<PAGE>
As filed with the Securities and Exchange Commission on November 17, 1995
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
CARRINGTON LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1435663
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
2001 WALNUT HILL LANE
IRVING, TEXAS 75038
(Address of Principal Executive Offices) (Zip Code)
-----------------------
CARRINGTON LABORATORIES, INC. 1985 STOCK OPTION PLAN
(Full title of the plan)
-----------------------
CHRISTOPHER S. RECORD, ESQ. Copy to:
Vice President, Business Development PAUL M. JOHNSTON, ESQ.
and Strategic Planning Thompson & Knight,
Carrington Laboratories, Inc. A Professional Corporation
2001 Walnut Hill Lane 1700 Pacific Avenue, Suite 3300
Irving, Texas 75038 Dallas, Texas 75201
(Name and address of agent for service) (214) 969-1358
(214) 518-1300
(Telephone number, including
area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================
PROPOSED PROPOSED
TITLE OF AMOUNT MAXIMUM MAXIMUM
SECURITIES TO TO BE OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 250,000
$.01 par value shares (2)(3) $19.125 $4,781,250 $956.25
per share
========================================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low sales
prices of the Common Stock on the NASDAQ Stock Market on November 14, 1995, as
reported in the November 15, 1995 edition of The Wall Street Journal.
(2) Pursuant to Rule 416, shares issuable upon any stock split, stock dividend
or similar transaction with respect to these shares are also being registered
hereunder.
(3) Includes an indeterminate number of preferred share purchase rights
issuable pursuant to the registrant's preferred share purchase rights plan,
which rights will be transferable only with shares of Common Stock registered
hereunder and issued pursuant to the registrant's 1985 Stock Option Plan, as
amended.
================================================================================
<PAGE>
PART II
Documents Incorporated by Reference
- -----------------------------------
The contents of the Registration Statements (the "Prior Registration
Statements") of Carrington Laboratories, Inc. (the "Registrant") on Form S-8,
Registration Nos. 33-22849, 33-36041, 33-42002 and 33-50430, filed with the
Securities and Exchange Commission on June 30, 1988, July 30, 1990, August 1,
1991 and August 4, 1992, respectively, including the documents incorporated by
reference therein, are incorporated by reference into this Registration
Statement.
In addition to the documents described above, the following documents
filed or to be filed by the Registrant with the Securities and Exchange
Commission are incorporated by reference into this Registration Statement:
(a) The description of the Registrant's Preferred Share Purchase
Rights (which rights are transferable only with related shares of
Common Stock) contained in the Registrant's Registration Statement on
Form 8-A filed on October 16, 1991, including any amendment or report
filed for the purpose of updating such description.
(b) All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this Registration Statement and prior to the
termination of the offering to which it relates shall be deemed to be
incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents.
Amendment to Plan
- -----------------
On February 10, 1994, the Board of Directors of the Registrant adopted
an amendment to the Registrant's 1985 Stock Option Plan (the "Plan") that
increased from 1,150,000 to 1,400,000 the aggregate number of shares of the
Registrant's Common Stock, par value $0.01 per share, reserved for issuance
under the Plan. The amendment was approved by the shareholders of the
Registrant on April 28, 1994.
Exhibits
- --------
In addition to the exhibits filed with or incorporated by reference
into the Prior Registration Statements, the following documents are filed
as exhibits to this Registration Statement:
4.1 Carrington Laboratories, Inc. 1985 Stock Option
Plan, as amended.
4.2 Form of Nonqualified Stock Option Agreement for
employees, as amended.
4.3 Form of Nonqualified Stock Option Agreement for
nonemployee directors, as amended.
5.1 Opinion of Thompson & Knight, P.C., regarding
250,000 shares of Common Stock.
23.1 Consent of independent public accountants to
incorporation of report by reference.
23.2 Consent of counsel (included in the opinion of
Thompson & Knight, P.C., filed herewith as
Exhibit 5.1).
24.1 Power of Attorney (included on the signature page
of this Registration Statement).
<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 Irving, State of Texas on
November 17, 1995.
CARRINGTON LABORATORIES, INC.
By: /s/ Carlton E. Turner
-------------------------------------------
Carlton E. Turner, 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. The undersigned persons hereby
constitute and appoint Carlton E. Turner and Christopher S. Record, or
either of them, as our true and lawful attorneys-in-fact with full power to
execute in our names and on our behalf, in the capacities indicated below,
any and all amendments to this Registration Statement to be filed with the
Securities and Exchange Commission and hereby ratify and confirm all that
such attorneys-in-fact shall lawfully do or cause to be done by virtue
hereof.
Signature Capacity in Which Signed Date
- --------- ------------------------ ----
/s/ Carlton E. Turner President, Chief Executive November 17, 1995
- ------------------------- Officer and Director
Carlton E. Turner, Ph.D. (principal executive officer)
/s/ Sheri Pantermuehl Chief Financial Officer ovember 17, 1995
- ------------------------- (principal financial and
Sheri Pantermuehl accounting officer)
/s/ R. Dale Bowerman Director November 17, 1995
- -------------------------
R. Dale Bowerman
/s/ George DeMott Director November 17, 1995
- -------------------------
George DeMott
/s/ Robert A. Fildes Director November 17, 1995
- -------------------------
Robert A. Fildes, Ph.D.
/s/ Thomas J. Marquez Director November 17, 1995
- -------------------------
Thomas J. Marquez
/s/ James T. O'Brien Director November 17, 1995
- -------------------------
James T. O'Brien
/s/ Selvi Vescovi Director November 17, 1995
- -------------------------
Selvi Vescovi
- 2 -
<PAGE>
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Number Exhibit Page
- --------------- ------- ------------
4.1 Carrington Laboratories, Inc. 1985 Stock Option Plan,
as amended.
4.2 Form of Nonqualified Stock Option Agreement for
employees, as amended.
4.3 Form of Nonqualified Stock Option Agreement for
nonemployee directors, as amended.
5.1 Opinion of Thompson & Knight, P.C., regarding
250,000 shares of Common Stock.
23.1 Consent of independent public accountants to
incorporation of report by reference.
23.2 Consent of counsel (included in the opinion of
Thompson & Knight, P.C., filed herewith as Exhibit
5.1).
24.1 Power of Attorney (included on the signature page of
this Registration Statement)
<PAGE>
EXHIBIT 4.1
AS AMENDED THROUGH
APRIL 28, 1994
CARRINGTON LABORATORIES, INC.
1985 STOCK OPTION PLAN
ARTICLE I
General
-------
Section 1. Purpose. It is the purpose of the Plan to promote the
-------
interests of the Company and its shareholders by attracting, retaining and
stimulating the performance of selected Employees and Directors by giving such
Employees and Directors the opportunity to acquire a proprietary interest in the
Company and an increased personal interest in its continued success and
progress.
Section 2. Definitions. As used herein the following terms have the
-----------
following meanings:
(a) "Affiliate" means any parent or subsidiary corporation of
the Company within the meaning of Section 424(e) and (f) of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Stock Option Committee described in Article
II hereof.
(e) "Common Stock" means the $0.01 par value Common Stock of the
Company.
(f) "Company" means Carrington Laboratories, Inc., a Texas
corporation.
(g) "Director" means a member of the Board.
(h) "Employee" means any employee of the Company or an Affiliate.
(i) "Employee-Director" means an Employee who is a Director.
(j) "Fair Market Value" means (A) the closing sales price of the
Common Stock on the date in question (or, if there is no reported sale on
such date, then on the last preceding date on which a reported sale
occurred), as reported on the NASDAQ National Market (if the Common Stock
is not listed on a national securities exchange and sales of the Common
Stock are regularly reported on such market), or as reported on a national
securities exchange (if the Common Stock is listed for trading on such
exchange), or (B) the mean between the bid and ask prices of the Common
Stock on the date in question (or, if there is no report of such prices on
such date, then on the last preceding date on which such prices were
reported), as reported by the National Association of Securities Dealers,
Inc.
(k) "Option" means any option to purchase shares of Common Stock
granted pursuant to the provisions of the Plan.
(l) "Optionee" means an Employee or Outside Director who has been
granted an Option under the Plan.
<PAGE>
-2-
<PAGE>
(m) "Outside Director" means a Director who is not an Employee.
(n) "Plan" means this Carrington Laboratories, Inc. 1985 Stock Option
Plan.
Section 3. Number of Shares. Options may be granted by the Company from
----------------
time to time under the Plan to purchase an aggregate of 1,400,000 shares of the
authorized Common Stock. If any Option expires or terminates for any reason
without having been exercised in full, the unpurchased shares subject to such
expired or terminated Option shall be available for purposes of the Plan.
ARTICLE II
Administration
--------------
The Plan shall be administered by a Stock Option Committee which shall
consist of three or more Outside Directors, each of whom shall be a
disinterested person within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"), or any similar rule or
regulation promulgated thereunder; provided, however, that the Committee shall
have no authority to administer or interpret the provisions of the Plan relating
to the grant of Options to Outside Directors. Each member of the Committee
shall be appointed by and shall serve at the pleasure of the Board. The Board
shall have the sole continuing authority to appoint members of the Committee
both in substitution for members previously appointed and to fill vacancies
however caused. The following provisions shall apply to the administration of
the Plan:
(a) The Committee shall designate one of its members as Chairman and
shall hold meetings at such times and places as it may determine. Each
member of the Committee shall be notified in writing of the time and place
of any meeting of the Committee at least two days prior to such meeting,
provided that such notice may be waived by a Committee member. A majority
of the members of the Committee shall constitute a quorum, and any action
taken by a majority of the members of the Committee present at any duly
called meeting at which a quorum is present (as well as any action
unanimously approved in writing) shall constitute action by the Committee.
(b) The Committee may appoint a Secretary (who need not be a member
of the Committee) who shall keep minutes of its meetings. The Committee
may make such rules and regulations for the conduct of its business as it
may determine.
(c) The Committee shall have full authority, subject to the express
provisions of the Plan, to interpret the Plan as it relates to options
granted or to be granted to Employees under the Plan, to provide, modify
and rescind rules and regulations relating thereto, to determine the terms
and provisions of each Option granted to an Employee and the form of each
option agreement evidencing an Option granted to an Employee under the Plan
and to make all other determinations and perform such actions as the
Committee deems necessary or advisable to administer the Plan as it relates
to Options granted or to be granted to Employees under the Plan. In
addition, the Committee shall have full authority, subject to the express
provisions of the Plan, to determine the Employees to whom Options shall be
granted, the time or date of grant of each such Option, the number of
shares subject thereto, and the price at which such shares may be
purchased. In making such determinations, the Committee may take into
account the nature of the services rendered by the Employee, his
-3-
<PAGE>
present and potential contributions to the success of the Company's
business and such other facts as the Committee in its discretion shall deem
appropriate to carry out the purposes of the Plan.
(d) Notwithstanding the authority hereby delegated to the Committee
to grant Options to Employees under the Plan, the Board of Directors also
shall have full authority, subject to the express provisions of the Plan,
to grant Options to Employees under the Plan, to interpret the Plan, to
provide, modify and rescind rules and regulations relating to it, to
determine the terms and provisions of Options granted to Employees and
Outside Directors under the Plan and to make all other determinations and
perform such actions as the Board deems necessary or advisable to
administer the Plan; provided, however, that (i) the Board of Directors
shall not grant any Option to any Employee-Director or officer (as defined
in Rule 16b-3) of the Company, except upon, and strictly in accordance
with, a recommendation of the Committee regarding the number of shares
covered by, and the recipient, timing, exercise price and other terms of,
such Option, and (ii) the Board of Directors shall have no authority,
discretion or power to select the Outside Directors who will receive
Options under the Plan, to set the number of shares to be covered by any
Option granted to an Outside Director, to set the exercise price or the
period within which such Options may be exercised, or to alter any other
terms or conditions specified herein relating to such Options except in
accordance with the express provisions of the Plan, including Section 2 of
Article V hereof.
(e) No member of the Committee or the Board of Directors shall be
liable for any action taken or determination made in good faith with
respect to the Plan or any Option granted hereunder.
(f) No member of the Committee shall be eligible to receive an
Option, except Options granted in accordance with the terms of Article III
of the Plan.
ARTICLE III
Grant of Options to Outside Directors
-------------------------------------
Section 1. Grant of Options. Each Outside Director shall be granted
----------------
Options under the Plan on the terms and conditions herein described. Options
will be granted automatically on the next business day immediately following the
annual meeting of shareholders of the Company in every year, beginning with the
year 1992 (each, for purposes of this Article III, a "Grant Date") to each
person who is an Outside Director on such date. The Options granted under this
Article III shall not be incentive stock options under Section 422 of the Code.
Section 2. Number. Each Outside Director serving as a Director on a Grant
------
Date shall be granted, as of such date, an Option to purchase 2,500 shares of
Common Stock; provided, however, that an Outside Director may decline to accept
any such Option. An Outside Director may indicate his election to decline to
accept any Option under the Plan by giving notice thereof to the Company, or by
refusing to execute a stock option agreement relating to the Option.
Section 3. Price. The purchase price per share of Common Stock under each
-----
Option granted under this Article III shall be the Fair Market Value per share
of Common Stock on the Grant Date of the Option.
-4-
<PAGE>
Section 4. Option Period and Terms of Exercise of Options. Except as
----------------------------------------------
otherwise provided for herein, each Option granted to an Outside Director under
the Plan shall be exercisable in whole or in part during the four-year period
commencing on the Grant Date of such Option. Any Option granted to an Outside
Director shall remain effective during its entire term regardless of whether the
Optionee continues to serve as a Director; provided, however, that the otherwise
unexpired portion of any Option granted hereunder to an Outside Director shall
expire and become null and void immediately upon the termination of such Outside
Director's Board membership if such Outside Director ceases to serve on the
Board by reason of such Outside Director's (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation or conversion of assets
or opportunities of the Company or any Affiliate. Nothing in the Plan or in any
option agreement evidencing an Option granted under the Plan to an Outside
Director shall confer upon such Director any right to continue as a Director of
the Company.
ARTICLE IV
Grant of Options to Employees
-----------------------------
Section 1. Grant of Options. At any time and from time to time during the
----------------
duration of the Plan and subject to the express provisions hereof, Options may
be granted by the Committee to any Employee for such number of shares of Common
Stock as the Committee in its discretion shall deem to be in the best interest
of the Company and which will serve to further the purposes of the Plan. The
Committee, in its discretion, may designate any Option granted to an Employee as
an incentive stock option intended to qualify under Section 422 of the Code;
provided, however, that with respect only to options granted prior to January 1,
1987, the sum of the aggregate Fair Market Value (determined as of the time an
incentive stock option is granted) of the Common Stock for which an Employee may
be granted incentive stock options under the Plan and the aggregate Fair Market
Value (determined as of the time such incentive stock options are granted) of
the stock for which such Employee may be granted incentive stock options under
all other such plans of the Company or any Affiliate shall not, in any calendar
year, exceed $100,000 plus any "unused limit carryover" as provided in Section
422A of the Internal Revenue Code of 1954, as in effect prior to January 1,
1987; and provided further, that with respect only to options granted after
December 31, 1986, the aggregate Fair Market Value of the Common Stock with
respect to which incentive stock options granted to an Employee under the Plan
(including all options qualifying as incentive stock options pursuant to Section
422 of the Code granted to such Employee under any other plan of the Company or
any Affiliate) are exercisable for the first time by such Employee during any
calendar year shall not exceed $100,000, determined as of the date the incentive
stock option is granted.
The aggregate number of shares for which Options are granted under the Plan
to Employee-Directors shall not exceed 40% of the total number of shares covered
by the Plan; provided, however, that if any Option granted to an Employee-
Director terminates without being exercised in full, the shares as to which such
Option was not exercised shall not be deemed to have been granted to an
Employee-Director for purposes of determining compliance with this restriction.
Section 2. Price. The purchase price per share of Common Stock under each
-----
Option granted under this Article IV shall be determined by the Committee but in
no event shall be less than 100% of the Fair Market Value per share of Common
Stock at the time the Option is granted; provided, however, that the purchase
price per share of Common Stock under any incentive stock option granted to an
Optionee who, at the time such incentive stock option is granted, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any
-5-
<PAGE>
Affiliate shall be at least 110% of the Fair Market Value per share of Common
Stock at the date of grant.
Section 3. Option Period and Terms of Exercise of Employee Options.
-------------------------------------------------------
Except as otherwise provided for herein, each Option granted to an Employee
under the Plan shall be exercisable during such period as the Committee shall
determine; provided, however, that the otherwise unexpired portion of any Option
granted to an Employee shall expire and become null and void no later than upon
the first to occur of (i) the expiration of ten years from the date such Option
was granted, (ii) the expiration of 30 days from the date of termination of the
Optionee's employment with the Company or an Affiliate for any reason other than
his death or disability, or (iii) the expiration of one year from the date of
termination of the Optionee's employment with the Company or an Affiliate by
reason of his death or disability. Anything herein to the contrary
notwithstanding, the otherwise unexpired portion of any Option granted to an
Employee hereunder shall expire and become null and void immediately upon the
termination of such Employee's employment with the Company or an Affiliate by
reason of such Employee's fraud, dishonesty or performance of other acts
detrimental to the Company or an Affiliate, or if, following the termination of
the Employee's employment with the Company or an Affiliate, the Company
determines that there is good cause to cancel such Option.
No incentive stock option granted to an Optionee hereunder prior to January
1, 1987, shall be exercisable while there is outstanding (within the meaning of
Section 422A of the Internal Revenue Code of 1954, as in effect prior to January
1, 1987) any stock option qualifying as an incentive stock option under Section
422A of the Internal Revenue Code of 1954, as in effect prior to January 1,
1987, which was previously granted to such Optionee to purchase shares of Common
Stock (or any other stock of the Company) or the stock of an Affiliate (or any
predecessor corporation of the Company or an Affiliate). In addition, any
incentive stock option granted to an Optionee who, at the time such incentive
stock option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Affiliate
shall not be exercisable after the expiration of five years from the date of its
grant.
Under the provisions of any option agreement evidencing an Option granted
to an Employee, the Committee may limit the number of shares purchasable
thereunder in any period or periods of time during which the Option is
exercisable and may impose such other terms and conditions upon the exercise of
an Option as are not inconsistent with the terms of the Plan; provided, however,
that the Committee, in its discretion, may accelerate the exercise date of any
such Option.
Section 4. Termination of Employment. A transfer of employment among the
-------------------------
Company and any of its Affiliates shall not be considered to be a termination of
employment for the purposes of the Plan. Nothing in the Plan or in any option
agreement evidencing an Option granted under the Plan to an Employee, including
an Employee-Director, shall confer upon any Optionee any right to continue in
the employ of the Company or any Affiliate or in any way interfere with the
right of the Company or any Affiliate to terminate the employment of the
Optionee at any time, with or without cause.
ARTICLE V
Miscellaneous
-------------
-6-
<PAGE>
Section 1. Adjustments Upon Changes in Common Stock. In the event the
----------------------------------------
Company shall effect a split of the Common Stock or a dividend payable in Common
Stock, or in the event the outstanding Common Stock shall be combined into a
smaller number of shares, the maximum number of shares as to which Options may
be granted under the Plan shall be decreased or increased proportionately. In
the event that, before delivery by the Company of all of the shares of Common
Stock for which any Option has been granted under the Plan, the Company shall
have effected such a split, dividend or combination, the shares still subject to
such Option shall be increased or decreased proportionately and the purchase
price per share shall be decreased or increased proportionately so that the
aggregate purchase price for all of the shares then subject to such Option shall
remain the same as immediately prior to such split, dividend or combination.
In the event of a reclassification of Common Stock not covered by the
foregoing, or in the event of a liquidation or reorganization (including a
merger, consolidation or sale of assets) of the Company, the Board shall make
such adjustments, if any, as it may deem appropriate in the number, purchase
price and kind of shares covered by the unexercised portions of Options
theretofore granted under the Plan. The provisions of this Section shall only
be applicable if, and only to the extent that, the application thereof does not
conflict with any valid governmental statute, regulation or rule.
Subject to Article V, Section 2 of the Plan, and notwithstanding any
indication to the contrary in the preceding paragraphs of this Section 1, upon
the occurrence of a "Change in Control" (as hereinafter defined) of the Company,
the maturity of all Options then outstanding under the Plan shall be accelerated
automatically, so that all such Options shall become exercisable in full with
respect to all shares as to which they shall not have previously been exercised
or become exercisable; provided, however, that no such acceleration shall occur
with respect to Options held by optionees whose employment with the Company or
an Affiliate shall have terminated prior to the occurrence of such Change in
Control.
For purposes of the Plan, a "Change in Control" of the Company shall be
deemed to have occurred if:
(a) the shareholders of the Company shall approve:
(i) any merger, consolidation or reorganization of the Company (a
"Transaction") in which the shareholders of the Company immediately
prior to the Transaction would not, immediately after the Transaction,
beneficially own, directly or indirectly, shares representing in the
aggregate more than 50% of all votes to which all shareholders of the
corporation issuing cash or securities in the Transaction (or of its
ultimate parent corporation, if any) would be entitled under ordinary
circumstances in the election of directors, or in which the members of
the Company's Board immediately prior to the Transaction would not,
immediately after the Transaction, constitute a majority of the board
of directors of the corporation issuing cash or securities in the
Transaction (or of its ultimate parent corporation, if any),
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions contemplated or
arranged by any party as a single plan) of all or substantially all of
the Company's assets, or
(iii) any plan or proposal for the liquidation or dissolution of
the Company;
-7-
<PAGE>
(b) individuals who constitute the Company's Board as of October 26,
1993 (the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board; provided, however, that for purposes of this
subparagraph (b), any individual who becomes a Director of the Company
subsequent to October 26, 1993, and whose election, or nomination for
election by the Company's shareholders, is approved by a vote of at least a
majority of the Incumbent Directors who are Directors at the time of such
vote, shall be considered an Incumbent Director; or
(c) any "person," as that term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
than the Company, any of its subsidiaries, any employee benefit plan of the
Company or any of its subsidiaries, or any entity organized, appointed or
established by the Company for or pursuant to the terms of such plan),
together with all "affiliates" and "associates" (as such terms are defined
in Rule 12b-2 under the Exchange Act) of such person, shall become the
"beneficial owner" or "beneficial owners" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of securities of the
Company representing in the aggregate 20% or more of either (i) the then
outstanding shares of Common Stock or (ii) the combined voting power of all
then outstanding securities of the Company having the right under ordinary
circumstances to vote in an election of the Company's Board ("Voting
Securities"), in either such case other than as a result of acquisitions of
such securities directly from the Company.
Notwithstanding the foregoing, a "Change in Control" of the Company shall
not be deemed to have occurred for purposes of subparagraph (c) of this Section
1 solely as the result of an acquisition of securities by the Company which, by
reducing the number of shares of Common Stock or other Voting Securities
outstanding, increases (i) the proportionate number of shares of Common Stock
beneficially owned by any person to 20% or more of the shares of Common Stock
then outstanding or (ii) the proportionate voting power represented by the
Voting Securities beneficially owned by any person to 20% or more of the
combined voting power of all then outstanding Voting Securities; provided,
however, that if any person referred to in clause (i) or (ii) of this sentence
shall thereafter become the beneficial owner of any additional shares of Common
Stock or other Voting Securities (other than as a result of a stock split, stock
dividend or similar transaction), then a "Change in Control" of the Company
shall be deemed to have occurred for purposes of subparagraph (c) of this
Section 1.
Section 2. Amendment and Termination of the Plan. Subject to the right of
-------------------------------------
the Board to terminate the Plan prior thereto, the Plan shall terminate at the
expiration of ten years from February 5, 1985, the date of adoption of the Plan
by the Board. No Options may be granted after termination of the Plan. The
Board may alter or amend the Plan but may not, without the approval of the
shareholders of the Company, make any alteration or amendment thereof which
operates to (i) abolish the Committee, change the qualifications of its members
or withdraw the administration of the Plan from its supervision, (ii) increase
the total number of shares of Common Stock which may be granted under the Plan
(other than as provided in Section 1 of this Article V), (iii) extend the term
of the Plan or the maximum exercise periods provided in Section 4 of Article III
and Section 3 of Article IV hereof, (iv) decrease the minimum purchase price for
Common Stock under the Pan, (v) materially increase the benefits accruing to
participants under the Plan, or (vi) materially modify the requirements as to
eligibility for participation in the Plan. Notwithstanding any other provision
of this Section, the provisions of the Plan governing (A) the number of Options
to be awarded to Outside Directors, (B) the number of shares of Common Stock to
be covered by each such Option, (C) the exercise price per share under each such
Option, (D) when and under what circumstances each such Option will be granted
and (E) the period within which each such Option may be
-8-
<PAGE>
exercised, shall not be amended or altered more than once every six months,
other than to comport with changes in the Code or the rules promulgated
thereunder, or the Employee Retirement Income Security Act of 1974, as amended,
or the rules promulgated thereunder.
No termination or amendment of the Plan shall adversely affect the rights
of an Optionee under an Option, except with the consent of such Optionee.
Section 3. Payment of Purchase Price; Application of Funds. Upon exercise
-----------------------------------------------
of an Option, the purchase price shall be paid in full in cash or by check;
provided. however, that at the request of an Optionee and to the extent
permitted by applicable law, the Company shall approve reasonable arrangements
with Optionees who are Outside Directors and may, in its sole and absolute
discretion, approve reasonable arrangements with one or more Optionees who are
Employees and their respective brokerage firms, under which such an Optionee may
exercise his Option by delivering to the Company an irrevocable notice of
exercise, together with such other documents as the Company shall require, and
the Company shall, upon receipt of full payment in cash or by check of the
purchase price and any other amounts due in respect of such exercise, deliver to
such Optionee's brokerage firm one or more certificates representing the shares
of Common Stock issued in respect of such exercise. The proceeds of any sale of
Common Stock covered by Options shall constitute general funds of the Company.
Upon exercise of an Option, the Optionee will be required to pay to the Company
the amount of any federal, state or local taxes required by law to be withheld
in connection with such exercise.
Section 4. Requirements of Law. The granting of Options and the issuance
-------------------
of Common Stock upon the exercise of an Option shall be subject to all
applicable laws, rules and regulations and to such approval by governmental
agencies as may be required.
Section 5. Nontransferability of Options. An Option granted under the
-----------------------------
Plan shall not be transferable by the Optionee except by will or by the laws of
descent and distribution and shall be exercisable during the lifetime of the
Optionee only by the Optionee.
Section 6. Investment Letter. The Company's obligation to deliver Common
-----------------
Stock with respect to an Option shall be conditioned upon its receipt from the
Optionee to whom such Common Stock is to be delivered of an executed investment
letter containing such representations and agreements as the Committee may
determine to be necessary or advisable in order to enable the Company to issue
and deliver such Common Stock to such Optionee in compliance with the Securities
Act of 1933 and other applicable federal, state or local securities laws or
regulations.
Section 7. Effective Date of the Plan. The Plan shall become effective,
--------------------------
as of the date of its adoption by the Board, when it has been duly approved by
the holders of a majority of the shares of Common Stock present or represented
and entitled to vote at a meeting of shareholders of the Company duly held in
accordance with applicable law within 12 months after the date of adoption of
the Plan by the Board. If the Plan is not so approved, the Plan shall terminate
and any Option granted hereunder shall be null and void.
Section 8. Gender. Words of any gender used in the Plan shall be
------
construed to include any other gender, unless the context requires otherwise.
-9-
<PAGE>
EXHIBIT 4.2
CARRINGTON LABORATORIES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement, made as of _____________, 19__, by and between CARRINGTON
LABORATORIES, INC., a Texas corporation (the "Company"), and
______________________ ("Employee").
W I T N E S S E T H :
---------------------
WHEREAS, it has been determined (i) that Employee is eligible to receive a
nonqualified stock option under the Company's 1985 Stock Option Plan, as amended
(the "Plan"), and (ii) that such an option should be granted to Employee;
NOW, THEREFORE, the Company and Employee hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
-----------
the following meanings, respectively:
(a) "Affiliate" shall have the meaning set forth in Article I, Section
2(a) of the Plan and shall include any party now or hereafter coming within
that definition.
(b) "Commencement Date" shall mean the date which is one (1) year from
the date of this Agreement.
(c) "Common Stock" shall have the meaning set forth in Article I,
Section 2 (e) of the Plan.
(d) "Expiration Date" shall mean the date which is ten (10) years from
the date of this Agreement.
2. Option. The Company hereby grants to Employee the option to
------
purchase, on the terms hereinafter set forth, ______ shares of the Company's
Common Stock at a price of $____ per share during the period beginning on the
Commencement Date and ending on the first to occur of (a) the Expiration Date or
(b) the date on which the employment of Employee by the Company or any of its
Affiliates terminates for any reason; provided, however, that if such employment
terminates on or after the Commencement Date and on or before the Expiration
Date, other than by reason of Employee's death or disability, then Employee may
exercise this option, to the extent he was entitled to do so at the date of such
termination of employment, at any time within thirty (30) days after the date of
such termination but not after the Expiration Date; and provided further, that
if such employment terminates on or after the Commencement
<PAGE>
Page Two
Date and on or before the Expiration Date by reason of Employee's becoming
permanently and totally disabled (within the meaning of Section 22(e) (3) of the
Internal Revenue Code of 1986, as amended), or by reason of amended), or by
reason of Employee's death, then Employee (or Employee's legal representative,
if Employee is legally incompetent), the executor or administrator of Employee's
estate or anyone who shall have acquired this option by will or pursuant to the
laws of descent and distribution may exercise this option, to the extent
Employee was entitled to do so at the date of such termination, at any time
within one (1) year after such termination but not after the Expiration Date.
Notwithstanding anything to the contrary herein, this option shall terminate
immediately upon the termination of Employee's employment on account of fraud,
dishonesty or the performance of other acts detrimental to the Company or an
Affiliate, or if, following the date of termination of Employee's employment,
the Company determines that there is good cause to cancel this option. A
transfer of employment among the Company and any of its Affiliates without
interruption of service shall not be considered a termination of employment for
purposes of this Agreement.
3. Exercise During Employment. Except as provided in Section 2 hereof,
--------------------------
this option may not be exercised unless Employee is at the time of exercise an
employee of the Company or an Affiliate.
4. Exercisability. Subject to the provisions of Sections 2 and 3 hereof,
--------------
this option may be exercised during the period beginning on the Commencement
Date and ending on the Expiration Date in accordance with the following
schedule:
(a) that number of whole shares of Common Stock which equals or most
closely approximates (but does not exceed) 25% of the total number of
shares covered by this option may be purchased in whole at any time, or in
part from time to time, on or after the Commencement Date;
(b) an additional number of whole shares of Common Stock which equals
or most closely approximates (but does not exceed) 25% of the total number
of shares covered by this option may be purchased in whole at any time, or
in part from time to time, on or after the date which is two (2) years
after the date of this Agreement;
(c) an additional number of whole shares of Common Stock which equals
or most closely approximates (but does not exceed) 25% of the total number
of shares covered by this option may be purchased in whole at any time, or
in part from time to time, on or after the date which is three (3) years
after the date of this Agreement; and
(d) all remaining shares of Common Stock covered by this option may
be purchased in whole at any time, or in part from time to time, on or
after the date which is four (4) years after the date of this Agreement.
<PAGE>
Page Three
Notwithstanding any contrary indication in this Agreement, (i) no fractional
shares of Common Stock may be purchased upon exercise of this option, and (ii)
upon the occurrence of a Change in Control (as defined in the Plan) prior to the
termination of this option, this option shall immediately and automatically
become exercisable with respect to all of the shares of Common Stock, if any, as
to which it was not already exercisable, and this provision shall be applicable
regardless of whether such Change in Control occurs before or after the
Commencement Date; provided, however, that this provision shall not be
interpreted to increase the number of shares of Common Stock for which this
option may be exercised by Employee if his employment by the Company or any of
its Affiliates shall have terminated prior to the occurrence of such Change in
Control.
5. Manner of Exercise. This option may be exercised by written notice
------------------
signed by the person entitled to exercise the same and delivered to the
President of the Company or sent by United States registered mail addressed to
the Company (for the attention of the President) at its corporate office in
Irving, Texas. Such notice shall state the number of shares of Common Stock as
to which this option is exercised and shall be accompanied by payment of the
full purchase price of such shares, plus the amount of any federal, state or
local taxes required by law to be paid or withheld in connection with such
exercise.
6. Payment. The purchase price for shares of Common Stock purchased upon
-------
exercise of this option shall be paid in cash or by check in United States
dollars.
7. Delivery of Shares. Delivery of the certificate or certificates
------------------
representing the shares of Common Stock purchased upon exercise of this option
shall be made promptly after the Company's receipt of notice of exercise and
payment. If the Company so elects, its obligation to deliver shares of Common
Stock upon the exercise of this option shall be conditioned upon its receipt
from the person exercising this option of any additional documents that, in the
opinion of the Company and its legal counsel are required in order to comply
with applicable securities laws.
8. Adjustments. In the event that, before delivery by the Company of all
-----------
the shares of Common Stock in respect of which this option is granted, the
Company shall have effected a Common Stock split or a dividend payable in Common
Stock, or the outstanding Common Stock of the Company shall have been combined
into a smaller number of shares, the shares of Common Stock still subject to
this option shall be increased or decreased to reflect proportionately the
increase or decrease in the number of shares outstanding, and the purchase price
per share shall be decreased or increased to make the aggregate purchase price
for all the shares then subject to this option the same as immediately prior to
such stock split, stock dividend or combination. In the event of a
reclassification of the shares of Common Stock not covered by the foregoing, or
in the event of a liquidation or reorganization (including a merger,
consolidation or sale of assets) of the Company, the
Page Four
<PAGE>
Board of Directors of the Company shall make such adjustments, if any, as it may
deem appropriate in the number, purchase price and kind of shares still subject
to this option.
9. Transferability. This option is not transferable otherwise than by
---------------
will or the laws of descent and distribution, and during the lifetime of
Employee this option is exercisable only by Employee or, if Employee is legally
incompetent, by Employee's legal representative.
10. Employment. Nothing in this Agreement confers upon Employee any right
----------
to continue in the employ of the Company or any Affiliate, nor shall this
Agreement interfere in any manner with the right of the Company or any Affiliate
to terminate the employment of Employee with or without cause at any time.
11. Option Subject to Plan. By execution of this Agreement, Employee
----------------------
agrees that this option and the shares of Common Stock to be received upon
exercise hereof shall be governed by and subject to all applicable provisions of
the Plan.
12. Construction. This option is not intended to be treated as an
------------
incentive stock option under Section 422A of the Internal Revenue Code of 1986,
as amended. This Agreement is governed by, and shall be construed and enforced
in accordance with, the laws of the State of Texas. Words of any gender used in
this Agreement shall be construed to include any other gender, unless the
context requires otherwise. The headings of the various sections of this
Agreement are intended for convenience of reference only and shall not be used
in construing the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
CARRINGTON LABORATORIES, INC.
By
_________________________________________
, President
____________________________________________
Signature of Employee
____________________________________________
(Type or print name of Employee)
<PAGE>
Page Five
RECORD OF EXERCISE:
- -------------------
DATE NO. OF SHARES EXERCISED INITIAL/AGREED
- ---- ----------------------- --------------
- ---- ------------------------ --------------
- ---- ------------------------ --------------
- ---- ------------------------ --------------
- ---- ------------------------ --------------
- ---- ------------------------ --------------
<PAGE>
EXHIBIT 4.3
CARRINGTON LABORATORIES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
WITH NONEMPLOYEE DIRECTOR
This Agreement, made as of _______________________, 19___, by and between
CARRINGTON LABORATORIES, INC., a Texas corporation (the "Company"), and
______________________________("Director"),
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company's 1985 Stock Option Plan, as amended (the "Plan"),
provides that a four-year, nonqualified stock option to purchase 2,500 shares of
the Company's Common Stock shall be granted to each nonemployee director of the
Company on the next business day immediately following the annual meeting of
shareholders of the Company in every year, beginning with the year 1992; and
WHEREAS, the 19________ annual meeting of shareholders of the Company was
held on _______________, 19____, and the next business day immediately following
that date was _____________, 19____; and
WHEREAS, Director is a non employee director of the Company and is willing
to accept the option that he is entitled to receive under the Plan on the date
of this Agreement;
NOW, THEREFORE, the Company and Director hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
-----------
the following meanings, respectively:
(a) "Affiliate" shall have the meaning set forth in Article I,
Section 2(a) of the Plan and shall include any party now or
hereafter coming within that definition.
(b) "Board" means the Board of Directors of the Company.
(c) "Commencement Date" shall mean the date of this Agreement.
(d) "Common Stock" shall have the meaning set forth in Article I,
Section 2(e) of the Plan.
(e) "Expiration Date" shall mean the date which is four (4) years
from the date of this Agreement.
<PAGE>
Page Two
2. Option. The Company hereby grants to Director the option to purchase,
------
on the terms hereinafter set forth, ________________ shares of the Company's
Common Stock at a price of $___________ per share during the period beginning on
the Commencement Date and ending on the Expiration Date. Except as otherwise
provided herein, this option shall remain effective during its entire term,
regardless of whether the Director continues to serve as a director of the
Company. In the event of Director's death on or before the Expiration Date, the
executor or administrator of Director's estate or anyone who shall have acquired
this option by will or pursuant to the laws of descent and distribution may
exercise this option at any time on or before the Expiration Date, to the extent
Director was entitled to do so at the time of his death. Notwithstanding
anything to the contrary herein, this option shall terminate immediately on the
termination of Director's Board membership if he ceases to serve on the Board by
reason of his (a) fraud or intentional misrepresentation, or (b) embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any
Affiliate.
3. Exercisability. Subject to the provisions of Section 2 hereof, this
--------------
option may be exercised in whole at any time, or in part from time to time,
during the period beginning on the Commencement Date and ending on the
Expiration Date. Notwithstanding any contrary indication in this Agreement, no
fractional shares of Common Stock may be purchased upon exercise of this option.
4. Manner of Exercise. This option may be exercised by written notice
------------------
signed by the person entitled to exercise the same and delivered to the
President of the Company or sent by United States registered mail addressed to
the Company (for the attention of the President) at its corporate office in
Irving, Texas. Such notice shall state the number of shares of Common Stock as
to which this option is exercised and shall be accompanied by payment of the
full purchase price of such shares, plus the amount of any federal, state or
local taxes required by law to be paid or withheld in connection with such
exercise.
5. Payment. The purchase price for shares of Common Stock purchased upon
-------
exercise of this option shall be paid in cash or by check in United States
dollars.
6. Delivery of Shares. Delivery of the certificate or certificates
------------------
representing the shares of Common Stock purchased upon exercise of this option
shall be made promptly after the Company's receipt of notice of exercise and
payment. If the Company so elects, its obligation to deliver shares of Common
Stock upon the exercise of this option shall be conditioned upon its receipt
from the person exercising this option of any additional documents that, in the
opinion of the Company and its legal counsel, are required in order to comply
with applicable securities laws.
7. Adjustments. In the event that, before delivery by the Company of all
-----------
the shares of Common Stock in respect of which this option is granted, the
Company shall have effected a Common stock split or a dividend payable in Common
Stock, or the outstanding Common Stock of the Company shall have been combined
into a smaller number of shares, the shares of Common Stock still subject to
this option shall be increased or decreased to reflect proportionately the
increase or decrease in the number of shares outstanding, and the purchase
<PAGE>
Page Three
price per share shall be decreased or increased to make the aggregate purchase
price for all the shares then subject to this option the same as immediately
prior to such stock split, stock dividend or combination. In the event of a
reclassification of the shares of Common Stock not covered by the foregoing, or
in the event of a liquidation or reorganization (including a merger,
consolidation or sale of assets) of the Company, the Board shall make such
adjustments, if any, as it may deem appropriate in the number, purchase price
and kind of shares still subject to this option.
8. Transferability. This option is not transferable otherwise than by
---------------
will or the laws of descent and distribution, and during the lifetime of
Director this option is exercisable only by Director or, if Director is legally
incompetent, by Director's legal representative.
9. Board Membership. Nothing in this Agreement confers upon Director any
----------------
right to continue to serve as a director of the Company, nor shall this
Agreement interfere in any manner with the right of the Company's shareholders
to terminate Director's position as a director of the Company with or without
cause at any time.
10. Option Subject to Plan. By execution of this Agreement, Director
----------------------
agrees that this option and the shares of Common Stock to be received upon
exercise hereof shall be governed by and subject to all applicable provisions of
the Plan.
11. Construction. This option is not intended to be treated as an
------------
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended. This Agreement is governed by, and shall be construed and enforced
in accordance with, the laws of the State of Texas. Words of any gender used in
this Agreement shall be construed to include any other gender, unless the
context requires otherwise. The headings of the various sections of this
Agreement are intended for convenience of reference only and shall not be used
in construing the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
CARRINGTON LABORATORIES, INC.
By:_________________________________________
, President
- ----------------------------------------------
Signature of Director
- ----------------------------------------------
[Type or Print Name of Director]
<PAGE>
EXHIBIT 5.1
THOMPSON & KNIGHT
3300 First City Center
Dallas, Texas 75201
(214) 969-1358
November 17, 1995
Carrington Laboratories, Inc.
2001 Walnut Hill Lane
Irving, Texas 75038
Re: 1985 Stock Option Plan and 1995
Form S-8 Registration Statement
-------------------------------
Gentlemen:
We have acted as counsel for Carrington Laboratories, Inc., a Texas
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of 250,000 shares of the
Company's Common Stock, par value $.01 per share (the "Shares"), for issuance
and sale pursuant to the Carrington Laboratories, Inc. 1985 Stock Option Plan,
as amended (the "Plan"). We have participated in the preparation of the
Company's Registration Statement on Form S-8 (the "Registration Statement") to
be filed with the Securities and Exchange Commission relating to the
registration of the Shares under the 1933 Act.
In connection with the foregoing, we have examined the originals or copies,
certified or otherwise authenticated to our satisfaction, of the Plan, the
Registration Statement and such corporate records of the Company, certificates
of public officials and officers of the Company and other instruments and
documents as we have deemed necessary as a basis for the opinion hereinafter
expressed. As to various questions of fact material to such opinion, we have,
where relevant facts were not independently established, relied upon statements
of officers of the Company whom we believe to be responsible.
Based upon the foregoing and in reliance thereon, we advise you that in our
opinion the Shares, when issued in accordance with the provisions of the Plan,
will be legally issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the prospectus distributed by the
Company in connection therewith. In giving this consent, we do not thereby
admit that we come within the category
<PAGE>
Carrington Laboratories, Inc.
November 17, 1995
Page 2
of persons whose consent is required under Section 7 of the 1993 Act or the
rules or regulations of the Securities and Exchange Commission thereunder.
Respectfully submitted,
Thompson & Knight,
A Professional Corporation
By: ____________________________________
Paul M. Johnston, Attorney
PMJ:ps
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation of our
report dated January 12, 1995, included in the Carrington Laboratories, Inc.,
Form 10-K for the year ended November 30, 1994, in this Registration Statement
and into the Company's previously filed Registration Statements on Form S-8
(File No. 33-22849, File No. 33-36041, No. 33-42002, and File No. 33-50430). It
should be noted that we have not audited any financial statements of the Company
subsequent to November 30, 1994, or performed any audit procedures subsequent to
the date of our report.
ARTHUR ANDERSEN LLP
Dallas, Texas,
November 17, 1995
