FORM S-8
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT PURSUANT TO THE SECURITIES EXCHANGE ACT OF
1933
Page 1 of 37
CARVER CORPORATION
(exact name of issuer as specified in its charter)
WASHINGTON.. 91-1043157
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
20121 48th Avenue W., Lynnwood, WA 98036
(address of principal executive offices)
(Zip code)
(206) 775-1202
(Registrant's telephone number, including area code)
CARVER CORPORATION 1995 STOCK OPTION PLAN
CARVER CORPORATION 1995 STOCK BONUS PLAN
(Full titles of the Plans)
John P. World
20121 48th Avenue W.
P.O. Box 1237
Lynnwood, Washington 98036
(Name and address of agent for service)
(206) 775-1202
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Securities be Maximum Maximum Registration
to be Registered Offering Aggregate Fee
Registered (1) Price Offering
Per Share Price
Common Stock, 239,500 $1.75 - $596,875 $205.82
par value shares $2.50
$0.01, subject
to outstanding
options (2)
Common Stock, 488,650 $1.9375 $946,760 $326.47
par value shares
$0.01, not
subject to
outstanding
options (3)
Total (2) (3) $532.29
(1) Pursuant to Rule 416(c), this registration statement also
includes an indeterminate number of shares as may become issuable
by reason of the anti-dilution provisions of the 1995 Stock Option
Plan.
(2) Based upon the exercise price of options granted and
outstanding as of the date of the filing of the registration
statement.
(3) Estimated, pursuant to Rule 457(h)(1) and (2), solely for
the purpose of calculating the amount of the registration fee
which is based on the average of the high and low prices for
shares of common stock of Carver Corporation on December 6, 1995,
as quoted by the National Association of Securities Dealers
Automated Quotation National Market System which was $1.9375 per
share.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are incorporated by
reference in this registration statement.
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994, the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1995, filed
with the Commission pursuant to Section 13(a) of the Exchange Act
of 1934, as amended (the "Exchange Act").
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the filing of the Form 10-K
referred to in (a) above.
(c) The description or the Company's securities contained in
a registration statement on Form 8-A filed pursuant to Section 12
of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering of the common stock
pursuant to the Plan described herein shall be deemed to be
incorporated by reference herein 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.
None
Item 6. Indemnification of Directors and Officers.
The Washington Business Corporation Act (Sections 23B.08.500
through 23B.08.600 of the Revised Code of Washington) authorizes a
court to award, or a corporation's Board of Directors to grant,
indemnity to directors and officers in terms sufficiently broad to
permit such indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended.
Article IX of the Company's Bylaws provides for indemnification of
its directors, officers, employees and other agents.
The Washington Business Corporation Act includes a provision
(Section 23B.08.320 of the Revised Code of Washington) that
permits a corporation to limit a director's liability to the
corporation or its shareholders for monetary damages for his acts
or omissions as a director, except for those acts or omissions
involving intentional misconduct or a knowing violation of law,
certain unlawful distributions or a transaction whereby the
director received a personal benefit to which he was not legally
entitled. The Registrant's Articles of Incorporation contain
provisions implementing the allowed limitations on director
liability.
Item 7. Exemption from Registration Claimed.
Not Applicable
Item 8. Exhibits.
Exhibit Number Exhibit
4.1 Carver Corporation 1995 Stock Option Plan
4.2 Carver Corporation 1995 Stock Bonus Plan
5.1 Opinion of Heller, Ehrman, White & McAuliffe
23.1 Consent of Heller, Ehrman, White & McAuliffe
(See Exhibit 5.1)
23.2 Consent of Moss Adams, Independent Auditors
24 Power of Attorney (See page 5 of this
Registration Statement)
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the 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 the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement.
(2) That for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934, (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of 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.
Signatures
The Registrant. 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 his behalf by the undersigned, thereunto
duly authorized, in the City of Lynnwood, State of Washington, on
the 12th day of December, 1995.
CARVER CORPORATION
By: /s/ ROBERT A. FULTON
Robert A. Fulton, President and Chief
Executive Officer (Principal Executive Officer)
Power of Attorney
Each person whose signature appears below constitutes and
appoints Robert A. Fulton and Sandra L. Jenkins, or any of them,
his or her attorney-in-fact, with the power of substitution, for
him or her in any and all capacities, to sign any amendments to
this Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming
all that said attorneys-in-fact, or their substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the date indicated.
Signature Title Date
/s/SANDRA L. JENKINS
Sandra L. Jenkins Vice President-Finance December 12, 1995
(Principal Financial and
Accounting Officer)
Robert W. Carver Director December __, 1995
/s/ ROBERT A.FULTON Director December 12, 1995
Robert A. Fulton
/s/ THOMAS C.GRAHAM
Thomas C. Graham Director December 12, 1995
/s/ JOHN F. VYNNE
John F. Vynne Director December 12, 1995
/s/ STEPHEN M.WILLIAMS
Stephen M. Williams Director December 12,1995
EXHIBIT INDEX
Exhibit No. Exhibit Page
4.1 Carver Corporation 1995 Stock Option Plan 7
4.2 Carver Corporation 1995 Stock Bonus Plan 20
5.1 Opinion of Heller, Ehrman, White & McAuliffe 27
23.2 Consent of Moss Adams, Independent Auditors 30
EXHIBIT 4.1
CARVER CORPORATION
1995 STOCK OPTION PLAN
This 1995 Stock Option Plan (the "Plan") provides for the
grant of options to acquire shares of common stock, .01 par value
(the "Common Stock"), of Carver Corporation, a Washington
corporation (the "Company"). Stock options granted under this
Plan that qualify under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), are referred to in this Plan as
"Incentive Stock Options." Incentive Stock Options and stock
options that do not qualify under Section 422 of the Code ("Non-
Qualified Stock Options") granted under this Plan are referred to
as "Options."
1. PURPOSES.
The purposes of this Plan are to retain the services of
directors, valued key employees and consultants of the Company
and such other persons as the Plan Administrator shall select in
accordance with Section 3 below, to encourage such persons to
acquire a greater proprietary interest in the Company, thereby
strengthening their incentive to achieve the objectives of the
shareholders of the Company, and to serve as an aid and inducement
in the hiring of new employees and to provide an equity incentive
to directors, consultants and other persons selected by the Plan
Administrator.
2. ADMINISTRATION.
This Plan shall be administered by the Board of Directors of
the Company (the "Board") if each director is a "disinterested
person" (as defined below). If all directors are not independent
directors, the Plan shall be administered by a committee designated
by the Board and composed of two (2) or more members of the Board,
which committee (the "Committee") may be an executive, compensation
or other committee, including a separate committee especially
created for this purpose. The term "disinterested person" shall
have the meaning assigned to it under Rule 16b-3 (as amended from
time to time) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or any successor rule or
regulatory requirement (the "Rule"). The Committee shall have the
powers and authority vested in the Board hereunder (including the
power and authority to interpret any provision of this Plan or of
any Option). The members of any such Committee shall serve at the
pleasure of the Board. A majority of the members of the Committee
shall constitute a quorum, and all actions of the Committee shall
be taken by a majority of the members present. Any action may be
taken by a written instrument signed by all of the members of the
Committee and any action so taken shall be fully effective as if
it had been taken at a meeting. The Board, or any committee
thereof appointed to administer the Plan, is referred to herein
as the "Plan Administrator."
Subject to the provisions of this Plan, and with a view to
effecting its purpose, the Plan Administrator shall have sole
authority, in its absolute discretion, to (a) construe and
interpret this Plan; (b) define the terms used in this Plan; (c)
prescribe, amend and rescind rules and regulations relating to
this Plan; (d) correct any defect, supply any omission or reconcile
any inconsistency in this Plan; (e) grant Options under this Plan
(other than pursuant to Section 6); (f) determine the individuals
to whom Options shall be granted under this Plan and whether the
Option is an Incentive Stock Option or a Non-Qualified Stock
Option; (g) determine the time or times at which Options shall be
granted under this Plan; (h) determine the number of shares of
Common Stock subject to each Option, the exercise price of each
Option, the duration of each Option and the times at which each
Option shall become exercisable; (i) determine all other terms and
conditions of Options; and (j) make all other determinations
necessary or advisable for the administration of this Plan. All
decisions, determinations and interpretations made by the Plan
Administrator shall be binding and conclusive on all participants
in this Plan and on their legal representatives, heirs and
beneficiaries.
The Plan Administrator shall have no authority, discretion
or power to select the persons who will receive Options under
Section 6 hereof or to set the number of shares to be covered by
such Options, the exercise price of such Options, the timing of
the grant of such Options or the period within which such Options
may be exercised.
The Board or the Committee may delegate to one or more
executive officers of the Company the authority to grant Options
under this Plan to employees of the Company who, on the Date of
Grant, are not subject to Section 16(b) of the Exchange Act with
respect to the Common Stock ("Non-Insiders"), and in connection
therewith the authority to determine: (a) the number of shares
of Common Stock subject to such Option; (b) the duration of the
Option; (c) the vesting schedule for determining the times at
which such Option shall become exercisable; and (d) all other
terms and conditions of such Options. The exercise price for any
Option granted by action of an executive officer or officers
pursuant to such delegation of authority shall not be less than
the fair market value per share of the Common Stock on the Date
of Grant. Unless expressly approved in advance by the Board or
the Committee, such delegation of authority shall not include the
authority to accelerate the vesting, extend the period for
exercise or otherwise alter the terms of outstanding Options.
The term "Plan Administrator" when used in any provision of this
Plan other than Sections 2, 5(m), 5(n) and 12 shall be deemed to
refer to the Board or the Committee, as the case may be, and an
executive officer who has been authorized to grant Options
pursuant hereto, insofar as such provision may be applied to Non-
Insiders and Options granted to Non-Insiders.
3. ELIGIBILITY.
Incentive Stock Options may be granted to any individual
who, at the time the Option is granted, is an employee of the
Company or any Related Corporation (as defined below), including
employees who are directors of the Company ("Employees"). Non-
Qualified Stock Options may be granted to Employees and to such
other persons as the Plan Administrator shall select. Options
shall be granted hereunder to directors who are not employees of
the Company or any related Corporation, but solely on the terms
and conditions set forth in Section 6 hereof. Options may be
granted in substitution for outstanding Options of another
corporation in connection with the merger, consolidation,
acquisition of property or stock or other reorganization between
such other corporation and the Company or any subsidiary of the
Company. Options also may be granted in exchange for outstanding
Options. No person shall be eligible to receive in any fiscal
year Options to purchase more than 50,000 shares of Common Stock
(subject to adjustment as set forth in Section 5(m) hereof). Any
person to whom an Option is granted under this Plan is referred
to as an "Optionee." Any person who is the owner of an Option is
referred to as a "Holder."
As used in this Plan, the term "Related Corporation," shall
mean any corporation (other than the Company) that is a "Parent
Corporation" of the Company or "Subsidiary Corporation" of the
Company, as those terms are defined in Sections 424(e) and
424(f), respectively, of the Code (or any successor provisions),
and the regulations thereunder (as amended from time to time).
4. STOCK.
The Plan Administrator is authorized to grant Options to
acquire up to a total of 360,000 shares of the Company's
authorized but unissued, or reacquired, Common Stock. The number
of shares with respect to which Options may be granted hereunder
is subject to adjustment as set forth in Section 5(m) hereof. Of
these 360,000 shares, 60,000 shares are available exclusively for
grant to certain directors of the Company under Section 6 hereof,
subject to adjustment in as set forth in Section 5(m). In the
event that any outstanding Option expires or is terminated for
any reason, the shares of Common Stock allocable to the unexercised
portion of such Option may again be subject to an Option to the
same Optionee or to a different person eligible under Section 3 of
this Plan; provided however, that any cancelled Options will be
counted against the maximum number of shares with respect to which
Options may be granted to any particular person as set forth in
Section 3 hereof.
5. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted under this Plan shall be evidenced by a
written agreement approved by the Plan Administrator (the
"Agreement"). Agreements may contain such provisions, not
inconsistent with this Plan, as the Plan Administrator in its
discretion may deem advisable. All Options also shall comply
with the following requirements:
(a) Number of Shares and Type of Option.
Each Agreement shall state the number of shares of Common
Stock to which it pertains and whether the Option is intended to
be an Incentive Stock Option or a Non-Qualified Stock Option. In
the absence of action to the contrary by the Plan Administrator
in connection with the grant of an Option, all Options shall be
Non-Qualified Stock Options. The aggregate fair market value
(determined at the Date of Grant, as defined below) of the stock
with respect to which Incentive Stock Options are exercisable for
the first time by the Optionee during any calendar year (granted
under this Plan and all other Incentive Stock Option plans of the
Company, a Related Corporation or a predecessor corporation)
shall not exceed $100,000, or such other limit as may be
prescribed by the Code as it may be amended from time to time.
Any portion of an Option which exceeds the annual limit shall not
be void but rather shall be a Non-Qualified Stock Option.
(b) Date of Grant.
Each Agreement shall state the date the Plan Administrator
has deemed to be the effective date of the Option for purposes of
this Plan (the "Date of Grant").
(c) Option Price.
Each Agreement shall state the price per share of Common
Stock at which it is exercisable. The exercise price shall be
fixed by the Plan Administrator at whatever price the Plan
Administrator may determine in the exercise of its sole discretion;
provided that the per share exercise price for an Incentive Stock
Option shall not be less than the fair market value per share of
the Common Stock at the Date of Grant as determined by the Plan
Administrator in good faith; provided further, that with respect to
Incentive Stock Options granted to greater-than-10 percent (>10%)
shareholders of the Company (as determined with reference to
Section 424(d) of the Code), the exercise price per share shall not
be less than 110 percent (110%) of the fair market value per share
of the Common Stock at the Date of Grant as determined by the Plan
Administrator in good faith; and, provided further, that Options
granted in substitution for outstanding options of another
corporation in connection with the merger, consolidation,
acquisition of property or stock or other reorganization involving
such other corporation and the Company or any subsidiary of the
Company may be granted with an exercise price equal to the exercise
price for the substituted option of the other corporation, subject
to any adjustment consistent with the terms of the transaction
pursuant to which the substitution is to occur.
(d) Duration of Options.
At the time of the grant of the Option, the Plan Administrator
shall designate, subject to paragraph 5(g) below, the expiration
date of the Option, which date shall not be later than 10 years
from the Date of Grant in the case of Incentive Stock Options;
provided, that the expiration date of any Incentive Stock Option
granted to a greater-than-10 percent (>10%) shareholder of the
Company (as determined with reference to Section 424(d) of the
Code) shall not be later than five years from the Date of Grant.
In the absence of action to the contrary by the Plan Administrator
in connection with the grant of a particular Option, and except in
the case of Incentive Stock Options as described above, all Options
granted under this Section 5 shall expire ten (10) years from the
Date of Grant.
(e) Vesting Schedule
No Option shall be exercisable until it has vested. The
vesting schedule for each Option shall be specified by the Plan
Administrator at the time of grant of the Option prior to the
provision of services with respect to which such Option is granted;
provided, that if no vesting schedule is specified at the time of
grant, the Option shall vest according to the following schedule:
Number of Years Percentage of Total
Following Date of Grant Option Vested
One 25%
Two 50%
Three 75%
Four 100%
The Plan Administrator may specify a vesting schedule for
all or any portion of an Option based on the achievement of
performance objectives established in advance of the commencement
by the Optionee of services related to the achievement of the
performance objectives. Performance objectives shall be expressed
in terms of one or more of the following: return on equity, return
on assets, share price, market share, sales, earnings per share,
costs, net earnings, net worth, inventories, cash and cash
equivalents, gross margin or the Company's performance relative to
its internal business plan. Performance objectives may be in
respect of the performance of the Company as a whole (whether on a
consolidated or unconsolidated basis), a Related Corporation, or a
subdivision, operating unit, product or product line of either of
the foregoing. Performance objectives may be absolute or relative
and may be expressed in terms of a progression or a range. An
option which is exercisable (in whole or in part) upon the
achievement of one or more performance objectives may be exercised
only following written notice to the Optionee and the Company by
the Plan Administrator that the performance objective has been
achieved.
(f) Acceleration of Vesting
The vesting of one or more outstanding Options may be
accelerated by the Plan Administrator at such times and in such
amounts as it shall determine in its sole discretion. The
vesting of Options also shall be accelerated under the
circumstances described in Sections 5(m) and 5(n) below.
(g) Term of Option.
Vested Options shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following
events: (i) the expiration of the Option, as designated by the
Plan Administrator in accordance with Section 5(d) above; (ii)
the date of an Optionee's termination of employment or contractual
relationship with the Company or any Related Corporation for cause
(as determined in the sole discretion of the Plan Administrator);
(iii) the expiration of ninety (90) days from the date of an
Optionee's termination of employment or contractual relationship
with the Company or any Related Corporation for any reason
whatsoever other than cause, death or Disability (as defined below)
unless, the exercise period is extended by the Plan Administrator
until a date not later than the expiration date of the Option; or
(iv) the expiration of one year from (A) the date of death of the
Optionee or (B) cessation of an Optionee's employment or
contractual relationship by reason of Disability (as defined below)
unless, the exercise period is extended by the Plan Administrator
until a date not later than the expiration date of the Option. If
an Optionee's employment or contractual relationship is terminated
by death, any Option held by the Optionee shall be exercisable only
by the person or persons to whom such Optionee's rights under such
Option shall pass by the Optionee's will or by the laws of descent
and distribution of the state or county of the Optionee's domicile
at the time of death. For purposes of the Plan, unless otherwise
defined in the Agreement, "Disability" shall mean any physical,
mental or other health condition which substantially impairs the
Optionee's ability to perform his or her assigned duties for one
hundred twenty (120) days or more in any two hundred forty (240)
day period or that can be expected to result in death. The Plan
Administrator shall determine whether an Optionee has incurred a
Disability on the basis of medical evidence acceptable to the
Plan Administrator. Upon making a determination of Disability,
the Plan Administrator shall, for purposes of the Plan, determine
the date of an Optionee's termination of employment or
contractual relationship.
Unless accelerated in accordance with Section 5(f) above,
unvested Options shall terminate immediately upon termination of
employment of the Optionee by the Company for any reason
whatsoever, including death or Disability. For purposes of this
Plan, transfer of employment between or among the Company and/or
any Related Corporation shall not be deemed to constitute a
termination of employment with the Company or any Related
Corporation. For purposes of this subsection with respect to
Incentive Stock Options, employment shall be deemed to continue
while the Optionee is on military leave, sick leave or other bona
fide leave of absence (as determined by the Plan Administrator).
The foregoing notwithstanding, employment shall not be deemed to
continue beyond the first ninety (90) days of such leave, unless
the Optionee's re-employment rights are guaranteed by statute or
by contract.
(h) Exercise of Options.
Options shall be exercisable, either all or in part, at any
time after vesting, until termination; provided, however, that
any Optionee who is subject to the reporting and liability
provisions of Section 16 of the Exchange Act with respect to the
Common Stock shall be precluded from selling or transferring any
Common Stock or other security underlying an Option during the
six (6) months immediately following the grant of that Option.
If less than all of the shares included in the vested portion of
any Option are purchased, the remainder may be purchased at any
subsequent time prior to the expiration of the Option term. No
portion of any Option for less than one hundred (100) shares (as
adjusted pursuant to Section 5(m) below) may be exercised;
provided, that if the vested portion of any Option is less than
one hundred (100) shares, it may be exercised with respect to all
shares for which it is vested. Only whole shares may be issued
pursuant to an Option, and to the extent that an Option covers
less than one (1) share, it is unexercisable.
Options or portions thereof may be exercised by giving
written notice to the Company, which notice shall specify the
number of shares to be purchased, and be accompanied by payment
in the amount of the aggregate exercise price for the Common
Stock so purchased, which payment shall be in the form specified
in Section 5(i) below. The Company shall not be obligated to
issue, transfer or deliver a certificate of Common Stock to the
Holder of any Option, until provision has been made by the
Holder, to the satisfaction of the Company, for the payment of
the aggregate exercise price for all shares for which the Option
shall have been exercised and for satisfaction of any tax with-
holding obligations associated with such exercise. During the
lifetime of an Optionee, Options are exercisable only by the
Optionee or a transferee who takes title to the Option in the
manner permitted by Subsection 5(k) hereof.
(I) Payment upon Exercise of Option.
Upon the exercise of any Option, the aggregate exercise
price shall be paid to the Company in cash or by certified or
cashier's check. In addition, the Holder may pay for all or any
portion of the aggregate exercise price by complying with one or
more of the following alternatives:
(1) by delivering to the Company shares of Common
Stock previously held by such Holder, or by the Company
withholding shares of Common Stock otherwise deliverable pursuant
to exercise of the Option, which shares of Common Stock received
or withheld shall have a fair market value at the date of exercise
(as determined by the Plan Administrator) equal to the aggregate
exercise price to be paid by the Optionee upon such exercise;
(2) by delivering a properly executed exercise notice
together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds to pay
the exercise price; or
(3) by complying with any other payment mechanism
approved by the Plan Administrator at the time of exercise.
(j) Rights as a Shareholder.
A Holder shall have no rights as a shareholder with respect
to any shares covered by an Option until such Holder becomes a
record holder of such shares, irrespective of whether such Holder
has given notice of exercise. Subject to the provisions of
Sections 5(m) and 5(n) hereof, no rights shall accrue to a Holder
and no adjustments shall be made on account of dividends (ordinary
or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the
Common Stock for which the record date is prior to the date the
Holder becomes a record holder of the shares of Common Stock
covered by the Option, irrespective of whether such Holder has
given notice of exercise.
(k) Transfer of Option.
Options granted under this Plan and the rights and privileges
conferred by this Plan may not be transferred, assigned, pledged or
hypothecated in any manner (whether by operation of law or
otherwise) other than by will, by applicable laws of descent and
distribution or (except in the case of an Incentive Stock Option)
pursuant to a qualified domestic relations order, and shall not be
subject to execution, attachment or similar process; provided
however, that any Agreement may provide or be amended to provide
that the Option to which it relates is transferrable without
payment of consideration to immediate family members of the
Optionee or to trusts or partnerships established exclusively for
the benefit of the Optionee and the Optionee's immediate family
members. Upon any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of any Option or of any right or privilege
conferred by this Plan contrary to the provisions hereof, or upon
the sale, levy or any attachment or similar process upon the rights
and privileges conferred by this Plan, such Option shall thereupon
terminate and become null and void.
(l) Securities Regulation and Tax Withholding.
(1) Shares shall not be issued with respect to an
Option unless the exercise of such Option and the issuance and
delivery of such shares shall comply with all relevant provisions
of law, including, without limitation, any applicable state
securities laws, the Securities Exchange Act of 1933, as amended,
the Exchange Act, the rules and regulations thereunder and the
requirements of any stock exchange upon which such shares may
then be listed, and such issuance shall be further subject to the
approval of counsel for the Company with respect to such
compliance, including the availability of an exemption from
registration for the issuance and sale of such shares. The
inability of the Company to obtain from any regulatory body the
authority deemed by the Company to be necessary for the lawful
issuance and sale of any shares under this Plan, or the
unavailability of an exemption from registration for the issuance
and sale of any shares under this Plan, shall relieve the Company
of any liability with respect to the non-issuance or sale of such
shares.
As a condition to the exercise of an Option,
the Plan Administrator may require the Holder to represent and
warrant in writing at the time of such exercise that the shares
are being purchased only for investment and without any then-
present intention to sell or distribute such shares. At the
option of the Plan Administrator, a stop-transfer order against
such shares may be placed on the stock books and records of the
Company, and a legend indicating that the stock may not be
pledged, sold or otherwise transferred unless an opinion of
counsel is provided stating that such transfer is not in violation
of any applicable law or regulation, may be stamped on the
certificates representing such shares in order to assure an
exemption from registration. The Plan Administrator also may
require such other documentation as may from time to time be
necessary to comply with federal and state securities laws. THE
COMPANY HAS NO OBLIGATION TO UNDERTAKE REGISTRATION OF OPTIONS OR
THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF OPTIONS.
(2) The Holder shall pay to the Company by
certified or cashier's check, promptly upon exercise of an Option
or, if later, the date that the amount of such obligations
becomes determinable, all applicable federal, state, local and
foreign withholding taxes that the Plan Administrator, in its
discretion, determines to result upon exercise of an Option or
from a transfer or other disposition of shares of Common Stock
acquired upon exercise of an Option or otherwise related to an
Option or shares of Common Stock acquired in connection with an
Option. Upon approval of the Plan Administrator, a Holder may
satisfy such obligation by complying with one or more of the
following alternatives selected by the Plan Administrator:
(A) by delivering to the Company shares of
Common Stock previously held by such Holder or by the Company
withholding shares of Common Stock otherwise deliverable pursuant
to the exercise of the Option, which shares of Common Stock
received or withheld shall have a fair market value at the date
of exercise (as determined by the Plan Administrator) equal to
the tax obligation to be paid by the Optionee upon such exercise;
provided that if the Holder is an Insider or if beneficial
ownership of the shares issuable upon exercise of the Option is
attributable to an Insider pursuant to the regulations under
Section 16 of the Exchange Act, the Holder will have executed, by
a date not later than six (6) months prior to the date of
exercise, an irrevocable election to satisfy its obligations
under this Paragraph 2 through the Company withholding shares of
Common Stock otherwise deliverable pursuant to the exercise of
the Option;
(B) by executing appropriate loan documents
approved by the Plan Administrator by which the Holder borrows
funds from the Company to pay the withholding taxes due under
this Paragraph 2, with such repayment terms as the Plan
Administrator shall select; or
(C) by complying with any other payment
mechanism approved by the Plan Administrator from time to time.
(3) The issuance, transfer or delivery of
certificates of Common Stock pursuant to the exercise of Options
may be delayed, at the discretion of the Plan Administrator,
until the Plan Administrator is satisfied that the applicable
requirements of the federal and state securities laws and the
withholding provisions of the Code have been met.
(m) Stock Dividend, Reorganization or Liquidation.
(1) If (i) the Company shall at any time be
involved in a transaction described in Section 424(a) of the Code
(or any successor provision) or any "corporate transaction"
described in the regulations thereunder; (ii) the Company shall
declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same
effect shall occur, the Plan Administrator shall, with respect to
each outstanding Option, proportionately adjust the number of
shares of Common Stock subject to such Option and/or the exercise
price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to
such event, and to the extent that such action shall include an
increase or decrease in the number of shares of Common Stock
subject to outstanding Options, the number of shares available
under Section 4 of this Plan and the number of shares of Common
Stock underlying Options to be granted pursuant to Section 6
hereof shall automatically be increased or decreased, as the case
may be, proportionately, without further action on the part of
the Plan Administrator, the Company, the Company's shareholders,
or any Holder.
(2) If the Company shall at any time declare an
extraordinary dividend with respect to the Common Stock, whether
payable in cash or other property, the Plan Administrator may, in
the exercise of its sole discretion and with respect to each
outstanding Option, proportionately adjust the number of shares
of Common Stock subject to such Option and/or adjust the exercise
price per share so as to preserve the rights of the Holder
substantially proportionate to the rights of the Holder prior to
such event, and to the extent that such action shall include an
increase or decrease in the number of shares of Common Stock
subject to outstanding Options, the number of shares available
under Section 4 of this Plan and the number of shares of Common
Stock underlying Options to be granted pursuant to Section 6
hereof shall automatically be increased or decreased, as the case
may be, proportionately, without further action on the part of
the Plan Administrator, the Company, the Company's shareholders,
or any Holder.
(3) If the Company is liquidated or dissolved, the
Plan Administrator may allow the Holders of any outstanding
Options to exercise all or any part of the unvested portion of
the Options held by them; provided, however, that such Options
must be exercised prior to the effective date of such liquidation
or dissolution. If the Holders do not exercise their Options
prior to such effective date, each outstanding Option shall
terminate as of the effective date of the liquidation or dissolu-
tion.
(4) The foregoing adjustments in the shares
subject to Options shall be made by the Plan Administrator, or by
any successor administrator of this Plan, or by the applicable
terms of any assumption or substitution document.
(5) The grant of an Option shall not affect in any
way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure, to merge, consolidate or dissolve, to
liquidate or to sell or transfer all or any part of its business
or assets.
(n) Change in Control
(1) Any and all Options that are outstanding under
the Plan at the time of occurrence of any of the events described
in Subparagraphs (A), (B), (C) and (D) below (an "Eligible
Option") shall become immediately vested and fully exercisable
for the periods indicated (each such exercise period referred to
as an "Acceleration Window"):
(A) For a period of forty-five (45) days
beginning on the day on which any Person together with all
Affiliates and Associates (as such terms are defined below) of
such Person shall become the Beneficial Owner (as defined below)
of twenty-five percent (25%) or more of the shares of Common
Stock then outstanding, but shall not include the Corporation,
any subsidiary of the Corporation, any employee benefit plan of
the Corporation or of any subsidiary of the Corporation, or any
Person or entity organized, appointed or established by the
Corporation for or pursuant to the terms of any such employee
benefit plan;
(B) Beginning on the date that a tender or
exchange offer for Common Stock by any Person (other than the
Corporation, any subsidiary of the Corporation, any employee
benefit plan of the Corporation or of any subsidiary of the
Corporation, or any Person or entity organized, appointed or
established by the Corporation for or pursuant to the terms of
any such employee benefit plan) is first published or sent or
given within the meaning of Rule 14d-2 under the Exchange Act and
continuing so long as such offer remains open (including any
extensions or renewals of such offer), unless by the terms of
such offer the offeror, upon consummation thereof, would be the
Beneficial Owner of less than thirty percent (30%) of the shares
of Common Stock then outstanding;
(C) For a period of twenty (20) days
beginning on the day on which the shareholders of the Corporation
(or, if later, approval by the shareholders of any Person) duly
approve any merger, consolidation, reorganization or other
transaction providing for the conversion or exchange of more than
fifty percent (50%) of the outstanding shares of Common Stock
into securities of any Person, or cash, or property, or a
combination of any of the foregoing; or
(D) For a period of twenty (20) days
beginning on the day on which, at any meeting of the shareholders
of the Company involving a contest for the election of directors,
individuals constituting a majority of the Board of Directors who
were not the Board of Director's nominees for election
immediately prior to the meeting are elected;
provided, however, that with respect to the events
specified in Subparagraphs (A), (B) and (C) above, such
accelerated vesting shall not occur if the event that would
otherwise trigger the accelerated vesting of Eligible Options has
received the prior approval of a majority of all of the directors
of the Corporation, excluding for such purposes the votes of
directors who are directors or officers of, or have a material
financial interest in any Person (other than the Corporation) who
is a party to the event specified in Subparagraph (A), (B) or (C)
above which otherwise would trigger acceleration of vesting and
provided, further, that no Option which is to be converted into
an option to purchase shares of Exchange Stock as stated at item
(3) below shall be accelerated pursuant to this Section 5(n).
(2) The exercisability of any Eligible Option which
remains unexercised following expiration of an Acceleration
Window shall be governed by the vesting schedule and other terms
of the Agreement representing such Option.
(3) If the shareholders of the Corporation receive
shares of capital stock of another Person ("Exchange Stock") in
exchange for or in place of shares of Common Stock in any
transaction involving any merger, consolidation, reorganization
or other transaction providing for the conversion or exchange of
all or substantially all outstanding shares of Common Stock into
Exchange Stock, then at the closing of such transaction all
Options granted hereunder shall be converted into options to
purchase shares of Exchange Stock unless the Corporation (by the
affirmative vote of a majority of all of the directors of the
Corporation, excluding for such purposes the votes of directors
who are directors or officers of, or have a material financial
interest in the Person issuing the Exchange Stock and any
Affiliate of such Person), in its sole discretion, determines
that any or all such Options granted hereunder shall not be so
converted but instead shall terminate. The amount and price of
converted Options shall be determined by adjusting the amount and
price of the Options granted hereunder in the same proportion as
used for determining the shares of Exchange Stock the holders of
the Common Stock received in such merger, consolidation,
reorganization or other transaction. Unless altered by the Plan
Administrator, the vesting schedule set forth in the Option
Agreement shall continue to apply to the Options granted for
Exchange Stock.
For the purposes of this Subsection 5(n): (i) "Person"
shall include any individual, firm, corporation, partnership or
other entity; (ii) "Affiliate" and "Associate" shall have the
meanings assigned to them in Rule 12b-2 under the Exchange Act;
and (iii) "Beneficial Owner" shall have the meaning assigned to
it in Rule 16a-1 under the Exchange Act.
6. NON-EMPLOYEE DIRECTORS.
Directors who are not also employees of the Company ("Non-
Employee Directors") shall be eligible to receive options under
the Plan only in accordance with the terms and conditions of this
Section 6.
(a) Number of Shares and Date of Grant
Concurrent with election to the Board of Directors, and so
long as shares are available for grant pursuant to Section 4,
each Non-Employee Director shall automatically receive an option
to purchase 2,500 shares of Common Stock, subject to adjustment
as set forth in Section 5(m) hereof. Every first Wednesday in
May for so long as shares are available for grant pursuant to
Section 4, each Non-Employee Director who was a director of the
Company as of December 31 of the immediately preceding year shall
receive an additional option to purchase 2,500 shares of Common
Stock, subject to adjustment as set forth in Section 5(m) hereof.
In addition, each Non-Employee Director holding office on the
date of approval of this Plan by the Company's shareholders shall
receive an option (a "Recognition Option") to purchase up to the
number of shares of Common Stock equal to the product of (x)
2,500, multiplied by (y) the number of complete years of
continuous service of such person as a Non-Employee Director,
subject to adjustment as set forth in Section 5(m) hereof.
Options granted pursuant to this Section 6 shall be Non-Qualified
Stock Options.
(b) Option Price
The exercise price of Options granted under this Section 6
shall be the fair market value of the Company's Common Stock on
the Date of Grant. For the purposes of this Section, the term
"fair market value" on any given day means: (i) if the Common
Stock is listed on a national securities exchange, the average of
the high and low prices of the Common Stock of the Company on
such exchange; or (ii) if the Common Stock is quoted in the over-
the-counter securities market, the last sale price of the Common
Stock as quoted by NASDAQ National Market System or, if the
Common Stock is not quoted in the National Market System, the
mean between the closing bid and asked prices of Common Stock as
quoted by NASDAQ.
(c) Vesting
In order to ensure that the Company will receive the
benefits contemplated in exchange for the Options, no Option
granted under this Section 6 shall be exercisable until it has
vested. Options (other than Recognition Options) shall vest and
become exercisable as follows: forty percent (40%) on the Date
of Grant; thirty percent (30%) on the first anniversary of the
Date of Grant; and thirty percent (30%) on the second anniversary
of the Date of Grant. Recognition Options shall vest according
to the same schedule but assuming that the Recognition Options
had been granted in annual increments of 2,500 shares beginning
on the first Wednesday in May of each of the calendar years
following the Optionee's initial election to the Board of
Directors.
(d) Term of Option
Options shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following
events:
(i) ten (10) years from the Date of Grant;
(ii) the expiration of ninety (90) days from the
date of Optionee's termination as a Director of the
Company for any reason other than death or Disability
(as defined below); or
(iii) the expiration of one (1) year from the date
of death of Optionee or the cessation of Optionee's
service as a Director by reason of Disability (as
defined below).
For purposes of this Section 6, unless otherwise defined in
the Agreement, "Disability" shall mean any physical, mental or
other health condition which substantially impairs the Optionee's
ability to perform his or her duties as a director of the Company
for one hundred twenty (120) days or more in any two hundred
forty (240) day period or that can be expected to result in
death.
(e) Other Terms
Except as otherwise provided in this Section 6, all Options
granted to Non-Employee Directors shall be subject to the
provisions of the Plan, including Section 5.
(f) Amendments
The provisions of this Section 6 shall not be amended more
than once every six (6) months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act,
or the rules thereunder.
7. EFFECTIVE DATE; TERM.
This Plan shall be effective as of February 15, 1995.
Incentive Stock Options may be granted by the Plan Administrator
from time to time thereafter until February 14, 2005. Non-
Qualified Stock Options may be granted until this Plan is
terminated by the Board in its sole discretion. Termination of
this Plan shall not terminate any Option granted prior to such
termination. Any Options granted by the Plan Administrator prior
to the approval of this Plan by the shareholders of the Company
shall be granted subject to ratification of this Plan by the
shareholders of the Company within twelve (12) months after this
Plan is adopted by the Board. The Plan Administrator may require
any shareholder approval that it considers necessary for the
Company to comply with or to avail the Company and/or the
Optionees of the benefits of any securities, tax, market listing
or other administrative or regulatory requirement. If such
shareholder ratification is sought within twelve (12) months
after this Plan is adopted by the Board and such shareholder
ratification is not obtained, each and every Option granted under
this Plan shall be null and void and shall convey no rights to
the Holder thereof.
8. NO OBLIGATIONS TO EXERCISE OPTION.
The grant of an Option shall impose no obligation upon the
Optionee to exercise such Option.
9. NO RIGHT TO OPTIONS OR TO EMPLOYMENT.
Except for the grant of options pursuant to Section 6
hereof, whether or not any Options are to be granted under this
Plan shall be exclusively within the discretion of the Plan
Administrator, and nothing contained in this Plan shall be
construed as giving any person any right to participate under
this Plan. The grant of an Option shall in no way constitute any
form of agreement or understanding binding on the Company or any
Related Company, express or implied, that the Company or any
Related Company will employ or contract with an Optionee for any
length of time, nor shall it interfere in any way with the
Company's or, where applicable, a Related Company's right to
terminate Optionee's employment at any time, which right is
hereby reserved.
10. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common
Stock issued upon the exercise of Options shall be used for
general corporate purposes, unless otherwise directed by the
Board.
11. INDEMNIFICATION OF PLAN ADMINISTRATOR.
In addition to all other rights of indemnification they may
have as members of the Board, members of the Plan Administrator
shall be indemnified by the Company for all reasonable expenses
and liabilities of any type or nature, including attorneys' fees,
incurred in connection with any action, suit or proceeding to
which they or any of them are a party by reason of, or in
connection with, this Plan or any Option granted under this Plan,
and against all amounts paid by them in settlement thereof
(provided that such settlement is approved by independent legal
counsel selected by the Company), except to the extent that such
expenses relate to matters for which it is adjudged that such
Plan Administrator member is liable for willful misconduct;
provided, that within fifteen (15) days after the institution of
any such action, suit or proceeding, the Plan Administrator
member involved therein shall, in writing, notify the Company of
such action, suit or proceeding, so that the Company may have the
opportunity to make appropriate arrangements to prosecute or
defend the same.
12. AMENDMENT OF PLAN.
Except as set forth in Section 6 hereof, the Plan
Administrator may, at any time, modify, amend or terminate this
Plan or modify or amend Options granted under this Plan,
including, without limitation, such modifications or amendments
as are necessary to maintain compliance with applicable statutes,
rules or regulations; provided however, no amendment with respect
to an outstanding Option which has the effect of reducing the
benefits afforded to the Holder thereof shall be made over the
objection of such Holder; further provided, that the events
triggering acceleration of vesting of outstanding Options may be
modified, expanded or eliminated without the consent of Holders.
The Plan Administrator may condition the effectiveness of any
such amendment on the receipt of shareholder approval at such
time and in such manner as the Plan Administrator may consider
necessary for the Company to comply with or to avail the Company
and/or the Optionees of the benefits of any securities, tax,
market listing or other administrative or regulatory requirement.
Without limiting the generality of the foregoing, the Plan
Administrator may modify grants to persons who are eligible to
receive Options under this Plan who are foreign nationals or
employed outside the United States to recognize differences in
local law, tax policy or custom.
EXHIBIT 4.2
CARVER CORPORATION
1995 STOCK BONUS PLAN
This 1995 Stock Bonus Plan (the "Plan") provides for the
grant of bonuses consisting of shares of common stock, $.01 par
value (the "Common Stock"), of Carver Corporation, a Washington
corporation (the "Company"). Bonuses granted under this plan
shall be Restricted Bonuses or Unrestricted Bonuses as defined in
Section 5(a) of the Plan.
1. PURPOSES. The purposes of this Plan are to reward
directors, valued key employees and consultants of the Company
and such other persons as the Plan Administrator shall select in
accordance with Section 3 below for their services to the
Company, to enable such persons to acquire a greater proprietary
interest in the Company, thereby strengthening their incentive to
achieve the objectives of the shareholders of the Company, and to
serve as an aid and inducement in the hiring of new employees.
2. ADMINISTRATION. This Plan shall be administered by
the Board of Directors of the Company (the "Board") if each
director is a "disinterested person" (as defined below). If all
directors are not disinterested persons, the Plan shall be
administered by a committee designated by the Board and composed
of two (2) or more members of the Board who are disinterested
persons, which committee (the "Committee") may be an executive,
compensation or other committee, including a separate committee
especially created for this purpose. "Disinterested person"
shall have the meaning assigned to it under Rule 16b-3 (as
amended from time to time) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulatory requirement ("Rule 16b-3"). The
Committee shall have the powers and authority vested in the Board
hereunder (including the power and authority to interpret any
provision of this Plan or of any Bonus). The members of any such
Committee shall serve at the pleasure of the Board. A majority
of the members of the Committee shall constitute a quorum, and
all actions of the Committee shall be taken by a majority of the
members present. Any action may be taken by a written instrument
signed by all of the members of the Committee and any action so
taken shall be fully effective as if it had been taken at a
meeting. The Board, or any committee thereof appointed to
administer the Plan, is referred to herein as the "Plan
Administrator".
Subject to the provisions of this Plan, and with a view
to effecting its purpose, the Plan Administrator shall have sole
authority, in its absolute discretion, to (a) construe and
interpret this Plan; (b) define the terms used in this Plan; (c)
prescribe, amend and rescind rules and regulations relating to
this Plan; (d) correct any defect, supply any omission or
reconcile any inconsistency in this Plan; (e) determine the
individuals to whom Bonuses shall be granted under this Plan and
whether the Bonus shall be a Restricted Bonus or an Unrestricted
Bonus; (f) determine the time or times at which Bonuses shall be
granted under this Plan; (g) determine the number of shares of
Common Stock covered by each Bonus; (h) determine all other terms
and conditions of Bonuses; and (i) make all other determinations
necessary or advisable for the administration of this Plan. All
decisions, determinations and interpretations made by the Plan
Administrator shall be binding and conclusive on all participants
in this Plan and on their legal representatives, heirs and bene-
ficiaries.
The Plan Administrator shall have no authority,
discretion or power to award bonuses hereunder to directors of
the Company. Benefits for such persons shall accrue solely in
accordance with Section 6 hereof.
The Board or the Committee may delegate to one or more
executive officers of the Company the authority to grant Bonuses
under this Plan to employees of the Company who, on the Date of
Grant, are not subject to Section 16(b) of the Exchange Act with
respect to the Common Stock ("Non-Insiders"), and in connection
therewith the authority to determine the number of shares of
Common Stock covered by such Bonus and all other terms and
conditions of such Bonuses. Unless expressly approved in advance
by the Board or the Committee, such delegation of authority shall
not include the authority to alter the terms of outstanding
Bonuses. The term "Plan Administrator" when used in any provision
of this Plan other than Sections 2 and 12 shall be deemed to refer
to the Board or the Committee, as the case may be, and an executive
officer who has been authorized to grant Bonuses pursuant hereto,
insofar as such provision may be applied to Non-Insiders and
Bonuses granted to Non-Insiders.
3. ELIGIBILITY. Bonuses may be granted to any
individual who, at the time the Bonus is granted, is an employee
of the Company or any Related Corporation (as defined below),
including employees who are directors of the Company ("Employees"),
and to such other persons as the Plan Administrator shall select.
Bonuses shall be granted hereunder to directors who are not
employees of the Company or any Related Corporation, but solely on
the terms and conditions set forth in Section 6 hereof. During
each calendar year of the term of the Plan, no person shall be
eligible to receive Bonuses covering more than 100,000 shares of
Common Stock (subject to adjustment in the event of a stock split,
stock dividend, recapitalization, reorganization or similar event).
Any person to whom a Bonus is granted under this Plan is referred
to as a "Grantee".
As used in this Plan, the term "Related Corporation",
shall mean any corporation (other than the Company) that is a
"Parent Corporation" of the Company or "Subsidiary Corporation"
of the Company, as those terms are defined in Sections 424(e) and
424(f), respectively, of the Internal Revenue Code of 1986, as
amended (or any successor provisions) (the "Code"), and the
regulations thereunder (as amended from time to time).
4. STOCK. In each year during the term of the Plan,
the Plan Administrator is authorized to grant Bonuses to acquire
an amount of shares of the Company's authorized but unissued, or
reacquired, Common Stock equal in amount to one percent (1%) of
the number of issued and outstanding shares of Common Stock on
the record date for the meeting of shareholders of the Company at
which this Plan is approved, in the case of 1995, and on
January 1 of each year thereafter. The number of shares with
respect to which Bonuses may be granted in each year hereunder is
subject to adjustment in the event of a stock split, stock
dividend, recapitalization, reorganization or similar event. In
the event that any outstanding Bonus is forfeited for any reason,
the shares of Common Stock allocable to the forfeited portion of
such Bonus may again be subject to a Bonus to the same Grantee or
to a different person eligible under Section 3 of this Plan.
Shares of Common Stock granted to a Grantee pursuant to a Bonus
are referred to herein as "Bonus Shares".
5. TERMS AND CONDITIONS OF BONUSES.
(a) Grant of Bonus. The Plan Administrator may grant
to a Grantee (i) Bonus Shares subject to the restrictions described
in Section 5(c) hereof (such grant a "Restricted Bonus" and such
shares "Restricted Bonus Shares"); or (ii) Bonus Shares which are
not subject to the restrictions described in Section 5(c) hereof
(such grant an "Unrestricted Bonus" and such shares "Unrestricted
Bonus Shares"). The Grantee shall pay no consideration for
Restricted Bonus Shares or Unrestricted Bonus Shares.
(b) Bonus Agreement. As soon as practicable after the
date of a Bonus grant, the Company and the Grantee shall enter
into a written agreement (a "Bonus Agreement") identifying the
date of grant, and specifying the terms and conditions of the
Bonus. Any Bonus under this Plan shall be governed by the terms
of the Plan and the applicable Bonus Agreement.
(c) Restricted Bonus Shares.
(i) Restrictions. Subject to the provisions of
the Plan and the Bonus Agreement, during the period (the
"Restriction Period"), if any, set by the Plan Administrator at
the time of award of the Bonus (the "Date of Grant"), commencing
with, and not exceeding ten (10) years from, the Date of Grant,
the Grantee shall not be permitted to sell, assign, transfer,
pledge or otherwise encumber Restricted Bonus Shares. Within
these limits, the Plan Administrator may provide for the lapse of
such restrictions in installments and may accelerate or waive
such restrictions, in whole or in part, based on service,
performance or such other factors or criteria as the Plan
Administrator may determine.
(ii) Dividends on Restricted Bonus Shares.
Unless otherwise determined by the Plan Administrator, with
respect to dividends on Restricted Bonus Shares, dividends
payable in cash shall be paid to the Grantee and dividends
payable in Common Stock shall be paid in the form of Restricted
Bonus Shares. The payment of share dividends in additional
Restricted Bonus Shares shall only be permissible if sufficient
shares of Common Stock are available under Section 4 for such
reinvestment.
(iii) Termination. Except to the extent
otherwise provided in the Bonus Agreement and pursuant to Section
5(c)(i), in the event the Grantee ceases to be, for any reason,
employed by, or a consultant to, the Company or a Related
Corporation (such event a "Termination") during the Restriction
Period, all Restricted Bonus Shares then subject to restriction
shall be forfeited by the Grantee.
(iv) Escrow and Voting of Restricted Bonus
Shares. As soon as practicable following the Grant Date, the
appropriate officers of the Company shall prepare, issue and
deliver certificate(s) representing Restricted Bonus Shares to
the Chief Financial Officer or General Counsel of the Company
(the "Administrative Executive") to be held by such person in
accordance with this paragraph. Any grant of Resticted Bonus
Shares under this Plan shall be made conditioned on the Grantee's
delivery to the Administrative Executive of stock power(s) duly
transferring ownership of the Restricted Bonus Shares to the
Company. The Administrative Executive shall deliver the share
certificate(s) and stock power(s) to the Grantee only following
the receipt of written certification from the Plan Administrator
that the Restricted Period relating to the Restricted Bonus
Shares has expired. Pending the delivery of share certificates
representing Restricted Bonus Shares to the Grantee as provided
in this paragraph 5(c)(iv) or the forfeiture of such shares as
provided in paragraph 5(c)(iii), the Grantee shall be entitled to
vote such shares.
(d) Performance Goals. Any Bonus may be granted
either alone or in addition to other Bonuses granted under the
Plan. The Plan Administrator may condition the grant of any
Bonus upon the attainment of specified performance goals or such
other factors or criteria, including continued employment or
consulting, as the Plan Administrator shall determine. Performance
objectives may vary from Grantee to Grantee and among groups of
Grantees and shall be based upon such Company, subsidiary, group or
division factors or criteria as the Plan Administrator may deem
appropriate, including, but not limited to, earnings per share or
return on equity. The other provisions of Bonuses also need not be
the same with respect to each recipient. Unless specified
otherwise in the Plan or by the Plan Administrator, the date of
grant of a Bonus shall be the date of action by the Plan
Administrator to grant the Bonus.
(e) Right of Repurchase. At the option of the Plan
Administrator, Bonus Shares issued under this Plan may be subject
to a right of repurchase in favor of the Company upon Termination
(as defined in Section 5(c)(iii) hereof) of the Grantee. The
terms and conditions of such right of repurchase, if any, shall
be set forth in the Bonus Agreement.
(f) Securities Regulation and Tax Withholding.
(i) Bonus Shares shall not be issued with respect
to a Bonus, unless the grant of such Bonus and the issuance and
delivery of such Bonus Shares shall comply with all relevant
provisions of law, including, without limitation, any applicable
state securities laws, the Securities Act of 1933, as amended,
the Exchange Act, the rules and regulations thereunder and the
requirements of any stock exchange or quotation system upon which
such Bonus Shares may then be listed or quoted, and such issuance
shall be further subject to the approval of counsel for the
Company with respect to such compliance, including the availability
of an exemption from registration for the issuance of such Bonus
Shares. The inability of the Company to obtain from any regulatory
body the authority deemed by the Company to be necessary for the
lawful issuance of any Bonus Shares under this Plan, or the
unavailability of an exemption from registration for the issuance
of any Bonus Shares under this Plan, shall relieve the Company of
any liability with respect to the non-issuance of such Bonus
Shares.
As a condition to the issuance of Bonus Shares,
the Plan Administrator may require the Grantee to represent and
warrant in writing at the time of such issuance that such Bonus
Shares are being acquired only for investment and without any
then-present intention to sell or distribute such Bonus Shares.
At the option of the Plan Administrator, a stop-transfer order
against such Bonus Shares may be placed on the stock books and
records of the Company, and a legend indicating that the Bonus
Shares may not be pledged, sold or otherwise transferred, unless
an opinion of counsel is provided stating that such transfer is
not in violation of any applicable law or regulation, may be
stamped on the certificates representing such Bonus Shares in
order to assure an exemption from registration. The Plan
Administrator also may require such other documentation as may
from time to time be necessary to comply with federal and state
securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE
REGISTRATION OF BONUS SHARES.
(ii) The Grantee shall pay to the Company by
certified or cashier's check, promptly upon grant of a Bonus or,
if later, the date that the amount of such obligations becomes
determinable (in either case, the "Tax Date"), all applicable
federal, state, local and foreign withholding taxes that the Plan
Administrator, in its discretion, determines to result upon grant
of a Bonus, lapse of restrictions on transfer of Restricted Bonus
Shares, transfer or other disposition of Bonus Shares or otherwise
related to a Bonus or Bonus Shares. Upon approval of the Plan
Administrator, a Grantee may satisfy such obligation by complying
with one or more of the following alternatives selected by the Plan
Administrator:
(A) by delivering to the Company shares of
Common Stock previously held by such Grantee or by the Company
withholding Bonus Shares otherwise issuable pursuant to the
Bonus, which have a fair market value at the Tax Date (as
determined by the Plan Administrator) equal to the tax obligation
to be paid by the Grantee on such Tax Date; provided, that if the
Grantee is an Insider or if beneficial ownership of Bonus Shares
is attributable to an Insider pursuant to the regulations under
Section 16 of the Exchange Act, the Grantee will have executed,
by a date not later than six (6) months prior to the Tax Date, an
irrevocable election to satisfy its obligations under this
Paragraph (ii) through the Company withholding shares of Common
Stock otherwise deliverable pursuant to the Bonus;
(B) by executing appropriate loan documents
approved by the Plan Administrator by which the Grantee borrows
funds from the Company to pay the withholding taxes due under
this Paragraph (ii), with such repayment terms as the Plan
Administrator shall select; or
(C) by complying with any other payment
mechanism approved by the Plan Administrator from time to time.
(iii) The issuance, transfer or delivery of
certificates representing Bonus Shares may be delayed, at the
discretion of the Plan Administrator, until the Plan
Administrator is satisfied that the applicable requirements of
the federal and state securities laws and the withholding
provisions of the Internal Revenue Code have been met.
(g) Adjustment of Bonuses; Waivers. The Plan
Administrator may adjust the restrictions, performance goals and
measurements applicable to Bonuses (i) to take into account
changes in law and accounting and tax rules; (ii) to make such
adjustments as the Plan Administrator deems necessary or
appropriate to reflect the inclusion or exclusion of the impact
of extraordinary or unusual items, events or circumstances in
order to avoid windfalls or hardships; and (iii) to make such
adjustments as the Plan Administrator deems necessary or
appropriate to reflect any material changes in business
conditions. In the event of hardship or other special
circumstances of a Grantee and otherwise in its discretion, the
Plan Administrator may waive in whole or in part any or all
restrictions, conditions, vesting or forfeiture with respect to
any Bonus granted to such Grantee. The provisions of this
Section 5(g) shall not apply to Bonuses granted under Section 6
hereof.
(h) Non-Competition. The Plan Administrator, in
addition to any other requirement it may impose, may condition
any discretionary adjustment or waiver pursuant Section 5(g)
hereof upon a Grantee's agreement to (i) not engage in any
business or activity competitive with any business or activity
conducted by the Company; and (ii) be available for consultations
at the request of the Company's management, all on such terms and
conditions (including conditions in addition to (i) and (ii)) as
the Plan Administrator may determine.
(i) Rights as Shareholder. Unless the Plan or the
Plan Administrator expressly specifies otherwise, a Grantee shall
have no rights as a shareholder with respect to any Bonus Shares
until the issuance (as evidenced by the appropriate entry on the
books of the Company or a duly authorized transfer agent) of a
certificate representing the Bonus Shares. Subject to Sections 4
and 5(c)(ii), no adjustment shall be made for dividends or other
rights for which the record date is prior to the date the
certificate is issued.
(j) Beneficiary Designation. The Plan Administrator,
in its discretion, may establish procedures for a Grantee to
designate a beneficiary to whom any Bonus Shares issuable or
amounts payable in the event of the Grantee's death are to be
issued or paid.
(k) Transfer Limitation on Stock. In addition to any
other transfer restrictions which may be imposed under the Plan
or any Bonus Agreement, a Grantee who is an Insider may not sell
or otherwise transfer, in whole or in part, any Bonus Shares
prior to the six-month anniversary of the issuance of such Bonus
Shares, unless the Plan Administrator determines that the
foregoing provisions are not necessary to make the transaction
exempt from Section 16(b) of the Exchange Act pursuant to Rule
16b-3.
6. NON-EMPLOYEE DIRECTORS. Directors who are not also
employees of the Company ("Non-Employee Directors") shall be
eligible to receive Bonuses under the Plan only in accordance
with the terms and conditions of this Section 6.
On each February 15, May 15, August 15 and November 15,
following shareholder approval of this Plan and for so long
thereafter as shares are available for grant pursuant to Section
4, each person who served as a Non-Employee Director during the
then most recently completed calendar quarter shall receive 250
Bonus Shares. Any person who served as a Non-Employee Director
for less than the entire quarter shall receive a pro-rated number
of Bonus Shares based on the number of days of service as a Non-
Employee Director during such quarter.
7. EFFECTIVE DATE; TERM. This Plan shall be effective as
of February 15, 1995. Bonuses may be granted by the Plan
Administrator from time to time thereafter until February 15,
2005, or until this Plan is terminated by the Board in its sole
discretion. Termination of this Plan shall not terminate any
Bonus granted prior to such termination. No Bonuses shall be
granted hereunder to directors of the Company pursuant to Section
6 hereof or to Insiders prior to the approval of this Plan by the
shareholders of the Company. The Plan Administrator may require
any shareholder approval that it considers necessary for the
Company to comply with or to avail the Company and/or the Optionees
of the benefits of any securities, tax, market listing or other
administrative or regulatory requirement.
8. NO OBLIGATIONS TO ACCEPT BONUS SHARES. The grant of an
Bonus shall impose no obligation upon the Grantee to receive
Bonus Shares.
9. NO RIGHT TO BONUSES OR TO EMPLOYMENT. Except for the
grant of Bonuses pursuant to Section 6 hereof, whether or not any
Bonuses are to be granted under this Plan shall be exclusively
within the discretion of the Plan Administrator, and nothing
contained in this Plan shall be construed as giving any person
any right to participate under this Plan. The grant of a Bonus
shall in no way constitute any form of agreement or understanding
binding on the Company or any Related Corporation, express or
implied, that the Company or any Related Corporation will employ
or contract with a Grantee for any length of time, nor shall it
interfere in any way with the Company's or, where applicable, a
Related Corporation's right to terminate a Grantee's employment
at any time, which right is hereby reserved.
10. RULE 16b3-3. With respect to Insiders, transactions
under this Plan are intended to comply with the applicable
conditions of Rule 16b-3. To the extent any provision of this
Plan or action by the Plan Administrator fails to so comply, it
shall be adjusted to comply with Rule 16b-3 to the extent
permitted by law and deemed advisable by the Plan Administrator.
It shall be the responsibility of Insiders and not of the
Company or the Plan Administrator, to comply with the
requirements of Section 16 of the Exchange Act; and neither the
Company nor the Plan Administrator shall be liable if this Plan
or any transaction under this Plan fails to comply with the
applicable conditions of Rule 16b-3, or if any Insider incurs any
liability under Section 16 of the Exchange Act.
11. INDEMNIFICATION OF PLAN ADMINISTRATOR. In addition to
all other rights of indemnification they may have as members of
the Board, members of the Plan Administrator shall be indemnified
by the Company for all reasonable expenses and liabilities of any
type or nature, including attorneys' fees, incurred in connection
with any action, suit or proceeding to which they or any of them
are a party by reason of, or in connection with, this Plan or any
Bonus granted under this Plan, and against all amounts paid by
them in settlement thereof (provided that such settlement is
approved by independent legal counsel selected by the Company),
except to the extent that such expenses relate to matters for
which it is adjudged that such Plan Administrator member is
liable for willful misconduct; provided, that within fifteen (15)
days after the institution of any such action, suit or proceeding,
the Plan Administrator member involved therein shall, in writing,
notify the Company of such action, suit or proceeding, so that the
Company may have the opportunity to make appropriate arrangements
to prosecute or defend the same.
12. AMENDMENT OF PLAN. Except as set forth in Section 6
hereof, the Plan Administrator may, at any time, modify, amend or
terminate this Plan or modify or amend Bonuses granted under this
Plan, including, without limitation, such modifications or
amendments as are necessary to maintain compliance with applicable
statutes, rules or regulations; provided, however, no amendment
with respect to an outstanding Bonus which has the effect of
reducing the benefits afforded to the Grantee thereof shall be made
over the objection of such Grantee. The Plan Administrator may
condition the effectiveness of any such amendment on the receipt of
shareholder approval at such time and in such manner as the Plan
Administrator may consider necessary for the Company to comply with
or to avail the Company and/or the Optionees of the benefits of any
securities, tax, market listing or other administrative or
regulatory requirement. Without limiting the generality of the
foregoing, the Plan Administrator may modify grants to persons who
are eligible to receive Bonuses under this Plan who are foreign
nationals or employed outside the United States to recognize
differences in local law, tax policy or custom.
13. UNFUNDED STATUS OF PLAN. The Plan shall constitute an
"unfunded" plan for incentive compensation. The Plan Administrator
may authorize the creation of trusts or arrangements to meet the
obligations created under the Plan to deliver Stock or make
payments; provided, however, that unless the Plan Administrator
otherwise determines, the existence of such trusts or other
arrangements shall be consistent with the "unfunded" status of the
Plan.
EXHIBIT 5.1
[HELLER, EHRMAN, WHITE & McAULIFFE Letterhead]
December 12, 1995
21232/0006
Carver Corporation
20121 48th Avenue W.
Lynwood, Washington 98036
Re: Registration Statement on Form S-8 under
the Securities Act of 1933, as amended
Ladies and Gentlemen:
Carver Corporation, a Washington corporation (the "Company"),
has requested our opinion with respect to certain matters relating
to the registration statement on Form S-8 (the "Registration
Statement") which the Company will be filing with the Securities
and Exchange Commission (the "Commission") in connection with the
registration under the Securities Act of 1933, as amended, of an
aggregate of 727,867 shares (the "Shares") of the Company's common
stock, par value $0.01 (the "Common Stock"). Of the Shares, 360,000
(the "Option Shares") are issuable by the Company upon the exercise
of options (the "Options") granted pursuant to the Carver
Corporation 1995 Stock Option Plan and 367,867 (the "Award Shares")
are issuable as awards (the "Awards") pursuant to the Carver
Corporation 1995 Stock Bonus Plan. The Carver Corporation 1995
Stock Option Plan and the Carver Corporation 1995 Stock Bonus Plan
are hereinafter referred to as the "Plans".
The Shares are currently unissued shares of the Company. The
Shares are to be sold or issued to employees and members of the
Company's board of directors (the "Board") as described in the
Plans.
We have based our opinion upon our review of the following
records, documents, instruments and certificates:
1. The Articles of Incorporation of the Company, certified
by the Secretary of State of the State of Washington as of November
16, 1995 and certified to us by an officer of the Company as being
complete, unamended and in full force and effect as of the date of
this opinion;
2. A Certificate of Existence/Authorization relating to the
Company issued by the Secretary of State of the State of
Washington, dated as of November 16, 1995;
3. The Bylaws of the Company, certified to us by an officer
of the Company as being complete, unamended and in full force and
effect as of the date of this opinion;
4. Records certified to us by an officer of the Company as
constituting all records of proceeding and actions of the Board
and the shareholders of the Company relating to the adoption of
the Plans;
5. The Plans;
6. Forms of Nonqualified Stock Option Agreement and
Incentive Stock Option Agreement (the "Option Agreements");
7. Information provided by the Company's transfer agent as
to the number of outstanding shares of Common Stock as of
November 21, 1995; and
8. A certificate of an officer of the Company, dated as of
the date of this opinion, stating that no dissolution proceedings
have been commenced with respect to the Company.
In connection with this opinion, we have, with your consent,
assumed the authenticity of all records, documents and instruments
submitted to us as originals, the genuineness of all signatures,
the legal capacity of natural persons and the authenticity and
conformity to the originals of all records, documents and
instruments submitted to us as copies.
This opinion is limited to the laws of the State of
Washington. We disclaim any opinion as to any statute, rule,
regulation, ordinance, order or other promulgation of any other
jurisdiction or any federal, regional or local governmental body.
Based upon the foregoing and our examination of such questions
of law as we have deemed necessary or appropriate for the purpose
of this opinion, and subject to the assumptions and qualifications
expressed herein, it is our opinion that the reservation for
issuance of the Shares has been duly authorized and, upon exercise
of the Options, payment of the exercise price for the Option Shares
and issuance and delivery of the Option Shares pursuant to the
terms of the Carver Corporation 1995 Stock Option Plan and the
relevant Option Agreements, or upon issuance and delivery of the
Award Shares pursuant to one or more Awards granted under the
Carver Corporation 1995 Stock Bonus Plan, such Shares will be
validly issued, fully paid and non-assessable.
Our opinion is qualified to the extent that in the event of
a stock split, share dividend or other reclassification of the
Common Stock effected subsequent to the date hereof, the number
of shares of Common Stock issuable upon the exercise of Options
or issuable pursuant to an Award may be adjusted automatically,
as set forth in the terms of the Plans, such that the number of
such shares may exceed the number of Company's remaining
authorized, but unissued shares of Common Stock at the time the
Options are exercised or an Award fully vests.
We expressly disclaim any obligation to advise you of any
developments in areas covered by this opinion that occur after
the date of this opinion.
We hereby authorize and consent to the use of this opinion
as Exhibit 5 to the Registration Statement.
Very truly yours,
HELLER, EHRMAN, WHITE & McAULIFFE
/s/ HELLER, EHRMAN, WHITE & MCAULIFFE
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference into this registration
statement on Form S-8 of our report dated February 9, 1995 on our
audits of the consolidated financial statements of Carver
Corporation and Subsidiary as of December 31, 1994 and 1993, and
for each of the years in the three year period ended December 31,
1994, which report is included in the Annual Report on Form 10-K of
Carver Corporation for the year ended December 31, 1994.
MOSS ADAMS LLP
Seattle, Washington
December 12, 1995
