<PAGE>
As filed with the Securities and Exchange Commission on November 1, 1996
Registration No. 33-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
VIDEO DISPLAY CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-1217564
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1868 TUCKER INDUSTRIAL DRIVE
TUCKER, GEORGIA 30084
(770)938-2080
(Address, including zip code, and telephone number of registrant's principal
executive offices)
VIDEO DISPLAY CORPORATION 1996 STOCK OPTION PLAN
(Full title of the Plan)
Ronald D. Ordway
1868 Tucker Industrial Drive
Tucker, Georgia 30084
(770)938-2080
(Name, address, including zip code, and telephone number of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================
Proposed Proposed
Title of maximum maximum
securities Amount offering price aggregate Amount of
to be registered to be registered per share offering price registration fee
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Common Stock, 500,000 $4.000 $2,000,000 $689.66
without par value (1)
=======================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and (h) and based upon the average of the high and low
prices of the Company's Common Stock on October 28, 1996, as reported by
the NASDAQ National Market System.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing the information specified in Part I will be sent
or given to persons participating in the Video Display Corporation 1996 Stock
Option Plan (the "Plan") of Video Display Corporation. In accordance with the
instructions to Part I of Form S-8, such documents have not been filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or as prospectus supplements pursuant
to Rule 424 of the Act.
PART II
Item 3. Incorporation of Documents by Reference.
- ------- ---------------------------------------
The following documents filed with the Securities and Exchange Commission
are hereby incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
February 29, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the thirteen weeks
ended May 31, 1996.
(c) The Company's Quarterly Report on Form 10-Q for the thirteen weeks
ended August 31, 1996.
(d) The description of the Company's Common Stock in Item 1 of the
Company's Registration Statement on Form 8-A under the 1934 Act, dated March 31,
1985.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") after the filing hereof and prior to a filing of a post-
effective amendment which indicates that all securities offered hereby have been
sold or which de-registers all securities remaining unsold, shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents.
Item 4. Description of Securities.
- ------ -------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
- ------ --------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
- ------ -----------------------------------------
The Company's Articles of Incorporation (the "Articles") provide that a
director shall not be personally liable to the Company or its stockholders for
monetary damages for breach of his duty of care or other duty as a director;
provided that the provisions eliminate or limit liability of a director only to
the maximum extent permitted from time to time by the Georgia Business
Corporation Code or any successor law or laws.
The Company's Bylaws provide that the Company shall indemnify any person
who was or is a party to or is threatened to be made a party to any threatened,
pending, or completed action, suit of proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that such person is or was a director or officer
of the Company, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any
2
<PAGE>
criminal action or proceeding, such person had no reasonable cause to believe
such person's conduct was unlawful. The Company's Bylaws also provide that the
Company shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that such person is or was a director or officer of the Company, if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Company, unless such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
such person's duty to the Company.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions of the Georgia
Business Corporation Code and the Company's Articles of Incorporation and By-
Laws, the Company has been informed that indemnification is considered by the
Securities and Exchange Commission to be against public policy and therefore
unenforceable.
Item 7. Exemption from Registration Claimed.
- ------ -----------------------------------
Not applicable.
Item 8. Exhibits.
- ------ --------
Exhibit No. Description Page No.
----------- ----------- --------
4(a) Video Display Corporation 1996 Stock Option Plan
4(b) Form of Incentive Stock Option Agreement
5(b) Opinion of counsel as to
legality of the securities being registered
15 Not applicable
23(c) Consent of Schnader Harrison Segal & Lewis
(included in opinion filed as Exhibit 5(b))
23(d) Consent of BDO Seidman, LLP
24(b) Power of Attorney (included on the signature page
hereof)
27 Not applicable
28 Not applicable
Item 9. Undertakings.
- ------- ------------
The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof)
3
<PAGE>
which, individually or in 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 statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Act each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange 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.
(5) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the 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 manner
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.
[Remainder of page left blank intentionally]
4
<PAGE>
SIGNATURES
----------
In accordance with 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 of filing on Form S-8 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Tucker,
State of Georgia, on October 29, 1996.
VIDEO DISPLAY CORPORATION
By: /s/ Ronald D. Ordway
---------------------
Ronald D. Ordway, Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Ronald D. Ordway as his true and lawful attorney-
in-fact and agent, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, 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, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
indicated on October 29, 1996.
SIGNATURE TITLE
--------- -----
/s/ Ronald D. Ordway Chief Executive Officer and Chairman of the
-------------------- Board of Directors (principal executive officer)
Ronald D. Ordway
/s/ Carol D. Franklin Secretary and Chief Financial Officer (principal
--------------------- accounting officer and principal financial
Carol D. Franklin officer)
/s/ A.J. Kenerleber Director
-------------------
A.J. Kenerleber
/s/ Murray Fox Director
--------------
Murray Fox
/s/ Carlton Sawyer Director
------------------
Carlton Sawyer
/s/ John McQueen Director
----------------
John McQueen
5
<PAGE>
EXHIBIT 4(A)
VIDEO DISPLAY CORPORATION
1996 STOCK OPTION PLAN
VIDEO DISPLAY CORPORATION, a Georgia corporation, hereby establishes this
Plan to be called the Video Display Corporation 1996 Stock Option Plan to
encourage employees of the Company to acquire Common Stock of the Company, and
thus provide an incentive for continuation of the efforts of the employees for
the success of the Company, for continuity of employment and to further the
interests of the shareholders.
SECTION 1. DEFINITIONS
Whenever used herein, the masculine pronoun shall be deemed to include the
feminine, the singular to include the plural, unless the context clearly
indicates otherwise, and the following capitalized words and phrases are used
herein with the meaning thereafter ascribed:
1.1 "Affiliate" shall mean any Parent or Subsidiary of the Company, or any
other entity designated by the Committee in which the Company owns, directly or
indirectly, fifty percent (50%) or more of the voting stock or capital at the
time of the granting of an Option; provided, however, that no Incentive Stock
Option may be granted to any employee of an Affiliate which is not a
corporation. Any Incentive Stock Options held by an employee of an Affiliate
which ceases to be fifty percent (50%) owned will be deemed to be a Non-
Qualified Stock Option three (3) months after the date that the Company's
ownership of the Affiliate falls below fifty percent (50%). If ownership by the
Company of the Affiliate falls below twenty-five percent (25%), a Participant's
employment will be considered terminated on the date that the Company's
ownership of the Affiliate falls below twenty-five percent (25%).
1.2 "Beneficiary" means the person or persons designated by a Participant
to exercise an Option in the event of the Participant's death while employed by
the Company, or in the absence of such designation, the executor or
administrator of the Participant's estate.
1.3 "Board" means the Board of Directors of the Company.
1.4 "Cause" means conduct by the Participant amounting to (1) fraud or
dishonesty against the Company or the Participant's employer, (2) willful
misconduct, repeated refusal to follow the reasonable directions of the
Participant's employer, or knowing violation of law in the course of performance
of the duties of the Participant's employment, (3) repeated absences from work
without a reasonable excuse, (4) intoxication with alcohol or drugs while on the
Company's or any Affiliate's premises during regular business hours, (5) a
conviction or plea of guilty or nolo contendere to a felony or a crime involving
dishonesty, or (6) a breach or violation of the terms of any employment or other
agreement to which the Participant and the Company or the Participant's employer
are parties.
1.5 "Change in Control" shall be deemed to have occurred if (i) a tender
offer shall be made and consummated with respect to the ownership of thirty
percent (30%) or more of the outstanding voting securities of the Company, (ii)
the Company shall be merged or consolidated with another corporation and as a
result of such merger or consolidation less than seventy percent (70%) of the
outstanding voting securities of the surviving or resulting corporation shall be
owned in the aggregate by the former shareholders of the Company, other than
affiliates (within the meaning of the Securities Exchange Act of 1934) of any
party to such merger or consolidation, (iii) the Company shall sell
substantially all of its assets to another corporation which corporation is not
wholly owned by the Company, or (iv) a person, within the meaning of Section
3(a)(9) or of Section 13(d)(3) (as in effect on the date hereof) of the
Securities Exchange Act of 1934, shall acquire thirty percent (30%) or more of
the outstanding voting securities of the Company (whether directly, indirectly
beneficially or of record). For purposes hereof, ownership of voting securities
shall take into account and shall include ownership as determined by applying
the provisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant
to the Securities Exchange Act of 1934.
<PAGE>
1.6 "Code" means the Internal Revenue Code of 1986, as amended.
1.7 "Committee" means the Compensation Committee or any successor
committee appointed by the Board or, if such committee has not been appointed,
the entire Board.
1.8 "Company" means Video Display Corporation, a Georgia corporation.
1.9 "Constructive Discharge" means the termination of a Participant's
employment by the Company or Affiliate on account of (i) any material reduction
in the Participant's Compensation, (ii) any material reduction in the level or
scope of job responsibility or status of the Participant occurring without the
consent of the Participant, or (iii) any relocation to an office of the Company
or Affiliate which is more than fifty (50) miles from the office where the
Participant was previously located to which the Participant has not agreed.
1.10 "Disability" has the same meaning as provided in the long-term
disability plan maintained by the Company. In the event of a dispute, the
determination of Disability shall be made by the Committee. If, at any time
during the period that this Plan is in operation, the Company does not maintain
a long term disability plan, Disability shall mean a physical or mental
condition which, in the judgment of the Committee, permanently prevents a
Participant from performing his usual duties for the Company or Affiliate or
such other position or job which the Company makes available to him and for
which the Participant is qualified by reason of his education, training and
experience. In making its determination the Committee may, but is not required
to, rely on advice of a physician competent in the area to which such Disability
relates. The Committee may make the determination as to Disability in its sole
discretion and any decision of the Committee will be binding on all parties.
1.11 "Disposition" means any conveyance, sale, transfer, assignment, pledge
or hypothecation, whether outright or as security, inter vivos or testamentary,
with or without consideration, voluntary or involuntary.
1.12 "Fair Market Value" means, for any particular date, (i) for any period
during which the Stock shall be listed for trading on a national securities
exchange or the National Association of Securities Dealers Automated Quotation
System ("NASDAQ"), the closing price per share of Stock on such exchange or the
NASDAQ closing bid price as of the close of such trading day, or (ii) until such
time as the Stock is listed on a national securities exchange or NASDAQ, the
Committee acting in good faith shall determine, through any reasonable valuation
method, the Fair Market Value of the Stock subject to this Plan. If the Fair
Market Value is to be determined as of a day when the securities markets are not
open, the Fair Market Value on that day shall be the Fair Market Value on the
next succeeding day when the markets are open.
1.13 "Incentive Stock Option" means an incentive stock option, as defined
in Code Section 422, described in Plan Section 3.2.
1.14 "Involuntary Termination" means the termination of the Participant's
employment relationship but does not include a termination for cause.
1.15 "Non-Qualified Stock Option" means a stock option, other than an
option qualifying as an Incentive Stock Option, described in Plan Section 3.2.
1.16 "Option" means a Non-Qualified Stock Option or an Incentive Stock
Option.
1.17 "Over 10 Percent Owner" means an individual who at the time an
Incentive Stock Option is granted owns Stock possessing more than ten percent
(10%) of the total combined voting power of the Company, determined by applying
the attribution rules of Code Section 424(d).
1.18 "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, with respect to Incentive
Stock Options, at the time of granting of the Option, each of the corporations
other than the Company owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
<PAGE>
1.19 "Participant" means an individual who receives an Option hereunder.
1.20 "Plan" means the Video Display Corporation 1996 Stock Option Plan.
1.21 "Retirement" means a participant's termination of employment after
attaining age 62 and seven (7) years of service.
1.22 "Stock" means the Company's common stock, no par value.
1.23 "Stock Option Agreement" means an agreement between the Company and a
Participant or other documentation evidencing on Option.
1.24 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, with respect to
Incentive Stock Options, at the time of the granting of the Option, each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
1.25 "Termination of Employment" means the termination of the employee-
employer relationship between a Participant and the Company and its Affiliates
regardless of the fact that severance or similar payments are made to the
Participant, for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability or Retirement. The
Committee shall, in its absolute discretion, determine the effect of all matters
and questions relating to Termination of Employment including, but not by way of
limitation, the question of whether a leave of absence constitutes a Termination
of Employment, or whether it is for Cause or is a Constructive Discharge.
1.26 "Vested" means that an Option is nonforfeitable and exercisable with
regard to a designated number of shares of Stock.
SECTION 2. GENERAL TERMS
2.1 PURPOSE OF THE PLAN. The Plan is intended to (a) provide an incentive
to employees of the Company and its Affiliates to stimulate their efforts toward
the continued success of the Company and to operate and manage the business in a
manner that will provide for the long-term growth and profitability of the
Company; (b) encourage stock ownership by employees by providing them with a
means to acquire a proprietary interest in the Company by acquiring shares of
Stock; and (c) provide a means of obtaining and rewarding employees.
2.2 STOCK SUBJECT TO THE PLAN. Subject to adjustment in accordance with
Section 6.2, 500,000 shares of Stock (the "Maximum Plan Shares") are hereby
reserved and subject to issuance under the Plan. At no time shall the Company
have outstanding Options and shares of Stock issued in respect to Options in
excess of the Maximum Plan Shares. To the extent permitted by law, the shares
of Stock attributable to the nonvested, unpaid, unexercised, unconverted or
otherwise unsettled portion of any Option that is forfeited, canceled or expires
or terminates for any reason without becoming vested, paid, exercised, converted
or otherwise settled in full shall again be available for purposes of the Plan.
2.3 ADMINISTRATION OF THE PLAN.
(a) Committee. The Plan shall be administered by the Committee. Upon
---------
the Company becoming registered under the rules and regulations of the
Securities and Exchange Act of 1934, as amended (the "1934 Act"), members of the
Committee shall always be members of the Board who are not eligible to
participate under the Plan or any other plan of the Company or its Affiliates
authorizing discretionary grants or awards of stock, stock options or stock
appreciation rights and who have not been eligible to so participate for at
least one (1) year prior to service as an administrator of the Plan.
Eligibility requirements for members of the Committee shall comply with Rule
16b-3 promulgated pursuant to the 1934 Act or any successor rule or regulation.
No person, other than members of the Committee, shall have any discretion
concerning decisions regarding the Plan.
<PAGE>
(b) Grant of Options. The Committee shall have full and complete
----------------
authority in its sole discretion, but subject to the express provisions of the
Plan, to grant Options; to determine the employees of the Company and of its
Affiliates to whom Options shall be granted; to determine the option price and
the number of shares of Stock to be covered by each Option, the vesting and
duration of each Option, the time or times within which each Option may be
exercised, and the other terms and conditions of the grant of each Option; to
cancel and amend Options (with the consent of the holder of the Option where
required); and to impose such conditions on the grant of Options as it
determines to be appropriate, including the surrender of outstanding stock
options issued under the Plan or any other stock option plan of the Company.
The provisions and conditions of the Options need not be the same with respect
to each Participant or with respect to each Option.
(c) Interpretation of Plan. The Committee may, subject to the
----------------------
provisions of the Plan, establish, amend, and rescind such rules and regulations
as it deems necessary or advisable for the proper administration of the Plan,
and may make determinations and may take such other action in connection with or
in relation to the Plan as it deems necessary or advisable. Each determination
or other action made or taken pursuant to the Plan, including interpretation of
the Plan and the specific conditions and provisions of the Options granted
hereunder by the Committee shall be final and conclusive for all purposes and
upon all persons including, but without limitation, the Company, its Affiliates,
the Committee, the Board, officers, and the affected employees of the Company
and/or its Affiliates and their successors-in-interest.
(d) Liability of Committee Members. No member of the Committee shall
------------------------------
be liable for any action or determination made in good faith with respect to the
administration of the Plan and the granting of Options thereunder.
2.4 ELIGIBILITY AND LIMITS. Participants in the Plan shall be selected by
the Committee. In the case of Incentive Stock Options, the aggregate Fair
Market Value (determined as of the date an Incentive Stock Option is granted) of
Stock with respect to which stock options intended to meet the requirements of
Code Section 422 become exercisable for the first time by an individual during
any calendar year under all plans of the Company and its Parents and
Subsidiaries shall not exceed $100,000; provided further, that if the limitation
is exceeded, the Incentive Stock Option(s) which cause the limitation to be
exceeded shall be treated as Non-Qualified Stock Options(s).
SECTION 3. TERMS OF OPTIONS
3.1 TERMS AND CONDITIONS OF ALL OPTIONS.
(a) Number of Shares. The number of shares of Stock as to which an
----------------
Option shall be granted shall be determined by the Committee in its sole
discretion, subject to the provisions of Sections 2.2 and 2.4 as to the total
number of shares available for grants under the Plan.
(b) Stock Option Agreement. Each Option shall be evidenced by a Stock
----------------------
Option Agreement in such form as the Committee may determine is appropriate,
subject to the provisions of the Plan.
(c) Date of Grant. The date an Option is granted shall be the date on
-------------
which the Committee has approved the terms and conditions of the Stock Option
Agreement and has determined the recipient of the Option and the number of
shares covered by the Option and has taken all such other action necessary to
complete the grant of the Option, or such later date as designated by the
Committee.
(d) Vesting of Options. The Committee may provide in any Stock Option
------------------
Agreement a vesting schedule. The vesting schedule shall specify when such
Options shall become Vested and thus exercisable. Notwithstanding any vesting
schedule which may be specified in an Stock Option Agreement,
(i) in the event the Participant's employment is terminated as a
result of an Involuntary Termination or Constructive Discharge within
the time period specified in the Stock Option Agreement following a
Change of Control, or
<PAGE>
(ii) if a tender offer shall be made and consummated of the
ownership of one hundred percent (100%) of the outstanding voting
securities of the Company,
the Options granted under the Plan shall become one hundred percent (100%)
Vested and exercisable except to the extent that the exercisability of any such
Option would result in an "excess parachute payment" within the meaning of
Section 280G of the Code.
(e) Transferability. Options shall not be transferable or assignable
---------------
except by will or by the laws of descent and distribution and, in such case,
such transferee shall be subject to all provisions of this Plan as was the
original Participant except and unless as provided for herein or in the
instrument evidencing such Option. Options shall be exercisable, during the
Participant's lifetime, only by the Participant, or in the event of the
Disability of the Participant, by the legal representative of the Participant.
(f) Rights as Shareholder. The holder of an Option, as such, shall
---------------------
have none of the rights of a stockholder of the Company or any Affiliate.
3.2 ADDITIONAL TERMS AND CONDITIONS OF OPTIONS. At the time any Option is
granted, the Committee shall determine whether the Option is to be an Incentive
Stock Option or a Non-Qualified Stock Option, and the Option shall be clearly
identified as to its status as an Incentive Stock Option or a Non-Qualified
Stock Option. At the time any Incentive Stock Option is exercised, the Company
shall be entitled to place a legend on the certificates representing the shares
of Stock purchased pursuant to the Option to clearly identify them as shares of
Stock purchased upon exercise of an Incentive Stock Option. An Incentive Stock
Option may only be granted within ten (10) years from the date the Plan, as
amended and restated, is adopted or the date such Plan is approved by the
Company's stockholders, whichever is earlier.
(a) Option Price. Subject to adjustment in accordance with Section
------------
6.2 and the other provisions of this Section 3.2, the exercise price (the
"Exercise Price") per share of the Stock purchasable under any Option shall be
as set forth in the applicable Stock Option Agreement. With respect to each
grant of an Incentive Stock Option to a Participant who is not an Over 10
Percent Owner, the Exercise Price per share shall not be less than the Fair
Market Value on the date the Option is granted. With respect to each grant for
an Incentive Stock Option to a Participant who is an Over 10 Percent Owner, the
Exercise Price shall not be less than one hundred ten percent (110%) of the Fair
Market Value on the date the Option is granted.
(b) Option Term. The Stock Option Agreement shall set forth the term
-----------
of each Option. Any Incentive Stock Option granted to a Participant who is not
an Over 10 Percent Owner shall not be exercisable after the expiration of ten
(10) years after the date the Option is granted. Any Incentive Stock Option
granted to an Over 10 Percent Owner shall not be exercisable after the
expiration of five (5) years after the date the Option is granted. In either
case, the Committee may specify a shorter term and state such term in the Stock
Option Agreement.
(c) Payment. Payment for all shares of Stock purchased pursuant to
-------
exercise of an Option shall be made in any form or manner authorized by the
Committee in the Stock Option Agreement or by amendment thereto, including, but
not limited to, cash or, if the Stock Option Agreement provides: (i) by
cancellation of indebtedness of the Company to the Participant; (ii) by
surrender of shares of Stock of the Company that have been owned by the
Participant for more than six (6) months (and which have been paid for within
the meaning of SEC Rule 144 and, if such shares were purchased from the Company
by use of a promissory note, such note has been fully paid with respect to such
Shares), or were obtained by the Participant in the open public market, having a
Fair Market Value equal to the Exercise Price of the Option; (iii) by
instructing the Company to withhold Shares otherwise issuable pursuant to an
exercise of the Option having a Fair Market Value equal to the Exercise Price of
the Option (including the withheld Shares); (iv) by waiver of compensation due
or accrued to the Participant for services rendered; (v) provided that a public
market for the Company's stock exists, through a "same day sale" commitment from
the Participant and a broker-dealer that is a member of the National Association
of Securities Dealers (an "NASD Dealer") whereby the Participant irrevocably
elects to exercise this Option and to sell a portion of the Shares so purchased
to pay for the Exercise Price and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the Exercise Price directly to the
Company; (vi) provided that a public market for the Company's stock exists,
through a "margin"
<PAGE>
commitment from the Participant and an NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to pledge the shares so purchased
to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or (vii) by any combination of the foregoing. Payment
shall be made at the time that the Option or any part thereof is exercised, and
no shares shall be issued or delivered upon exercise of an Option until full
payment has been made by the Participant.
(d) Conditions to the Exercise of an Option. Each Option granted
---------------------------------------
under the Plan shall be exercisable by whom, at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Committee shall
specify in the Stock Option Agreement; provided, however, that subsequent to the
grant of an Option, the Committee, at any time before complete termination of
such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part, including, without limitation, upon a Change in
Control, and may permit the Participant or any other designated person acting
for the benefit of the Participant to exercise the Option, or any portion
thereof, for all or part of the remaining Option term notwithstanding any
provision of the Stock Option Agreement to the contrary.
(e) Termination of Incentive Stock Option. With respect to an
-------------------------------------
Incentive Stock Option, in the event of Termination of Employment of a
Participant, the Option or portion thereof held by the Participant which is
unexercised shall expire, terminate, and become unexercisable as of the
expiration of three (3) months after the date of Termination of Employment, or
any earlier date set forth in the applicable Stock Option Agreement; provided,
however, that in the case of a holder whose Termination of Employment is due to
death or Disability, one (1) year shall be substituted for such three (3) month
period. For purposes of this Subsection (e), Termination of Employment of the
Participant shall not be deemed to have occurred if the Participant is employed
by another corporation (or a parent or subsidiary corporation of such other
corporation) which has assumed the Incentive Stock Option of the Participant in
a transaction to which Code Section 424(a) is applicable.
(f) Special Provisions for Certain Substitute Options.
-------------------------------------------------
Notwithstanding anything to the contrary in this Section 3.2, any Option issued
in substitution for an option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code Section
424(a) is applicable, may provide for an exercise price computed in accordance
with such Code Section and the regulations thereunder and may contain such other
terms and conditions as the Committee may prescribe to cause such substitute
Option to contain as nearly as possible the same terms and conditions (including
the applicable vesting and termination provisions) as those contained in the
previously issued option being replaced thereby.
3.3 TREATMENT OF OPTIONS UPON TERMINATION OF EMPLOYMENT. Except as
otherwise provided by Plan Section 3.2(e), any Option granted under this Plan to
a Participant who suffers a Termination of Employment may be canceled,
accelerated, paid or continued, as provided in the Stock Option Agreement or, in
the absence of such provision, as the Committee may determine. The portion of
any Option exercisable in the event of continuation or the amount of any payment
due under a continued Option may be adjusted by the Committee to reflect the
Participant's period of service from the date of grant through the date of the
Participant's Termination of Employment or such other factors as the Committee
determines that are relevant to its decision to continue the Option.
SECTION 4. SURRENDER OF OPTIONS
4.01 GENERAL RULE. The Committee acting in its absolute discretion may
incorporate a provision in a Stock Option Agreement to allow an Employee to
surrender his or her Option in whole or in part in lieu of the exercise in whole
or in part of that Option on any date that: (i) the Fair Market Value of the
Shares subject to such Option exceeds the Option Price for such Shares; and (ii)
the Option to purchase such Shares is otherwise exercisable.
4.02 PROCEDURE. The surrender of an Option in whole or in part shall be
effected by the delivery of the Stock Option Agreement to the Committee (or to
its delegate) together with a statement signed by the Employee which specifies
the number of Shares (the "Surrendered Shares") as to which the Employee
surrenders his or her Option and how he or she desires payment be made for such
Surrendered Shares.
<PAGE>
4.03 PAYMENT. An Employee in exchange for his or her Surrendered Shares
shall receive a payment in cash or in Shares, or in a combination of cash and
Shares, equal in amount on the date such surrender is effected to the excess of
the Fair Market Value of the Surrendered Shares on such date over the Exercise
Price for the Surrendered Shares. The Committee acting in its absolute
discretion can approve or disapprove an Employee's request for payment in whole
or in part in cash and can make that payment in cash or in such combination of
cash and Shares as the Committee deems appropriate. A request for payment only
in Shares shall be approved and made in Shares to the extent payment can be made
in whole Shares and (at the Committee's discretion) in cash in lieu of any
fractional Shares.
4.04 RESTRICTIONS. Any Stock Option Agreement which incorporates a
provision to allow an Employee to surrender his or her Option in whole or in
part also shall incorporate such additional restrictions on the exercise or
surrender of such Option as the Committee deems necessary to satisfy the
conditions to the exemption under Rule 16b-3 (or any successor exemption) to
Section 16 of the 1934 Act.
SECTION 5. RESTRICTION ON STOCK
The Participant shall not have the right to make or permit to exist any
Disposition of the shares of Stock issued pursuant to the Plan except as
provided in the Plan or the Stock Option Agreement. Any Disposition of the
shares of Stock issued under the Plan by the Participant not made in accordance
with the Plan or the Stock Option Agreement shall be void. The Company shall
not recognize, or have the duty to recognize, any Disposition not made in
accordance with the Plan and the Stock Option Agreement, and the shares so
transferred shall continue to be bound by the Plan and the Stock Option
Agreement.
SECTION 6. GENERAL PROVISIONS
6.1 WITHHOLDING. Whenever the Company proposes or is required to issue or
transfer shares of Stock under the Plan, the Company shall have the right to
require the recipient to remit to the Company an amount sufficient to satisfy
any federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such shares. A Participant may pay the
withholding tax in cash, or, if the Stock Option Agreement provides, a
Participant may also elect to have the number of shares of Stock he is to
receive reduced by, or with respect to an exercised Option, tender back to the
Company, the smallest number of whole shares of Stock which, when multiplied by
the Fair Market Value of the shares determined as of the Tax Date (defined
below), is sufficient to satisfy federal, state and local, if any, withholding
taxes arising from exercise (a "Withholding Election"). A Participant may make
a Withholding Election only if both of the following conditions are met: (i) the
Withholding Election must be made on or prior to the date on which the amount of
tax required to be withheld is determined (the "Tax Date") by executing and
delivering to the Company a properly completed notice of Withholding Election as
prescribed by the Committee; and (ii) any Withholding Election made will be
irrevocable; however, the Committee may in its sole discretion disapprove and
give no effect to the Withholding Election.
6.2 CHANGES IN CAPITALIZATION; MERGER; LIQUIDATION.
(a) Stock Splits and Dividends. The number of shares of Stock
--------------------------
reserved for the grant of Options, and the number of shares of Stock reserved
for issuance upon the exercise and the Exercise Price of each outstanding
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Stock resulting from a subdivision or combination of
shares or the payment of a stock dividend in shares of Stock to holders of
outstanding shares of Stock or any other increase or decrease in the number of
shares of Stock outstanding effected without receipt of consideration by the
Company.
(b) Mergers, Etc. In the event of a merger, consolidation or other
------------
reorganization of the Company or tender offer for shares of Stock, the Committee
may make such adjustments with respect to Options and take such other action as
it deems necessary or appropriate to reflect or anticipate such merger,
consolidation, reorganization or tender offer, including, without limitation,
the substitution of new Options, the termination or adjustment of outstanding
Options, the acceleration of Options, or the removal of restrictions on
outstanding Options. Any adjustment pursuant to this Section 6.2 may provide,
in the Committee's discretion, for the elimination without payment therefor of
any fractional shares that might otherwise become subject to any Option.
<PAGE>
(c) No Impairment. The existence of the Plan and the Options granted
-------------
pursuant to the Plan shall not impair or affect in any way the right or power of
the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company or its Affiliates, any issue of debt or equity
securities having preferences or priorities as to the Stock or the rights
thereof, the dissolution or liquidation of the Company or any Affiliate, any
sale or transfer of all or any part of its business or assets, or any other
corporate act or proceeding of the Company or any Affiliate.
6.3 CASH DISTRIBUTIONS. The Committee may, at any time and in its
discretion, grant to any holder of an Option the right to receive, at such times
and in such amounts as determined by the Committee in its discretion, a cash
amount which is intended to reimburse such person for all or a portion of the
federal, state and local income taxes imposed upon such person as a consequence
of the receipt of the Option or the exercise of rights thereunder.
6.4 COMPLIANCE WITH CODE. All Incentive Stock Options to be granted
hereunder are intended to comply with Code Section 422, and all provisions of
the Plan and all Incentive Stock Options granted hereunder shall be construed in
such manner as to effectuate that intent. If for any reason it is subsequently
determined that an Option intended to qualify as an Incentive Stock Option does
not so qualify, the Company and its Affiliates shall have no liability to the
Participant.
6.5 RIGHT TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any Option
shall confer upon any Participant the right to continue as an employee or
officer of the Company or any of its Affiliates or affect the right of the
Company or any of its Affiliates to terminate the Participant's employment at
any time.
6.6 RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS. Each Option is
subject to the condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification of the shares
covered by such Option upon any securities exchange or under any state or
federal law is necessary or desirable as a condition of or in connection with
the granting of such Option or the purchase or delivery of shares thereunder,
the delivery of any or all shares pursuant to such Option may be withheld unless
and until such listing, registration or qualification shall have been effected.
Shares shall not be issued with respect to any Option granted under the Plan
unless the issuance and delivery of such Shares shall comply with (or be exempt
from) all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, any applicable state securities law, and the requirements of any
stock exchange or national market system on which the Shares may then be listed.
If the issuance or transfer of Shares to be issued or issued pursuant to any
Option granted under this Plan may in the opinion of counsel to the Company
conflict or be inconsistent with any applicable laws or regulations of any
governmental agency having jurisdiction, including, without limitation, federal
and state securities laws, the Company reserves the right to delay the issuance
of the Shares upon the exercise of an Option and such delay shall be without
liability to or other obligation of the Company. The Company shall have no
obligation hereunder to file registration statements or other reports or notices
or obtain any license or permit or exemption under any federal or state law with
respect to the grant of an Option or the issuance of Shares upon the exercise of
an Option or the transfer of such Shares at any time thereafter. The Committee
may require that the Participant or other holder of an Option, as a condition to
each exercise of the Option in whole or in part, to represent to the Company in
writing that the Shares to be acquired upon the exercise of the Option are to be
acquired by the Participant or other holder of the Option for investment
purposes only, for such person's own account, and not with a view to
distribution and make such other representations as counsel to the Company may
reasonably request to assure the availability of an exemption from or compliance
with the registration, notice, reporting or licensing requirements of applicable
federal or state securities laws. The Option may also set forth such other terms
and conditions relating to the non-registration or qualification of the Shares
or the issuance or transfer of the Shares by the Company under the federal and
state securities laws, as the Committee may prescribe. Such representations and
other terms and conditions shall continue in effect as long as counsel to the
Company may reasonably request.
6.7 NON-ALIENATION OF BENEFITS. Other than as specifically provided with
regard to the death of a Participant, no benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge; and any attempt to do so shall be void. No such benefit
shall, prior to receipt by the Participant, be in any manner liable for or
subject to the debts, contracts, liabilities, engagements or torts of the
Participant.
<PAGE>
6.8 AMENDMENTS, MODIFICATIONS AND TERMINATION OF THE PLAN. The Committee
may terminate the Plan, in whole or in part, may suspend the Plan, in whole or
in part, from time to time, and may amend the Plan from time to time, including
the adoption of amendments deemed necessary or desirable to qualify the Options
under the laws of various countries (including tax laws) and under rules and
regulations promulgated by the Securities and Exchange Commission (the "SEC")
with respect to employees who are subject to the provisions of Section 16 of the
1934 Act, or to correct any defect or supply an omission or reconcile any
inconsistency in the Plan or in any Option granted thereunder, without the
approval of the stockholders of the Company; provided, however, that, upon the
Company becoming registered under the 1934 Act, no action shall be taken without
the prior or subsequent approval of the stockholders of the Company, in
accordance with Section 16 of the 1934 Act, to increase the number of shares of
Stock for which Options may be granted, or materially increase the benefits
accruing to participants under the Plan, or materially modify the requirements
as to eligibility for participation in the Plan, or withdraw administration from
the Committee, or permit any person while a member of the Committee to be
eligible to receive, other than pursuant to an non-discretionary formula plan, a
grant or award of a stock option, a stock appreciation right or other equity
security of the Company. Without limiting the foregoing, the Committee may make
amendments applicable or inapplicable only to participants who are subject to
Section 16 of the 1934 Act.
No amendment or termination or modification of the Plan shall in any manner
affect any Option theretofore granted without the consent of the Participant,
except that the Committee may amend or modify the Plan in a manner that does
affect Options theretofore granted upon a finding by the Committee that such
amendment or modification is in the best interest of holders of outstanding
Options affected thereby.
This Plan is intended to comply with all applicable requirements of Rule
16b-3 or its successors under the 1934 Act, insofar as participants subject to
Section 16 of that Act are concerned. To the extent any provision of the Plan
does not so comply, the provision shall, to the extent permitted by law and
deemed advisable by the Committee, be deemed null and void with respect to such
participants.
6.9 CHOICE OF LAW. The laws of the State of Georgia shall govern the
Plan, to the extent not preempted by federal law.
6.10 EFFECTIVE DATE OF PLAN; TERMINATION. The Plan shall become effective
on the date of its adoption by the Board, subject to the approval of the Plan by
the shareholders of the Company. The Plan shall terminate as of the tenth
(10th) anniversary of the date the Plan is adopted by the Board or approved by
the shareholders, whichever is earlier, or as of the date when there are no
longer any Options issuable or outstanding under the Plan, or such earlier date
as the Board may determine.
6.11 STOCKHOLDER APPROVAL. The Plan shall be submitted to the stockholders
of the Company for their approval within twelve (12) months before or after the
adoption of the Plan by the Board. Options may be granted under the Plan prior
to receipt of such approval; provided, however, that in the event such approval
is not obtained, the Plan and all Options granted under the Plan shall be null
and void and of no force and effect.
VIDEO DISPLAY COMPANY
Attest: By: /s/ Ronald D. Ordway
-------------------------------
/s/ Carol D. Franklin Title: Chief Executive Officer
- ---------------------- -----------------------------
Secretary
[CORPORATE SEAL]
<PAGE>
EXHIBIT 4(b)
___________________________________________
| OPTION GRANT |
| |
| Participant:_________________________ |
| |
| Address:_____________________________ |
| |
| _____________________________ |
| |
| Option Shares: _____________________ |
| (Number of Shares of Common Stock) |
| |
| Exercise Price per share: $_________ |
| |
| Date of Option Grant: ______________ |
| |
| Expiration Date: ___________________ |
|_________________________________________|
VIDEO DISPLAY CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
("Option Agreement")
SECTION I
GRANT
VIDEO DISPLAY CORPORATION, a Georgia corporation (the "Company") hereby
grants to the individual named above (the "Participant") an incentive stock
option ("Option") within the meaning of Section 422 of the Internal Revenue Code
to purchase the number of shares of common stock, no par value, of the Company
(collectively, the "Option Shares") set forth above, on the terms and conditions
herein set forth and subject to the provisions of the Video Display Corporation
1996 Stock Option Plan, as amended from time to time (the "Plan"). The exercise
price of each such share (or fraction thereof) shall be the Exercise Price set
forth above. The Option shall expire on the Expiration Date set forth above,
unless sooner terminated as provided in Section III or Section IX of this Option
Agreement or as provided in the Plan. Each term used herein shall have the same
meaning as provided in the Plan unless herein otherwise provided.
This Option is granted pursuant to the Plan.
SECTION II
EXERCISE OF THE OPTION
The Option granted hereunder may be exercised at any time and from time to
time during the period commencing from the date the Option is granted or the
date the Plan is approved by the shareholders of the Company, whichever is
later, and continuing until the date the Option expires, provided and only to
the extent that this Option has vested and is exercisable as provided
hereinafter and in the Plan. To the extent Option Shares do not vest prior to
the termination of the Option for any reason, such Option Shares may not be
acquired hereunder.
SECTION III
EARLY TERMINATION OF OPTION
The provisions of Sections I and II notwithstanding, this Option may not be
exercised in whole or in part following the date of the termination of
employment of the Participant, whether by reason of resignation, discharge,
retirement, disability, death, or otherwise.
<PAGE>
SECTION IV
VESTING OF OPTION
The Option hereby granted shall vest only during the Participant's
continuous employment with the Company and/or any Parent and/or Subsidiary, and
shall be exercisable by Participant only upon and after such vesting and prior
to its termination, in accordance with the following schedule:
Initial 20% of the Option Shares Shall vest as of the later of the first
(1st) anniversary of the grant of the
Option or the third (3rd) anniversary of
commencement of employment.
Additional 20% of the Option Shares Shall vest as of the later of the second
(2nd) anniversary of the grant of the
Option or the third (3rd) anniversary of
commencement of employment.
Additional 20% of the Option Shares Shall vest as of the third (3rd)
anniversary of the grant of the Option.
Additional 20% of the Option Shares Shall vest as of the fourth (4th)
anniversary of the grant of the Option.
Additional 20% of the Option Shares Shall vest as of the fifth (5th)
anniversary of the grant of the Option.
SECTION V
TRANSFER
The Option may not be transferred and may be exercised only by Participant
during his lifetime. More particularly, but without limiting the generality of
the foregoing, the Option may not be assigned, transferred, pledged or
hypothecated in any way (whether by operation of law or otherwise). The Option
shall not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the Option
contrary to the provisions hereof, and the levy of any attachment or similar
process on the Option, shall be null and void and without effect.
SECTION VI
TOTAL OR PARTIAL EXERCISE
The portion of the Option which has vested and is exercisable may be
exercised either at one time as to the total number of such Option Shares or may
be exercised from time to time as to any portion thereof prior to the
termination of the Option. Notwithstanding the foregoing, this Option shall
not be exercisable with respect to less than twenty percent (20%) of the total
Option Shares or all of the remaining Option Shares, whichever is less, in any
single exercise of this Option.
SECTION VII
NOTICE OF EXERCISE; ISSUANCE OF CERTIFICATES
Subject to the terms and conditions of the Option, the vested portions of
the Option may be exercised by written notice to the Company, at its principal
office at Video Display Corporation, 1868 Tucker Industrial Drive, Tucker,
Georgia 30084, or such other place designated in writing by the Company from
time to time to the Participant. Such notice shall state the election to
exercise the Option and the number of Option Shares in respect of which it is
being exercised, and shall be signed by the person so exercising the Option.
Such notice shall be accompanied by a certified or bank cashier's check payable
to the order of the Company or other consideration approved by the Board of
Directors for the full purchase price of the Option Shares in respect of which
the Option is being exercised. The certificate or
<PAGE>
certificates representing the Option Shares shall be issued and delivered by the
Company as soon as practicable after receipt of the notice and payment. Such
certificate or certificates shall be registered in the name of the person so
exercising the Option and, if the Option shall be exercised by the Participant
and the Participant shall so request in the notice exercising the Option, such
certificate or certificates shall be registered in the name of Participant and
another person jointly, with right of survivorship, and shall be delivered to or
on the written order of the person or persons exercising the Option.
SECTION XIII
ISSUANCE AND TRANSFER OF SHARES
This Option may not be exercised unless such exercise is in compliance with
the Securities Act of 1933 and all applicable state securities laws, as they are
in effect on the date of exercise, and the requirements of any stock exchange or
national market system on which the Company's Common Stock may be listed at the
time of exercise. The Participant understands that the Company is under no
obligation to register, qualify or list the Option Shares with the Securities
and Exchange Commission ("SEC"), any state securities commission or any stock
exchange to effect such compliance. Subject to the further provisions of the
Plan, in the event the issuance or transfer of the Option Shares covered by the
Option may, in the opinion of counsel to the Company, conflict or be
inconsistent with any such laws or any other applicable law or regulation of any
governmental agency having jurisdiction, the Company reserves the right to
refuse or to delay the issuance or transfer of such Option Shares.
SECTION IX
ADJUSTMENT ON RECAPITALIZATION
In the event of a merger, consolidation, reorganization, recapitalization,
reclassification of stock, stock dividend, split-up or other change in the
corporate structure or capitalization of the Company affecting the Company's
common stock as presently constituted, the Option shall be adjusted, modified or
terminated as provided in or pursuant to the provisions of Section VI of the
Plan.
SECTION X
NOTICE OF DISQUALIFYING DISPOSITION
In the event the Participant sells or otherwise disposes of any of the
Option Shares acquired pursuant to this Option on or before the later of two
(2) years after the date of grant or one (1) year after exercise of the Option
with respect to the Option Shares to be sold or disposed, the Participant shall
immediately notify the Company in writing of such sale or disposition. The
Participant acknowledges and agrees that the Participant may be subject to
income tax withholding by the Company on the compensation income recognized by
the Participant from any such early sale or disposition by payment in cash or
out of the current wages or other earnings payable to the Participant.
SECTION XI
TAX CONSEQUENCES
Set forth below is a brief summary as of the date of this Option of some of
the federal and Georgia tax consequences of exercise of this Option and
disposition of the Option Shares. The Company has designated this Option as an
incentive stock option. Notwithstanding such designation, an incentive stock
option may be treated in whole or in part as a nonqualified stock option for
federal and state income tax purposes, depending upon the fair market value of
the Options that vest in a given year (as described in Section 2.4 of the Plan),
whether the Participant has made a disqualifying disposition (as described in
Section X), and other factors. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE TAX LAWS OF OTHER STATES
MAY VARY. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE OPTION SHARES.
Exercise. If this Option qualifies as an incentive stock option under the
--------
Internal Revenue Code of 1986, as amended (the "Code"), there will be no regular
federal income tax liability or Georgia income tax liability upon the exercise
of the Option, although the excess, if any, of the fair market value of the
Option Shares on the date of exercise
<PAGE>
over the Exercise Price will be treated as an adjustment to alternative minimum
taxable income for federal income tax purposes and may subject the Participant
to an alternative minimum tax liability in the year of exercise.
Exercise of Nonqualified Stock Option. If this Option does not qualify as
-------------------------------------
an incentive stock option under the Code, there may be a regular federal income
tax liability and a Georgia income tax liability upon the exercise of the
Option. The Participant will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the excess, if any, of the fair
market value of the Option Shares on the date of exercise over the Exercise
Price. The Company will be required to withhold from the Participant's
compensation or collect from the Participant and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise.
Disposition of Shares. In the case of a nonqualified option, if Option
---------------------
Shares are held for more than one year before disposition, any gain on
disposition of the Option Shares will be treated as long-term capital gain for
federal and Georgia income tax purposes. In the case of an incentive stock
option, if the Option Shares are held for more than one year after the date of
exercise and more than two years after the date of grant, any gain on
disposition on the Option Shares will be treated as long-term capital gain for
federal and Georgia income tax purposes. If Option Shares acquired pursuant to
an incentive stock option are disposed of within such one year or two year
periods (a "Disqualifying Disposition"), gain on such Disqualifying Disposition
will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the fair market value of the Option Shares on
the date of exercise over the Exercise Price (the "Spread"). Any gain in excess
of the Spread shall be treated as capital gain.
SECTION XII
NO RIGHT TO EMPLOYMENT
Nothing in the Plan or this Option Agreement shall confer on the
Participant any right to continue in the employ of, or other relationship with,
the Company or any Affiliate of the Company or limit in any way the right of the
Company or any Affiliate of the Company to terminate the Participant's
employment or other relationship at any time, with or without cause.
SECTION XIII
INTERPRETATION
Any dispute regarding the interpretation of this Option Agreement shall be
submitted by the Participant or the Company to the Committee that administers
the Plan, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on the
Company and the Participant.
SECTION XIV
ENTIRE AGREEMENT
This Option Agreement and the Plan constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and supersede all prior
undertakings and agreements with respect to the subject matter hereof. The
Participant acknowledges and agrees that except as otherwise evidenced by
written agreement(s) between the Company and the Participant signed by both
parties, the Participant currently has no interest, claim or right in any
securities of the Company, except as set forth in this Option Agreement.
SECTION XV
GOVERNING LAW
This option grant shall be governed by the laws of the State of Georgia.
VIDEO DISPLAY CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE>
PARTICIPANT ACKNOWLEDGMENT
I have read the above Incentive Stock Option Agreement and the Video
Display Corporation 1996 Stock Option Plan ("Plan") and hereby accept the above
Option to purchase shares of the common stock of the Company in accordance with
and subject to the terms and conditions of the Incentive Stock Option Agreement
and the Plan with which I am familiar and I agree to be bound thereby. I
further understand that (i) any rule, regulation and determination, including
interpretation by the Committee regarding the Plan, the Options granted
thereunder and the exercise thereof shall be final and conclusive for all
purposes and on all persons including the Company and myself; and (ii) the grant
of this Option shall not affect in any way the Company and/or its Affiliate's
right to terminate my employment or constitute an agreement by me to remain in
the employ of the Company or any Affiliate for any specified term.
------------------------------------------
PARTICIPANT
------------------------------------------
Acceptance Date
<PAGE>
EXHIBIT 5(B)
November 1, 1996
Video Display Corporation
1868 Tucker Industrial Drive
Tucker, Georgia 30084
Ladies and Gentlemen:
We have acted as counsel to Video Display Corporation, a Georgia
corporation (the "Company"), in connection with its Registration Statement on
Form S-8 (the "Registration Statement"), filed under the Securities Act of 1933,
as amended, relating to the offering of up to 500,000 Common Shares, without par
value of the Company (the "Common Shares"), pursuant to the Company's 1996 Stock
Option Plan (the "Plan").
In connection with the foregoing, we have examined (a) the Articles of
Incorporation, as amended, and the Bylaws of the Company, (b) the Plan, and (c)
such records of the corporate proceedings of the Company and such other
documents as we deemed necessary to render this opinion.
Based on such examination, we are of the opinion that :
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Georgia.
2. The Common Shares available for issuance under the Plan, when issued
and sold pursuant to the Plan, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5(b) to the
Registration Statement.
Very truly yours,
SCHNADER HARRISON SEGAL & LEWIS
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EXHIBIT 23(D)
Video Display Corporation
Atlanta, Georgia
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our reports dated May 20,
1996, relating to the consolidated financial statements and schedules of Video
Display Corporation appearing in the Company's Annual Report on Form 10-K for
the year ended February 29, 1996.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
BDO Seidman, LLP
Atlanta, Georgia
November 1, 1996
