part thereof from the date of filing of such
documents.
Any statement made in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which is also
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Page 2 of 55 pages
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article XI of the Registrant's Certificate of Incorporation contains
certain provisions permitted under the Delaware General Corporation Law relating
to the liability of directors. These provisions eliminate a director's liability
for monetary damages for a breach of fiduciary duty, except in certain
circumstances involving wrongful acts such as the breach of a director's duty of
loyalty or acts or omissions involving intentional misconduct or a knowing
violation of law.
The Delaware General Corporation Law provides that a director or
officer of a corporation (i) shall be indemnified by the corporation for all
expenses of litigation or other legal proceedings when he is successful on the
merits, (ii) may be indemnified by the corporation for the expenses, judgments,
fines and amounts paid in settlement of such litigation (other than a derivative
suit) even if he is not successful on the merits if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation (and, in the case of a criminal proceeding, had no reason to
believe his conduct was unlawful), and (iii) may be indemnified by the
corporation for expenses of a derivative suit (a suit by a stockholder alleging
a breach by a director or officer of a duty owed to the corporation), even if he
is not successful on the merits, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, provided that no such indemnification may be made in accordance
with this clause (iii) if the director or officer is adjudged liable to the
corporation, unless a court determines that, despite such adjudication but in
view of all of the circumstances, he is entitled to indemnification of such
expenses. The indemnification described in clauses (ii) and (iii) above shall be
made upon order by a court or a determination by (a) a majority of disinterested
directors, (b) if there are no such directors or if such directors so direct, by
independent legal counsel in a written opinion or (c) the stockholders that
indemnification is proper because the applicable standard of conduct is met.
Expenses incurred by a director or officer in defending an action may be
advanced by the corporation prior to the final disposition of such action upon
receipt of an undertaking by such director or officer to repay such expenses if
it is ultimately determined that he is not entitled to be indemnified in
connection with the proceeding to which the expenses relate. The Registrant's
Bylaws provides that directors and officers are to be indemnified to the maximum
extent permitted by Delaware law.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
4.1 Certificate of Incorporation of Atrion
Corporation (incorporated herein by
reference to Appendix B to the Registrant's
definitive Proxy Statement filed January 10,
1997)(1)
4.2 Bylaws of Atrion Corporation (incorporated
herein by reference to Appendix C to the
Registrant's definitive Proxy Statement
filed January 10, 1997)(1)
4.3 Rights Agreement, dated as of February 1,
1990, between AlaTenn Resources, Inc. and
American Stock Transfer &
</TABLE>
Page 3 of 55 pages
<PAGE> 4
<TABLE>
<S> <C>
Trust Company, which includes the form of
Rights Certificate as Exhibit A and the
Summary of Rights to Purchase Common Shares
as Exhibit B (incorporated herein by
reference to Exhibit 1 to the Registration
Statement on Form 8-A filed February 15,
1990)(1)
4.4(a) Atrion Corporation 1997 Stock Incentive Plan
(incorporated herein by reference to Exhibit
10j to the Registrant's Annual Report on
Form 10-K for the year ended December 31,
1997, filed on March 31, 1998) (1)(3)
4.4(b) Atrion Corporation 1997 Stock Incentive
Plan, as amended(2)(3)
4.5 Form of Award Agreement for Incentive Stock
Option(2)(3)
4.6 Form of Award Agreement for Nonqualified
Stock Option for Key Employee(2)(3)
4.7 Form of Award Agreement for Nonqualified
Stock Option for Director(2)(3)
4.8 Form of Award Agreement for Restricted Stock
(2)(3)
5 Opinion of Berkowitz, Lefkovits, Isom &
Kushner, A Professional Corporation(2)
23.1 Consent of Berkowitz, Lefkovits, Isom &
Kushner, A Professional Corporation
(contained in Exhibit 5)(2)
23.2 Consent of Arthur Andersen LLP(2)
</TABLE>
- ------------------------------
(1) Incorporated herein by reference as indicated.
(2) Filed herewith.
(3) Management contract or compensatory plan or arrangement.
Page 4 of 55 pages
<PAGE> 5
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10
(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (i) and (ii) above shall not apply if the
information required to be included in a post-effective amendment by such
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment involving a
fundamental change in the information set forth in this 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;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering;
(b) 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 this 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; and
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of
Page 5 of 55 pages
<PAGE> 6
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.
Page 6 of 55 pages
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Allen, State of Texas on June 10, 1998.
ATRION CORPORATION
By: /s/ Jerry A. Howard
------------------------------
Jerry A. Howard
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---- ----- ----
<S> <C> <C>
/s/ Jerry A. Howard President, Chief Executive June 10, 1998
- ---------------------------------- Officer and Director
Jerry A. Howard (PRINCIPAL EXECUTIVE OFFICER)
/s/ Jeffery Strickland Vice President and Chief Financial June 10, 1998
- ----------------------------------- Officer, Secretary and Treasurer
Jeffery Strickland (PRINCIPAL FINANCIAL AND ACCOUNTING
OFFICER)
/s/ Emile A. Battat Chairman of the Board and Director June 10, 1998
- -----------------------------------
Emile A. Battat
</TABLE>
Page 7 of 55 pages
<PAGE> 8
<TABLE>
<S> <C> <C>
/s/ Richard O. Jacobson Director June 10, 1998
- ---------------------------------
Richard O. Jacobson
/s/ John H. P. Maley Director June 10, 1998
- ---------------------------------
John H. P. Maley
/s/ Jerome J. McGrath Director June 10, 1998
- ---------------------------------
Jerome J. McGrath
/s/ Hugh J. Morgan, Jr. Director June 10, 1998
- ---------------------------------
Hugh J. Morgan, Jr.
/s/ J. Kenneth Smith Director June 10, 1998
- ----------------------------------
J. Kenneth Smith
/s/ Roger F. Stebbing Director June 10, 1998
- ---------------------------------
Roger F. Stebbing
/s/ John P. Stupp, Jr. Director June 10, 1998
- -----------------------------------
John P. Stupp, Jr.
</TABLE>
Page 8 of 55 pages
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description Page
- -------------- ----------- ----
<S> <C> <C>
4.4(b) Atrion Corporation 1997 Stock Incentive Plan, as
amended 10
4.5 Form of Award Agreement for Incentive Stock
Option 26
4.6 Form of Award Agreement for Nonqualified Stock
Option for Key Employee 33
4.7 Form of Award Agreement for Nonqualified Stock
Option for Director 40
4.8 Form of Award Agreement for Restricted Stock 46
5 Opinion of Berkowitz, Lefkovits, Isom & Kushner, A
Professional Corporation 52
23.1 Consent of Berkowitz, Lefkovits, Isom & Kushner, A
Professional Corporation (contained in Exhibit 5 filed
herewith)
23.2 Consent of Arthur Andersen LLP 54
</TABLE>
Page 9 of 55 pages
<PAGE> 1
EXHIBIT 4.4(b)
Page 10 of 55 pages
<PAGE> 2
ATRION CORPORATION
1997 STOCK INCENTIVE PLAN
AS AMENDED
ARTICLE 1 - ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. Atrion Corporation, a Delaware corporation (the
"Company"), hereby establishes an incentive compensation plan to be known as the
"Atrion Corporation 1997 Stock Incentive Plan" (the "Plan"), as set forth
herein. The Plan permits the Company to grant Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock and
Performance Shares, as defined herein.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the interests of
the Company by affording employees of the Company and the Subsidiaries and
directors of the Company an opportunity to acquire a proprietary interest in the
Company, and by providing such persons with long-term financial incentives 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
employees and directors upon whose judgment, interest and special effort the
successful conduct of its operation is largely dependent.
1.3 Duration of the Plan. The Plan shall be effective on March 12, 1997, the
date of its adoption by the Board of Directors (the "Effective Date"), subject
to approval by the Company's stockholders within twelve (12) months thereafter,
such approval to be by stockholder vote sufficient to satisfy the federal tax
requirements then in effect related to stockholder approval of stock option
plans providing for the grant of Incentive Stock Options and any requirement of
The Nasdaq Stock Market, 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 15 hereof, until all Shares subject to it shall have been purchased or
acquired according to the provisions hereof. However, in no event may an Award
of an ISO, as such terms are defined herein, be granted under the Plan after
March 12, 2007, although an ISO granted prior thereto may extend beyond such
date.
ARTICLE 2 - DEFINITIONS
Whenever used in the Plan, the following capitalized terms shall have the
meanings set forth below:
2.1 "Award" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock or Performance Shares.
2.2 "Award Agreement" means a written agreement between the Company and a
Participant setting forth the terms and provisions applicable to an Award
granted by the Company to such Participant hereunder.
2.3 "Board" or "Board of Directors" means the Board of Directors of the Company.
2.4 "Change in Control" means the occurrence of any of the following:
(a) when any "person," as such term is used in Section 13(d) or 14(d) of the
Exchange Act (other than the Company or any subsidiary or any employee benefit
plan of the Company or any subsidiary
Page 11 of 55 pages
<PAGE> 3
(including its trustee)), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 promulgated under the Exchange Act), directly or indirectly of
securities of the Company representing twenty-five percent (25%) or more of the
combined voting power of the Company's outstanding securities;
(b) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (i) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
parent entity) seventy-five percent (75%) or more of the combined voting power
of the voting securities of the Company or such surviving or parent entity
outstanding immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquired
twenty-five percent (25%) or more of the combined voting power of the Company's
then outstanding securities;
(c) when, during any period of two (2) consecutive years during the existence
of the Plan, the individuals who, at the beginning of such period, constitute
the Board cease, for any reason, to constitute at least a majority thereof,
unless the election or the nomination for election by the Company's stockholders
of each director first elected during such period was approved by a vote of at
least sixty-seven percent (67%) of the directors then still in office who were
directors of the Company at the beginning of any such period or whose election
or nomination for election was previously so approved; or
(d) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the assets of the Company which will result in the Company
having no significant continuing operations.
2.5 "Change in Control Price" means the highest price per share (a) paid for
Shares in any transaction reported on any exchange on which the Common Stock is
listed or on The Nasdaq Stock Market, as the case may be, or (b) paid or offered
in any transaction related to a Change in Control of the Company, in either
event at any time during the preceding sixty (60) day period, as determined by
the Committee.
2.6 "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and references thereto shall include the applicable Treasury regulations
thereunder.
2.7 "Committee" means the Compensation Committee of the Board.
2.8 "Common Stock" means the ten cent ($0.10) par value common stock of the
Company.
2.9 "Company" means Atrion Corporation, a Delaware corporation, and any
successor as provided in Article 18 hereof.
2.10 "Director" means any individual who is a member of the Board.
2.11 "Disability" with respect to a Participant means physical or mental
inability to perform the normal duties of his employment by the Company or
service as a Director as determined by a physician selected by the Committee
after an examination of such Participant; provided, however, that if such
participant fails or refuses to cooperate in such examination, the determination
of his Disability shall be made by the Committee in its sole discretion.
Page 12 of 55 pages
<PAGE> 4
2.12 "Earnings per Share" means the consolidated "earnings per share" of the
Common Stock determined in accordance with generally accepted accounting
principles.
2.13 "Effective Date" means the date described in Section 1.3 hereof.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
2.15 "Fair Market Value" as of any date means (i) with respect to an Award of an
ISO and an Award which is intended to qualify under the Performance-Based
Exception, the average of the high and low sales price of a Share on such date
as reported by (1) any national securities exchange on which the Shares are
actively traded or (2) The Nasdaq Stock Market or, if no Shares are traded on
such exchange or system on such date, then on the next preceding date on which
any Shares were traded on such exchange or system; and (ii) with respect to all
other Awards, the closing sales price of a Share on such date as reported by (1)
any national securities exchange on which the Shares are actively traded or (2)
The Nasdaq Stock Market or, if no Shares are traded on such exchange or system
on such date, then on the next preceding date on which any Shares were traded on
such exchange or system.
2.16 "Freestanding SAR" means an SAR granted independently of any Options.
2.17 "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted pursuant to Article 5 hereof which is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code.
2.18 "Insider" shall mean an individual who is required to file reports of
beneficial ownership and changes in beneficial ownership with the Securities and
Exchange Commission under Section 16 of the Exchange Act.
2.19 "Key Employee" means an employee of the Company or any Subsidiary who is
designated as a key employee by the Committee.
2.20 "Named Executive Officer" means, for a calendar year, a Participant who is
one of the group of "covered employees" for such calendar year within the
meaning of Section 162(m) of the Code.
2.21 "Non-Employee Director" means a Director who, at the time of determination
of such status, (i) is not an officer or otherwise employed by the Corporation
or a Subsidiary; (ii) does not receive compensation directly or indirectly from
the Corporation or a Subsidiary for services rendered as a consultant or in any
capacity other than as a Director, except for an amount for which disclosure
would not be required pursuant to Item 404(a) of Regulation S-K; (iii) does not
possess an interest in any other transactions for which disclosure would be
required pursuant to Item 404(a) of Regulation S-K; and (iv) is not engaged in a
business relationship for which disclosure would be required pursuant to Item
404(b) of Regulation S-K.
2.22 "Nonqualified Stock Option" or "NQSO" means an option to purchase Shares
granted pursuant to Article 5 or Article 10 hereof which is not intended to meet
the requirements of Section 422 of the Code.
2.23 "Option" means an Incentive Stock Option or a Nonqualified Stock Option.
Page 13 of 55 pages
<PAGE> 5
2.24 "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.
2.25 "Outside Director" means a Director who is not an employee of the Company
or any Subsidiary.
2.26 "Participant" means a Key Employee or an Outside Director who has been
granted an Award which is outstanding hereunder.
2.27 "Performance-Based Exception" means the performance-based exception, set
forth in Section 162(m)(4)(C) of the Code, from the deductibility limitations of
Section 162(m) of the Code.
2.28 "Performance Share" means an Award granted pursuant to Article 8 hereof.
2.29 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, at its discretion), and such Shares are subject to
a substantial risk of forfeiture, as provided in Article 7 hereof.
2.30 "Prior Plans" means the (i) Atrion Corporation 1990 Stock Option Plan and
(ii) Atrion Corporation 1994 Key Employee Stock Incentive Plan.
2.31 "Restricted Stock" means an Award granted pursuant to Article 7 hereof.
2.32 "Return on Assets" means the consolidated "return on average assets" of the
Company and its subsidiaries determined in accordance with generally accepted
accounting principles.
2.33 "Return on Equity" means the consolidated "return on average common
stockholders' equity" of the Company and its subsidiaries determined in
accordance with generally accepted accounting principles.
2.34 "Revenues" means the consolidated "revenues" of the Company and its
subsidiaries determined in accordance with generally accepted accounting
principles.
2.35 "Shares" means the shares of Common Stock of the Company.
2.36 "Stock Appreciation Right" or "SAR" means an Award granted to a Key
Employee alone or in tandem with a related Option pursuant to Article 6 hereof
which is designated as an SAR and which grants such Key Employee the right to
receive payment of an amount equal to the appreciation in the value of Shares.
2.37 "Subsidiary" means any corporation, partnership, joint venture, affiliate,
or other entity of which a majority of the outstanding voting stock or power is
beneficially owned, directly or indirectly, by the Company.
2.38 "Tandem SAR" means an SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
a Share under the related Option (and when a Share is purchased under the
Option, the Tandem SAR shall similarly be canceled).
2.39 "Total Stockholder Return" means the percentage change in the value of an
initial investment in
Page 14 of 55 pages
<PAGE> 6
the Common Stock assuming the reinvestment of all dividends paid on such shares.
ARTICLE 3 - ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee, all of the
members of which shall be Non-Employee Directors. Any action taken with respect
to Named Executive Officers for purposes of meeting the Performance-Based
Exception shall be taken by the Committee only if all of the members of the
Committee are "outside directors" within the meaning of Code Section 162(m),
subject to any applicable transition rules under Code Section 162(m). If all of
the members of the Committee are not "outside directors," such action shall be
taken by a subcommittee of the Committee of two (2) or more members, all of whom
are "outside directors."
3.2 Authority of the Committee. Except as limited by law, or by the Certificate
of Incorporation or Bylaws of the Company, and subject to the provisions hereof,
the Committee shall have full power to designate the Key Employees who shall
participate in the Plan; determine the sizes and types of Awards (other than
Options granted to Outside Directors pursuant to Article 10 hereof); determine
the terms and provisions of Awards in a manner consistent with the Plan (other
than Options granted to Outside Directors pursuant to Article 10 hereof);
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; determine whether Awards (other than Options granted to Outside
Directors pursuant to Article 10 hereof) will be granted singularly, in
combination or in tandem; accelerate or defer (with the consent of the Key
Employee) the vesting, exercise or payment of an Award (other than Options
granted to Outside Directors pursuant to Article 10 hereof) or the performance
period of an Award (other than Options granted to Outside Directors pursuant to
Article 10 hereof), but no deferral shall extend beyond the term of the Award;
to accept the surrender of Awards and the substitution of new or revised Awards
in exchange therefor (other than Options granted to Outside Directors pursuant
to Article 10 hereof); and (subject to the provisions of Article 15 hereof),
amend the terms and provisions of any outstanding Award to the extent such terms
and provisions are within the discretion of the Committee as provided in the
Plan. The Committee shall make all other decisions relating to the operation of
the Plan, and all other determinations which may be necessary or advisable for
the administration of the Plan.
3.3 Decisions Binding. All determinations and decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive and binding on
all persons, including the Company, its stockholders, Directors, employees,
Participants, and their estates and beneficiaries.
3.4 Administration of Article 10. Notwithstanding any other provision of the
Plan, the Board shall administer Article 10 of the Plan, and the Committee shall
exercise no discretion with respect to Article 10. In the Board's administration
of Article 10 and the Options granted to Outside Directors, the Board shall have
all of the authority and discretion otherwise granted to the Committee with
respect to the administration of the Plan.
ARTICLE 4 - SHARES SUBJECT TO THE PLAN
4.1 Number of Shares Available for Grants. Beginning on the Effective Date,
there is hereby reserved for grants of Awards under the Plan the number of
Shares equal to the sum of:
(a) Five Hundred Thousand (500,000) Shares; and
Page 15 of 55 pages
<PAGE> 7
(b) such number of Shares reserved for issuance under the Prior Plans in excess
of the number of Shares as to which options have been awarded thereunder as of
the Effective Date including any Shares subject to options previously granted
under the Prior Plans which hereafter shall lapse, expire, terminate or be
canceled.
The number of Shares reserved for grants of Awards under this Section 4.1 shall
be subject to adjustment as provided in Section 4.3 hereof.
4.2 Lapsed Awards. If any Award granted hereunder is canceled, terminates,
expires or lapses for any reason (with the exception of the termination of a
Tandem SAR upon exercise of the related Option, or the termination of a related
Option upon exercise of the corresponding Tandem SAR), any Shares subject to
such Award shall again be available for the grant of an Award under the Plan.
4.3 Adjustments in Authorized Shares. Subject to Article 14 hereof, in the event
of any change in corporate capitalization, such as a stock dividend or 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 Section 368 of the Code) or any partial or
complete liquidation of the Company, such adjustment shall be made in the number
and class of Shares reserved under the Plan, in the number, class and price of
Shares subject to outstanding Awards granted under the Plan, and in the
numerical limit set forth in the last sentence of Section 4.1 hereof, 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.
In the case of Options granted to Outside Directors pursuant to Article 10
hereof, the foregoing adjustments shall be made by the Board, and any such
adjustments also shall apply to the future grants provided by Article 10 hereof.
ARTICLE 5 - STOCK OPTIONS
5.1 Grant of Options. Subject to the terms and conditions of this Article, and
to such other terms and conditions as the Committee may determine, Options may
be granted to Key Employees in such number and at such times as shall be
determined by the Committee.
5.2 Award Agreement. Each Option granted shall be evidenced by an Award
Agreement that shall specify the Option Price, the term of the Option, the
number of Shares subject to such Option and such other provisions as the
Committee shall determine which are not inconsistent with the provisions of the
Plan. The Award Agreement also shall specify whether the Option is intended to
be an ISO or an NQSO.
5.3 Option Price. The Option Price of an ISO shall not be less than the Fair
Market Value of a Share on the date the Option is granted and the Option Price
of an NQSO shall be as determined by the Committee in its sole discretion.
5.4 Term 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.
5.5 Exercise of Options. The Shares subject to an Option may be purchased in
such installments and on such exercise dates as shall be set forth in the Award
Agreement. Any Shares not purchased on the applicable exercise date may be
purchased thereafter at any time prior to the final expiration of the
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Option. In no event shall any Option be exercised, in whole or in part, after
its expiration date.
5.6 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:
(a) in cash or its equivalent, or (b) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the
aggregate Option Price, or (c) by a combination of (a) and (b). The Committee
also may allow cashless exercise or payment 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.
5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on the transfer of Shares acquired pursuant to the exercise of an
Option granted under this Article as it may deem advisable including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which the Common Stock is then
listed or traded and under any state securities laws applicable to such Shares.
5.8 Termination of Employment. Each Award Agreement with respect to Options
granted hereunder shall set forth the extent to which the Participant shall have
the right to exercise the Options following termination of the Participant's
employment with the Company or its Subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement, need not be uniform among all Options issued
pursuant to this Article, may reflect distinctions based on the reasons for
termination of employment and may include provisions relating to a Participant's
competition with the Company after termination of employment. In that regard, if
an Award Agreement permits exercise of an Option following the death of the
Participant, the Award Agreement shall provide that such Option shall be
exercisable to the extent provided therein by any person that may be empowered
to do so under the Participant's will or, if the Participant shall fail to make
a testamentary disposition of the Option or shall have died intestate, by the
Participant's executor or other legal representative.
5.9 TRANSFERABILITY OF OPTIONS.
(a) Incentive Stock Options. No ISO granted under this Article may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant shall be exercisable during his or her lifetime only by
such Participant.
(b) Nonqualified Stock Options. Any NQSO granted under this Article 5 may be
transferable or nontransferable in the discretion of the Committee and under
such terms and conditions as may be set forth in the Award Agreement with
respect to such NQSO.
5.10 No Rights. A Participant granted an Option under the Plan shall have no
rights as a stockholder of the Company with respect to the Shares subject to
such Option except to the extent that Shares are issued to the Participant upon
the exercise of such Option.
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5.11 Certain Additional Provisions for Incentive Stock Options.
(a) Exercisability. The aggregate Fair Market Value (determined on the date
the Award is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Key Employee during any
calendar year (under all plans of the Company and its Subsidiaries) shall not
exceed One Hundred Thousand Dollars ($100,000).
(b) Termination of Employment. No Incentive Stock Option may be
exercised more than three (3) months after termination of employment for any
reason other than Disability or death, unless (i) the Participant dies during
such three (3)-month period, and (ii) the Award Agreement or the Committee
permits later exercise.
(c) Company and Subsidiaries Only. Incentive Stock Options may be
granted only to persons who are employees of the Company or a Subsidiary on the
date the Award is granted.
(d) Expiration. No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the date the Award is granted; provided,
however, that if the Option is granted to a Key Employee who, together with
persons whose stock ownership is attributed to the Key Employee pursuant to
section 424(d) of the Code, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of the stock of the Company or
any of its Subsidiaries, the Option may not be exercised after the expiration of
five (5) years from the Grant Date.
5.12 Substitute Options. Notwithstanding any other provision of this Plan, in
the event that the Company or a Subsidiary consummates a transaction described
in section 424(a) of the Code (e.g., the acquisition of property or stock from
an unrelated corporation), persons who become employees of the Company or any
Subsidiary on account of such transaction may be granted Options in substitution
for options granted by their former employer. If such substitute Options are
granted, the Committee, in its sole discretion and consistent with section
424(a) of the Code, shall determine the exercise price of such substitute
Options.
ARTICLE 6 - STOCK APPRECIATION RIGHTS
6.1 Grant of SARs. Subject to the terms and conditions of this Article, and to
such other terms and conditions as the Committee may determine, SARs may be
granted to Key Employees at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of such forms of SARs. The Committee shall have
complete discretion in determining the number of Shares covered by SARs granted
hereunder (subject to Article 4 hereof) and in determining the terms and
provisions pertaining to such SARs. The number of Shares covered by a
Freestanding SAR shall be counted against the number of Shares available for
grants of Awards under Section 4.1 hereof, but the number of Shares covered by a
Tandem SAR shall not be so counted. The grant price of a Freestanding SAR shall
equal the Fair Market Value of a Share on the date of grant of the SAR. The
grant price of a Tandem SAR shall equal the Option Price of the related Option.
6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. In no event shall the exercise period for a Tandem SAR exceed the
exercise period
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for the related Option. Notwithstanding any other provision of this Plan to the
contrary, with respect to a Tandem SAR granted in connection with an ISO: (i)
the Tandem SAR will expire no later than the expiration of the underlying ISO;
(ii) the value of the payout with respect to the Tandem SAR shall not exceed the
difference between the Option Price of the underlying ISO and the Fair Market
Value of the Shares subject to the underlying ISO at the time the Tandem SAR is
exercised; and (iii) the Tandem SAR may be exercised only when the Fair Market
Value of the Shares subject to the ISO exceeds the Option Price of the ISO.
6.3 Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and provisions the Committee, in its sole discretion, imposes
upon them.
6.4 Award Agreement. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the grant price, the term of the SAR, and such other
provisions as the Committee shall determine.
6.5 Term of SARs. The term of an SAR granted under the Plan shall be determined
by the Committee, in its sole discretion; provided, however, that such term
shall not exceed 10 years.
6.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company equal to the product of (i) the
difference between the Fair Market Value of a Share on the date of exercise over
the grant price and (ii) the number of Shares with respect to which the SAR is
exercised. At the discretion of the Committee, the payment upon exercise may be
in cash, in Shares of equivalent value, or in some combination thereof;
provided, however, that from and after the date of a Change in Control, the
exercise of an SAR may be settled only in cash.
6.7 Termination of Employment. Each Award Agreement with respect to SARs granted
hereunder shall set forth the extent to which the Key Employee shall have the
right to exercise the SAR following termination of the Key Employee's employment
with the Company or its Subsidiaries, as the case may be. Such provisions shall
be determined in the sole discretion of the Committee, shall be included in the
Award Agreement, need not be uniform among all SARs issued pursuant to the Plan,
may reflect distinctions based on the reasons for termination of employment and
may include provisions relating to a Key Employee's competition with the Company
after termination of employment. In that regard, if an Award Agreement permits
exercise of an SAR following the death of the Participant, the Award Agreement
shall provide that such SAR shall be exercisable to the extent provided therein
by any person that may be empowered to do so under the Key Employee's will, or
if the Key Employee shall fail to make a testamentary disposition of the SAR or
shall have died intestate, by the Key Employee's executor or other legal
representative.
6.8 Nontransferability of SARs. Except as otherwise provided in an Award
Agreement, no SAR may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in an Award Agreement, all
SARs granted to a Key Employee under the Plan shall be exercisable during his or
her lifetime only by such Key Employee.
6.9 No rights. A Key Employee granted an SAR shall have no rights as a
stockholder of the Company with respect to the Shares covered by such SAR except
to the extent that Shares are issued to the Key Employee upon exercise of the
SAR.
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ARTICLE 7 - RESTRICTED STOCK
7.1 Grant of Restricted Stock. Subject to the terms and conditions of this
Article, and to such other terms and conditions as the Committee may determine,
the Committee, at any time and from time to time, may grant Shares of Restricted
Stock to Key Employees in such numbers as the Committee shall determine.
7.2 Award Agreement. Each Restricted Stock grant shall be evidenced by an Award
Agreement that shall specify the Period or Periods of Restriction, the number of
Shares of Restricted Stock granted, and such other provisions as the Committee
shall determine.
7.3 Transferability. Except as provided in this Article, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Award Agreement,
or upon earlier satisfaction of any other conditions, as specified by the
Committee in its sole discretion and set forth in the Award Agreement. All
rights with respect to Restricted Stock granted to a Key Employee under the Plan
shall be available during his or her lifetime only to such Key Employee.
7.4 Other Restrictions. The Committee may impose such other conditions or
restrictions on any Shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, a requirement that Key
Employees pay a certain purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional, or individual), time-based restrictions on vesting
following the attainment of the performance goals and restrictions under
applicable federal or state securities laws. The Company shall retain the
certificates representing Shares of Restricted Stock in the Company's possession
until such time as all conditions and restrictions applicable to such Shares
have been satisfied. Except as otherwise provided in this Article or in the
applicable Award Agreement, or as otherwise required by law, Shares of
Restricted Stock shall become freely transferable by the Key Employee after the
last day of the Period of Restriction.
7.5 Voting Rights. During the Period of Restriction, Key Employees owning Shares
of Restricted Stock granted hereunder may exercise full voting rights with
respect to such Shares.
7.6 Dividends and other Distributions. During the Period of Restriction, Key
Employees owning Shares of Restricted Stock granted hereunder may be credited
with regular cash dividends paid with respect to the underlying Shares while
they are so owned. The Committee may apply any restrictions to the dividends
that the Committee deems appropriate. In the event that any dividend constitutes
a "derivative security" or an "equity security" pursuant to Section 16 under the
Exchange Act, such dividend shall be subject to a vesting period equal to the
remaining vesting period of the Shares of Restricted Stock with respect to which
the dividend is paid.
7.7 Termination of Employment. Each Award Agreement with respect to Restricted
Stock granted hereunder shall set forth the extent to which the Key Employee
shall have the right to receive unvested Restricted Shares following termination
of the Key Employee's employment with the Company or its Subsidiaries, as the
case may be. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement, need not be uniform among
all Shares of Restricted Stock issued pursuant to the Plan, may reflect
distinctions based on the reasons for termination of employment and may include
provisions relating to a Key Employee's competition with the Company after
termination of employment. In amplification but not limitation of the foregoing,
in the case of an
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Award of Restricted Stock to a Named Executive Officer which is intended to
qualify for the Performance-Based Exception, the Award Agreement may provide
that such Restricted Stock may become payable in the event of a termination of
employment by reason of death, Disability or Change in Control, such payment not
to occur before attainment of the related performance goal.
ARTICLE 8 - PERFORMANCE SHARES
8.1 Grant of Performance Shares. Subject to the terms and conditions of this
Article and to such other terms and conditions as the Committee may determine,
Performance Shares may be granted to Key Employees in such amounts, upon such
terms and at such times as shall be determined by the Committee. The number and
vesting of Performance Shares granted shall be conditioned upon the degree of
attainment of specified performance goals or other conditions over a specified
period (the "Performance Period") as determined by the Committee, subject to
Section 3.1 hereof. The terms and provisions of an Award of Performance Shares
shall be evidenced by an appropriate Award Agreement.
8.2 Value of Performance Shares. The value of a Performance Share at any time
shall be the Fair Market Value of a Share at such time.
8.3 Form and Timing of Payment of Performance Shares. The Committee shall
establish the amount of payment to be made under an Award of Performance Shares
if the performance goals or other conditions are met. Such Award shall be
expressed in terms of Shares. After the completion of a Performance Period, the
performance of the Company, subsidiary, division or individual, as the case may
be, shall be measured against the performance goals or other conditions, and the
Committee shall determine whether all, none or a portion of an Award shall be
paid. The Committee shall pay any earned Performance Shares as soon as
practicable after they are earned in the form of cash, Shares or a combination
thereof (as determined by the Committee) having an aggregate Fair Market Value
equal to the value of the earned Performance Shares as of the date they are
earned. Any Shares used to pay earned Performance Shares may be issued subject
to any restrictions deemed appropriate by the Committee. In addition, the
Committee, in its discretion, may cancel any earned Performance Shares and grant
Stock Options to the Key Employee which the Committee determines to be of
equivalent value based on a conversion formula stated in the applicable Award
Agreement. The Committee, in its discretion, may also grant dividend equivalent
rights with respect to earned but unpaid Performance Shares as evidenced by the
applicable Award Agreement. Performance Shares shall have no voting rights.
8.4 Termination of Employment. Each Award Agreement with respect to Performance
Shares granted hereunder shall set forth the extent to which the Key Employee
shall have the right to receive unearned Performance Shares following
termination of the Key Employee's employment with the Company and its
Subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreements,
need not be uniform among all Performance Shares awarded pursuant to the Plan,
may reflect distinctions based on the reasons for termination of employment and
may include provisions relating to a Key Employee's competition with the Company
after termination of employment.
8.5 Nontransferability. Except as otherwise provided in an Award Agreement with
respect to Performance Shares granted hereunder, Performance Shares may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, except
as otherwise provided in an Award Agreement, a Key Employee's rights
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under the Plan shall be exercisable during the Key Employee's lifetime only by
the Key Employee.
ARTICLE 9 - PERFORMANCE MEASURES
The performance measure or measures to be used for purposes of Awards, other
than Options, to Named Executive Officers which are designed to qualify for the
Performance-Based Exception shall be selected from among the following
alternatives:
(a) Earnings per Share;
(b) Return on Assets;
(c) Return on Equity;
(d) Revenues; or
(e) Total Stockholder Return
In the event that applicable tax or securities laws change in order to permit
Committee discretion to alter the governing performance measures without
obtaining stockholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval.
ARTICLE 10 - OUTSIDE DIRECTOR OPTIONS.
The provisions of this Article 10 shall apply only to grants of Options
to Outside Directors as provided below. Except as set forth in this Article 10,
the other provisions of the Plan shall apply to grants of Options to Outside
Directors to the extent not inconsistent with this Article 10. For purposes of
interpreting the applicable provisions of the Plan, an Outside Director's
service as a member of the Board shall be deemed to be employment with the
Company.
10.1 General. Outside Directors shall be granted Nonqualified Stock Options in
accordance with this Article 10. The Option Price per share of Shares
purchasable under Options granted to Outside Directors shall be the Fair Market
Value of a Share on the date of grant. Options granted pursuant to this Article
10 shall be subject to the terms of this Article 10 and shall not be subject to
discretionary acceleration of exercisability.
10.2 Annual Grants. On July 10 of each year while this Plan is in effect,
commencing with July 10, 1997, each Outside Director will be granted
automatically, without action by the Committee, an Option to purchase Two
Thousand (2,000) Shares. The Option Price shall equal the Fair Market Value of
the Common Stock as of the date of grant.
10.3 Vesting. Each Option granted under this Article 10 shall be fully
exercisable on the date of grant. Sections 5.4 and 5.8 hereof shall not apply to
Options granted to Outside Directors.
10.4 Duration. Each Option granted to an Outside Director shall expire on the
first to occur of (i) the tenth anniversary of the date of grant of the Option,
(ii) six (6) months after the date the Outside Director ceases to be a Director
other than as a result of the death of the Outside Director; or (iii) one (1)
year after the Outside Director ceases to be a Director by reason of the death
of the Outside Director,
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in which event the Option may be exercised during such period by the executor or
administrator of the Outside Director's estate, by the person or persons to whom
the Outside Director's rights under the Option shall pass by the Outside
Director's will or the laws of descent and distribution or by the Outside
Director's designated beneficiary. The Committee may not provide for an extended
exercise period beyond the periods set forth in this Article 10.
ARTICLE 11 - BENEFICIARY DESIGNATION
Each Participant may, from time to time, designate 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 will 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.
ARTICLE 12 - DEFERRALS
The Committee may permit a Key Employee to defer such Key Employee's receipt of
the payment of cash or the delivery of Shares that would otherwise be due to
such Key Employee by virtue of the exercise of an Option or SAR, the lapse or
waiver of restrictions with respect to Restricted Stock, or the satisfaction of
any requirements or goals with respect to Performance Shares. 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 13 - RIGHTS OF PARTICIPANTS
13.1 Employment. Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant's employment or service at
any time and for any reason, nor confer upon any Participant any right to
continue in the employ or service of the Company or its Subsidiaries. For
purposes of this Plan, a transfer of a Key Employee's employment between the
Company and a Subsidiary, or between Subsidiaries, shall not be deemed to be a
termination of employment.
13.2 Participation. No Key Employee shall have the right to be selected to
receive any Award under this Plan, or, having been so selected, to be selected
to receive any future Award.
ARTICLE 14 - CHANGE IN CONTROL OF THE COMPANY
Except as may be set forth in an Award Agreement, in the event of a Change in
Control, the following provisions shall apply: (i) Options granted under Article
5 hereof and SARs shall become immediately and fully exercisable; (ii)
Restricted Shares granted under the Plan shall be immediately and fully vested
and all restrictions shall lapse; and (iii) the target payout opportunities
attainable under all outstanding Awards of Restricted Stock and Performance
Shares shall be deemed to have been fully earned for the entire Performance
Period(s) as of the effective date of the Change in Control. To the extent set
forth in any Award Agreement (other than with respect to Options granted to
Outside Directors pursuant to Article 10 hereof) a Key Employee will be
permitted to surrender for cancellation within sixty (60) days after such Change
in Control any outstanding Options, SARs, Restricted Stock or Performance Shares
and the Key Employee will be entitled to receive a payment (i) with respect to
each Option in an amount
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equal to the excess, if any, of the Change in Control Price over the Option
Price; (ii) with respect to each SAR in an amount equal to the excess, if any,
of the Change in Control Price over the grant price of the SAR; (iii) with
respect to each share of Restricted Stock the Change in Control Price; and (iv)
with respect to each Performance Share, the Change in Control Price.
ARTICLE 15 - AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time, and from time to time, alter, amend, discontinue,
suspend or terminate the Plan in whole or in part; provided, however, that 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.
ARTICLE 16 - WITHHOLDING
16.1 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, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of this Plan.
16.2 Share Withholding. With respect to withholding required upon the exercise
of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon
any other taxable event arising as a result of Awards granted hereunder,
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 as of which the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and subject to any restrictions or limitations that
the Committee, in its sole discretion, deems appropriate.
ARTICLE 17 - INDEMNIFICATION
Each person who is or shall have been a member of the Committee 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 or her in satisfaction of any judgment in any such
action, suit, or proceeding against him or her, provided he or she shall give
the Company an opportunity, at its own expense, to defend the same before he or
she undertakes to defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Certificate 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 18 - 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
or assets of the Company.
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ARTICLE 19 - MISCELLANEOUS
19.1 Gender and Number. Whenever the context so requires, the singular shall
include the plural and the plural shall include the singular and the gender of
any pronoun shall include the other genders.
19.2 Severability. The invalidity of this Plan with respect to one or more
persons shall not affect the rights and obligations of any other person
hereunder in any manner whatsoever. The invalidity of one or more provisions of
this Plan shall not affect the validity of any other provision of this Plan in
any manner whatsoever.
19.3 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.
19.4 Securities Laws Compliance. With respect to Insiders, transactions under
this Plan are intended to comply with all applicable conditions of Rule 16b-3
promulgated under the Exchange Act. To the extent any provision 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.
19.5 Governing Law. This Plan shall be construed according to the laws of the
State of Delaware.
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EXHIBIT 4.5
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ATRION CORPORATION
1997 STOCK INCENTIVE PLAN
AWARD AGREEMENT FOR INCENTIVE STOCK OPTION
THIS AWARD AGREEMENT (the "Agreement") is made and entered into
effective as of the ____ day of __________________ 199__, by and between Atrion
Corporation, a Delaware corporation (the "Company"), and _________________, an
employee of the Company or of a Subsidiary (the "Participant"), pursuant to the
Atrion Corporation 1997 Stock Incentive Plan, as it may be amended and restated
from time to time (the "Plan"). Capitalized terms used but not defined herein
shall have the meanings set forth in the Plan.
W I T N E S S E T H:
WHEREAS, the Participant is an employee of the Company or a Subsidiary
and has been designated as a Key Employee by the Committee; and
WHEREAS, the Committee has granted, subject to the execution of this
Agreement, and the Participant desires to receive, an Award pursuant to the
Plan.
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises and covenants herein contained, and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Subject to the execution of this Agreement, the Company has granted
to the Participant an Award in the form of the right and option (the "Option")
to purchase from the Company such number of whole Shares as is set forth on
Exhibit A attached hereto from the authorized and unissued Common Stock of the
Company, or from the treasury stock of the Company, at and for the Option Price
set forth on Exhibit A attached hereto. In accordance with Section 5.2 of the
Plan, the Option is hereby designated as an ISO.
2. The Option shall be exercised by delivery to the Company at its
principal office of written notice of the Participant's intent to exercise the
Option with respect to the number of Shares then being purchased, accompanied by
payment in full to the Company of the amount of the Option Price for the number
of Shares then being purchased. The Option Price upon exercise of the Option
shall be payable to the Company (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the aggregate Option Price or (c) by a combination of (a) and
(b). The Option Price shall be paid directly by the Participant; however, if the
exercise of the Option is in accordance with Section 220.3(e) of Regulation T
promulgated by the Board of Governors of the Federal Reserve System (a "cashless
exercise"), the Option Price may be paid directly by a registered broker-dealer
for the account of the Participant.
3. The Option may be exercised and Shares may be purchased by the
Participant as the result of such exercise only during the term or terms set
forth on Exhibit A attached hereto; provided, however, that in no event shall
the total number of Shares purchased hereunder pursuant to the exercise of the
Page 27 of 55 pages
<PAGE> 3
Option exceed the number set forth on Exhibit A attached hereto, as the same may
be adjusted in accordance with the Plan, and in no event shall the period for
exercising the Option exceed ten (10) years from the date of the grant of the
Option. Exercise of the Option following termination of employment is subject to
the following additional terms and conditions:
(a) In the event the employment of the Participant shall be
terminated for any reason other than for cause, death or Disability, the Option
may be exercised at any time after such termination and before the earlier of
(i) three (3) months and (ii) the expiration date of the Option.
(b) If the employment of the Participant is terminated for
cause, the Option shall terminate immediately upon termination of employment.
For purposes of this Award Agreement, "cause" shall be defined as a good faith
determination by the Committee that the Participant has been (i) guilty of
willful misconduct or dishonesty or (ii) derelict in, or guilty of a breach or
gross neglect of, Participant's duty to the Company.
(c) If the employment of the Participant shall be terminated
by reason of Disability, the Option may be exercised at any time after such
termination and before the earlier of (i) twelve (12) months and (ii) the
expiration date of the Option.
(d) If the employment of the Participant shall be terminated
by reason of the death of the Participant, the executor or administrator of the
estate of the Participant, or other allowable transferee, shall have the right
to exercise the Option at any time after such termination and before the earlier
of (i) three (3) months and (ii) the expiration date of the Option.
(e) Notwithstanding any other provision hereof, in no event
may the Option be exercised at any time after termination of employment with
respect to any number of Shares in excess of the number of Shares as to which
the Option was exercisable at the time of termination of employment.
4. In case of any exercise of the Option, this Agreement,
accompanied by payment of the full purchase price for the Shares then being
purchased as provided in Paragraph 2 above, shall be surrendered to the Company.
The Company will thereupon cause to be issued and delivered to the Participant
(or, in the event of a cashless exercise, to the Participant's broker-dealer),
as soon as reasonably may be done in accordance with the terms of the Plan, a
certificate or certificates, representing the Shares so purchased and fully paid
for. In the event of a partial exercise, the Company will endorse on Exhibit B
attached hereto the fact that the Option has been partially exercised on such
date, setting forth the extent of such exercise, and return this Agreement to
the Participant.
5. The Option is personal to the Participant and may not in any
manner or respect be assigned or transferred otherwise than by will or the laws
of descent and distribution, and is exercisable during the Participant's
lifetime only by the Participant. To the extent the Option is not exercised, the
Shares covered hereby shall be considered released to the Company.
6. The Option is in all respects subject to, and shall be
governed and determined by, the provisions of the Plan (all of the terms of
which are incorporated herein by reference) and to any rules which might be
adopted by the Board or the Committee with respect thereto to the same extent
and with the same effect as if set forth fully herein.
7. (a) Notwithstanding any provision of the Plan or of this Award
Agreement to the
Page 28 of 55 pages
<PAGE> 4
contrary, the Committee, in its sole and exclusive discretion, shall have the
power at any time to (i) accelerate the vesting of the Option granted hereby,
including without limitation, acceleration to such a date that would result in
the Option becoming immediately vested, or (ii) waive any restrictions of the
Option granted hereby.
(b) In the event of a Change in Control, the Option granted
hereby, to the extent the same is not then exercisable at the time of the Change
in Control, shall become immediately and fully exercisable by virtue of the
Change in Control.
8. This Agreement shall terminate no later than ten (10) years
from the date of grant of the Option.
9. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, applied without giving effect
to any conflict-of-law principles. Any validity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
10. This Agreement shall be binding upon and shall inure to the
benefit of each of the parties hereto and their respective executors,
administrators, personal representatives, legal representatives, heirs, and
successors in interest.
11. This Agreement may be executed in any number of counterparts,
each of which shall be considered an original, and such counterparts shall,
together, constitute and be one and the same instrument.
12. Upon demand by the Company, the Participant agrees to deliver
to the Company at the time of any complete or partial exercise of this Option a
written representation that the Shares being acquired upon such exercise are
being acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation prior to
the delivery of any Shares issued upon exercise of this Option and prior to the
expiration of the Option period shall be a condition precedent to the right of
the Participant or any other persons to purchase Shares hereunder.
13. The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of the grant or exercise of the Option.
With respect to withholding required upon the exercise of the Option, the
Participant 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 as of which the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and subject to any restrictions or limitations that
the Committee, in its sole discretion, deems appropriate.
14. This Agreement shall not be deemed to confer upon Participant
any right to continue Participant's employment by the Company, and the Company
may terminate such employment at any time for any reason, subject to the
provisions of any applicable employment agreement.
Page 29 of 55 pages
<PAGE> 5
IN WITNESS WHEREOF, the Company and the Participant have executed and
delivered this Agreement as of the day and year first written above.
ATRION CORPORATION
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
PARTICIPANT
------------------------------------
Name:
-------------------------------
Page 30 of 55 pages
<PAGE> 6
EXHIBIT A
TO
AWARD AGREEMENT
<TABLE>
<S> <C> <C>
Participant: --------------------------
Grant Date: --------------------------
Option Price: $
--------------------------
Can Only Be Must Be
Shares Subject to Option Exercised After Exercised Before
- ------------------------ --------------- ----------------
</TABLE>
Page 31 of 55 pages
<PAGE> 7
EXHIBIT B
TO
AWARD AGREEMENT
Pursuant to Paragraph 4 hereof, record partial exercise below:
PARTIAL EXERCISE
----------------
<TABLE>
<CAPTION>
Signature of
No. of Shares Date of No. of Shares Endorsing
Exercised Exercise Remaining Officer
- --------- -------- --------- -------
<S> <C> <C> <C>
</TABLE>
Page 32 of 55 pages
<PAGE> 1
EXHIBIT 4.6
Page 33 of 55 pages
<PAGE> 2
ATRION CORPORATION
1997 STOCK INCENTIVE PLAN
AWARD AGREEMENT FOR NONQUALIFIED STOCK OPTION
FOR KEY EMPLOYEE
THIS AWARD AGREEMENT (the "Agreement") is made and entered into
effective as of the ____ day of __________________ 199__, by and between Atrion
Corporation, a Delaware corporation (the "Company"), and _________________, an
employee of the Company or of a Subsidiary (the "Participant"), pursuant to the
Atrion Corporation 1997 Stock Incentive Plan, as it may be amended and restated
from time to time (the "Plan"). Capitalized terms used but not defined herein
shall have the meanings set forth in the Plan.
W I T N E S S E T H:
WHEREAS, the Participant is an employee of the Company or a Subsidiary
and has been designated as a Key Employee by the Committee; and
WHEREAS, the Committee has granted, subject to the execution of this
Agreement, and the Participant desires to receive, an Award pursuant to the
Plan.
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises and covenants herein contained, and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Subject to the execution of this Agreement, the Company has granted
to the Participant an Award in the form of the right and option (the "Option")
to purchase from the Company such number of whole Shares as is set forth on
Exhibit A attached hereto from the authorized and unissued Common Stock of the
Company, or from the treasury stock of the Company, at and for the Option Price
set forth on Exhibit A attached hereto. In accordance with Section 5.2 of the
Plan, the Option is hereby designated as an NQSO.
2. The Option shall be exercised by delivery to the Company at its
principal office of written notice of the Participant's intent to exercise the
Option with respect to the number of Shares then being purchased, accompanied by
payment in full to the Company of the amount of the Option Price for the number
of Shares then being purchased. The Option Price upon exercise of the Option
shall be payable to the Company (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the aggregate Option Price or (c) by a combination of (a) and
(b). The Option Price shall be paid directly by the Participant; however, if the
exercise of the Option is in accordance with Section 220.3(e) of Regulation T
promulgated by the Board of Governors of the Federal Reserve System (a "cashless
exercise"), the Option Price may be paid directly by a registered broker-dealer
for the account of the Participant.
3. The Option may be exercised and Shares may be purchased by the
Participant as the result of such exercise only during the term or terms set
forth on Exhibit A attached hereto; provided, however,
Page 34 of 55 pages
<PAGE> 3
that in no event shall the total number of Shares purchased hereunder pursuant
to the exercise of the Option exceed the number set forth on Exhibit A attached
hereto, as the same may be adjusted in accordance with the Plan, and in no event
shall the period for exercising the Option exceed ten (10) years from the date
of the grant of the Option. Exercise of the Option following termination of
employment is subject to the following additional terms and conditions:
(a) In the event the employment of the Participant shall be
terminated for any reason other than for cause, death or Disability, the Option
may be exercised at any time after such termination and before the earlier of
(i) three (3) months and (ii) the expiration date of the Option.
(b) If the employment of the Participant is terminated for
cause, the Option shall terminate immediately upon termination of employment.
For purposes of this Award Agreement, "cause" shall be defined as a good faith
determination by the Committee that the Participant has been (i) guilty of
willful misconduct or dishonesty or (ii) derelict in, or guilty of a breach or
gross neglect of, Participant's duty to the Company.
(c) If the employment of the Participant shall be terminated
by reason of Disability, the Option may be exercised at any time after such
termination and before the earlier of (i) twelve (12) months and (ii) the
expiration date of the Option.
(d) If the employment of the Participant shall be terminated
by reason of the death of the Participant, the executor or administrator of the
estate of the Participant, or other allowable transferee, shall have the right
to exercise the Option at any time after such termination and before the earlier
of (i) three (3) months and (ii) the expiration date of the Option.
(e) Notwithstanding any other provision hereof, in no event
may the Option be exercised at any time after termination of employment with
respect to any number of Shares in excess of the number of Shares as to which
the Option was exercisable at the time of termination of employment.
4. In case of any exercise of the Option, this Agreement,
accompanied by payment of the full purchase price for the Shares then being
purchased as provided in Paragraph 2 above, shall be surrendered to the Company.
The Company will thereupon cause to be issued and delivered to the Participant
(or, in the event of a cashless exercise, to the Participant's broker-dealer),
as soon as reasonably may be done in accordance with the terms of the Plan, a
certificate or certificates, representing the Shares so purchased and fully paid
for. In the event of a partial exercise, the Company will endorse on Exhibit B
attached hereto the fact that the Option has been partially exercised on such
date, setting forth the extent of such exercise, and return this Agreement to
the Participant.
5. The Option is personal to the Participant and may not in any
manner or respect be assigned or transferred otherwise than by will or the laws
of descent and distribution, and is exercisable during the Participant's
lifetime only by the Participant. To the extent the Option is not exercised, the
Shares covered hereby shall be considered released to the Company.
6. The Option is in all respects subject to, and shall be
governed and determined by, the provisions of the Plan (all of the terms of
which are incorporated herein by reference) and to any rules which might be
adopted by the Board or the Committee with respect thereto to the same extent
and with the same effect as if set forth fully herein.
Page 35 of 55 pages
<PAGE> 4
7. (a) Notwithstanding any provision of the Plan or of this Award
Agreement to the contrary, the Committee, in its sole and exclusive discretion,
shall have the power at any time to (i) accelerate the vesting of the Option
granted hereby, including without limitation, acceleration to such a date that
would result in the Option becoming immediately vested, or (ii) waive any
restrictions of the Option granted hereby.
(b) In the event of a Change in Control, the Option granted hereby,
to the extent the same is not then exercisable at the time of the Change in
Control, shall become immediately and fully exercisable by virtue of the Change
in Control.
8. This Agreement shall terminate no later than ten (10) years from
the date of grant of the Option.
9. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, applied without giving effect to any
conflict-of-law principles. Any validity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
10. This Agreement shall be binding upon and shall inure to the benefit
of each of the parties hereto and their respective executors, administrators,
personal representatives, legal representatives, heirs, and successors in
interest.
11. This Agreement may be executed in any number of counterparts, each
of which shall be considered an original, and such counterparts shall, together,
constitute and be one and the same instrument.
12. Upon demand by the Company, the Participant agrees to deliver to
the Company at the time of any complete or partial exercise of this Option a
written representation that the Shares being acquired upon such exercise are
being acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation prior to
the delivery of any Shares issued upon exercise of this Option and prior to the
expiration of the Option period shall be a condition precedent to the right of
the Participant or any other persons to purchase Shares hereunder.
13. The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of the grant or exercise of the Option.
With respect to withholding required upon the exercise of the Option, the
Participant 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 as of which the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and subject to any restrictions or limitations that
the Committee, in its sole discretion, deems appropriate.
14. This Agreement shall not be deemed to confer upon Participant any
right to continue Participant's employment by the Company, and the Company may
terminate such employment at any time for any reason, subject to the provisions
of any applicable employment agreement.
Page 36 of 55 pages
<PAGE> 5
IN WITNESS WHEREOF, the Company and the Participant have executed and
delivered this Agreement as of the day and year first written above.
ATRION CORPORATION
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
PARTICIPANT
-----------------------------------
Name:
------------------------------
Page 37 of 55 pages
<PAGE> 6
EXHIBIT A
TO
AWARD AGREEMENT
<TABLE>
<S> <C> <C>
Participant: -------------------------
Grant Date: -------------------------
Option Price: $
-------------------------
Can Only Be Must Be
Shares Subject to Option Exercised After Exercised Before
- ------------------------ --------------- ----------------
</TABLE>
Page 38 of 55 pages
<PAGE> 7
EXHIBIT B
TO
AWARD AGREEMENT
Pursuant to Paragraph 4 hereof, record partial exercise below:
PARTIAL EXERCISE
----------------
<TABLE>
<CAPTION>
Signature of
No. of Shares Date of No. of Shares Endorsing
Exercised Exercise Remaining Officer
- ------------- -------- ------------- ------------
<S> <C> <C> <C>
</TABLE>
Page 39 of 55 pages
<PAGE> 1
EXHIBIT 4.7
Page 40 of 55 pages
<PAGE> 2
ATRION CORPORATION
1997 STOCK INCENTIVE PLAN
AWARD AGREEMENT FOR NONQUALIFIED STOCK OPTION
FOR DIRECTOR
THIS AWARD AGREEMENT (the "Agreement") is made and entered into
effective as of the 10th day of July, _____, by and between Atrion Corporation,
a Delaware corporation (the "Company"), and _________________, a Director of the
Company (the "Participant"), pursuant to the Atrion Corporation 1997 Stock
Incentive Plan, as it may be amended and restated from time to time (the
"Plan"). Capitalized terms used but not defined herein shall have the meanings
set forth in the Plan.
W I T N E S S E T H:
WHEREAS, the Participant is a Non-Employee Director, as defined in
Section 2.21 of the Plan; and
WHEREAS, in accordance with Article 10 of the Plan the Participant is
to receive the Award described herein.
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises and covenants herein contained, and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Subject to the execution of this Agreement, the Company has granted
to the Participant, in accordance with Section 10.2 of the Plan, an Award in the
form of the right and option (the "Option") to purchase from the Company such
number of whole Shares as is set forth on Exhibit A attached hereto from the
authorized and unissued Common Stock of the Company, or from the treasury stock
of the Company, at and for the Option Price set forth on Exhibit A attached
hereto. In accordance with Sections 5.2, 10.1 and 10.2 of the Plan, the Option
is hereby designated as an NQSO.
2. The Option shall be exercised by delivery to the Company at its
principal office of written notice of the Participant's intent to exercise the
Option with respect to the number of Shares then being purchased, accompanied by
payment in full to the Company of the amount of the Option Price for the number
of Shares then being purchased. The Option Price upon exercise of the Option
shall be payable to the Company (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the aggregate Option Price or (c) by a combination of (a) and
(b). The Option Price shall be paid directly by the Participant; however, if the
exercise of the Option is in accordance with Section 220.3(e) of Regulation T
promulgated by the Board of Governors of the Federal Reserve System (a "cashless
exercise"), the Option Price may be paid directly by a registered broker-dealer
for the account of the Participant.
3. The Option may be exercised and Shares may be purchased by the
Participant as the result of such exercise only during the term set forth on
Exhibit A attached hereto; provided, however, that in no event shall the total
number of Shares purchased hereunder pursuant to the exercise of the Option
exceed the number set forth on Exhibit A attached hereto, as the same may be
adjusted in accordance with the Plan,
Page 41 of 55 pages
<PAGE> 3
and in no event shall the period for exercising the Option exceed ten (10) years
from the date of the grant of the Option. Exercise of the Option is subject to
the following additional terms and conditions:
(a) In the event the Participant ceases to be a Director other than
as a result of the Participant's death, the Option may be exercised at any time
after the date of such cessation and before the earlier of (i) six (6) months
and (ii) the expiration date of the Option.
(b) In the event the Participant ceases to be a Director by reason
of the Participant's death, the Option may be exercised at any time after such
death and before the earlier of (i) twelve (12) months and (ii) the expiration
date of the Option.
4. In case of any exercise of the Option, this Agreement, accompanied
by payment of the full purchase price for the Shares then being purchased as
provided in Paragraph 2 above, shall be surrendered to the Company. The Company
will thereupon cause to be issued and delivered to the Participant (or, in the
event of a cashless exercise, to the Participant's broker-dealer), as soon as
reasonably may be done in accordance with the terms of the Plan, a certificate
or certificates, representing the Shares so purchased and fully paid for. In the
event of a partial exercise, the Company will endorse on Exhibit B attached
hereto the fact that the Option has been partially exercised on such date,
setting forth the extent of such exercise, and return this Agreement to the
Participant.
5. The Option is personal to the Participant and may not in any manner
or respect be assigned or transferred otherwise than by will or the laws of
descent and distribution, and is exercisable during the Participant's lifetime
only by the Participant. To the extent the Option is not exercised, the Shares
covered hereby shall be considered released to the Company.
6. The Option is in all respects subject to, and shall be governed and
determined by, the provisions of the Plan (all of the terms of which are
incorporated herein by reference) and to any rules which might be adopted by the
Board or the Committee with respect thereto to the same extent and with the same
effect as if set forth fully herein.
7. This Agreement shall terminate no later than ten (10) years from the
date of grant of the Option.
8. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, applied without giving effect to any
conflict-of-law principles. Any validity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
9. This Agreement shall be binding upon and shall inure to the benefit
of each of the parties hereto and their respective executors, administrators,
personal representatives, legal representatives, heirs, and successors in
interest.
10. This Agreement may be executed in any number of counterparts, each
of which shall be considered an original, and such counterparts shall, together,
constitute and be one and the same instrument.
11. Upon demand by the Company, the Participant agrees to deliver to
the Company at the time of any complete or partial exercise of this Option a
written representation that the Shares being acquired upon such exercise are
being acquired for investment and not for resale or with a view to the
distribution
Page 42 of 55 pages
<PAGE> 4
thereof. Upon such demand, delivery of such representation prior to the delivery
of any Shares issued upon exercise of this Option and prior to the expiration of
the Option period shall be a condition precedent to the right of the Participant
or any other persons to purchase Shares hereunder.
12. The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of the grant or exercise of the Option.
With respect to withholding required upon the exercise of the Option, the
Participant 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 as of which the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and subject to any restrictions or limitations that
the Committee, in its sole discretion, deems appropriate.
IN WITNESS WHEREOF, the Company and the Participant have executed and
delivered this Agreement as of the day and year first written above.
ATRION CORPORATION
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
PARTICIPANT
-----------------------------------
Name:
------------------------------
Page 43 of 55 pages
<PAGE> 5
EXHIBIT A
TO
AWARD AGREEMENT
<TABLE>
<S> <C> <C>
Participant: -------------------------
Grant Date: -------------------------
Option Price: $
-------------------------
Can Only Be Must Be
Shares Subject to Option Exercised After Exercised Before
- ------------------------ --------------- ----------------
</TABLE>
Page 44 of 55 pages
<PAGE> 6
EXHIBIT B
TO
AWARD AGREEMENT
Pursuant to Paragraph 4 hereof, record partial exercise below:
PARTIAL EXERCISE
----------------
<TABLE>
<CAPTION>
Signature of
No. of Shares Date of No. of Shares Endorsing
Exercised Exercise Remaining Officer
- --------- -------- --------- -------
<S> <C> <C> <C>
</TABLE>
Page 45 of 55 pages
<PAGE> 1
EXHIBIT 4.8
Page 46 of 55 pages
<PAGE> 2
ATRION CORPORATION
1997 STOCK INCENTIVE PLAN
AWARD AGREEMENT FOR RESTRICTED STOCK
THIS AWARD AGREEMENT (the "Agreement") is made and entered into
effective as of the ____ day of __________________ 199__, by and between Atrion
Corporation, a Delaware corporation (the "Company"), and _________________, an
employee of the Company or of a Subsidiary (the "Participant"), pursuant to the
Atrion Corporation 1997 Stock Incentive Plan, as it may be amended and restated
from time to time (the "Plan"). Capitalized terms used but not defined herein
shall have the meanings set forth in the Plan.
W I T N E S S E T H:
WHEREAS, the Participant is an employee of the Company or a Subsidiary
and has been designated as a Key Employee by the Committee; and
WHEREAS, the Committee has granted, subject to the execution of this
Agreement, and the Participant desires to receive, an Award pursuant to the
Plan.
NOW, THEREFORE, for and in consideration of the premises, the mutual
promises and covenants herein contained, and other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
(a) Subject to the execution of this Agreement, the Company has granted
to the Participant an Award in the form of the number of Shares of Restricted
Stock as is set forth on Exhibit A attached hereto from the authorized and
unissued Common Stock of the Company, or from the treasury stock of the Company,
at and for the purchase price set forth on Exhibit A attached hereto.
(b) The Period of Restriction with respect to the Shares of Restricted
Stock shall be as set forth on Exhibit A attached hereto. During the Period of
Restriction, and except as otherwise set forth herein, the Restricted Stock
subject to the Period of Restriction may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated by the Participant. Except as
otherwise provided herein, or as otherwise required by law, the Shares of
Restricted Stock shall become freely transferable by the Participant after the
last day of the Period of Restriction to which such Shares are subject.
(c) During the Period of Restriction, (i) the Participant may exercise
full voting rights with respect to the Shares of Restricted Stock (ii) the
Participant shall be entitled to receive cash dividends paid with respect to the
Shares of Restricted Stock and (iii) the Participant shall be credited with and
entitled to receive stock dividends paid with respect to the Shares of
Restricted Stock; provided, however that such stock dividends shall be subject
to the same restrictions and vesting period as the Shares of Restricted Stock
with respect to which they were paid.
(d) (a) In the event the employment of the Participant shall be
terminated (i) by reason of death or disability prior to the expiration of the
Period of Restriction or (ii) by the Company without cause,
Page 47 of 55 pages
<PAGE> 3
then the Period of Restriction shall lapse on the day immediately following
Participant's last day of employment with the Company.
(b) If, at any time prior to the expiration of the Period of
Restriction, (i) Participant terminates his employment with the Company, other
than by reason of death or disability; or (ii) the Company terminates the
employment of the Participant for cause, the Restricted Stock subject to the
Period of Restriction shall be forfeited. Concurrently with the execution of
this Agreement, Participant is executing and delivering to the Company stock
powers endorsed in blank for the Company to effect the transfer of ownership to
the Company of the forfeited Shares of Restricted Stock.
(c) For purposes of this Agreement, "cause" shall be defined as a
good faith determination by the Committee that the Participant has been (i)
guilty of willful misconduct or dishonesty or (ii) derelict in, or guilty of a
breach or gross neglect of, Participant's duty to the Company.
(e) (a) The Company will retain in its possession the stock certificate
or certificates evidencing the Shares of Restricted Stock registered in the name
of the Participant until such time as all conditions and restrictions applicable
to such Shares have been satisfied. Upon the expiration of the Period of
Restriction with respect to any of the Shares of Restricted Stock, the Company
will deliver to Participant the stock certificate or certificates therefor.
(b) Participant hereby consents to the placement on the certificate
or certificates evidencing the Shares of Restricted Stock of a restrictive
legend substantially to the following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AS MORE FULLY SET FORTH IN THE AWARD AGREEMENT FOR
RESTRICTED STOCK DATED AS OF___________ BETWEEN THE CORPORATION
AND ___________.
Participant further consents to the placement on the certificate or certificates
evidencing the Shares of Restricted Stock of a legend substantially to the
following effect:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT RELATING TO THE SHARES OR AN OPINION OF THE
CORPORATION'S COUNSEL THAT REGISTRATION IS NOT REQUIRED.
(f) The Award is in all respects subject to, and shall be governed and
determined by, the provisions of the Plan (all of the terms of which are
incorporated herein by reference) and to any rules which might be adopted by the
Board or the Committee with respect thereto to the same extent and with the same
effect as if set forth fully herein.
(g) (a) Notwithstanding any provision of the Plan or of this Agreement
to the contrary, the Committee, in its sole and exclusive discretion, shall have
the power at any time to (i) accelerate the expiration or lapse of the Period of
Restriction or (ii) waive any restrictions of the Award of Restricted Stock
granted hereby.
Page 48 of 55 pages
<PAGE> 4
(b) In the event of a Change in Control, the Period of Restriction,
to the extent the same shall not have lapsed or expire, shall immediately and
completely lapse by virtue of the Change in Control.
(h) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, applied without giving effect to any
conflict-of-law principles. Any validity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
(i) This Agreement shall be binding upon and shall inure to the benefit
of each of the parties hereto and their respective executors, administrators,
personal representatives, legal representatives, heirs, and successors in
interest.
(j) This Agreement may be executed in any number of counterparts, each
of which shall be considered an original, and such counterparts shall, together,
constitute and be one and the same instrument.
(k) The Participant hereby represents and warrants to the Company as
follows:
(a) The Shares of Restricted Stock are being acquired for
investment and not for resale or with a view to the distribution thereof.
(b) The Participant (i) acknowledges his understanding of the risks
inherent in an investment of the nature of the Shares of Restricted Stock; (ii)
has adequate means of providing for his current needs and personal contingencies
and has no need for liquidity with respect to his ownership of the Shares of
Restricted Stock; and (iii) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Shares of Restricted Stock.
(c) Participant acknowledges that the Shares of Restricted Stock
have not been registered under the Securities Act of 1933, as amended, or any
state securities laws and, therefore, cannot be resold, pledged, assigned or
otherwise disposed of unless subsequently registered under the Securities Act
and the applicable securities laws of certain states, or unless an exemption
therefrom is available.
(l) The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, an amount
sufficient to satisfy federal, state and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any taxable event arising as a result of the Award or receipt of the Shares of
Restricted Stock. With respect to withholding which may be required, the
Participant 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 as of which the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. In the event Participant desires to make an election with
respect to the Shares of Restricted Stock under Section 83(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), Participant will timely make such
election in accordance with the rules and regulations of the Code and promptly
notify the Company thereof. All such elections shall be irrevocable, made in
writing, signed by the Participant, and subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
(m) This Agreement shall not be deemed to confer upon Participant any
right to continue Participant's employment by the Company, and the Company may
terminate such employment at any time for any reason, subject to the provisions
of any applicable employment agreement.
Page 49 of 55 pages
<PAGE> 5
IN WITNESS WHEREOF, the Company and the Participant have executed and
delivered this Agreement as of the day and year first written above.
ATRION CORPORATION
By:
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
PARTICIPANT
--------------------------------------
Name:
---------------------------------
Page 50 of 55 pages
<PAGE> 6
EXHIBIT A
TO
AWARD AGREEMENT
<TABLE>
<S> <C>
Participant:
Date:
Purchase Price Pursuant to
Paragraph 1 of the Award
Agreement: $
Period of Restriction:
No. of Date Period of
Shares Restriction Expires
------ -------------------
</TABLE>
Page 51 of 55 pages
<PAGE> 1
EXHIBIT 5
Page 52 of 55 pages
<PAGE> 2
BERKOWITZ, LEFKOVITS, ISOM & KUSHNER
A Professional Corporation
1600 SouthTrust Tower
Birmingham, AL 35203
(205) 328-0480
June 10, 1998
Board of Directors
Atrion Corporation
Gentlemen:
We have acted as counsel to Atrion Corporation, a Delaware corporation (the
"Company"), in connection with the registration by the Company of 500,000 shares
of common stock, par value $0.10 per share (the "Shares"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, relating to the Atrion Corporation 1997 Stock Incentive
Plan (the "Plan"). This opinion is being delivered to you pursuant to item
601(b)(5) of Regulation S-K promulgated by the Securities and Exchange
Commission. In so acting, we have examined the Registration Statement, together
with originals or copies of such corporate records, agreements, documents and
other instruments, and of certificates or comparable documents of public
officials and of officers or other representatives of the Company, and we have
made such inquiry of such officers and representatives, as we have deemed
relevant and necessary for the purposes of the opinion set forth herein.
Based upon the foregoing, we are of the opinion that the Shares which are the
subject of the Registration Statement have been duly authorized and, when sold
in accordance with the Plan and the related Award Agreements entered into in
connection therewith, will be validly issued, fully paid and non-assessable
shares of common stock of the Company.
We hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
This opinion is being rendered solely for the purpose described above and is not
to be used or relied upon by any other person and, except as provided in the
preceding paragraph, may not be disclosed, quoted, filed with any governmental
agency or otherwise referred to without our written consent.
Very truly yours,
/s/ BERKOWITZ, LEFKOVITS, ISOM & KUSHNER
A Professional Corporation
Page 53 of 55 pages
<PAGE> 1
EXHIBIT 23.2
Page 54 of 55 pages
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Atrion Corporation 1997 Stock Incentive
Plan of our report dated February 20, 1998, with respect to the financial
statements of Atrion Corporation included in its Annual Report on Form 10-K for
the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
June 10, 1998
Page 55 of 55 pages
