<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. 1995 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>
==========================================================================================
TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED
SECURITIES TO TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,500,000
$.01 par value shares (2)(3) $19.125 $28,687,500 $5,737.50
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 1995 Stock Option Plan.
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
----------------
Item 2. Registrant Information and Employee Plan Annual Information.*
-----------------------------------------------------------
* Information required by Part I to be contained in the Section
10(a) prospectus is omitted from this Registration Statement in
accordance with Rule 428 under the Securities Act of 1933 and the
Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents filed by the Registrant with the Securities
and Exchange Commission are incorporated by reference in this Registration
Statement:
(1) The Registrant's Annual Report on Form 10-K for the fiscal year
ended November 30, 1994, containing the consolidated financial
statements of the Registrant and its subsidiaries and certain
supplementary data for the fiscal year ended November 30, 1994,
together with the report thereon of Arthur Andersen LLP,
independent public accountants.
(2) The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995.
(3) The Registrant's Current Report on Form 8-K dated February 21,
1995 (Date of Event: February 9, 1995).
(4) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 since
November 30, 1994.
(5) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A, including any
amendment or report filed for the purpose of updating such
description.
(6) 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.
In addition, all documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters
all 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.
<PAGE>
Item 4. Description of Securities.
-------------------------
Not Applicable.
Item 5. Interest of Named Experts and Counsel.
-------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers.
-----------------------------------------
The Registrant is a Texas corporation. Under Article 2.02-1 of the
Texas Business Corporation Act, the Registrant has the power to indemnify
its directors and officers, subject to certain limitations.
Reference is made to Article Nine of the Bylaws of the Registrant,
which provides for indemnification of directors and officers of the
Registrant under certain circumstances.
Pursuant to Article 1302-7.06 of the Texas Miscellaneous Corporation
Laws Act, the Restated Articles of Incorporation of the Registrant limit
the personal liability of the directors of the Registrant to the Registrant
or its shareholders for monetary damages for breach of fiduciary duty under
certain circumstances.
The Registrant maintains a directors' and officers' liability
insurance policy insuring its directors and officers against certain
liabilities and expenses incurred by them in their capacities as such and
insuring the Registrant, under certain circumstances, in the event that
indemnification payments are made by the Registrant to such directors and
officers.
The foregoing summaries are necessarily subject to the complete text
of the statute, bylaws, articles of incorporation and insurance policy
referred to above and are qualified in their entirety by reference thereto.
Item 7. Exemption from Registration Claimed.
-----------------------------------
Not Applicable.
Item 8. Exhibits.
--------
The following documents are filed as exhibits to this Registration
Statement:
4.1 Carrington Laboratories, Inc. 1995 Stock Option Plan.
4.2 Form of Nonqualified Stock Option Agreement for employees.
4.3 Form of Nonqualified Stock Option Agreement for nonemployee
directors.
5.1 Opinion of Thompson & Knight, P.C., regarding 1,500,000
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).
-2-
<PAGE>
24.1 Power of Attorney (included on the signature page of this
Registration Statement).
Item 9. Undertakings.
------------
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represents a fundamental change in the information set
forth in this Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The Registrant hereby further undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
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.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant 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 Registrant of expenses incurred or
paid by a director, officer or controlling person of the
Registrant in the successful
-3-
<PAGE>
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
-4-
<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.
<TABLE>
<CAPTION>
Signature Capacity in Which Signed Date
- -------------------------- --------------------------------------- -----------------
<S> <C> <C>
/s/ Carlton E. Turner President, Chief Executive Officer and November 17, 1995
- -------------------------- Director (principal executive officer)
Carlton E. Turner, Ph.D.
/s/ Sheri Pantermuehl Chief Financial Officer (principal November 17, 1995
- -------------------------- financial and accounting officer)
Sheri Pantermuehl
/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
</TABLE>
-5-
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Number Exhibit Numbered Page
- -------------- ---------------------------------------------- -------------
[S] [C] [C]
4.1 Carrington Laboratories, Inc. 1995 Stock Option
Plan.
4.2 Form of Nonqualified Stock Option Agreement for
employees.
4.3 Form of Nonqualified Stock Option Agreement for
nonemployee directors.
5.1 Opinion of Thompson & Knight, P.C., regarding
1,500,000 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
CARRINGTON LABORATORIES, INC.
1995 STOCK OPTION PLAN
ARTICLE I
General
-------
Section 1.01. 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 1.02. 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
<PAGE>
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.
(m) "Outside Director" means a Director who is not an Employee.
(n) "Plan" means this Carrington Laboratories, Inc. 1995 Stock Option
Plan.
Section 1.03. Number of Shares. Options may be granted by the Company
----------------
from time to time under the Plan to purchase an aggregate of 1,500,000 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 two 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.
- 2 -
<PAGE>
(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 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 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 shall not grant any Option to any Employee-
Director or officer (as defined in Rule 16b-3) of the Company, and (ii) the
Board 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 5.02 of Article V hereof.
(e) No member of the Committee or the Board 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
Grants of Options to Outside Directors
--------------------------------------
Section 3.01. Grants of Options. Beginning with the year 1995, Options
-----------------
shall be granted by the Company to its Outside Directors on the terms and
conditions herein
- 3 -
<PAGE>
described. The Options granted under this Article III shall not be incentive
stock options under Section 422 of the Code.
(a) Initial Grant. An Option to purchase 10,000 shares of Common
-------------
Stock shall be granted automatically to each Outside Director who is newly
elected to the Board, irrespective of whether such Outside Director is
elected by the Board or by the shareholders. The date of grant of such
Option shall be the effective date of such Outside Director's election to
the Board, unless such date is not a business day, in which case the date
of grant shall be the next business day immediately following such
effective date. For purposes of this Section 3.01, the term "newly elected
to the Board" shall mean that the Outside Director was not serving as a
Director or an Outside Director immediately prior to the time of his
election in respect of which such Option is granted.
(b) Annual Grant. An Option to purchase 2,500 shares of Common Stock
------------
shall be granted automatically, on the date of each annual meeting of
shareholders of the Company (or, if such date is not a business day, on the
next business day immediately following the date of such annual meeting),
to each person who (i) is an Outside Director on the date of such grant and
immediately following such annual meeting and (ii) has served in that
capacity for at least six months immediately preceding the date of such
grant.
Section 3.02. Declination. Any Outside Director may decline to accept any
-----------
Option granted to him pursuant to this Article III by giving written notice to
the Company of his election to decline to accept such Option or by refusing to
execute a stock option agreement relating to such Option
Section 3.03. 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 date of grant of such Option.
Section 3.04. 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 date of grant 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.
- 4 -
<PAGE>
ARTICLE IV
Grant of Options to Employees
-----------------------------
Section 4.01. Grant of Options. At any time and from time to time during
----------------
the term 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 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. If an Option that is intended to be an incentive stock
option shall be granted and such Option does not comply with the proviso of the
immediately preceding sentence, such Option shall not be void but shall be
deemed to be an incentive stock option to the extent it does not exceed the
limit established by such proviso and shall be deemed a nonqualified stock
option to the extent it exceeds that limit.
The aggregate number of shares of Common Stock for which any
individual may be granted Options under the Plan during any one calendar year
shall not exceed 50,000. 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 4.02. 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 Affiliate shall be at least 110% of the
Fair Market Value per share of Common Stock at the date of grant.
Section 4.03. 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
- 5 -
<PAGE>
other than his retirement, death or disability, (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, (iv) the expiration of three
years from the date of termination of such Optionee's employment with the
Company or an Affiliate by reason of his retirement, or (v) the expiration of
two years from the date of such Optionee's death following the termination of
his employment with the Company or an Affiliate by reason of his retirement.
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.
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 4.04. 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
-------------
Section 5.01. 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
- 6 -
<PAGE>
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 5.02 of the Plan, and notwithstanding
any indication to the contrary in the preceding paragraphs of this Section 5.01,
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 the date of
adoption of the Plan by the Board (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 the date of adoption of the Plan by
the Board, 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 5.01 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 5.01.
Section 5.02. 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 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 5.01 of this Article V), (iii) extend the term of the Plan
or the maximum exercise
- 8 -
<PAGE>
periods provided in Section 3.04 of Article III and Section 4.03 of Article IV
hereof, (iv) decrease the minimum purchase price for Common Stock under the
Plan, (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 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.
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 5.03. 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 5.04. 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 5.05. 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 5.06. 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.
- 9 -
<PAGE>
Section 5.07. Date of Adoption and Effective Date of the Plan. The Plan
-----------------------------------------------
shall be deemed adopted by the Board on April 1, 1995. The Plan shall be deemed
effective as of the date of its adoption by the Board, provided it is 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 5.08. Gender. Words of any gender used in the Plan shall be
------
construed to include any other gender, unless the context requires otherwise.
- 10 -
<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 1995 Stock Option Plan (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
1.02(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. (By way of example, if the date of this
Agreement were January 1, 1996, the Commencement Date would be January 1,
1997.)
(c) "Common Stock" shall have the meaning set forth in Article I,
Section 1.02(e) of the Plan.
(d) "Expiration Date" shall mean the date which is ten (10) years from
and inclusive of the date of this Agreement. (By way of example, if the
date of this Agreement were January 1, 1996, the Expiration Date would be
December 31, 2005.)
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 (i) the Expiration Date or
(ii) the date on which the employment of Employee by the Company or any of its
Affiliates terminates for any reason; provided, however, that
(a) if such employment terminates on or after the Commencement Date
and on or before the Expiration Date, other than by reason of Employee's
retirement,
<PAGE>
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; or
(b) if such employment terminates on or after the Commencement 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; or
(c) if such employment terminates on or after the Commencement Date
and on or before the Expiration Date by reason of Employee's retirement,
Employee may exercise this option, to the extent he was entitled to do so
at the date of such retirement, at any time within three (3) years after
the date of such retirement; provided, however, that if Employee shall die
within such three-year period, then 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 his death, at
any time within the first to expire of (i) two (2) years after the date of
his death or (ii) three (3) years after the date of his retirement, but not
after the Expiration Date in any event.
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.
The Stock Option Committee that administers the Plan shall have the
authority to make, in its sole discretion, any and all determinations that are
required to be made in connection with this Agreement regarding the reasons for
or circumstances of the termination of Employee's employment with the Company or
any Affiliate, including but not limited to the determinations of (1) whether
Employee's employment by the Company or any of its Affiliates terminated by
reason of Employee's retirement, death or disability or on account of fraud,
dishonesty or the performance of other acts detrimental to the Company or
whether there is good cause to cancel this option, and (2) what criteria or
requirements,
- 2 -
<PAGE>
if any, should be applied in making the determinations described in clause (1)
of this sentence.
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 from
and inclusive of 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
from and inclusive of 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 from and inclusive of the date of
this Agreement.
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
- 3 -
<PAGE>
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 any applicable law.
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 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.
- 4 -
<PAGE>
12. Construction. This option shall not 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:_____________________________________
Carlton E. Turner, Ph.D., President
________________________________
Signature of Employee
________________________________
(Type or print name of Employee)
- 5 -
<PAGE>
RECORD OF EXERCISE
------------------
DATE NO. OF SHARES EXERCISED INITIAL/AGREED
- ---- ----------------------- --------------
__________________ ________________________ ______________
__________________ ________________________ ______________
__________________ ________________________ ______________
__________________ ________________________ ______________
__________________ ________________________ ______________
- 6 -
<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 1995 Stock Option Plan (the "Plan") provides that a
four-year, nonqualified stock option to purchase 2,500 shares of the Company's
Common Stock shall be granted automatically, on the date of each annual meeting
of shareholders of the Company, to each person who (i) is a nonemployee director
of the Company on the date of such grant and immediately following such annual
meeting and (ii) has served in that capacity for at least six months immediately
preceding the date of such grant; and
WHEREAS, the annual meeting of shareholders of the Company for the current
calendar year was held on the date of this Agreement, and Director satisfies the
conditions described in clauses (i) and (ii) of the immediately preceding
paragraph 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
1.02(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 1.02(e) of the Plan.
(e) "Expiration Date" shall mean the date which is four (4) years from
and inclusive of the date of this Agreement. (By way of example, if the
date of this Agreement were January 1, 1996, the Expiration Date would be
December 31, 1999.)
2. Option. The Company hereby grants to Director the option to purchase,
------
on the terms hereinafter set forth, 2,500 shares of the Company's Common Stock
at a price of $_______ per share during the period beginning on the
Commencement Date and ending
<PAGE>
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.
The Stock Option Committee that administers the Plan shall have the
authority to make, in its sole discretion, any and all determinations that are
required to be made in connection with this Agreement regarding the reasons for
or circumstances of Director's ceasing to serve on the Board, including but not
limited to the determinations of (1) whether Director ceased to serve on the
Board for any of the reasons set forth in clause (a) or clause (b) of the
immediately preceding paragraph and (2) what criteria or requirements, if any,
should be applied in making the determinations described in clause (1) of this
sentence.
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 any applicable law.
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
- 2 -
<PAGE>
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 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 shall not 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:_____________________________________
Carlton E. Turner, Ph.D., President
_______________________________
- 3 -
<PAGE>
Signature of Director
________________________________
[Type or Print Name of Director]
- 4 -
<PAGE>
RECORD OF EXERCISE
------------------
DATE NO. OF SHARES EXERCISED INITIAL/AGREED
- ---- ----------------------- --------------
____________ _______________________ ______________
____________ _______________________ ______________
____________ _______________________ ______________
____________ _______________________ ______________
____________ _______________________ ______________
- 5 -
<PAGE>
EXHIBIT 5.1
THOMPSON & KNIGHT, P.C.
3300 First City Center
Dallas, Texas 75201
(214) 969-1358
November 17, 1995
Carrington Laboratories, Inc.
2001 Walnut Hill Lane
Irving, Texas 75038
Re: 1995 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 1,500,000 shares of the
Company's Common Stock, par value $.01 per share (the "Shares"), for issuance
and sale pursuant to the Carrington Laboratories, Inc. 1995 Stock Option Plan
(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.
<PAGE>
Carrington Laboratories, Inc.
November 17, 1995
Page 2
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we come within
the category 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 by
reference in this registration statement of our report dated January 12, 1995,
incorporated by reference in Carrington Laboratories, Inc.'s Annual Report (Form
10-K) for the year ended November 30, 1994, and to all references to our Firm
included in this registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas,
November 17, 1995
