Registration No. 333-76345
As filed with the Securities and Exchange Commission
on May 28, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
NORTEK, INC.
(Exact name of issuer as specified in its charter)
Delaware 05-0314991
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 Kennedy Plaza, Providence, Rhode Island 02903
(Address of Principal Executive Offices) (Zip Code)
NORTEK, INC. 1999 EQUITY AND CASH INCENTIVE PLAN
(Full title of the plan)
Copy to
Richard L. Bready, Chairman Kevin W. Donnelly, Esq.
Nortek, Inc., 50 Kennedy Plaza Nortek, Inc., 50 Kennedy Plaza
Providence, Rhode Island 02903 Providence, Rhode Island 02903
(Name and address of agent for service)
(401) 751-1600
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Securities to be Maximum Maximum Registration
be Registered Offering Aggregate Fee
Registered (1) Price Per Offering
Share(2) Price(2)
Common Stock,
Par Value $1.00 575,000 $30.25 $17,161,581 $4,771(2)
Per Share (1)
(1) Persons eligible to receive awards under the Plan being
registered hereunder (the "Plan") may receive shares of or may
receive options to purchase shares of Special Common Stock, par
value $1.00 per share, which are convertible into Common Stock. No
more than 575,000 shares of Common Stock and Special Common Stock in
the aggregate may be issued. There is also registered hereunder
575,000 attached Rights to purchase one one-hundredth of a share of
Series A Participating Preference Stock of the Company.
(2) Outstanding options on the date hereof have a weighted
average exercise price of $29.5625 and a maximum aggregate offering
price of $9,983,256. The registration fee payable with respect to
such options is $2,775. There are 237,300 shares available for
grant under the Plan, at exercise prices still to be determined.
For the purpose of determining the registration fee, the maximum per
share and aggregate offering prices have been determined, pursuant
to Rule 457(h) of the Securities Act of 1933, as amended, on the
basis of the average of the high and low prices of the Common Stock
reported on the New York Stock Exchange on May 25, 1999. The
registration fee for the shares not yet subject to outstanding
options is $1,996. The total registration fee payable in respect of
the shares being registered hereunder is $4,771.
Exhibit Index on Page 7.
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Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Nortek, Inc. (the "Company") hereby incorporates the following
documents by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 filed with the Securities and Exchange Commission
(the "Commission") on March 30, 1999.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
April 3, 1999 filed with the Commission on May 18, 1999.
(c) The Company's Current Reports on Form 8-K filed with the
Commission on January 11, 1999, March 10, 1999, April 8,
1999, April 23, 1999 and April 26, 1999.
(d) All other reports filed by the Company with the Commission
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") since the end of the
fiscal year covered by the Company's Annual Report referred to
above.
The description of the Company's Common Stock contained in its
registration statement on Form 8-A filed with the Commission on April
23, 1981 and the description of the Company's Special Common Stock
contained in its registration statement on Form 8-A filed with the
Commission on November 25, 1986.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of
such reports and documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The validity of the shares of Common Stock (and the attached
Rights) and Special Common Stock offered hereby is being passed upon by
Kevin W. Donnelly, Vice President, General Counsel and Secretary of the
Company. Mr. Donnelly owns 27,007 shares of Common Stock (including
18,914 shares subject to exercisable options) and 10 shares of Special
Common Stock.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL")
provides that a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal or
investigative (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. Section 145 further provides that
a corporation similarly may indemnify any
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such person serving in any
such capacity who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor, against
expenses actually and reasonably incurred in connection with the
defense or settlement of such action or suit if he acted in good faith
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Delaware Court of Chancery or such
other court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in
its certificate of incorporation a provision eliminating or limiting
the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision shall not eliminate or limit the
liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the DGCL
(relating to unlawful payment of dividends and unlawful stock purchase
and redemption) or (iv) for any transaction from which the director
derived an improper personal benefit.
The Company's Certificate of Incorporation provides that its
directors shall not be liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director except to
the extent that exculpation from liabilities is not permitted under the
DGCL as in effect at the time such liability is determined. The
Company's By-Laws further provide that Registrant shall indemnify its
directors and officers to the fullest extent permitted by the DGCL.
The directors and officers of the Company are covered under
directors' and officers' liability insurance policies maintained by the
Company.
Item 7. Exemption From Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibits marked with an asterisk are filed herewith. The
remainder of the exhibits have heretofore been filed with the
Commission and are incorporated herein by reference:
Exhibit Number
*4.1 Nortek, Inc. 1999 Equity and Cash Incentive Plan.
4.2 Indenture dated as of February 14, 1994 between the Company and
State Street Bank and Trust Company, as Trustee, relating to the 9
7/8% Senior Subordinated Notes due March 1, 2004 (Exhibit 4.5 to
Form 10-K filed March 25, 1994, File No. 1-6112).
4.3 Indenture dated as of March 17, 1997 between the Company and State
Street Bank and Trust Company, as Trustee relating to the 9.25%
Series A and Series B Senior Notes due March 15, 2007 (Exhibit 4.2
to Registration Statement No. 333-25505 filed April 18, 1997).
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4.4 Indenture dated as of August 26, 1997 between the Company and
State Street Bank and Trust Company, as Trustee relating to the
9.125% Series A and B Senior Notes due September 1,2007. (Exhibit
4.1 to Registration Statement No. 333-36711 filed September 30,
1997).
4.5 Indenture dated as of July 31, 1998 between the Company and State
Street Bank and Trust Company, as Trustee relating to the 8.875%
Series A and B Senior Notes due August 1, 2008 (Exhibit 4.1 to
Registration Statement No. 333-64731 filed September 30, 1998).
4.6 Second Amended and Restated Rights Agreement dated as of April 1,
1996 between the Company and State Street Bank and Trust Company,
as Rights Agent (Exhibit 1 to Form 8-K filed April 2, 1996).
*5. Opinion of Kevin W. Donnelly, Esq.
*23.1 Consent of Kevin W. Donnelly, Esq. (contained in Exhibit 5).
*23.2 Consent of Arthur Andersen LLP.
24. Power of Attorney (see page 9 of the Registration Statement).
*99.1 Form of Stock Option Certificate.
Item 9. Undertakings
(a) The Company hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement,
(i) to include any prospectus required by Section 10(a)(3) of the
Act,
(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, represent a fundamental change in the information set forth
in the registration statement,
(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) shall not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Company pursuant to Section
13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) that, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Company's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to
<PAGE>
Section 15(d) of the
Exchange Act) that is incorporated by reference in the 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.
(c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
Company 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
Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8
and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Providence, Rhode Island on this 28th day of May, 1999.
NORTEK, INC.
By: /s/ Richard L. Bready
Richard L. Bready
Chairman of the Board
We, the undersigned officers and directors of the Company, hereby
severally constitute and appoint Richard L. Bready, Richard J. Harris
and Kevin W. Donnelly, and each of them singly, our true and lawful
attorneys or attorney to execute in our names, in the capacities
indicated below, any and all amendments to this registration statement
on Form S-8, and all instruments necessary or incidental in connection
therewith, and to file the same with the Commission. Each of said
attorneys shall have power to act hereunder with or without any other
of said attorneys, and shall have full power of substitution and
resubstitution. Each of said attorneys shall have full power and
authority to do and perform in the name and on behalf of each of the
undersigned, in any and all capacities, every act whatsoever requisite
or necessary to be done in the premises, as fully and to all intents
and purposes as each of the undersigned might or could do in person,
and each of the undersigned hereby ratifies and approves the acts of
said attorneys and each of them.
Pursuant to the requirements of the Act, this registration
statement has been signed below by the following persons in the
capacities and on the date indicated.
Name Title Date
/s/ Richard L. Bready Chairman of the Board of May 28, 1999
Richard L. Bready Directors and President
(Principal Executive
Officer)
/s/Richard J. Harris Vice President and May 28, 1999
Richard J. Harris Treasurer (Principal
Financial Officer) and
Director
/s/ Almon C. Hall Vice President and May 28, 1999
Almon C. Hall Controller (Principal
Accounting Officer)
/s/ Phillip L. Cohen Director May 28, 1999
Phillip L. Cohen
/s/ William I. Kelly Director May 28, 1999
William I. Kelly
/s/ J. Peter Lyons Director May 28, 1999
J. Peter Lyons
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EXHIBIT INDEX
Exhibits marked with an asterisk are filed herewith.
The remainder of the exhibits have heretofore been filed
with the Commission and are incorporated herein by
reference:
Exhibit Number
*4.1 Nortek, Inc. 1999 Equity and Cash Incentive Plan.
4.2 Indenture dated as of February 14, 1994 between the
Company and State Street Bank and Trust Company, as
Trustee, relating to the 9 7/8% Senior Subordinated
Notes due 2004 (Exhibit 4.5 to Form 10-K filed March
25, 1994, File No. 1-6112).
4.3 Indenture dated as of March 17, 1997 between the
Company and State Street Bank and Trust Company, as
Trustee relating to the 9.25% Series A and Series B
Senior Notes due March 15, 2007 (Exhibit 4.2 to
Registration Statement No. 333-25505 filed April 18,
1997).
4.4 Indenture dated as of August 26, 1997 between the
Company and State Street Bank and Trust Company, as
Trustee relating to the 9.125% Series A and B Senior
Notes due September 1, 2007. (Exhibit 4.1 to
Registration Statement No. 333-36711 filed September
30, 1997).
4.5 Indenture dated as of July 31, 1998 between the Company
and State Street Bank and Trust Company, as Trustee
relating to the 8.875% Series A and B Senior Notes due
August 1, 2008 (Exhibit 4.1 to Registration Statement
No. 333-64731 filed September 30, 1998).
4.6 Second Amended and Restated Rights Agreement dated as
of April 1, 1996 between the Company and State Street
Bank and Trust Company, as Rights Agent (Exhibit 1 to
Form 8-K filed April 2, 1996).
*5 Opinion of Kevin W. Donnelly, Esq.
*23.1 Consent of Kevin W. Donnelly, Esq. (contained in
Exhibit 5).
*23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (see page 9 of the Registration
Statement).
*99.1 Form of Stock Option Certificate.
<PAGE>
Exhibit 4.1
NORTEK, INC.
1999 EQUITY AND CASH INCENTIVE PLAN
1. PURPOSE
The purpose of this Equity and Cash Incentive Plan (the
"Plan") is to advance the interests of Nortek, Inc. (the
"Company") and its subsidiaries by enhancing their ability
to attract and retain employees and other persons or
entities who are in a position to make significant
contributions to the success of the Company and its
subsidiaries through ownership of shares of the Company's
Common Stock and Special Common Stock and cash incentives.
The Plan is intended to accomplish these goals by
enabling the Company to grant Awards in the form of Options,
Stock Appreciation Rights, Restricted Stock or Unrestricted
Stock Awards, Deferred Stock Awards or Performance Awards,
or combinations thereof, all as more fully described below.
2. ADMINISTRATION
Unless otherwise determined by the Board of Directors
of the Company (the "Board"), the Plan will be administered
by a Committee of the Board designated for such purpose (the
"Committee"). The Committee shall consist of at least two
directors. A majority of the members of the Committee shall
constitute a quorum, and all determinations of the Committee
shall be made by a majority of its members. Any
determination of the Committee under the Plan may be made
without notice or meeting of the Committee by a writing
signed by a majority of the Committee members. During such
times as the Company's Common Stock is registered under the
Securities Exchange Act of 1934 (the "1934 Act"), all
members of the Committee shall be "non-employee directors"
within the meaning of Rule 16b-3 promulgated under the 1934
Act and "outside directors" within the meaning of Section
162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as
amended (the "Code").
The Committee will have authority, not inconsistent
with the express provisions of the Plan and in addition to
other authority granted under the Plan, to (a) grant Awards
at such time or times as it may choose; (b) determine
whether the Award is with respect to the Company's Common
Stock, $1.00 par value, or its Special Common Stock, $1.00
par value (together, the "Stock"), or a combination thereof
and the size of each Award, including the number of shares
of Stock subject to the Award; (c) determine the type or
types of each Award; (d) determine the terms and conditions
of each Award; (e) waive compliance by a holder of an Award
with any obligations to be performed by such holder under an
Award and waive any terms or conditions of an Award; (f)
amend or cancel an existing Award in whole or in part (and
if an award is canceled, grant another Award in its place on
such terms and conditions as the Committee shall specify),
except that the Committee may not, without the consent of
the holder of an Award, take any action under this clause
with respect to such Award if such action would adversely
affect the rights of such holder; (g) prescribe the form or
forms of instruments that are required or deemed appropriate
under the Plan, including any written notices and elections
required of Participants (as defined below), and change such
forms from time to time; (h) adopt, amend and rescind rules
and regulations for the administration of the Plan; and
(i) interpret the Plan and decide any questions and settle
all controversies and disputes that may arise in connection
with the Plan. Such determinations and actions of the
Committee, and all other determinations and actions of the
Committee made or taken under authority granted by any
provision of the Plan, will be conclusive and will bind all
parties. Nothing in this paragraph shall be construed as
limiting the power of the Committee to make adjustments
under Section or Section 8.6.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it
is approved by the stockholders of the Company. Awards may
be made prior to such stockholder approval if made subject
thereto. No Award may be granted under the Plan after May
20, 2009, but Awards previously granted may extend beyond
that date.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 8.6, the
aggregate number of shares of Stock that may be delivered
under the Plan will be 575,000. If any Award requiring
exercise by the Participant for delivery of Stock terminates
without having been exercised in full, or if any Award
payable in Stock or cash is satisfied in cash rather than
Stock, the number of shares of Stock as to which such Award
was not exercised or for which cash was substituted will be
available for future grants.
Subject to Section 8.6(a), the maximum number of shares
of Stock as to which Options or Stock Appreciation Rights
may be granted to any Participant in any one calendar year
is 300,000, which limitation shall be construed and applied
consistently with the rules under Section 162(m) of the
Code.
Stock delivered under the Plan may be either authorized
but unissued Stock or previously issued Stock acquired by
the Company and held in treasury. No fractional shares of
Stock will be delivered under the Plan.
5. ELIGIBILITY AND PARTICIPATION
Each key employee of the Company or any of its
subsidiaries (an "Employee") and each other person or entity
(including without limitation non-Employee directors of the
Company or a subsidiary of the Company) who, in the opinion
of the Committee, is in a position to make a significant
contribution to the success of the Company or its
subsidiaries will be eligible to receive Awards under the
Plan (each such Employee, person or entity receiving an
Award, "a Participant"). A "subsidiary" for purposes of the
Plan will be a corporation in which the Company owns,
directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock.
6. TYPES OF AWARDS
6.1. Options
(a) Nature of Options. An Option is an Award giving
the recipient the right on exercise thereof to purchase
Stock.
Both "incentive stock options," as defined in Section
422(b) of the Code (any Option intended to qualify as an
incentive stock option being hereinafter referred to as an
"ISO"), and Options that are not ISOs, may be granted under
the Plan. ISOs shall be awarded only to Employees. An
Option awarded under the Plan shall be a non-ISO unless it
is expressly designated as an ISO at time of grant.
(b) Exercise Price. The exercise price of an Option
will be determined by the Committee subject to the
following:
(1) The exercise price of an ISO or an Option
intended to qualify as performance based compensation
under Section 162(m) of the Code shall not be less than
100% of the fair market value of the Stock subject to
the Option, determined as of the time the Option is
granted.
(2) In no case may the exercise price paid for
Stock which is part of an original issue of authorized
Stock be less than the par value per share of the
Stock.
(c) Duration of Options. The latest date on which an
Option may be exercised will be the tenth anniversary of the
day immediately preceding the date the Option was granted,
or such earlier date as may have been specified by the
Committee at the time the Option was granted.
(d) Exercise of Options. An Option will become
exercisable at such time or times, and on such conditions,
as the Committee may specify. The Committee may at any time
and from time to time accelerate the time at which all or
any part of the Option may be exercised. Any exercise of an
Option must be in writing, signed by the proper person and
delivered or mailed to the Company, accompanied by (1) any
documents required by the Committee and (2) payment in full
in accordance with paragraph (e) below for the number of
shares for which the Option is exercised.
(e) Payment for Stock. Stock purchased on exercise of
an Option must be paid for as follows: (1) in cash or by
check (acceptable to the Company in accordance with
guidelines established for this purpose), bank draft or
money order payable to the order of the Company or (2) if so
permitted by the Committee at or after the grant of the
Option or by the instrument evidencing the Option, (i)
through the delivery of shares of Stock which have been held
for at least six months (unless the Committee approves a
shorter period) and which have a fair market value equal to
the exercise price, (ii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to
the Company sufficient funds to pay the exercise price, or
(iii) by any combination of the foregoing permissible forms
of payment.
(f) Discretionary Payments. If (i) the market price
of shares of Stock subject to an Option (other than an
Option which is in tandem with a Stock Appreciation Right as
described in Section 6.2) exceeds the exercise price of the
Option at the time of its exercise, and (ii) the person
exercising the Option so requests the Committee in writing,
the Committee may in its sole discretion cancel the Option
and cause the Company to pay in cash or in shares of Common
Stock (at a price per share equal to the fair market value
per share) to the person exercising the Option an amount
equal to the difference between the fair market value of the
Stock which would have been purchased pursuant to the
exercise (determined on the date the Option is canceled) and
the aggregate exercise price which would have been paid.
6.2. Stock Appreciation Rights.
(a) Nature of Stock Appreciation Rights. A Stock
Appreciation Right (or "SAR") is an Award entitling the
holder on exercise to receive an amount in cash or Stock or
a combination thereof (such form to be determined by the
Committee) determined in whole or in part by reference to
appreciation, from and after the date of grant, in the fair
market value of a share of Stock. SARs may be based solely
on appreciation in the fair market value of Stock or on a
comparison of such appreciation with some other measure of
market growth such as (but not limited) to appreciation in a
recognized market index. The date as of which such
appreciation or other measure is determined shall be the
exercise date unless another date is specified by the
Committee.
(b) Grant of Stock Appreciation Rights. SARs may be
granted in tandem with, or independently of, Options granted
under the Plan.
(1) Rules Applicable to Tandem Awards. When SARs
are granted in tandem with Options, (a) the SAR will be
exercisable only at such time or times, and to the
extent, that the related Option is exercisable and will
be exercisable in accordance with the procedure
required for exercise of the related Option; (b) the
SAR will terminate and no longer be exercisable upon
the termination or exercise of the related Option,
except that a SAR granted with respect to less than the
full number of shares covered by an Option will not be
reduced until the number of shares as to which the
related Option has been exercised or has terminated
exceeds the number of shares not covered by the SAR;
(c) the Option will terminate and no longer be
exercisable upon the exercise of the related SAR; and
(d) the SAR will be transferable only with the related
Option.
(2) Exercise of Independent SARs. A SAR not
granted in tandem with an Option will become
exercisable at such time or times, and on such
conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which
all or any part of the Right may be exercised.
Any exercise of an independent SAR must be in writing,
signed by the proper person and delivered or mailed to the
Company, accompanied by any other documents required by the
Committee.
6.3. Restricted and Unrestricted Stock.
(a) Grant of Restricted Stock. Subject to the terms
and provisions of the Plan, the Committee may grant shares
of Stock in such amounts and upon such terms and conditions
as the Committee shall determine subject to the restrictions
described below ("Restricted Stock").
(b) Restricted Stock Agreement. The Committee may
require, as a condition to an Award, that a recipient of a
Restricted Stock Award enter into a Restricted Stock Award
Agreement, setting forth the terms and conditions of the
Award. In lieu of a Restricted Stock Award Agreement, the
Committee may provide the terms and conditions of an Award
in a notice to the Participant of the Award, on the Stock
certificate representing the Restricted Stock, in the
resolution approving the Award, or in such other manner as
it deems appropriate.
(c) Transferability and Other Restrictions. Except as
otherwise provided in this Section 6.3, the shares of
Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable period or
periods established by the Committee and the satisfaction of
any other conditions or restrictions established by the
Committee (such period during which a share of Restricted
Stock is subject to such restrictions and conditions is
referred to as the "Restricted Period"). Except as the
Committee may otherwise determine under Section 7.1, if a
Participant suffers a Termination of Service (as defined at
Section 7.1) for any reason during the Restricted Period,
the Company may purchase the shares of Restricted Stock
subject to such restrictions and conditions for the amount
of cash paid by the Participant for such shares; provided,
that if no cash was paid by the Participant such shares of
Restricted Stock shall be automatically forfeited to the
Company.
During the Restricted Period with respect to any shares
of Restricted Stock, the Company shall have the right to
retain in the Company's possession the certificate or
certificates representing such shares.
(d) Removal of Restrictions. Except as otherwise
provided in this Section 6.3, a share of Restricted Stock
covered by a Restricted Stock grant shall become freely
transferable by the Participant upon completion of the
Restricted Period, including the passage of any applicable
period of time and satisfaction of any conditions to
vesting. The Committee, in its sole discretion, shall have
the right at any time immediately to waive all or any part
of the restrictions and conditions with regard to all or any
part of the shares held by any Participant.
(e) Voting Rights, Dividends and Other Distributions.
During the Restricted Period, Participants holding shares of
Restricted Stock granted hereunder may exercise full voting
rights and shall receive all regular cash dividends paid
with respect to such shares. Except as the Committee shall
otherwise determine, any other cash dividends and other
distributions paid to Participants with respect to shares of
Restricted Stock including any dividends and distributions
paid in shares shall be subject to the same restrictions and
conditions as the shares of Restricted Stock with respect to
which they were paid.
(f) Other Awards Settled with Restricted Stock. The
Committee may, at the time any Award described in this
Section 6 is granted, provide that any or all the Stock
delivered pursuant to the Award will be Restricted Stock.
(g) Unrestricted Stock. Subject to the terms and
provisions of the Plan, the Committee may grant shares of
Stock free of restrictions under the Plan in such amounts
and upon such terms and conditions as the Committee shall
determine.
(h) Notice of Section 83(b) Election. Any Participant
making an election under Section 83(b) of the Code with
respect to Restricted Stock must provide a copy thereof to
the Company within 10 days of filing such election with the
Internal Revenue Service.
6.4. Deferred Stock.
A Deferred Stock Award entitles the recipient to
receive shares of Stock to be delivered in the future.
Delivery of the Stock will take place at such time or times,
and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which
delivery of all or any part of the Stock will take place.
At the time any Award described in this Section 6.4 is
granted, the Committee may provide that, at the time Stock
would otherwise be delivered pursuant to the Award, the
Participant will instead receive an instrument evidencing
the Participant's right to future delivery of Deferred
Stock.
6.5. Performance Awards; Performance Goals.
(a) Nature of Performance Awards. A Performance Award
entitles the recipient to receive, without payment, an
amount in cash or Stock or a combination thereof (such form
to be determined by the Committee) following the attainment
of Performance Goals (as hereinafter defined). Performance
Goals may be related to personal performance, corporate
performance, departmental performance or any other category
of performance established by the Committee. The Committee
will determine the Performance Goals, the period or periods
during which performance is to be measured and all other
terms and conditions applicable to the Award.
(b) Other Awards Subject to Performance Condition.
The Committee may, at the time any Award described in this
Section 6.5 is granted, impose the condition (in addition to
any conditions specified or authorized in this Section 6 or
any other provision of the Plan) that Performance Goals be
met prior to the Participant's realization of any payment or
benefit under the Award. Any such Award made subject to the
achievement of Performance Goals (other than an Option or
SAR) shall be treated as a Performance Award for purposes of
Section 6.5(c) below.
(c) Limitations and Special Rules. In the case of any
Performance Award intended to qualify for the
performance-based remuneration exception described in
Section 162(m)(4)(C) of the Code and the regulations
thereunder (an "Exempt Award"), the Committee shall in
writing preestablish specific Performance Goals. A
Performance Goal must be established prior to passage of 25%
of the period of time over which attainment of such goal is
to be measured. "Performance Goal" means criteria based
upon any one or more of the following (on a consolidated,
divisional, subsidiary, line of business or geographical
basis or in combinations thereof): (i) sales; revenues;
assets; expenses; earnings before or after deduction for all
or any portion of interest, taxes, depreciation or
amortization, whether or not on a continuing operations or
an aggregate or per share basis; return on equity,
investment, capital or assets; inventory level or turns; one
or more operating ratios; borrowing levels, leverage ratios
or credit rating; market share; capital expenditures; cash
flow; stock price; stockholder return; or any combination of
the foregoing; or (ii) acquisitions and divestitures (in
whole or in part); joint ventures and strategic alliances;
spin-offs, split-ups and the like; reorganizations;
recapitalizations, restructurings, financings (issuance of
debt or equity) and refinancings; transactions that would
constitute a Change of Control; or any combination of the
foregoing. A Performance Goal and targets with respect
thereto determined by the Committee need not be based upon
an increase, a positive or improved result or avoidance of
loss. The maximum Exempt Award payable to any Participant
in respect of all such Performance Goals for any year shall
not exceed $10,000,000. Payment of Exempt Awards based
upon a Performance Goal for calendar years 2004 and
thereafter is conditioned upon reapproval by Employer's
shareholders no later than Employer's first meeting of
shareholders in 2003.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Termination of Service.
If a Participant who is an Employee ceases to be an
Employee, or if there is a termination of the consulting,
service or similar relationship in respect of which a
non-Employee Participant was granted an Award hereunder
(such termination of the employment or other relationship to
be referred to as a "Termination of Service"), except as
otherwise provided by the Committee with respect to an
Award, the following will apply:
(a) Options and SARs.
(1) All Options and SARs held by the Participant
immediately prior to the Termination of Service, to the
extent then exercisable, may be exercised as follows:
(i) If the Termination of Service is on account
of the Participant's death, such Awards may be
exercised by the Participant's executor or
administrator or the person or persons to whom the
Option or Right is transferred by will or the
applicable laws of descent and distribution, at any
time within the one year period ending with the first
anniversary of the Participant's death, and shall
thereupon terminate.
(ii) If the Termination of Service is on account
of the Participant's retirement with consent of the
Company after attainment of age 65 or total and
permanent disability (as determined by the Committee),
such Awards may be exercised by the Participant at any
time in accordance with the original terms of the
Award.
(iii) If the Termination of Service is for any
other reason, such Awards may be exercised by the
Participant at any time within the three month period
following the Termination, and shall thereupon
terminate, unless the Award provides by its terms for
immediate termination of the Award in the event of such
a Termination of Service or unless the Termination of
Service results from a discharge for cause that, in the
opinion of the Committee, casts such discredit on the
Participant as to justify immediate termination of the
Award.
(2) In no event, however, shall an Option or SAR
remain exercisable beyond the latest date on which it
could have been exercised without regard to this
Section 7.
(3) Options and SARs held by a Participant
immediately prior to the Termination of Service that
are not then exercisable shall terminate upon the
Termination of Service.
(b) Restricted Stock. Restricted Stock held by the
Participant must be transferred to the Company (and, in the
event the certificates representing such Restricted Stock
are held by the Company, such Restricted Stock will be so
transferred without any further action by the Participant)
in accordance with Section 6.3(c).
(c) Deferred Stock and Performance Awards. Any
payment or benefit under a Deferred Stock Award or
Performance Award to which the Participant was not
irrevocably entitled prior to the Termination of Service
will be forfeited and the Award canceled upon the
Termination of Service.
(d) Special Circumstances. In the case of a
Participant who is an Employee, a Termination of Service
shall not be deemed to have resulted by reason of (i) a sick
leave or other bona fide leave of absence approved for
purposes of the Plan by the Committee, so long as the
Employee's right to reemployment is guaranteed either by
statute or by contract, or (ii) a transfer of employment
between the Company and a subsidiary or between
subsidiaries, or to the employment of a corporation (or a
parent or subsidiary corporation of such corporation)
issuing or assuming an option in a transaction to which
Section 424(a) of the Code applies.
7.2. Change of Control Provisions.
(a) Effect of Change of Control. Notwithstanding any
other provision of the Plan to the contrary, except as
otherwise explicitly provided by the Committee in writing
with respect to a particular Award at the time the Award is
granted, in the event of a Change of Control:
(1) Acceleration of Awards. As of the date on
which such Change of Control is determined to have
occurred, (i) Options and SARs that are outstanding and
that are not then exercisable shall become exercisable
to the full extent of the original grants; (ii) shares
of Restricted Stock that are not otherwise vested shall
vest (and any Stock to be delivered under any other
Award as Restricted Stock shall upon delivery be
unrestricted); and (iii) holders of Performance Awards
granted hereunder as to which the relevant performance
period has not ended shall be entitled at the time of
the Change of Control to receive a cash payment per
Performance Award equal to the full value of the cash
component of such Award (if any) plus the fair market
value of any Stock included in such Award.
(2) Termination of Awards in Certain
Transactions. If, as part of, or in connection with,
the Change of Control, there occurs a merger or
consolidation in which the Company is not the surviving
corporation or which results in the acquisition of
substantially all the Company's outstanding stock by a
person, entity or group of persons and/or entities
acting in concert or there is a dissolution or
liquidation of the Company, Awards payable in Stock
that are not cashed out or otherwise disposed of in or
prior to the transaction will terminate.
(3) Restriction on Termination of Awards Due to
Termination of Employment. Awards that remain
outstanding after a Change of Control shall not be
terminated as a result of a Termination of Service,
other than by reason of death, for a period of at least
seven months following such Termination of Service.
(4) Restriction on Amendment. In connection with
or following a Change of Control, neither the Committee
nor the Board may impose additional conditions upon
exercise or otherwise amend or restrict an Award, or
amend the terms of the Plan in any manner adverse to
the holder thereof, without the written consent of such
holder.
Notwithstanding the foregoing, if any right granted pursuant
to this Section 7.2 would make a Change of Control
transaction ineligible for pooling of interests accounting
under applicable accounting principles that but for this
Section 7.2 would otherwise be eligible for such accounting
treatment, the Committee shall have the authority to
substitute stock for the cash which would otherwise be
payable pursuant to this Section 7.2 having a fair market
value equal to such cash.
(b) Definition of Change of Control. A "Change of
Control" shall be deemed to have occurred if and when:
(1) The Company ceases to be a publicly owned
corporation having at least 500 stockholders; or
(2) There occurs any event or series of events
that would be required to be reported as a change of
control in response to Item 1(a) on a Form 8-K filed by
the Company under the Exchange Act or in any other
filing by the Company with the Securities and Exchange
Commission unless the person ("Person"), as that term
is defined or used in Section 13(d) or 14(d)(2) of the
1934 Act, acquiring control is an affiliate of the
Company as of the date the Plan is approved by
stockholders of the Company; or
(3) The Company executes an agreement of
acquisition, merger, or consolidation which
contemplates that after the effective date provided for
in the agreement all or substantially all of the
business and/or assets of the Company will be
controlled by another Person; provided, however, for
purposes of this subparagraph (3) that (i) if such an
agreement requires as a condition precedent approval by
the Company's shareholders of the agreement or
transaction, a Change of Control shall not be deemed to
have taken place unless and until such approval is
secured and, (ii) if the voting shareholders of such
other Person shall, immediately after such effective
date, be substantially the same as the voting
shareholders of the Company immediately prior to such
effective date, the execution of such agreement shall
not, by itself, constitute a "Change of Control"; or
(4) Any Person (other than the Company, a
majority-owned subsidiary of the Company, an employee
benefit plan maintained by the Company or a
majority-owned subsidiary of the Company or members of
the Board on the date the Plan is approved by
stockholders of the Company) becomes the beneficial
owner, directly or indirectly (either as a result of
the acquisition of securities or as the result of an
arrangement or understanding, including the holding of
proxies, with or among security holders), of securities
of the Company representing 25% or more of the votes
that could then be cast in an election for members of
the Board unless within 15 days of being advised that
such ownership level has been reached, the Company's
board of directors adopts a resolution approving the
acquisition of that level of securities ownership by
such Person; or
(5) During any period of 24 consecutive months,
commencing after the date this Plan is approved by
stockholders of the Company, individuals who at the
beginning of such 24-month period were directors of the
Company shall cease to constitute at least a majority
of the Board, unless the election of each director who
was not a director at the beginning of such period has
been approved in advance by directors representing at
least two thirds of (i) the directors then in office
who were directors at the beginning of the 24-month
period, or (ii) the directors specified in clause (i)
plus directors whose election has been so approved by
directors specified in clause (i).
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
Awards will be evidenced by such written instruments,
if any, as may be prescribed by the Committee from time to
time. Such instruments may be in the form of agreements to
be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not
be executed by the Participant but acceptance of which will
evidence agreement to the terms thereof.
8.2. Rights as a Stockholder, Dividend Equivalents.
Except as specifically provided by the Plan, the
receipt of an Award will not give a Participant rights as a
stockholder; the Participant will obtain such rights,
subject to any limitations imposed by the Plan or the
instrument evidencing the Award, only upon the issuance of
Stock. However, the Committee may, on such conditions as it
deems appropriate, provide that a Participant will receive a
benefit in lieu of cash dividends that would have been
payable on any or all Stock subject to the Participant's
Award had such Stock been outstanding. Without limitation,
the Committee may provide for payment to the Participant of
amounts representing such dividends, either currently or in
the future, or for the investment of such amounts on behalf
of the Participant.
8.3. Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares
of Stock pursuant to the Plan or to remove restriction from
shares previously delivered under the Plan (a) until all
conditions of the Award have been satisfied or removed, (b)
until, in the opinion of the Company's counsel, all
applicable federal and state laws and regulation have been
complied with, (c) if the outstanding Stock is at the time
listed on any stock exchange or The Nasdaq National Market,
until the shares to be delivered have been listed or
authorized to be listed on such exchange or market upon
official notice of notice of issuance, and (d) until all
other legal matters in connection with the issuance and
delivery of such shares have been approved by the Company's
counsel. If the sale of Stock has not been registered under
the Securities Act of 1933, as amended, the Company may
require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may
require that the certificates evidencing such Stock bear an
appropriate legend restricting transfer.
If an Award is exercised by the Participant's legal
representative, the Company will be under no obligation to
deliver Stock pursuant to such exercise until the Company is
satisfied as to the authority of such representative.
8.4. Tax Withholding.
The Company will withhold from any cash payment made
pursuant to an Award an amount sufficient to satisfy all
federal, state and local withholding tax requirements (the
"withholding requirements").
In the case of an Award pursuant to which Stock may be
delivered, the Committee will have the right to require that
the Participant or other appropriate person remit to the
Company an amount sufficient to satisfy the withholding
requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the
delivery of any Stock or removal of restrictions thereon.
If and to the extent that such withholding is required, the
Committee may permit the Participant or such other person to
elect at such time and in such manner as the Committee
provides to have the Company hold back from the shares to be
delivered, or to deliver to the Company, Stock having a
value calculated to satisfy the withholding requirement.
The Committee may make such share withholding mandatory with
respect to any Award at the time such Award is made to a
Participant.
If at the time an ISO is exercised the Committee
determines that the Company could be liable for withholding
requirements with respect to the exercise or with respect to
a disposition of the Stock received upon exercise, the
Committee may require as a condition of exercise that the
person exercising the ISO agree (a) to provide for
withholding under the preceding paragraph of this Section
8.4, if the Committee determines that a withholding
responsibility may arise in connection with tax exercise,
(b) to inform the Company promptly of any disposition
(within the meaning of section 424(c) of the Code) of Stock
received upon exercise, and (c) to give such security as the
Committee deems adequate to meet the potential liability of
the Company for the withholding requirements and to augment
such security from time to time in any amount reasonably
deemed necessary by the Committee to preserve the adequacy
of such security.
8.5. Transferability of Awards.
Unless otherwise permitted by the Committee, no Award
(other than an Award in the form of an outright transfer of
cash or Unrestricted Stock) may be transferred other than by
will or by the laws of descent and distribution.
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a stock dividend, stock split or
combination of shares, recapitalization or other change in
the Company's capitalization, or other distribution to
holders of Stock other than normal cash dividends, after the
effective date of the Plan, the Committee will make any
appropriate adjustments to the maximum number of shares that
may be delivered under the Plan under the first paragraph of
Section 4 above and to the limits described in the second
paragraph of Section 4 and in Section 6.5(c).
(b) In any event referred to in paragraph (a), the
Committee will also make any appropriate adjustments to the
number and kind of shares of Stock or securities subject to
Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision
of Awards affected by such change. The Committee may also
make such adjustments to take into account material changes
in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar
corporate transactions, or any other event, if it is
determined by the Committee that adjustments are appropriate
to avoid distortion in the operation of the Plan; provided,
that adjustments pursuant to this sentence shall not be made
to the extent it would cause any Award intended to be exempt
under Section 162(m)(4)(c) of the Code to fail to be so
exempt.
(c) In the case of ISOs, the adjustments described in
(a) and (b) will be made only to the extent consistent with
continued qualification of the Option under Section 422 of
the Code (in the case of an ISO) or Section 162(m) of the
Code.
8.7. Employment Rights, Etc.
Neither the adoption of the Plan nor the grant of
Awards will confer upon any person any right to continued
retention by the Company or any subsidiary as an Employee or
otherwise, or affect in any way the right of the Company or
subsidiary to terminate an employment, service or similar
relationship at any time. Except as specifically provided
by the Committee in any particular case, the loss of
existing or potential profit in Awards granted under the
Plan will not constitute an element of damages in the event
of termination of an employment, service or similar
relationship even if the termination is in violation of an
obligation of the Company to the Participant.
8.8. Deferral of Payments.
The Committee may agree at any time, upon request of
the Participant, to defer the date on which any payment
under an Award will be made.
8.9. Past Services as Consideration.
Where a Participant purchases Stock under an Award for
a price equal to the par value of the Stock the Committee
may determine that such price has been satisfied by past
services rendered by the Participant.
9. EFFECT, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to
a Participant will affect the Company's right to grant to
such Participant awards that are not subject to the Plan, to
issue to such Participant Stock as a bonus or otherwise, or
to adopt other plans or arrangements under which Stock may
be issued to Employees.
The Committee may at any time or times amend the Plan
or any outstanding Award for any purpose which may at the
time be permitted by law, or may at any time terminate the
Plan as to any further grants of Awards, provided that
(except to the extent expressly required or permitted by the
Plan) no such amendment will, without the approval of the
stockholders of the Company, effectuate a change for which
stockholder approval is required in order for the Plan to
continue to qualify for the award of ISOs under Section 422
of the Code or for the award of performance-based
compensation under Section 162(m) of the Code.
Exhibit 5
[Nortek Letterhead]
KEVIN W. DONNELLY
VICE PRESIDENT, GENERAL COUNSEL and SECRETARY
e-mail address: [email protected]
May 28, 1999
Board of Directors
NORTEK, INC.
50 Kennedy Plaza
Providence, RI 02903
Ladies and Gentlemen:
This opinion is rendered to you in connection with the
proposed issue by Nortek, Inc. (the "Company") of up to
575,000 shares in the aggregate which may be shares of its
Common Stock, $1.00 par value, or shares of its Special
Common Stock, $1.00 par value (the "Shares"), together with
such Preference Stock Purchase Rights as may be issued in
connection with the Common Stock pursuant to the provisions
of the Second Amended and Restated Rights Agreement dated as
of April 1, 1996 (the "Rights Agreement"), between the
Company and State Street Bank and Trust Company, as Rights
Agent (the "Rights"), covered by the Registration Statement
referred to below. The Shares are to be issued in
accordance with the terms of stock options and other awards
granted pursuant to the Company's 1999 Equity and Cash
Incentive Plan (the "Plan").
I am Vice President and General Counsel of the Company
and am familiar with the proceedings taken from time to time
in connection with issuances of the Company's capital stock,
and the adoption of the Plan. I have examined such
certificates, records, documents and papers and I have
deemed necessary for the purposes of this opinion, including
a copy of the Company's Registration Statement on Form S-8
being filed with the Securities and Exchange Commission
contemporaneously herewith.
Based upon the foregoing, I am of the opinion that when
duly executed certificates representing the Shares have been
issued against receipt of the agreed consideration therefor
in accordance with the terms of the stock options and other
awards granted pursuant to the terms of the Plan, the Shares
will have been validly issued and will be fully paid and
nonassessable. I am further of the opinion that any Rights
issuable in accordance with the terms of the Rights
Agreement will be validly issued with no additional
consideration required to be paid therefor under the terms
of the Rights Agreement.
I hereby consent to the Company's filing of this
opinion as an exhibit to the above-mentioned Registration
Statement and amendments thereto.
Very truly yours,
/s/ Kevin W. Donnelly
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
To Nortek, Inc.
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of
our report dated March 22, 1999 included in Nortek, Inc.'s
Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this Registration
Statement.
/s/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
May 28, 1999
Exhibit 99.1
NORTEK, INC.
1999 EQUITY AND CASH INCENTIVE PLAN
Stock Option Certificate
Stock Option granted by Nortek, Inc., a Delaware
corporation, (the "Company") to __________________, an
employee of the Company or of a subsidiary of the Company,
(the "Employee") pursuant to the Company's 1999 Equity and
Cash Incentive Plan, (the "Plan").
This certificate evidences the grant by the Company to the
Employee of an option to purchase, on the terms provided
herein and in the Plan, a total of _______ shares of the
Company's [Common Stock] [Special Common Stock], $1.00 par
value ("Common Stock"), at a price of ___________ per share.
The options are to be non-statutory options within the
meaning of Section 422(b) of the Internal Revenue Code (the
"Code").
The options shall expire on _______________ and are subject
to earlier termination as provided in the Plan. Subject to
the other terms hereof and of the Plan, this option is
exercisable as follows: _______ shares immediately; an
additional __________ of the shares on and after
____________________; and an additional __________ of the
shares on and after ____________________.
Each election to exercise this option shall be in writing,
signed by the proper person, and received by the Company at
its principal office in Providence, Rhode Island,
accompanied by this certificate and payment in full as
provided in the Plan.
This certificate and the option evidenced hereby are subject
to the provisions of the Plan, a copy of which is furnished
to the Employee herewith.
IN WITNESS WHEREOF, Nortek, Inc. has caused this certificate
to be executed by its Chairman and Chief Executive Officer,
hereunto authorized under its corporate seal duly attested.
This option is granted at the Company's office, on the date
stated below.
Attest: NORTEK, INC.
___________________________ By:
_______________________________
Secretary Chairman and Chief Executive
Officer
Date: _____________________
Accepted and Agreed:
___________________________
Employee
