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As filed with the Securities and Exchange Commission on February 14, 1997
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SPIRE CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2457335
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
ONE PATRIOTS PARK
BEDFORD, MASSACHUSETTS 01730-2396
(Address, including Zip Code, of Principal Executive Offices)
SPIRE CORPORATION
1996 EQUITY INCENTIVE PLAN
(Full title of the plan)
--------------------------
RICHARD S. GREGORIO, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
SPIRE CORPORATION
ONE PATRIOTS PARK, BEDFORD, MASSACHUSETTS 01730-2396
(617) 275-6000
(Name, address and telephone number of agent for service)
--------------------------
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per share (1) offering price (1) fee (2)
- -------------------------------------------------------------------------------
[C] [C] [C] [C] [C]
Common Stock,
$.01 par value 300,000 sh. $2.63/$2.25 $684,682 $217
- -------------------------------------------------------------------------------
(1) The offering price for shares not subject to options on the date hereof has
been estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) on the basis of the average of the high and low prices
of Spire Corporation, as reported on the Nasdaq National Market System on
February 10, 1997. The offering price for shares subject to options outstanding
on the date hereof is the actual exercise price of such options.
(2) $83.22 of the registration fee is payable in respect of 104,425 shares
subject to outstanding options at an exercise price of $2.63 per share on the
date hereof, and $133.33 of the registration fee is payable in respect of
195,575 shares reserved for issuance under the Plan and not yet subject to
options on the date hereof.
Page 1 of ___
Exhibit Index at Page 5
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Note: The documents containing the Registrant's 1996 Equity Incentive Plan
information required by Item 1 of this Form S-8 and the statement of
availability of Registrant information, and other information required by Item 2
of this Form will be sent or given to employees as specified by Rule 428 of the
Securities Act of 1933, as amended. In accordance with Rule 428 and the
requirements of Part I of Form S-8, such documents are not being filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424. The Registrant will maintain a file of such documents in accordance
with the provisions of Rule 428. Upon request, the Registrant shall furnish to
the Commission or its staff a copy of any or all of the documents included in
such file.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated in and made a part of this
registration statement by reference:
a. The Company's Annual Report on Form 10-KSB for the year ended December
31, 1995.
b. The Company's Quarterly Report on Form 10-QSB for the quarterly period
ended March 31, 1996.
c. The Company's Quarterly Report on Form 10-QSB for the quarterly period
ended June 30, 1996.
d. The Company's Quarterly Report on Form 10-QSB for the quarterly period
ended September 30, 1996.
e. The Description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A, File No. 0-12742.
All documents filed by the Company with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 prior to the filing of a post-effective amendment to this registration
statement that indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this registration statement from the date of filing
of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not required.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
No material interests.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Massachusetts Business Corporation Law, Section 13(b)(1-1/2) enables a
corporation in its Articles of Organization or an amendment thereto validly
approved by stockholders to eliminate or limit personal liability of members of
its Board of Directors to the corporation or its stockholders for monetary
damages for breach of a director's fiduciary duty of care. However, the
elimination or limitation shall not apply where there has been a breach of duty
of loyalty, failure to act in good faith, engaging in intentional misconduct or
knowingly violating a law, paying a dividend or approving a stock repurchase
that is deemed illegal or obtaining an improper personal benefit. The Company's
Articles of Organization, as amended, contain the following language:
3
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"No director shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director notwithstanding
any provision of law imposing such liability; provided, however, that, to the
extent required by applicable law, this 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 61 or 62 or successor provisions of the Massachusetts
Business Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. This provision shall not eliminate or
limit the liability of a director for any act or omission occurring prior to the
date upon which this provision becomes effective. No amendment to or repeal of
this provision shall apply to or have any effect on the liability or alleged
liability of any director for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal."
The Massachusetts Business Corporation Law, Section 67, permits a
corporation organized under Massachusetts law to indemnify directors and
officers to the extent specified in the corporation's Articles of Organization
or a By-Law adopted by the stockholders. The By-Laws of the Company contain the
following provisions in Article VII. INDEMNIFICATION OF DIRECTORS AND OFFICERS:
"Any person threatened with or made a party to any action, suit or other
proceeding by reason of the fact that he, his testator or intestate, is or was a
Director, officer, employee or other agent of the Corporation or is or was a
Director, officer, employee or other agent of another organization and in which
he, his testator or intestate, serves or served at the request of the
Corporation, or who serves or served at its request in any capacity with respect
to an employee benefit plan, shall be indemnified by the Corporation against all
liabilities and expenses, including counsel fees reasonably incurred by him in
connection therewith, except that no indemnification shall be provided for any
person with respect to any matter as to which he shall have been adjudicated in
any proceeding not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Corporation or to the extent that such
matter relates to service with respect to an employee benefit plan, in the best
interest of the participants of such employee benefit plan; provided, however,
as to matters disposed of by a compromise payment by such person, pursuant to a
consent decree or otherwise, no reimbursement, either for said payment or for
any other expenses in connection with the matter so disposed of, shall be
provided unless such compromise shall be approved
(a) by a disinterested majority of the Directors then in office, or
(b) if a majority of the Directors are interested, by a majority of
the disinterested Directors then in office, provided that there
has been obtained an opinion in writing of independent legal
counsel to the effect that such Director or officer does not
appear to have acted in good faith in the reasonable belief that
his action was in the best interests of the Corporation, or
(c) by the holders of a majority of the outstanding stock at the time
entitled to vote for Directors, not counting as outstanding any
stock owned by any interested person.
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The Board of Directors may from time to time authorize the payment by the
Corporation of expenses incurred by any such person in defending any such
action, suit or other proceeding in advance of the final disposition of such
action, suit or other proceeding, upon receipt of an undertaking from such
person to repay such payment if he shall be adjudicated to be not entitled to
indemnification under this ARTICLE VII or if the matter involved shall be
disposed of by a compromise payment with respect to which he shall not be
entitled to indemnification under this ARTICLE VII. Such undertaking may be
accepted without reference to the financial ability of such person to make
repayment."
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Exhibit List
5. Legal opinion of James W. Spindler, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of James W. Spindler, Esq., is contained in the opinion
filed as Exhibit 5 to this Registration Statement.
99. Spire Corporation 1996 Equity Incentive Plan.
ITEM 9. UNDERTAKINGS.
The undersigned small business issuer will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement
to:
(iii) Include any additional or changed material information
on the plan of distribution.
(2) For determining any liability under the Securities Act, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
The undersigned small business issuer hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the small business issuer's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934)
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.
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Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the provisions described under
"Item 6 -- Indemnification of Directors and Officers" above, or otherwise, the
small business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer 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 small business
issuer 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, 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 Town of Bedford, Massachusetts, on February 13, 1997.
SPIRE CORPORATION
By /s/Roger G. Little
-------------------------------
Roger G. Little
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY DATE
/s/ Roger G. Little President (principal executive February 13, 1997
- ------------------------ officer), Chairman of the Board
Roger G. Little and Director
/s/ Richard S. Gregorio Vice President and Chief February 13, 1997
- ------------------------ Financial Officer, Treasurer,
Richard S. Gregorio Clerk (principal financial and
accounting officer)
/s/ A. John Gale Director February 13, 1997
- ------------------------
A. John Gale
/s/ Carl N. Graf Director February 13, 1997
- ------------------------
Carl N. Graf
/s/ Udo Henseler Director February 13, 1997
- ------------------------
Udo Henseler
/s/ Roger W. Redmond Director February 13, 1997
- ------------------------
Roger W. Redmond
/s/ John A. Tarello Director February 13, 1997
- ------------------------
John A. Tarello
7
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JAMES W. SPINDLER
COUNSELOR AT LAW
66 WESTON ROAD
LINCOLN MASSACHUSETTS 01773
TEL: (617) 259-9832
FAX: (617) 259-9846
EXHIBIT 5
February 13, 1997
Spire Corporation
One Patriots Park
Bedford, Massachusetts 01730
Dear Sirs:
I am acting as counsel to Spire Corporation (the "Company") in connection
with the issuance from time to time of up to an aggregate of 300,000 shares of
the Company's Common Stock, $.01 par value (the "Shares"), under the Company's
1996 Equity Incentive Plan. The issuance of the Shares is being registered under
the Securities Act of 1933, as amended, on a Registration Statement on Form S-8
(the "Registration Statement").
In connection with this opinion, I have examined and am familiar with
originals or copies, certified or otherwise identified to my satisfaction, of
such documents, corporate records and other instruments and have made such other
investigations as I have deemed necessary to enable me to express the opinion
set forth below.
On the basis of the foregoing and my review of such other matters as I have
deemed relevant, I am of the opinion that the Shares have been duly authorized
and, when certificates therefor have been duly executed and delivered and the
consideration therefor paid pursuant to the terms of such Plan, will be validly
issued, fully paid and non-assessable.
I express no opinion on the laws of any jurisdiction other than the Business
Corporation Law of the Commonwealth of Massachusetts.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/James W. Spindler
-----------------------------------
James W. Spindler
8
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Exhibit 23.1
ACCOUNTANTS' CONSENT
The Board of Directors
Spire Corporation
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
February 7, 1997
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Exhibit 99
SPIRE CORPORATION
EQUITY INCENTIVE PLAN
1 PURPOSE
The purpose of this Equity Incentive Plan (the "Plan") is to advance the
interests of Spire Corporation (the "Company") by enhancing its 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
("Stock").
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, Performance
Awards, Loans or Supplemental Grants, 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, each of whom (if the Plan is administered by the
Committee) is a non-Employee director and an outside director, as such terms
are defined or interpreted for purposes of Rule 16b-3 (including amendments
and successor provisions) as promulgated by the Securities and Exchange
Commission pursuant to its authority under the Securities Exchange Act of
1934, as amended (the "1934 Act") and Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), respectively. 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. 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 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 Participant (as defined below) with any obligations to be performed by
the Participant under an Award and waive any term or condition 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 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, 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
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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 7.3 or Section 8.6.
With respect to persons subject to Section 16 of the 1934 Act, transactions
under this plan are intended to comply with all applicable conditions of
Rule 16b-3 (including amendments and successor provisions) under the 1934
Act. To the extent any provision of the Plan or action by the Committee or
Board fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. Further, the Plan
shall be deemed affirmatively amended from time to time in any regard
necessary so as to obtain compliance with said Section 16 and said Rule
16b-3.
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. Grants of Awards under the Plan may be made
prior to that date, subject to such approval of the Plan. No Award may be
granted under the Plan after December 10, 2006, but Awards previously
granted may extend beyond that date.
4 SHARES SUBJECT TO THE PLAN
Subject to the adjustment as provided in Section 8.6 below, the aggregate
number of shares of Stock that may be delivered under the Plan will be
300,000. 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. The maximum number
of shares (subject to adjustment as provided in Section 8.6 below) with
respect to which Awards may be made under the Plan to any one Participant
during the term of the Plan shall be 75,000 shares. The preceding sentence
shall be construed consistent with the regulations 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
Those eligible to receive Awards under the Plan ("Participants") will be
persons in the employ of the Company or any of its parents or subsidiaries
("Employees") and other persons or entities (including without limitation
non-Employee directors of the Company or a parent or subsidiary of the
Company) who, in the opinion of the Committee, are in a position to make a
significant contribution to the success of the Company or its parents or
subsidiaries. A "subsidiary" for purposes of the Plan will be a corporation
in which the
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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
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(a) NATURE OF OPTIONS
An Option is an Award entitling the recipient on exercise thereof to
purchase Stock at a specified exercise price.
Both "incentive stock options," as defined in Section 422 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 incentive
stock options, may be granted under the Plan. ISOs shall be awarded only
to Employees.
(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 shall not be less than 100% (110% in the
case of an ISO granted to a ten-percent stockholder) of the fair market
value of the Stock subject to the Option, determined as of the time the
Option is granted. A "ten-percent stockholder" is any person who at the
time of grant owns, directly or indirectly, or is deemed to own by
reason of the attribution rules of Section 424(d) of the Code, stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of any of its subsidiaries.
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.
3) The Committee may reduce the exercise price of an Option at any time
after the time of grant, but in the case of an Option originally awarded
as an ISO, only with consent of the Participant.
(c) DURATION OF OPTIONS
The latest date on which an Option may be exercised will be the tenth
anniversary (fifth anniversary, in the case of an ISO granted to a
ten-percent stockholder) 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
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Options granted under any single Award 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
instrument evidencing the Option (or in the case of an Option which is
not an ISO, by the Committee at or after grant of the Option), (i)
through the delivery of shares of Stock which have been outstanding for
at least six months (unless the Committee expressly approves a shorter
period) and which have a fair market value on the last business day
preceding the date of exercise equal to the exercise price, or (ii) by
delivery of a promissory note of the Option holder to the Company,
payable on such terms as are specified by the Committee, or (iii) 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 (iv) by any combination of the permissible forms of payment;
PROVIDED, that if the Stock delivered upon exercise of the Option is an
original issue of authorized Stock, at least so much of the exercise
price as represents the par value of such Stock must be paid other than
by the Option holder's promissory note.
(f) DISCRETIONARY PAYMENTS
If 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 below) exceeds the exercise price of the Option
at the time of its exercise, the Committee may 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. The Committee may
exercise its discretion to take such action only if it has received a
written request from the person exercising the Option, but such a
request will not be binding on the Committee.
6.2 Stock Appreciation Rights
-------------------------
(a) NATURE OF STOCK APPRECIATION RIGHTS
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A Stock Appreciation Right is an Award entitling the recipient on
exercise of the Right 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 in Stock
value.
In general, a Stock Appreciation Right entitles the Participant to
receive, with respect to each share of Stock as to which the Right is
exercised, the excess of the share's fair market value on the date of
exercise over its fair market value on the date the Right was granted.
However, the Committee may provide at the time of grant that the amount
the recipient is entitled to receive will be adjusted upward or downward
under rules established by the Committee to take into account the
performance of the Stock in comparison with the performance of other
stocks or an index or indices of other stocks. The Committee may also
grant Stock Appreciation Rights providing that following a change in
control of the Company, as determined by the Committee, the holder of
such Right will be entitled to receive, with respect to each share of
Stock subject to the Right, an amount equal to the excess of a specified
value (which may include an average of values) for a share of Stock
during a period preceding such change in control over the fair market
value of a share of Stock on the date the Right was granted.
(b) GRANT OF STOCK APPRECIATION RIGHTS
Stock Appreciation Rights may be granted in tandem with, or
independently of, Options granted under the Plan. A Stock Appreciation
Right granted in tandem with an Option which is not an ISO may be
granted either at or after the time the Option is granted. A Stock
Appreciation Right granted in tandem with an ISO may be granted only at
the time the Option is granted.
(c) RULES APPLICABLE TO TANDEM AWARDS
When Stock Appreciation Rights are granted in tandem with Options, the
following will apply:
1) The Stock Appreciation Right 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.
2) The Stock Appreciation Right will terminate and no longer be
exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right 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 Stock
Appreciation Right.
3) The Option will terminate and no longer be exercisable upon the
exercise of the related Stock Appreciation Right.
4) The Stock Appreciation Right will be transferable only with the
related Option.
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5) A Stock Appreciation Right granted in tandem with an ISO may be
exercised only when the market price of the Stock subject to the Option
exceeds the exercise price of such Option.
(d) EXERCISE OF INDEPENDENT STOCK APPRECIATION RIGHTS
A Stock Appreciation Right 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 Stock Appreciation Right 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) NATURE OF RESTRICTED STOCK AWARD
A Restricted Stock Award entitles the recipient to acquire, for a
purchase price equal to par value, shares of Stock subject to the
restrictions described in paragraph (d) below ("Restricted Stock").
(b) ACCEPTANCE OF AWARD
A Participant who is granted a Restricted Stock Award will have no
rights with respect to such Award unless the Participant accepts the
Award by written instrument delivered or mailed to the Company
accompanied by payment in full of the specified purchase price, if any,
of the shares covered by the Award. Payment may be by certified or bank
check or other instrument acceptable to the Committee.
(c) RIGHTS AS A STOCKHOLDER
A Participant who receives Restricted Stock will have all the rights of
a stockholder with respect to the Stock, including voting and dividend
rights, subject to the restrictions described in paragraph (d) below and
any other conditions imposed by the Committee at the time of grant.
Unless the Committee otherwise determines, certificates evidencing
shares of Restricted Stock will remain in the possession of the Company
until such shares are free of all restrictions under the Plan.
(d) RESTRICTIONS
Except as otherwise specifically provided by the Plan, Restricted Stock
may not be sold, assigned, transferred, pledged or otherwise encumbered
or disposed of, and if the Participant ceases to be an Employee or
otherwise suffers a Status Change (as defined in Section 7.2(a) below)
for any reason, must be offered to the Company for purchase
<PAGE> 7
for the amount of cash paid for the Stock, or forfeited to the Company
if no cash was paid. These restrictions will lapse 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 the restrictions
on all or any part of the shares will lapse.
(e) NOTICE OF 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 the filing of such election with the Internal Revenue
Service.
(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
The Committee may, in its sole discretion, approve the sale to any
Participant of shares of Stock free of restrictions under the Plan for a
price which is not less than the par value of the Stock.
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 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. Performance Goals may be related to personal performance,
corporate performance, departmental performance or any other category of
performance deemed by the Committee to be important to the success of
the Company. The Committee will determine the Performance Goals, the
period or periods during which performance is to measured and all other
terms and conditions applicable to the Award.
<PAGE> 8
(b) OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION
The Committee may, at the time any Award described in this Section 6 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.
6.6 Loans and Supplemental Grants
-----------------------------
(a) LOANS
The Company may make a loan to a Participant ("Loan") either on the date
of or after the grant of any Award to the Participant. A Loan may be
made either in connection with the purchase of Stock under the Award or
with the payment of any Federal, state and local income tax with respect
to income recognized as a result of the Award. The Committee will have
full authority to decide whether to make a Loan and to determine the
amount, terms and conditions of the Loan, including the interest rate
(which may be zero), whether the Loan is to be secured or unsecured or
with or without recourse against the borrower, the terms on which the
Loan is to be repaid and the conditions, if any, under which it may be
forgiven. However, no Loan may have a term (including extensions)
exceeding ten years in duration.
(b) SUPPLEMENTAL GRANTS
In connection with any Award, the Committee may at the time such Award
is made or at a later date, provide for and grant a cash award to the
Participant ("Supplemental Grant") not to exceed an amount equal to (1)
the amount of any federal, state and local income tax on ordinary income
for which the Participant may be liable with respect to the Award,
determined by assuming taxation at the highest marginal rate, plus (2)
an additional amount on a grossed-up basis intended to make the
Participant whole on an after-tax basis after discharging all the
Participant's income tax liabilities arising from all payments under
this Section 6. Any payments under this subsection (b) will be made at
the time the Participant incurs Federal income tax liability with
respect to the Award.
7 EVENTS AFFECTING OUTSTANDING AWARDS
7.1 Death
-----
If a Participant dies, the following will apply:
(a) All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, to the extent then exercisable, 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 a period of six months after
the Participant's death (or such shorter or longer period as the Committee
may
<PAGE> 9
determine), and shall thereupon terminate. In no event, however, shall an
Option or Stock Appreciation Right remain exercisable beyond the latest date
on which it could have been exercised without regard to this Section 7.
Except as otherwise determined by the Committee, all Options and Stock
Appreciation Rights held by a Participant immediately prior to death that
are not then exercisable shall terminate at death.
(b) Except as otherwise determined by the Committee, all 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 above.
(c) Any payment or benefit under a Deferred Stock Award, Performance Award,
or Supplemental Grant to which the Participant was not irrevocably entitled
prior to death will be forfeited and the Award canceled as of the time of
death, unless otherwise determined by the Committee.
7.2 Termination of Service (Other than by Death)
--------------------------------------------
If a Participant who is an Employee ceases to be an Employee for any reason
other than death, or if there is a termination (other than by reason of
death) of the consulting, service (including but not limited to service as a
director) or similar relationship in respect of which a non-Employee
Participant was granted an Award hereunder (such termination of the
employment or other relationship being hereinafter referred to as a "Status
Change"), the following will apply:
(a) Any Options or Rights that were exercisable immediately prior to the
Status Change will continue to be exercisable for such period as the
Committee may determine, and shall thereupon terminate, unless the Award
provides by its terms for immediate termination in the event of a Status
Change or unless the Status Change results from a discharge for cause which
in the opinion of the Committee casts such discredit on the Participant as
to justify immediate termination of the Award. Except as otherwise
determined by the Committee, all Options and Stock Appreciation Rights held
by the Participant that were not exercisable immediately prior to the Status
Change shall terminate at the time of the Status Change. In no event,
however, shall an Option or Stock Appreciation Right remain exercisable
beyond the latest date on which it could have been exercised without regard
to this Section 7. For purposes of this paragraph, in the case of a
Participant who is an Employee, a Status Change 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.
(b) Except as otherwise determined by the Committee, all Restricted Stock
held by the Participant at the time of the Status Change must be transferred
to the Company (and, in the
<PAGE> 10
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 above.
(c) Any payment or benefit under a Deferred Stock Award, Performance Award,
or Supplemental Grant to which the Participant was not irrevocably entitled
prior to the Status Change will be forfeited and the Award canceled as of
the date of such Status Change unless otherwise determined by the Committee.
7.3 Certain Corporate Transactions
------------------------------
7.3.1 Mergers, Sales etc.
------------------
In the event of a consolidation or merger 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 single person or entity or by a
group of persons and/or entities acting in concert, or in the event of the
sale or transfer of substantially all the Company's assets (a "covered
transaction"), all outstanding Awards will terminate as of the effective
date of the covered transaction, and the following rules shall apply:
(a) Subject to paragraphs (b) and (c) below, the Committee shall, at least
twenty (20) days prior to the effective date of the covered transaction, (1)
make each outstanding Option and Stock Appreciation Right exercisable in
full, (2) remove the restrictions from each outstanding share of Restricted
Stock, (3) cause the Company to make any payment and provide any benefit
under each outstanding Deferred Stock Award, Performance Award, and
Supplemental Grant which would have been made or provided with the passage
of time had the transaction not occurred and the Participant not suffered a
Status Change (or died), (4) forgive all or any portion of the principal of
or interest on a Loan; and (5) notify the affected Participants to permit
them to take appropriate and timely action with respect to the covered
transaction.
(b) If an outstanding Award is subject to performance or other conditions
(other than conditions relating only to the passage of time and continued
employment) which will not have been satisfied at the time of the covered
transaction, the Committee may in its sole discretion remove such
conditions. If it does not do so, however, such Award will terminate as of
the date of the covered transaction notwithstanding paragraph (a) above.
(c) With respect to an outstanding Award held by a participant who,
following the covered transaction, will be employed by or otherwise
providing services to a corporation which is a surviving or acquiring
corporation in such transaction or an affiliate of such a corporation, the
Committee may, in lieu of the action described in paragraph (a) above,
arrange to have such surviving or acquiring corporation or affiliate grant
to the Participant a replacement award which, in the judgment of the
Committee, is substantially equivalent to the Award.
<PAGE> 11
7.3.2 Liquidation and Dissolution
In the event of a liquidation or dissolution of the Company, all outstanding
Awards will terminate as of the effective date of such liquidation or
dissolution, and the following rules shall apply:
(a) Subject to paragraphs (b) and (c) below, the Committee may, prior to the
effective date of such liquidation or dissolution, (1) make each outstanding
Option and Stock Appreciation Right exercisable in full, (2) remove the
restrictions from each outstanding share of Restricted Stock, (3) cause the
Company to make any payment and provide any benefit under each outstanding
Deferred Stock Award, Performance Award, and Supplemental Grant which would
have been made or provided with the passage of time had the transaction not
occurred and the Participant not suffered a Status Change (or died), and (4)
forgive all or any portion of the principal of or interest on a Loan.
(b) If an outstanding Award is subject to performance of other conditions
(other than conditions relating only to the passage of time and continued
employment) which will not have been satisfied at the time of such
liquidation or dissolution, the Committee may in its sole discretion remove
such conditions. If it does not do so, however, such Award will terminate as
of the date of such liquidation or dissolution notwithstanding paragraph (a)
above.
(c) With respect to an outstanding Award held by a Participant who,
following such liquidation or dissolution, will be employed by or otherwise
providing services to a corporation which is a surviving or acquiring
corporation in such transaction or an affiliate of such a corporation, the
Committee may, in lieu of the action described in paragraph (a) above,
arrange to have such surviving or acquiring corporation or affiliate grant
to the Participant a replacement award which, in the judgment of the
Committee, is substantially equivalent to the Award.
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, upon actual receipt of Stock. However, the
Committee may, on such conditions as it deems appropriate,
<PAGE> 12
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 restrictions 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 regulations have been complied with, (c) if the
outstanding Stock is at the time listed on any stock exchange, until the
shares to be delivered have been listed or authorized to be listed on such
exchange upon official 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. 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 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 inform
the Company promptly of any disposition (within the meaning of Section
424(c) of the Code) of Stock received upon exercise, and (b) to give such
<PAGE> 13
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 reasonable deemed necessary by the Committee
to preserve the adequacy of such security.
8.5 Non-transferability of Awards
-----------------------------
Except as otherwise determined 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, and during an employee's lifetime an Award requiring exercise
may be exercised only by the Participant (or in the event of the
Participant's incapacity, the person or persons legally appointed to act on
the Participant's behalf).
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 common stockholders other than 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, or with respect to which Awards may be made to any one Participant,
under Section 4 above.
(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.
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.
<PAGE> 14
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, DISCONTINUANCE, CANCELLATION, 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.
