Registration Statement No. 333-_______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Autotote Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware 81-0422894
- --------------------------------------------------------------------------------
State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
750 Lexington Avenue, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Autotote Corporation
- --------------------------------------------------------------------------------
1997 Incentive Compensation Plan
(Full title of the plans)
Martin E. Schloss
Vice President and General Counsel
Autotote Corporation
750 Lexington Avenue
25th Floor
New York, New York 10022
- --------------------------------------------------------------------------------
(Name and Address of Agent For Service)
(212) 754-2233
- --------------------------------------------------------------------------------
(Telephone Number, Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered(1) Per Share Offering Price Registration Fee
- ----------------- ------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Class A Common Stock, $.01
par value ("Class A Common
Stock") 1,600,000 $2.15625(2) $3,450,000 $1,046
</TABLE>
(1) This registration statement (the "Registration Statement") covers
shares of Class A Common Stock which may be offered or sold from time
to time pursuant to the Registrant's 1997 Incentive Compensation Plan
(the "Plan").
(2) Estimated solely for the purpose of calculating the registration fee.
The proposed maximum offering price per share has been determined
pursuant to Rules 457(h) and 457(c) promulgated under the Securities
Act of 1933, as amended, on the basis of the average of the high and
low sale prices of the Class A Common Stock as reported on the
American Stock Exchange on January 22, 1998.
Page 1 of 7
Exhibit index appears on page 7
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents, which have been filed by Autotote Corporation
(the "Registrant") with the Securities and Exchange Commission (the "SEC"), are
incorporated by reference in this Registration Statement as of their respective
dates:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1996.
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended January 31, 1997, April 30, 1997 and July 31, 1997.
(c) The Registrant's Current Reports on Form 8-K dated April 30, 1997
and August 11, 1997.
(d) The description of the Registrant's Class A Common Stock, $.01 par
value ("Class A Common Stock"), contained in the latest registration statement
of the Registrant under Section 12 of the Securities Exchange Act of 1934, as
amended (the "1934 Act"), including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable
Item 5. Interests of Named Experts and Counsel
Martin E. Schloss, who is the Vice President and General Counsel of the
Registrant, has acted as counsel to the Registrant in connection with this
Registration Statement and has given an opinion as to the legality of the
securities being registered hereby.
Item 6. Indemnification of Directors and Officers
The Delaware General Corporation Law (the "DGCL"), at Section 145,
provides, in pertinent part, that a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving another corporation, partnership, joint
venture, trust or other enterprise, at the request of the corporation, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Lack of good faith, or
lack of a reasonable belief that one's actions are in or not opposed to the best
interest of the corporation, or with respect to any criminal action or
proceeding, lack of reasonable cause to believe one's conduct was unlawful is
not presumed from the termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or nolo contendere plea or its equivalent. In
addition, the indemnification of expenses (including attorneys' fees) is allowed
in derivative actions, except no indemnification is allowed in respect of any
claim, issue or matter as to which any such person has been adjudged to be
liable to the corporation, unless and only to the extent the Court of Chancery
or the court in which such action or suit was brought decides that
indemnification is proper. To the extent that any such person succeeds on the
merits or otherwise in defense of any of the above described actions
Page 2 of 7
<PAGE>
or proceedings, he shall be indemnified against expenses (including attorneys'
fees). The determination that the person to be indemnified met the applicable
standard of conduct, if not made by a court, is made by the Board of Directors
of the corporation by a majority vote of a quorum consisting of directors not
party to such an action, suit or proceeding or, if a quorum is not obtainable or
a disinterested quorum so directs, by independent legal counsel in a written
opinion or by the stockholders. Expenses may be paid in advance upon the receipt
of undertakings to repay. A corporation may purchase indemnity insurance.
The Certificate of Incorporation of the Registrant, provides at Article
Ninth that no director of the Registrant shall be liable to the Registrant or
its stockholders for monetary damages for breach of fiduciary duty to the
fullest extent allowed by Delaware law. The Registrant's By-laws at Article VII
provide that the Registrant shall indemnify all allowed persons for liabilities
and expenses to the fullest extent allowed by Delaware law.
Article Ninth eliminates the personal liability of directors, as
directors (but not as officers), to the Registrant and its stockholders unless
one of the statutorily required exceptions (breach of the duty of loyalty, bad
faith, etc.) applies. As a result, directors are not liable even for grossly
negligent actions or omissions, including grossly negligent decisions involving
control of the Registrant, in the absence of breach of the duty of loyalty, bad
faith, improper personal benefit or another statutory exception. Article Ninth
does not limit or eliminate the liability of a director for any act or omission
occurring prior to June 15, 1997, when Article Ninth became effective. Also, it
does not affect a director's liability to third parties, nor the liability of a
director to the Registrant or its stockholders arising from any legal
requirement (such as the federal securities laws) other than the duty of care
imposed by Delaware law.
The Board of Directors of the Registrant passed a resolution, dated as
of June 26, 1995, authorizing and directing the Registrant, prior to the final
disposition of the action entitled IN RE AUTOTOTE SECURITIES LITIGATION, in the
United States District Court for the District of Delaware (the "Action"), to
indemnify certain of the present and former officers and directors of the
Registrant (each, an "Individual Defendant"), who have been named as defendants
in the Action, against and reimburse each Individual Defendant for, all expenses
(including reasonable attorneys' fees) actually and reasonably incurred by such
Individual Defendants in connection with the Action.
Item 7. Exemption from Legislation Claimed
Not Applicable
Item 8. Exhibits.
5.1 Opinion of counsel as to legality of the shares of Class A
Common Stock covered by this Registration Statement.
10.1 1997 Incentive Compensation Plan.
10.2 Form of Option Agreement.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of counsel (included in Exhibit 5.1)
24.1 Powers of Attorney for the Registrant are set forth on the
signature page of the Registration Statement.
Item 9. Undertakings
A. Post-Effective Amendments
The Registrant hereby undertakes:
Page 3 of 7
<PAGE>
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(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; and
(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 Statement;
PROVIDED, HOWEVER, that subparagraphs (i) and (ii) above will not apply if the
information required to be included in a post-effective amendment by those
subparagraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the 1934
Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment,
any of the securities being registered which remain unsold at the termination of
the offering.
B. Subsequent Documents Incorporated by Reference
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the 1934 Act that is incorporated
by reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
C. Claims for Indemnification
Insofar as indemnification for liabilities arising under the Securities
Act 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 SEC such indemnification is against
public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
Page 4 of 7
<PAGE>
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 New York, New York on the 27th day of January, 1998.
Autotote Corporation
(Registrant)
By: /s/ A. Lorne Weil
-----------------
A. Lorne Weil,
Chairman of the Board,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Martin E. Schloss and William Luke his true and
lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and any registration statement
for the same offering covered by this Registration Statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act, and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, and hereby ratifies and confirms all that said
attorneys-in-fact and agents, each acting alone, or their substitute or
resubstitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed by the following persons in
the capacities and on the date indicated.
Signature Title(s) Date
/s/ A. Lorne Weil Chairman of the Board, January 27, 1998
- ----------------- President, Chief Executive
A. Lorne Weil Officer and Director (principal
executive officer)
/s/ William Luke Vice President and Chief) January 27, 1998
- ----------------- Financial Officer (principal
William Luke financial officer)
/s/ DeWayne E. Laird Corporate Controller January 27, 1998
- -------------------- (principal accounting officer)
DeWayne E. Laird
/s/ Marshall Bartlett Director January 27, 1998
- ---------------------
Marshall Bartlett
/s/ Larry J. Lawrence Director January 27, 1998
- ---------------------
Larry J. Lawrence
Page 5 of 7
<PAGE>
/s/ Sir Brian Wolfson Director January 27, 1998
- ---------------------
Sir Brian Wolfson
/s/ Alan J. Zakon Director January 27, 1998
- -----------------
Alan J. Zakon
Page 6 of 7
<PAGE>
INDEX TO EXHIBITS
Page
----
5.1 Opinion of counsel as to legality of the shares of Class A Common Stock
covered by this Registration Statement.
10.1 1997 Incentive Compensation Plan.
10.2 Form of Option Agreement.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of counsel.
(included in Exhibit 5.1).
24.1 Powers of Attorney for the Registrant are set forth on the signature
page of the Registration Statement.
Page 7 of 7
[LOGO OF AUTOTOTE APPEARS HERE]
Exhibit 5.1
January 27, 1998
Autotote Corporation
750 Lexington Avenue
New York, New York 10022
Ladies and Gentlemen:
I am the Vice President and General Counsel of Autotote Corporation, a
Delaware corporation (the "Company"), and have acted as counsel to the Company
in connection with its Registration Statement on Form S-8 filed pursuant to the
Securities Act of 1933, as amended, relating to the registration of 1,600,000
shares (the "Shares") of the Company's Class A Common Stock, par value $.01 per
share (the "Common Stock") which may be issued under the Company's 1997
Incentive Compensation Plan (the "Plan"). The total number of shares of Common
Stock issuable under the Plan is 1,600,000.
For purposes of the opinion expressed in this letter, I have examined
the Certificate of Incorporation and By-laws of the Company, records of the
corporate proceedings of the Company and such other documents and records of the
Company as I have deemed necessary or appropriate as a basis for such opinions.
In making my examination, I have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to me as originals and the conformity to the originals of all documents
submitted to me as photostatic or conformed copies.
I am a member of the Bar of the State of New York and, for purposes of
the opinion expressed in this letter, do not hold myself out as expert on, nor
am I in rendering the opinion expressed herein passing on, the laws of any
jurisdiction other than the federal laws of the United States, the laws of the
State of New York and the General Corporation Law of the State of Delaware.
Based on the foregoing, and having regard to such legal considerations
as I have deemed relevant, I am of the opinion that the Shares have been duly
authorized and, upon the issuance thereof and payment therefor in accordance
with the terms of the Plan, will be legally issued, fully paid and
nonassessable.
I hereby consent to the inclusion of this letter as an exhibit to the
Registration Statement. In giving such consent we do not thereby concede that we
are within the category of persons whose consent is required under Section 7 of
the Securities Act or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Martin E. Schloss
---------------------
Martin E. Schloss
Exhibit 10.1
AUTOTOTE CORPORATION
-----------------------------------------------------
1997 INCENTIVE COMPENSATION PLAN
<PAGE>
AUTOTOTE CORPORATION
1997 INCENTIVE COMPENSATION PLAN
PAGE
1. Purpose............................................................. 1
2. Definitions......................................................... 1
3. Administration...................................................... 3
(a) Authority of the Committee................................... 3
(b) Manner of Exercise of Committee Authority.................... 3
(c) Limitation of Liability...................................... 4
4. Limitations on Plan Awards.......................................... 4
(a) Overall Number of Shares Available for Delivery.............. 4
(b) Application of Limitation to Grants of Awards................ 4
(c) Availability of Shares Not Delivered under Awards ........... 4
5. Eligibility; Per-Person Award Limitations........................... 5
6. Specific Terms of Awards............................................ 5
(a) General...................................................... 5
(b) Options...................................................... 5
(c) Stock Appreciation Rights.................................... 6
(d) Restricted Stock............................................. 6
(e) Deferred Stock............................................... 7
(f) Bonus Stock and Awards in Lieu of Obligations................ 8
(g) Dividend Equivalents......................................... 8
(h) Other Stock-Based Awards..................................... 8
(i) Performance Goals Applicable to Designated Covered Employees. 8
7. Certain Provisions Applicable to Awards............................. 10
(a) Stand-Alone, Additional, Tandem, and Substitute Awards ...... 10
(b) Term of Awards............................................... 10
(c) Form and Timing of Payment under Awards; Deferrals .......... 10
(d) Exemptions from Section 16(b) Liability...................... 10
8. Change in Control................................................... 11
(a) Effect of "Change in Control"................................ 11
(b) Definition of "Change in Control"............................ 11
(c) Definition of "Change in Control Price" ..................... 11
<PAGE>
AUTOTOTE CORPORATION
1997 INCENTIVE COMPENSATION PLAN
9. General Provisions.................................................. 12
(a) Compliance with Legal and Other Requirements................. 12
(b) Limits on Transferability; Beneficiaries..................... 12
(c) Adjustments.................................................. 12
(d) Taxes........................................................ 13
(e) Changes to the Plan and Awards............................... 14
(f) Limitation on Rights Conferred under Plan.................... 14
(g) Unfunded Status of Awards; Creation of Trusts................ 14
(h) Nonexclusivity of the Plan................................... 14
(i) Payments in the Event of Forfeitures; Fractional Shares ..... 14
(j) Governing Law................................................ 14
(k) Plan Effective Date and Shareholder Approval................. 15
<PAGE>
AUTOTOTE CORPORATION
1997 INCENTIVE COMPENSATION PLAN
EFFECTIVE AS OF AUGUST 13, 1997
1. PURPOSE. The purpose of this 1997 Incentive Compensation Plan (the
"Plan") is to assist Autotote Corporation, a Delaware corporation (the
"Company"), and its subsidiaries in attracting, retaining, and rewarding
executives, directors, employees, and other persons who provide services to the
Company and/or its subsidiaries, enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of
interests between such persons and the Company's stockholders, and providing
such persons with performance incentives to expend their maximum efforts in the
creation of stockholder value. The Plan is also intended to qualify certain
compensation awarded under the Plan for tax deductibility under Code Section
162(m) (as hereafter defined) to the extent deemed appropriate by the Committee
which administers the Plan.
2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms defined in Section 1
hereof:
(a) "Award" means any award of an Option, SAR (including Limited
SAR), Restricted Stock, Deferred Stock, Stock granted as a bonus or in
lieu of another award, Dividend Equivalent, or Other Stock-Based
Award, together with any other right or interest granted to a
Participant under the Plan.
(b) "Beneficiary" means the person, persons, trust, or trusts
which have been designated by a Participant in his or her most recent
written beneficiary designation filed with the Committee to receive
the benefits specified under the Plan upon such Participant's death or
to which Awards or other rights are transferred if and to the extent
permitted under Section 9(b) hereof. If, upon a Participant's death,
there is no designated Beneficiary or surviving designated
Beneficiary, then the term Beneficiary means person, persons, trust,
or trusts entitled by will or the laws of descent and distribution to
receive such benefits.
(c) "Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 under the Exchange Act and any successor to such
Rule.
(d) "Board" means the Company's Board of Directors.
(e) "Change in Control" means Change in Control as defined with
related terms in Section 8 of the Plan.
(f) "Change in Control Price" means the amount calculated in
accordance with Section 8(c) of the Plan.
<PAGE>
(g) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor
provisions and regulations thereto.
(h) "Committee" means a committee of two or more directors
designated by the Board to administer the Plan; provided, however,
that directors appointed as members of the Committee shall not be
employees of the Company or any subsidiary. In appointing members of
the Committee, the Board will consider whether a member is or will be
a Qualified Member, but such members are not required to be Qualified
Members at the time of appointment or during their term of service on
the Committee.
(i) "Covered Employee" means an Eligible Person who is a "covered
employee" within the meaning of Code Section 162(m).
(j) "Deferred Stock" means a right, granted to a Participant
under Section 6(e) hereof, to receive Stock, at the end of a specified
deferral period.
(k) "Dividend Equivalent" means a right, granted to a Participant
under Section 6(g), to receive cash, Stock, other Awards, or other
property equal in value to dividends paid with respect to a specified
number of shares of Stock, or other periodic payments.
(l) "Effective Date" means the date of approval of the Plan by
stockholders of the Company.
(m) "Eligible Person" means each executive officer and other
officer or employee of the Company or of any subsidiary, including
each such person who may also be a director of the Company, each
non-employee director of the Company, and each other person who
provides substantial services to the Company and/or its subsidiaries
and who is designated as eligible by the Committee. An employee on
leave of absence may be considered as still in the employ of the
Company or a subsidiary for purposes of eligibility for participation
in the Plan.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(o) "Fair Market Value" means the fair market value of Stock,
Awards, or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined
by the Committee, the Fair Market Value of Stock shall be the average
of the high and low sales prices of Stock on a given date or, if there
are no sales on that date, on the latest previous date on which there
were sales, reported for composite transactions in securities listed
on the principal trading market on which Stock is then listed.
(p) "Incentive Stock Option" or "ISO" means any Option intended
to be and
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<PAGE>
designated as an incentive stock option within the meaning of Code
Section 422 or any successor provision thereto.
(q) "Limited SAR" means a right granted to a Participant under
Section 6(c) hereof.
(r) "Option" means a right, granted to a Participant under
Section 6(b) hereof, to purchase Stock or other Awards at a specified
price during specified time periods.
(s) "Other Stock-Based Awards" means Awards granted to a
Participant under Section 6(h) hereof.
(t) "Participant" means a person who has been granted an Award
under the Plan which remains outstanding, including a person who is no
longer an Eligible Person.
(u) "Qualified Member" means a member of the Committee who is a
"Non-Employee Director" within the meaning of Rule 16b-3(b)(3) and an
"outside director" within the meaning of Regulation 1.162-27 under
Code Section 162(m).
(v) "Restricted Stock" means Stock granted to a Participant under
Section 6(d) hereof, that is subject to certain restrictions and to a
risk of forfeiture.
(w) "Rule 16b-3" means Rule 16b-3, as from time to time in effect
and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange
Act.
(x) "Stock" means the Company's Class A Common Stock, $.01 par
value, and such other securities as may be substituted (or
resubstituted) for Stock pursuant to Section 9(c) hereof.
(y) "Stock Appreciation Rights" or "SAR" means a right granted to
a Participant under Section 6(c) hereof.
3. ADMINISTRATION.
(a) Authority of the Committee. Except as otherwise provided
below, the Plan shall be administered by the Committee. The Committee
shall have full and final authority, in each case subject to and
consistent with the provisions of the Plan, to select Eligible Persons
to become Participants, grant Awards, determine the type, number, and
other terms and conditions of, and all other matters relating to,
Awards, prescribe Award agreements (which need not be identical for
each Participant) and rules and regulations for the administration of
the Plan, construe and interpret the Plan and Award agreements and
correct defects, supply omissions, or reconcile inconsistencies
therein, and to make all other decisions and determinations as the
Committee may deem necessary or advisable for the administration of
the Plan. The foregoing notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting Awards under the
Plan to non-employee directors, and may perform any function of the
Committee under the Plan for any
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<PAGE>
other purpose, including for the
purpose of ensuring that transactions under the Plan by Participants
who are then subject to Section 16 of the Exchange Act in respect of
the Company are exempt under Rule 16b-3. In any case in which the
Board is performing a function of the Committee under the Plan, each
reference to the Committee herein shall be deemed to refer to the
Board, except where the context otherwise requires.
(b) Manner of Exercise of Committee Authority. At any time that a
member of the Committee is not a Qualified Member, any action of the
Committee relating to an Award granted or to be granted to a
Participant who is then subject to Section 16 of the Exchange Act in
respect of the Company, or relating to an Award intended by the
Committee to qualify as "performance-based compensation" within the
meaning of Code Section 162(m) and regulations thereunder, may be
taken either (i) by a subcommittee, designated by the Committee,
composed solely of two or more Qualified Members, or (ii) by the
Committee but with each such member who is not a Qualified Member
abstaining or recusing himself or herself from such action; provided,
however, that, upon such abstention or recusal, the Committee remains
composed of two or more Qualified Members. Such action, authorized by
such a subcommittee or by the Committee upon the abstention or recusal
of such non-Qualified Member(s), shall be the action of the Committee
for purposes of the Plan. Any action of the Committee shall be final,
conclusive and binding on all persons, including the Company, its
subsidiaries, Participants, Beneficiaries, transferees under Section
9(b) hereof, or other persons claiming rights from or through a
Participant, and stockholders. The express grant of any specific power
to the Committee, and the taking of any action by the Committee, shall
not be construed as limiting any power or authority of the Committee.
The Committee may delegate to officers or managers of the Company or
any subsidiary, or committees thereof, the authority, subject to such
terms as the Committee shall determine, to perform such functions,
including administrative functions, as the Committee may determine, to
the extent that such delegation will not result in the loss of an
exemption under Rule 16b-3(d)(1) for Awards granted to Participants
subject to Section 16 of the Exchange Act in respect of the Company
and will not cause Awards intended to qualify as "performance-based
compensation" under Code Section 162(m) to fail to so qualify. The
Committee may appoint agents to assist it in administering the Plan.
(c) Limitation of Liability. The Committee and each member
thereof shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him or her by any executive
officer, other officer or employee of the Company or a subsidiary, the
Company's independent auditors, consultants, or any other agents
assisting in the administration of the Plan. Members of the Committee
and any officer or employee of the Company or a subsidiary acting at
the direction or on behalf of the Committee shall not be personally
liable for any action or determination taken or made in good faith
with respect to the Plan, and shall, to the extent permitted by law,
be fully indemnified and protected by the Company with respect to any
such action or determination.
4. LIMITATIONS ON PLAN AWARDS.
(a) Overall Number of Shares Available for Delivery. Subject to
adjustment as provided in Section 9(c) hereof, the total number of
shares of Stock reserved and available for delivery in connection with
Awards under the Plan shall be 1.6 million. Any shares of
-4-
<PAGE>
Stock delivered under the Plan shall consist of authorized and
unissued shares or treasury shares.
(b) Application of Limitation to Grants of Awards. No Award may
be granted if the number of shares of Stock to which such Award
relates, when added to the number of shares of Stock to which other
then-outstanding Awards relate and the number of shares of Stock
issued or delivered upon settlement of previously granted Awards,
exceeds the number of shares of Stock reserved for issuance under this
Section 4. The Committee may adopt reasonable counting procedures to
ensure appropriate counting, avoid double counting (as, for example,
in the case of tandem or substitute awards) and make adjustments if
the number of shares of Stock actually delivered differs from the
number of shares previously counted in connection with an Award.
(c) Availability of Shares Not Delivered under Awards. Shares of
Stock subject to an Award under the Plan that is canceled, expired,
forfeited, settled in cash, or otherwise terminated without a delivery
of shares to the Participant, including (i) the number of shares
withheld in payment of any exercise or purchase price of an Award or
taxes relating to Awards, and (ii) the number of shares surrendered in
payment of any exercise or purchase price of an Award or taxes
relating to any Award, will again be available for Awards under the
Plan, except that if any such shares could not again be available for
Awards to a particular Participant under any applicable law or
regulation, such shares shall be available exclusively for Awards to
Participants who are not subject to such limitation.
5. ELIGIBILITY; PER-PERSON AWARD LIMITATIONS. Awards may be granted
under the Plan only to Eligible Persons. In each fiscal year during any part of
which the Plan is in effect, an Eligible Person who is an employee of the
Company or any of its subsidiaries may not be granted Awards relating to more
than one million shares of Stock, subject to adjustment as provided in Section
9(c), under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g), and 6(h).
6. SPECIFIC TERMS OF AWARDS.
(a) General. Awards may be granted on the terms and conditions
set forth in this Section 6. In addition, the Committee may impose on
any Award or the exercise thereof, at the date of grant or thereafter
(subject to Section 9(e)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall
determine, including terms requiring forfeiture of Awards in the event
of termination of employment by the Participant and terms permitting a
Participant to make elections relating to his or her Award. The
Committee shall retain full power and discretion to accelerate, waive
or modify, at any time, any term or condition of an Award that is not
mandatory under the Plan. Except as expressly provided by the
Committee (including for purposes of complying with requirements of
the Delaware General Corporation Law relating to lawful consideration
for issuance of shares), no consideration other than services will be
required for the grant (but not the exercise) of any Award.
(b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
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(i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee,
provided that such exercise price shall be not less than the Fair
Market Value of a share of Stock on the date of grant of such
Option except as provided under Section 7(a) hereof.
(ii) Time and Method of Exercise. The Committee shall
determine the time or times at which or the circumstances under
which an Option may be exercised in whole or in part (including
based on achievement of performance goals and/or future service
requirements), the methods by which such exercise price may be
paid or deemed to be paid, the form of such payment, including,
without limitation, cash, Stock, other Awards or awards granted
under other plans of the Company or any subsidiary, or other
property (including notes or other contractual obligations of
Participants to make payment on a deferred basis), and the methods
by or forms in which Stock will be delivered or deemed to be
delivered to Participants.
(iii) ISOs. The terms of any ISO granted under the Plan
shall comply in all respects with the provisions of Code Section
422. Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to ISOs (including any SAR in tandem
therewith) shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as
to disqualify either the Plan or any ISO under Code Section 422,
unless the Participant has first requested the change that will
result in such disqualification. ISOs may be granted only to
employees of the Company or any of its subsidiaries. To the extent
that the aggregate Fair Market Value (determined as of the time
the Option is granted) of the Stock with respect to which ISOs
granted under this Plan and all other plans of the Company and any
subsidiary are first exercisable by any employee during any
calendar year shall exceed the maximum limit (currently,
$100,000), if any, imposed from time to time under Code Section
422, such Options shall be treated as Options that are not ISOs.
(c) Stock Appreciation Rights. The Committee is authorized to
grant SARs to Participants on the following terms and conditions:
(i) Right to Payment. A SAR shall confer on the Participant
to whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one share of Stock on
the date of exercise (or, in the case of a "Limited SAR," the Fair
Market Value determined by reference to the Change in Control
Price, as defined under Section 8(c) hereof) over (B) the grant
price of the SAR as determined by the Committee.
(ii) Other Terms. The Committee shall determine at the date
of grant or thereafter, the time or times at which and the
circumstances under which a SAR may be exercised in whole or in
part (including based on achievement of performance goals and/or
future service requirements), the method of exercise, method of
settlement, form of consideration payable in settlement, method
by or forms in which Stock will be delivered or deemed to be
delivered to Participants, whether or not a
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SAR shall be in tandem or in combination with any other Award,
and any other terms and conditions of any SAR. Limited SARs that
may only be exercised in connection with a Change in Control or
other event as specified by the Committee may be granted on such
terms, not inconsistent with this Section 6(c), as the Committee
may determine. SARs and Limited SARs may be either freestanding
or in tandem with other Awards.
(d) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and
conditions:
(i) Grant and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may
impose, which restrictions may lapse separately or in combination
at such times, under such circumstances (including based on
achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Committee
may determine at the date of grant or thereafter. Except to the
extent restricted under the terms of the Plan and any Award
agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder,
including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment
or other requirement imposed by the Committee). During the
restricted period applicable to the Restricted Stock, subject to
Section 9(b) below, the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined, or otherwise
encumbered by the Participant.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the applicable
restriction period, Restricted Stock that is at that time subject
to restrictions shall be forfeited and reacquired by the Company;
provided that the Committee may provide, by rule or regulation or
in any Award agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted
Stock shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part the forfeiture of
Restricted Stock.
(iii) Certificates for Stock. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are
registered in the name of the Participant, the Committee may
require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to
such Restricted Stock, that the Company retain physical possession
of the certificates, and that the Participant deliver a stock
power to the Company, endorsed in blank, relating to the
Restricted Stock.
(iv) Dividends and Splits. As a condition to the grant of an
Award of Restricted Stock, the Committee may require that any cash
dividends paid on a share of Restricted Stock be automatically
reinvested in additional shares of Restricted Stock or applied to
the purchase of additional Awards under the Plan. Unless otherwise
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determined by the Committee, Stock distributed in connection with
a Stock split or Stock dividend, and other property distributed as
a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with respect
to which such Stock or other property has been distributed.
(e) Deferred Stock. The Committee is authorized to grant Deferred
Stock to Participants, which are rights to receive Stock at the end of
a specified deferral period, subject to the following terms and
conditions:
(i) Award and Restrictions. Settlement of an Award of
Deferred Stock shall occur upon expiration of the deferral period
specified for such Deferred Stock by the Committee (or, if
permitted by the Committee, as elected by the Participant). In
addition, Deferred Stock shall be subject to such restrictions
(which may include a risk of forfeiture) as the Committee may
impose, if any, which restrictions may lapse at the expiration of
the deferral period or at earlier specified times (including based
on achievement of performance goals and/or future service
requirements), separately or in combination, in installments or
otherwise, as the Committee may determine.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the applicable
deferral period or portion thereof to which forfeiture conditions
apply (as provided in the Award agreement evidencing the Deferred
Stock), all Deferred Stock that is at that time subject to
deferral (other than a deferral at the election of the
Participant) shall be forfeited; provided that the Committee may
provide, by rule or regulation or in any Award agreement, or may
determine in any individual case, that restrictions or forfeiture
conditions relating to Deferred Stock shall be waived in whole or
in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in
part the forfeiture of Deferred Stock.
(iii) Dividend Equivalents. Unless otherwise determined by
the Committee at date of grant, Dividend Equivalents on the
specified number of shares of Stock covered by an Award of
Deferred Stock shall be either (A) paid with respect to such
Deferred Stock at the dividend payment date in cash or in shares
of unrestricted Stock having a Fair Market Value equal to the
amount of such dividends, or (B) deferred with respect to such
Deferred Stock and the amount or value thereof automatically
deemed reinvested in additional Deferred Stock, other Awards or
other investment vehicles, as the Committee shall determine or
permit the Participant to elect.
(f) Bonus Stock and Awards in Lieu of Obligations. The Committee
is authorized to grant Stock as a bonus, or to grant Stock or other
Awards in lieu of obligations to pay cash or deliver other property
under the Plan or under other plans or compensatory arrangements.
Stock or Awards granted hereunder shall be subject to such other terms
as shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to a Participant, entitling the Participant to
receive cash, Stock, other Awards,
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or other property equal in value to dividends paid with respect to a
specified number of shares of Stock, or other periodic payments.
Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Stock, Awards, or other
investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants
such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related
to, Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, convertible or
exchangeable debt securities, other rights convertible or exchangeable
into Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or any other factors
designated by the Committee, and Awards valued by reference to the
book value of Stock or the value of securities of or the performance
of specified subsidiaries. The Committee shall determine the terms and
conditions of such Awards. Stock delivered pursuant to an Award in the
nature of a purchase right granted under this Section 6(h) shall be
purchased for such consideration, paid for at such times, by such
methods, and in such forms, including, without limitation, cash,
Stock, other Awards, or other property, as the Committee shall
determine.
(i) Performance Goals Applicable to Designated Covered Employees.
If the Committee determines that an Award described in Sections 6(d),
6(e) or 6(h) to be granted to an Eligible Person who is designated by
the Committee as likely to be a Covered Employee should qualify as
"performance-based compensation" for purposes of Code Section 162(m),
the grant, exercise, and/or settlement of such Award shall be
contingent upon achievement of preestablished performance goals and
other terms set forth in this Section 6(i).
(i) Performance Goals Generally. The performance goals for
such Awards shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with this
Section 6(i). Performance goals shall be objective and shall
otherwise meet the requirements of Code Section 162(m) and
regulations thereunder (including Regulation 1.162-27 and
successor regulations thereto), including the requirement that the
level or levels of performance targeted by the Committee result in
the achievement of performance goals being "substantially
uncertain." The Committee may determine that such Awards shall be
granted, exercised, and/or settled upon achievement of any one
performance goal or that two or more of the performance goals must
be achieved as a condition to grant, exercise, and/or settlement
of such Awards. Performance goals may differ for Awards granted to
any one Participant or to different Participants.
(ii) Business Criteria. One or more of the following
business criteria for the Company, on a consolidated basis, and/or
for specified subsidiaries or business units
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of the Company (except with respect to the total stockholder
return and earnings per share criteria), shall be used by the
Committee in establishing performance goals for such Awards: (1)
earnings per share; (2) revenues; (3) cash flow; (4) cash flow
return on investment; (5) return on net assets, return on assets,
return on investment, return on capital, return on equity; (6)
economic value added; (7) operating margin; (8) net income;
pretax earnings; pretax earnings before interest, depreciation
and amortization; pretax operating earnings after interest
expense and before incentives, service fees, and extraordinary or
special items; operating earnings; (9) total stockholder return;
and (10) any of the above goals as compared to the performance of
a published or special index deemed applicable by the Committee
including, but not limited to, the Standard & Poor's 500 Stock
Index or a group of comparator companies.
(iii) Performance Period; Timing for Establishing
Performance Goals. Achievement of performance goals in respect of
such Awards shall be measured over a performance period of up to
ten years, as specified by the Committee. Performance goals shall
be established not later than 90 days after the beginning of any
performance period applicable to such Awards, or at such other
date as may be required or permitted for "performance-based
compensation" under Code Section 162(m).
(iv) Other Terms. The Committee may, in its discretion,
reduce the amount of a settlement otherwise to be made in
connection with such Awards, but may not exercise discretion to
increase any such amount payable to a Covered Employee in respect
of an Award subject to this Section 6(i). All determinations by
the Committee as to the establishment of performance goals, and
the achievement of performance goals relating to Awards subject to
this Section 6(i), shall be made in writing in the case of any
Award intended to qualify under Code Section 162(m). The Committee
may not delegate any responsibility relating to such Awards, and
the Board shall not perform such functions at any time that the
Committee is composed solely of Qualified Members. Because the
Committee cannot determine with certainty whether a given
Participant will be a Covered Employee with respect to a fiscal
year that has not yet been completed, the term Covered Employee as
used herein shall mean only a person designated by the Committee,
at the time of grant of an Award, as likely to be a Covered
Employee with respect to that fiscal year. If any provision of the
Plan as in effect on the date of adoption or any agreements
relating to Awards that are designated as intended to comply with
Code Section 162(m) does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations thereunder,
such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements.
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee,
be granted either alone or in addition to, in tandem with, or in
substitution or exchange for, any other Award or any award
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granted under another plan of the Company, any subsidiary, or any
business entity to be acquired by the Company or a subsidiary, or
any other right of a Participant to receive payment from the
Company or any subsidiary. Such additional, tandem, and
substitute or exchange Awards may be granted at any time. If an
Award is granted in substitution or exchange for another Award or
award, the Committee shall require the surrender of such other
Award or award in consideration for the grant of the new Award.
In addition, Awards may be granted in lieu of cash compensation,
including in lieu of cash amounts payable under other plans of
the Company or any subsidiary, in which the value of Stock
subject to the Award is equivalent in value to the cash
compensation (for example, Deferred Stock or Restricted Stock),
or in which the exercise price, grant price, or purchase price of
the Award in the nature of a right that may be exercised is equal
to the Fair Market Value of the underlying Stock minus the value
of the cash compensation surrendered (for example, Options
granted with an exercise price "discounted" by the amount of the
cash compensation surrendered).
(b) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee; provided that in no
event shall the term of any Option or SAR exceed a period of ten years
(or, in the case of an ISO, such shorter term as may be required under
Code Section 422).
(c) Form and Timing of Payment under Awards; Deferrals. Subject
to the terms of the Plan and any applicable Award agreement, payments
to be made by the Company or a subsidiary upon the exercise of an
Option or other Award or settlement of an Award may be made in Stock,
other Awards, or other property, and may be made in a single payment
or transfer, in installments, or on a deferred basis. The settlement
of any Award may be accelerated in the discretion of the Committee or
upon occurrence of one or more specified events (in addition to a
Change in Control). Installment or deferred payments may be required
by the Committee (subject to Section 9(e) of the Plan, including the
consent provisions thereof in the case of any deferral of an
outstanding Award not provided for in the original Award agreement) or
permitted at the election of the Participant on terms and conditions
established by the Committee. Payments 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 or other amounts in respect of installment or
deferred payments denominated in Stock.
(d) Exemptions from Section 16(b) Liability. It is the intent of
the Company that the grant of any Awards to or other transaction by a
Participant who is subject to Section 16 of the Exchange Act shall be
exempt under Rule 16b-3 (except for transactions which a Participant
has been advised in advance are non-exempt). Accordingly, if any
provision of this Plan or any Award agreement does not comply with the
requirements of Rule 16b-3 as then applicable to any such transaction,
such provision shall be construed or deemed amended to the extent
necessary to conform to the applicable requirements of Rule 16b-3 so
that such Participant shall avoid liability under Section 16(b).
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8. CHANGE IN CONTROL.
(a) Effect of "Change in Control." In the event of a "Change in
Control," the following provisions shall apply unless otherwise
provided in the Award agreement:
(i) Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable
and vested as of the time of the Change in Control;
(ii) If any optionee holds an Option immediately prior to a
Change in Control that was not previously exercisable and vested
in full throughout the 60-day period preceding the Change in
Control, he shall be entitled to elect, during the 60-day period
preceding the Change in Control, in lieu of acquiring the shares
of Stock covered by the portion of the Option that was not vested
and exercisable within such 60-day period, to receive, and the
Company shall be obligated to pay, in cash the excess of the
Change in Control Price over the exercise price of such Option,
multiplied by the number of shares of Stock covered by such
portion of the Option;
(iii) The restrictions, deferral of settlement, and
forfeiture conditions applicable to any other Award granted under
the Plan shall lapse and such Awards shall be deemed fully vested
as of the time of the Change in Control, except to the extent of
any waiver by the Participant and subject to applicable
restrictions set forth in Section 9(a) hereof; and
(iv) With respect to any outstanding Award subject to
achievement of performance goals and conditions under the Plan,
such performance goals and other conditions will be deemed to be
met if and to the extent so provided by the Committee in the Award
agreement relating to such Award.
(b) Definition of "Change in Control." A "Change in Control"
shall mean the occurrence of any of the following:
(i) when any "person" as defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) of the Exchange
Act but excluding the Company and any subsidiary and any employee
benefit plan sponsored or maintained by the Company or any
subsidiary (including any trustee of such plan acting as trustee),
directly or indirectly, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of securities of the Company
representing at least 40% percent (or such greater percentage as
the Committee may specify in connection with the grant of any
Award) of the combined voting power of the Company's
then-outstanding securities; or
(ii) the occurrence of a transaction requiring stockholder
approval for the acquisition of the Company by an entity other
than the Company or a subsidiary through purchase of assets, or by
merger, or otherwise.
(c) Definition of "Change in Control Price." The "Change in
Control Price" means an amount in cash equal to the higher of (i) the
amount of cash and fair market value of
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property that is the highest price per share paid (including
extraordinary dividends) in any transaction triggering the Change in
Control, or (ii) the highest Fair Market Value per share at any time
during the 60-day period preceding the Change in Control.
9. GENERAL PROVISIONS.
(a) Compliance with Legal and Other Requirements. The Company
may, to the extent deemed necessary or advisable by the Committee,
postpone the issuance or delivery of Stock or payment of other
benefits under any Award until completion of such registration or
qualification of such Stock or other required action under any federal
or state law, rule, or regulation, listing or other required action
with respect to any stock exchange or automated quotation system upon
which the Stock or other securities of the Company are listed or
quoted, or compliance with any other obligation of the Company, as the
Committee may consider appropriate, and may require any Participant to
make such representations, furnish such information and comply with or
be subject to such other conditions as it may consider appropriate in
connection with the issuance or delivery of Stock or payment of other
benefits in compliance with applicable laws, rules, and regulations,
listing requirements, or other obligations. The foregoing
notwithstanding, in connection with a Change in Control, the Company
shall take or cause to be taken no action, and shall undertake or
permit to arise no legal or contractual obligation, that results or
would result in any postponement of the issuance or delivery of Stock
or payment of benefits under any Award or the imposition of any other
conditions on such issuance, delivery or payment, to the extent that
such postponement or other condition would represent a greater burden
on a Participant than existed on the 90th day preceding the Change in
Control.
(b) Limits on Transferability; Beneficiaries. No Award or other
right or interest of a Participant under the Plan shall be pledged,
hypothecated or otherwise encumbered or subject to any lien,
obligation or liability of such Participant to any party, or assigned
or transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary upon the death of a
Participant, and such Awards or rights that may be exercisable shall
be exercised during the lifetime of the Participant only by the
Participant or his or her guardian or legal representative, except
that Awards and other rights (other than ISOs and SARs in tandem
therewith) may be transferred to one or more Beneficiaries or other
transferees during the lifetime of the Participant, and may be
exercised by such transferees in accordance with the terms of such
Award, but only if and to the extent such transfers are permitted by
the Committee pursuant to the express terms of an Award agreement
(subject to any terms and conditions which the Committee may impose
thereon). A Beneficiary, transferee, or other person claiming any
rights under the Plan from or through any Participant shall be subject
to all terms and conditions of the Plan and any Award agreement
applicable to such Participant, except as otherwise determined by the
Committee, and to any additional terms and conditions deemed necessary
or appropriate by the Committee.
(c) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split,
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reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, liquidation, dissolution or other similar
corporate transaction or event affects the Stock such that an
adjustment is determined by the Committee to be appropriate under the
Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of shares of
Stock which may be delivered in connection with Awards granted
thereafter, (ii) the number and kind of shares of Stock by which
annual per-person Award limitations are measured under Section 5
hereof, (iii) the number and kind of shares of Stock subject to or
deliverable in respect of outstanding Awards and (iv) the exercise
price, grant price or purchase price relating to any Award and/or make
provision for payment of cash or other property in respect of any
outstanding Award. In addition, the Committee is authorized to make
adjustments in the terms and conditions of, and the criteria included
in, Awards (including performance goals) in recognition of unusual or
nonrecurring events (including, without limitation, events described
in the preceding sentence, as well as acquisitions and dispositions of
businesses and assets) affecting the Company, any subsidiary or any
business unit, or the financial statements of the Company or any
subsidiary, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business
conditions or in view of the Committee's assessment of the business
strategy of the Company, any subsidiary or business unit thereof,
performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other
circumstances deemed relevant; provided that no such adjustment shall
be authorized or made if and to the extent that such authority or the
making of such adjustment would cause Options, SARs, or Awards granted
under Section 6(i) hereof to Participants designated by the Committee
as Covered Employees and intended to qualify as "performance-based
compensation" under Code Section 162(m) and regulations thereunder to
otherwise fail to qualify as "performance-based compensation" under
Code Section 162(m) and regulations thereunder.
(d) Taxes. The Company and any subsidiary is authorized to
withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any payroll
or other payment to a Participant, amounts of withholding and other
taxes due or potentially payable in connection with any Award, and to
take such other action as the Committee may deem advisable to enable
the Company and Participants to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to any Award.
This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in
satisfaction of a Participant's tax obligations, either on a mandatory
or elective basis in the discretion of the Committee.
(e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's
authority to grant Awards under the Plan without the consent of
stockholders or Participants, except that any amendment or alteration
to the Plan shall be subject to the approval of the Company's
stockholders not later than the annual meeting next following such
Board action if such stockholder approval is required by any federal
or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or
quoted, and the
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Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; provided that,
without the consent of an affected Participant, no such Board action
may materially and adversely affect the rights of such Participant
under any previously granted and outstanding Award. The Committee may
waive any conditions or rights under, or amend, alter, suspend,
discontinue, or terminate any Award theretofore granted and any Award
agreement relating thereto, except as otherwise provided in the Plan;
provided that, without the consent of an affected Participant, no such
Committee action may materially and adversely affect the rights of
such Participant under such Award. Notwithstanding anything in the
Plan to the contrary, if any right under this Plan would cause a
transaction to be ineligible for pooling of interest accounting that
would, but for the right hereunder, be eligible for such accounting
treatment, the Committee may modify or adjust the right so that
pooling of interest accounting shall be available, including the
substitution of Stock having a Fair Market Value equal to the cash
otherwise payable hereunder for the right which caused the transaction
to be ineligible for pooling of interest accounting.
(f) Limitation on Rights Conferred under Plan. Neither the Plan
nor any action taken hereunder shall be construed as (i) giving any
Eligible Person or Participant the right to continue as an Eligible
Person or Participant or in the employ or service of the Company or a
subsidiary, (ii) interfering in any way with the right of the Company
or a subsidiary to terminate any Eligible Person's or Participant's
employment or service at any time, (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be
treated uniformly with other Participants and employees, or (iv)
conferring on a Participant any of the rights of a stockholder of the
Company unless and until the Participant is duly issued or transferred
shares of Stock in accordance with the terms of an Award.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a
Participant or obligation to deliver Stock pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the
creation of trusts and deposit therein cash, Stock, other Awards or
other property, or make other arrangements to meet the Company's
obligations under the Plan. Such trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.
The trustee of such trusts may be authorized to dispose of trust
assets and reinvest the proceeds in alternative investments, subject
to such terms and conditions as the Committee may specify and in
accordance with applicable law.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan
by the Board nor its submission to the stockholders of the Company for
approval shall be construed as creating any limitations on the power
of the Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable including incentive arrangements
and awards which do not qualify under Code Section 162(m).
(i) Payments in the Event of Forfeitures; Fractional Shares.
Unless otherwise
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<PAGE>
determined by the Committee, in the event of a forfeiture of an Award
with respect to which a Participant paid cash or other consideration,
the Participant shall be repaid the amount of such cash or other
consideration. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards or other property shall be issued
or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise
eliminated.
(j) Governing Law. The validity, construction and effect of the
Plan, any rules and regulations under the Plan, and any Award
agreement shall be determined in accordance with the Delaware General
Corporation Law, without giving effect to principles of conflicts of
laws, and applicable federal law.
(k) Plan Effective Date and Stockholder Approval. The Plan has
been adopted by the Board on July 15, 1997, and shall become effective
upon approval by the stockholders of the Company not later than one
year after that date.
-16-
AUTOTOTE CORPORATION
1997 INCENTIVE COMPENSATION PLAN
STOCK OPTION TO PURCHASE CLASS A COMMON STOCK
Stock Option granted by Autotote Corporation, a Delaware corporation (the
"Company") to ______________ (the "Participant"), pursuant to the Company's 1997
Incentive Compensation Plan (the "Plan").
1. Grant of Option
This certificate evidences the grant by the Company on ____________ to the
Participant of an option (the "Option") to purchase, in whole or in part, on the
terms herein provided, a total of __________ shares (the "Shares") of the Class
A Common Stock, $.01 par value per share, of the Company at an exercise price of
$_______ per share, which is not less than the fair market value of the Shares
on the date of grant of this Option.
The Option becomes exercisable in the following cumulative installments:
============ =================
============ =================
The latest date on which this Option may be exercised (if not earlier
terminated) is _______________.
2. Exercise of Option
Each election to exercise this Option shall be in writing signed by the
Participant or by his/her executor or administrator or the person or persons to
whom this Option is transferred by will or the applicable laws of descent and
distribution, or if the Participant is incapacitated, by the person or persons
legally appointed to act on the Participant's behalf (in each such case, the
"Legal Representative"), and received by the Company at its principal office,
accompanied by payment in full as provided in the Plan. In the event that this
Option is exercised by the Legal Representative of the Participant, the Company
shall be under no obligation to deliver Shares hereunder unless and until the
Company is satisfied as to the authority of the person or persons exercising
this Option.
3. Taxes
The Company is authorized to withhold shares pursuant to the exercise of this
Option in an amount sufficient to satisfy any withholding and other taxes due or
potentially payable in connection with such exercise.
4. Nontransferability of Option
This Option may not be pledged, hypothecated or otherwise encumbered or subject
to any lien, obligation or liability of such Participant to any party, or
assigned or transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary (as defined under the Plan) upon
the death of the Participant, and is exercisable during the Participant's
lifetime only by the Participant or by his or her guardian or legal
representative, except as provided under the Plan.
5. Provisions of the Plan
This Option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant herewith.
IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer.
AUTOTOTE CORPORATION
By: ____________________________
Dated: _________________
Exhibit 23.1
The Board of Directors and Stockholders
Autotote Corporation:
We consent to the incorporation by reference of our report dated December 5,
1996, except for Notes 7 and 21 which are as of January 29, 1997, and Note 22
which is as of July 1, 1997, with respect to the consolidated balance sheets of
Autotote Corporation and subsidiaries as of October 31, 1996 and 1995 and the
related consolidated statements of operations, stockholders' equity (deficit),
cash flows, and financial statement schedule for each of the years in the
three-year period ended October 31, 1996, which report appears in the October
31, 1996, annual report on Form 10-K of Autotote Corporation.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Short Hills, New Jersey
January 23, 1998
