As filed with the Securities and Exchange Commission on July 2, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRECISION STANDARD, INC.
-------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COLORADO 84-0985295
-------- ----------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER ID NO.)
12000 E. 47TH AVENUE, SUITE 400, DENVER, COLORADO 80239
-------------------------------------------------------
(ADDRESS OF PRINCIPAL OFFICES)
PRECISION STANDARD, INC.
NONQUALIFIED STOCK OPTION PLAN
------------------------------
(FULL TITLE OF THE PLAN)
MATTHEW L. GOLD, PRESIDENT
PRECISION STANDARD, INC.
12000 E. 47TH AVENUE, SUITE 400
DENVER, COLORADO 80239
-------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(303) 371-6525
--------------
(TELEPHONE NUMBER, INCLUDING AREA CODE OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
registered registered per share(1) price(1) fee
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$0.0001 Par Value 625,000 $3.875 $2,421,875 $673.28
</TABLE>
(1) The price of $3.875 per share, which is the last price reported to
The Nasdaq Stock Market on June 27, 1999, is set forth solely for
purposes of calculating the filing fee.
REGISTRATION OF ADDITIONAL SHARES
THE CONTENTS OF THE FORM S-8 REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION BY PRECISION STANDARD, INC. ON JUNE 8,
1994, FILE NUMBER 33-79676, ARE INCORPORATED HEREIN BY REFERENCE.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on
this 1st day of July, 1999.
PRECISION STANDARD, INC.
By:/s/Matthew L. Gold
Matthew L. Gold, President
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
--------- ----- ----
Chairman, President,
/s/Matthew L. Gold Chief Executive Officer, July 1, 1999
Matthew L. Gold and Director
(Principal Executive Officer
and Principal Financial
and Accounting Officer)
/s/Donald C. Hannah Director July 1, 1999
Donald C. Hannah
/s/George E.R. Kinnear Director July 1, 1999
George E.R. Kinnear II
/s/Thomas C. Richards Director July 1, 1999
Thomas C. Richards
EXHIBIT INDEX
No. Description Method of Filing
- ---------------- ----------------
4 Precision Standard, Inc.
Nonqualified Stock
Option Plan Filed herewith electronically
5 Opinion of Gorsuch Kirgis LLP
regarding legality of shares
being issued Filed herewith electronically
23 Consent of Arthur Andersen LLP Filed herewith electronically
GORSUCH KIRGIS LLP
Attorneys at Law
Tower I, Suite 1000 1515 Arapahoe Street Denver, Colorado 80202
Telephone (303) 376-5000 Facsimile (303) 376-5001
July 1, 1999
Precision Standard, Inc.
12000 E. 47th Avenue, Suite 400
Denver, Colorado 80239
Re: Precision Standard, Inc.
Registration Statement on Form S-8
Gentlemen:
We are counsel to Precision Standard, Inc., a Colorado corporation
(the "Company"), in connection with the preparation of a registration
statement on Form S-8 to be filed with the Securities and Exchange
Commission (the "Registration Statement"), relating to the proposed
offering by the Company of up to 625,000 additional shares of Common Stock
pursuant to the Company's Nonqualified Stock Option Plan (the "Plan").
In this connection, we have examined originals or copies, certified
or otherwise identified to our satisfaction, of such corporate records,
certificates and written or oral statements of officers, legal counsel and
accountants of the Company and of public officials, and other documents
that we have considered necessary and appropriate, and, based thereon, we
advise you that in our opinion:
1. The Company is a corporation duly organized and validly existing
under the laws of the State of Colorado.
2. The shares offered by the Company, when issued pursuant to and
in accordance with the Plan will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
GORSUCH KIRGIS LLP
/s/Gorsuch Kirgis LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Precision Standard, Inc. and Subsidiaries:
As independent public accountants, we hereby consent to the incorporation
by reference in the Company's registration statement filed on Form S-8 of
our report dated March 30, 1999 included in the Precision Standard, Inc.'s
Form 10-K for the year ended December 31, 1998 and to all references to
our Firm included in the registration statement.
/s/Arthur Andersen LLP
Birmingham, Alabama
June 30, 1999
10
PRECISION STANDARD, INC.
NONQUALIFIED STOCK OPTION PLAN
MARCH 29, 1996
AS AMENDED JUNE 1, 1999
Section 1. PURPOSE. The purpose of the PRECISION STANDARD, INC.
(the "Company") Nonqualified Stock Option Plan (the "Plan") is to provide
incentives for selected persons to promote the financial success and
progress of the Company by granting such persons awards ("Awards") of
incentives in the form of options to purchase shares of the Company's
Common Stock ("Options"), stock appreciation rights ("SARs"), and Common
Stock of the Company ("Stock Grants"). An Award may consist of one or a
combination of such incentives and may be made at any time or from time to
time.
Section 2. GENERAL PROVISIONS.
A. ADMINISTRATION. The Plan shall be administered by the
Compensation Committee, which shall be comprised of two or more
independent outside directors appointed by the Board of Directors (the
"Committee"). Notwithstanding the foregoing, if it would be consistent
with all applicable laws, including, without limitation, Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Rule
16b-3"), and the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations promulgated thereunder (including, without limitation,
the regulations relating to Section 162(m) of the Code), then the Plan may
be administered by the Board of Directors, and if so administered all
subsequent references to the Committee shall refer to the Board of
Directors. Any action of the Committee shall be taken by majority vote or
the unanimous written consent of the Committee members.
B. AUTHORITY OF THE COMMITTEE. Subject to other provisions of
the Plan, and with a view towards furtherance of its purpose, the
Committee shall have sole authority and absolute discretion:
1. to construe and interpret the Plan;
2. to define the terms used herein;
3. to prescribe, amend and rescind rules and regulations
relating to the Plan;
4. to determine the persons to whom Awards are granted;
5. to determine the time or times at which Awards shall
be granted;
6. to determine the number of shares subject to each
Award;
7. to determine all of the other terms and conditions of
the Options, SARs, and Stock Grants awarded hereunder; and
8. to make all other determinations necessary or
advisable for the administration of the Plan and to do everything
necessary or appropriate to administer the Plan.
All decisions, determinations and interpretations made by the Committee
shall be binding and conclusive on all participants in the Plan and on
their legal representatives, heirs and beneficiaries.
C. MAXIMUM NUMBER OF SHARES SUBJECT TO THE PLAN. The maximum
aggregate number of shares of Common Stock subject to the Plan shall be
1,000,000, subject to adjustment as provided in Section 2.G of the Plan.
The Common Stock subject to the Plan may be divided among the various
types of Awards as the Committee determines in its sole discretion from
time to time. For purposes of calculating the maximum number of shares of
Common Stock which may be issued under the Plan, (a) all shares underlying
an Option (including the shares, if any, withheld for tax withholding
requirements) shall be counted when cash is used as full payment for
shares issued upon exercise of the Option; (b) in the case of net exercise
of an Option, only the net shares issued (including the shares, if any,
withheld for tax withholding requirements) shall be counted when shares of
Common Stock are used as full or partial payment for shares issued upon
exercise of an Option; (c) all shares underlying an SAR (including the
shares, if any, withheld for tax withholding requirements) shall be
counted upon exercise of an SAR; and (d) all shares issued pursuant to a
Stock Grant (including the shares, if any, withheld for tax withholding
requirements) shall be counted when the shares are no longer subject to
any conditions, such as a vesting schedule, and certificates representing
such shares have been issued and delivered. If any Options or SARs
granted under the Plan expire or terminate for any reason before they have
been exercised, the shares subject to such Options or SARs shall again be
available under the Plan.
D. ELIGIBILITY AND PARTICIPATION. Subject to the terms of the
Plan, Awards may be granted to such employees, officers, directors,
consultants and independent contractors of the Company or any Parent,
Subsidiary or Affiliate of the Company, as defined below, as the Committee
may select from time to time in its sole discretion. Employees of the
Company are eligible to receive Awards for no more than an aggregate of
500,000 shares of the Company's Common Stock per employee under the Plan.
If any Options or SARs granted to an employee expire unexercised or
terminate before vesting, they shall not be included in the foregoing
maximum aggregate of 500,000 shares per employee. The Committee, in its
sole discretion, shall determine the number of shares of the Company's
Common Stock covered by any Award made to executive officers or other
employees under the Plan. Grants to non-employee directors of the Company
may only be made pursuant to formula grants in the manner and amounts set
forth in Section 7 hereof, provided that, if, and to the extent that, the
Committee or the Board of Directors could exercise authority to determine
the amount, price and timing of grants hereunder to its members,
consistent with all applicable laws, including, without limitation Rule
16b-3, grants to non-employee directors may be made by the Committee or
the Board of Directors as permitted by law. A person may be granted more
than one Award under the Plan. As used in the Plan, the following terms
shall have the following meanings:
1. "PARENT" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if,
at the time of the granting of an Award, each of such corporations other
than the Company owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
2. "SUBSIDIARY" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company
if, at the time of granting of an Award, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
3. "AFFILIATE" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled
by, or is under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to cause the
direction of the management and policies of the corporation, whether
through the ownership of voting securities, by contract or otherwise.
4. "COMMON STOCK" means shares of the Company's $.0001
par value common stock, or such other shares as are substituted pursuant
to Section 2.G hereof.
E. EFFECTIVE DATE OF PLAN. The Plan was adopted by the
Company in September 1989 and was amended April 17, 1992, May 17, 1994,
May 29, 1996 and May 12, 1997. On April 2, 1999, the Committee adopted
the most recent amendments to the Plan, which shall be submitted to the
shareholders of the Company for their approval and adoption at a meeting
to be held on May 17, 1999, or at any adjournment thereof. The
shareholders shall be deemed to have approved and adopted these most
recent amendments to the Plan only if they are approved and adopted at a
meeting of the shareholders duly held by vote taken in the manner required
by the laws of the State of Colorado.
F. TERMINATION AND AMENDMENT OF PLAN. The Plan shall
terminate on September 8, 2009. No Options, SARs, or Stock Grants shall
be granted under the Plan after that date. Subject to the limitation
contained in Section 2.H of the Plan, the Board or the Committee may at
any time amend or revise the terms of the Plan, including the form and
substance of the Options, SARs, and Stock Grants granted hereunder,
provided that no such amendment or revision shall (i) increase the maximum
aggregate number of shares that may be issued pursuant to Awards granted
under the Plan, except as permitted under Section 2.G of the Plan; or (ii)
effect any change to the Plan which is required to be approved by
shareholders by law, including without limitation the regulations
promulgated under Section 162(m) of the Code.
G. ADJUSTMENTS. If the outstanding shares of Common Stock are
increased, decreased, changed into or exchanged for a different number or
kind of shares or securities through merger, consolidation, combination,
exchange of shares, reorganization, recapitalization, reclassification,
stock dividend, stock split or reverse stock split, an appropriate and
proportionate adjustment shall be made in the maximum number and kind of
shares as to which Options, SARs, and Stock Grants may be granted under
the Plan. A corresponding adjustment shall be made to the number or kind
of shares allocated to unexercised Options and SARs, or portions thereof,
and to unvested Options, SARs, and Stock Grants granted prior to any such
change. Any such adjustment in outstanding Options or SARs shall be made
without change in the aggregate purchase price applicable to the
unexercised portion of such Options or SARs, but with a corresponding
adjustment in the price for each share covered by the Options or SARs.
H. PRIOR OPTIONS AND OBLIGATIONS. No amendment, suspension or
termination of the Plan shall, without the consent of the person who has
received an Award, alter or impair any of that person's Options or
obligations under any Award granted under the Plan prior to that
amendment, suspension or termination.
I. PRIVILEGES OF STOCK OWNERSHIP. Notwithstanding the
exercise of any Option or SAR, or the receipt of any Stock Grant, granted
pursuant to the terms of the Plan, no person shall have any of the rights
or privileges of a shareholder of the Company with respect to any shares
of stock until certificates representing such shares have been issued and
delivered. No shares shall be required to be issued and delivered upon
exercise of any Option or SAR, or pursuant to a Stock Grant, until there
has been compliance with all of the requirements of law and of all
regulatory agencies having jurisdiction over the issuance and delivery of
the securities.
J. RESERVATION OF SHARES OF COMMON STOCK. During the term of
the Plan, the Company will at all times reserve and keep available such
number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plan. In addition, the Company will from time to
time, as is necessary to accomplish the purposes of the Plan, seek or
obtain from any regulatory agency having jurisdiction any requisite
authority in order to issue shares of common stock hereunder. The
inability of the Company to obtain from any regulatory agency having
jurisdiction the authority deemed by the Company's counsel to be necessary
to the lawful issuance of any Award or shares of its stock hereunder shall
relieve the Company of any and all liability with respect to the
nonissuance of the Award or the shares of Common Stock as to which the
requisite authority shall not have been obtained.
K. TAX WITHHOLDING. The exercise of any Option or SAR, and
the receipt of any Stock Grant, is subject to the condition that if at any
time the Company shall determine, in its discretion, that the satisfaction
of withholding tax or other withholding obligations under any state or
federal law is necessary or desirable as a condition of, or in connection
with, such exercise or delivery or purchase of shares pursuant thereto,
then in such event, the exercise of an Option or SAR, or the receipt of a
Stock Grant, shall not be effective unless such withholding shall have
been effected or obtained in a manner acceptable to the Company.
L. FAIR MARKET VALUE. The "fair market value" of the Common
Stock means if there is an established market for the Company's Common
Stock on a stock exchange, in an over-the-counter market or otherwise, the
mean of the highest and lowest quoted selling prices on the valuation
date, or (b) if there were no such sales on the valuation date, then in
accordance with Treasury Regulation Section 20.2031-2 or successor
regulations. With respect to the grant of Options or SARs, unless
otherwise specified by the Committee at the time of grant, or in the Plan
(as in the case of automatic grants to non-employee directors pursuant to
Section 7 hereof), the valuation date for purposes of determining fair
market value shall be the date of grant. The Committee may, however,
specify in any grant of an Option or SAR that, instead of the date of
grant, the valuation date shall be a valuation period of up to ninety (90)
days preceding the date of grant, and fair market value for purposes of
such grant shall be the average over the valuation period of the mean of
the highest and lowest quoted selling prices on each date on which sales
were made in the valuation period, provided, however, that if the
Committee fails to specify a valuation period and there were no sales on
the date of grant then fair market value shall be determined as if the
Committee had specified a thirty (30) day valuation period for such
determination, unless there is no established market for the Company's
Common Stock in which case determination of fair market value shall be in
accordance with clause (b) above.
Section 3. OPTIONS.
A. OPTION PRICE. The option price for shares acquired
pursuant to the exercise of any Option, in whole or in part, shall be
determined by the Committee at the time of the grant of the Option. Such
option price may be less than the fair market value of the Company's
Common Stock on the date of grant, but in no event shall the option price
be less than fifty percent (50%) of the fair market value of the Common
Stock on the date of grant. The foregoing notwithstanding, the option
price of Options granted to officers or directors shall be 100% of the
fair market value of the Company's Common Stock on the date of grant.
B. EXERCISE OF OPTIONS. Each Option shall be exercisable in
one or more installments during its term, and the right to exercise may be
cumulative, as determined by the Committee. No Option may be exercised
for a fraction of a share of Common Stock. The option price shall be paid
at the time of exercise of the Option in cash or shares of the Company's
Common Stock, or in a combination thereof. If permitted by the Committee,
payment may also be made by delivering a properly executed notice together
with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds attributable to the purchased
shares needed to pay the exercise price. If any portion of the purchase
price at the time of exercise is paid in shares of Common Stock, those
shares shall be tendered at their fair market value on the date of
exercise. The Committee may also permit a participant to effect a net
exercise of an Option without tendering any shares of the Company's Common
Stock as payment for the Option. In such an event, the participant will
be deemed to have paid for the exercise of the Option with shares of the
Company's stock and shall receive from the Company a number of shares
equal to the difference between the shares that would have been tendered
and the number of Options exercised. The Committee may in its discretion
and subject to ratification by the entire Board of Directors, loan one or
more participants all or a portion of the exercise price, together with
the amount of any tax liability incurred by the participant as a result of
the exercise of the Option, for up to three (3) years with interest
payable at the prime rate quoted in the Wall Street Journal on the date of
exercise. Non- employee directors may receive such loans for the exercise
of their Options without Committee approval or Board ratification.
C. ACCELERATION OF OPTIONS. Notwithstanding the first
sentence of Section 3.B of the Plan, if the Company or its shareholders
enter into an agreement to dispose of all or substantially all of the
assets or stock of the Company by means of a sale, merger or other
reorganization, liquidation, or otherwise, any Option granted pursuant to
the Plan shall become immediately exercisable with respect to the full
number of shares subject to that Option during the period commencing as of
the date of the agreement to dispose of all or substantially all of the
assets or stock of the Company and ending when the disposition of assets
or stock contemplated by that agreement is consummated or the Option is
otherwise terminated in accordance with its provisions or the provisions
of the Plan, whichever occurs first; provided that no Option shall be
immediately exercisable under this Section on account of any agreement of
merger or other reorganization where the shareholders of the Company
immediately before the consummation of the transaction will own at least
50% of the total combined voting power of all classes of stock entitled to
vote of the surviving entity (whether the Company or some other entity)
immediately after the consummation of the transaction. In the event the
transaction contemplated by the agreement referred to in this Section is
not consummated, but rather is terminated, canceled or expires, the
Options granted pursuant to the Plan shall thereafter be treated as if
that agreement had never been entered into.
D. WRITTEN NOTICE REQUIRED. Any Option granted pursuant to
the Plan shall be exercised when written notice of that exercise has been
given to the Company at its principal office by the person entitled to
exercise the Option and full payment for the shares with respect to which
the Option is exercised has been received by the Company.
Section 4. RELOAD OPTIONS. Concurrently with the award of
Options under the Plan, the Committee may authorize reload options
("Reload Options") to purchase, for cash or shares, the number of shares
of Common Stock used to exercise the underlying Option.
A. RELOAD OPTION AMENDMENT. Each notice evidencing the grant
of an Option shall state whether the Committee has authorized Reload
Options with respect to the underlying Option. Upon the exercise of an
underlying Option, the Reload Option will be evidenced by an amendment to
the notice of grant of the underlying Option. Reload Options shall be
subject to the terms and conditions in the underlying option agreement and
shall be subject to the terms and conditions set forth in the Plan.
B. RELOAD OPTION PRICE. The option price per share of Common
Stock deliverable upon exercise of a Reload Option shall be the fair
market value of a share of Common Stock on the date of exercise of the
underlying Option.
C. TERM AND EXERCISE. Each Reload Option is fully exercisable
from the date of exercise of the underlying Option and shall remain
exercisable for the remaining term of the underlying Option. Reload
Options may be exercised in the same manner as the underlying Options in
accordance with the Plan.
D. TERMINATION OF EMPLOYMENT. No additional Reload Options
shall be granted to participants in the Plan when an Option or Reload
Option is exercised pursuant to the terms of the Plan following
termination of the participant's employment or the cessation of the
participant's service to the Company as a director, consultant or
independent contractor.
Section 5. STOCK APPRECIATION RIGHTS. The Committee may, from
time to time in its sole discretion, grant SARs in addition to or in
conjunction with Options granted hereunder, either at the time of the
grant of the Options or at any subsequent time during the term of the
Options. Subject to the terms of the Plan, the Committee shall determine
and designate the recipients of SARs, the dates SARs are granted, the
number of shares subject to SARs, the duration of each SAR, and whether
SARs are alternative to any previously or contemporaneously granted Option
or Reload Option ("Related Options"). SARs shall be subject to the terms
and conditions and evidenced by agreements in the form determined from
time to time by the Committee.
A. VALUE OF SARs. SARs shall entitle their holders to receive
a number of shares of the Company's Common Stock equal to (i) the excess
of the fair market value of a share of the Company's Common Stock on the
date of exercise over a specified price fixed by the Committee, which
price may not be less than 100% of the fair market value of a share of
Common Stock on the date of the grant, multiplied by (ii) the number of
shares as to which the holder is exercising the SAR.
B. DURATION. The term of an SAR granted as an alternative to
an Option will be the same as the term of its Related Option; upon
exercise of the SAR, the Related Option will terminate, and upon exercise
of the Related Option, the SAR will terminate. The term of an SAR granted
in addition to and separately from any Option shall be specified by the
Committee at the time such SAR is granted.
C. EXERCISE OF SARs. SARs may be exercised according to their
terms by providing written notice to the Company at any time prior to the
expiration of the SAR. No SAR may be exercised for a fraction of a share
of Common Stock. If the SAR is alternative to an Option, the Related
Option shall be deemed terminated to the extent the SAR is exercised.
Section 6. STOCK GRANTS. The Committee may, from time to time in
its sole discretion, grant shares of the Company's Common Stock under the
Plan. Such Stock Grants may be awarded with or without conditions, such
as vesting schedules or performance requirements. Recipients of Stock
Grants will not be required to pay for the acquisition of the Company's
Common Stock but will be subject to tax consequences and resale
restrictions.
Section 7. GRANTS TO OUTSIDE DIRECTORS. Except as provided in
Section 2.D hereof, the Committee shall have no discretion to determine
the amount, price or timing of grants of Awards to directors who are not
employees of the Company. Grants of Awards hereunder to directors who are
not employees of the Company shall be granted on December 10 of each year
without further action by the Committee. Each such grant shall be for one
share of Common Stock for each two dollars of director's compensation to
include retainer plus four Board meetings paid to the director during the
calendar year, but not to include any additional compensation for
committee meetings attended not held in conjunction with Board meetings or
for additional Board meetings attended beyond four; such amount to be
reduced accordingly if less than four Board meetings attended. The
exercise price for Options granted to outside directors shall be 100% of
the fair market value of the Common Stock on the date of grant calculated
in accordance with Section 2.L hereof with a valuation period of thirty
(30) days. Each Option granted in accordance with this Section shall
include authorization for a Reload Option in accordance with Section 4 of
the Plan.
Section 8. TERMS AND CONDITIONS MAY DIFFER. The terms and
conditions of Awards granted under the Plan may differ as the Committee
shall in its discretion determine so long as all Awards satisfy the
requirements of the Plan.
Section 9. DURATION OF OPTIONS AND SARs. Each Option and each
SAR granted pursuant to the Plan shall expire on the date determined by
the Committee which shall be not later than ten years after the date of
grant and shall be subject to early termination as provided in the Plan.
Subject to the foregoing, Options granted to outside directors pursuant to
Section 7 hereof shall be fully vested on the date of grant and shall be
exercisable for a period of ten years.
Section 10. LIMITATIONS ON ACQUIRING VOTING STOCK. No Award may
be granted to persons who are not officers or directors of the Company if
such Award would cause that person to hold, beneficially or of record, in
excess of 5% of the outstanding voting stock of the Company.
Section 11. COMPLIANCE WITH SECURITIES LAWS. Shares of Common
Stock shall not be issued with respect to any Award granted under the Plan
unless the issuance and delivery of the shares pursuant thereto shall
comply with all relevant provisions of state and federal law, including
without limitation the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. Further, each recipient of an Award hereunder shall consent
to the imposition of a legend on the certificate representing the shares
of Common Stock issued hereunder restricting the transferability of such
shares as required by law, the Award, or by the Plan.
Section 12. EMPLOYMENT. Each recipient of an Award, if requested
by the Committee, must agree in writing as a condition of the granting of
his or her Award, to remain in the employ of the Company or to remain as a
consultant to the Company, or any of its Subsidiaries, following the date
of the granting of that Award for a period or periods specified by the
Committee, which period(s) shall in no event exceed an aggregate of four
years. Nothing in the Plan or in any Award granted hereunder shall confer
upon any Award recipient any right to continued employment or retainer by
the Company or any of its Subsidiaries, or limit in any way the right of
the Company or any Subsidiary at any time to terminate or alter the terms
of that employment or consulting arrangement.
Section 13. RIGHTS UPON TERMINATION OF EMPLOYMENT, DIRECTOR,
CONSULTANT OR INDEPENDENT CONTRACTOR STATUS. If an Award recipient ceases
to be employed by the Company or ceases to serve as a director, consultant
or independent contractor of the Company, or any Subsidiary, for any
reason other than death or retirement, his or her Award shall terminate
one year from the date of the Award recipient ceases to be employed by or
serve as a director, consultant or independent contractor of the Company;
provided that the Committee may, in its discretion, allow Options and SARs
to remain exercisable (to the extent exercisable on the date of
termination of employment or retainer) for up to one additional year for
each year of service to the Company by the Award recipient (up to a
maximum of five years after the date of termination), unless the Option,
SAR, or the Plan otherwise provides for earlier termination; and provided
further that, for purposes of determining when a director no longer serves
the Company, the period during which post-retirement or similar benefits
are paid to the director by the Company shall be deemed to be continued
service.
Section 14. RIGHTS UPON DEATH. Except as otherwise limited by the
Committee at the time of the grant of an Option or SAR, if the recipient
dies while he or she is an employee, director or consultant of the Company
or any Subsidiary, his or her Options and SARs shall remain exercisable
for one year after the date of death, unless the Options, SARs, or the
Plan otherwise provide for earlier termination. During such exercise
period after death, Options and SARs may be fully exercised, to the extent
that they remain unexercised on the date of the recipient's death, by the
person or persons to whom the recipient's rights to the Options or SARs
shall pass by will or by laws of descent and distribution.
Section 15. WAIVER OF VESTING RESTRICTIONS IN THE EVENT OF
RETIREMENT. Notwithstanding any provision of the Plan, in the event an
Award recipient retires as an employee or director of the Company, or any
Subsidiary, the Committee shall have the discretion to waive any vesting
restrictions on the retiree's Options, SARs, or Stock Grants.
Section 16. AWARDS NOT TRANSFERABLE. Awards granted pursuant to
the Plan may not be sold, pledged, assigned or transferred in any manner
otherwise than by will or the laws of descent and distribution. During
the lifetime of the Award recipient, Options and SARs may only be
exercised by that recipient or by his or her guardian or legal
representative.
Section 17. REPORTS TO SHAREHOLDERS. Upon written request, the
Company shall furnish to each Award recipient a copy of its most recent
Form 10-K Annual Report and each quarterly report to shareholders issued
since the end of the Company's most recent fiscal year.
