As filed with the Securities and Exchange Commission on November 3, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1993
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OEA, INC.
(Exact name of registrant as specified in its charter)
----------------------
DELAWARE 36-2362379
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
34501 EAST QUINCY AVENUE
POST OFFICE BOX 100488
DENVER, COLORADO 80250
(303) 693-1248
(Address of principal executive offices)
OEA, INC. EMPLOYEES' STOCK OPTION PLAN
OEA, INC. NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Full titles of the plans)
----------------------
J. THOMPSON MCCONATHY RONALD R. LEVINE, II, ESQ.
OEA, INC. DAVIS, GRAHAM & STUBBS LLP
34501 EAST QUINCY AVENUE 370 SEVENTEENTH STREET, SUITE 4700
POST OFFICE BOX 100488 DENVER, COLORADO 80202
DENVER, COLORADO 80250 (303) 892-9400
(303) 693-1248 (Copies of all correspondence)
(Name, address and telephone number,
including area code, of agent for service)
----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================
Proposed Proposed
Amount maximum maximum
Title of securities to be offering price aggregate Amount of
to be registered registered per unit(1) offering price(1) registration fee
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value 650,000 shares $10.875 $7,068,750 $1,966
====================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457(h), based upon the closing
price of the Company's Common Stock on October 29, 1998 as reported on the
New York Stock Exchange.
(2) This Registration Statement also applies to rights under the Company's
Common Share Purchase Rights Plan, which are attached to tradeable with the
shares of Common Stock registered hereby. No registration fee is required
for such rights and the shares underlying such rights as they will be
issued for no additional consideration.
<PAGE>
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed or to be filed by OEA, Inc. (the
"Company") with the Securities and Exchange Commission (the "Commission") are
hereby incorporated or deemed to be incorporated in this Registration Statement
by reference:
A. The Company's Annual Report on Form 10-K, for the fiscal year
ended July 31, 1998; and
B. The description of the Company's Common Stock, par value $.10 per
share, contained in its Registration Statement on Form 8-A, as filed with the
Commission (file no. 1-06711) as amended.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
subsequent to the date of this Registration Statement and prior to the filing of
a post-effective amendment to this Registration Statement indicating that all
securities offered under the Registration Statement have been sold, or
deregistering all securities then remaining unsold, shall be deemed to be
incorporated in this Registration Statement by reference and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated by, or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modified or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
4. DESCRIPTION OF SECURITIES
Not Applicable.
5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("Delaware Law")
permits, subject to certain conditions, a corporation to indemnify its
directors, officers, employees and agents against expenses (including attorneys'
fees), judgments, fines and amounts paid in
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settlement actually and reasonably incurred by such director, officer, employee
or agent in connection with the threatened, pending or completed actions, suits
and proceedings (other than actions by or in the right of the corporation) in or
to which any of such persons is a party or is threatened to be made a party.
The Company's Bylaws and Certificate of Incorporation provide that the
Company shall indemnify all officers, directors and employees of the Company to
the full extent permitted by Delaware Law.
The Company maintains a policy insuring, subject to certain exceptions,
its directors and officers and the directors and officers of its subsidiaries
against liabilities that may be incurred by such persons in such capacities.
The OEA, Inc. Employees' Stock Option Plan and the OEA, Inc. Nonemployee
Directors' Stock Option Plan both provide that no member of the Committee
administering such plans shall be liable for any action, interpretation or
determination made in good faith with respect to the Plans, and that all members
of the Committee shall, in addition to their rights as directors, be fully
protected by the Company with respect to any such action, interpretation or
determination.
7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not applicable.
8. EXHIBITS
4.1 Employees' Stock Option Plan.
4.2 Nonemployee Directors' Stock Option Plan.
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP.
23.1 Consent of Davis, Graham & Stubbs LLP. (See Exhibit 5.1.)
23.2 Consent of Ernst & Young LLP.
24.1 Powers of Attorney. Included on Signature Page.
- ------------------
9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to
include any prospectus
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required by section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth
in this Registration Statement; and (iii) to include any additional or
changed material information on the plan of distribution, provided,
however, that paragraphs A(1)(i) and A(1)(ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in 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.
B. The undersigned Registrant hereby undertakes that, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 6 of this Registration Statement,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding), is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
*****
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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 City of Aurora, State of Colorado, on the 3rd day of
November, 1998.
OEA, INC.
By:/s/ Charles B. Kafadar
------------------------------------
Charles B. Kafadar
Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints jointly and severally, Charles B. Kafadar and
J. Thompson McConathy, or either of them, with full power to act alone, his true
and lawful attorneys-in-fact, with full power of substitution, and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments
and amendments filed pursuant to Rule 462) to this Registration Statement on
Form S-8, and file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact full power and authority to do and perform each and every
act and thing requisite and necessary to be done as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact or either of them may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
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<CAPTION>
Signature Title Date
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<S> <C> <C>
/s/ Charles B. Kafadar Chief Executive Officer, President November 3, 1998
- ----------------------------------- and Director (Principal Executive
Charles B. Kafadar Officer)
/s/ J. Thompson Mcconathy Vice President of Finance November 3, 1998
- ----------------------------------- (Principal Financial Officer)
J. Thompson McConathy
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Jepson S. Fuller Controller November 3, 1998
- ----------------------------------- (Principal Accounting Officer)
Jepson S. Fuller
/s/ Robert J. Schultz Chairman of the Board November 3, 1998
- -----------------------------------
Robert J. Schultz
/s/ George S. Ansell Director November 3, 1998
- -----------------------------------
George S. Ansell
/s/ Erwin H. Billig Director November 3, 1998
- -----------------------------------
Erwin H. Billig
/s/ J. Robert Burnett Director November 3, 1998
- -----------------------------------
J. Robert Burnett
/s/ Philip E. Johnson Director November 3, 1998
- -----------------------------------
Philip E. Johnson
/s/ Lewis W. Watson Director November 3, 1998
- -----------------------------------
Lewis W. Watson
</TABLE>
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EXHIBIT INDEX
4.1 OEA, Inc. Employees' Stock Option Plan.
4.2 OEA, Inc. Nonemployee Directors' Stock Option Plan.
5.1 Opinion and Consent of Davis, Graham & Stubbs LLP.
23.1 Consent of Davis, Graham & Stubbs LLP. (See Exhibit 5.1.)
23.2 Consent of Ernst & Young LLP.
24.1 Powers of Attorney. Included on Signature Page.
<PAGE>
OEA, INC.
EMPLOYEES' STOCK OPTION PLAN
SECTION 1
INTRODUCTION
1.1 Establishment. OEA, Inc., a Delaware corporation, hereby establishes
the OEA, Inc. Employees' Stock Option Plan (the "Plan") for certain key
employees of OEA, Inc., together with its affiliated corporations, as defined in
Section 2.1(a) hereafter, are referred to as the "Company," except where the
context otherwise requires.
1.2 Purposes. The purposes of the Plan are to provide the key management
employees selected for participation in the Plan with added incentives to
continue in the long-term service of the Company and to create in such employees
a more direct interest in the future success of the operations of the Company by
relating incentive compensation to increases in stockholder value, so that the
income of the key management employees is more closely aligned with the income
of the Company's stockholders. The Plan also is designed to attract key
employees and to retain and motivate participating employees by providing an
opportunity for investment in the Company.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "Affiliated Corporation" means any corporation or other entity
(including, but not limited to, a partnership) which is affiliated with OEA,
Inc. through stock ownership or otherwise and is treated as a common employer
under the provisions of Code Sections 414(b) and (c).
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Disability" means a physical or mental condition which, in the
judgment of the Company, based on medical reports or other evidence satisfactory
to the Company, permanently prevents an employee from satisfactorily performing
his or her usual duties for the Company or the duties of such other position or
job which the Company makes available to him or her and for which such employee
is qualified by reason of his or her training, education, or experience.
(e) "Effective Date" means the effective date of the Plan, which
will be the date of approval of the Plan by the Company's stockholders.
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(f) "Eligible Employees" means (i) full-time key employees
(including, without limitation, officers and directors who are also employees of
the Company) and (ii) key consultants (including, without limitation, directors
who are also consultants of the Company, whether or not such consultants serve
the Company on a full-time basis) of the Company or any Affiliated Corporation
or any division thereof, whose judgment, initiative and efforts are, or will be,
important to the successful conduct of its business. An Eligible Employee will
be considered a "full-time" employee if such employee is employed by the Company
on a minimum basis of thirty hours of service per week.
(g) "Fair Market Value" means the officially quoted closing price of
the Stock on the New York Stock Exchange on a particular date, or if no such
prices are reported on the New York Stock Exchange, then Fair Market Value shall
mean the average of the high and low sale prices for the Stock (or if no sales
prices are reported, the average of the high and low bid prices) as reported by
the principal regional stock exchange, or if not so reported, as reported by a
quotation system of general circulation to brokers and dealers. If there are no
Stock transactions on such date, the Fair Market Value shall be determined as of
the immediately preceding date on which there were Stock transactions. If the
Stock is not publicly traded, the Fair Market Value of the Stock on any date
shall be determined in good faith by the Incentive Plan Committee after such
consultation with outside legal, accounting and other experts as the Incentive
Plan Committee may deem advisable.
(h) "Incentive Plan Committee" means a committee consisting of at
least two members of the Board who are empowered hereunder to take actions in
the administration of the Plan, which shall be so constituted at all times as to
permit the Plan to comply with Rule 16b-3. Members of the Incentive Plan
Committee shall be appointed from time to time by the Board, shall serve at the
pleasure of the Board, and may resign at any time upon written notice to the
Board.
(i) "Incentive Stock Option" means any Option designated as such and
granted in accordance with the requirements of Code Section 422.
(j) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(k). "Non-Statutory Option" means any Option other than an
Incentive Stock Option.
(l) "Option" means a right to purchase Stock at a stated price for a
specified period of time.
(m) "Option Price" means the price at which Shares of Stock subject
to an Option may be purchased, determined in accordance with Section 5.2(b).
(n) "Option Holder" means an Eligible Employee of the Company
designated by the Incentive Plan Committee from time to time during the term of
the Plan to receive one or more Options under the Plan.
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(o) "Plan Year" means each 12-month period beginning August 1 and
ending the following July 31, except that for the first year of the Plan the
Plan Year shall begin on the Effective Date and extend to the first July 31
following the Effective Date.
(p) "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act or
any successor rule.
(q) "Share" or "Shares" means a share or shares of Stock.
(r) "Stock" means the common stock of the Company.
2.2 Gender and Number. Except where otherwise indicated by the context,
the masculine gender also shall include the feminine gender, and the definition
of any term herein in the singular also shall include the plural.
SECTION 3
PLAN ADMINISTRATION
3.1 Incentive Plan Committee; Powers. The Plan shall be administered by
the Incentive Plan Committee. In accordance with the provisions of the Plan, the
Incentive Plan Committee shall have full power and authority, in its sole
discretion, to administer the Plan, including authority to interpret and
construe any provision of the Plan and any Option granted hereunder, to select
the Eligible Employees to whom Options will be granted, the amount of each
Option, and any other terms and conditions of each Option as the Incentive Plan
Committee may deem necessary or desirable and consistent with the terms of the
Plan. The Incentive Plan Committee shall have full power and authority to
determine the form or forms of the agreements with Option Holders, which shall
evidence the particular provisions, terms, conditions, rights and duties of the
Company and the Option Holders with respect to Options granted pursuant to the
Plan, which provisions need not be identical except as may be provided herein.
The Incentive Plan Committee in granting an Option may provide for the granting
or issuance of additional, replacement or alternative Options upon the
occurrence of specified events, including the exercise of the original Option.
3.2 Interpretation. The Incentive Plan Committee may from time to time
adopt such rules and regulations for administering the Plan as it may deem
necessary in order to comply with the requirements of the Code or in order to
conform to any regulation or to any change in law or regulation applicable
thereto, or as it may otherwise deem proper and in the best interests of the
Company. The Incentive Plan Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any agreement entered
into hereunder in the manner and to the extent it shall deem expedient and it
shall be the sole and final judge of such expediency. No member of the Incentive
Plan Committee shall be liable for any action, interpretation or determination
made in good faith, and all members of the Incentive Plan Committee shall, in
addition to their rights as directors, be fully protected by the Company with
respect to any such action, interpretation or determination. All actions taken
and all interpretations and determinations
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made by the Incentive Plan Committee pursuant to the provisions of the Plan
shall be final, binding and conclusive for all purposes and on all persons. Any
determination reduced in writing and signed by all of the members shall be fully
effective as if it had been made by a majority vote at a meeting duly called and
held.
SECTION 4
STOCK RESERVED FOR THE PLAN
4.1 Number of Shares. 600,000 Shares are authorized for issuance under the
Plan in accordance with the provisions of the Plan. Shares which may be issued
upon the exercise of Options shall be applied to reduce the maximum number of
Shares remaining available under the Plan. The 600,000 Shares reserved for
issuance under the Plan may be either authorized and unissued or held in the
treasury of the Company.
4.2 Unused and Forfeited Stock. Any Shares that are subject to an Option
under this Plan which are not used because the terms and conditions of the
Option are not met, including any Shares that are subject to an Option which
expires or is terminated for any reason, any Shares which are used for full or
partial payment of the purchase price of Shares with respect to which an Option
is exercised, and any Shares retained by the Company pursuant to Section 12.2
automatically shall become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company shall
at any time increase or decrease the number of its outstanding Shares of Stock,
or change in any way the rights and privileges of such Shares by means of the
payment of a stock dividend or any other distribution upon such Shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under this Plan, then the Incentive Plan Committee
shall, in its sole discretion and in such manner as the Incentive Plan Committee
may deem equitable and appropriate, make such adjustments to any or all of (i)
the number and kind of Shares which thereafter may be made subject to the
benefits contemplated by the Plan, (ii) the number and kind of Shares subject to
outstanding Options, and (iii) the purchase or exercise price with respect to
any of the foregoing, provided, however, that the number of Shares subject to
any Option shall always be a whole number. The Incentive Plan Committee may, if
deemed appropriate, provide for a cash payment to any Option Holder of an Option
in connection with any adjustment made pursuant to this Section.
4.4 General Adjustment Rules. If any adjustment or substitution provided
for in this Section 4 shall result in the creation of a fractional Share under
any Option, the Company shall, in lieu of issuing such fractional Share, pay to
the Option Holder a cash sum in an amount equal to the product of such fraction
multiplied by the Fair Market Value of a Share on the date the fractional Share
otherwise would have been issued.
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SECTION 5
STOCK OPTIONS
5.1 Grant of Options. An Eligible Employee may be granted one or more
Options. The Incentive Plan Committee, in its sole discretion, shall designate
whether an Option is to be considered an Incentive Stock Option or a
Non-Statutory Option. The Incentive Plan Committee may grant both an Incentive
Stock Option and a Non-Statutory Option to the same Eligible Employee at the
same time or at different times. Incentive Stock Options and Non-Statutory
Options, whether granted at the same or different times, shall be deemed to have
been awarded in separate grants, shall be clearly identified, and in no event
shall the exercise of one Option affect the right to exercise any other Option
or affect the number of Shares for which any other Option may be exercised.
5.2 Option Agreements. Each Option granted under the Plan shall be
evidenced by a written stock option agreement which shall be entered into by the
Company and the Option Holder, and which shall contain the following terms and
conditions, as well as such other terms and conditions not inconsistent
therewith, as the Incentive Plan Committee may consider appropriate in each
case. In the event of any inconsistency between the provisions of the Plan and
any such agreement entered into hereunder, the provisions of the Plan shall
govern. Any such agreement may be supplemented or amended from time to time as
approved by the Incentive Plan Committee as contemplated herein.
(a) Number of Shares. Each stock option agreement shall state that
it covers a specified number of Shares, as determined by the Incentive Plan
Committee. Notwithstanding any other provision of the Plan, the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by an Option Holder in any calendar year, under
the Plan or otherwise, shall not exceed $100,000. For this purpose, the Fair
Market Value of the Shares shall be determined as of the time an Option is
granted.
(b) Price. The price at which each Share covered by an Option may be
purchased shall be determined by the Incentive Plan Committee and set forth in
the stock option agreement. In no event shall the Option Price for each Share
covered by an Incentive Stock Option be less than the Fair Market Value of the
Stock on the date the Option is granted. The Option Price for each Share covered
by an Incentive Stock Option granted to an Eligible Employee who then owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company must be at least 110% of the Fair Market Value of the Stock
subject to the Incentive Stock Option on the date the Option is granted. The
Option Price for each Share covered by a Non-Statutory Option may be granted at
any price less than Fair Market Value, in the sole discretion of the Incentive
Plan Committee.
(c) Duration of Options. Each stock option agreement shall state the
period of time, determined by the Incentive Plan Committee, within which the
Option may be exercised by the
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Option Holder (the "Option Period"). The Option Period must expire, in all
cases, not more than ten years from the date an Option is granted; provided,
however, that the Option Period of an Incentive Stock Option granted to an
Eligible Employee who then owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company must expire not
more than five years from the date such Option is granted. Notwithstanding any
other provision of the Plan, any Option Holder who is subject to Section 16 of
the 1934 Act may not exercise any portion of an Option during the first six
months following the grant of such Option, except that this limitation shall not
apply in the event of the Option Holder's death or Disability during such
six-month period.
(d) Termination of Employment, Death, Disability, Etc. Except as
otherwise determined by the Incentive Plan Committee, each stock option
agreement shall provide as follows with respect to the exercise of the Option
upon termination of the employment or the death of the Option Holder:
(i) If the employment of the Option Holder is terminated
within the Option Period for cause, as determined by the Company, the Option
thereafter shall be void for all purposes. As used in this section, "cause"
shall mean an act of fraud or dishonesty, moral turpitude and a gross violation,
as determined by the Company, of the Company's established policies and
procedures. The effect of this section shall be limited to determining the
consequences of a termination, and nothing in this section shall restrict or
otherwise interfere with the Company's discretion with respect to the
termination of any employee.
(ii) If the Option Holder dies, or if the Option Holder
becomes Disabled during the Option Period while still employed, or within the
three-month period referred to in (iii) below, the Option may be exercised by
those entitled to do so under the Option Holder's will or by the laws of descent
and distribution within twelve months following the Option Holder's death or
Disability, but not thereafter. In any such case, the Option may be exercised
only as to the Shares as to which the Option had become exercisable on or before
the date of the Option Holder's death or Disability.
(iii) If the employment of the Option Holder by the Company is
terminated (which for this purpose means that the Option Holder is no longer
employed by the Company or by an Affiliated Corporation) within the Option
Period for any reason other than cause, Disability, or the Option Holder's
death, the Option may be exercised by the Option Holder within three months
following the date of such termination (provided that such exercise must occur
within the Option Period), but not thereafter. In any such case, the Option may
be exercised only as to the Shares as to which the Option had become exercisable
on or before the date of termination of employment.
(e) Transferability. Each stock option agreement shall provide that
the Option granted therein is not transferable by the Option Holder except by
will or pursuant to the laws of descent and distribution or pursuant to a
qualified domestic relations order, and that such Option is exercisable during
the Option Holder's lifetime only by him or her, or in the event of Disability
or incapacity, by his or her guardian or legal representative.
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(f) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the method
for exercising the Option granted therein shall be by delivery to the Corporate
Secretary of the Company of written notice specifying the particular Option (or
portion thereof) which is being exercised, the number of Shares with respect to
which such Option is exercised and including payment of the Option Price. Such
notice shall be in a form satisfactory to the Incentive Plan Committee. An
Option for the purchase of Shares granted hereunder may be exercised either in
whole at any time, or from time to time in part in lots of 25 Shares or
multiples thereof or, in the event any balance as to which the Option remains
unexercised shall be less than 25 Shares, in a lot equal to such balance. The
exercise of the Option shall be deemed effective upon receipt of such notice by
the Corporate Secretary and payment to the Company of the Option Price. The
purchase of such Stock shall take place at the principal offices of the Company
upon delivery of such notice, at which time the purchase price of the Stock
shall be paid in full by any of the methods or any combination of the methods
set forth in (ii) below. A properly executed certificate or certificates
representing the Stock shall be issued by the Company and delivered to the
Option Holder.
(ii) The method or methods of payment of the Option Price for
the Shares to be purchased upon exercise of an Option shall be determined by the
Incentive Plan Committee and may consist of (i) cash, (ii) cashier's check
payable to the order of the Company, (iii) certificates representing whole
Shares of Stock already owned by the Option Holder, the Fair Market Value of
which equals at least the Option Price of the Stock to be purchased pursuant to
the Option; provided however, that Shares used for this purpose must have been
held by the Option Holder for such minimum period of time as may be established
from time to time by the Incentive Plan Committee, (iv) any combination of the
foregoing methods of payment, or such other consideration and method of payment
as may be permitted for the issuance of Shares under applicable state law. The
Fair Market Value of any Shares delivered in payment of the Option Price shall
be the Fair Market Value as of the exercise date and the exercise date shall be
the date of delivery of such Stock used as payment of the Option Price.
(g) Date of Grant. An Option shall be considered as having been
granted on the date specified in the grant resolution of the Incentive Plan
Committee.
5.3 Stockholder Privileges. Prior to the exercise of the Option and the
transfer of Shares to the Option Holder, an Option Holder shall have no rights
as a stockholder with respect to any Shares subject to any Option granted to
such person under this Plan, and until the Option Holder becomes the holder of
record of such Stock, no adjustments shall be made for dividends or other
distributions or other rights as to which there is a record date preceding the
date such Option Holder becomes the holder of record of such Stock, except as
provided in Section 4.
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SECTION 6
CHANGE IN CONTROL
6.1 Change in Control. In the event of a change in control of the Company,
as defined in Section 6.2, notwithstanding any contrary vesting schedule, unless
the applicable stock option agreement provides otherwise, each outstanding
Option shall become exercisable in full in respect of the aggregate number of
Shares covered thereby, upon the occurrence of the events described in clause
(a) and (b) of Section 6.2 or immediately prior to the consummation of the
events described in clause (c) of Section 6.2, and the Incentive Plan Committee,
in its sole discretion, without obtaining stockholder approval, to the extent
permitted in Section 11, may take any or all of the following actions: (a) grant
a cash bonus award to any Option Holder in an amount necessary to pay the Option
Price of all or any portion of the Options then held by such Option Holder; (b)
pay cash to any or all Option Holders in exchange for the cancellation of their
outstanding Options in an amount equal to the difference between the Option
Price of such Options and the greater of the tender offer price for the
underlying Stock or the Fair Market Value of the Stock on the date of the
cancellation of the Options; and (c) make any other adjustments or amendments to
the outstanding Options. Notwithstanding the foregoing, unless otherwise
provided in the applicable stock option agreement, Incentive Plan Committee may,
in its discretion, determine that any or all outstanding Options granted
pursuant to the Plan will not vest or become exercisable on an accelerated basis
in connection with an event described in clause (c) of Section 6.2 and/or will
not terminate if not exercised prior to consummation of such event, if the Board
or the surviving or acquiring corporation, as the case may be, shall have taken,
or made effective provision for the taking of, such action as in the opinion of
the Incentive Plan Committee is equitable and appropriate to substitute a new
Option for such Option or to assume such Option and in order to make such new or
assumed Option, as nearly as may be practicable, equivalent to the old Option
(before giving effect to any acceleration of the vesting or exercisability
thereof), taking into account, to the extent applicable, the kind and amount of
securities, cash or other assets into or for which the Stock may be changed,
converted or exchanged in connection with such event.
6.2 Definition. A "change in control" shall be deemed to have occurred if
(a) any "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the 1934 Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
more than 33-1/3% of the then outstanding voting stock of the Company; or (b) at
any time during any period of three consecutive years (not including any period
prior to the Effective Date), individuals who at the beginning of such period
constitute the Board (and any new director whose election by the Board or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof; or (c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into
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<PAGE>
voting securities of the surviving entity) at least 80% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets.
6.3 Golden Parachute Payments. If the provisions of this Section would
result in the receipt by any Option Holder of a payment within the meaning of
Code Section 280G and the regulations thereunder and if the receipt of such
payment would result in the imposition of any excise tax under Code Sections
280G and 4999, then the amount of such payment will be reduced to the extent
required, in the opinion of independent tax counsel, to prevent the imposition
of such excise tax; provided, however, that the Incentive Plan Committee, in its
sole discretion, may authorize the payment of all or any portion of the amount
of such reduction to the Option Holder. In such event, the Company will have no
obligation or liability with respect to the Option Holder for the amount of any
excise tax imposed on the Option Holder under Code Sections 280G and 4999.
SECTION 7
RIGHTS OF EMPLOYEES AND OPTION HOLDERS
7.1 Employment. Nothing contained in the Plan or in any Option shall
confer upon any Eligible Employee any right with respect to the continuation of
his or her employment by the Company, or interfere in any way with the right of
the Company, subject to the terms of any separate employment agreement to the
contrary, at any time to terminate such employment or to increase or decrease
the compensation of such Employee from the rate in existence at the time of the
grant of an Option. Whether an authorized leave of absence, or absence in
military or government service, shall constitute a termination of employment
shall be determined by the Incentive Plan Committee at the time.
7.2 Nontransferability. No right or interest of any Option Holder in an
Option granted pursuant to the Plan shall be assignable or transferable during
the lifetime of the Option Holder, either voluntarily or involuntarily, or be
subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event or an Option Holder's death, an Option Holder's rights
and interests in Options shall, to the extent provided in Section 5, be
transferable by testamentary will or the laws of decent and distribution or
pursuant to a qualified domestic relations order. In the opinion of the
Incentive Plan Committee, if an Option Holder is disabled from caring for his
affairs because of mental condition, physical condition or age, such Option
Holder's Options shall be exercised by such person's guardian, conservator or
other legal personal representative upon furnishing the Incentive Plan Committee
with evidence satisfactory to the Incentive Plan Committee of such status.
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SECTION 8
GENERAL RESTRICTIONS
8.1 Investment Representations. The Company may require any Option Holder,
as a condition of exercising such Option or receiving Stock under the Option, to
give written assurances, in the substance and form satisfactory to the Company
and its counsel, to the effect that such person is acquiring the Stock subject
to the Option for his own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to comply with
federal and applicable state securities laws. Legends evidencing such
restrictions may be placed on the certificates evidencing the Stock.
8.2 Compliance with Securities Laws. Each Option shall be subject to the
requirement that, if at any time counsel to the Company shall determine that the
listing, registration or qualification of the Shares subject to such Option upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance or purchase of Shares thereunder, such
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Incentive Plan Committee. Nothing
herein shall be deemed to require the Company to apply for or to obtain such
listing, registration or qualification.
8.3 Stock Restriction Agreement. The Incentive Plan Committee may provide
that Shares of Stock issuable upon the exercise of an Option shall, under
certain conditions, be subject to restrictions whereby the Company has a right
of first refusal with respect to such Shares or a right or obligation to
repurchase all or a portion of such Shares, which restrictions may survive a
Option Holder's term of employment with the Company.
SECTION 9
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by an Option Holder
as a result of the exercise of an Option shall not constitute "earnings" with
respect to which any other employee benefits of such Option Holder are
determined, including without limitation benefits under any pension, profit
sharing, life insurance or salary continuation plan.
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<PAGE>
SECTION 10
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time-to-time may amend or
modify, the Plan; provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
stockholders if stockholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that stockholder approval otherwise is necessary
or desirable.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Options theretofore granted under the Plan, without the
consent of the Option Holder holding such Options.
SECTION 11
WITHHOLDING
11.1 Withholding Requirement. The Company's obligations to deliver Shares
upon the exercise of an Option shall be subject to the Option Holder's
satisfaction of all applicable federal, state and local income and other tax
withholding requirements.
11.2 Withholding With Stock. At the time an Option is exercised by the
Option Holder, the Incentive Plan Committee, in its sole discretion, may permit
the Option Holder to pay all such amounts of tax withholding, or any part
thereof, by transferring to the Company, or directing the Company to withhold
from Shares otherwise issuable to such Option Holder, Shares having a value
equal to the amount required to be withheld or such lesser amount as may be
determined by the Incentive Plan Committee at such time. The value of Shares to
be withheld shall be based on the Fair Market Value of the Stock on the date
that the amount of tax to be withheld is to be determined.
SECTION 12
NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to employees generally, or to any class or group of employees,
which the Company or any Affiliated Corporation now has lawfully put into
effect, including, without limitation, any retirement, pension, savings and
stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.
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SECTION 13
REQUIREMENTS OF LAW
13.1 Requirements of Law. The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
13.2 Federal Securities Law Requirements. 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 or its successors under the
1934 Act. To the extent any provision of the Plan or action by the Incentive
Plan Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Incentive Plan Committee.
13.3 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado.
SECTION 14
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Option shall be granted after such termination. If not sooner
terminated under the preceding sentence, the Plan shall fully cease and expire
at midnight on the date that is ten years from the Effective Date of the Plan.
Options outstanding at the time of the Plan termination may continue to be
exercised in accordance with their terms.
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OEA, INC.
NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
SECTION 1
INTRODUCTION
The OEA, Inc. Nonemployee Directors' Stock Option Plan (the "Plan")
provides for the grant of Stock Options to Nonemployee Directors of OEA, Inc.
(hereinafter referred to as the "Company") in order to encourage and provide
incentives for high level performance by the Nonemployee Directors of the
Company.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set forth
below:
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
(c) "Committee" means a committee of at least two members of the
Board who are empowered hereunder to take actions in the administration of the
Plan, which shall be so constituted at all times as to permit the Plan to comply
with Rule 16b-3. Each member of the Committee shall be a person who qualifies as
a "disinterested person" under Rule 16b-3. Members of the Committee shall be
appointed from time to time by the Board, shall serve at the pleasure of the
Board, and may resign at any time upon written notice to the Board.
(d) "Disability" means a physical or mental condition which, in the
judgment of the Company, based on medical reports or other evidence satisfactory
to the Company, permanently prevents an individual from satisfactorily
performing his or her usual duties as a director of the Company.
(e) "Effective Date" means the effective date of the Plan, which
will be the date of approval of the Plan by the Company's stockholders.
(f) "Fair Market Value" means the officially quoted closing price of
the Stock on the New York Stock Exchange on a particular date or, if no such
prices are reported on the New York Stock Exchange, then Fair Market Value shall
mean the average of the high and low sale prices for the Stock (or if no sales
prices are reported, the average of the high and low bid prices) as reported by
the principal regional stock exchange, or if not so reported. as reported by a
quotation system of general circulation to brokers and dealers. If there are no
Stock transactions on such date, the Fair Market Value shall be determined as of
the immediately preceding date on which there were
<PAGE>
Stock transactions. If the Stock is not publicly traded, the Fair Market Value
of the Stock on any date shall be determined in good faith by the Incentive Plan
Committee after such consultation with outside legal, accounting and other
experts as the Incentive Plan Committee may deem advisable.
(g) "Effective Date" means the effective date of the Plan, which
will be the date of approval of the Plan by the Company's stockholders.
(h) "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Non-Employee Director" means a member of the Board of Directors
of the Company who is not also an employee or officer of the Company.
(j) "Option" means a right to purchase Stock at a stated price for a
specified period of time.
(k) "Option Price" means the price at which Shares of Stock subject
to an Option may be purchased, determined in accordance with Section 5.2(b).
(l) "Option Holder" means a Nonemployee Director to whom an Option
is granted.
(m) "Plan Year" means each 12-month period beginning August 1 and
ending the following July 31, except that for the first year of the Plan the
Plan Year shall begin on the Effective Date and extend to the first July 31
following the Effective Date.
(n) "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, or
any successor rule.
(o) "Share" or "Shares" means a share or shares of Stock.
(p) "Stock" means the common stock of the Company.
2.2 Gender and Number. Except where otherwise indicated by the context,
the masculine gender also shall include the feminine gender, and the definition
of any term herein in the singular also shall include the plural.
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<PAGE>
SECTION 3
PLAN ADMINISTRATION; ELIGIBILITY
3.1 Committee; Powers. The Plan shall be administered by the Committee. In
accordance with the provisions of the Plan, the Committee shall have full power
and authority, in its sole discretion, to administer the Plan, including
authority to interpret and construe any provision of the Plan and any Option
granted hereunder, to select the Nonemployee Directors to whom Options will be
granted, the amount of each Option, and any other terms and conditions of each
Option as the Committee may deem necessary or desirable and consistent with the
terms of the Plan. The Committee shall have full power and authority to
determine the form or forms of the agreements with Option Holders, which shall
evidence the particular provisions, terms, conditions, rights and duties of the
Company and the Option Holders with respect to Options granted pursuant to the
Plan, which provisions need not be identical except as may be provided herein.
The Committee in granting an Option may provide for the granting or issuance of
additional, replacement or alternative Options upon the occurrence of specified
events, including the exercise of the original Option.
3.2 Interpretation. The Committee may from time to time adopt such rules
and regulations for administering the Plan as it may deem necessary in order to
comply with the requirements of the Code or in order to conform to any
regulation or to any change in law or regulation applicable thereto, or as it
may otherwise deem proper and in the best interests of the Company. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any agreement entered into hereunder in the
manner and to the extent it shall deem expedient and it shall be the sole and
final judge of such expediency. No member of the Committee shall be liable for
any action, interpretation or determination made in good faith, and all members
of the Committee shall, in addition to their rights as directors, be fully
protected by the Company with respect to any such action, interpretation or
determination. All actions taken and all interpretations and determinations made
by the Committee pursuant to the provisions of the Plan shall be final, binding
and conclusive for all purposes and on all persons. Any determination reduced in
writing and signed by all of the members shall be fully effective as if it had
been made by a majority vote at a meeting duly called and held.
3.3 Eligibility. The persons who shall be eligible to participate in the
Plan and to receive grants of Options under the Plan shall be each Nonemployee
Director, provided that no grants shall be made to any member of the Committee
while serving as such.
SECTION 4
STOCK RESERVED FOR THE PLAN
4.1 Number of Shares. Subject to the provisions of this Section 4, 50,000
Shares are authorized for issuance under the Plan in accordance with the
provisions of the Plan. Shares which may be issued upon the exercise of Options
shall be applied to reduce the maximum number
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of Shares remaining available under the Plan. The 50,000 Shares reserved for
issuance under the Plan may be either authorized and unissued or held in the
treasury of the Company.
4.2 Unused and Forfeited Stock. Any Shares that are subject to an Option
under this Plan which are not used because the terms and conditions of the
Option are not met, including any Shares that are subject to an Option which
expires or is terminated for any reason, any Shares which are used for full or
partial payment of the purchase price of Shares with respect to which an Option
is exercised automatically shall become available for use under the Plan.
4.3 Adjustments for Stock Split, Stock Dividend, Etc. If the Company shall
at any time increase or decrease the number of its outstanding Shares of Stock
or change in any way the rights and privileges of such Shares by means of the
payment of a stock dividend or any other distribution upon such Shares payable
in Stock, or through a stock split, subdivision, consolidation, combination,
reclassification or recapitalization involving the Stock, then in relation to
the Stock that is affected by one or more of the above events, such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under this Plan, then the Committee shall, in its
sole discretion and in such manner as the Committee may deem equitable and
appropriate, make such adjustments to any or all of (i) the number and kind of
Shares which thereafter may be made subject to the benefits contemplated by the
Plan, (ii) the number and kind of Shares subject to outstanding Options, and
(iii) the purchase or exercise price with respect to any of the foregoing,
provided, however, that the number of Shares subject to any Option shall always
be a whole number. The Committee may, if deemed appropriate, provide for a cash
payment to any Option Holder of an Option in connection with any adjustment made
pursuant to this Section.
4.4 General Adjustment Rules. If any adjustment or substitution provided
for in this Section shall result in the creation of a fractional Share under any
Option, the Company shall, in lieu of issuing such fractional Share, pay to the
Option Holder a cash sum in an amount equal to the product of such fraction
multiplied by the Fair Market Value of a Share on the date the fractional Share
otherwise would have been issued.
SECTION 5
STOCK OPTIONS
5.1 Grant of Options. A Nonemployee Director may be granted one or more
Options. The Options granted under the Plan shall be nonstatutory stock options
("NSOs") that are intended to be options that do not qualify as "incentive stock
options" under Code Section 422.
5.2 Option Agreements. Each Option granted under the Plan shall be
evidenced by a written stock option agreement which shall be entered into by the
Company and the Option Holder and which shall contain the following terms and
conditions, as well as such other terms and conditions not inconsistent
therewith, as the Incentive Plan Committee may consider appropriate in each
case. Any such agreement may be supplemented or amended from time to time as
approved by
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<PAGE>
the Committee as contemplated herein. In the event of any inconsistency between
the provisions of the Plan and any such agreement entered into hereunder. the
provisions of the Plan shall govern.
(a) Number of Shares. Each Stock Option Agreement shall state that
it covers a specified number of Shares of Stock as determined by the Committee.
(b) Price. The Option Price per Share of Stock for the Shares to be
purchased pursuant to the exercise of any Option shall be 100% of the Fair
Market Value of a Share of Stock on the date on which the Nonemployee Director
is granted the Option.
(c) Duration of Options. Each stock option agreement shall state the
period of time, as determined by the Committee, within which the Option may be
exercised by the Option Holder (the "Option Period"). The Option Period must
expire, in all cases, not more than five years from the date an Option is
granted. Notwithstanding any other provision of the Plan, any Option Holder who
is subject to Section 16 of the 1934 Act may not exercise any portion of an
Option during the first six months following the grant of such Option, except
that this limitation shall not apply in the event of the Option Holder's death
or Disability during such six-month period.
(d) Termination of Director Status, Death, or Disability. Each stock
option agreement shall provide as follows with respect to the exercise of the
Option upon termination of the Option Holder's term as a director of the
Company, or the death or Disability of the Option Holder:
(i) If the Option Holder's term as a director is terminated
within the Option Period for cause, the Option thereafter shall be void
for all purposes. As used in this Section, "cause" shall mean an act of
fraud or dishonesty, moral turpitude or any act or failure to act that
shall have been determined by at least 66 2/3% of the members of the Board
then in office (other than such director) to be in derogation of the
director's duties.
(ii) If the Option Holder dies. or if the Option Holder
becomes Disabled during the Option Period while still a director of the
Company, or within the three-month period referred to in (iii) below, the
Option may be exercised by those entitled to do so under the Option
Holder's will or by the laws of descent and distribution within twelve
months following the Option Holder's death or Disability, but not
thereafter. In any such case, the Option may be exercised only as to the
Shares as to which the Option had become exercisable on or before the date
of the Option Holder's death or Disability.
(iii) If the Option Holder's term as a director of the Company
is terminated within the Option Period for any reason other than for
cause, Disability or the Option Holder's death, the Option may be
exercised by the Option Holder within three months following the date of
such termination (provided that such exercise must occur within the Option
Period), but not thereafter. In any such case the Option may be exercised
only as to the Shares as to which the Option had become exercisable on or
before the date of termination of the Nonemployee Director's term as a
director of the Company.
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<PAGE>
(e) Transferability. Each stock option agreement shall provide that
the Option granted therein is not transferable by the Option Holder except by
will or the laws of descent and distribution or pursuant to a qualified domestic
relations order, and that such Option is exercisable during the Option Holder's
lifetime only by him or her or, in the event of Disability or incapacity, by his
or her guardian or legal representative.
(f) Exercise, Payments, Etc.
(i) Each stock option agreement shall provide that the method
for exercising the Option granted therein shall be by delivery to the
Corporate Secretary of the Company of written notice specifying the
particular Option (or portion thereof) which is being exercised, the
number of Shares with respect to which such Option is exercised and
including payment of the Option Price. Such notice shall be in a form
satisfactory to the Committee. An Option for the purchase of Shares
granted hereunder may be exercised either in whole at any time, or from
time to time in part in lots of 25 Shares or multiples thereof or, in the
event any balance as to which the Option remains unexercised shall be less
than 25 Shares, in a lot equal to such balance. The exercise of the Option
shall be deemed effective upon receipt of such notice by the Corporate
Secretary and payment to the Company of the Option Price. The purchase of
such Stock shall take place at the principal offices of the Company upon
delivery of such notice, at which time the purchase price of the Stock
shall be paid in full by any of the methods or any combination of the
methods set forth in (ii) below. A properly executed certificate or
certificates representing the Stock shall be issued by the Company and
delivered to the Option Holder.
(ii) The method or methods of payment of the Option Price for
the Shares to be purchased upon exercise of an Option shall be determined
by the Committee and may consist of (i) cash, (ii) cashier's check payable
to the order of the Company, (iii) certificates representing whole Shares
of Stock already owned by the Option Holder, the Fair Market Value of
which equals at least the Option Price of the Stock to be purchased
pursuant to the Option; provided however, that Shares used for this
purpose must have been held by the Option Holder for such minimum period
of time as may be established from time to time by the Committee, (iv) any
combination of the foregoing methods of payment, or such other
consideration and method of payment as may be permitted for the issuance
of Shares under applicable state law. The Fair Market Value of any Shares
delivered in payment of the Option Price shall be the Fair Market Value as
of the exercise date and the exercise date shall be the date of delivery
of such Stock used as payment of the Option Price.
(g) Date of Grant. An Option shall be considered as having been
granted on the date specified in the grant resolution of the Committee.
5.3 Stockholder Privileges. Prior to the exercise of the Option and the
transfer of Shares to the Option Holder, an Option Holder shall have no rights
as a stockholder with respect to any Shares subject to any Option granted to
such person under this Plan, and until the Option Holder becomes the holder of
record of such Stock, no adjustments shall be made for dividends
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or other distributions or other rights as to which there is a record date
preceding the date such Option Holder becomes the holder of record of such
Stock, except as provided in Section 4.
SECTION 6
CHANGE IN CONTROL
6.1 Change in Control. In the event of a change in control of the Company
as defined in Section 6.2 notwithstanding any contrary vesting schedule, unless
the applicable stock option agreement provides otherwise, each outstanding
Option shall become exercisable in full in respect of the aggregate number of
Shares covered thereby, upon the occurrence of the events described in clause
(a) and (b) of Section 6.2 or immediately prior to the consummation of the
events described in clause (c) of Section 6.2, and the Committee, in its sole
discretion, without obtaining stockholder approval, to the extent permitted in
Section 9, may take any or all of the following actions: (a) grant a cash bonus
award to any Option Holder in an amount necessary to pay the Option Price of all
or any portion of the Options then held by such Option Holder; (b) pay cash to
any or all Option Holders in exchange for the cancellation of their outstanding
Options in an amount equal to the difference between the Option Price of such
Options and the greater of the tender offer price for the underlying Stock or
the Fair Market Value of the Stock on the date of the cancellation of the
Options; and (c) make any other adjustments or amendments to the outstanding
Options. Notwithstanding the foregoing, unless otherwise provided in the
applicable stock option agreement, the Committee may, in its discretion,
determine that any or all outstanding Options granted pursuant to the Plan will
not vest or become exercisable on an accelerated basis in connection with an
event described in clause (c) of Section 6.2 and/or will not terminate if not
exercised prior to consummation of such event, if the Board or the surviving or
acquiring corporation, as the case may be, shall have taken, or made effective
provision for the taking of, such action as in the opinion of the Committee is
equitable and appropriate to substitute a new Option for such Option or to
assume such Option and in order to make such new or assumed Option, as nearly as
may be practicable, equivalent to the old Option (before giving effect to any
acceleration of the vesting or exercisability thereof), taking into account, to
the extent applicable, the kind and amount of securities, cash or other assets
into or for which the Stock may be changed, converted or exchanged in connection
with such event.
6.2 Definition. A "change in control" shall be deemed to have occurred if
(a) any "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the 1934 Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
more than 33-1/3% of the then outstanding voting stock of the Company; or (b) at
any time during any period of three consecutive years (not including any period
prior to the Effective Date), individuals who at the beginning of such period
constitute the Board (and any new director whose election by the Board or whose
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof; or (c) the stockholders of the
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<PAGE>
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets.
6.3 Golden Parachute Payments. If the provisions of this Section would
result in the receipt by any Option Holder of a payment within the meaning of
Code Section 280G and the regulations thereunder, and if the receipt of such
payment would result in the imposition of any excise tax under Code Sections
280G and 4999, then the amount of such payment will be reduced to the extent
required, in the opinion of independent tax counsel, to prevent the imposition
of such excise tax; provided, however, that the Committee, in its sole
discretion, may authorize the payment of all or any portion of the amount of
such reduction to the Option Holder. In such event, the Company will have no
obligation or liability with respect to the Option Holder for the amount of any
excise tax imposed on the Option Holder under Code Sections 280G and 4999.
SECTION 7
RIGHTS OF DIRECTORS AND OPTION HOLDERS
7.1 Directorship of Company. Nothing in this Plan shall interfere in any
way with the right of the stockholders of the Company to remove the Option
Holder from the Board of Directors pursuant to applicable state laws and the
Company's Articles of Incorporation and Bylaws.
7.2 Nontransferability. No right or interest of any Option Holder in an
Option granted pursuant to the Plan shall be assignable or transferable during
the lifetime of the Option Holder, either voluntarily or involuntarily, or be
subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. In the event of an Option Holder's death, an Option Holder's rights
and interests in Options shall, to the extent provided in Section 5, be
transferable by testamentary will or the laws of descent and distribution or
pursuant to a qualified domestic relations order. In the opinion of the
Committee, if an Option Holder is disabled from caring for his affairs because
of mental condition, physical condition or age, such Option Holder's Options
shall be exercised by such person's guardian, conservator or other legal
personal representative upon furnishing the Committee with evidence satisfactory
to the Committee of such status.
-8-
<PAGE>
SECTION 8
GENERAL RESTRICTIONS
8.1 Investment Representations. The Company may require any Option Holder,
as a condition of exercising such Option or receiving Stock under the Option, to
give written assurances, in the substance and form satisfactory to the Company
and its counsel, to the effect that such person is acquiring the Stock subject
to the Option for his own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to comply with
federal and applicable state securities laws. Legends evidencing such
restrictions may be placed on the certificates evidencing the Stock.
8.2 Compliance with Securities Laws. Each Option shall be subject to the
requirement that, if at any time counsel to the Company shall determine that the
listing, registration or qualification of the Shares subject to such Option upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, is necessary as a condition of,
or in connection with, the issuance or purchase of Shares thereunder, such
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained on conditions acceptable to the Committee. Nothing herein shall be
deemed to require the Company to apply for or to obtain such listing,
registration or qualification.
8.3 Stock Restriction Agreement. The Committee may provide that Shares of
Stock issuable upon the exercise of an Option shall, under certain conditions,
be subject to restrictions whereby the Company has a right of first refusal with
respect to such Shares or a right or obligation to repurchase all or a portion
of such Shares, which restrictions may survive an Option Holder's term as a
director of the Company.
SECTION 9
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time-to-time may amend or
modify, the Plan; provided, however, that no amendment or modification may
become effective without approval of the amendment or modification by the
stockholders if stockholder approval is required to enable the Plan to satisfy
any applicable statutory or regulatory requirements, or if the Company, on the
advice of counsel, determines that stockholder approval otherwise is necessary
or desirable.
No amendment. modification or termination of the Plan shall in any manner
adversely affect any Options theretofore granted under the Plan, without the
consent of the Option Holder holding such Options.
-9-
<PAGE>
SECTION 10
NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board nor the submission of the
Plan to stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board may deem necessary or desirable or preclude or limit the continuation
of any other plan, practice or arrangement for the payment of compensation or
fringe benefits to Nonemployee Directors, which the Company now has lawfully put
into effect.
SECTION 11
REQUIREMENTS OF LAW
11.1 Requirements of Law. The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
11.2 Federal Securities Law Requirements. 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 or its successors under the
1934 Act. To the extent any provision of the Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee.
11.3 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado.
SECTION 12
DURATION OF THE PLAN
The Plan shall terminate at such time as may be determined by the Board of
Directors, and no Option shall be granted after such termination. If not sooner
terminated under the preceding sentence, the Plan shall fully cease and expire
at midnight on the date that is ten years from the Effective Date of the Plan.
Options outstanding at the time of the Plan termination may continue to be
exercised in accordance with their terms.
-10-
November 3, 1998
OEA, Inc.
34501 East Quincy Avenue
Post Office Box 100488
Denver, Colorado 80250
Re: Sale of Shares of Common Stock Pursuant to
Registration Statement On Form S-8
------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to OEA, Inc. (the "Company") in connection with
the preparation of a Registration Statement on Form S-8 (the "Registration
Statement") filed by the Company with the Securities and Exchange Commission.
The Registration Statement relates to the registration under the Securities Act
of 1933, as amended (the "1933 Act"), of 650,000 shares of the Company's common
stock, $.10 par value per share (the "Shares"). Terms used herein but not
defined have the meanings attributed to those terms in the Registration
Statement.
This opinion is delivered pursuant to the requirements of Item 601(b)(5)
of Regulation S-K under the 1933 Act.
In rendering the following opinion, we have examined and relied only
upon the documents specifically described below. In our examination, we have
assumed the genuineness of all signatures, the authenticity, accuracy and
completeness of the documents submitted to us as originals, and the conformity
with the original documents of all documents submitted to us as copies. Our
examination was limited to the following documents and no others:
1. Certificate of Incorporation of the Company, as amended to date;
2. Bylaws of the Company, as amended to date;
3. Resolutions adopted by the Board of Directors of the Company
authorizing the OEA, Inc. Employees' Stock Option Plan and the
OEA, Inc. Nonemployee
<PAGE>
Directors' Stock Option Plan and resolutions of the stockholders
of the Company adopting such plans; and
4. The Registration Statement, exhibits filed in connection
therewith and incorporated by reference including all documents
incorporated therein by reference.
We have not undertaken, nor do we intend to undertake, any independent
investigation beyond such documents and records, or to verify the adequacy or
accuracy of such documents and records.
The following opinions are limited solely to the applicable provisions
of the General Corporation Law of the State of Delaware. While we are not
licensed to practice in the State of Delaware, we have reviewed applicable
provisions of the General Corporation Law of Delaware as we have deemed
appropriate in connection with the provisions expressed herein. Except as
described, we have neither examined nor do we express any opinion with respect
to Delaware law.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are duly and validly authorized and when issued and sold as contemplated
by the Registration Statement and subject to the proper execution and delivery
of stock certificates evidencing the Shares, will be legally and validly issued,
fully paid and non-assessable shares of capital stock of the Company.
We hereby consent to the filing of this opinion as an Exhibit to the
aforesaid Registration Statement. In giving this consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules of the Securities and
Exchange Commission.
Very truly yours,
/s/Davis Graham & Stubbs LLP
DAVIS, GRAHAM & STUBBS LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement pertaining to the OEA, Inc. Employees' Stock Option Plan and the OEA,
Inc. Nonemployee Directors' Stock Option Plan of our report dated September 21,
1998, with respect to the consolidated financial statements of OEA, Inc.,
included in its Annual Report on Form 10-K for the year ended July 31, 1998,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Denver, Colorado
November 2, 1998
