<PAGE> 1
As filed with the Securities and Exchange Commission on August 1, 1995
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------------
COMPUTER LANGUAGE RESEARCH, INC.
(Exact name of registrant as specified in its charter)
Texas 75-1297386
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2395 Midway Road 75006
Carrollton, Texas (Zip Code)
(Address of Principal Executive Offices)
COMPUTER LANGUAGE RESEARCH, INC., NON-EMPLOYEE DIRECTORS'
1994 STOCK OPTION PLAN
(Full Title of the Plan)
----------------------
Douglas H. Gross
Secretary and General Counsel
Computer Language Research, Inc.
2395 Midway Road
Carrollton, Texas 75006
(Name and address of agent for service)
(214) 250-7000
(Telephone number, including area code, of agent for service)
----------------------
Copy To:
Guy H. Kerr
Locke Purnell Rain Harrell
(A Professional Corporation)
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
Title Proposed Maximum Proposed Maximum
of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered Registered Per Share (1) Price (1) Registration Fee
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 250,000
$.01 Par Value shares $10.00 $2,500,000 $862.09
==============================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended, solely for purposes of calculating the registration fee, based on
the average of the high and low prices reported on the NASDAQ-National Market
System on July 26, 1995.
================================================================================
Page 1 of 21 pages. Exhibit Index appears at page 10.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE UPON FILING WITH THE
COMMISSION IN ACCORDANCE WITH RULE 462 PROMULGATED UNDER THE ACT.
<PAGE> 2
PART I
INFORMATION REQUIRED IN SECTION 10(a) PROSPECTUS
The information specified by Item 1 and Item 2 of Part I of Form S-8
is omitted from this filing in accordance with the provisions of Rule 428 under
the Securities Act of 1933, as amended, and the introductory note of Part I of
Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents set forth below are incorporated by reference in this
Registration Statement. All documents subsequently filed by Computer Language
Research, Inc. (the "Company") pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all securities
offered hereunder have been sold or which deregisters all such securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. The Company's Proxy Statement dated April 1, 1995, in
connection with the Annual Meeting of Shareholders of the
Company held on May 2, 1995.
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995.
4. The Company's Current Report on Form 8-K dated June 23, 1995.
5. The description of the Company's common stock, $.01 par value,
which is contained in the Company's Registration Statement on
Form 8-A dated June 13, 1983 (Commission File No. 0-12311)
filed pursuant to Section 12 of the Exchange Act, and all
amendments thereto and reports which have been filed for the
purpose of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
1
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act permits a
corporation to indemnify its directors and officers and to purchase insurance
with respect to liability arising out of their capacity or status as directors
and officers. The Company's Bylaws provide that the Company shall indemnify a
director if the director conducted himself in good faith and reasonably
believed, in the case of conduct in his official capacity as a director of the
Company, that his conduct was in the Company's best interests, and in all other
cases, that his conduct was at least not opposed to the Company's best
interests, or, in the case of any criminal proceeding, the director had no
reasonable cause to believe his conduct was unlawful. The Company's Bylaws
also provide that the Company shall indemnify its directors against reasonable
expenses incurred in a proceeding if the director has been wholly successful,
on the merits or otherwise, in the defense of the proceeding or if a court of
competent jurisdiction determines that the director is fairly and reasonably
entitled to indemnification. The Bylaws further provide that the Company may
purchase and maintain insurance on behalf of directors, officers, employees and
agents of the Company whether or not the Company would have the power to
indemnify them against that liability under the Bylaws. In addition, the
Company's Articles of Incorporation provide that a director shall not be liable
to the Company or its shareholders for monetary damages for an act or omission
in the director's capacity as a director, except for: (i) a breach of the
director's duty of loyalty to the Company or its shareholders; (ii) an act or
omission not in good faith that constitutes a breach of duty of the director to
the Company or an act or omission that involves intentional misconduct or a
knowing violation of the law; (iii) a transaction from which the director
received an improper personal benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office; or (iv) an act or
omission for which the liability of a director is expressly provided by an
applicable statute.
Article XII of the Company's Articles of Incorporation, included as
Exhibit 3.06 to the Form 10-K (Commission File No. 0-12311), for the fiscal
year ended December 31, 1993, which provides for the limitation of a director's
liability to the Company and its shareholders for monetary damages, is
incorporated herein by reference. Article Eleven of the Company's Bylaws,
included as Exhibit 3.07 to the Form 10-K (Commission File No. 0-12311), for
the fiscal year ended December 31, 1994, which provides for indemnification of
directors and officers, is incorporated herein by reference.
The Company maintains insurance for its directors and officers against
liabilities for actions taken in such capacities, including certain liabilities
under the federal securities laws.
2
<PAGE> 4
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
5.1 Opinion of Locke Purnell Rain Harrell (A Professional
Corporation).
23.1 Consent of Ernst & Young, LLP, Independent Auditors.
23.2 Consent of Locke Purnell Rain Harrell (A Professional
Corporation) (included in opinion filed as Exhibit 5.1
hereto).
24.1 Power of Attorney (included on the signature page of this
Registration Statement).
99.1 Computer Language Research, Inc., Non-Employee Directors' 1994
Stock Option Plan.
3
<PAGE> 5
ITEM 9. UNDERTAKINGS.
The Company 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 (the "Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
Provided, however, that paragraphs (1)(i) and (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 or furnished to the Securities and
Exchange Commission by the Company pursuant to Section 13 or
Section 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
Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the Act,
each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
4
<PAGE> 6
(5) Insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions,
or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company 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 Company
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company 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 Carrollton, State of Texas, on July 28, 1995.
COMPUTER LANGUAGE RESEARCH, INC.,
a Texas corporation
By: /s/ Stephen T. Winn
----------------------------
Stephen T. Winn, President
6
<PAGE> 8
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Stephen T. Winn, President of the
Company, M. Brian Healy, Group Vice President-Finance and Administration of the
Company, and Douglas H. Gross, Secretary and General Counsel of the Company,
and each of them, each with full power to act without the other, his true and
lawful attorneys-in-fact and agents, each 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 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 each of
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Stephen T. Winn President and Director July 28, 1995
----------------------------- (Principal Executive
Stephen T. Winn Officer)
/s/ M. Brian Healy Group Vice President- July 28, 1995
----------------------------- Finance and Administration
M. Brian Healy (Principal Financial Officer
and Principal Accounting
Officer)
/s/ Francis W. Winn Chairman of the Board and July 28, 1995
----------------------------- Director
Francis W. Winn
/s/ Dr. David L. Winn Director July 28, 1995
-----------------------------
Dr. David L. Winn
/s/ James R. Dunaway, Jr. Director July 28, 1995
-----------------------------
James R. Dunaway, Jr.
</TABLE>
7
<PAGE> 9
<TABLE>
<S> <C> <C>
/s/ Alfred R. Berkeley III Director July 28, 1995
-----------------------------
Alfred R. Berkeley III
/s/ Merle J. Volding Director July 28, 1995
-----------------------------
Merle J. Volding
/s/ Max D. Hopper Director July 28, 1995
-----------------------------
Max D. Hopper
</TABLE>
8
<PAGE> 10
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
-------
Number Exhibit Sequentially Number Page
------ ------- ------------------------
<S> <C> <C>
5.1 Opinion of Locke Purnell Rain Harrell (A 11
Professional Corporation).
23.1 Consent of Ernst & Young, LLP, Independent 14
Auditors.
23.2 Consent of Locke Purnell Rain Harrell (A
Professional Corporation) (included in opinion
filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on the signature page
of this Registration Statement).
99.1 Computer Language Research, Inc., Non-Employee 16
Directors' 1994 Stock Option Plan.
</TABLE>
9
<PAGE> 1
EXHIBIT 5.1
740-8523
July 28, 1995
Computer Language Research, Inc.
2395 Midway Road
Carrollton, Texas 75006
Re: Registration of 250,000 shares of Common Stock, par value $.01
per share, pursuant to a Registration Statement on Form S-8
Gentlemen:
We have acted as special counsel for Computer Language Research, Inc.,
a Texas corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement on Form S-8 (the "Registration Statement"), of 250,000
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock") to be offered to non-employee directors of the Company pursuant to the
Computer Language Research, Inc., Non-Employee Directors' 1994 Stock Option
Plan (the "Option Plan").
Based upon our examination of such papers and documents and the
investigation of such matters of law as we have deemed relevant or necessary in
rendering this opinion, we hereby advise you that we are of the opinion that:
1. The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of
Texas.
2. Assuming, with respect to shares of Common Stock issued after
the date hereof, (i) the receipt of proper consideration for
the issuance thereof in excess of par value thereof, (ii) the
availability of a sufficient number of shares of Common Stock
authorized by the Company's Articles of Incorporation then in
effect, (iii) compliance with the terms of any agreement
entered into in connection with any options under the Option
Plan, and (iv) no change occurs in the applicable law or the
pertinent facts, the shares of Common Stock purchasable upon
the exercise of any option granted under the Option Plan
<PAGE> 2
Computer Language Research, Inc.
July 28, 1995
Page 2
will be duly authorized and validly issued, fully paid and
non-assessable shares of Common Stock.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement filed by the Company with the Securities and Exchange
Commission for the registration under the Securities Act, of 250,000 shares of
Common Stock of the Company covered by the Option Plan. By so consenting, we
do not thereby admit that our firm's consent is required by Section 7 of the
Securities Act.
Very truly yours,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ Guy H. Kerr
--------------------------
Guy H. Kerr
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG, LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement
Form S-8 pertaining to the Computer Language Research, Inc., Non-Employee
Directors' 1994 Stock Option Plan of our report dated February 24, 1995, with
respect to the consolidated financial statements and schedule of Computer
Language Research, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1994 filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
July 28, 1995
Dallas, Texas
<PAGE> 1
EXHIBIT 99.1
COMPUTER LANGUAGE RESEARCH, INC.
NON-EMPLOYEE DIRECTORS' 1994 STOCK OPTION PLAN
SECTION ONE. NAME. This stock option plan for
non-employee directors of Computer Language Research, Inc. (the "CORPORATION")
shall be known as the Computer Language Research, Inc., Non-Employee Directors'
1994 Stock Option Plan (the "PLAN").
SECTION TWO. PURPOSE. This Plan enables the Corporation to
attract and retain persons of outstanding credentials and competence to serve
as members of the Corporation's Board of Directors (the "BOARD") and to more
closely align the interests of the non-employee members of the Board with those
of the Corporation's shareholders and to motivate non-employee members of the
Board to take such actions as shall improve corporate performance on a
long-term basis.
SECTION THREE. EFFECTIVE DATE. The effective date of this Plan shall
be August 4, 1994, the date on which this Plan was adopted by the Corporation's
Board of Directors subject to the approval of the Corporation's shareholders at
the annual meeting of shareholders to be held in 1995.
SECTION FOUR. TERMINATION DATE. This Plan shall terminate on the
earlier of August 4, 2004 or on such date as the Board in its sole discretion
shall determine to terminate or abandon this Plan (the "TERMINATION DATE").
SECTION FIVE. PARTICIPATION. Participation in this Plan shall be
limited to non-employee directors, that is, to persons who are members of the
Board and who are not full time employees of the Corporation (the
"PARTICIPANTS", a "PARTICIPANT"). The term "Participant" does not include
advisory, emeritus or honorary directors.
SECTION SIX. NONSTATUTORY OPTIONS. Each Option(1) shall be a nonstatutory
stock option, not intended to meet the requirements of Section 422 of the
Code(2).
SECTION SEVEN. AVAILABLE SHARES. The total number of shares of Common
Stock(3) with respect to which Options to purchase may be granted pursuant to
this Plan shall not exceed 250,000, subject to adjustment as provided in this
Plan. Subject to the Committee's modification of share usage and/or issuance
intended to conform this Plan and any Options to the requirements of Rule
16b-3, shares of unissued Common Stock subject to Options which expire,
terminate, or are canceled or forfeited for any reason under this Plan shall
again become available for the granting of Options.
SECTION EIGHT. ADMINISTRATION.
__________________________________
(1)"OPTION" means a right, granted under the provisions of this Plan, to
purchase, as provided in this Plan, shares of Common Stock at a specified price
during specified time periods.
(2)"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, together with rules, regulations and interpretations promulgated
thereunder.
(3)"COMMON STOCK" means the Corporation's common stock, $0.01 par value, and
such other stock as may be substituted for Common Stock pursuant to this Plan.
<PAGE> 2
A. THE COMMITTEE. The Plan shall be administered by a
Committee of the Board comprised of not less that two members of the Board,
none of whom shall be a Participant (the "COMMITTEE").
B. COMMITTEE ACTION. A majority of the members of the
Committee shall constitute a quorum. The approval of a quorum, expressed by a
vote at a meeting, or the unanimous written consent of all members without a
meeting, shall constitute the action of the Committee and shall be valid and
effective for all purposes of this Plan.
C. COMMITTEE AUTHORITY. Subject to the provisions
of Section 8D of this Plan, the Committee may adopt, amend, suspend, waive and
rescind all rules, regulations and procedures and make all other decisions and
determinations and take all other actions as it shall deem necessary or proper
for the administration of this Plan. The Committee may also interpret this
Plan and the Committee's interpretation shall be full, final and conclusive and
binding on all persons and entities, including, without limitation, the
Corporation, Participants, persons claiming any rights under this Plan from or
through any Participant, and shareholders. The Committee may consult with
legal counsel, who may be counsel for the Company, and shall not incur any
liability for any action taken in good faith in reliance upon the written
advice of legal counsel. Each member of the Committee shall be entitled to, in
good faith, rely or act upon any report or other information furnished to him
or her by any officer, manager or other employee of the Corporation, the
Corporation's independent certified public accountants, or any executive
compensation consultant or other professional retained by the Corporation to
assist in the administration of this Plan. The Committee may delegate to
officers or managers of the Corporation the authority, subject to such terms as
the Committee shall determine, to perform administrative functions under this
Plan. In no event shall the Committee or the Board have any power or authority
which would cause this Plan to fail to be a plan described in Rule
16b-3(c)(2)(ii) under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").
D. AMENDMENT. Subject to the following sentences,
the Committee may from time to time amend or modify this Plan. No such
amendment shall impair without a Participant's consent any outstanding Option
or deprive any Participant of any shares of Common Stock which he or she may
have acquired through the exercise of any Option, except such an amendment made
to cause this Plan to qualify for the exemption provided by Rule 16b-3 under
the Exchange Act. No such amendment shall be made without shareholder approval
where such approval would be required as a condition of compliance with Rule
16b-3. No such amendment shall be made within six months after any previous
amendment, except to the extent such amendment is required to comply with
changes to the Code, ERISA, or the rules thereunder.
E. RULE 16B-3. The Corporation intends that this
Plan and its operation comply with the provisions of Rule 16b-3 under the
Exchange Act. The amount, nature and timing of all Options, the selection of
Participants to whom grants of Options are to be granted, the number of shares
subject to any Option, the Exercise Price of any Option, the periods during
which any Option may be exercised, and the term of any Option shall be
automatically determined as provided in this Plan and the Committee shall have
no discretion as to such matters. The Committee at all times shall be
empowered to take all actions reasonably required to permit this Plan to comply
with the provisions of Rule 16b-3 under the Exchange Act. The Committee shall
not be empowered to take any action which would result in this Plan failing to
qualify as a formula plan under Rule 16b-3. Upon the effectiveness of any
amendment to Rule 16b-3, this Plan and any Option or Option agreement held by a
Participant then subject to Section 16 of the Exchange Act shall be deemed to
be amended, without further action on the part of the Committee, the Board or
the Participant, to the extent necessary for
<PAGE> 3
Options under this Plan to qualify for the exemption provided by Rule 16b-3, as
so amended, except to the extent any such amendment requires shareholder
approval.
SECTION NINE. GRANTS. All grants provided for in this
Section Nine shall be subject to the approval of the Plan by the Corporation's
shareholders at the annual meeting of shareholders to be held in 1995. As
soon as practicable after the grant of any Option hereunder, the Corporation
and the Participant shall enter into a Stock Option Agreement evidencing the
Option so granted. The agreement shall be in such form, consistent with the
Plan, as the Committee shall deem appropriate.
A. INITIAL GRANTS. Those persons who were elected
Directors of the Corporation at the annual meeting of the Corporation's
shareholders on April 26, 1994, shall, if he or she shall be a Participant, be
granted, without further action by the Board of Directors, an Option to
purchase 7,500 shares of Common Stock at an exercise price per share equal to
the Fair Market Value(4) of a share of Common Stock on August 4, 1994.
B. NEW DIRECTOR GRANTS. Commencing on August 4,
1994, each time a person shall, for the first time, be elected a director of
the Corporation by vote of its shareholders or by vote of a majority of the
directors pursuant to the provisions of Section 4 of the Corporation's Bylaws,
such person, if he or she shall be a Participant, shall be granted, without
further action by the Board or the Committee, an Option to purchase 7,500
shares of Common Stock at an exercise price per share equal to the Fair Market
Value of a share of Common Stock at the date of election.
C. RE-ELECTED DIRECTOR GRANTS. Commencing on August 4,
1994, each time a person shall be re-elected a director of the Corporation by
vote of its shareholders, such person, if he or she shall be a Participant,
shall be granted without further action by the Board or the Committee, an
Option to purchase 2,500 shares of Common Stock at an exercise price per share
equal to the Fair Market Value of a share of Common Stock at the date of
election.
SECTION TEN. EXERCISABILITY & RESTRICTION ON SALE OF PURCHASED SHARES.
A. GENERAL. Subject to the provisions of Section
10B, after each of the first five anniversaries of the grant of an Option, a
Participant may purchase respectively 20%, 40%, 60%, 80% and 100% of the Common
Stock subject to the Option.
B. SPECIAL CIRCUMSTANCES. Notwithstanding the
provisions of Section 10A, each outstanding Option (i) shall become immediately
exercisable in full upon the Termination Date, a Participant's death; a
Participant becoming Disabled(5); or a Participant's retirement from the Board
with at least five year's service as a director; and (ii) shall become
exercisable in full immediately prior to the effective date of any Change in
Control(6).
__________________________________
(4)"FAIR MARKET VALUE" on any date means the closing price of the Common Stock
reported in The Wall Street Journal for such date (or the preceding business
day if such date is not a business day), if the Common Stock is quoted in the
NASDAQ National Market System or, if the Common Stock shall cease to be quoted,
the value of the Common Stock as reasonably determined in good faith by the
Committee using a generally accepted methodology for valuing stock.
(5)The term "DISABLED" shall have the meaning set forth in Section 422(c)(6)
of the Code.
(6)A "CHANGE OF CONTROL" of the Corporation shall be deemed to have occurred
upon the happening of any of the following:
A. The acquisition of BENEFICIAL OWNERSHIP (within the meaning
of Rule 13d-3 under the Exchange Act) of 50% or more of either the
then-outstanding shares of Common Stock or the combined voting power of the
Corporation's then-outstanding
<PAGE> 4
C. RESTRICTION ON SALE OF PURCHASED SHARES. Unless
permitted by the provisions of Rule 16b-3 under the Exchange Act, no shares
acquired upon exercise of an Option granted pursuant to this Plan shall be sold
within six months of the date of grant of such Option.
SECTION ELEVEN. OPTION ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If the
Corporation shall at any time change the number of issued shares of Common
Stock without new consideration to the Corporation (such as by stock dividend,
stock split, recapitalization, reorganization, exchange of shares, combination
or other change in corporate structure affecting the Common Stock) or make a
distribution of cash or property which has a substantial adverse impact on the
value of the issued Common Stock, the total number of shares available for
Options under this Plan shall be simultaneously and commensurately adjusted and
the number of shares covered by each unexercised or unexerciseable outstanding
Option and/or the Exercise Price for each unexercised or unexerciseable
outstanding Option shall be simultaneously adjusted so that the net economic
value of each such unexercised or unexerciseable outstanding Option shall be
the same as it was prior to the aforesaid action.
SECTION TWELVE. OPTION TERMINATION. Each Option shall automatically
terminate upon the earliest of: (i) one year after the Termination Date, (ii)
one year after a Participant ceases to be a director of the Corporation by
reason of death, (iii) one year after a Participant ceases to be a director of
the Corporation by reason of a Participant's becoming Disabled, (iv) one year
after a Participant ceases to be a director of the Corporation by reason of
retirement from the Board with at least five years service as a director; (v)
the date a Participant ceases to be a director of the Corporation for any other
reason; or (vi) the effective date of any Change of Control. No decision by
the Board to terminate this Plan prior to the Termination Date, shall affect
any Options then outstanding under this Plan.
SECTION THIRTEEN. NO EXERCISE OBLIGATION. No Participant shall be under
any obligation to exercise any Option granted to him or her under this Plan.
SECTION FOURTEEN. NOTICE OF EXERCISE. Each Participant may exercise an
Option by giving written notice of the exercise to the Corporation, specifying
the number of shares to be purchased, accompanied by payment in full (in cash
or by check only) of the Exercise Price for the shares of Common Stock to be
purchased.
--------------------------------------------------------------------------------
voting securities entitled to vote for the election of directors by any person,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, but excluding the Corporation its subsidiaries, and any employee
benefit plan (or related trust) sponsored or maintained by the Corporation or
its subsidiaries), such acquisition being other than from the Corporation or
pursuant to an "Excluded Transaction" (as defined below);
B. The individuals who, as of April 26, 1994, constitute the
Board (the "INCUMBENT BOARD") cease for any reason to constitute at least a
majority of the Board; provided that any individual, nominated for election to
the Board by at least a majority of the Incumbent Board and subsequently
elected a director by vote of the Corporation's shareholders, shall be
considered to be a member of the Incumbent Board.
C. Approval by the shareholders of the Corporation of (i) a
reorganization, merger, consolidation, or similar business combination, other
than an Excluded Transaction, (ii) a liquidation or dissolution of the
Corporation, or (iii) the sale of all or substantially all of the assets of the
Corporation, other than an Excluded Transaction.
An "EXCLUDED TRANSACTION" means a reorganization, merger, consolidation, or
similar business combination or the sale of all or substantially all of the
assets of the Corporation (each being a "Transaction"), in each case with
respect to which persons who were the shareholders of the Corporation
immediately prior to such Transaction, own directly or indirectly, immediately
after such Transaction, more than 50% of the combined voting power of the
then-outstanding securities entitled to vote for the election of directors of
the reorganized, merged or consolidated corporation, or the corporation than
acquired such assets.
<PAGE> 5
SECTION FIFTEEN. NONTRANSFERABILITY. No Option granted under this Plan
shall be transferable or assignable except by last will and testament or the
laws of descent and distribution. During the Participant's lifetime, Options
shall be exercisable only by the Participant or by the Participant's guardian
or legal representative. If a Participant dies while a director of the
Corporation, the Options held by such deceased Participant's estate shall be
exercisable by the Participant's legal representatives, heirs, legatees, or
distributees.
SECTION SIXTEEN. NONHYPOTHECATION. No right or interest of a Participant
in any Option shall be pledged, encumbered or hypothecated to or in favor of
any person or entity other than the Corporation, or shall be subject to any
lien, obligation or liability of such Participant to any person or entity other
than the Corporation.
SECTION SEVENTEEN. NO RIGHT TO OFFICE. This Plan shall not be construed as
conferring any rights upon any Participant to continue as a member of the
Board, nor shall it interfere with the rights of the Corporation or its
shareholders to renominate or not renominate or to re-elect or not re-elect a
director.
SECTION EIGHTEEN. GOVERNING LAW. Except as otherwise required by
applicable federal laws, this Plan shall in all respects be governed by and
construed in accordance with the laws of the State of Texas (without regard to
principles of conflicts of law) and exclusive jurisdiction and venue of all
disputes arising out of or relating to this agreement shall be in any state or
federal court of appropriate jurisdiction in Dallas County, Texas. This Plan
shall be performable in Dallas County, Texas.
SECTION NINETEEN. CONSTRUCTION. For purposes of this Plan, the word
"or" is disjunctive but not necessarily exclusive. Words in the singular
include the plural; words in the plural include the singular; words in the
neuter gender include the masculine and feminine genders, and words in the
masculine or feminine gender include the other and neuter genders.
