<PAGE> 1
As filed with the Securities and Exchange Commission on December 29, 1995
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
MCDONALD & COMPANY INVESTMENTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 34-139150
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
McDonald & Company Investments, Inc.
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2603
(Address of principal executive offices, including zip code)
______________________
MCDONALD & COMPANY INVESTMENTS, INC.
1995 KEY EMPLOYEES STOCK OPTION PLAN
(Full title of the plan)
______________________
Copy to:
William B. Summers, Jr.
President and Chief Executive Officer Thomas F. McKee, Esq.
McDonald & Company Investments, Inc. Calfee, Halter & Griswold
1400 McDonald Investment Center 1400 McDonald Investment Center
800 Superior Avenue 800 Superior Avenue
Cleveland, Ohio 44114-2603 Cleveland, Ohio 44114-2688
(216) 443-2300 (216) 622-8200
(Name, address and telephone number, including area code, of agent for
service)
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share (1) price (1) fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 500,000 $17.8125 $8,906,250 $3,072.00
par value shares
$1.00 per share
- --------------------------------------------------------------------------------
<FN>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee.
</TABLE>
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The following documents of McDonald & Company Investments,
Inc. (the "Company"), previously filed with the Securities and Exchange
Commission, are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1995:
2. The Company's Quarterly Report on Form 10-Q for the
first and second quarters of the 1996 fiscal year;
3. The Company's definitive Proxy Statement used in
connection with its Annual Meeting of Stockholders
held on August 2, 1995;
4. The Company's Form 8-K Current Report dated August
15, 1995; and
5. The Company's Form 8-A (Reg. No. 1-8526).
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of
this Registration Statement, 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 the Registration Statement and to be a part hereof from the date
of filing of such documents.
Item 4. Description of Securities
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Article VII of the Company's Certificate of Incorporation
provides that Directors of the Company are not personally liable to the Company
for any breach of fiduciary duty as a Director, except in certain very limited
circumstances.
Article V of the Company's By-Laws provides in part that the
Company shall indemnify any Director or officer who was or is a party to or is
threatened to be made a party to, or is involved in, any threatened, pending or
completed action, suit or proceeding, whether civil, criminal administrative or
investigative, by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a Director or officer of the
Company, or is or was serving at the request of the Company, in certain
capacities for another entity, against all expense, liability and loss
reasonably incurred or suffered by such person in connection with such action,
suit or proceeding. Responsibility for determinations with respect to such
indemnification shall be made by the Board of Directors, by independent legal
counsel or by the stockholders of the Company.
The Company has also entered into indemnity agreements (the
"Indemnity Agreements") with its Directors and officers that further expand the
protection provided to the Company's Directors and officers and are based upon
II-1
<PAGE> 3
the sections of the General Corporation Law of the State of Delaware and
Article V of the Company's By-Laws that recognize the validity of additional
indemnity rights granted by agreement. The substantive content of the
Indemnity Agreements and Article V of the By-Laws is substantially the same
except that pursuant to the Indemnity Agreements (i) indemnity is expressly
provided for settlements in derivative actions and (ii) partial indemnification
is permitted in the event that the Director or officer is not entitled to full
indemnification.
Both the General Corporation Law of the State of Delaware and
Article V of the Company's By-Laws provide that the Company may maintain
insurance to cover losses incurred pursuant to liability of Directors and
officers of the Company, which insurance, if any, may cover liability of
Directors and officers of the Company arising under the Securities Act of 1933.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
See the Exhibit Index at Page E-1 of this Registration
Statement.
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:
(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
the 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 the Registration
Statement; and
(iii) 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 in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3 or Form S-8, and 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 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 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.
(c) 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 described under Item 6 above, 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 Securities Act of
1933 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 against the registrant 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 Securities Act of 1933 and will be governed
by the final adjudication of such issue.
II-2
<PAGE> 4
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 Cleveland, State of Ohio, this 28th day of
December, 1995.
MCDONALD AND COMPANY INVESTMENTS, INC.
By: /s/ William B. Summers, Jr.
-------------------------------
William B. Summers, Jr.,
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below, constitutes and appoints Thomas M. O'Donnell, William
B. Summers, Jr., Robert T. Clutterbuck and Thomas F. McKee, or any one of them,
his or her true and lawful attorneys-in-fact and agents, with full power of
substitution for him or her and his or her name, place and stead, in any and
all capacities, to sign any or all amendments or post-effective amendments to
this Registration Statement, and to file the same, with all Exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, or any one of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any one
of them, or their or his substitute or substitutes may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities indicated on December 28, 1995.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William B. Summers, Jr.
----------------------------- President, Chief Executive Officer
William B. Summers, Jr. and Director (Principal Executive
Officer)
/s/ Thomas M. O'Donnell
----------------------------- Chairman and Director
Thomas M. O'Donnell
/s/ Robert T. Clutterbuck
----------------------------- Treasurer (Principal Accounting and Financial
Robert T. Clutterbuck Officer)
/s/ James A. Karman
----------------------------- Director
James A. Karman
</TABLE>
II-3
<PAGE> 5
<TABLE>
<S> <C>
/s/ Frederick R. Nance
----------------------------- Director
Frederick R. Nance
/s/ Willard E. Carmel
----------------------------- Director
Willard E. Carmel
/s/ Rena J. Blumberg
----------------------------- Director
Rena J. Blumberg
/s/ Donald E. Weston
----------------------------- Director
Donald E. Weston
----------------------------- Director
Edward Fruchtenbaum
</TABLE>
II-4
<PAGE> 6
CALFEE, HALTER & GRISWOLD
1400 McDonald Investment Center
Cleveland, Ohio 44114
December 28, 1995
McDonald & Company Investments, Inc.
McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114-2603
We are familiar with the proceedings taken and proposed to be
taken by McDonald & Company Investments, Inc., a Delaware corporation (the
"Company"), with respect to 500,000 shares of Common Stock, par value $1.00 per
share (the "Stock"), of the Company to be issued from time to time upon the
exercise of stock options granted pursuant to the Company's 1995 Key Employees
Stock Option Plan (the "Plan"). As counsel for the Company, we have assisted
in the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") to be filed by the Company with the Securities and Exchange
Commission to effect the registration of the Stock under the Securities Act of
1933, as amended.
In this connection, we have examined the Certificate of
Incorporation and the By-Laws of the Company, both as amended, records of
proceedings of the Board of Directors and stockholders of the Company, and such
other records and documents as we have deemed necessary or advisable to render
the opinion contained herein. Based upon our examination and inquiries, we are
of the opinion that the Stock, when issued and sold upon the exercise of the
options pursuant to the terms and conditions of the Plan, will be duly
authorized and validly issued, fully paid and nonassessable.
We are admitted to the practice of law solely in the State of
Ohio. The opinions expressed in this letter are limited to matters of Ohio
law, Delaware general corporate law and United States federal law.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement. This opinion is limited to the matters
expressly set forth herein, and no opinion is implied or may be inferred beyond
that expressly stated herein. This opinion is furnished to you and is solely
for your benefit. No other person or entity may rely upon the opinion set
forth herein without the prior written consent of the undersigned.
Respectfully submitted,
CALFEE, HALTER & GRISWOLD
II-5
<PAGE> 7
EXHIBIT 23.1
We consent to the incorporation by reference in the
Registration Statement (Form S-8) and in the related Prospectus, pertaining
to McDonald & Company Investments, Inc. 1995 Key Employees Stock Option Plan
of our report dated May 2, 1995, with respect to the financial statements and
schedules of McDonald & Company Investments, Inc. included and incorporated
by reference in its Annual Report (Form 10-K) for the year ended
March 31, 1995, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Cleveland, Ohio
December 28, 1995
II-6
<PAGE> 8
EXHIBIT 23.2
CONSENT OF COUNSEL
The consent of Calfee, Halter & Griswold is contained in their
opinion filed as Exhibit 5.1 to this Registration Statement.
II-7
<PAGE> 9
EXHIBIT 24.1
MCDONALD & COMPANY INVESTMENTS, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that McDonald & Company
Investments, Inc. hereby constitutes and appoints Thomas M. O'Donnell, William
B. Summers, Jr., Robert T. Clutterbuck, and Thomas F. McKee, or any one of
them, its attorneys-in-fact and agents, each with full power of substitution
and resubstitution for it in any and all capacities, to sign any or all
amendments or post-effective amendments to this Registration Statement, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting onto each of
such attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary in connection with such
matters and hereby ratifying and confirming all that each of such
attorneys-in-fact and agents or his substitute or substitutes may do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney has been signed at
Cleveland, Ohio on December 28, 1995.
MCDONALD & COMPANY INVESTMENTS, INC.
By: /s/ William B. Summers, Jr.
_________________________________
William B. Summers, Jr.
President and Chief
Executive Officer
II-8
<PAGE> 10
EXHIBIT 24.1
(Continued)
MCDONALD & COMPANY INVESTMENTS, INC.
Certified Resolution
I, THOMAS F. McKEE, Secretary of McDonald & Company
Investments, Inc., a Delaware corporation (the "Company") do hereby certify
that the following is a true copy of a resolution adopted by the Board of
Directors on August 2, 1995 and that the same has not been changed and remains
in full force and effect.
RESOLVED, that Thomas M. O'Donnell, William B. Summers, Jr.,
Robert T. Clutterbuck, and Thomas F. McKee, be, and each of them hereby is,
appointed as the attorney of McDonald & Company Investments, Inc., with full
power of substitution and resubstitution for and in the name, place and stead
of the Company to sign, attest and file a Registration Statement on Form S-8,
or any other appropriate form that may be used from time to time, with respect
to the issue and sale of the Shares, and any and all amendments, post-effective
amendments and exhibits to such Registration Statement and any and all
applications or other documents to be filed with the Securities and Exchange
Commission or any national securities exchange pertaining to the listing
thereon of the Shares covered by such Registration Statement or pertaining to
such registration and any and all applications or other documents to be filed
with any governmental or private agency or official relative to the issuance of
said Shares with full power and authority to do and perform any and all acts
and things whatsoever requisite and necessary to be done in the premises,
hereby ratifying and approving the acts of such attorneys or any such
substitute or substitutes and, without implied limitation, including in the
above authority to do the foregoing on behalf and in the name of any duly
authorized officer of the Company; and the President and Chief Executive
Officer of the Company be, and hereby is authorized and directed for and on
behalf of the Company to execute a Power of Attorney evidencing the foregoing
appointment.
/s/ Thomas F. McKee
_____________________________________
Thomas F. McKee, Secretary
Dated: December 28, 1995
II-9
<PAGE> 11
MCDONALD & COMPANY INVESTMENTS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description of Document Page
- -------------- ----------------------- ----------
<S> <C>
4.1 1995 Key Employees Stock Option Plan.
5.1 Opinion of Calfee, Halter & Griswold regarding
the validity of the securities being registered
(see page II-5 of this Registration Statement).
23.1 Consent of Ernst & Young (see page II-6 of this
Registration Statement).
23.2 Consent of Calfee, Halter & Griswold (see page
II-7 of this Registration Statement).
24.1 Power of Attorney and related Certified
Resolution (see pages II-8 and II-9 of this
Registration Statement).
</TABLE>
E-1
<PAGE> 1
EXHIBIT 4.1
MCDONALD & COMPANY INVESTMENTS, INC.
1995 KEY EMPLOYEES STOCK OPTION PLAN
McDonald & Company Investments, Inc. hereby adopts a stock option plan for
the benefit of certain persons and subject to the terms and provisions set forth
below.
1. DEFINITIONS. The following terms shall have the meanings set forth
below whenever used in this instrument:
(a) The word "Board" shall mean the Board of Directors of the Company.
(b) The word "Code" shall mean the United States Internal Revenue Code
(Title 26 of the United States Code).
(c) The word "Committee" shall mean the Compensation Committee
appointed by the Board.
(d) The words "Common Stock" shall mean Common Stock, par value $1.00
per share, of the Company.
(e) The word "Company" shall mean McDonald & Company Investments,
Inc., a Delaware corporation, and any successor thereto which shall
maintain this Plan.
(f) The word "Disability" shall mean the Optionee's inability, due to
a physical or mental condition, to perform services for the Company or any
Subsidiary substantially consistent with past practice, as determined by
the Committee pursuant to written certification of such Disability from a
physician acceptable to the Committee.
(g) The words "Key Employee" shall mean any person who is a high-level
executive officer or other valuable managerial employee of either the
Company or any Subsidiary.
(h) The word "Optionee" shall mean any Key Employee to whom a stock
option has been granted pursuant to this Plan.
(i) The word "Plan" shall mean this instrument, McDonald & Company
Investments, Inc. 1995 Key Employees Stock Option Plan, as it is originally
adopted and as it may be amended hereafter.
(j) The word "Subsidiary" shall mean any corporation at least 50% of
the common stock of which is owned directly or indirectly by the Company.
(k) The words "Substantial Stockholder" shall mean any person who
would otherwise be a Key Employee except that such person owns more than
10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary. Ownership shall be determined in accordance with
Section 424(d) of the Code and lawful applicable regulations.
2. PURPOSE OF THE PLAN. The purpose of the Plan is to provide Key Employees
of the Company and its Subsidiaries with an additional incentive to serve and
promote the interests of the Company, its stockholders and the Company's
subsidiary corporations as may be designated for participation herein. The
premise of the Plan is that, if such Key Employees increase their proprietary
interest in the Company as they may already hold, then the incentive of such Key
Employees to work toward the Company's continued success will be commensurately
increased. Accordingly, the Company may, from time to time during the effective
period of the Plan, grant to such Key Employees as may be selected to
participate in the Plan options to purchase shares of Common Stock on the terms
and subject to the conditions set forth in the Plan.
1
<PAGE> 2
3. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective on May 3,
1995, subject to approval by holders of a majority of the outstanding shares of
voting capital stock of the Company present in person or by proxy and entitled
to vote on the adoption of the Plan. In the event the Plan is not so approved
within twelve (12) months after the date the Plan is adopted, the Plan and any
options granted hereunder shall be null and void. If, however, the Plan is so
approved, subject to the provisions of Section 8, no further stockholder
approval shall be required with respect to the granting of any options pursuant
to the Plan.
4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the
Committee. The Committee shall consist of no fewer than three (3) members, who
shall be designated by the Board. Each member of the Committee shall be a
"disinterested person" within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 or any amendment of or successor to such rule as
may be in effect from time to time. A majority of the Committee shall constitute
a quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by all of the members,
shall be acts of the Committee. Subject to the terms and conditions of the Plan,
the Committee shall have full and final authority in its absolute discretion:
(a) To select the Key Employees to whom options may be granted;
(b) To determine the number of shares of Common Stock subject to any
option;
(c) To determine the time when options will be granted;
(d) To determine the option price of shares of Common Stock subject to
an option;
(e) To determine the time when each option may be exercised;
(f) To determine at the time of grant of an option whether and to what
extent such option is an incentive stock option under Section 422 of the
Code;
(g) To determine whether stock appreciation rights shall be made part
of any option grant pursuant to Section 9 hereof, the method of valuing the
stock appreciation rights and whether the stock appreciation rights may be
exercised in lieu of or in addition to the related option;
(h) To prescribe the form of the option agreements governing the
options which are granted under the Plan and to set the provisions of such
option agreements as the Committee may deem necessary or desirable provided
such provisions are not contrary to the terms and conditions of either the
Plan or, where the option is an incentive stock option, Section 422 of the
Code;
(i) To adopt, amend and rescind such rules and regulations as, in the
Committee's opinion, may be advisable in the administration of the Plan;
and
(j) To construe and interpret the Plan, the rules and regulations and
the instruments evidencing options granted under the Plan and to make all
other determinations deemed necessary or advisable for the administration
of the Plan.
Any decision made or action taken by the Committee in connection with the
administration, interpretation, and implementation of the Plan and of its rules
and regulations, shall, to the extent permitted by law, be conclusive and
binding upon all Optionees under the Plan and upon any person claiming under or
through such an Optionee. Neither the Committee nor any of its members shall be
liable for any act taken by the Committee pursuant to the Plan. No member of the
Committee shall be liable for the act of any other member. No person shall be
appointed to the Committee who was eligible to receive an option or a stock
appreciation right under the Plan or any other plan of the Company or any of its
subsidiary corporations during the one-year period immediately preceding his
appointment to the Committee. If for any reason any member of the Committee
ceases to meet the requirements of Rule 16b-3(c)(2) of the Securities
2
<PAGE> 3
Exchange Act of 1934, the Board shall appoint new member(s) of the Committee in
order to comply with such requirements.
Notwithstanding anything herein to the contrary, the maximum aggregate
number of shares of Common Stock (i) for which stock options may be granted, and
(ii) with respect to which stock appreciation rights may be granted, to any
particular employee during any calendar year during the term of this Plan is
50,000, subject to adjustment in accordance with Section 6.
5. PERSONS ELIGIBLE FOR OPTIONS. Subject to the restrictions herein
contained, options may be granted from time to time in the discretion of the
Committee only to such Key Employees, as designated by the Committee, whose
initiative and efforts contribute or may be expected to contribute to the
continued growth and future success of the Company and/or its Subsidiaries. No
option shall be granted to any Key Employee during any period of time when he is
on leave of absence. The Committee may grant more than one option, with or
without stock appreciation rights, to the same Key Employee. Members of the
Committee shall not be eligible to participate in this Plan, or to receive
options or stock appreciation rights under the Plan, while serving on the
Committee.
6. SHARES SUBJECT TO THE PLAN. Subject to the provisions of Section 9
concerning payment for stock appreciation rights in shares of Common Stock and
subject to the provisions of the next succeeding paragraph of this Section 6,
the aggregate number of shares of Common Stock for which options may be granted
under the Plan shall be 500,000 shares of Common Stock. Either treasury or
authorized and unissued shares of Common Stock, or both, in such amounts, within
the maximum limits of the Plan, as the Committee shall from time to time
determine, may be issued upon exercise of the options. All shares of Common
Stock which are the subject of any lapsed, expired or terminated options may be
made available for reoffering pursuant to options granted under the Plan to any
Key Employee.
In the event that subsequent to the date of adoption of the Plan by the
Board, the outstanding shares of Common Stock are, as a result of a stock split,
stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization, spin-off, split-off, split-up or other such
change (including, without limitation, any transaction described in Section
424(a) of the Code) or a special dividend or other distribution to the Company's
stockholders, increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company,
then (i) there shall automatically be substituted for each share of Common Stock
subject to an unexercised option granted under the Plan and each share of Common
Stock available for additional grants of options under the Plan the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock shall be exchanged, (ii) the option price per share of Common Stock
or unit of securities shall be increased or decreased proportionately so that
the aggregate purchase price for the securities subject to the option shall
remain the same as immediately prior to such event, and (iii) the Committee
shall make such other adjustments to the securities subject to options, the
provisions of the Plan, and option agreements as may be appropriate, equitable
and in compliance with the provisions of Section 424(a) of the Code to the
extent applicable and any such adjustment shall be final, binding and conclusive
as to each Optionee. Any such adjustment may, in the discretion of the
Committee, provide for the elimination of fractional shares.
7. OPTION PROVISIONS.
(a) Option Price. The option price per share of Common Stock which is the
subject of an incentive stock option under the Plan shall be determined by the
Committee at the time of grant but shall not be less than one hundred percent
(100%) of the fair market value of a share of Common Stock on the date the
option is granted; provided, however, that if a Key Employee to whom an
incentive stock option is granted is at the time of the grant a Substantial
Stockholder, the option price per share of Common Stock shall be determined by
the Committee but shall
3
<PAGE> 4
never be less than one hundred ten percent (110%) of the fair market value of a
share of Common Stock on the date the option is granted. The option price per
share of Common Stock under each option granted pursuant to the Plan which is
not an incentive stock option shall be determined by the Committee at the time
of grant and may be above or below the fair market value of a share of Common
Stock on the date the option is granted. Such fair market value shall be
determined in accordance with procedures to be established by the Committee. The
date on which the Committee approves the granting of an option shall be deemed
for all purposes hereunder the date on which the option is granted.
(b) Period of Option. The Committee shall determine when each option is to
expire but no option shall be exercisable after ten (10) years have elapsed from
the date upon which the option is granted; provided, however, that no incentive
stock option granted to a person who is a Substantial Stockholder at the time of
the grant of such option shall be exercisable after five (5) years have elapsed
from the date upon which the option is granted.
(c) Limitation on Exercise and Transfer of Option. Except as otherwise
provided in the event of an Optionee's death, only the Optionee may exercise an
option, provided that a guardian or other legal representative who has been duly
appointed for such Optionee may exercise an option on behalf of the Optionee. No
option granted hereunder shall be transferable other than by the Last Will and
Testament of the Optionee or, if the Optionee dies intestate, by the applicable
laws of descent and distribution. No option granted hereunder may be pledged or
hypothecated, nor shall any such option be subject to execution, attachment or
similar process. Unless otherwise determined by the Committee, (i) no award
granted under the Plan may be transferred or assigned by the Optionee to whom it
is granted other than by will, pursuant to the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined in the Code, and
(ii) an award granted under this Plan may be exercised, during the Optionee's
lifetime, only by the Optionee or by the Optionee's guardian or legal
representative. Notwithstanding the foregoing, no incentive stock option may be
transferred or assigned pursuant to a qualified domestic relations order or
exercised, during the Optionee's lifetime, by the Optionee's guardian or legal
representative.
(d) Conditions Governing Exercise of Option. The Committee may, in its
absolute discretion, either require that, prior to the exercise of any option
granted hereunder, the Optionee shall have been an employee for a specified
period of time after the date such option was granted, or make any option
granted hereunder immediately exercisable. Each option shall be subject to such
additional restrictions or conditions with respect to the right to exercise and
the time and method of exercise as shall be prescribed by the Committee. Upon
satisfaction of any such conditions, the option may be exercised in whole or in
part at any time during the option period, but this right of exercise shall be
limited to whole shares, unless the Committee shall otherwise provide. Options
shall be exercised by the Optionee giving written notice to the Secretary of the
Company at its principal office, by certified mail, return receipt requested, of
the Optionee's exercise of the option and the number of shares with respect to
which the option is being exercised, accompanied by full payment of the purchase
price either in cash or, with the consent of the Committee, in whole or in part
in shares of Common Stock having a fair market value on the date the option is
exercised equal to that portion of the purchase price for which payment in cash
is not made. Such notice shall be deemed delivered when deposited in the mails.
Notwithstanding anything in the foregoing to the contrary, in the event of a
"change in control" the Committee shall have the authority and power: (i) to
cause all outstanding options to be immediately exercisable notwithstanding any
vesting limitation otherwise previously imposed on such options; and (ii) to
accelerate the termination date of all such options. Thereafter, upon such
determination, an Optionee may exercise any and all outstanding options (in
whole or in part), whether or not such options are by their terms fully
exercisable at such time) and the Committee may authorize the acceptance of the
surrender of the right to exercise such option or any portion thereof, but in no
event after the expiration of the term of the option. The term "change in
control" shall include, but not be limited to: (i) the first purchase of shares
pursuant
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to a tender offer or exchange (other than a tender offer or exchange by the
Company) for all or part of the Company's common stock of any class or any
securities convertible into such common stock; (ii) the receipt by the Company
of a Schedule 13D or other advice indicating that a person is the "beneficial
owner" (as that term is defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of twenty percent (20%) or more of the Company's Common Stock
calculated as provided in paragraph (d) of said Rule 13d-3; (iii) the date of
approval by shareholders of the Company of an agreement providing for any
consolidation or merger of the Company in which the Company will not be the
continuing or surviving corporation or pursuant to which shares of capital
stock, of any class or any securities convertible into such capital stock, of
the Company would be converted into cash, securities, or other property, other
than a merger of the Company in which the holders of common stock of all classes
of the Company immediately prior to the merger would have the same proportion of
ownership of common stock of the surviving corporation immediately after the
merger; (iv) the date of the approval by shareholders of the Company of any
sale, lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the Company; (v)
the adoption of any plan or proposal for the liquidation (but not a partial
liquidation) or dissolution of the Company; or (vi) such other event as the
Committee shall, in its sole and absolute discretion, deem to be a "change in
control." The manner of application and interpretation of the foregoing
provisions shall be determined by the Committee in its sole and absolute
discretion.
(e) Termination of Employment, Etc. If an Optionee ceases to be an
employee of the Company or a Subsidiary, his option shall, unless otherwise
provided in the option agreement between the Optionee and the Company, terminate
on the date he ceases to be so employed and neither he nor any other person
shall have any rights after the date he ceases to be so employed to exercise all
or any part of the option. An Optionee's employment shall not be deemed to have
terminated while he is on a military, sick or other bona fide approved leave of
absence from the Company or a Subsidiary as such a leave of absence is described
in Section 1.421-7(h) of the Federal Income Tax Regulations or any lawful
successor regulations thereto. If the stock option is an incentive stock option,
no option agreement shall:
(i) permit any Optionee to exercise any incentive stock option more
than three (3) months after the date the Optionee ceased to be employed by
the Company and all Subsidiaries if the reason for the Optionee's cessation
of employment was other than his death or his Disability; or
(ii) permit any Optionee to exercise any incentive stock option more
than one (1) year after the date the Optionee ceased to be employed by the
Company and all Subsidiaries if the reason for the Optionee's cessation of
employment was the Optionee's Disability; or
(iii) permit any person to exercise any incentive stock option more
than one (1) year after the date the Optionee ceased to be employed by the
Company and all Subsidiaries if either (A) the reason for the Optionee's
cessation of employment was his death or (B) the Optionee died within three
(3) months after ceasing to be employed by the Company and all
Subsidiaries.
If any option is by the terms of the option agreement exercisable following the
Optionee's death, then such option shall be exercisable by the Optionee's
estate, or the person designated in the Optionee's Last Will and Testament, or
the person to whom the option was transferred by the applicable laws of descent
and distribution.
(f) Limitations on Grant of Incentive Stock Options. During the calendar
year in which any incentive stock options granted under the Plan first become
exercisable by any Optionee, the aggregate fair market value of the shares of
Common Stock which are subject to such incentive stock options (determined as of
the date the incentive stock options were granted) shall not exceed the sum of
One Hundred Thousand Dollars ($100,000.00). Options which are not designated as
incentive stock options shall not be subject to the limitation described in the
preceding sentence and shall not be counted when applying such limitation.
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(g) Prohibition of Alternative Options. It is intended that Key Employees
may be granted, simultaneously or from time to time, "incentive stock options"
under Section 422 of the Code, or other stock options, but no Key Employees
shall be granted alternative rights in incentive stock options and other stock
options so as to prevent options granted as incentive stock options under the
Plan from qualifying as such within the meaning of Section 422 of the Code.
(h) Waiver by Committee of Conditions Governing Exercise of Option. The
Committee may, in its discretion, waive any restrictions or conditions set forth
in an option agreement concerning an Optionee's right to exercise any option
and/or the time and method of exercise.
8. AMENDMENTS TO THE PLAN. The Committee is authorized to interpret the
Plan and from time to time adopt any rules and regulations for carrying out the
Plan that it may deem advisable. Subject to the approval of the Board, the
Committee may at any time amend, modify, suspend or terminate the Plan. In no
event, however, without the approval of the Company's stockholders, shall any
action of the Committee or the Board result in:
(a) Amending, modifying or altering the eligibility requirements
provided in Section 5 hereof;
(b) Increasing or decreasing, except as provided in Section 6 hereof,
the maximum number of shares for which options may be granted;
(c) Decreasing the minimum option price per share at which options may
be granted under the Plan, as provided in Section 7(a) hereof;
(d) Extending either the maximum period during which an option is
exercisable as provided in Section 7(b) hereof or the date on which the
Plan shall terminate as provided in Section 12 hereof;
(e) Changing the requirements relating to the Committee;
(f) Making any other change which would cause any option granted under
the Plan as an incentive stock option not to qualify as an incentive stock
option within the meaning of Section 422 of the Code; or
(g) Making any change which would eliminate the exemption provided by
Rule 16b-3 for this Plan and for securities awarded under this Plan;
except as necessary to conform the Plan and the option agreements to changes in
the Code or other governing law.
9. STOCK APPRECIATION RIGHTS. The Committee may provide, at the time of
the grant of a stock option and upon such terms and conditions as it deems
appropriate, that an Optionee shall have the right with respect to all or a
portion of the options granted to him to elect to surrender such options in
exchange for the consideration set forth in this Section 9 in lieu of exercising
such options. Alternatively, the Committee may provide, at the time of the grant
of a stock option and upon such terms and conditions as it deems appropriate,
that an Optionee shall have the right with respect to all or a portion of the
options granted to him to receive the consideration set forth in this Section 9
upon exercising such options in addition to any Shares of Common Stock purchased
upon exercise thereof. Stock appreciation rights must be specifically granted by
the Committee; provided, however, no Optionee shall be entitled to such rights
solely as a result of the grant of an option to him. Stock appreciation rights,
if granted, may be exercised either with respect to all or a portion of the
option to which they relate. Stock appreciation rights shall not be transferable
separate from the option with respect to which they were granted and shall be
subject to all of the restrictions on transfer applicable to the said options.
Stock appreciation rights shall be exercisable only at such times and by such
persons as are specified in the option agreement governing the stock option with
respect to which the stock appreciation rights were granted. A stock
appreciation right shall provide that an Optionee shall have the right to
receive a percentage, not greater than One Hundred Percent (100%), of the
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excess over the option price, if any, of the fair market value of the shares of
Common Stock covered by the option, as determined by the Committee as of the
date of exercise of the stock appreciation right, in the manner provided for
herein. Such amount shall be payable in one or more of the following manners, as
shall be determined by the Committee;
(a) in cash;
(b) in shares of Common Stock having a fair market value equal to such
amount; or
(c) in a combination of cash and shares of Common Stock.
If payment is made in whole or in part in shares of Common Stock, such payment
shall thereby reduce the number of shares available for the grant of options
under this Plan.
In no event may any Optionee exercise any stock appreciation rights granted
hereunder unless such Optionee is then permitted to exercise the option or the
portion thereof with respect to which such stock appreciation rights relate. If
the option agreement with the Optionee provides that exercise of the stock
appreciation right shall be in lieu of exercise of the option, then (i) upon the
exercise of any stock appreciation rights, the option or that portion thereof to
which the stock appreciation rights relate shall be cancelled, and (ii) upon the
exercise of the option or that portion thereof to which the stock appreciation
rights relate, the stock appreciation rights shall be cancelled, and the option
agreement governing such option shall be deemed amended as appropriate without
any further action by the Committee or the Optionee. If the option agreement
with the Optionee provides that exercise of the stock appreciation right shall
be in addition to exercise of the option, then (i) upon the exercise of any
stock appreciation rights, the option or that portion thereof to which the stock
appreciation rights relate shall be deemed exercised and (ii) upon the exercise
of the option, the stock appreciation rights corresponding thereto shall be
deemed exercised to the extent the option is exercised. The terms of any stock
appreciation rights granted hereunder shall be incorporated into the option
agreement which governs the option with respect to which the stock appreciation
rights are granted, and shall be such terms as the Committee shall prescribe
which are not inconsistent with this Plan. The granting of an option or stock
appreciation right shall impose no obligation upon the Optionee to exercise such
option or right. The Company's obligation to satisfy stock appreciation rights
shall not be funded or secured in any manner.
10. INVESTMENT REPRESENTATION, APPROVALS AND LISTING. The Committee may
condition its grant of any option hereunder upon receipt of an investment
representation from the Optionee which shall be substantially similar to the
following:
"Optionee agrees that any share of Common Stock of McDonald & Company
Investments, Inc. which he may acquire by virtue of the exercise of this
option shall be acquired for investment purposes only and not with a view
to distribution or resale; provided, however, that this restriction shall
become inoperative in the event the Common Stock of McDonald & Company
Investments, Inc. which are subject to this option shall be registered
under the Securities Act of 1933, as amended, or in the event McDonald &
Company Investments, Inc. is otherwise satisfied that the offer or sale of
the Common Stock of McDonald & Company Investments, Inc. which are subject
to this option may lawfully be made without registration under the
Securities Act of 1933, as amended."
The Company shall not be required to issue any certificates for Common Stock
upon the exercise of an option or a stock appreciation right granted under the
Plan prior to (i) obtaining any approval from any governmental agency which the
Committee shall, in its sole discretion, determine to be necessary or advisable,
(ii) the admission of such shares to listing on any national securities exchange
on which the Common Stock may be listed, (iii) completion of any registration or
other qualification of the Common Stock under any state or federal law or ruling
or regulations of any governmental body which the Committee shall, in its sole
discretion,
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determine to be necessary or advisable, or the determination by the Committee,
in its sole discretion, that any registration or other qualification of the
Common Stock is not necessary or advisable, and (iv) obtaining an investment
representation from the Optionee in the form set forth above or in such other
form as the Committee, in its sole discretion, shall determine to be adequate.
11. GENERAL PROVISIONS.
(a) Option Agreements Need Not Be Identical. The form and substance of
option agreements and grants of stock appreciation rights, whether granted at
the same or different times, need not be identical.
(b) No Right To Be Employed, Etc. Nothing in the Plan or in any option
agreement shall confer upon any Optionee any right to continue in the employ of
the Company or a Subsidiary, or to serve as a member of the Board, or to be
entitled to receive any remuneration or benefits not set forth in the Plan or
such option agreement, or to interfere with or limit either the right of the
Company or a Subsidiary to terminate his employment at any time or the right of
the stockholders of the Company to remove him as a member of the Board with or
without cause.
(c) Optionee Does Not Have Rights Of Stockholder. Nothing contained in the
Plan or in any option agreement shall be construed as entitling any Optionee to
any rights of a stockholder as a result of the grant of an option until such
time as shares of Common Stock are actually issued to such Optionee pursuant to
the exercise of an option or stock appreciation right.
(d) Successors In Interest. The Plan shall be binding upon the successors
and assigns of the Company.
(e) No Liability Upon Distribution Of Stock. The liability of the Company
under the Plan and any distribution of Common Stock made hereunder is limited to
the obligations set forth herein with respect to such distribution and no term
or provision of the Plan shall be construed to impose any liability on the
Company or the Committee in favor of any person with respect to any loss, cost
or expense which the person may incur in connection with or arising out of any
transaction in connection with the Plan.
(f) Use Of Proceeds. The cash proceeds received by the Company from the
issuance of shares of Common Stock pursuant to the Plan will be used for general
corporate purposes.
(g) Expenses. The expenses of administering the Plan shall be borne by the
Company.
(h) Captions. The captions and section numbers appearing in the Plan are
inserted only as a matter of convenience. They do not define, limit, construe or
describe the scope or intent of the provisions of the Plan.
(i) Number. The use of the singular or plural herein shall not be
restrictive as to number and shall be interpreted in all cases as the context
may require.
(j) Gender. The use of the feminine, masculine or neuter pronoun shall not
be restrictive as to gender and shall be interpreted in all cases as the context
may require.
12. TERMINATION OF THE PLAN. The Plan shall terminate on May 3, 2005, and
thereafter no options shall be granted under the Plan. All options outstanding
at the time of termination of the Plan shall continue in full force and effect
according to the terms of the option agreements governing such options and the
terms and conditions of the Plan.
13. GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Delaware and any applicable federal
law.
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