<PAGE>
As filed with the Securities and Exchange Commission on March 23, 1999
Registration No. 333-_______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
SCHERER HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 59-0688813
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
120 INTERSTATE NORTH PARKWAY, S.E., SUITE 305, ATLANTA, GEORGIA 30339
(Address of principal executive offices, including zip code)
SCHERER HEALTHCARE, INC. 1994 STOCK INCENTIVE PLAN
(Full title of the plan)
---------------
COPIES TO:
<TABLE>
<S> <C>
GARY W. RUFFCORN DAVID M. CALHOUN, ESQ.
SCHERER HEALTHCARE, INC. LONG ALDRIDGE & NORMAN LLP
120 INTERSTATE NORTH PARKWAY 303 PEACHTREE STREET
SUITE 305 SUITE 5300
ATLANTA, GEORGIA 30339 ATLANTA, GEORGIA 30308
(Name and address of agent for service) (404) 527-4000
(770) 933-1800
(Telephone number, including area code,
of agent for service)
</TABLE>
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities to Amount to be Proposed Maximum Offering Proposed Maximum Amount of Registration
be Registered Registered Price Per Share (3) Aggregate Offering Price (3) Fee (3)
- ----------------------- --------------- -------------------------- ----------------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, $.01
par value per share
1994 Stock Incentive 270,000(1) $ 1.967 $ 531,090 $ 147.64
Plan 630,000(2) $ 3.750 $ 2,362,500 $ 656.78
Total 1,000,000 $ 2,893,590 $ 804.42
- ----------------------- --------------- -------------------------- ----------------------------- ----------------------
</TABLE>
(1) The shares consist of Common Stock of the Registrant (the "Common Stock")
that may be acquired pursuant to options that have been granted pursuant
to the Scherer Healthcare, Inc. 1994 Stock Incentive Plan (the "Stock
Incentive Plan").
(2) The shares consist of Common Stock of the Registrant that may be acquired
pursuant to options or awards of restricted stock that may be granted in
the future pursuant to the Stock Incentive Plan.
(3) The offering price for the 270,000 shares subject to currently outstanding
options under the Stock Incentive Plan is based on the applicable option
exercise prices for each currently outstanding option. The exercise price
for such options varies from $1.69 per share to $3.56 per share with an
average exercise price of $1.967 per share and a total exercise price for
all options of $531,090. The offering price of the 630,000 shares that may
be acquired pursuant to options available for grant in the future under
the Stock Incentive Plan is not presently determinable. The offering price
for such shares is estimated pursuant to Rule 457(c) and (h)(1) solely for
the purpose of calculating the registration fee, and is based upon the
average of the high and low prices of the Common Stock on March 19, 1999,
as quoted on the Nasdaq National Market.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in the instructions
to Part I of the Registration Statement on Form S-8 will be sent or given to
participants in the Stock Incentive Plan as required by Rule 428(b)(1) of the
rules promulgated under the Securities Act of 1933, as amended. As permitted by
the instructions to Part I of the Registration Statement on Form S-8, such
documents are not filed with this Registration Statement.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Registrant with the
Securities and Exchange Commission (the "Commission") are hereby incorporated
herein by reference as of their respective dates.
(1) The Registrant's Annual Report on Form 10-K for the fiscal year
ended March 31, 1998;
(2) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998;
(3) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998;
(4) The Registrant's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1998;
(5) The Registrant's Proxy Statement dated July 29, 1998 relating to
its 1998 Annual Meeting of Shareholders; and
(6) The description of the Registrant's Common Stock as contained in
the Registrant's Registration Statement on Form 10 (Registration
No. 0-10552), as filed with the Commission on February 10, 1969.
In addition, all reports and documents subsequently filed by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date hereof and prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and made a part hereof
from the date of the filing of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article NINTH of the Company's Certificate of Incorporation and Article
V of the Company's Bylaws provide that each person who was or is made a party
to, is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company) (a "Proceeding"), by reason of the
fact that he is or was a director, officer, employee or agent of the Company (or
was serving at the request of the Company as a director, officer, employee or
agent of another entity, including employee benefit plans) will be indemnified
and held harmless by the Company to the fullest extent authorized by the
Delaware General Corporation Law as it currently exists or is later amended. Any
indemnification shall be made by the Company only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct required.
Under Section 145 of the Delaware General Corporation Law, a
corporation may indemnify a director, officer, employee or agent of the
corporation (or other entity if such person is serving in such capacity at the
corporation's request) against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him 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, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of an action brought by
<PAGE>
or in the right of a corporation, the corporation may indemnify a director,
officer, employee or agent of the corporation (or other entity if such person is
serving in such capacity at the corporation's request) against expenses
(including attorneys' fees) actually and reasonably incurred by him 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, except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless a court determines
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnification
for such expenses as the court shall deem proper. Expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigation action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the corporation.
Article TENTH of the Company's Certificate of Amendment of the
Certificate of Incorporation also provides that a director of the Company shall
not be personally liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for any acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law or (iv) for any transaction in which the
director derived an improper personal benefit.
The Company maintains directors and officers liability insurance that
will insure against liabilities that directors or officers of the Company may
incur in such capacities.
II-2
<PAGE>
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Certificate of Incorporation of the Registrant, as amended (1)
4.2 Bylaws of the Registrant (1)
4.3 The Registrant's 1994 Stock Incentive Plan*
5 Opinion of Long Aldridge & Norman LLP*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Long Aldridge & Norman LLP (included in Exhibit 5)
24 Powers of Attorney (included on the Signature Page to this Registration
Statement)
</TABLE>
- --------------
* Filed herewith.
(1) Filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1994, and incorporated herein by reference.
II-3
<PAGE>
ITEM 9. UNDERTAKINGS
A. RULE 415 OFFERING.
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, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, because this registration statement is on Form S-8,
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. SUBSEQUENT DOCUMENTS INCORPORATED BY REFERENCE.
The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
II-4
<PAGE>
C. INDEMNIFICATION OF OFFICERS, DIRECTORS AND CONTROLLING
PERSONS.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on March 19, 1999.
SCHERER HEALTHCARE, INC.
(Registrant)
By: /s/ ROBERT P. SCHERER, JR
-------------------------
Robert P. Scherer, Jr.
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Robert P. Scherer, Jr. and Gary W. Ruffcorn, and each of them, his true
and lawful attorneys-in-fact and agents, with full power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated as of March 19, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ---------- -----
<S> <C>
/s/ ROBERT P. SCHERER, JR. Chairman of the Board, President and
- -------------------------- Chief Executive Officer
Robert P. Scherer, Jr.
/s/ GARY W. RUFFCORN Vice President and Chief Financial Officer
- -------------------------
Gary W. Ruffcorn
/s/ STEPHEN LUKAS, SR. Director
- -------------------------
Stephen Lukas, Sr.
</TABLE>
[Signatures Continued On Next Page]
II-6
<PAGE>
<TABLE>
<S> <C>
/s/ KENNETH H. ROBERTSON Director
- --------------------------
Kenneth H. Robertson
/s/ WILLIAM J. THOMPSON Director
- --------------------------
William J. Thompson
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Certificate of Incorporation of the Registrant, as amended (1)
4.2 Bylaws of the Registrant (1)
4.3 The Registrant's 1994 Stock Incentive Plan*
5 Opinion of Long Aldridge & Norman LLP*
23.1 Consent of Arthur Andersen LLP*
23.2 Consent of Long Aldridge & Norman LLP (included in Exhibit 5)
24 Powers of Attorney (included on the Signature Page to this Registration
Statement)
</TABLE>
- -------------
* Filed herewith.
(1) Filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the
fiscal year ended March 31, 1994, and incorporated herein by reference.
II-8
<PAGE>
Exhibit 4.3
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SCHERER HEALTHCARE, INC.
1994 STOCK INCENTIVE PLAN
<PAGE>
SCHERER HEALTHCARE, INC.
1994 STOCK INCENTIVE PLAN
1. PURPOSE.
a. The purpose of this 1994 Stock Incentive Plan (the "Plan")
is to further the growth and development of Scherer
Healthcare, Inc., a Delaware corporation (the "Company"),
by encouraging employees, consultants, advisors and, for a
limited time, outside directors of the Company and its
subsidiaries to obtain a proprietary interest in the
Company by owning its stock. The Company intends that the
Plan will provide such persons with an added incentive to
continue in the employ and service of the Company and its
subsidiaries and will stimulate their efforts in promoting
the growth, efficiency and profitability of the Company.
The Company also intends that the Plan will afford the
Company and its subsidiaries a means of attracting to it
service persons of outstanding quality.
b. It is further intended that part of the Plan qualify as an
incentive stock option plan, and that any option granted in
accordance with such portion of the Plan qualify as an
incentive stock option ("ISO"), all within the meaning of
Section 422 of the Internal Revenue code of 1986, as
amended (the "Code"). The tax effects of any other stock
option (a "Non-ISO"), stock appreciation rights ("SAR's")
or restricted stock ("Restricted Stock") granted hereunder
should be determined under Section 83 of the Code. Unless
otherwise specified, the term "Options" shall refer to both
ISO's and Non-ISO's, and to any Reload Options (as
described in Section 5(i) hereof) granted in connection
therewith; and the term "Stock Rights" shall refer to
Options, SAR's and Restricted Stock.
2. ADMINISTRATION.
a. The Plan shall be administered and interpreted by the
committee appointed by the Company's Board of Directors
(the "Committee"). Subject to the provisions of the Plan,
the Committee shall have the authority and sole discretion
to determine and designate, from time to time, those
persons eligible for a grant of Stock Rights under the
Plan, those persons to whom Stock Rights are to be granted,
the purchase price (if any) of the shares covered by any
Stock Rights granted, the time or times at which Stock
Rights shall be granted, the manner in and conditions under
which Options or SAR's are exercisable (including, without
limitation, any limitations or restrictions thereon), and
the restrictions and conditions to which Restricted Stock
shall be subject. In making such determinations, the
Committee may take into account the nature of the services
rendered by the respective persons to whom Stock Rights may
be granted, their present and potential contributions to
the Company's success and such other factors as the
Committee, in its sole discretion, shall deem relevant.
Subject to the express provisions of the Plan, the
Committee also shall have authority to interpret the Plan,
to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of
the instruments by which Stock Rights shall be evidenced
(which shall not be inconsistent with the terms of the
Plan), and to make all other determinations necessary or
advisable for the administration of the Plan, all of which
determinations shall be final, binding and conclusive.
b. The Board of Directors, in accordance with the applicable
provisions of the Company's By-Laws, shall appoint the
Committee from among its members to serve at the pleasure
of the Board. The Board from time to time may remove
members from, or add members to, the Committee and shall
fill all vacancies thereon. The following requirements
shall apply:
i. During the period any director is serving on the
Committee and during the 1-year period immediately
preceding the commencement of such service, he or
she shall not be or have been granted or awarded
any Stock Right or other equity securities of the
Company under
Page 1
<PAGE>
the Plan (or any other discretionary stock plan of
the Company or any Company affiliate as defined by
Rule 144 (a) (I) of the Securities Act of 1933).
Notwithstanding the foregoing, a member of the
Committee may participate during such period in
(i) a formula plan, (iiI) an ongoing securities
acquisition program with broad-based employee
participation, and/or (iii) a program to elect to
receive all or part of his annual retainer in
equity securities of the Company, all as defined
and limited by Rule 16b-3 issued under Section 16
of the Securities and Exchange Act of 1934, as
amended ("Rule 16b-3").
ii. The Committee shall be composed of two or more
directors.
iii. These requirements are intended to comply with the
"disinterested administration rule" of Rule 16-3
or any successor rule or regulation, and shall be
interpreted and construed in a manner which
assures compliance with said Rule. To the extent
Rule 16b-3 is modified to reduce or increase the
restrictions on who may serve on the Committee,
the Plan shall be deemed modified in a similar
manner.
c. The Committee may select one of its members as its chairman
and shall hold its meetings at such times and at such
places as it shall deem advisable. A majority of the
Committee shall constitute a quorum, and such majority
shall determine its actions. The Committee shall keep
minutes of its proceedings and shall report the same to the
Board of Directors at the meeting next succeeding.
d. In addition to such other rights of indemnification as they
have as directors or as members of the Committee, the
members of the Committee shall be indemnified by the
Company against reasonable expenses (including, without
limitation, attorneys' fees) actually and necessarily
incurred in connection with the defense of any action, suit
or proceeding, or in connection with any appeal, to which
they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the
Plan or any Stock Rights granted hereunder, and against all
amounts paid by them in settlement thereof (provided such
settlement is approved to the extent required by and in the
manner provided by the By-Laws of the Company relating to
indemnification of directors) or paid by them in
satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that
such Committee member or members did not act in good faith
and in a manner he, she or they reasonably believed to be
in or not opposed to the best interest of the Company.
3. STOCK.
The stock subject to the Stock Rights and other provisions of the
Plan shall be authorized but unissued or reacquired shares of the
$0.01 par value common stock of the Company (the "Common Stock").
Subject to readjustment in accordance with the provisions of Section
8, the total number of shares of the Common Stock for which Stock
Rights may be granted to persons participating in the Plan shall not
exceed in the aggregate 1,000,000 shares of Common Stock, less any
shares used as payment for SAR's pursuant to Section 6(a).
Notwithstanding the foregoing, the following shares again may become
subject to Stock Rights under the Plan: (i) shares of Common Stock
allocable to the unexercised portion of any expired or terminated
Option; and (ii) shares of Restricted Stock which are forfeited for
any reason.
4. ELIGIBILITY TO RECEIVE STOCK RIGHTS; TYPE OF OPTIONS.
a. The persons eligible to receive Stock Rights hereunder
shall be key employees, directors, consultants and advisors
of the Company and its subsidiary corporations (within the
meaning of Section 424(f) of the Code; "Subsidiaries");
provided, (i) ISO's may be granted only to employees
(including officers, whether or not they also are
directors, but excluding directors, consultants and
advisors who are not otherwise employees of the Company or
its Subsidiaries; and (ii) no director, (A) who is not
Page 2
<PAGE>
an employee of the Company or its Subsidiaries or (B) who
is then currently serving on the Committee, shall be
eligible to receive any Stock Rights. The Committee from
time to time may select such persons (from that group
specified above) to whom Stock Rights are to be offered and
granted hereunder; such selected persons hereinafter are
referred to individually as "Key Person" and collectively
as "Key Persons," and any Key Persons to whom Options are
offered and granted hereunder hereinafter are referred to
individually as "Optionee" and collectively as "Optionees."
b. The Committee may grant, at any time, new Stock Rights to a
Key Person who previously has received Stock Rights,
whether such Stock Rights include (i) prior Options that
still are outstanding, previously have been exercised in
whole or in part, have expired or are canceled in
connection with the issuance of new Stock Rights, or (ii)
shares of Restricted Stock that still are subject to
forfeiture, have vested in whole or in part, or are
canceled in connection with the issuance of new Stock
Rights. The purchase price of any new Options may be
established by the Committee without regard to any existing
Option Price (as described below).
5. TERMS AND CONDITIONS OF OPTIONS.
Options may be granted to Optionees from time to time and at such
times as may be authorized by the Committee. Subject to the
provisions hereinafter set forth, each Option granted under the Plan
shall be designated either as an ISO or a Non-ISO. In addition,
pursuant to the terms of Section 6, the Committee may grant SAR's in
tandem with any Option. In its authorization of the granting of an
Option hereunder, the Committee shall specify the name of the
Optionee, the number of shares of stock subject to such Option,
whether such Option is an ISO or a Non-ISO and whether such Option
shall be accompanied by SAR'S. The Committee then shall prepare a
written agreement, executed and dated by the Company, evidencing
such Option (the "Option Agreement") and setting forth the terms and
conditions of such Option; provided, an Option Agreement evidencing
both an ISO and a Non-ISO shall identify clearly the status and
terms of each Option. The Committee shall present such Option
Agreement to the Optionee. Upon execution of such agreement by the
Optionee, such Option shall be deemed to have been granted effective
as of the date of grant specified in subsection (c)(i) hereof. The
failure of the Optionee to execute the Option Agreement within 30
days after the date of the receipt of same shall render the Option
Agreement and the underlying Option null and void AB INITIO. Option
Agreements and the Options granted thereby shall comply with and be
subject to the following terms and conditions:
a. OPTIONEE AND NUMBER OF SHARES. Each Option Agreement shall
state the name of the Optionee and the total number of
shares of the Common Stock to which it pertains.
b. EMPLOYMENT/SERVICE. Each Optionee shall agree to remain in
the employ or service, as applicable, of the Company or a
Subsidiary for such period and pursuant to such terms, as
the Committee may require in the Option Agreement;
provided, such Agreement shall not impose upon the Company
or a Subsidiary any obligation to retain the Optionee in
its employ or service, as applicable, for any period.
c. OPTION PRICE.
i. The purchase price of the shares of Common Stock
underlying each Option (the "Option Price") shall
be determined by the Committee, which
determination shall be final, binding and
conclusive; provided, in no event shall the Option
Price of any ISO be less than 100 percent (110
percent in the case of ISO's of Optionees who own
more than 10 percent of the voting power of all
classes of stock of the Company, a parent
corporation (within the meaning of Section 424(e)
of the Code) of the Company (a "Parent"), or a
Subsidiary) of the fair market value of the Common
Stock on the date the Option is granted. Upon
execution of an Option Agreement by both the
Company and Optionee, the date as of which the
Page 3
<PAGE>
Committee granted the Option shall be considered
the date on which such Option is granted;
provided, any Option granted (pursuant to an
executed Option Agreement) to a prospective
employee, director, consultant or advisor of the
Company or a Subsidiary prior to the Commencement
of his or her employment or service shall be
deemed to be granted on, and shall become
effective on, the first day of employment or
service. Notwithstanding the foregoing, for
purposes of calculating the holding period
described in Sections 5(h) and (l), the effective
date of the grant of any Option granted prior to
the approval of the Plan by the stockholders of
the company in accordance with Section 10 of the
Plan shall be the date of such approval.
ii. If the Common Stock subject to the Plan is
registered on a national securities exchange (as
such term is defined by the Securities Exchange
Act of 1934) or is regularly traded in the
over-the-counter market on the date of
determination, the fair market value per share
shall be determined as the price equal to the mean
between (A) the high and low sales prices or (B)
the high "bid" and low "ask" prices, whichever are
reported, of a share of the Common Stock on said
national securities exchange or over-the-counter
market (as applicable on that day). If shares are
publicly traded on a national securities exchange
or the over-the-counter market but no shares of
the Stock are traded on that date (or if records
of such sales are unavailable or burdensome to
obtain) but there were shares traded on dates
within a reasonable period both before and after
such date, the fair market value shall be the
weighted average of the means between (A) the high
and low sales prices or (B) the high "bid" and low
"ask" prices, whichever are reported, of the
Common Stock on the nearest date before and the
nearest date after the date of determination. For
the purposes of this paragraph, all bid and ask
prices shall be those which are reported by the
National Association of Securities Dealers
Automated Quotation System (or a successor to such
system). If the Common Stock is traded both on a
national securities exchange, and in the
over-the-counter market, fair market value shall
be determined by the prices on the national
securities exchange, unless transactions on such
exchange and in the over-the-counter market are
jointly reported on a consolidated reporting
system in which case fair market value shall be
determined by reference to such consolidated
reporting system. If the Common Stock is not
listed for trading on a national securities
exchange and is not regularly traded in the
over-the-counter market, then the Committee shall
determine the fair market value of the Common
Stock from all relevant available facts which may
include opinions of independent experts as to
value and may take into account any recent sales
and purchases of such Common Stock to the extent
they are representative.
d. TERMS OF OPTIONS. Terms of Options granted under the Plan
shall commence on the date of grant and shall expire on
such date as the Committee may determine for each Option;
provided, in no event shall any Option be exercisable after
10 years (5 years in the case of ISO's granted to Optionees
who own more than 10 percent of the voting power of all
classes of the Company's Common Stock or the stock of a
Parent or Subsidiary from the date the Option is granted.
Any Reload Option granted pursuant to Section 5(i) hereof
shall expire as of the date of expiration of the original
Option with respect to which such Reload Option is granted.
No Option shall be granted hereunder after 10 years from
the earlier of the date the Plan is approved by the
stockholders or is adopted by the Board of Directors.
e. ISO'S CONVERTED TO NON-ISO'S. In the event any part or all
of an ISO granted under the Plan at any time fails to
satisfy all of the requirements of an incentive stock
option, then such ISO shall be split into an ISO and
Non-ISO so that the portion of the Option, if any, that
still qualifies as an incentive stock option shall remain
an ISO, and the portion that does not qualify as an
incentive stock option shall become a Non-ISO. Such split
of an ISO into an ISO portion and a Non-ISO portion shall
be evidenced by one or more Option Agreements, as long as
each Option is identified clearly as to its status as an
ISO or Non-ISO.
Page 4
<PAGE>
f. TERMS OF EXERCISE. Subject to the terms of this Section
and Section 4, the Committee may specify the terms pursuant
to which each Option may be exercised. Each Option shall
become exercisable in such installments (which need not be
equal and which may or may not correspond to a vesting
schedule specified by the Committee) and at such times as
designated by the Committee; provided, notwithstanding
anything herein to the contrary, no Option, or portion
thereof, or related SAR may be exercised until the
expiration of the holding period described in subsection
(1) hereof. The exercise of an Option may be for less than
the full number of shares of Common Stock subject to such
Option, but, unless the Option Agreement permits a smaller
percentage, such exercise shall not be made for less than
10-percent of the number of shares of Common Stock
initially subject to such Option. Subject to the other
restrictions on exercise set forth herein, the unexercised
portion of an Option may be exercised at a later date by
the Optionee; provided, the 10-percent requirement set
forth above shall not apply to any exercise of an Option if
all remaining shares of Common Stock subject to such Option
are exercised.
g. METHOD OF EXERCISE. All Options granted hereunder shall be
exercised by written notice directed to the Secretary of
the Company at its principal place of business or to such
other person as the Committee may direct. Each notice of
exercise shall identify the Option which the Optionee is
exercising (in whole or in part) and shall be accompanied
by payment of the Option Price for the number of shares
specified in such notice and by any documents required by
Section 9(a). The Company shall make delivery of such
shares within a reasonable period of time; provided, if any
law or regulation requires the Company to take any action
(including, but not limited to, the filing of a
registration statement under the Securities Act of 1933, as
amended (the "1933 Act"), and causing such registration
statement to become effective) with respect to the shares
specified in such notice before the issuance thereof, then
the date of delivery of such shares shall be extended for
the period necessary to take such action. In the event an
Optionee exercises both an ISO and a Non-ISO, separate
certificates shall be issued to such Optionee for the ISO
and Non-ISO shares.
h. MEDIUM AND TIME OF PAYMENT.
i. The Option Price shall be payable upon the
exercise of the Option in an amount equal to the
number of shares then being purchased times the
per share Option Price. Payment, at the election
of the Optionee [or his or her successors as
provided in Section 5(j)(iii)], shall be (A) in
cash; (B) by delivery to the Company of a
certificate or certificates for shares of the
Common Stock duly endorsed for transfer to the
Company with signature guaranteed by a member firm
of a national stock exchange or by a national or
state bank (or guaranteed or notarized in such
other manner as the Committee may require); (C) if
the Committee, in its sole discretion, so permits
in such Optionee's Option Agreement, by
relinquishing the option rights granted hereunder
with respect to one or more of the shares of the
Common Stock subject to the Option; or (D) by a
combination of (A) and (B) and, if permitted in
such Optionee's Option Agreement, (C).
ii. If all or part of the Option Price is paid by
delivery of shares of the Common Stock, the
following conditions shall apply:
(1) Such shares shall be valued on the basis
of the fair market value of the Common
Stock on the date of exercise. Fair
market value shall be determined in the
manner provided in Section 5(c)(ii)
(dealing with determining Option Price);
(2) On the date of such payment, the Optionee
must have held such shares for at least 6
months from (i) the date of acquisition,
in the case of shares acquired other than
through an exercise or award of Stock
Rights, or (ii) the date of grant or
award (as
Page 5
<PAGE>
described in Section 5(c)(i) hereof) of
the underlying Stock Rights, if such
shares were acquired in connection with
the exercise or award of Stock Rights; and
(3) The value of such Common Stock shall be
less than or equal to the total Option
Price payment. If the Optionee delivers
Common Stock with a value that is less
than the total Option Price, then such
Optionee shall pay the balance of the
total Option Price in cash.
iii. If all or part of their Option Price is paid by
relinquishing the option rights to one or more of
the shares subject to the Option, the following
conditions shall apply:
(1) For purposes of calculating the number of
shares of the Common Stock for which the
option rights are to be relinquished, the
relinquishment of the option rights of
one such share shall be deemed to
generate a dollar amount in payment of
the Option Price equal to the fair market
value of one share of the Common Stock
(as determined under subsection (c)(ii)
hereof), and such amount shall be applied
toward the payment of the Option Price;
(2) The Option with respect to which option
rights are relinquished must have been
granted (as described in Section 5(c)(i)
hereof) to the Optionee at least 6 months
prior to the date of such payment; and
(3) The total value of such shares for which
option rights are relinquished shall be
less than or equal to the total Option
Price. If the Optionee relinquishes the
option rights for shares with a value
that is less than the Option Price, the
balance of the Option Price shall be paid
in one or both of the alternative payment
forms described in subsection (i) hereof.
iv. In addition to the payment of the purchase price
of the shares then being purchased, an Optionee
also shall pay in cash (or have withheld from his
or her normal pay or payments) an amount equal to
the amount, if any, which the Company at the time
of exercise is required to withhold under income
tax withholding provisions of the Code and of the
income tax laws of the state of the Optionee's
residence.
i. RELOAD OPTIONS. At the time of granting any ISO or Non-ISO
hereunder, the Committee shall designate, in its
discretion, whether such ISO or Non-ISO shall be
accompanied by a "Reload Option." A "Reload Option" shall
be an Option that is granted (i) to an Optionee who pays
for exercise of all or part of such ISO or non-ISO with
shares of the Common Stock pursuant to Section 5(h) hereof,
(ii) for the same number of shares as is exchanged in
payment for the exercise of such ISO or Non-ISO; (iii) as
of the date of such payment, and (iv) subject to all of the
same terms and conditions as such ISO or Non-ISO; provided,
the Option Price for shares subject to the Reload Option
shall be determined pursuant to Section 5(c) hereof on the
basis of the fair market value of such shares on the date
the Reload Option is granted. In addition, the Committee,
in its discretion, may grant one or more successive Reload
Options to an Optionee who pays for exercise of a Reload
Option with shares of the Common Stock. In no event shall
the term of any Reload Option extend beyond the original
term of the ISO or Non-ISO with respect to which such
Reload Option was granted.
j. EFFECT OF TERMINATION OF EMPLOYMENT/SERVICE OR DEATH.
Except as provided in parts (i), (ii) and (iii) of this
subsection, no ISO shall be exercisable unless the Optionee
thereof shall have been an employee of the Company and/or a
Subsidiary from the date of the granting of the Option
until the date of exercise, and no Non-ISO shall be
exercisable unless the Optionee thereof shall have been an
Page 6
<PAGE>
employee, director, consultant or advisor (as applicable)
of the Company and/or a Subsidiary from the date of the
granting of the Option until the date of exercise;
provided, the Committee, in its sole discretion, may waive
the application of this Section 5(j) with respect to any
Non-ISO's granted hereunder and, instead, may provide a
different expiration date or dates in a Non-ISO Option
Agreement.
i. In the event an Optionee ceases to be an employee
(and, in the case of a Non-ISO, a director,
consultant and advisor) of the Company and its
Subsidiaries for any reason other than retirement
with the consent of the Company, death or
disability, any Option or unexercised portion
thereof granted to him or her shall terminate on
and shall not be exercisable after the earlier to
occur of (a) the expiration date of the Option, or
(b) 1 month after termination of employment or
service, as applicable; provided, the Committee
may provide in the Option Agreement that such
Option or any unexercised portion thereof shall
terminate sooner. Prior to the earlier of the
dates specified in the first sentence of this
subsection (5)(j)(i), the Option shall be
exercisable only in accordance with its terms and
only for the number of shares exercisable on the
date of termination of employment or service, as
applicable. The question of whether an authorized
leave of absence or absence for military or
government service or for any other reason shall
constitute a termination of employment or service
for purposes of the Plan shall be determined by
the Committee, which determination shall be final
and conclusive.
ii. Upon an Optionee's retirement with the Company's
consent or the termination of an Optionee's
employment or service, as applicable, due to
disability, as determined by the Committee in its
sole discretion, any Option or unexercised portion
thereof granted to him or her which is otherwise
exercisable shall terminate on and shall not be
exercisable after the earlier to occur of (a) the
expiration date of such Option, or (b) 3 months
after the date on which such Optionee ceases to be
an employee and, in the case of a Non-ISO, a
director, consultant and advisor of the Company
and its Subsidiaries; provided, the Committee may
provide in the Option Agreement that such Option
or any unexercised option thereof shall terminate
sooner. Prior to the earlier of such dates, such
Option shall be exercisable only in accordance
with its terms and only for the number of shares
exercisable on the date such Optionee's employment
or service, as applicable ceases, due to
retirement with the consent of the Company or
disability.
iii. In the event of the death of the Optionee while he
or she is an employee or, in the case of a
Non-ISO, a director, consultant or advisor of the
Company or a Subsidiary or within 3 months after
the date on which such Optionee's employment or
service, as applicable, terminated due to
retirement with the Company's consent or due to
disability, as determined by the Committee in its
sole discretion, any Option or unexercised portion
thereof granted to him or her may be exercised by
his or her personal representatives, heirs or
legatees at any time prior to the expiration of 1
year from the date of death of such Optionee, but
in no event later than the date of expiration of
the option period; provided, the Committee may
provide in the Option Agreement that such Option
or any unexercised portion thereof shall terminate
sooner. Such exercise shall be effected pursuant
to the terms of this Section 5 as if such personal
representatives, heirs or legatees are the named
Optionee.
k. RESTRICTIONS ON TRANSFER AND EXERCISE OF OPTIONS. Unless
prior written authorization is received from the Committee,
no Option shall be assignable or transferable by the
Optionee except by will or by the laws of descent and
distribution and, during the lifetime of an Optionee, the
Option shall be exercisable only by him or her.
Page 7
<PAGE>
l. HOLDING PERIOD. No Option or SAR granted hereunder may be
exercised within the 6-month period immediately following
the date of grant (as described in Section 5(c)(i) hereof).
m. RIGHTS AS A STOCKHOLDER. An Optionee shall have no rights
as a stockholder with respect to shares covered by his or
her Option until the date of the issuance of the shares to
him or her and only after the Option Price of such shares
is fully paid. Unless specified in Section 8, no adjustment
will be made for dividends or other rights for which the
record date is prior to the date of such issuance,
n. MISCELLANEOUS PROVISIONS. The Option Agreements authorized
under the Plan shall contain such other provisions,
including, without limitation, restrictions upon the
exercise of the Option as the Committee shall deem
advisable. In the event of any conflict between the
provisions of an Option Agreement and the Plan, the Plan
shall control.
o. NO OBLIGATION TO EXERCISE OPTION. The granting of an Option
shall impose no obligation upon the Optionee to exercise
such Option.
6. STOCK APPRECIATION RIGHTS (SAR'S).
a. Pursuant to such terms and conditions as the Committee
deems appropriate in each case, the Committee may authorize
the company to accept an Optionee's surrender of his or her
right to exercise an Option (or any portion thereof), in
consideration for the payment by the Company of an amount
equal to the excess of the fair market value of the shares
of Common Stock subject to such Option (or portion thereof)
surrendered over the Option Price of such shares; provided,
SAR's granted with respect to ISO's must be granted at the
same time that the ISO's are granted. SAR's shall be
granted with respect to a Reload Option if and to the
extent SAR's are granted with respect to the original
Option. An Optionee may elect to receive payment for
exercise of any SAR in the form of shares of Common Stock
valued at the then fair market value thereof or in cash, or
partly in cash and partly in shares of Common Stock;
provided, the Committee, in its sole discretion, may
consent to or disapprove, in whole or in part, an
Optionee's election to receive full or partial payment in
cash. If the Committee disapproves such an election, the
Committee shall specify the manner in which payment for
exercise of the SAR shall be made. The Committee may
specify payment in shares of Common Stock or in a
combination of shares of Common Stock and cash in an amount
not greater than the amount of cash specified in the
Optionee's election. For purposes hereof, fair market
value of the shares shall be determined as of the date of
exercise of the SAR and pursuant to the terms of Section
5(c). Payment in shares of Common Stock shall reduce the
number of shares subject to the Plan by the number of
shares so paid.
b. Any election by an Optionee to receive payment for exercise
of an SAR shall be made in the same manner and pursuant to
the same procedures prescribed for the exercise of the
corresponding Option; provided, if the Optionee elects to
receive payment in cash, the following conditions must be
met: (i) such an election shall be made during the period
beginning on the 3rd business day following the date of the
release of quarterly or annual summary statements of the
Company's sales and earnings and ending on the 12th
business day following such date; (ii) the Company
regularly releases for publication such financial
information; and (iii) such financial information regularly
appears on or in a wire service, financial news service or
newspaper of general circulation, or otherwise is made
publicly available.
c. Any Option surrendered as provided in this Section shall be
canceled by the Company, and the underlying share of Common
Stock shall not be subject to further grant hereunder.
Page 8
<PAGE>
d. The Committee shall be authorized hereunder to make payment
to the Optionee in shares of Common Stock only if Section
83, as amended, of the Internal Revenue Code applies to the
Common Stock transferred to the Optionee.
e. Notwithstanding anything contained herein to the contrary,
the SAR's provided in this Section, by their terms, shall
meet the following requirements:
i. The SAR's shall expire no later than the
expiration date of the underlying Option to which
such rights relate;
ii. The SAR's may be for no more than the difference
between the exercise price of the underlying
Option and the fair market value of the Stock
subject to the underlying Option at the time such
SAR's are exercised;
iii. The SAR's may be transferable only when the
underlying Option is transferable, and under the
same conditions;
iv. The SAR's may be exercised only when the
underlying Option is eligible to be exercised;
v. The SAR's may be exercised only when the fair
market value of the Common Stock subject to the
underlying option exceeds the Option Price of such
Option, and only upon expiration of the holding
period described in Section 5(1); and
vi. The SAR's may be exercised only if such exercise has
the same economic and tax consequences as the
exercise of the underlying Option followed by an
immediate sale of the Common Stock acquired thereby.
7. RESTRICTED STOCK.
Restricted Stock may be awarded to Key Persons from time to time and
at such times as may be authorized by the Committee. An award of
Restricted Stock shall provide a Key Person with no immediate rights
of ownership in the shares of Common Stock underlying the award, but
such shares shall be subject to such restrictions as the Committee
shall specify and shall be subject to forfeiture by the Key Person
until the earlier of (i) the time such restrictions lapse or are
satisfied, or (ii) the time such shares are forfeited. In its
authorization of an award of Restricted Stock hereunder, the
Committee shall specify the name of the Key Person, the number of
shares of Restricted Stock to be awarded and the restrictions to
which such Restricted Stock shall be subject. The Committee then
shall prepare a written agreement, executed and dated by the
Company, evidencing such terms of the award (the "Restriction
Agreement"). The Committee shall present such Restriction Agreement
to the Key Person. The failure of the Key Person to execute the
Restriction Agreement within 30 days after the date of the receipt
of same shall render the Restriction Agreement and the underlying
award of Restricted Stock null and void AB INITIO. Restriction
Agreements and the Restricted Stock awarded thereby shall comply
with and be subject to the following terms and conditions:
a. KEY PERSON AND NUMBER OF SHARES. Each Restriction Agreement
shall state the name of the Key Person and the total number
of shares of the Common Stock to which it pertains.
b. RESTRICTIONS ON STOCK. The vesting of complete ownership
rights in any Restricted Stock awarded pursuant to this
Section 7 shall be subject to such terms and conditions as
the Committee may determine in its sole discretion;
provided, no Key Person shall be required to pay any
consideration in the form of cash or other property as a
condition to acquiring the Restricted Stock. A Key Person
shall vest and obtain a nonforfeitable interest in the
Restricted Stock as of the date that the last of such terms
and conditions is satisfied, provided, if such terms and
conditions are not satisfied by the
Page 9
<PAGE>
deadline, if any, designated by the Committee and specified
in the Restriction Agreement, the portion of Restricted
Stock still subject to such terms and conditions shall be
forfeited and returned to the Company. The Committee, in
its sole discretion, may provide for the lapse of the terms
and conditions to which Restricted Stock is subject in
installments, and may provide for different terms and
conditions and/or a different restriction period with
respect to each award, or any portion of an award, of
Restricted Stock.
c. DELIVERY OF RESTRICTED STOCK.
i. The Company shall make delivery of the shares of
Restricted Stock within a reasonable period of
time after expiration of a restriction period;
provided, if any law or regulation requires the
Company to take any action (including, but not
limited to, the filing of a registration statement
under the 1933 Act and causing such registration
statement to become effective) with respect to
such shares before the issuance thereof, then the
date of delivery of such shares shall be extended
for the period necessary to take such action.
ii. The certificates delivered representing shares of
the Restricted Stock shall bear restrictive
legends required pursuant to Section 9.
iii. A Key Person shall pay in cash (or have withheld
from his or her normal pay) an amount equal to the
amount, if any, which the Company is required at
any time to withhold under the income tax laws of
the Federal Government or the state of the Key
Person's residence.
d. TERMINATION OF EMPLOYMENT/SERVICE. Except as otherwise
determined by the Committee and set forth in a Restriction
Agreement, in the event that the employment or other
service (as applicable) of a Key Person to whom Restricted
Stock has been granted ceases or is terminated for any
reason (including a termination by the Company whether or
not for good cause and a termination by reason of the
death, disability or retirement of the Key Person) before
satisfaction of the terms and conditions to which the
Restricted Stock is subject, all shares of Restricted Stock
still subject to restriction shall be forfeited and shall
be reacquired by the Company.
e. TRANSFER. No rights to Restricted Stock shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise
disposed of while such shares are still subject to
restriction, except that, subject to Section 7(d), such
Restricted Stock rights may be bequeathed by will or
transferred by operation of the laws of descent and
distribution.
f. WAIVER OF RESTRICTIONS. If the Committee determines that,
in cases of death, disability, retirement, or other
circumstances determined by the Committee, a waiver of any
or all remaining restrictions with respect to a Key
Person's Restricted Stock would be desirable, it may elect
in its sole discretion to waive such remaining restrictions.
g. RIGHTS AS A STOCKHOLDER. Until the last of the restriction
lapses or is satisfied and Restricted Stock is delivered to
the Key Person, the Key Person shall have no rights as a
stockholder with respect to the Restricted Stock.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
a. In the event that the outstanding shares of the Common
Stock of the Company are hereafter increased or decreased
or changed into or exchanged for a different number or kind
of shares or other securities of the Company by reason of a
recapitalization, reclassification, stock split,
combination of shares or dividend payable in shares of the
Common Stock, the following rules shall apply:
Page 10
<PAGE>
i. The Committee shall make an appropriate adjustment
in the number and kind of shares available for the
granting of Stock Rights under the Plan.
ii. The Committee also shall make an appropriate
adjustment in the number and kind of shares (A) as
to which outstanding Options, or portions thereof
then unexercised, shall be exercisable, or (B) as
to which Restricted Stock has been awarded but not
yet issued, to the end that the Key Person's
proportionate interest shall be maintained as
before the occurrence of such event; any such
adjustment in any outstanding Options shall be
made without change in the total price applicable
to the unexercised portion of such Option and with
a corresponding adjustment in the Option Price per
share. No fractional shares shall be issued to
Optionee in making the foregoing adjustments, and
the number of shares available under the Plan or
the number of shares subject to any outstanding
Stock Rights shall be the next lower number of
shares, rounding all fractions downward.
iii. Any adjustment to or assumption of ISO's under
this subsection (a) shall be made in accordance
with Internal Revenue Code Section 424(a), as
amended, and the regulations promulgated
thereunder so as to preserve the status of such
ISO's as incentive stock options under Internal
Revenue Code Section 422, as amended.
iv. If any rights or warrants to subscribe for
additional shares are given pro rata to holders of
outstanding shares of the class or classes of
stock then set aside for the Plan, (A) each
Optionee shall be entitled to the same rights or
warrants on the same basis as holders of the
outstanding shares with respect to such portion of
his or her Option as is exercised on or prior to
the record date for determining stockholders
entitled to receive or exercise such rights or
warrants, and (B) each Key Person to whom
Restricted Stock has been awarded but not yet
issued shall be entitled to the same rights or
warrants as holders of the same number of shares.
v. If a Key Person becomes entitled to an adjustment
in the number or kind of shares or other
securities of the Company by reason of his or her
rights to Restricted Stock, such shares or other
securities shall be subject to the same terms and
restrictions as the Restricted Stock with respect
to which such shares are issued.
b. Subject to any required action by the stockholders, if the
Company shall be a party to any reorganization involving
merger, consolidation, acquisition of the stock or
acquisition of the assets of the Company, the Committee, in
its discretion, may declare that:
i. any or all outstanding Options granted hereunder
shall become immediately nonforfeitable and
exercisable (to the extent permitted under federal
or state securities laws);
ii. any or all Restricted Stock awarded hereunder
shall become immediately nonforfeitable;
iii. any Option granted but not yet exercised, or any
Restricted Stock awarded but not yet issued, shall
pertain to and apply, with appropriate adjustment
as determined by the Committee, to the securities
of the resulting corporation to which a holder of
the number of shares of the Common Stock subject
to such Options or Restricted Stock (whichever is
applicable) would have been entitled; and/or
iv. any or all Options granted hereunder are to become
immediately nonforfeitable and exercisable (to the
extent permitted under federal or state securities
laws) and are to be terminated after giving at
least 30 days' notice to the Key Persons to whom
such Options have been granted.
Page 11
<PAGE>
c. If the Board adopts a plan of dissolution and liquidation
that is approved by the stockholders of the Company, the
Committee shall give each Optionee notice of such event at
least 10 days prior to its effective date, and the rights
of all Optionees shall become immediately nonforfeitable
and exercisable (to the extent permitted under federal or
state securities laws). In addition, all Restricted Stock
awarded hereunder immediately shall become nonforfeitable
and all restrictions thereon (except restrictions on
transferability imposed by federal or state securities
laws) shall lapse.
d. Any issuance by the Company of stock of any class, or
securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of
the Common Stock subject to any Stock Rights, except as
specifically provided otherwise in this Section 8. The
grant of Stock Rights pursuant to the Plan shall not affect
in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge,
consolidate or dissolve, or to liquidate, sell or transfer
all or any part of its business or assets. All adjustments
the Committee makes under this Section 8 shall be
conclusive.
9. EMPLOYEE'S AGREEMENT AND SECURITIES REGISTRATION.
a. If, in the opinion of counsel for the Company, such action
is necessary or desirable, no Stock Rights shall be granted
to any Key Person, unless, at the time of grant, such Key
Person (i) represents and warrants that he or she will
acquire the stock for investment only and not for purposes
of resale or distribution, and (ii) makes such further
representations and warranties as are deemed necessary or
desirable by counsel to the Company with regard to holding
and resale of the stock. If at the time of the exercise of
any Option, the exercise of an SAR paid in whole or in part
in shares of Common Stock, or the issuance of any
Restricted Stock, it is necessary or desirable, in the
opinion of counsel for the Company, in order to comply with
any applicable laws or regulations relating to the sale of
securities, that the Key Person represent and warrant that
he or she is purchasing or acquiring the Common Stock for
investment and not with any present intention to resell or
distribute the same or make other and further
representations and warranties with regard to the holding
and resale of such shares, the Key Person shall, upon the
request of the Committee, execute and deliver to the
Company an agreement or affidavit to such effect. Should
the Committee have reasonable cause to believe that such
Key Person did not execute such agreement in good faith;
the Company shall not be bound by the exercise of the
Option or any agreement to issue the Restricted Stock,
whichever is applicable. In addition to any restrictive
legend required pursuant to Section 7, all certificates
issued pursuant to the Plan shall be marked with the
following restrictive legend or similar legend, if such
marking, in the opinion of counsel to the Company, is
necessary or desirable:
The shares evidenced by this certificate have not
been registered under the Securities Act of 1933,
as amended (the "1933 Act"), or under the
securities laws of any state (the "State
Securities Acts") and have been issued or sold in
reliance upon Section 4(2) of the 1933 Act and
Section 10-5-9(9) of the Georgia Securities Act of
1973.
These shares are held by an "affiliate" of the
Company (as such term is defined in Rule 144
promulgated by the Securities and Exchange
Commission under the 1933 Act). Accordingly, these
shares may not be sold, hypothecated, pledged or
otherwise transferred, except (i) pursuant to an
effective registration statement under the 1933
Act and any applicable State Securities Acts with
respect to such shares, (ii) in accordance with
said Rule 144, or (iii) upon issuance to the
Company of a favorable opinion of counsel or the
submission to the Company of such other evidence
as may be satisfactory to the Company that such
proposed sale, assignment, encumbrance or other
transfer will not be in violation of the 1933 Act
or any applicable State Securities Acts or any
rules or regulations
Page 12
<PAGE>
thereunder. Amy attempted transfer of the
certificate representing these shares which is in
violation of the preceding restrictions will not
be recognized by the Company, nor will any
transferee of such shares be recognized as the
owner thereof by the Company.
If the Common Stock to be acquired upon the exercise of an option or
any SAR is registered with the Securities and Exchange Commission as
of the date of granting an Option or SAR, or if such Common Stock is
registered as of the date of exercise, or if Restricted Stock is
registered as of the date of issuance, then the Committee, in its
discretion, may dispense with the above investment affidavits and
the Common Stock may be issued without the first paragraph of the
restrictive legend set forth above. If the Common Stock is held by a
Key Person who is not an affiliate, as that term is defined in Rule
144 of the 1933 Act, or who ceases to be an affiliate, the
Committee, in its discretion, may dispense with or authorize the
removal of the second paragraph of the restrictive legend set forth
above.
b. In the event that the Company in its sole discretion shall
deem it necessary or advisable to register, under the 1933
Act or any state securities acts, any shares with respect
to which Stock Rights have been granted hereunder, then the
Company shall take such action at its own expense before
delivery of the certificates representing such shares to a
Key Person. In the event the shares of Common Stock of the
Company shall be listed on any national securities exchange
or on the over-the-counter market at the time of the
exercise of an Option or SAR or issuance of Restricted
Stock, the Company shall make prompt application for the
listing of the shares of Common Stock to be issued on such
stock exchange of such shares, at the sole expense of the
Company.
10. EFFECTIVE DATE; AMENDMENT AND TERMINATION OF THE PLAN.
a. The Plan shall be effective as of April 1, 1994, and no
Stock Rights shall be granted hereunder prior to said date;
provided, adoption of the Plan shall be approved by the
holders of a majority of the voting power of the
outstanding shares of the Common Stock not later than the
earlier of (i) the annual meeting of the stockholders of
the Company which immediately follows the date of the first
grant or award of Stock Rights hereunder, or (ii) 12 months
after the adoption of the Plan by the Board, and failure to
obtain such approval shall render the Plan and any Stock
Rights granted hereunder null and void AB INITIO.
b. In the event the Board shall determine that a portion of
the Plan does not qualify as an "Incentive Stock Option
Plan" pursuant to Internal Revenue Code Section 422, as
amended, or that the Plan is not in the best interest of
the Company or its stockholders for any reason, the Board
shall have the power to add to, amend or repeal any of the
provisions of the a Plan, to suspend the operation of the
entire Plan or any of its provisions for any period or
periods or to terminate the Plan in whole or in part. In
the event of any such action, the Committee shall prepare
written procedures which, when approved by the Board, shall
govern the administration of the Plan resulting from such
addition, amendment, repeal, suspension or termination.
Notwithstanding the above provisions, no such addition,
amendment, repeal, suspension or termination shall
adversely affect, in any way, the rights of the Key Persons
who have outstanding Stock Rights without the consent of
such Key Persons, nor may any such change in the Plan be
made without the prior approval of the holders of a
majority of the outstanding Common Stock if (i) such change
would cause the applicable portions of the Plan to fail to
qualify as an "incentive stock option plan" pursuant to
Internal Revenue Code Section 422, as amended, or (ii) such
stockholder approval is required under Internal Revenue
Code Section 422, as amended, Rule 16b-3, or any other
applicable law or regulation.
Page 13
<PAGE>
11. APPLICATION OF FUNDS.
The proceeds by the company from the sale of the Common Stock
subject to the Stock Rights granted hereunder will be used for
general corporate purposes.
12. NOTICES.
All notices or other communications by a Key Person to the Committee
pursuant to or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Committee
at the location, or by the person, designated by the Committee for
the receipt thereof.
13. TERM OF PLAN.
Subject to the terms of Section 10(b), the Plan shall terminate upon
the later of (i) the complete exercise or lapse of the last
outstanding Option, (ii) the last share of Restricted Stock becoming
nonforfeitable, or (iii) the last date upon which Stock Rights may
be granted hereunder.
Page 14
<PAGE>
EXHIBIT 5
March 17, 1999
Scherer Healthcare, Inc.
120 Interstate North Parkway, S.E.
Suite 305
Atlanta, GA 30339
Re: Scherer Healthcare, Inc. 1994 Stock Incentive Plan -
Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to Scherer Healthcare, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") and the
filing thereof with the Securities and Exchange Commission. Pursuant to the
Registration Statement, the Company intends to register under the Securities
Act of 1933, as amended, an aggregate of 1,000,000 shares (the "Shares") of
common stock, par value $.01 per share, of the Company (the "Common Stock").
The Shares represent Common Stock that the Company may issue upon the award
of restricted stock, upon the exercise of options outstanding or upon the
exercise of options which may be granted in the future under the Company's
1994 Stock Incentive Plan (the "Stock Incentive Plan").
The opinion hereinafter set forth is given to the Company pursuant
to Item 8 of Form S-8 and Item 601(b)(5) of Regulation S-K. The only opinion
rendered by this firm consists of the matter set forth in numbered paragraph
(1) below (our "Opinion"), and no other opinion is implied or to be inferred
beyond such matters. Additionally, our Opinion is based upon and subject to
the qualifications, limitations and exceptions set forth in this letter.
Our Opinion is furnished for the benefit of the Company solely with
regard to the Registration Statement, may be relied upon by the Company only
in connection with the Registration Statement and may not otherwise be relied
upon, used, quoted or referred to by or filed with any other person or entity
without our prior written permission.
In rendering our Opinion, we have examined such agreements,
documents, instruments and records as we deemed necessary or appropriate
under the circumstances for us to express our Opinion, including, without
limitation, the record of corporate proceedings and the Stock Incentive
<PAGE>
Scherer Healthcare, Inc.
Page 2
March 17, 1999
Plan. In making all of our examinations, we assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to the original documents of all documents submitted to us as
copies, and the due execution and delivery of all documents by any persons or
entities other than the Company where due execution and delivery by such
persons or entities is a prerequisite to the effectiveness of such documents.
As to various factual matters that are material to our Opinion, we
have relied upon the factual statements set forth in a certificate of
officers of the Company and originals or copies of certificates of various
public officials. We have not independently verified or investigated, nor do
we assume any responsibility for, the factual accuracy or completeness of
such factual statements.
Members of this firm are admitted to the Bar of the State of Georgia
and are duly qualified to practice law in that state. We do not herein
express any opinion concerning any matter respecting or affected by any laws
other than the laws of the State of Georgia and the Delaware General
Corporation Laws that, in the exercise of reasonable professional judgment,
are normally considered in transactions such as those contemplated by this
type of issuance of shares. The Opinion hereinafter set forth is based upon
pertinent laws and facts in existence as of the date hereof, and we expressly
disclaim any obligation to advise you of changes to such pertinent laws or
facts that hereafter may come to our attention.
Based upon and subject to the foregoing, we are of the following
opinion:
(1) The Shares, when issued in accordance with the terms of the
Stock Incentive Plan against payment in full of the exercise
price therefor, if applicable, will be validly issued, fully
paid and nonassessable.
We hereby consent to the filing of this Opinion as an exhibit to the
Registration Statement.
Very truly yours,
LONG ALDRIDGE & NORMAN LLP
By: /s/ David M. Calhoun
-------------------------
David M. Calhoun
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated June 3, 1998
included in Scherer Healthcare, Inc.'s Form 10-K for the year ended March 31,
1998 and to all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
-----------------------
Arthur Andersen LLP
Atlanta, Georgia
March 17, 1999
