As filed with the Securities and Exchange Commission on December 8, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------
SCHAWK, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 2545354
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
(Address, including zip code of registrant's principal executive office)
------------------------------------------------
SCHAWK, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
------------------------
DAVID A. SCHAWK
SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
(847) 827-9494
(Name, address and telephone number, including area code, of agent for service)
Copies to:
JOHN T. MCENROE, ESQ.
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601
(312) 609-7500
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Registered(1) Offering Price Per Share(2) Aggregate Offering Price(2) Registration Fee
- ------------------- ---------------- --------------------------- --------------------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par
value $0.01 per share 1,000,000 $14.344 $1,434,400 $3,988
===================== ================= =========================== ============================ =================
(1) Together with an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the Schawk, Inc. Employee Stock Purchase Plan (the "Plan") as the result of
a stock split, stock dividend or similar adjustment of the outstanding
Common Stock pursuant to Rule 416(a).
(2) Pursuant to Rule 457(h)(1) under the Securities Act of 1933, as amended,
the proposed maximum offering price per share and the registration fee have
been estimated based on the average of the high and low sales prices for
the Common Stock as reported by the New York Stock Exchange on December 4,
1998.
</TABLE>
================================================================================
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
NOTE: The documents containing the information required by this section will be
given to employees eligible to participate in the Plan, and are not required to
be filed with the Securities and Exchange Commission (the "Commission") as a
part of the Registration Statement or as an Exhibit.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by Schawk, Inc., a
Delaware corporation ("Registrant"), are incorporated in this Registration
Statement by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1997
(File No. 0-09335);
(b) All other reports filed by the Registrant pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, since December 31, 1997; and
(c) The description of Registrant's Common Stock contained in the
Registration Statement on Form 8-A, dated November 21, 1986.
All documents filed by Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold
are incorporated by reference in this Registration Statement and are a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law makes provision for
the indemnification of officers and directors in terms sufficiently broad to
indemnify officers and directors under certain circumstances from liabilities
(including reimbursement for expenses incurred) arising under the Securities Act
of 1933, as amended (the "Securities Act"). The Certificate of Incorporation of
the Registrant provides for indemnification to the fullest extent allowed under
Delaware law.
Section 102(b)(7) of the Delaware General Corporation Law permits
corporations to limit directors' monetary liability for breach of fiduciary duty
except in certain circumstances. The Certificate of Incorporation of the
Registrant provides for this liability limitation of its directors.
The directors and officers of the Registrant are not covered by any
insurance policies indemnifying them against any liabilities.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers or controlling
persons of the Registrant, pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that, in the opinion of the 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 in
2
<PAGE>
connection with the securities being registered hereunder. 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.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Certificate of Incorporation of Schawk, Inc., as amended
(incorporated by reference to Exhibit 4.2 to Registration
Statement No. 333-39113).
4.2 By-Laws of Schawk, Inc., as amended (incorporated by reference to
Exhibit 4.3 to Registration Statement No. 333-39113).
5 Opinion of Vedder, Price, Kaufman & Kammholz regarding the
legality of the Common Stock to be issued upon exercise of
options issued under the Plan.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Vedder, Price, Kaufman & Kammholz (included in
Exhibit 5).
24 Powers of Attorney (included on the signature pages of the
Registration Statement).
99 Schawk, Inc. Employee Stock Purchase Plan.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information set forth in the 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 undersigned Registrant hereby 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 herein, 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
3
<PAGE>
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 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 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, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
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 Des Plaines, State of Illinois, on this 8th day of
December, 1998.
Schawk, Inc.
By:/s/ David A. Schawk
--------------------------------
David A. Schawk
President, Chief Executive
Officer and Director
We, the undersigned officers and directors of Schawk, Inc., and each of us,
do hereby constitute and appoint each and any of David A. Schawk and A. Alex
Sarkisian our true and lawful attorney and agent, with full power of
substitution and resubstitution, to do any and all acts and things in our name
and behalf in any and all capacities and to execute any and all instruments for
us in our names in any and all capacities, which attorney and agent may deem
necessary or advisable to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules, regulations, and requirements of the
Commission, in connection with this Registration Statement, including
specifically, but without limitation, power and authority to sign for us or any
of us in our names in the capacities indicated below, any and all amendments
(including post-effective amendments) hereto; and we do hereby ratify and
confirm all that said attorney and agent, or his substitute, shall do or cause
to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title Date
/s/Clarence W. Schawk Director and Chairman of the Board December 8, 1998
- -----------------------
Clarence W. Schawk
/s/David A. Schawk Director, President and December 8, 1998
- ----------------------- Chief Executive Officer
David A. Schawk
/s/A. Alex Sarkisian Director, Executive Vice President December 8, 1998
- ----------------------- and Corporate Secretary
A. Alex Sarkisian
/s/James J. Patterson Senior Vice President and December 8, 1998
- ----------------------- Chief Financial Officer
James J. Patterson
/s/Judith W. McCue Director December 8, 1998
- -----------------------
Judith W. McCue
<PAGE>
Name Title Date
/s/Robert F. Meinken Director December 8, 1998
- -----------------------
Robert F. Meinken
/s/John T. McEnroe Director December 8, 1998
- -----------------------
John T. McEnroe
/s/Hollis W. Rademacher Director December 8, 1998
- -----------------------
Hollis W. Rademacher
/s/Dennis D. Wilson Chief Accounting Officer and December 8, 1998
- ----------------------- Director of Financial Reporting
Dennis D. Wilson
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
4.1 Certificate of Incorporation of Schawk, Inc., as amended (incorporated
by reference to Exhibit 4.2 to Registration Statement No. 333-39113).
4.2 By-Laws of Schawk, Inc., as amended (incorporated by reference to
Exhibit 4.3 to Registration Statement No. 333-39113).
5 Opinion of Vedder, Price, Kaufman & Kammholz regarding the legality of
the Common Stock to be issued upon exercise of options issued under the
Plan.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Vedder, Price, Kaufman & Kammholz (included in Exhibit 5).
24 Powers of Attorney (included on the signature pages of the Registration
Statement).
99 Schawk, Inc. Employee Stock Purchase Plan.
EXHIBIT 5
VEDDER PRICE VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601-1003
312-609-7500
FACSIMILE: 312-609-5005
A PARTNERSHIP INCLUDING VEDDER, PRICE,
KAUFMAN & KAMMHOLZ, P.C.
WITH OFFICES IN CHICAGO AND NEW YORK CITY
December 8, 1998
Schawk, Inc.
1695 River Road
Des Plaines, Illinois 60018
Gentlemen:
Reference is hereby made to the Registration Statement on Form S-8 (the
"Registration Statement") being filed by Schawk, Inc., a Delaware corporation
(the "Company"), relating to the registration of 1,000,000 shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), reserved
for issuance pursuant to the Schawk, Inc. Employee Stock Purchase Plan,
effective as of January 1, 1999 (the "Plan"). We have acted as counsel for the
Company in connection with the Registration Statement.
It is our opinion that such shares of Common Stock, when issued and paid
for in accordance with the terms of such Plan, will be validly issued, fully
paid and nonassessable.
We hereby consent to the use of this opinion in connection with said
Registration Statement.
Very truly yours,
/s/ VEDDER PRICE, KAUFMAN & KAMMHOLZ
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in The Registration Statement
(Form S-8) pertaining to the Schawk Inc. Employee Stock Purchase Plan
of our report dated February 13, 1998, with respect to the consolidated
financial statements and schedule of Schawk, Inc., included in its Annual Report
(10-K) for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
Chicago, Illinois /s/ ERNST & YOUNG LLP
December 4, 1998
EXHIBIT 99
SCHAWK, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Effective January 1, 1999)
1. PURPOSE. The purpose of the Schawk, Inc. Employee Stock Purchase Plan
(the "Plan"), is to provide employees of Schawk, Inc. ("Schawk") and
Participating Subsidiaries (Schawk and the Participating Subsidiaries being
collectively referred to as the "Company") an opportunity to own an equity
interest in Schawk and, through such ownership, to promote their identification
with the interests of shareholders of Schawk, to stimulate their commitment to
the business objectives of Schawk and to maintain their motivation through the
opportunity to share in the growth of Schawk. It is intended that options issued
pursuant to the Plan shall constitute options issued pursuant to an "employee
stock purchase plan" within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended.
2. DEFINITIONS. As used herein, the terms set forth below have the
meanings assigned to them in this Section 2 and shall include the plural as well
as the singular.
Administrator means the brokerage firm or financial institution (if
any) retained to perform administrative services described in Section 6(b).
Board of Directors means the board of directors of Schawk, Inc.
Brokerage Account means the account in which the Deposited Shares are
held.
Code means the Internal Revenue Code of 1986, as amended.
Committee means the committee that administers the Plan and which is
appointed pursuant to Section 6.
Company means Schawk and any Participating Subsidiaries.
Compensation means the Participant's base pay while a Participant in
the Plan, including overtime and bonuses, but excluding stock option awards
or stock grants and other forms of compensation.
Deposited Shares means the full and fractional Shares that have been
purchased for or issued on behalf of a Participant pursuant to the exercise
of Options under the Plan and which are held for the Participant in a
Brokerage Account.
Elected Percentage means the percentage of Compensation that the
Participant elects to contribute toward the purchase of Shares pursuant to
this Plan.
Entry Date means the first day of January, April, July and October.
<PAGE>
Fair Market Value means for a Trading Day the closing price for Shares
as reported by the New York Stock Exchange ("NYSE") as reported in the Wall
Street Journal or, if the Shares are no longer listed on the NYSE, as
reported on such other exchange on which the Shares are listed.
Grant Date means the first Trading Day of January, April, July and
October.
Option means an option granted under this Plan that will entitle a
Participant to purchase Shares.
Participating Subsidiary means a Subsidiary listed in Appendix A whose
employees are eligible to be granted Options under the Plan.
Plan means the Schawk, Inc. Employee Stock Purchase Plan.
Purchase Account means the account used to purchase Shares through the
exercise of Options under the Plan.
Purchase Date means the last Trading Day of March, June, September and
December, or such other date as shall be established by the Committee.
Purchased Shares means the full and fractional Shares purchased or
issued pursuant to the exercise of Options under the Plan.
Restricted Period means the period of time during which Shares are
held in the Deposit Account pursuant to Section 11(d).
Shares means the Class A common stock of Schawk, Inc., par value $.01
per share.
Statutory Limitation is defined in Section 7.
Subsidiary means any corporation of which stock possessing at least
50% of the total combined voting power of all classes of stock entitled to
vote is owned by Schawk or any other Subsidiary or Subsidiaries.
Trading Day means any day on which Shares are traded on the NYSE or,
if the Shares are no longer listed on the NYSE, such other exchange on
which the Shares are listed.
3. STOCK TO BE ISSUED UNDER THE PLAN.
(a) SCHAWK SHARES. The stock subject to Options shall be the Class A
common stock of Schawk (the "Shares"), as traded on the NYSE or on such other
exchange as the Shares shall be listed.
2
<PAGE>
(b) LIMITS UPON NUMBER OF SHARES ISSUABLE. Subject to adjustment
pursuant to Section 12, the maximum number of Shares issuable upon the exercise
of Options shall not exceed 1,000,000. Shares granted under the Plan may be
either authorized but unissued shares or shares now or hereafter held in the
treasury of Schawk. In the event that any Option granted pursuant to this Plan
expires or is terminated, surrendered or canceled without being exercised, in
whole or in part, for any reason, the Shares which were subject to such Option
shall again be available for grant as an Option under this Plan and shall not
reduce the aggregate number of Shares available for grant under this Plan.
4. APPROVAL BY SHAREHOLDERS. Continuance of the Plan shall be subject to
approval by the shareholders of Schawk within twelve months before or after the
date the Plan is adopted by the Board of Directors. If such shareholder approval
is obtained at a duly held shareholders' meeting, it may be obtained by the
affirmative vote of the holders of a majority of the Shares of Schawk present at
the meeting or represented and entitled to vote thereon.
5. ADMINISTRATION.
(a) POWERS AND DUTIES OF COMMITTEE. The Plan shall be administered, in
accordance with the provisions hereof, by a duly authorized committee the
members of which shall be appointed by the Board of Directors (the "Committee").
Subject to the provisions of the Plan and Section 423 of the Code, the Committee
shall have the discretionary authority to determine the time and frequency of
granting Options, the terms and conditions of the Options and the number of
Shares subject to each Option. The Committee shall also have the discretionary
authority to do everything necessary and appropriate to administer the Plan,
including, without limitation, interpreting the provisions of the Plan (but any
such interpretation shall not be inconsistent with the provisions of Section 423
of the Code). All actions, decisions and determinations of, and interpretations
by the Committee with respect to the Plan shall be final and binding upon all
Participants and upon their executors, administrators, personal representatives,
heirs and legatees. No member of the Board of Directors or the Committee shall
be liable for any action, decision, determination or interpretation made in good
faith with respect to the Plan or any Option granted hereunder.
(b) ADMINISTRATOR. Schawk, any Participating Subsidiary or the
Committee may engage the services of a brokerage firm or financial institution
(the "Administrator") to perform certain ministerial and procedural duties under
the Plan including, but not limited to, mailing and receiving notices
contemplated under the Plan, determining the number of Purchased Shares for each
Participant, maintaining or causing to be maintained the Purchase Account and
the Brokerage Account, disbursing funds maintained in the Purchase Account or
proceeds from the sale of Shares through the Brokerage Account, and filing with
the appropriate tax authorities proper tax returns and forms (including
information returns) and providing to each Participant statements as required by
law or regulation.
3
<PAGE>
6. ELIGIBILITY.
(a) EMPLOYEES ONLY; NON-DISCRIMINATION. Only employees of the Company
shall be eligible to be granted Options under the Plan. Every employee of the
Company shall be eligible to participate on the first Entry Date that occurs six
months after such employee's first day of employment; provided, that such
employee completes and submits an election form by the deadline prescribed by
the Committee. Notwithstanding anything in the foregoing to the contrary,
employees whose customary employment is for not more than 20 hours per week or 5
months in any calendar year shall not be eligible to participate. An employee
who does not become a Participant on the first Entry Date on which he/she is
eligible may thereafter become a Participant on any subsequent Entry Date by
completing and submitting an election form by the deadline prescribed by the
Committee. All employees eligible to be granted Options under the Plan shall
have the same rights and privileges with respect to Options granted at the same
time.
(b) 5% SHAREHOLDERS EXCLUDED. Notwithstanding the foregoing, in no
event may an employee be granted an Option if such employee, immediately after
the Option is granted, owns stock possessing 5% or more of the total combined
voting power or value of all classes of stock of Schawk or a Subsidiary. For
purposes of determining such stock ownership, the rules of Section 424(d) of the
Code shall apply, and stock which the employee may purchase under outstanding
options (whether issued pursuant to this Plan or otherwise) shall be treated as
stock owned by the employee.
7. LIMITATIONS ON NUMBER OF SHARES TO BE PURCHASED. In no event shall a
Participant be granted an Option which would permit his/her rights to purchase
Shares under all employee stock purchase plans (within the meaning of Section
423 of the Code) of his/her employing Participating Subsidiary and its parent
and subsidiary corporations (as defined in Section 424 of the Code) to accrue at
a rate which exceeds $15,000 in value of such Shares (determined at the Grant
Date relating to such Option) for each calendar year in which any such Option is
outstanding at any time (such limitation is referred to herein as the "Statutory
Limitation"). The Statutory Limitation applies only to Options granted under
"employee stock purchase plans" within the meaning of Section 423 of the Code
and does not limit the amount of Shares or other stock of Schawk which an
employee may purchase outright or under any other stock or bonus plans then in
effect.
8. PURCHASE ACCOUNT. A non-interest-bearing account shall be established
with the Administrator (the "Purchase Account") for the purpose of purchasing
Shares by Participants under the Plan. Shares purchased under the Plan shall be
purchased with funds credited to the Purchase Account in accordance with the
Participant's election under Section 9.
9. PAYROLL DEDUCTIONS.
(a) A Participant who elects to purchase Shares under this Plan shall
be deemed to have authorized his/her employer to withhold 1% to 15% (in whole
percentages) from the periodic payment of his/her Compensation (the "Elected
Percentages"). The Participant's employer shall withhold the Elected Percentage
from each payment of Compensation, commencing on the Entry
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<PAGE>
Date on which the employee becomes a Participant and continuing until such
election is changed or terminated. Such Participant shall be deemed to have
given instruction to his/her employer to credit the amount so deducted to the
Purchase Account. The amounts so credited in the Purchase Account during each
calendar quarter may only be applied toward the purchase of Shares pursuant to
Options granted on the immediately preceding Grant Date.
(b) CHANGING THE ELECTION. A Participant may change his/her Elected
Percentage or terminate the election under subsection (a) above as of a
subsequent Entry Date by completing and submitting a change in election form by
the deadline prescribed by the Committee.
10. GRANT AND EXERCISE OF OPTIONS.
(a) GRANT. Options to purchase up to the number of Shares equal to 15%
of each Participant's Compensation for the current calendar quarter divided by
the Purchase Price (subject to the Statutory Limitation) shall be deemed to have
been granted on the first Trading Day of January, April, July and October (the
"Grant Date").
(b) EXERCISE. The Options shall be exercised and full and fractional
Shares shall be purchased or issued using amounts credited to each Participant's
Purchase Account as of the last Trading Day of the calendar quarter containing
the Grant Date, or such other date(s) as shall be established by the Committee
(each such date being a "Purchase Date").
(c) TERMINATION OF EMPLOYMENT. If a Participant terminates employment
with the Company prior to a Purchase Date, any amounts in his/her Purchase
Account shall be paid to the Participant and shall not be used to exercise
Options.
11. TERMS AND CONDITIONS OF OPTIONS. Options granted hereunder shall be
subject to the following terms and conditions:
(a) PURCHASE PRICE. The purchase price of each Share subject to an
Option under the Plan shall be the lesser of 85 percent of the Fair Market Value
of a Share on the applicable Grant Date or 85 percent of the Fair Market Value
of a Share on the applicable Purchase Date.
(b) TERM OF OPTIONS. An Option granted hereunder shall expire after
the applicable Purchase Date next following the Grant Date.
(c) ASSIGNABILITY OF OPTIONS. No Option granted hereunder shall be
assignable or transferable except by will or by the laws of descent and
distribution, and shall be exercisable, during the lifetime of the Participant,
only by the Participant.
(d) RESTRICTED PERIOD. Upon exercise of an Option, and subject to
subsection (e) below, the Participant shall be deemed to have consented to the
deposit of all of the full and fractional Shares purchased pursuant to such
exercise (the "Deposited Shares") in a designated brokerage account maintained
by the Administrator for such benefit (the "Brokerage Account") for
5
<PAGE>
the greater of a two year period after the relevant Grant Date or a one year
period after the relevant Purchase Date (the "Restricted Period"). The Deposited
Shares will be held in book-entry form in the name of the Administrator as
nominee.
(e) WITHDRAWAL AND SALE OF DEPOSITED SHARES. A Participant (or if the
Participant has died, his/her executor or personal representative) may instruct
the Administrator (either in writing or in accordance with such procedures as
established by the Committee) to (i) sell his/her Deposited Shares through the
Brokerage Account at any time and (ii) pay over to such Participant the proceeds
(less any expenses and withholding taxes, including, without limitation, wage
and employment withholding taxes) of such sale. In addition, a Participant (or
if the Participant has died, his/her executor or personal representative) may
withdraw the Participant's Deposited Shares at any time at his/her own expense.
Such withdrawal shall be contingent on the Participant satisfying all Federal
income tax obligations. If the employment of a Participant is terminated (for
any reason) and such termination occurs subsequent to the Restricted Period with
respect to any Deposited Shares or subsequent to such termination the Restricted
Period lapses, the Administrator may require the Participant to withdraw such
Deposited Shares from the Brokerage Account at the Participant's own expense.
12. ADJUSTMENT OF NUMBER OF SHARES SUBJECT TO OPTIONS. The aggregate number
of Shares with respect to which Options may be granted, the aggregate number of
Shares subject to each outstanding Option, and the Option price per Share may
all be appropriately adjusted as the Board of Directors may determine for any
increase or decrease in the number of issued and outstanding Shares resulting
from a subdivision or consolidation of Shares, whether through reorganization,
recapitalization, stock split-up, stock distribution or combination of Shares,
or the payment of a Share dividend or other increase or decrease in the number
of such Shares outstanding effected without receipt of consideration by Schawk.
Adjustments under this Section 12 shall be made according to the sole discretion
of the Board of Directors, and its decision shall be binding and conclusive;
provided, however, that Options granted pursuant to the Plan shall not be
adjusted in a manner that causes the Options to fail to qualify as options
issued pursuant to an "employee stock purchase plan" within the meaning of
Section 423.
13. RIGHTS AS A SHAREHOLDER. A Participant shall have rights as a
shareholder of Schawk with respect to each Deposited Share under the Plan.
14. OTHER REGULATORY ACTIONS. Prior to the offering of any Shares under the
Plan, Schawk shall effect a registration of the offering of the Shares of Schawk
reserved under the Plan in accordance with the requirements of the Securities
Act of 1933 and the rules and regulations thereunder.
15. AMENDMENTS; TERMINATION OF THE PLAN. The Board of Directors may from
time to time amend, modify, suspend, discontinue or terminate the Plan at any
time without notice; provided that no Participant's existing rights in respect
of existing Options are adversely affected thereby; provided, further, upon any
such amendment or modification, all Participants shall continue to have the same
rights and privileges in respect of existing Options; provided, further, that no
such
6
<PAGE>
amendment of the Plan shall, except as provided in Section 13 hereof: (i)
increase the total number of Shares issuable under the Plan; (ii) increase the
maximum number of Shares which any Participant may purchase under the Plan; or
(iii) increase, enlarge or improve the rights of existing or future Participants
under the Plan unless such amendment shall have been approved by shareholders of
Schawk within the twelve month period either before or after the adoption of
such amendment.
16. NO OTHER OBLIGATIONS. The receipt of an Option pursuant to the Plan
shall impose no obligation upon the Participant to purchase any Shares covered
by such Option. Nor shall the granting of an Option pursuant to the Plan
constitute an agreement or an understanding, express or implied, on the part of
Schawk or any Participating Subsidiary to employ the Participant for any
specified period.
17. NOTICES. Any notice which the Company or any Participant may be
required or permitted to give to the other shall be in writing and may be
delivered personally or by mail, postage prepaid, addressed: if to the Company
(or to the Administrator), to such address as the Company, by notice to such
Participant, may designate in writing from time to time; and, if to the
Participant, at his/her address as shown on the payroll records of the Company.
18. GOVERNING LAW. The Plan and all Options granted hereunder shall be
construed in accordance with and governed by the laws of the State of Illinois
without reference to choice of law principles and subject in all cases to the
Code and the regulations thereunder.
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APPENDIX A
PARTICIPATING SUBSIDIARIES
Schawk-Asia, Inc.
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