As Filed with the Securities Registration No.33-________
and Exchange Commission on
September 25, 1997.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------
F O R M S - 8
REGISTRATION STATEMENT
Under the Securities Act of 1933
Lancer Corporation
- -------------------------------------------------------------------------------
(Exact name of issuer as specified in its charter)
Texas 74-1591073
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
235 West Turbo, San Antonio, Texas 78216
- -------------------------------------------------------------------------------
(Address of Principal Executive Office) (Zip Code)
Stock Incentive Plan
- -------------------------------------------------------------------------------
(Full title of the Plans)
Alfred A. Schroeder
235 West Turbo, San Antonio, Texas 78216
- -------------------------------------------------------------------------------
(Name and address of agent for service)
(210) 524-1100
- -------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
Calculation of Registration Fee
- ------------------------------------------------------------------------------------------------------------
Proposed Propose maximum
Title of securities Amount to be maximum offering aggregate offering Amount of
to be registered registered price per unit price registration fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.01 par value (1)900,000 (2) $14.75 (2) $13,275,000 (2)$4,022.73
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement also covers such additional number of shares,
presently undeterminable, as may become issuable under the Plan in the event of
Common Stock dividends, Common Stock splits, mergers, reorganizations,
split-ups, combinations, recapitalizations or other changes in Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(g).
<PAGE>
PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
Omitted pursuant to Rule 424 promulgated by the Securities and Exchange
Commission (the Commission) pursuant to the Securities Exchange Act of 1934, as
amended (the 1934 Act).
Item 2. Registrant Information and Employee Plan Annual Information
Omitted pursuant to Rule 424 promulgated by the Commission pursuant to the
1934 Act.
2
<PAGE>
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents filed by Lancer Corporation (hereinafter the
Company or the Registrant) with the Commission are incorporated in and made a
part of this Registration Statement by reference: Item 1, Description of
Registrant s Securities to be Registered, of Form 8-A dated September 16, 1985;
Annual Report on Form 10-K for the fiscal year ended December 31, 1996;
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997; and
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the 1934 Act after the date of this Registration
Statement, and prior to the filing of a post-effective amendment which indicates
that all securities offered have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part thereof from the date of the filing of
such documents.
Item 4. Description of Securities
Non-applicable.
Item 5. Interests of Named Experts and Counsel
Non-applicable.
Item 6. Indemnification of Directors and Officers
Article 2.02(16) of the Texas Business Corporation Act (the TBCA) empowers
the Company to indemnify directors, officers, employees and agents of the
Company and to purchase liability insurance for those persons to the extent
permitted by Article 2.02-1 of the TBCA.
Article 2.02-1 of the TBCA in part provides that a corporation may
indemnify its officers and directors for any liability if it is determined that
such officer or director (i) conducted himself in good faith, (ii) reasonably
believed, in the case of conduct in his official capacity as an officer or
director, that his conduct was in the corporation s best interest, and in all
other cases, that his conduct was at least not opposed to the corporation s best
interest, and (iii) in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful. These determinations must be
made (i) by a majority vote of a quorum consisting of the directors who at the
time of the vote are not named defendants or respondents in the proceeding, (ii)
if such a quorum cannot be obtained, by a majority vote of a committee of the
Board of Directors, designated to act in the matter by a majority vote of all
directors, consisting solely of two or more directors who, at the time of the
vote, are not named defendants or respondents in the proceeding, (iii) by
special legal counsel selected by the Board of Directors or a committee of the
Board by a vote as set forth in (i) or (ii) above, or, if such a quorum cannot
be obtained and such a committee vote cannot be established, by a majority vote
of all directors, or (iv) by the shareholders in a vote that excludes the shares
that are held by directors and officers who are named defendants or respondents
in the proceeding.
3
<PAGE>
Under Article 2.02-1 of the TBCA, an officer or a director may be
indemnified against judgments, penalties (including excise and similar taxes),
fines, settlements, and reasonable expenses actually incurred by the officer or
director in connection with the proceeding, but if the officer or director is
found liable to the corporation or is found liable on the basis that personal
benefit was improperly received by the officer or director, the indemnification
(i) is limited to reasonable expenses actually incurred by the officer or
director in connection with the proceeding, and (ii) shall not be made in
respect of any proceeding in which the officer or director shall have been found
liable for willful or intentional misconduct in the performance of his duty to
the corporation. The termination of a proceeding by judgment, order, settlement,
or conviction, or upon a plea nolo contendere or its equivalent is not of itself
determinative that the officer or director did not meet the requirements set
forth above. An officer or director shall be deemed to have been found liable in
respect of any claim, issue or matter only after the officer or director shall
have been so adjudged by a court of competent jurisdiction after exhaustion of
all appeals therefrom.
Article 2.02-1 of the TBCA authorizes a corporation to pay or reimburse the
reasonable expenses incurred by an officer or director in advance of the final
disposition of such proceeding if the corporation receives a written affirmation
by the officer or director of his good faith belief that he has met the standard
of conduct necessary for indemnification as well as a written undertaking to
repay the amount paid by the corporation if it is ultimately determined that the
officer or director has not met the requirements for indemnification. In
addition, Article 2.02-1 of the TBCA empowers a corporation to indemnify and
advance reasonable expenses to an employee, agent and certain other persons to
the same extent it may indemnify in advance expenses to officers and directors.
Finally, Article 2.02-1 of the TBCA empowers a corporation to purchase and
maintain insurance on behalf of directors, officers, employees, agents and
certain other persons against any liability asserted against such persons,
whether or not the corporation would have the power to indemnify such persons
against that liability under Article 2.02-1 of the TBCA.
Under the Company s Bylaws, the Company shall, to the fullest extent to
which it is empowered to do so by the TBCA or any other applicable laws as may
from time to time be in effect, indemnify any person who was, is or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Company or is
or was serving at the request of the Company as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, against all
expenses (including court costs and attorneys fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided it is determined in accordance
with applicable law that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company. Expenses
may be advanced by the Company in advance of the final disposition of a
proceeding upon the receipt of an undertaking by him to repay such amount unless
it is ultimately determined he is entitled to indemnification. Further, under
the Company s Bylaws the Board of Directors has the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the Company would have the power to indemnify
him against such liability under the Company s Bylaws.
4
<PAGE>
Item 7. Exemption from Registration Claimed
On April 1, 1997, the Company issued 81,888 shares of Common Stock to
Applied Beverage Systems (1990) Ltd. (ABS) in exchange for all of its assets in
reliance on Section 4(2) of the Securities Act of 1933, as amended. On July 8,
1997, a three-for-two stock split in the form of a stock dividend was paid by
the Company on all of its outstanding Common Stock, resulting in an additional
40,944 shares of Common Stock issued to ABS.
Item 8. Exhibits
*4.1 The Company s Articles of Incorporation, with Amendments.
*4.2 The Company s Bylaws, with Amendments.
4.3 The Stock Incentive Plan.
5.1 Opinion of Matthews & Branscomb.
23.1 Consent of KPMG Peat Marwick, LLP.
23.2 Consent of Matthews & Branscomb, P.C. is included in their
opinion filed as Exhibit 5.1 of this Registration Statement.
-------------
*These exhibits are incorporated by reference to the same exhibits to the
Registrant s Registration Statement No. 33-55776 filed on Form S-8 with the
Securities and Exchange Commission on December 16, 1992.
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, as amended (the 1933
Act);
5
<PAGE>
(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,
represents 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 registration statement is on
Form S-3 or Form S-8 and the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registration
pursuant to Section 13 or Section 15(d) of the 1934 Act that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the 1933 Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant s
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan s annual report
pursuant to Section 15(d) of the 1934 Act) 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.
(c) The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each employee to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14(a)-3 or Rule 14(c)-3 under the 1934 Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sooner given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the TBCA, the Registrant s Articles of Incorporation or
the Registrant s Bylaws, or otherwise, the Registrant has been advised that in
the opinion of the 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 director, officer or controlling
person of the Registrant the successful defense of any action, suit or
proceeding) as 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 the public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
6
<PAGE>
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 its behalf by the undersigned, thereunto
duly authorized, in the City of San Antonio, State of Texas, on September 17,
1997.
REGISTRANT:
LANCER CORPORATION
By: /s/John P. Herbots
Name: John P. Herbots
Title: Vice President-Finance
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the date indicated.
September 17, 1997 /s/ Alfred A. Schroeder
- ----------------------------------------------------------------------------
Date Alfred A. Schroeder, Chairman of the Board
September 17, 1997 /s/ George F. Schroeder
- ----------------------------------------------------------------------------
Date George F. Schroeder, President, Chief
Executive Officer and Director
7
<PAGE>
September 17, 1997 /s/ John P. Herbots
- ----------------------------------------------------------------------------
Date John P. Herbots, Vice President-Finance,
Secretary, Treasurer and Director
September 17, 1997 /s/ Walter J. Biegler
- ----------------------------------------------------------------------------
Date Walter J. Biegler, Director
September 17, 1997 /s/ Jean M. Braley
- ----------------------------------------------------------------------------
Date Jean M. Braley, Director
September 17, 1997 /s/ Charles K. Clymer
- ----------------------------------------------------------------------------
Date Charles K. Clymer, Director
September 17, 1997 /s/ Michael E. Smith
- ----------------------------------------------------------------------------
Date Michael E. Smith, Director
8
<PAGE>
REOFFER PROSPECTUS
After giving effect to two three-for-two stock splits and an amendment of
the Stock Incentive Plan by the Shareholders of Lancer Corporation (the Company
or Lancer) on May 22, 1997, to increase the number of shares available for
issuance under the Stock Incentive Plan, this Prospectus relates to 900,000
shares of the Common Stock, par value $.01 per share (Common Stock), of the
Company, to be acquired by the Selling Shareholders (as defined below) upon the
exercise of the options granted under the Stock Incentive Plan, as amended (the
Plan). This Prospectus also relates to such additional number of shares,
presently undeterminable, as may become issuable under the Plan in the event of
Common Stock dividends, Common Stock splits, mergers, reorganizations,
split-ups, combinations, recapitalizations or other changes in the Common Stock.
This Prospectus is intended for use in connection with any resale of shares of
Common Stock by any Selling Shareholder (as defined below) who may be deemed an
affiliate of the Company within the meaning of the Securities Act of 1933, as
amended (the 1933 Act), and the rules and regulations promulgated thereunder.
This Prospectus is being filed by the Company in conjunction with a Form S-8
Registration Statement of even date herewith.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus; and if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any Selling Shareholders. The delivery of this Prospectus at
any time does not imply that any information contained in it is correct as of
any time subsequent to the date upon it. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities offered hereby
in any state to any person to whom it is unlawful to make such offer or
solicitation in such state.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION (THE COMMISSION) NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. FOR A DISCUSSION OF CERTAIN CONSIDERATIONS INVOLVED IN
EVALUATING AN INVESTMENT IN THE COMPANY, SEE RISK FACTORS.
---------------------------------------------------
The date of this Prospectus is September 17, 1997.
9
R1
<PAGE>
AVAILABLE INFORMATION
Lancer Corporation (the Company or Lancer) is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the 1934 Act),
and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the Commission). Such
reports, proxy statements and other information can be inspected and copied at
the Commission s office at Room 1024, 450 5th Street, N.W., Washington, D.C.
20549, and at the following Regional Offices of the Commission: New York
Regional Office, Jacob K. Javits Federal Building, 75 Park Place, 14th Floor,
New York, New York 10007; Los Angeles Regional Office, 5757 Wilshire Boulevard,
Suite 500 East, Los Angeles, California 90036; and Chicago Regional Office,
Everett McKinley Dirksen Building, 219 South Dearborn Street, Room 1204,
Chicago, Illinois 60604 and Fort Worth Regional Office, 8th Floor, 411 West
Seventh Street, Fort Worth, Texas 76102. Copies of such reports, proxy
statements and other information concerning the Company can also be obtained
from the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. Such reports, proxy statements and other information
concerning the Company also may be inspected at the office of the American Stock
Exchange, 86 Trinity Place, NY, NY 10006-1881.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in and made a part of this Prospectus by reference: Item 1,
Description of Registrant s Securities to be Registered, on Form 8-A dated
September 16, 1985; Annual Report on Form 10-K for the fiscal year ended
December 31, 1996; Quarterly Report on Form 10-Q for the quarter ended March 31,
1997; and Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14, or 15(d) of the 1934 Act after the date of this Prospectus, and prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Prospectus and
to be part of this Prospectus from the date of filing such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which is also incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
10
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<PAGE>
Lancer will provide without charge to each person to whom this Prospectus
is delivered, upon written or oral request of such person, a copy of any or all
of the information referred to above that has been or may be incorporated by
reference into this Prospectus (not including exhibits to the information so
incorporated unless such exhibits are specifically incorporated by reference as
well). Such request should be addressed to Lancer Corporation, 235 West Turbo,
San Antonio, Texas 78216, (210) 524-1100.
11
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<PAGE>
TABLE OF CONTENTS
Page
Available Information R2
Incorporation of Certain Documents by Reference R2
Risk Factors R5
Use of Proceeds R7
Selling Shareholders R7
Plan of Distribution R8
Indemnification of Officers and Directors R9
12
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<PAGE>
LANCER CORPORATION
Lancer Corporation, a Texas corporation (Lancer or the Company), designs,
engineers, manufactures and markets fountain soft drink and other dispensing
systems and related equipment for use in the food service and beverage industry.
Lancer maintains its principal executive offices at 235 West Turbo, San Antonio,
Texas 78216, and its telephone number is (210) 524-1100.
RISK FACTORS
The securities offered hereby involve some risk. In analyzing this
offering, prospective investors should carefully consider, among others, the
matters set forth below. The order in which such risks are discussed is not
necessarily indicative of their relative significance.
1. Reliance on One Customer.
Substantially all of the Company s sales are derived from, or influenced
by, The Coca-Cola Company. Lancer is a preferred supplier to The Coca-Cola
Company. Direct sales to The Coca-Cola Company, the Company s largest customer,
accounted for approximately 33%, 50% and 46% of the Company s total net sales
for the years ended December 31, 1996, 1995 and 1994, respectively. None of the
Company s customers, including The Coca-Cola Company, are contractually
obligated to purchase minimum volumes of Lancer products. Consequently, The
Coca-Cola Company has the ability to adversely affect, directly or indirectly,
the volume and price of the products sold by the Company. Lancer does not expect
any significant volume or price reductions in its business with The Coca-Cola
Company. If they were to occur, however, such reductions would have a material
adverse impact on the Company s financial position and its results of
operations.
2. Competition.
The business of manufacturing and marketing beverage dispensing systems and
related equipment is highly competitive, and the Company frequently competes
with companies having substantially greater resources. The Company believes that
product suitability and reliability, technical expertise, warranty, price and
delivery time are important competitive factors and that the Company will be
able to continue to compete successfully as a result of the technological
expertise of its personnel, its ability to fabricate a substantial portion of
parts used in its dispensing systems and its reputation for high product
performance.
3. Lack of Dividends.
The Company has never paid cash dividends on the Common Stock, and does not
anticipate doing so anytime in the near future. Payment of cash dividends is
within the discretion of the Company s Board of Directors and is dependent upon
earnings, operations, capital requirements, general financial condition of the
Company and general business conditions.
R5
13
<PAGE>
4. International Operations.
For the years ended December 31, 1996, 1995, and 1994, forty-three percent
(43%), thirty-five percent (35%) and twenty-nine percent (29%), respectively, of
the Company s net sales were derived from sales to customers in foreign
countries. In addition, the Company manufactures some of its products in Mexico,
Australia, New Zealand, and Brazil, and markets and distributes its products
internationally through the Company wholly-owned subsidiaries. The Company s
foreign sales and operations could be adversely affected by foreign currency
fluctuations, exchange controls, tax policies and other political and economic
events, such as expropriation and deterioration in foreign economies. The
Company attempts to limit such risks; however, there can be no assurance that
these efforts will be successful.
5. Supplies Shortages.
Substantially all raw materials and parts not manufactured internally are
available from two or more suppliers. The Company has not experienced any
significant shortages in the supply of its raw materials and parts over the past
several years; however, from time to time shortages have occurred. Shortages in
such raw materials and parts may delay or limit the manufacture of the Company s
products and thus, adversely affect the Company s operations. The Company does
not stockpile large amounts of such raw materials and parts, but attempts to
control its inventory through extrapolation of historical production figures and
its knowledge of the market. In addition, the Company has often manufactured
parts that were not then available in desired quantities. However, there can be
no assurance that these measures will be successful or that such shortages will
not occur in the future.
6. Liability.
Like other manufacturers, the Company is subject to various claims arising
in the ordinary course of business, including product liability claims and
employees claims for personal injury. In 1988, the Company opted out of the
Texas workman s compensation program (under which the Company s liability for an
employee s personal injury claim was limited) primarily as a cost-cutting
measure; at the same time, the Company implemented an intensive safety program
designed to limit the number and extent of employee-related injuries. In
addition, the Company has accrued approximately $1,148,000 as of July 1, 1997,
to cover employees personal injury claims and has obtained a reimbursement
insurance policy covering employees personal injury claims which, after a $1
million self-insured retention by the Company, provides coverage of $5 million
per occurrence and $10 million in the aggregate. The Company also has obtained
general liability insurance covering product liability claims up to $25 million.
Under catastrophic circumstances, such liability could exceed the Company s
insurance limits and could have a material adverse effect upon the Company.
R6
14
<PAGE>
7. Key Personnel.
The Company is dependent upon the services of Alfred A. Schroeder and
George F. Schroeder--the Chairman of the Board and President, respectively, of
the Company--due primarily to their technical expertise and their relationships
with the Company s customers. While the Company does not anticipate the loss of
the Schroeders services in the near future, any such loss could have a material
adverse effect upon the Company.
8. Voting Power.
As of July 1, 1997, the directors and executive officers of the Company
will beneficially own approximately 35.6% of the outstanding shares of the
Common Stock. As a result, the directors and the executive officers of the
Company have the ability to affect the vote of the Company s shareholders on
significant corporate actions requiring shareholder approval, including mergers,
share exchanges and sales of all or substantially all of the Company s assets.
With such voting power, the directors and executive officers of the Company may
also have the ability to delay or prevent a change in control of the Company.
USE OF PROCEEDS
The net proceeds from the sale of the Common Stock pursuant to the exercise
of options issued under the Plan will be added to the Company s working capital
and used for general corporate purposes. The net proceeds received by optionees
upon the sale of the Common Stock issued upon the exercise of options granted
pursuant to the Plan shall be used for the personal purposes of the optionees.
SELLING SHAREHOLDERS
It is anticipated that the optionees listed below (individually the Selling
Shareholder and collectively the Selling Shareholders) will sell, from time to
time, all or some of the shares of Common Stock issued upon the exercise of the
options granted pursuant to the Plan. The number of shares of Common Stock which
are subject to such options as of July 1, 1997, and which may be offered for
sale by the Selling Shareholders pursuant to this Prospectus, is also listed
below. The number of shares of Common Stock owned by the Selling Shareholders as
of July 1, 1997, after exercise of any options granted under the Plan is also
provided below. In addition, certain unnamed non-affiliates may use this reoffer
prospectus for reoffers and resales in accordance with rules and regulations
promulgated by the Securities and Exchange Commission.
15
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<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock Owned
by Selling Shareholder due to the Shares of Common Stock
Name of Selling Shareholder Exercise of Options Under the Plans Subject to Options
<S> <C> <C>
Abbott, Robert W. 28,125
Canales, Jose A. 11,250
Durham, Samuel 33,750
Herbots, John P. 22,500
Raymondi, Michael U. 22,500
Sprinkle, James R. 11,250
Thomas, Charles W. 11,250
Adams, Raymond J. 1,200 2,700
Adams, Scott D. 4,500
Brightwell, William T. 3,000
Brown Sammy E. 4,500
Dooley, Dan P. 4,500
Elwood, Ray O. 4,500
Frerich, Raymond A. 7,500
Giblin, Vince A. 6,750
Guy, Thomas 4,500
Hooker, Joseph D. 4,500
Hunt, Dan 6,000
Kolodziejcyk, Roger 1,500
Lawrence, John 4,500
Minyon, James 4,500
Mushinski, Marion A. 6,000
Neal, Scott J. 1,800 4,060
Rohmer, Christi A. 4,500
Romanyszyn, Michael T., Jr. 6,750
Thomas, Glen R. 4,500
Thomas, John P. 1,200 4,500
Wanderski, Paul E. 600 2,700
Young, Calvin L., Jr. 3,600
Bodolai, Peter 4,500
Brown, Peter 4,500
Carrera, Jose Marcos 7,500
Chowdhury, Anuradha 1,500
Courtnell, Andrew 4,500
Calaby, Stephen 4,500
Demkin, Vlademir 4,500
Gehl, Robert E. 7,500
Kiriakoff, Zdravko 4,500
Pereira, Bryan 6,750
Sanclemente, Antonio 7,500
Thompson, Keith 4,500
Vlismas, Steve 4,500
Whelan, John 9,000
</TABLE>
PLAN OF DISTRIBUTION
The Selling Shareholders may sell their shares of Common Stock issued upon
exercise of the options granted under the Plan (i) pursuant to this Prospectus
through brokers transactions within the meaning of Rule 144(g) promulgated under
the 1933 Act, or (ii) in a transaction exempt from the registration provisions
of Section 5 of the 1933 Act.
16
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<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article 2.02(16) of the Texas Business Corporation Act (the TBCA) empowers
the Company to indemnify directors, officers, employees and agents of the
Company and to purchase liability insurance for those persons to the extent
permitted by Article 2.02-1 of the TBCA.
Article 2.02-1 of the TBCA in part provides that a corporation may
indemnify its officers and directors for any liability if it is determined that
such officer or director (i) conducted himself in good faith, (ii) reasonably
believed, in the case of conduct in his official capacity as an officer or
director, that his conduct was in the corporation s best interest, and in all
other cases, that his conduct was at least not opposed to the corporation s best
interest, and (iii) in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful. These determinations must be
made (i) by a majority vote of a quorum consisting of the directors who at the
time of the vote are not named defendants or respondents in the proceeding, (ii)
if such a quorum cannot be obtained, by a majority vote of a committee of the
Board of Directors, designated to act in the matter by a majority vote of all
directors, consisting solely of two or more directors who, at the time of the
vote, are not named defendants or respondents in the proceeding, (iii) by
special legal counsel selected by the Board of Directors or a committee of the
Board by a vote as set forth in (i) or (ii) above, or, if such a quorum cannot
be obtained and such a committee vote cannot be established, by a majority vote
of all directors, or (iv) by the shareholders in a vote that excludes the shares
that are held by directors and officers who are named defendants or respondents
in the proceeding.
Under Article 2.02-1 of the TBCA, an officer or a director may be
indemnified against judgments, penalties (including excise and similar taxes),
fines, settlements, and reasonable expenses actually incurred by the officer or
director in connection with the proceeding, but if the officer or director is
found liable to the corporation or is found liable on the basis that personal
benefit was improperly received by the officer or director, the indemnification
(i) is limited to reasonable expenses actually incurred by the officer or
director in connection with the proceeding, and (ii) shall not be made in
respect of any proceeding in which the officer or director shall have been found
liable for willful or intentional misconduct in the performance of his duty to
the corporation. The termination of a proceeding by judgment, order, settlement,
or conviction, or upon a plea nolo contendere or its equivalent is not of itself
determinative that the officer or director did not meet the requirements set
forth above. An officer or director shall be deemed to have been found liable in
respect of any claim, issue or matter only after the officer or director shall
have been so adjudged by a court of competent jurisdiction after exhaustion of
all appeals therefrom.
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Article 2.02-1 of the TBCA authorizes a corporation to pay or reimburse the
reasonable expenses incurred by an officer or director in advance of the final
disposition of such proceeding if the corporation receives a written affirmation
by the officer or director of his good faith belief that he has met the standard
of conduct necessary for indemnification as well as a written undertaking to
repay the amount paid by the corporation if it is ultimately determined that the
officer or director has not met the requirements for indemnification. In
addition, Article 2.02-1 of the TBCA empowers a corporation to indemnify and
advance reasonable expenses to an employee, agent and certain other persons to
the same extent it may indemnify in advance expenses to officers and directors.
Finally, Article 2.02-1 of the TBCA empowers a corporation to purchase and
maintain insurance on behalf of directors, officers, employees, agents and
certain other persons against any liability asserted against such persons,
whether or not the corporation would have the power to indemnify such persons
against that liability under Article 2.02-1 of the TBCA.
Under the Company s Bylaws, the Company shall, to the fullest extent to
which it is empowered to do so by the TBCA or any other applicable laws as may
from time to time be in effect, indemnify any person who was, is or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer of the Company or is
or was serving at the request of the Company as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, against all
expenses (including court costs and attorneys fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided it is determined in accordance
with applicable law that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company. Expenses
may be advanced by the Company in advance of the final disposition of a
proceeding upon the receipt of an undertaking by him to repay such amount unless
it is ultimately determined he is entitled to indemnification. Further, under
the Company s Bylaws the Board of Directors has the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the Company would have the power to indemnify
him against such liability under the Company s Bylaws.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the Act) may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
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EXHIBIT 4.3
LANCER CORPORATION
STOCK INCENTIVE PLAN
Effective Date: March 1, 1996
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TABLE OF CONTENTS
SECTION 1 - PURPOSE OF PLAN P1
SECTION 2 - DEFINITIONS P1
SECTION 3 - PARTICIPATION P2
SECTION 4 - SHARES SUBJECT TO PLAN P2
(a) Maximum Shares P2
(b) Adjustment of Shares and Price P3
SECTION 5 - GENERAL TERMS AND CONDITIONS OF OPTIONS P3
(a) General Terms P3
(b) Exercise Price P4
SECTION 6 - EXERCISE OF OPTIONS P4
(a) General Exercise Rights P4
(b) Notice of Exercise P4
(c) Exercise After Termination of Employment P5
(d) Payment of Option Exercise Price P5
(e) Payment With Loan P6
(f) Rights as a Shareholder P6
(g) Effect of Dissolution, Merger, Etc P6
SECTION 7 - SPECIAL PROVISIONS FOR ISOS P7
SECTION 8 - RESTRICTIONS ON TRANSFERS; GOVERNMENT REGULATION P8
(a) Awards Not Transferable P8
(b) Government Regulations P8
SECTION 9 - TAX WITHHOLDING P8
SECTION 10 - ADMINISTRATION OF PLAN P9
(a) The Committee P9
(b) Committee Action P9
(c) Committee Authority P9
(d) Indemnification P10
SECTION 11 - EFFECTIVE DATE P10
SECTION 12 - AMENDMENT AND TERMINATION P10
(a) The Plan P10
(i) Amendment P10
(ii) Termination P11
(b) Awards P11
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SECTION 13 - MISCELLANEOUS P11
(a) Employment P11
(b) Multiple Awards P11
(c) Written Notice P11
(d) Applicable Law; Severability P12
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LANCER CORPORATION
STOCK INCENTIVE PLAN
SECTION 1 - PURPOSE OF PLAN
This Stock Incentive Plan is intended to promote the long-term interests of the
Company and its shareholders by providing officers and other key employees of
the Company and its Affiliates and other key individuals (including
non-employees) with an additional incentive to promote the financial success of
the Company and its Affiliates.
SECTION 2 - DEFINITIONS
Unless otherwise required by the context, the following terms when used in the
Plan shall have the meanings set forth in this Section 2:
(a) Affiliate: Any parent corporation or subsidiary corporation s of the
Company, as such terms are defined in Sections 424(e) and (f),
respectively, of the Code.
(b) Agreement: A stock option agreement evidencing an Award in such form
as adopted by the Committee pursuant to the Plan.
(c) Award: An award of an Option under the Plan.
(d) Board of Directors: The Board of Directors of the Company.
(e) Code: The Internal Revenue Code of 1986, as amended from time to time.
(f) Committee: The Compensation Committee of the Board of Directors or
such other committee appointed by the Board of Directors which meets
the requirements set forth in Section 10(a) hereof.
(g) Company: Lancer Corporation, a Texas corporation.
(h) Effective Date: The date on which the Plan shall become effective as
set forth in Section 11 hereof.
(i) Exchange Act: The Securities Exchange Act of 1934, as amended,
together with all regulations and rules issued thereunder.
(j) Exercise Price: The price per Share at which the Shares subject to
such Option may be purchased upon exercise of such Option.
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(k) Fair Market Value: As applied to a specific date, the mean between the
highest and lowest quoted selling price of a Share on the American
Stock Exchange on such date, or if there are no reported sales on such
date, on the last preceding date on which sales were reported. The
Fair Market Value determined by the Committee in good faith in such
manner shall be final, binding and conclusive on all parties.
(l) ISO: An Option intended to qualify as an incentive stock option, as
defined in Section 422 of the Code or any statutory provision that may
replace such Section.
(m) NQSO: An Option not intended to be an ISO and designated a
nonqualified stock option by the Committee.
(n) Option: Any ISO or NQSO granted under the Plan.
(o) Participant: An individual who has been granted an Award under the
Plan.
(p) Plan: This Lancer Corporation Stock Incentive Plan, as the same may be
amended from time to time.
(q) Related: An Option which is granted in connection with, and to the
extent exercisable, in whole or in part, in lieu of another Option
(r) Shares: Shares of the Company s authorized but unissued or reacquired
$.01 par value common stock, or such other class or kind of shares or
other securities as may be applicable pursuant to the provisions of
Section 4(b) hereof.
(p) Subsidiary: Any subsidiary corporation of the Company, as such term is
defined in Section 424(f) of the Code.
SECTION 3 - PARTICIPATION
Except as modified below, the class of person eligible to receive Awards under
the Plan shall be those officers and other key employees of the Company or its
Affiliates and those non-employees of the Company or its Affiliates, as
designated by the Committee from time to time, but in no case shall any members
of the Committee be eligible to receive any Award under the Plan. Although
designated non-employees are eligible to participate in the Plan, non-employees
are not eligible to receive an ISO under this Plan.
SECTION 4 - SHARES SUBJECT TO PLAN
(a) Maximum Shares. Subject to adjustment by the operation of Section 4(b)
hereof, the maximum number of shares with respect to which Awards may
be made under the Plan is 900,000. The Shares with respect to which
Awards may be made under the Plan may be either authorized and
unissued shares or issued shares heretofore or hereafter reacquired
and held as treasury shares. Shares which are subject to Related
Options shall be counted only once in determining whether the maximum
number of Shares with respect to which Awards may be granted under the
Plan has been exceeded. An Award shall not be considered to have been
made under the Plan with respect to any Option to the extent that it
terminates without being exercised, and new Awards may be granted
under the Plan with respect to the number of Shares as to which such
termination has occurred.
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(b) Adjustment of Shares and Price. In the event that the Shares are
changed into or exchanged for a different kind or number of shares of
Stock or securities of the Company as the result of any stock
dividend, stock split, combination of shares, exchange of shares,
merger, consolidation, reorganization, recapitalization or other
change in capital structure, then the number of Shares subject to this
Plan and to Awards granted hereunder and the purchase price,
repurchase price or Exercise Price for such Shares shall be equitably
adjusted by the Committee to prevent the dilution or enlargement of
Awards, and my new stock or securities into which the Shares are
changed or for which they are exchanged shall be substituted for the
Shares subject to this Plan and to Awards granted hereunder; provided,
however, that fractional shares may be deleted from any such
adjustment or substitution.
SECTION 5 - GENERAL TERMS AND CONDITIONS OF OPTIONS
(a) General Terms. The Committee shall have full and complete authority
and discretion, except as expressly limited by the Plan to grant
Options and to provide the terms and conditions (which need not be
identical among Participants) thereof. In particular, the Committee
shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option, determined in accordance with
Section 5(b) hereof;
(ii) the number of Shares subject to, and the expiration date of, any
Option; provided, however, that no Option shall have a term in
excess of 10 years from the date of grant of the Option;
(iii)the manner, time and rate (cumulative or otherwise) of exercise
of such Option; and
(iv) the restrictions, if any, to be placed upon such Option or upon
Shares which may be issued upon exercise of such Option. The
Committee may, as a condition of granting any Option, require
that a Participant agree not to thereafter exercise one or more
Options previously granted to such Participant.
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(b) Exercise Price.The Exercise Price shall be determined by the Committee and
shall not be less than the Fair Market Value per Share on the date of
grant. Notwithstanding the foregoing, in no event shall the Exercise Price
be less than the par value per Share.
SECTION 6 - EXERCISE OF OPTIONS
(a) General Exercise Rights. An Option granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such Option was
granted only by such Participant, and with respect to an Option granted to
an employee of the Company or its Affiliates except as provided in Section
6(c) hereof, no such Option may be exercised unless at the time such
Participant exercises such Option, such Participant is an employee of, and
has continuously since the grant thereof been an employee of the Company or
an Affiliate. Transfer of employment between Affiliates or between an
Affiliate and the Company shall not be considered an interruption or
termination of employment for any purpose of this Plan. Neither shall a
leave of absence at the request, or with the approval, of the Company or an
Affiliate be deemed an interruption or termination of employment, so long
as the period of such leave does not exceed 90 days, or, if longer, so long
as the Participant s right to re-employment with the Company or an
Affiliate is guaranteed by contract. An Option also shall contain such
conditions upon exercise (including, without limitations, conditions
limiting the time of exercise to specified periods) as may be required to
satisfy applicable regulatory requirements, including, without limitations,
Rule 16b-3 (or any successor rule) promulgated by the Securities and
Exchange Commission.
(b) Notice of Exercise. An Option may not be exercised with respect to less
than 25 Shares, unless the exercise relates to all Shares covered by the
Option at the date of exercise. An Option shall be exercised by delivery of
a written notice to the Company. Such notice shall state the election to
exercise the Option and the number of whole Shares in respect of which it
is being exercised, and shall be signed by the person or persons so
exercising the Option. Such notice shall either: (a) be accompanied by
payment of the full Exercise Price and all applicable withholding taxes, in
which event the Company shall deliver any certificate(s) representing
Shares which the Participant is entitled to receive as a result of the
exercise as soon as practicable after the notice has been received; or (b)
fix a date (not less than 5 nor more than 15 business days from the date
such notice has been received by the Company) for the payment of the full
Exercise Price and all applicable withholding taxes, against delivery by
the Company of any certificate(s) representing Shares which the Participant
is entitled to receive as a result of the exercise. Payment of such
Exercise Price and withholding taxes shall be made as provided in Sections
6(d) and 9, respectively. In the event the Option shall be exercised
pursuant to Section 6(c)(i) hereof, by any person or persons other than the
Participant, such notice shall be accompanied by appropriate proof of the
right of such person or persons to exercise the Option.
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<PAGE>
(c) Exercise After Termination of Employment . With respect to an Option
granted to an employee of the Company or its Affiliates, except as
otherwise determined by the Committee at the date of grant of the Option or
Award and as is provided in the applicable Agreement evidencing the Option,
upon termination of a Participant s employment with the Company or any of
its Affiliates, such Participant (or in the case of death, the person(s) to
whom the Option is transferred by will or the laws of descent and
distribution) may exercise such Option during the following periods of time
(but in no event after the normal expiration date of such Option):
(i) in the case of termination as a result of death, disability or
retirement of the Participant, the option shall remain exercisable (as
to the number of shares exercisable on the termination date) for one
year after the date of termination; for this purpose, disability shall
mean much physical or mental condition affecting the Participant as
determined by the Committee in its sole discretion, and retirement
shall mean voluntary retirement from the Company or any Affiliate;
(ii) in the case of termination for cause, the Option shall immediately
terminate and shall no longer be exercisable; and
(iii)in the case of termination for any reason other than those set forth
in subparagraphs (i) and (ii) above, with respect to the shares
exercisable on the date of termination, the Option shall remain
exercisable for 90 days after the date of termination.
To the extent the Option is not exercised within the foregoing periods of time,
the Option shall automatically terminate at the end of the applicable period of
time. Notwithstanding the foregoing provisions, failure to exercise an ISO
within the periods of time prescribed under Section 421 and 422 of the Code
shall cause an ISO to cease to be treated as an incentive stock option for
purposes of Section 421 of the Code.
(d) Payment of Option Exercise Price. Upon the exercise of an Option,
payment of the Exercise Price shall be made either (i) in cash (by
certified check, personal check, bank draft or money order), (ii) with
the consent of the Committee and subject to Section 6(e) hereof, by
delivering the Participant s duly-executed promissory note and related
documents, (iii) with the consent of the Committee, by delivering
Shares owned by the Participant for more than six (6) months valued at
Fair Market Value, or (iv) by a combination of the foregoing forms of
payment.
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<PAGE>
(e) Payment With Loan. The Committee may in its sole discretion assist any
Participant in the exercise of one or more Options granted to such
Participant under the Plan by authorizing the extension of a loan to
such Participant from the Company. Except as otherwise provided in
this Section 6(e), the terms of any loan (including the interest rate
and terms of repayment) shall be established by the Committee in its
sole discretion. The maximum amount of any loan shall not exceed 80%
of the Exercise Price payable for the Shares being purchased. Any such
loan by the Company shall be with full recourse against the
Participant to whom the loan is granted, shall be secured in whole or
in part by the Shares so purchased, and shall bear interest at a rate
not less than the minimum interest rate required at the time of
purchase of the Shares in order to avoid having imputed interest or
original issue discount under Section 483 or 1272 of the Code. In
addition, any such loan by the Company to an employee shall become
immediately due and payable in full, at the option of the Company,
upon termination of the Participant s employment with the Company or
its Affiliates for any reason or upon a sale of any Shares acquired
with such loan to the intent of the cash and fair market value of any
property received by the Participant in such sale. The Committee may
make arrangements for the application of payroll deductions from
compensation payable to the Participant to amounts owing to the
Company under any such loan. Until any loan by the Company under this
Section 6(e) is fully paid in cash, the Shares shall be pledged to the
Company as security for such loan and the Company shall retain
physical possession of the stock certificates evidencing the Shares so
purchased together with a duly executed stock power for such Shares.
No loan shall be made hereunder unless counsel for the Company shall
be satisfied that the loan and the issuance of Shares funded thereby
will be in compliance with all applicable Federal, state and local
laws.
(f) Rights as a Shareholder. A Participant shall have no rights as a
shareholder with respect to any Shares issuable an exercise of any
Option until the date of the issuance of a stock certificate to the
Participant for such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date
is prior to the date such stock certificate is issued, except as
provided in Section 4(b) hereof.
(g) Effect of Dissolution, Merger, Etc. Upon the dissolution or
liquidation of the Company, or upon a reorganization, merger, or
consolidation of the Company with one or more corporations as a result
of which the Company is not the surviving corporation, or upon a sale
of substantially all the property of the Company to another
corporation, this Plan shall terminate, and any outstanding Options
shall terminate, unless provision be made in connection with such
transaction for the assumption of such Options and Awards, or the
substitution for such Options and Awards of new incentive awards
covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to number and kind
of Shares and prices.
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SECTION 7 - SPECIAL PROVISIONS FOR ISOS
Any provision of the Plan to the contrary notwithstanding the following special
provisions shall apply to all ISOs granted under the Plan:
(a) the Option must be expressly designated as an ISO by the Committee and
the ISO Agreement;
(b) no ISO shall be granted more than ten years from the Effective Date of
the Plan and no ISO shall be exercisable more than ten years from the
date such ISO is granted;
(c) the Exercise Price of any ISO shall not be less than the Fair Market
Value per Share on the date such ISO is granted;
(d) no ISO shall be granted to any individual who, at the time such ISO is
granted, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Affiliate
unless the Exercise Price of such ISO is at least 110% of the Fair
Market Value per Share at the date of grant and such ISO is not
exercisable after the expiration of five years from the date such ISO
is granted;
(e) the aggregate Fair Market Value (determined as of the time any ISO is
granted) of any Company stock with respect to which any ISOs granted
to a Participant are exercisable for the first time by such
Participant during any calendar year (under this Plan and all other
stock option plans of the Company and any of its Affiliates and any
predecessor of any such corporation) shall not exceed $100,000 as
required under Section 422(d)(7) of the Code. (To the extent the
$100,000 limit is exceeded, the $100,000 in options, measured as
described above, granted earliest in time will be treated as ISOs);
(f) no ISO shall be granted to an individual who is not an employee of the
Company or its Affiliates at the time such ISO is Granted; and
(g) any other terms and conditions as may be required in order that the
ISO qualifies as an incentive stock option under Section 422 of the
Code or successor provision.
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SECTION 8 - RESTRICTIONS ON TRANSFERS; GOVERNMENT REGULATION
(a) Awards Not Transferable. No Option nor any right or interest of a
Participant under the Plan in any instrument evidencing any Option
under the Plan may be assigned, encumbered, or transferred, except, in
the event of the death of a Participant, by will or the laws of
descent and distribution.
(b) Government Regulations. This Plan, the granting of Awards under this
Plan and the issuance or transfer of Shares (and/or the payment of
money) pursuant thereto are subject to all applicable Federal and
state laws, rules and regulations and to such approvals by any
regulatory or governmental agency including without limitation no
action positions of the Securities and Exchange Commission) which may,
in the opinion of counsel for the Company, be necessary or advisable
in connection therewith. Without limiting the generality of the
foregoing, no Awards may be granted under this Plan and no Shares
shall be issued by the Company, nor cash payments made by the Company,
pursuant to or in connection with any such Award, unless and until, in
each such case, all legal requirements applicable to the issuance or
payment have, in the opinion of counsel to the Company, been complied
with. In connection with any stock issuance or transfer, the person
acquiring the Shares shall, if requested by the Company, give
assurances satisfactory to counsel to the Company in respect of such
matters as the Company may deem desirable to assure compliance with
all applicable legal requirements. The Company shall not be required
to deliver any Shares under the Plan prior to (i) the admission of
such Shares to listing or for quotation an any stock exchange or
automated quotation system on which Shares may then be listed or
quoted, and (ii) the completion and effectiveness of such registration
or other qualification of such Shares under any state or Federal law,
rule or regulation, as the Committee shall determine to be necessary
or advisable.
SECTION 9 - TAX WITHHOLDING
The Company shall have the right to withhold from amounts due Participants, or
to collect from Participants directly, the amount which the Company deems
necessary to satisfy any taxes required by law to be withheld at any time by
reason of participation in the Plan, and the obligations of the Company under
the Plan shall be conditional on payment of such taxes. The Participant may,
prior to the due date of any taxes, pay such amounts to the Company in cash or
with the consent of the Committee, in Shares (which shall be valued at their
Fair Market Value on the date of payment). There is no obligation under this
Plan that any Participant be advised of the existence of the tax or the amount
required to be withheld. Without limiting the generality of the foregoing, in
any case where it determines that a tax is or will be required to be withheld in
connection with the issuance or transfer or vesting of Shares under this Plan,
the Company may, pursuant to such rules as the Committee may establish, reduce
the number of such Shares so issued or transferred by such number of Shares as
the Company may deem appropriate in its sole discretion to accomplish such
withholding or make such other arrangement as it deems satisfactory.
NotwithstandIng any other provision of this Plan, the Committee may impose such
conditions on the payment of any withholding obligation as may be required to
satisfy applicable regulatory requirements, including, without limitation, Rule
16b-3 (or successor provision) promulgated by the Securities and Exchange
Commission.
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SECTION 10 - ADMINISTRATION OF PLAN
(a) The Committee. The Plan shall be administered by the Committee, which
shall be comprised of two or more members of the Board of Directors,
each of whom shall be a disinterested person a defined in Rule 16b-3
(or successor provision) promulgated by the Securities and Exchange
Commission.
(b) Committee Action. A majority of the members of the Committee at the
time in office shall constitute a quorum for the transaction of
business, and any determination or action may be taken at a meeting by
a majority vote or may be taken without a meeting by a written
resolution signed by all members of the Committee. All decisions and
determinations of the Committee shall be final conclusive and binding
upon all Participants and upon all other persons claiming any rights
under the Plan with respect to any Options. Members of the Board of
Directors and members of the Committee acting under the Plan shall be
fully protected in relying in good faith upon the advice of counsel
and shall incur no liability except for willful misconduct in the
performance of their duties.
(c) Committee Authority. In amplification of the Committee s powers and
duties, but not by way of limitation, the Committee shall have full
authority and power to:
(i) Construe and interpret the provisions of the Plan and make rules
and regulations for the administration of the Plan not
inconsistent with the Plan;
(ii) Decide all questions of eligibility for Plan participation and
for the grant of Awards;
(iii)Adopt forms of Agreements and other documents consistent with
the Plan;
(iv) Engage agents to perform legal, accounting and other such
professional services as it may deem proper for administering the
Plan; and
(v) Take such other actions as may be reasonably required or
appropriate to administer the Plan or to carry out the Committee
activities contemplated by other sections of this Plan.
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(d) Idemnification. In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, the Board of
Directors and the members of the Committee shall be indemnified by the
Company against the reasonable expenses, including court costs and
reasonable attorneys fees, actually incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal
therein. to which they or any of than may be a part by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted hereunder, and against all amounts paid by them in settlement
thereof or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except where such indemnification is expressly
prohibited by applicable law.
SECTION 11- EFFECTIVE DATE
The effective date of this Plan shall be March 1, 1996 (the date such Plan was
approved by the Board of Directors), subject to receipt of shareholder approval
of this Plan within one year of that date. All Awards pursuant to this Plan
prior to receipt of shareholder approval shall be effective when made but shall
be subject to the terms of this Plan only upon receipt of such shareholder
approval. If such approval is not received within the one-year period specified
above, all Awards made on or after March 1, 1996 shall be forfeited.
SECTION 12 - AMENDMENT AND TERMINATION
(a) The Plan
(i) Amendment. The Board of Directors may amend the Plan from time to time
in its sole discretion; provided, however, that no such amendment
shall, without the approval of the shareholders of the Company if such
approval is required by the laws of the State of Texas or Section 422
of the Code or Rule 16b-3 under the Exchange Act: (a) change the class
of persons eligible to receive Awards or otherwise materially modify
the requirements as to eligibility for participation in the Plan; (b)
increase the aggregate number of Shares with respect to which Awards
may be made under the Plan; (c) materially increase the benefits
accruing to Participants under the Plan; or (d) remove the
administration of the Plan from the Committee or render any member of
the Committee eligible to receive an Award under the Plan while
serving thereon. Any purported amendment in violation of these
restrictions shall be void and of no effect. Furthermore, no amendment
shall impair the rights of any Participants under any Award
theretofore made under the Plan, without the Participants consent.
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(ii) Termination . The Board of Directors may suspend or terminate the Plan
at any time. Upon termination of the Plan, no additional Awards shall
be granted under the Plan; provided, however, that the terms of the
Plan shall continue in full force and effect with respect to
outstanding and unexercised Options granted under the Plan and Shares
issued under the Plan.
(b) Awards. Subject to the terms and conditions and the limitations of the
Plan, the Committee may in the exercise of its sole discretion modify,
extend or renew the terms of outstanding Awards (to the extent not
theretofore exercised) and authorize the granting of new Awards in
substitution therefor (to the extent not theretofore exercised). Without
limiting the generality of the foregoing, the Committee may in its
discretion at any time accelerate the time at which any Option is
exercisable, subject to compliance with the requirements of Rule 16b-3 (or
successor provision) promulgated by the Securities and Exchange Commission.
Notwithstanding the foregoing, however, no modification of an Award shall,
without the consent of the Participant, impair any rights or obligations
under any Awards theretofore granted under the Plan.
SECTION 13 - MISCELLANEOUS
(a) Employment. Neither the establishment of the Plan nor any amendments
thereto, nor the granting of any Award under the Plan, shall be construed
as in any way modifying or affecting, or evidencing any intention or
understanding with respect to, the terms of the employment of any
Participant with the Company or any of its Affiliates. No person shall have
a right to be granted Awards or, having been selected as a Participant for
one Award, to be so selected again.
(b) Multiple Awards. Subject to the terms and restrictions set forth in the
Plan, a Participant may hold more than one Award.
(c) Written Notice. As used herein, any notices required hereunder shall be in
writing and shall be given on the forms, if any, provided or specified by
the Committee. Written notice shall be effective upon actual receipt by the
person to whom such notice is to be given; provided, however, that in the
case of notices to Participants and their heirs, legatees and legal
representatives, notice shall be effective upon delivery if delivered
personally or three business days after mailing, registered first class
postage prepaid to the last known address of the person to whom notice is
given. Written notice shall be given to the Committee and the Company at
the following address or such other address as may be specified from time
to time.
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P11
<PAGE>
Lancer Corporation
235 West Turbo
San Antonio, Texas 78216
Attn: Secretary
(d) Applicable Law; Severability. The Plan shall be governed by and construed
in all respect in accordance with the laws of the State of Texas. If any
provision of the Plan shall be held by a court of competent jurisdiction to
be invalid or unenforceable, the remaining provisions hereof shall continue
to be fully effective.
33
P12
EXHIBIT 5.1
Matthews & Branscomb, P.C.
106 S. St. Marys St., Sutie 700
San Antonio, Texas 78205
September 17, 1997
Lancer Corporation
6655 Lancer Boulevard
San Antonio, Texas 78219
Attn: John P. Herbots
Gentlemen:
We have acted as special securities counsel for Lancer Corporation, a Texas
corporation (the Company), in connection with various legal matters relating to
the Registration Statement on Form S-8 to be filed by the Company with the
Securities and Exchange Commission with respect to 900,000 shares of Common
Stock, $.01 par value per share (the Common Stock), of the Company which may be
purchased pursuant to exercise of options granted pursuant to the Companys Stock
Incentive Plan of 1996 (collectively, the Plan). We have examined such corporate
records, certificates and other documents and such questions of law as we have
considered necessary or appropriate for the purposes of this opinion and, on the
basis of such examination, advise you that in our opinion the 900,000 shares of
Common Stock to be issued to participants in the Plan will, when issued pursuant
to the terms of the Plan, be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Securities Act of 1933.
Very truly yours,
MATTHEWS & BRANSCOMB,
A Professional Corporation
By:/s/ Mark A. Phariss
Mark A. Phariss
34
EXHIBIT 23.1
The Board of Directors
Lancer Corporation:
We consent to incorporation by reference in the registration statement on Form
S-8 of Lancer Corporation of our report dated February 27, 1997, relating to the
consolidated balance sheets of Lancer Corporation and subsidiaries as of
December 31, 1996 and 1995, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1996 and related schedule, which report appears in the
December 31, 1996, annual report on Form 10-K of Lancer Corporation.
/s/KPMG Peat Marwick LLP
San Antonio, Texas
September 17, 1997
35
