<PAGE>
Filed with the Securities and Exchange Commission on October 17, 1996
Registration No.: 33-____________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AMERICAN SOFTWARE, INC.
(Exact name of issuer as specified in its charter)
Georgia 58-1098795
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
470 East Paces Ferry Road, N. E.
Atlanta, Georgia 30305
(Address of Principal Executive Offices)
AMERICAN SOFTWARE, INC. INCENTIVE STOCK OPTION PLAN,
NONQUALIFIED STOCK OPTION PLAN, 1991 EMPLOYEE STOCK OPTION PLAN AND DIRECTOR
AND OFFICER STOCK OPTION PLAN (COLLECTIVELY, THE "PLANS")
(Full Title of the Plans)
Agent for Service: With Copies to:
Henry B. Levi James C. Edenfield and
Gambrell & Stolz, L.L.P. Peter W. Pamplin
Suite 4300, One Peachtree Center American Software, Inc.
303 Peachtree Street, N. E. 470 East Paces Ferry Road, N.E.
Atlanta, Georgia 30308 Atlanta, Georgia 30305
Telephone Number of Agent for Service: 404/577-6000
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Maximum
Aggregate
Proposed Offering
Maximum Price
Offering of
Amount Price Additional Amount of
Title of Securities to be Per Shares/2/ Registration
to be Registered Registered/1/ Share/2/ /3/ Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Shares,
Par Value $.10 3,950,486 Shs. $6.625 $2,896,251 $998.71
================================================================================
</TABLE>
<PAGE>
/1/Based upon the aggregate number of Shares presently authorized for issuance
under the Plans, less shares already purchased pursuant to options granted under
such Plans. Pursuant to General Instruction E, the registration fee is payable
only with respect to (a) the additional 250,000 shares registered resulting from
an amendment to one of the Plans, and (b) 187,170 shares that inadvertently were
not included in previous Registration Statements registering shares that may be
issued pursuant to options granted under the Plans. The remaining shares were
registered under Registration Statement Numbers 33-42017, 33-67010, 33-83396
and/or 33-62587.
/2/Based upon the closing price of the Class A Common Shares on NASDAQ National
on October 4, 1996.
/3/Estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457(g).
STATEMENT PURSUANT TO GENERAL INSTRUCTION E
The contents of Registration Statement No. 33-42017 on Form S-8 of the
Registrant are hereby incorporated by reference thereto, except for Item 5 of
Part II, which is revised as set forth below. Such Registration Statement
related to the same stock option plans to which this Registration Statement
relates. This Registration Statement is being filed to register additional
securities, of the same class, registered under Registration Statement No. 33-
42017.
Item 5. Interests of Named Experts and Counsel.
--------------------------------------
The firm of Gambrell & Stolz, L.L.P., Atlanta, Georgia, is general
counsel to the Registrant. As of September 12, 1996, lawyers associated with
that firm owned or had options to purchase 37,992 Class A Common Shares of the
Registrant. David H. Gambrell and James R. McGuone, partners in that firm, are a
Director of the Registrant and the Secretary of the Registrant, respectively.
2
<PAGE>
SIGNATURES
The Registrant. 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 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 October 16, 1996.
AMERICAN SOFTWARE, INC.
By: /s/ James C. Edenfield
-------------------------------------
James C. Edenfield, 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 Capacity Date
---- -------- ----
<S> <C> <C>
/s/ James C. Edenfield
- ----------------------- President, Chief Executive October 16 , 1996
James C. Edenfield Officer and Director -----
/s/ Thomas L. Newberry
- ----------------------- Chairman of the Board of October 17 , 1996
Thomas L. Newberry Directors -----
/s/ David H. Gambrell
- ----------------------- Director October 7 , 1996
David H. Gambrell -----
- ----------------------- Director October , 1996
Thomas R. Williams -----
/s/ Peter W. Pamplin
- ----------------------- Chief Accounting Officer October 16 , 1996
Peter W. Pamplin and Acting Chief Financial -----
Officer
</TABLE>
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
5.1 Opinion of Gambrell & Stolz, L.L.P.
regarding legality of Securities
23.1 Consent of KPMG Peat Marwick LLP
24 Power of Attorney
99.1 Amended and Restated American Software, Inc.
1991 Employee Stock Option Plan
99.2 Amended and Restated American Software, Inc.
Director and Officer Stock Option Plan
</TABLE>
<PAGE>
[LETTERHEAD OF GAMBRELL & STOLZ, L.L.P. APPEARS HERE]
October 7, 1996
WRITER'S DIRECT DIAL: EXHIBIT 5.1
404/221-6508
Board of Directors
American Software, Inc.
470 East Paces Ferry Road
Atlanta, Georgia 30305
Gentlemen:
We are familiar with the proceedings taken and proposed to be taken by
American Software, Inc., a Georgia corporation (the "Company"), in connection
with its Amended and Restated Incentive Stock Option Plan, its Amended and
Restated Nonqualified Stock Option Plan, its Amended and Restated 1991 Employee
Stock Option Plan and its Amended and Restated Director and Officer Stock Option
Plan (collectively, the "Plans"), the granting of options to purchase $.10 par
value Class A Common Shares of the Company (the "Shares") pursuant to the Plans
and the issuance of the Shares upon exercise of such options. We understand that
as of October 7, 1996 the aggregate number of Shares that may be issued after
the date hereof pursuant to options granted under the Plans is 3,950,486.
We have assisted in the preparation of the Registration Statement on Form
S-8 (the "Registration Statement") to be filed by the Company with the
Securities and Exchange Commission for the purpose of registering under the
Securities Act of 1933, as amended, an aggregate of 3,950,486 Shares reserved
for issuance under the Plans. In connection therewith, we have examined, among
other things, such records and documents as we have deemed necessary to express
the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
(1) The Company is a duly organized and legally existing corporation under
the laws of the State of Georgia.
(2) When options for the purchase of not more than 3,950,486 of the Shares
have been granted to eligible employees under the Plans, without exceeding the
limits of the individual
<PAGE>
GAMBRELL & STOLZ, L.L.P.
Board of Directors
American Software, Inc.
October 7, 1996
Page 2.
Plans, such options will be legally constituted and obligations of the
Company in accordance with their terms.
(3) When such 3,950,486 Shares have been delivered by the
Company upon the exercise of options under the Plans against payment of
the purchase price therefor, without exceeding the limits of the
individual Plans, said Shares will be validly issued and outstanding,
fully paid and nonassessable. This opinion assumes compliance with
applicable federal and state securities laws and with proper corporate
procedures regarding the issuance of the Shares.
We consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to this firm included
therein.
Very truly yours,
GAMBRELL & STOLZ, L.L.P.
By: /s/ Henry D. Levi
-----------------------------------
a Partner
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
American Software, Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-8 of American Software, Inc. of our report dated June 14, 1996,
relating to the consolidated balance sheets of American Software, Inc. and
subsidiaries as of April 30, 1996 and 1995, and the related consolidated
statements of operations, shareholders' equity, and cash flows for each of the
years in the three-year period ended April 30, 1996, and related schedule, which
report appears in the April 30, 1996 Annual Report on Form 10-K of American
Software, Inc.
KPMG PEAT MARWICK LLP
Atlanta, Georgia
October 14, 1996
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
above hereby constitutes and appoints James C. Edenfield and Peter W. Pamplin,
or any one of them, as true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any or 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 and necessary to be done in and about the
premises, 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 thereof.
<PAGE>
EXHIBIT 99.1
AMERICAN SOFTWARE, INC.
1991 EMPLOYEE STOCK OPTION PLAN
(Amended and Restated Effective September 25, 1996)
1. Purpose. This Plan shall be known as the "1991 Employee Stock Option
-------
Plan" (hereinafter referred to as "the Plan" or "this Plan"). The purpose of the
Plan is to provide certain key employees of American Software, Inc. (the
"Company") and its subsidiaries with additional incentive to increase their
efforts on the Company's behalf and to remain in the employ of the Company or
any of its subsidiaries by granting key employees from time to time options to
purchase Class A Common Shares of the Company.
The options granted under this Plan may, but need not, constitute
"incentive stock options" (referred to herein as "Incentive" options) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). An option granted which does not constitute an Incentive option shall
for purposes of the Plan constitute a "Non-Qualified" option. The terms
"subsidiary" or "subsidiaries" mean and include any corporation or other entity
at least a majority of the outstanding voting shares of which is, at the time,
directly or indirectly owned by the Company or by one or more subsidiaries.
2. Shares. The shares to be optioned under the Plan shall be the
------
Company's Class A Common Shares, $0.10 par value (the "Shares"), which Shares
may either be authorized but unissued Shares or treasury Shares. The aggregate
number of Shares for which options may be granted under the Plan shall (subject
to the provisions of paragraph 8) be (i) 2,400,000 Shares (inclusive of the
total number of Shares with respect to which no options have been granted under
the Company's Incentive Stock Option Plan and Nonqualified Stock Option Plan
(collectively the "Prior Plans") on the Effective Date as provided in paragraph
15), plus (ii) the total number of Shares as to which options granted under the
Prior Plans or this Plan terminate (including options terminated upon the
granting of replacement options or otherwise) or expire without being wholly
exercised. New options may be granted under this Plan covering the number of
Shares to which such termination or expiration relates.
3. Administration. The Plan shall be administered by the Employee Stock
--------------
Option Plan Committee (the "Committee") of the Company's Board of Directors (the
"Board"). The Committee shall consist of such members (not less than two) of the
Board as shall be appointed from time to time by the Board. No member of the
Committee while serving as such shall be eligible for participation in the Plan.
Subject to the provisions of the Plan, the Committee shall have exclusive power
to select the employees to whom options will be granted under the Plan, to
determine the number of options to be awarded to each employee selected and to
determine the time or times when options will be awarded. The Committee shall
have full power and authority to administer and interpret the Plan and to adopt
such rules, regulations, agreements and instruments for implementing the Plan
and for the conduct of its business as the Committee deems necessary or
advisable. The Committee's interpretation of the Plan, and all determinations
<PAGE>
made by the Committee pursuant to the powers vested in it hereunder, shall be
conclusive and binding on all persons having any interest in the Plan or in any
options granted hereunder.
4. Eligibility. Participants in the Plan shall be selected by the
-----------
Committee from among key personnel of the Company or a subsidiary; provided,
however, that no director, officer or 10% shareholder (as such terms are defined
pursuant to Section 16 of the Securities Exchange Act of 1934, as amended) of
the Company shall be eligible to participate in the Plan. Options held by a
person who subsequently becomes a director, officer or 10% shareholder shall not
be affected by this restriction. Options shall be granted to individuals solely
in connection with their employment with the Company or a subsidiary.
5. Grant of Options. The Committee may from time to time grant options
----------------
to purchase Shares to such of the eligible employees as may be selected by the
Committee and for such number or numbers of shares as may be determined by the
Committee. Each grant of an option pursuant to this Plan shall be granted within
ten years from the date this Plan is adopted by the Board. Each grant of an
option pursuant to this Plan shall be made upon such terms and conditions as may
be determined by the Committee at the time of grant, subject to the terms,
conditions and limitations set forth in this Plan.
An individual optionee may be granted (i) an Incentive option, (ii) a
Non-Qualified option, or (iii) an Incentive option and a Non-Qualified option at
the same time.
6. Terms, Conditions and Form of Options. Each option shall be evidenced
-------------------------------------
by a written agreement ("option agreement") in such form as the Board shall from
time to time approve, which agreement shall comply with and be subject to the
following terms and conditions:
6.1 Option Effective Date. Each option agreement shall specify an
---------------------
effective date, which shall be the date on which the option is granted by the
Committee.
6.2 Option Term. (a) An option shall in no event be exercisable
-----------
after the expiration of ten years from the effective date of the option. In
addition, and in limitation of the above, the option period of any option shall
terminate three months after the termination of the option holder's employment
by the Company for any reason except the Retirement (as hereinafter defined),
death or disability of the option holder-employee (the "optionee").
(b) (i) The term "Retirement" means the voluntary termination of
employment by an option holder whose age and/or years of employment qualify that
employee for normal retirement under the policies of the Company in effect from
time to time.
(ii) For any option granted on or before August 23, 1994, the
Committee may in its discretion amend that option, on an individual basis, to
permit the exercise of such option beyond the date of Retirement, through the
expiration date of the option.
<PAGE>
(iii) The Committee may in its discretion provide in standard
option grant agreements that any option granted after August 23, 1994 may be
exercised after the date of Retirement, through the expiration date of the
option.
(iv) Notwithstanding the foregoing, no option may be exercised
after the expiration of ten years from the effective date of the option, nor may
an option be exercised beyond the amount which is vested as of the date of
Retirement.
(c) In the event of termination of employment due to the death or
disability of an optionee, the option period of the option held by him upon the
date of such termination shall terminate upon the earlier of (a) twelve months
after the date of the optionee's death or termination due to disability, as the
case may be, or (b) the date of termination of such option as determined by his
option agreement. In the event of termination of an optionee's employment due to
the death of the optionee, such optionee's options may be exercised during the
12-month period by his estate or by the person who acquired the right to
exercise such options through bequest or inheritance.
As used herein, "disability" shall mean the inability of the employee
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or has lasted or can be expected to last for a continuous period of at
least twelve months.
No transfer of an option by an optionee by will or by the laws of
descent and distribution shall be effective unless the Company shall have been
furnished with written notice thereof and a copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the successor-in-interest or successors-in-
interest of the terms and conditions of the option.
(d) If an optionee is placed on leave of absence status by the
Company or any subsidiary, any then exercisable option shall be suspended at
such time. If an optionee is placed on lay-off status by the Company or any
subsidiary, any then exercisable option may be exercised during the following
period of three months and shall be suspended thereafter. In either case, the
unexercised portion of the option shall either (i) terminate three months after
the optionee's termination of employment with the Company and its subsidiaries
or (ii) be reinstated upon such optionee being re-employed from leave of absence
or lay-off status by the Company or any subsidiary.
6.3 Exercise Price. The exercise price of options shall be the price
--------------
per share fixed by the Committee (the "Exercise Price"); provided, however, that
the Exercise Price per Share for Incentive options shall not be less than the
fair market value of a Share on the date the option is granted. In the event
that the Shares are then listed on an established stock exchange, such fair
market value shall be deemed to be the closing price of the Shares on such stock
exchange on the day the option is granted or, if no sale of the Shares shall
have been made on any stock exchange on that day, the fair market value shall be
determined as such price for the
<PAGE>
next preceding day upon which a sale shall have occurred. In the event that the
Shares are not listed upon an established exchange but are quoted on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the fair market value shall be deemed to be the closing price for
the Shares as quoted on NASDAQ on the day the option is granted. If no sale of
the Shares shall have been made on NASDAQ on that day, the fair market value
shall be determined by such prices on the next preceding day on which a sale
shall have occurred. In the event that the Shares are neither listed on an
established stock exchange nor quoted on NASDAQ, the fair market value on the
day the option is granted shall be determined by the Committee.
6.4 Nontransferability of Options. An option shall not be
-----------------------------
transferable by the optionee otherwise than by will, by the laws of descent and
distribution or by a qualified domestic relations order, and shall be exercised
during the lifetime of the optionee only by the optionee or by his guardian or
legal representative. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
7. Exercise of Options. An option granted pursuant to this Plan shall be
-------------------
exercisable at any time within the option period, subject to the terms and
conditions of such option. Exercise of any option shall be made by the delivery,
during the period that such option is exercisable, to the Company in person or
by mail of (i) written notice from the optionee stating that he is exercising
such option and (ii) the payment of the aggregate purchase price of all Shares
as to which such option is then exercised. Such aggregate purchase price shall
be paid to the Company at the time of exercise. Payment shall normally be made
by cash or check; provided, however, that in its sole discretion the Committee
may approve of payment in whole or in part by the giving of a note with adequate
stated interest or by the surrender of common stock. Upon the exercise of an
option in compliance with the provisions of this paragraph, and upon the receipt
by the Company of the payment for said Shares, the Company shall (i) deliver or
cause to be delivered to the optionee so exercising his option a certificate or
certificates for the number of Shares with respect to which the option is so
exercised and payment is so made, and (ii) register or cause such Shares to be
registered in the name of the exercising optionee.
8. Changes in Capital Structure. Appropriate adjustments shall be made
----------------------------
to the price of the Shares and the number of Shares subject to outstanding
options and the number of Shares issuable under this Plan if there are any
changes in the Shares by reason of stock dividends, stock splits, reverse stock
splits, mergers, recapitalizations or consolidations.
9. Controlling Terms. Option agreements pertaining to options granted
-----------------
pursuant hereto may include conditions that are more (but not less) restrictive
to the optionee than the conditions contained herein and, in such event, the
more restrictive conditions shall apply.
10. Termination of the Plan. This Plan shall terminate upon the close of
-----------------------
business of the day preceding the tenth anniversary of the approval of this Plan
by the Board unless it shall have been sooner terminated by the Board or by
reason of there having been granted and
<PAGE>
fully exercised stock options covering all of the Shares subject to this Plan.
Upon such termination, no further options may be granted hereunder. If, after
termination of this Plan upon the tenth anniversary hereof or by Board action as
provided above, there are outstanding options which have not been fully
exercised, such options shall remain in effect in accordance with their terms
and shall remain subject to the terms of this Plan.
11. Amendment or Discontinuance of Plan. The Board may amend, suspend or
-----------------------------------
discontinue this Plan at any time without restriction; provided, however, that
the Board may not alter, amend, discontinue, revoke or otherwise impair any
outstanding options which have been granted pursuant to this Plan and which
remain unexercised, except in the event that there is secured the written
consent of the holder of the outstanding option proposed to be so altered or
amended. Nothing contained in this paragraph, however, shall in any way
condition or limit the termination of an option, as hereinabove provided, where
reference is made to termination of employment of an optionee, or as provided in
an option agreement.
12. Limitation of Rights.
--------------------
12.1 No Implied Employment Agreement. Neither this Plan nor the
-------------------------------
granting of an option nor any other action taken pursuant to this Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company or any subsidiary will retain any person as an employee for any
period of time.
12.2 No Rights as Shareholder. An optionee shall have no rights as a
------------------------
shareholder with respect to Shares covered by his option until the date of
exercise of the option, and, except as provided in paragraph 8, no adjustment
will be made for dividends or other rights for which the record date is before
the date of such exercise.
13. Liquidation of the Company. In the event of the complete liquidation
--------------------------
or dissolution of the Company, other than as an incident to a merger,
reorganization or other adjustment referred to in paragraph 8, any options
granted pursuant to this Plan and remaining unexercised shall be deemed
cancelled without regard to or limitation by any other provisions of this Plan.
14. Intention of Construction. To the extent options granted hereunder
-------------------------
are intended to constitute Incentive options and comply with Section 422 of the
Code and all provisions of this Plan, all such options and all option agreements
relating thereto shall be construed in such a manner as to effectuate that
intent.
15. Shareholder Approval; Effective Date. This Plan shall become
------------------------------------
effective on the date it is approved by the shareholders of the Company (the
"Effective Date").
<PAGE>
EXHIBIT 99.2
AMERICAN SOFTWARE, INC.
DIRECTOR AND OFFICER STOCK OPTION PLAN
(Amended and Restated Effective September 25, 1996)
1. Purpose. This Plan shall be known as the "Director and Officer Stock
-------
Option Plan" (hereinafter referred to as "the Plan" or "this Plan"). The purpose
of the Plan is to provide directors and officers of American Software, Inc. (the
"Company") and its subsidiaries with additional incentive to increase their
efforts on the Company's behalf and to remain in the employ of the Company or
any of its subsidiaries or to remain as directors of the Company by granting to
such persons from time to time options to purchase Class A Common Shares of the
Company.
The options granted under this Plan may, but need not, constitute
"incentive stock options" (referred to herein as "Incentive" options) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). An option granted which does not constitute an Incentive option shall
for purposes of the Plan constitute a "Non-Qualified" option. The terms
"subsidiary" or "subsidiaries" mean and include any corporation or other entity
at least a majority of the outstanding voting shares of which is, at the time,
directly or indirectly owned by the Company or by one or more subsidiaries.
2. Shares. The shares to be optioned under the Plan shall be the
------
Company's Class A Common Shares, $0.10 par value (the "Shares"), which Shares
may either be authorized but unissued Shares or treasury Shares. The aggregate
number of Shares for which options may be granted under the Plan shall (subject
to the provisions of paragraph 8) be 900,000 Shares, plus the total number of
Shares as to which options granted under this Plan terminate (including options
terminated upon the granting of replacement options or otherwise) or expire
without being wholly exercised. New options may be granted under this Plan
covering the number of Shares to which such termination or expiration relates.
3. Administration. The Plan shall be administered by the Director
--------------
and Officer Stock Option Plan Committee (the "Committee") of the Company's Board
of Directors (the "Board"). The Committee shall consist of such members (not
less than two) of the Board as shall be appointed from time to time by the Board
and who shall be "disinterested persons" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended. No member of the Committee while
serving as such shall be eligible for participation in the Plan and no member of
the Board may serve on the Committee if he or she received a grant of an option
under this Plan or any other stock option plan of the Company within twelve
months prior to serving on the Committee or while serving on the Committee,
except for options granted pursuant to paragraph 5(b). Subject to the provisions
of the Plan, the Committee shall have exclusive power to select the persons to
whom options will be granted under the Plan, to determine the number of options
to be awarded to each employee selected and to determine the time or times when
options will be awarded. The Committee shall have full power and authority to
administer and interpret the Plan and to adopt such rules, regulations,
agreements and instruments for implementing the Plan
<PAGE>
and for the conduct of its business as the Committee deems necessary or
advisable. The Committee's interpretation of the Plan, and all determinations
made by the Committee pursuant to the powers vested in it hereunder, shall be
conclusive and binding on all persons having any interest in the Plan or in any
options granted hereunder.
4. Eligibility. Participants in the Plan shall be selected by the
-----------
Committee from among the directors and officers of the Company and its
subsidiaries.
5. Grant of Options. (a) The Committee may from time to time grant
----------------
options to purchase Shares to such of the directors and officers of the Company
and its subsidiaries as may be selected by the Committee and for such number or
numbers of shares as may be determined by the Committee. Each grant of an option
pursuant to this Plan shall be granted within ten years from the date this Plan
is adopted by the Board. Each grant of an option pursuant to this Plan shall be
made upon such terms and conditions as may be determined by the Committee at the
time of grant, subject to the terms, conditions and limitations set forth in
this Plan.
An individual optionee may be granted (i) an Incentive option, (ii) a
Non-Qualified option, or (iii) an Incentive option and a Non-Qualified option at
the same time.
(b) (i) Commencing October 31, 1994 and continuing on each April 30
and October 31 thereafter during the term of this Plan, each member of the Board
of Directors then in office who is not a full-time employee of the Company,
including members of the Committee, shall receive on each such October 31 and
April 30 an automatic grant of Non-Qualified options to purchase 5,000 Shares,
reduced pro rata to the extent that the director shall have served as a director
of the Company for less than six full months prior to such date. This 5000-Share
amount shall be adjusted automatically to reflect any stock dividends, stock
splits or similar events occurring after August 23, 1994.
(ii) The option price for each such grant shall be equal to the
closing market price of the Shares on the date of grant (or the next preceding
business day if the date of grant is not a business day).
(iii) The options shall not be exercisable until one year after
the date of grant, at which time the options shall be exercisable in full and
shall remain exercisable until ten years after the date of grant, regardless of
whether the option holder remains a director of the Company. In the event of the
death or disability of the option holder, the option may be exercised by his or
her heirs or personal representatives for the remaining term of the option.
(iv) The options shall be represented by option grants in
substantially the same forms as are used from time to time for other Non-
Qualified options granted under this Plan, subject only to the terms set forth
above.
6. Terms, Conditions and Form of Options. Each option shall be evidenced
-------------------------------------
by a written agreement ("option agreement") in such form as the Board shall from
time to time
<PAGE>
approve, which agreement shall comply with and be subject to the following terms
and conditions:
6.1 Option Effective Date. Each option agreement shall specify an
---------------------
effective date, which shall be the date on which the option is granted by the
Committee.
6.2 Option Term. (a) An option shall in no event be exercisable
-----------
after the expiration of ten years from the effective date of the option. In
addition, and in limitation of the above, the option period of any option, other
than an option granted pursuant to paragraph 5(b), shall terminate three months
after the termination of the option holder's employment (or service as a
director) with the Company or subsidiary for any reason except the Retirement
(as hereinafter defined), death or disability of the option holder (the
"optionee"). An option granted pursuant to paragraph 5(b) shall terminate in
accordance with paragraph 5(b)(iii).
(b) (i) The term "Retirement" means the voluntary termination of
employment by an option holder whose age and/or years of employment qualify that
employee for normal retirement under the policies of the Company in effect from
time to time.
(ii) For any option granted on or before August 23, 1994, the
Committee may in its discretion amend that option, on an individual basis, to
permit the exercise of such option beyond the date of Retirement, through the
expiration date of the option.
(iii) The Committee may in its discretion provide in standard
option grant agreements that any option granted after August 23, 1994 may be
exercised after the date of Retirement, through the expiration date of the
option.
(iv) Notwithstanding the foregoing, no option may be exercised
after the expiration of ten years from the effective date of the option, nor may
an option be exercised beyond the amount which is vested as of the date of
Retirement.
(c) In the event of termination of employment (or service as a
director) due to the death or disability of an optionee, the option period of
the option held by him upon the date of such termination shall terminate upon
the earlier of (i) twelve months after the date of the optionee's death or
termination due to disability, as the case may be, or (ii) the date of
termination of such option as determined by his option agreement. In the event
of termination of an optionee's employment due to the death of the optionee,
such optionee's options may be exercised during the 12-month period by his
estate or by the person who acquired the right to exercise such options through
bequest or inheritance.
As used herein, "disability" shall mean the inability of the employee
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or has lasted or can be expected to last for a continuous period of at
least twelve months.
<PAGE>
No transfer of an option by an optionee by will or by the laws of
descent and distribution shall be effective unless the Company shall have been
furnished with written notice thereof and a copy of the will and/or such other
evidence as the Committee may deem necessary to establish the validity of the
transfer and the acceptance by the successor-in-interest or successors-in-
interest of the terms and conditions of the option.
(d) If an optionee is placed on leave of absence status by the Company
or any subsidiary, any then exercisable option shall be suspended at such time.
If an optionee is placed on lay-off status by the Company or any subsidiary, any
then exercisable option may be exercised during the following period of three
months and shall be suspended thereafter. In either case, the unexercised
portion of the option shall either (i) terminate three months after the
optionee's termination of employment with the Company and its subsidiaries or
(ii) be reinstated upon such optionee being re-employed from leave of absence or
lay-off status by the Company or any subsidiary.
6.3 Exercise Price. The exercise price of options shall be the price
--------------
per share fixed by the Committee (the "Exercise Price"); provided, however, that
the Exercise Price per Share for Incentive options shall not be less than the
fair market value of a Share on the date the option is granted. In the event
that the Shares are then listed on an established stock exchange, such fair
market value shall be deemed to be the closing price of the Shares on such stock
exchange on the day the option is granted or, if no sale of the Shares shall
have been made on any stock exchange on that day, the fair market value shall be
determined as such price for the next preceding day upon which a sale shall have
occurred. In the event that the Shares are not listed upon an established
exchange but are quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the fair market value shall be deemed to
be the closing price for the Shares as quoted on NASDAQ on the day the option is
granted. If no sale of the Shares shall have been made on NASDAQ on that day,
the fair market value shall be determined by such prices on the next preceding
day on which a sale shall have occurred. In the event that the Shares are
neither listed on an established stock exchange nor quoted on NASDAQ, the fair
market value on the day the option is granted shall be determined by the
Committee.
6.4 Ten Percent Shareholder. Notwithstanding the above, in regard to
-----------------------
a director or officer who possesses more than 10% of the total combined voting
power of all classes of stock of the Company or of its subsidiaries and who
receives an Incentive option, the exercise price hereunder shall not be less
than 110% of the fair market value of Common Stock on the date the Incentive
option is granted and the option by its terms shall not be exercisable after the
expiration of 5 years from the date such option is granted.
6.5 Nontransferability of Options. An option shall not be
-----------------------------
transferable by the optionee otherwise than by will, by the laws of descent and
distribution or by a qualified domestic relations order, and shall be exercised
during the lifetime of the optionee only by the optionee or by his guardian or
legal representative. No option or interest therein may be
<PAGE>
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
7. Exercise of Options. An option granted pursuant to this Plan shall be
-------------------
exercisable at any time within the option period, subject to the terms and
conditions of such option. Exercise of any option shall be made by the delivery,
during the period that such option is exercisable, to the Company in person or
by mail of (i) written notice from the optionee stating that he is exercising
such option and (ii) the payment of the aggregate purchase price of all Shares
as to which such option is then exercised. Such aggregate purchase price shall
be paid to the Company at the time of exercise. Payment shall normally be made
by cash or check; provided, however, that in its sole discretion the Committee
may approve of payment in whole or in part by the giving of a note with adequate
stated interest or by the surrender of common stock. Upon the exercise of an
option in compliance with the provisions of this paragraph, and upon the receipt
by the Company of the payment for said Shares, the Company shall (i) deliver or
cause to be delivered to the optionee so exercising his option a certificate or
certificates for the number of Shares with respect to which the option is so
exercised and payment is so made, and (ii) register or cause such Shares to be
registered in the name of the exercising optionee.
8. Changes in Capital Structure. Appropriate adjustments shall be made
----------------------------
to the price of the Shares and the number of Shares subject to outstanding
options and the number of Shares issuable under this Plan if there are any
changes in the Shares by reason of stock dividends, stock splits, reverse stock
splits, mergers, recapitalizations or consolidations.
9. Controlling Terms. Option agreements pertaining to options granted
-----------------
pursuant hereto may include conditions that are more (but not less) restrictive
to the optionee than the conditions contained herein and, in such event, the
more restrictive conditions shall apply.
10. Termination of the Plan. This Plan shall terminate upon the close of
-----------------------
business of the day preceding the tenth anniversary of the approval of this Plan
by the Board unless it shall have been sooner terminated by the Board or by
reason of there having been granted and fully exercised stock options covering
all of the Shares subject to this Plan. Upon such termination, no further
options may be granted hereunder. If, after termination of this Plan upon the
tenth anniversary hereof or by Board action as provided above, there are
outstanding options which have not been fully exercised, such options shall
remain in effect in accordance with their terms and shall remain subject to the
terms of this Plan.
11. Amendment or Discontinuance of Plan. The Board may amend, suspend or
-----------------------------------
discontinue this Plan at any time without restriction; provided, however, that
the Board may not alter, amend, discontinue, revoke or otherwise impair any
outstanding options which have been granted pursuant to this Plan and which
remain unexercised, except in the event that there is secured the written
consent of the holder of the outstanding option proposed to be so altered or
amended. Nothing contained in this paragraph, however, shall in any way
condition or limit the termination of an option, as hereinabove provided, where
reference is made to termination of employment of an optionee, or as provided in
an option agreement.
<PAGE>
12. Limitation of Rights.
--------------------
12.1 No Implied Employment Agreement. Neither this Plan nor the
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granting of an option nor any other action taken pursuant to this Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that the Company or any subsidiary will retain any person as an employee for any
period of time.
12.2 No Rights as Shareholder. An optionee shall have no rights as
------------------------
a shareholder with respect to Shares covered by his option until the date of
exercise of the option, and, except as provided in paragraph 8, no adjustment
will be made for dividends or other rights for which the record date is before
the date of such exercise.
13. Liquidation of the Company. In the event of the complete liquidation
--------------------------
or dissolution of the Company, other than as an incident to a merger,
reorganization or other adjustment referred to in paragraph 8, any options
granted pursuant to this Plan and remaining unexercised shall be deemed
cancelled without regard to or limitation by any other provisions of this Plan.
14. Intention of Construction. To the extent options granted hereunder
-------------------------
are intended to constitute Incentive options and comply with Section 422 of the
Code and all provisions of this Plan, all such options and all option agreements
relating thereto shall be construed in such a manner as to effectuate that
intent.
15. Shareholder Approval; Effective Date. This Plan shall become
------------------------------------
effective on the date it is approved by the shareholders of the Company (the
"Effective Date").
