<PAGE>
As filed with the Securities and Exchange Commission on June 22, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KAYDON CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3186040
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
315 East Eisenhower Parkway, Ann Arbor, MI 48108
(Address of principal executive offices) (zip code)
Kaydon Corporation 1999 Long Term Stock Incentive Plan
(Full title of the Plan)
John F. Brocci
Vice President Administration and Secretary
Kaydon Corporation
315 East Eisenhower Parkway
Ann Arbor, Michigan 48108
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (734) 747-7025
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Offering Aggregate Amount of
Securities Amount to be Price Offering Registration
to be Registered Registered Share* Price* Fee
- ---------------- ------------ --------- --------- ------------
Common Stock,
$ 0.10 par value 2,000,000 shs. $33.25 $66,500,000 $18,487.00
- ---------------------------------------------------------------------------
* Estimated solely for purposes of computing the Registration Fee, pursuant
to Rule 457(h).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation by Reference.
The following documents filed by Kaydon Corporation (the "Company")
with the Securities and Exchange Commission (the "Commission") are
incorporated in this Registration Statement by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998.
(b) The Company's Quarterly Report on Form 10-Q for the
Quarterly Period ended April 3, 1999.
(c) The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A, No. 1-
11333, filed on May 20, 1994 under the Securities Exchange
Act of 1934.
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,
as amended, subsequent to the date of this Registration Statement and prior
to the termination of the offering of the common stock covered by this
Registration Statement shall be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof from the date of filing
of each such document.
Item 4. Description of Securities.
The class of securities to be offered is registered under Section 12
of the Securities Exchange Act of 1934.
Item 5. Interests of Named Experts and Counsel.
No material interests.
Item 6. Indemnification of Directors and Officers.
General Corporation Law of the State of Delaware
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") grants each corporation organized thereunder, such as the
Company, the power to indemnify its directors and officers against
liabilities for certain of their acts. Article 6 of the Company's Bylaws
requires the Company to indemnify directors and officers of the Company to
the full
<PAGE> 3
extent permitted by, and in the manner permissible under, the laws of the
State of Delaware. Section 102(b)(7) of the DGCL permits the inclusion of a
provision in the certificate of incorporation of each corporation organized
thereunder, such as the Company, eliminating or limiting, with certain
exceptions, the personal liability of a director to the corporation or its
stockholders for monetary damages for certain breaches of fiduciary duty as
a director. Article Eight of the Certificate of Incorporation of the
Company eliminates the liability of directors except to the extent that such
liability arises (i) from a breach of the director's duty of loyalty to the
Company or its stockholders, (ii) as a result of acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL (relating to the unlawful payment
of dividends or unlawful stock purchase or redemption) or (iv) any
transaction from which the director derived an improper personal benefit.
The foregoing statements are subject to the detailed provisions of Sections
102(b)(7) and 145 of the DGCL, Article Eight of the Certificate of
Incorporation of the Company and Article 6 of the Bylaws of the Company, as
applicable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed with this Registration Statement:
5 Opinion of Dykema Gossett PLLC as to the legality of the securities
being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Dykema Gossett PLLC (contained in its opinion filed as
Exhibit 5)
24 Power of Attorney (contained on signature page)
99.1 1999 Long Term Stock Incentive Plan
Item 9. Undertakings.
(1) The undersigned registrant hereby undertakes to file, during
any period in which offers or sales are being made, a post-effective
amendment to this registration statement: (i) to include any prospectus
required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect
in the prospectus any facts or events arising after the effective date of
this registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this registration statement; (iii) to
include any material information with respect to the plan of distribution
not previously disclosed in this registration statement or any material
change to such information in this registration
<PAGE> 4
statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if this registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) The undersigned registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
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) The undersigned registrant hereby undertakes 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) The undersigned registrant hereby undertakes that, for the
purpose of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 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) or 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange 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.
<PAGE> 5
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 Ann Arbor, State of Michigan on
June 22, 1999.
KAYDON CORPORATION
By: /S/ BRIAN P. CAMPBELL
Brian P. Campbell,President
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Brian P.
Campbell and John F. Brocci, or either of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution, for him and
in his name, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement filed
by Kaydon Corporation and to file the same with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
and agents, 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, this
Registration Statement has been signed by the following persons in the
capacities indicated on June 22, 1999.
Signature Title
/S/ BRIAN P. CAMPBELL President and Director (principal
Brian P. Campbell executive and principal financial officer)
/S/ KENNETH W. CRAWFORD Vice President Finance and Corporate Controller
Kenneth W. Crawford (principal accounting officer)
/S/ GERALD J. BREEN Director
Gerald J. Breen
/S/ LAWRENCE J. CAWLEY Director
Lawrence J. Cawley
/S/ THOMAS C. SULLIVAN Director
Thomas C. Sullivan
/S/ B. JOSEPH WHITE Director
B. Joseph White
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------- -----------------------
5 Opinion of Dykema Gossett PLLC as to the legality of the
securities being registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Dykema Gossett PLLC (contained in its opinion filed
as Exhibit 5)
24 Power of Attorney (contained on signature page)
99.1 Kaydon Corporation 1999 Long Term Stock Incentive Plan
EXHIBIT 5
Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243
June 21, 1999
Kaydon Corporation
315 East Eisenhower Parkway
Ann Arbor, MI 48108
Ladies and Gentlemen:
We have served as counsel to Kaydon Corporation (the "Company") in
connection with the preparation of the Registration Statement (Form S-8) to
be filed by the Company with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, representing the issuance in the
manner described in the Registration Statement of up to 2,000,000 shares of
the Company's Common Stock, $0.10 par value (the "Common Stock"), pursuant
to the Company's 1999 Long Term Stock Incentive Plan.
We have examined and relied upon the originals, or copies certified
or otherwise identified to our satisfaction, of such corporate records,
documents, certificates and other instruments as in our judgment are
necessary or appropriate to enable us to render the opinion expressed below.
Based upon such examination and our participation in the preparation
of the Registration Statement, it is our opinion that (1) the Company is
duly incorporated and validly existing as a corporation in good standing
under the laws of Delaware and (2) the Common Stock, when issued in the
manner described in the Registration Statement, will be validly issued,
fully paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
DYKEMA GOSSETT PLLC
/S/ PAUL R. RENTENBACH
Paul R. Rentenbach
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Kaydon Corporation:
As independent public accountants, we hereby consent to this
incorporation by reference in the Registration Statement on Form S-8 of our
report dated January 21, 1999, included in Kaydon Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this Registration Statement.
/S/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Grand Rapids, MI
June 22, 1999
KAYDON CORPORATION
1999 LONG TERM STOCK INCENTIVE PLAN
Section 1. Purposes
The purposes of the 1999 Long Term Stock Incentive Plan (the "Plan")
are to encourage selected employees of, and Consultants to, Kaydon
Corporation (the "Company") and its Subsidiaries to acquire a proprietary
interest in the Company in order to create an increased incentive to
contribute to the Company's future success and prosperity, and enhance the
ability of the Company and its Subsidiaries to attract and retain highly
qualified individuals upon whom the sustained progress, growth and
profitability of the Company depend, thus enhancing the value of the Company
for the benefit of its stockholders.
Section 2. Definitions
As used in the Plan, the following terms shall have the meanings set
forth below:
(a) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Award, Dividend
Equivalent or Other Stock-Based Award granted under the Plan.
(b) "Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing any Award granted under the Plan.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(d) "Committee" shall mean the Compensation Committee of the
Company, each of the members of which is a "non-employee director" within
the meaning of Rule 16b-3.
(e) "Consultant" shall mean any individual performing bona fide
services for the Company (other than services in connection with the offer
or sale of securities in a capital-raising transaction) including former and
prospective employees of the Company and any other individuals designated as
such by the Committee.
(f) "Dividend Equivalent" shall mean any right granted under
Section 6(e) of the Plan.
(g) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(h) "Incentive Stock Option" shall mean an Option granted under
Section 6(a) of the Plan that is intended to meet the requirements of
Section 422 of the Code, or any successor provision thereto.
(i) "Non-Qualified Stock Option" shall mean an Option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
(j) "Option" shall mean an Incentive Stock Option or a Non-
Qualified Stock Option.
(k) "Other Stock-Based Award" shall mean any right granted under
Section 6(f) of the Plan.
(l) "Participant" shall mean an employee of, or Consultant to,
the Company or any Subsidiary designated to be granted an Award under the
Plan.
(m) "Performance Award" shall mean any right granted under
Section 6(d) of the Plan.
(n) "Permanent and Total Disability" shall mean that the
Participant (i) is unable to perform the essential functions of his or her
job for more than one-hundred eighty (180) days, and (ii) is eligible for,
and has started to receive, social security disability benefits. The
determination of the Participant's satisfaction of (i) and (ii) in the
preceding sentence shall be made at the sole discretion of the Committee.
(o) "Restricted Period" shall mean the period of time during
which Awards of Restricted Stock or Restricted Stock Units are subject to
restrictions.
(p) "Restricted Stock" shall mean any Share granted under
Section 6(c) of the Plan.
(q) "Restricted Stock Unit" shall mean any right granted under
Section 6(c) of the Plan that is denominated in Shares.
(r) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act, or any successor
rule or regulation.
(s) "Section 16" shall mean Section 16 of the Exchange Act, the
rules and regulations promulgated by the Securities and Exchange Commission
thereunder, or any successor provision, rule or regulation.
(t) "Shares" shall mean the Company's common stock, par value
$.10 per share, and such other securities or property as may become the
subject of Awards, or become subject to Awards, pursuant to an adjustment
made under Section 4(c) of the Plan.
(u) "Stock Appreciation Right" shall mean any right granted
under Section 6(b) of the Plan.
(v) "Subsidiary" shall mean any entity in which the Company has
a fifty percent (50%) or greater equity interest and any other entity in
which the Committee determines the Company has a significant equity
interest.
Section 3. Administration
The Committee shall administer the Plan, and subject to the terms of
the Plan and applicable law, the Committee's authority shall include without
limitation the power to:
(a) designate Participants;
(b) determine the types of Awards to be granted;
(c) determine the number of Shares to be covered by Awards and
any payments, rights or other matters to be calculated in connection
therewith;
(d) determine the terms and conditions of Awards and amend the
terms and conditions of outstanding Awards;
(e) determine how, whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or
suspended; provided, however, that the Committee shall not accept the tender
of Shares that have been held by the Participant for less than six months;
(f) determine how, whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property
and other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(g) determine the methods or procedures for establishing the
fair market value of any property (including, without limitation, any Shares
or other securities) transferred, exchanged, given or received with respect
to the Plan or any Award;
(h) prescribe and amend the forms of Award Agreements and other
instruments required under or advisable with respect to the Plan;
(i) designate Options granted to key employees of the Company or
its Subsidiaries as Incentive Stock Options;
(j) interpret and administer the Plan, Award Agreements, Awards
and any contract, document, instrument or agreement relating thereto;
(k) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the
administration of the Plan;
(l) decide all questions and settle all controversies and
disputes which may arise in connection with the Plan, Award Agreements and
Awards;
(m) make any other determination and take any other action that
the Committee deems necessary or desirable for the interpretation,
application and administration of the Plan, Award Agreements and Awards.
All designations, determinations, interpretations and other decisions under
or with respect to the Plan, Award Agreements or any Award shall be within
the sole discretion of the Committee, may be made at any time and shall be
final, conclusive and binding upon all persons, including the Company,
Subsidiaries, Participants, beneficiaries of Awards and stockholders of the
Company.
Section 4. Shares Available for Awards
(a) Shares Available. Subject to adjustment as provided in
Section 4(c):
(i) Initial Authorization. There shall be 2,000,000 Shares
initially available for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above,
up to 2,000,000 Shares acquired by the Company subsequent to the
effectiveness of the Plan as full or partial payment for the
exercise price for an Option or any other stock option granted by
the Company, or acquired by the Company, in open market transactions
or otherwise, in connection with the Plan or any Award hereunder or
any other employee stock option or restricted stock issued by the
Company may thereafter be included in the Shares available for
Awards. If any Shares covered by an Award or to which an Award
relates are forfeited, or if an Award expires, terminates or is
canceled, then the Shares covered by such Award, or to which such
Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares available under the Plan by reason of
such Award, to the extent of any such forfeiture, expiration,
termination or cancellation, may thereafter be available for further
granting of Awards and included as acquired Shares for purposes of
the preceding sentence.
(iii) Accounting for Awards. For purposes of this Section 4,
(A) if an Award (other than a Dividend Equivalent) is
denominated in Shares, the number of Shares covered by such
Award, or to which such Award relates, shall be counted on
the date of grant of such Award against the aggregate number
of Shares available for granting Awards under the Plan to
the extent determinable on such date and insofar as the
number of Shares is not then determinable under procedures
adopted by the Committee consistent with the purposes of the
Plan; and
(B) Dividend Equivalents and Awards not denominated in
Shares shall be counted against the aggregate number of
Shares available for granting Awards under the Plan in such
amount and at such time as the Committee shall determine
under procedures adopted by the Committee consistent with
the purposes of the Plan;
provided, however, that Awards that operate in tandem with (whether
granted simultaneously with or at a different time from), or that
are substituted for, other Awards or restricted stock awards or
stock options granted under any other plan of the Company may be
counted or not counted under procedures adopted by the Committee in
order to avoid double counting. Any Shares that are delivered by
the Company or its Subsidiaries, and any Awards that are granted by,
or become obligations of, the Company, through the assumption by the
Company of, or in substitution for, outstanding restricted stock
awards or stock options previously granted by an acquired company
shall not, except in the case of Awards granted to Participants who
are directors or officers of the Company for purposes of Section 16,
be counted against the Shares available for granting Awards under
the Plan.
(iv) Sources of Shares Deliverable Under Awards. Any Shares
delivered pursuant to an Award may consist, in whole or in part, of
authorized but unissued Shares or of Shares reacquired by the
Company, including but not limited to Shares purchased on the open
market.
(b) Individual Stock-Based Awards. Subject to adjustment as
provided in Section 4(c), no Participant may receive stock-based Awards
under the Plan during any three consecutive calendar years that relate to
more than 500,000 Shares. No provision of this Paragraph 4(b) shall be
construed as limiting the amount of any cash-based Award which may be
granted to any Participant.
(c) Adjustments. Upon the occurrence of any dividend or other
distribution (whether in the form of cash, Shares, other securities or other
property), change in the capital or shares of capital stock,
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, issuance of warrants or other
rights to purchase Shares or other securities of the Company or
extraordinary transaction or event which affects the Shares, then the
Committee shall have the authority to make such adjustment, if any, in such
manner as it deems appropriate, in (i) the number and type of Shares (or
other securities or property) which thereafter may be made the subject of
Awards, (ii) outstanding Awards including without limitation the number and
type of Shares (or other securities or property) subject thereto, and (iii)
the grant, purchase or exercise price with respect to outstanding Awards
and, if deemed appropriate, make provision for cash payments to the holders
of outstanding Awards; provided, however, that the number of Shares subject
to any Award denominated in Shares shall always be a whole number.
Section 5. Eligibility
Any employee of, or Consultant to, the Company or any Subsidiary, including
any officer of the Company (who may also be a director, but excluding a
member of the Committee, any person who serves only as a director of the
Company and any Consultant to the Company or a Subsidiary who is also a
director of the Company and who is not rendering services pursuant to a
written agreement with the entity in question), as may be selected from time
to time by the Committee or by the directors to whom authority may be
delegated pursuant to Section 3 hereof in its or their discretion, is
eligible to be designated a Participant.
Section 6. Awards
(a) Options. The Committee is authorized to grant Options to
Participants.
(i) Committee Determinations. Subject to the terms of the Plan,
the Committee shall determine:
(A) the purchase price per Share under each Option;
(B) the term of each Option; and
(C) the time or times at which an Option may be
exercised, in whole or in part, the method or methods by
which and the form or forms (including, without limitation,
cash, Shares, other Awards or other property, or any
combination thereof, having a fair market value on the
exercise date equal to the relevant exercise price) in which
payment of the exercise price with respect thereto may be
made or deemed to have been made. The terms of any
Incentive Stock Option granted under the Plan shall comply
in all respects with the provisions of Section 422 of the
Code, or any successor provision thereto, and any
regulations promulgated thereunder.
Subject to the terms of the Plan, the Committee may impose
such conditions or restrictions on any Option as it deems
appropriate.
(ii) Other Terms. Unless otherwise determined by the Committee:
(A) A Participant electing to exercise an Option shall
give written notice to the Company, as may be specified by
the Committee, of exercise of the Option and the number of
Shares elected for exercise, such notice to be accompanied
by such instruments or documents as may be required by the
Committee, and shall tender the purchase price of the Shares
elected for exercise.
(B) At the time of exercise of an Option payment in
full in cash shall be made for all Shares then being
purchased. At the discretion of the Committee, as set
forth in a Participant's Award Agreement, any Option granted
under the Plan may be deemed exercised by delivery to the
Company of a properly executed exercise notice, acceptable
to the Committee, together with irrevocable instructions to
the Participant's broker to deliver to the Company
sufficient cash to pay the exercise price and any applicable
income and employment withholding taxes, in accordance with
a written agreement between the Company and the brokerage
firm.
(C) The Company shall not be obligated to issue any
Shares unless and until:
(1) if the class of Shares at the time is listed upon
any stock exchange, the Shares to be issued have
been listed, or authorized to be added to the list
upon official notice of issuance, upon such
exchange, and
(2) in the opinion of the Company's counsel there has
been compliance with applicable law in connection
with the issuance and delivery of Shares and such
issuance shall have been approved by the Company's
counsel.
Without limiting the generality of the foregoing, the
Company may require from the Participant such investment
representation or such agreement, if any, as the Company's
counsel may consider necessary in order to comply with the
Securities Act of 1933 as then in effect, and may require
that the Participant agree that any sale of the Shares will
be made only in such manner as shall be in accordance with
law and that the Participant will notify the Company of any
intent to make any disposition of the Shares whether by
sale, gift or otherwise. The Participant shall take any
action reasonably requested by the Company in such
connection. A Participant shall have the rights of a
stockholder only as and when Shares have been actually
issued to the Participant pursuant to the Plan.
(D) If the employment of, or consulting arrangement
with, a Participant terminates for any reason (including
termination by reason of the fact that an entity is no
longer a Subsidiary) other than the Participant's death, the
Participant may thereafter exercise the Option as provided
below, except that the Committee may terminate the
unexercised portion of the Option concurrently with or at
any time following termination of the employment or
consulting arrangement (including termination of employment
upon a change of status from employee to Consultant) if it
shall determine that the Participant has engaged in any
activity detrimental to the interests of the Company or a
Subsidiary. If such termination is voluntary on the part of
the Participant, the option may be exercised only within ten
days after the date of termination. If such termination is
involuntary on the part of the Participant, if an employee
retires or if the employment or consulting relationship is
terminated by reason of Permanent and Total Disability, the
Option may be exercised within three months after the date
of termination or retirement; provided, however, that at the
Committee's discretion, Options held by a retiree of the
Company may continue to vest in accordance with the Option
vesting schedule in effect prior to such Participant's
retirement (however any Incentive Stock Option would
automatically convert to a Non-Qualified Option after the
three-month period after retirement). For purposes of this
Paragraph (D), a Participant's employment or consulting
arrangement shall not be considered terminated (i) in the
case of approved sick leave or other bona fide leave of
absence (not to exceed one year), (ii) in the case of a
transfer of employment or the consulting arrangement among
the Company and Subsidiaries, or (iii) by virtue of a change
of status from employee to Consultant or from Consultant to
employee, except as provided above.
(E) If a Participant dies at a time when entitled to
exercise an Option, then at any time or times within one
year after death such Option may be exercised, as to all or
any of the Shares which the Participant was entitled to
purchase immediately prior to death. The Company may
decline to deliver Shares to a designated beneficiary until
it receives indemnity against claims of third parties
satisfactory to the Company. Except as so exercised such
Option shall expire at the end of such period.
(F) An Option may be exercised only if and to the
extent such Option was exercisable at the date of
termination of employment or the consulting arrangement, and
an Option may not be exercised at a time when the Option
would not have been exercisable had the employment or
consulting arrangement continued.
(iii) Restoration Options. The Committee may grant a
Participant the right to receive a restoration
Option with respect to an Option or any other
option granted by the Company. Unless the
Committee shall otherwise determine, a restoration
Option shall provide that the underlying option
must be exercised while the Participant is an
employee of or Consultant to the Company or a
Subsidiary and the number of Shares which are
subject to a restoration Option shall not exceed
the number of whole Shares exchanged in payment of
the original option.
(b) Stock Appreciation Rights. The Committee is authorized to
grant Stock Appreciation Rights to Participants. Subject to the terms of
the Plan, a Stock Appreciation Right granted under the Plan shall confer on
the holder thereof a right to receive, upon exercise thereof, the excess of
(i) the fair market value of one Share on the date of exercise or, if the
Committee shall so determine in the case of any such right other than one
related to any Incentive Stock Option, at any time during a specified period
before or after the date of exercise over (ii) the grant price of the right
as specified by the Committee. Subject to the terms of the Plan, the
Committee shall determine the grant price, term, methods of exercise and
settlement and any other terms and conditions of any Stock Appreciation
Right and may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it may deem appropriate.
(c) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant to
Participants Awards of Restricted Stock, which shall consist of
Shares, and Restricted Stock Units which shall give the Participant
the right to receive cash, other securities, other Awards or other
property, in each case subject to the termination of the Restricted
Period determined by the Committee.
(ii) Restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with respect to
portions of Shares covered by the same Award. Subject to the terms
of the Plan, Awards of Restricted Stock and Restricted Stock Units
shall have such restrictions as the Committee may impose (including,
without limitation, limitations on the right to vote Restricted
Stock or the right to receive any dividend or other right or
property), which restrictions may lapse separately or in combination
at such time or times, in installments or otherwise. Unless the
Committee shall otherwise determine, any Shares or other securities
distributed with respect to Restricted Stock or which a Participant
is otherwise entitled to receive by reason of such Shares shall be
subject to the restrictions contained in the applicable Award
Agreement. Subject to the aforementioned restrictions and the
provisions of the Plan, Participants shall have all of the rights of
a stockholder with respect to Shares of Restricted Stock.
(iii) Registration. Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance
of stock certificates.
(iv) Forfeiture. Except as otherwise determined by the
Committee:
(A) If the employment of, or consulting arrangement
with, a Participant terminates for any reason (including
termination by reason of the fact that any entity is no
longer a Subsidiary), other than the Participant's death or
Permanent and Total Disability or, in the case of an
employee, retirement, all Shares of Restricted Stock
theretofore awarded to the Participant which are still
subject to restrictions shall upon such termination of
employment or the consulting relationship be forfeited and
transferred back to the Company. Notwithstanding the
foregoing or Paragraph (C) below, if a Participant continues
to hold an Award of Restricted Stock following termination
of the employment or consulting arrangement (including
retirement and termination of employment upon a change of
status from employee to Consultant), the Shares of
Restricted Stock which remain subject to restrictions shall
nonetheless be forfeited and transferred back to the Company
if the Committee at any time thereafter determines that the
Participant has engaged in any activity detrimental to the
interests of the Company or a Subsidiary. For purposes of
this Paragraph (A), a Participant's employment or consulting
arrangement shall not be considered terminated (i) in the
case of approved sick leave or other bona fide leave of
absence (not to exceed one year), (ii) in the case of a
transfer of employment or the consulting arrangement among
the Company and Subsidiaries, or (iii) by virtue of a change
of status from employee to Consultant or from Consultant to
employee, except as provided above.
(B) If a Participant ceases to be employed or retained
by the Company or a Subsidiary by reason of death or
Permanent and Total Disability or if following retirement a
Participant continues to have rights under an Award of
Restricted Stock and thereafter dies, the restrictions
contained in the Award shall lapse with respect to such
Restricted Stock.
(C) If an employee ceases to be employed by the Company
or a Subsidiary by reason of retirement, the restrictions
contained in the Award of Restricted Stock shall continue to
lapse in the same manner as though employment had not
terminated.
(D) At the expiration of the Restricted Period as to
Shares covered by an Award of Restricted Stock, the Company
shall deliver the Shares as to which the Restricted Period
has expired, as follows:
(1) if an assignment to a trust has been made
in accordance with Section 6(g)(iv)(B)(1)(c), to
such trust; or
(2) if the Restricted Period has expired by
reason of death and a beneficiary has been
designated in a form approved by the Company, to
the beneficiary so designated; or
(3) in all other cases, to the Participant or
the legal representative of the Participant's
estate.
(d) Performance Awards. The Committee is authorized to grant
Performance Awards to Participants. Subject to the terms of the Plan, a
Performance Award granted under the Plan (i) may be denominated or payable
in cash, Shares (including, without limitation, Restricted Stock), other
securities, other Awards, or other property, and (ii) shall confer on the
holder thereof rights valued as determined by the Committee and payable to,
or exercisable by, the holder of the Performance Award, in whole or in part,
upon the achievement of such performance goals during such performance
periods as the Committee shall establish. Subject to the terms of the Plan,
the performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance Award
granted, the amount of any payment or transfer to be made pursuant to any
Performance Award and other terms and conditions shall be determined by the
Committee.
(e) Dividend Equivalents. The Committee is authorized to grant
to Participants Awards under which the holders thereof shall be entitled to
receive payments equivalent to dividends or interest with respect to a
number of Shares determined by the Committee, and the Committee may provide
that such amounts (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested. Subject to the terms of the
Plan, such Awards may have such terms and conditions as the Committee shall
determine.
(f) Other Stock-Based Awards. The Committee is authorized to
grant to Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to or otherwise based on or related
to Shares (including, without limitation, securities convertible into
Shares), as are deemed by the Committee to be consistent with the purposes
of the Plan, provided, however, that such grants to persons who are subject
to Section 16 must comply with the provisions of Rule 16b-3. Subject to the
terms of the Plan, the Committee shall determine the terms and conditions of
such Awards. Shares or other securities delivered pursuant to a purchase
right granted under this Section 6(f) shall be purchased for such
consideration, which may be paid by such method or methods and in such form
or forms, including, without limitation, cash, Shares, other securities,
other Awards or other property or any combination thereof, as the Committee
shall determine.
(g) General.
(i) No Cash Consideration for Awards. Awards may be granted for
no cash consideration or for such minimal cash consideration as may
be required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may,
in the discretion of the Committee, be granted either alone or in
addition to, in tandem with or in substitution for any other Award
or any award granted under any other plan of the Company or any
Subsidiary. Awards granted in addition to or in tandem with other
Awards or in addition to or in tandem with awards granted under
another plan of the Company or any Subsidiary, may be granted either
at the same time as or at a different time from the grant of such
other Awards or awards.
(iii) Forms of Payment Under Awards. Subject to the terms of the
Plan and of any applicable Award Agreement, payments or transfers to
be made by the Company or a Subsidiary upon the grant, exercise, or
payment of an Award may be made in such form or forms as the
Committee shall determine, including, without limitation, cash,
Shares, other securities, other Awards, or other property, or any
combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee.
Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments.
(iv) Limits on Transfer of Awards.
(A) Except as the Committee may otherwise determine, no
Award or right under any Award may be sold, encumbered,
pledged, alienated, attached, assigned or transferred in any
manner and any attempt to do any of the foregoing shall be
void and unenforceable against the Company.
(B) Notwithstanding the provisions of Paragraph (A)
above:
(1) Except as set forth in Paragraph (2) below,
a Participant may assign or transfer a Non-
Qualified Stock Option or rights under an Award of
Restricted Stock or Restricted Stock Units:
(a) to a beneficiary designated by the
Participant in writing on a form approved
by the Committee;
(b) by will or the applicable laws of descent
and distribution to the personal
representative, executor or administrator
of the Participant's estate; or
(c) to a revocable grantor trust established by
the Participant for the sole benefit of the
Participant during the Participant's life,
and under the terms of which the
Participant is and remains the sole trustee
until death or physical or mental
incapacity. Such assignment shall be
effected by a written instrument in form
and content satisfactory to the Committee,
and the Participant shall deliver to the
Committee a true copy of the agreement or
other document evidencing such trust. If
in the judgment of the Committee the trust
to which a Participant may attempt to
assign rights under such an Award does not
meet the criteria of a trust to which an
assignment is permitted by the terms
hereof, or if after assignment, because of
amendment, by force of law or any other
reason such trust no longer meets such
criteria, such attempted assignment shall
be void and may be disregarded by the
Committee and the Company and all rights to
any such Awards shall revert to and remain
solely in the Participant. Notwithstanding
a qualified assignment, the Participant,
and not the trust to which rights under
such an Award may be assigned, for the
purpose of determining compensation arising
by reason of the Award, shall continue to
be considered an employee or Consultant, as
the case may be, of the Company or a
Subsidiary, but such trust and the
Participant shall be bound by all of the
terms and conditions of the Award Agreement
and this Plan. Shares issued in the name
of and delivered to such trust shall be
conclusively considered issuance and
delivery to the Participant.
(2) The Committee shall not permit directors or
officers of the Company for purposes of Section 16
to transfer or assign Awards except as permitted
under Rule 16b-3.
(C) The Committee, the Company and its officers, agents
and employees may rely upon any beneficiary designation,
assignment or other instrument of transfer, copies of trust
agreements and any other documents delivered to them by or
on behalf of the Participant which they believe genuine and
any action taken by them in reliance thereon shall be
conclusive and binding upon the Participant, the personal
representatives of the Participant's estate and all persons
asserting a claim based on an Award. The delivery by a
Participant of a beneficiary designation, or an assignment
of rights under an Award as permitted hereunder, shall
constitute the Participant's irrevocable undertaking to hold
the Committee, the Company and its officers, agents and
employees harmless against claims, including any cost or
expense incurred in defending against claims, of any person
(including the Participant) which may be asserted or alleged
to be based on an Award, subject to a beneficiary
designation or an assignment. In addition, the Company may
decline to deliver Shares to a beneficiary until it receives
indemnity against claims of third parties satisfactory to
the Company.
(v) Share Certificates. All certificates for Shares or other
securities delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the
Plan or the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which
such Shares or other securities are then listed and any applicable
Federal or state securities laws, and the Committee may cause a
legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(vi) Change in Control.
(A) Notwithstanding any of the provisions of this Plan or
instruments evidencing Awards granted hereunder, upon a
Change in Control (as hereinafter defined) the vesting of
all rights of Participants under outstanding Awards shall be
accelerated and all restrictions thereon shall terminate in
order that Participants may fully realize the benefits
thereunder. Such acceleration shall include, without
limitation, the immediate exercisability in full of all
Options and the termination of restrictions on Restricted
Stock and Restricted Stock Units. Further, in addition to
the Committee's authority set forth in Section 4(c), the
Committee, as constituted before such Change in Control, is
authorized, and has sole discretion, as to any Award, either
at the time such Award is made hereunder or any time
thereafter, to take any one or more of the following
actions: (i) provide for the purchase of any such Award,
upon the Participant's request, for an amount of cash equal
to the amount that could have been attained upon the
exercise of such Award or realization of the Participant's
rights had such Award been currently exercisable or payable;
(ii) make such adjustment to any such Award then outstanding
as the Committee deems appropriate to reflect such Change in
Control; and (iii) cause any such Award then outstanding to
be assumed, or new rights substituted therefor, by the
acquiring or surviving corporation after such Change in
Control.
(B) A Change in Control shall occur if:
(1) any "person" or "group of persons" as such
terms are used in Sections 13(d) and 14(d) of the
Exchange Act, other than pursuant to a transaction
or agreement previously approved by the Board of
Directors of the Company, directly or indirectly
purchases or otherwise becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange
Act) or has the right to acquire such beneficial
ownership (whether or not such right is exercisable
immediately, with the passage of time, or subject
to any condition) of voting securities representing
25 percent or more of the combined voting power of
all outstanding voting securities of the Company;
or
(2) during any period of twenty-four
consecutive calendar months, the individuals who at
the beginning of such period constitute the
Company's Board of Directors, and any new directors
whose election by such Board or nomination for
election by stockholders was approved by a vote of
at least two-thirds of the members of such Board
who were either directors on such Board at the
beginning of the period or whose election or
nomination for election as directors was previously
so approved, for any reason cease to constitute at
least a majority of the members thereof.
(vii) Cash Settlement. Notwithstanding any provision of this Plan
or of any Award Agreement to the contrary, any Award outstanding
hereunder may at any time be canceled in the Committee's sole
discretion upon payment of the value of such Award to the holder
thereof in cash or in another Award hereunder, such value to be
determined by the Committee in its sole discretion.
Section 7. Amendment and Termination
Except to the extent prohibited by applicable law and unless
otherwise expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board of Directors of the
Company may amend the Plan and the Board of Directors or the Committee may
amend any outstanding Award; provided, however, that without the consent of
affected Participants, no amendment of the Plan or of any Award may impair
the rights of Participants under outstanding Awards.
(b) Waivers. The Committee may waive any conditions or rights
under any Award theretofore granted, prospectively or retroactively, without
the consent of any Participant.
(c) Adjustments of Awards Upon the Occurrence of Certain Unusual
or Nonrecurring Events. The Committee shall be authorized to make
adjustments in the terms and conditions of, and the criteria included in,
Awards in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4(c) hereof) affecting the
Company, any Subsidiary, or the financial statements of the Company or any
Subsidiary, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits to be made available under the Plan.
(d) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it
shall deem desirable to effectuate the Plan.
Section 8. General Provisions
(a) No Rights to Awards. No Participant or other person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards
of the same type and the determination of the Committee to grant a waiver or
modification of any Award and the terms and conditions thereof need not be
the same with respect to each Participant.
(b) Withholding. The Company or any Subsidiary shall be
authorized to withhold from any Award granted or any payment due or transfer
made under any Award or under the Plan the amount (in cash, Shares, other
securities, other Awards or other property) of withholding taxes due in
respect of an Award, its exercise or any payment or transfer under such
Award or under the Plan and to take such other action as may be necessary in
the opinion of the Company or Subsidiary to satisfy all obligations for the
payment of such taxes. In no event shall the Company or any Subsidiary
withhold from an Award under the Plan more Shares than are required to meet
the established minimum tax withholding requirements of federal, state and
local obligations.
(c) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Subsidiary from
adopting or continuing in effect other or additional compensation
arrangements, including the grant of options and other stock-based awards,
and such arrangements may be either generally applicable or applicable only
in specific cases.
(d) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or any Subsidiary. Further, the Company or a Subsidiary may at
any time dismiss a Participant from employment, free from any liability, or
any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Award Agreement or other written agreement with the Participant.
(e) Governing Law. The validity, construction and effect of the
Plan and any rules and regulations relating to the Plan shall be determined
in accordance with the laws of the State of Delaware and applicable Federal
law.
(f) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of
the Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award, and
the remainder of the Plan and any such Award shall remain in full force and
effect.
(g) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind
or a fiduciary relationship between the Company or any Subsidiary and a
Participant or any other person. To the extent that any person acquires a
right to receive payments from the Company or any Subsidiary pursuant to an
Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Subsidiary.
(h) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional Shares, or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise
eliminated.
(i) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference.
Such headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
Section 9. Effective Date of the Plan
The Plan shall be effective as of the date of its approval by the
Company's stockholders.