<PAGE>
As filed with the Securities and Exchange Commission on April 21, 1995
Registration No. 33-
--------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AEP INDUSTRIES INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation or Organization)
22-1916107
----------------------------------
(I.R.S. Employer Identification No.)
125 PHILIPS AVENUE, SOUTH HACKENSACK, NEW JERSEY 07606
-----------------------------------------------------------
(Address of Principal Executive Offices)(Zip Code)
1995 STOCK OPTION PLAN
----------------------
(Full title of the Plan)
PAUL M. FEENEY
EXECUTIVE VICE PRESIDENT
AEP INDUSTRIES INC.
125 PHILIPS AVENUE
SOUTH HACKENSACK, NEW JERSEY 07606
-------------------------------------
(Name and Address of Agent For Service)
(201) 641-6600
-----------------------------------------------------------
(Telephone Number, Including Area Code, of Agent for Service)
Copy to:
Paul E. Gelbard, Esq.
Bachner, Tally, Polevoy & Misher
380 Madison Avenue
New York, New York 10017
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Per Offering Registration
to be Registered Registered Share Price Fee
- ------------------- ---------- --------- ---------- -------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value 500,000 $23.56 $11,780,000 $4,062.10
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<FN>
(1) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. The price shown is the average of the
high and low price of the Common Stock as reported on Nasdaq National
Market on April 18, 1995.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are hereby incorporated by reference into this
Registration Statement, and all documents subsequently filed by AEP Industries
Inc. (the "Registrant") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, 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 hereof
from the date of filing such documents:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1994;
(b) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
January 31, 1995;
(c) The Registrant's definitive Proxy Statement, dated February 28,
1995, as filed with the Securities and Exchange Commission in
connection with the Registrant's Annual Meeting of Stockholders held
April 11, 1995.
Item 4. DESCRIPTION OF SECURITIES.
No response is required to this item.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby has been passed upon
by Bachner, Tally, Polevoy & Misher. A member of such firm is a director,
stockholder and optionholder of the Registrant.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
ARTICLE XVI of the Registrant's Certificate of Incorporation, as
amended, provides as follows:
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
for the
2
<PAGE>
unlawful payment of dividends or unlawful stock purchases under
Section 174 of the General Corporation Law of Delaware, or (iv) for
any transaction from which the director derived any improper
personal benefit. If after approval by the stockholders of this
provision the General Corporation law of Delaware is amended to
authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of Delaware, as so amended.
Any repeal or modification of this Article by the stockholders of
the Corporation shall be by the affirmative vote of the holders of
not less than eighty percent (80%) of the outstanding shares of
stock of the Corporation and entitled to vote in the election of
Directors, considered for the purposes of this Article SIXTEENTH as
one class, shall be prospective only and shall not adversely affect
any right or protection of a director of the Corporation existing at
the time of such repeal or modification.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
No response to this Item is required.
Item 8. EXHIBITS.
4 AEP Industries Inc. 1995 Stock Option Plan
5 Opinion of Bachner, Tally, Polevoy & Misher, with respect to the
legality of the Common Stock to be registered hereunder
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Bachner, Tally, Polevoy & Misher (contained in Exhibit 5)
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 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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
3
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant as described above, or otherwise, the Registrant has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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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 South Hackensack, State of New Jersey, on the 21st
day of April, 1995.
AEP Industries Inc.
-------------------------------
(Registrant)
By: /s/ J. Brendan Barba
------------------------------
J. Brendan Barba, Chairman
of the Board and 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.
/s/ J. Brendan Barba April 21, 1995
- --------------------------------
J. Brendan Barba, Chairman
of the Board and President
(Principal Executive Officer)
/s/ Paul M. Feeney April 21, 1995
- --------------------------------
Paul M. Feeney, Executive
Vice President-Finance, Director
(Principal Financial Officer)
/s/ Lawrence R. Noll April 21, 1995
- --------------------------------
Lawrence R. Noll
Vice President-Finance and Secretary, Director
(Principal Accounting Officer)
/s/ Kenneth Avia April 21, 1995
- --------------------------------
Kenneth Avia, Director
/s/ Robert W. Cron April 21, 1995
- --------------------------------
Robert W. Cron, Director
/s/ Paul E. Gelbard April 21, 1995
- --------------------------------
Paul E. Gelbard, Director
5
<PAGE>
INDEX TO EXHIBITS
AEP INDUSTRIES INC.
Sequentially
Exhibit Numbered
No. Description Page
- ------- ----------- ------------
4 AEP Industries Inc. 1995 Stock Option Plan 7 - 30
5 Opinion of Bachner, Tally, Polevoy &
Misher, with respect to the legality
of the Common Stock to be registered
hereunder 31 - 32
23(a) Consent of Arthur Andersen LLP 33
23(b) Consent of Bachner, Tally, Polevoy &
Misher (contained in Exhibit 5) 34
<PAGE>
Exhibit 4
AEP INDUSTRIES INC.
1995 STOCK OPTION PLAN
7
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AEP INDUSTRIES INC.
1995 Stock Option Plan
1. PURPOSES OF PLAN. The purposes of this Plan are (a) to provide
incentives for key employees of the Company and its Subsidiary or Parent
corporations, and for members of the Board of Directors of the Company, by
encouraging their ownership of Stock and (b) to aid the Company in retaining
such key employees and Board members, upon whose efforts the Company's success
and future growth depends, and attracting other such employees and Board
members.
2. DEFINITIONS. Except as otherwise defined in the Plan, the
following terms shall have the meanings set forth below:
(a) "AFFILIATE" shall have the meaning ascribed to such term in Rule
12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) "AGREEMENT" means a written agreement implementing the grant of
each Award signed by an authorized officer of the Company and by the
Participant.
(c) "AWARD" means individually or collectively, a grant under this
Plan of Non-qualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Units, Performance Shares, or Other Stock
Unit Awards, including a grant of Non-qualified Stock Options pursuant to
Section 12 below. Each Award shall be evidenced by an Agreement containing such
terms and conditions as the Committee may approve, in addition to any applicable
terms and conditions specified in the Plan.
(d) "AWARD DATE" or "GRANT DATE" means the date on which an
Award is made by the Committee under this Plan or automatic grant under Section
12.
(e) "BENEFICIAL OWNER" shall have the meaning ascribed to such term
in Rule 13d-3 under the Exchange Act.
(f) "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors
of the Company.
(g) "CHANGE IN CONTROL" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
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(i) Any person, corporation or other entity or group,
including any "group" as defined in Section 13(d)(3) of the Exchange
Act other than (A) those persons in control of the Company on the
Effective Date, (B) any person acting on behalf of the Company in a
distribution of stock to the public, or (C) a trustee or other
fiduciary holding securities of the Company under an employee
benefit plan of the Company, becomes the beneficial owner of shares
of the Company having 20% or more of the total number of votes that
may be cast for the election of directors of the Company; or
(ii) As the result of, or in connection with, any tender or
exchange offer, merger or other business combination, sale of assets
or contested election, or any combination of the foregoing (a
"Transaction"), the persons who were directors of the Company before
the Transaction shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company or its
assets; or
(iii) If at any time, (A) the Company shall consolidate with,
or merge with, any other Person and the Company shall not be the
continuing or surviving corporation, (B) any Person shall
consolidate with, or merge with, the Company, and the Company shall
be the continuing or surviving corporation and in connection
therewith, all or part of the outstanding Stock shall be changed
into or exchanged for stock or other securities of any other Person
or cash or any other property, (C) the Company shall be a party to a
statutory share exchange with any other Person after which the
Company is a Subsidiary of any other Person, or (D) the Company
shall sell or otherwise transfer 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole)
to any Person or Persons.
(h) "CODE" means the Internal Revenue Code of 1986 and any successor
statute thereto, as amended.
(i) "COMMITTEE" shall mean the Stock Option Committee of the Board
of Directors.
(j) "COMPANY" means AEP Industries Inc., or any successor thereto as
provided in Article 18 herein.
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(k) "CONTINUING DIRECTOR" means an individual who was a member of
the Board of Directors on the Effective Date or whose subsequent nomination for
election or reelection to the Board of Directors was recommended or approved by
the affirmative vote of two-thirds of the members of the Board on the Effective
Date who were then in office.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(m) "FAIR MARKET VALUE" on a particular day means the last sale
price regular way on such day or if such day is not a business day on the
preceding business day, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading as reported by such exchange,
or if the Common Stock is not listed or admitted to trading on any national
securities exchange, in the over-the-counter market on such day, as reported on
the Nasdaq National Market ("Nasdaq"), or if there are no such prices reported
on such exchange or Nasdaq on such day, the average of the closing high bid and
low asking price of the Stock as reported by such exchange or Nasdaq, and if
there be none, then as furnished to the Committee by any New York Stock Exchange
member selected from time to time by the Committee for such purpose. If there
is no bid or asked price reported on any such day, the market value shall be
determined by the Committee in accordance with the regulations promulgated under
Section 2031 of the Code, or by any other appropriate method selected by the
Committee.
In the case of an Incentive Stock Option, if the foregoing method of
determining fair market value should be inconsistent with Section 422 of the
Code, "Fair Market Value" shall be determined by the Committee in a manner
consistent with such section of the Code and shall mean the value as so
determined.
(n) "INCENTIVE STOCK OPTION" or "ISO" means an option to
purchase Stock, granted under Section 6 herein, which is designated as an
incentive stock option and is intended to meet the requirements of Section 422
of the Code.
(o) "KEY EMPLOYEE" means an officer or other key employee of the
Company or its Parent or Subsidiaries, who, in the opinion of the Committee, can
contribute significantly to the growth and profitability of, or perform services
of major importance to, the Company and its Subsidiaries.
(p) "NON-QUALIFIED STOCK OPTION" or "NQSO" means an option to
purchase Stock, granted under Section 6 or 12 herein, which is not intended to
be an Incentive Stock Option.
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(q) "OPTION" means an Incentive Stock Option or a Non-qualified
Stock Option.
(r) "OTHER STOCK UNIT AWARD" means awards of Stock or other awards
that are valued in whole or in part by reference to, or are otherwise based on,
Shares or other securities of the Company.
(s) "OUTSIDE DIRECTOR" means a member of the Board who is not an
employee of the Company or any Subsidiary or Affiliate.
(t) "PARENT" means a parent corporation of the Company within the
means of Section 424(c) of the Code.
(u) "PARTICIPANT" means a Key Employee or Outside Director who has
been granted an Award under the Plan.
(v) "PERFORMANCE AWARD" means a performance-based Award, which may
be in the form of either Performance Shares or Performance Units.
(w) "PERFORMANCE SHARE" means an Award, designated as a Performance
Share, granted to a Participant pursuant to Section 9 herein, the value of which
is determined by the Fair Market Value of Company Stock in a manner deemed
appropriate by the Committee and described in the Agreement.
(x) "PERFORMANCE UNIT" means an Award, designated as a Performance
Unit, granted to a Participant pursuant to Section 9 herein, the value of which
is determined, in whole or in part, by the attainment of preestablished goals
relating to Company financial or operating performance as deemed appropriate by
the Committee and described in the Agreement but which is not determined by
reference to the Fair Market Value of Common Stock.
(y) "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is restricted, pursuant to Section 8
herein.
(z) "PERSON" shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d).
(aa) "PLAN" means the AEP Industries Inc. 1995 Stock Option Plan, as
hereafter from time to time amended.
(bb) "RELATED OPTION" means an Incentive Stock Option or a
Non-qualified Stock Option granted in conjunction with the grant of a Stock
Appreciation Right.
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(cc) "RESTRICTED STOCK" means an Award of Stock granted to a
Participant pursuant to Section 8 herein.
(dd) "RULE 16B-3" means Rule 16b-3 adopted pursuant to Section 16(b)
of the Exchange Act. A reference in the Plan to Rule 16b-3 shall include a
reference to any corresponding rule (or number redesignation) of any amendments
to Rule 16b-3 adopted after the effective date of the Plan's adoption.
(ee) "SECRETARY" means the officer designated as the Secretary of the
Company.
(ff) "SECTION 16 PERSON" means a Participant who is subject to
Section 16(b) of the Exchange Act with respect to transactions involving Company
Stock.
(gg) "STOCK" or "SHARES" means the common stock of the Company,
$.01 par value.
(hh) "STOCK APPRECIATION RIGHT" or "SAR" means an Award,
designated as a Stock Appreciation Right, granted to a Participant pursuant to
Section 7 herein.
(ii) "SUBSIDIARY" shall mean, a subsidiary of the Company within the
meaning of Code Section 424(f).
3. ADMINISTRATION.
(a) The Plan shall be administered by a Committee, which shall consist of
not less than two members of the Board. Subject to the provisions of the next
sentence, the Committee shall be the Stock Option Committee unless the Board
shall appoint another Board committee to administer the Plan. Unless the Board
determines otherwise, (i) all members of the Committee shall be "outside
directors" as described in Code Section 162(m), and (ii) no person shall be
appointed to or serve as a member of the Committee unless at the time of such
appointment and service he shall be a "disinterested person," as defined in Rule
16b-3. The Committee, subject to the terms of the Plan, shall have plenary
authority to establish such rules and regulations, make such determinations and
interpretations, and take such other administrative actions as it deems
necessary or advisable.
(b) The express grant in this Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. In
addition to any other powers and, subject to the provisions of the Plan, the
Committee shall have the following specific powers: (i) to grant Awards and to
determine the terms and conditions of the Awards; (ii) to determine all terms
and provisions of each Agreement, which need not be
12
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identical; (iii) to construe and interpret the Agreements and the Plan; (iv) to
establish, amend, or waive rules or regulations for the Plan's administration;
(v) to accelerate the exercisability of any Award, the end of a Performance
Period or termination of any Period of Restriction; (vi) to amend the terms of
previously granted Awards so long as the terms as amended are consistent with
the terms of the Plan and provided that the consent of the Participant is
obtained with respect to any amendment that would be detrimental to the
Participant, except that such consent will not be required if such amendment is
for the purpose of complying with Rule 16b-3 or any requirement of the Code
applicable to the Award; and (vii) to make all other determinations and take all
other actions necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Committee shall be final,
conclusive and binding on all persons, including Participants and their legal
representatives and beneficiaries. However, in no event shall the Committee
have any discretion to select Outside Directors for participation in the Plan or
make decisions concerning the timing, price, or amount of an option grant to an
Outside Director under the Plan, as such matters shall be determined exclusively
in accordance with the terms of Section 12 of the Plan, in accordance with Rule
16b-3.
(c) The Board of Directors shall designate one of the members of the
Committee as its Chairman. The Committee shall hold its meetings at such times
and places as it may determine. A majority of its members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by all
members shall be as effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a secretary (who need
not be a member of the Committee). No member of the Committee shall be liable
for any act or omission with respect to his service on the Committee, if he acts
in good faith and in a manner he reasonably believes to be in, or not opposed
to, the best interests of the Company. Service on the Committee shall
constitute service as a director of the Company for all purposes.
4. STOCK AVAILABLE. Subject to adjustment as provided in Section 13
herein, the maximum aggregate number of Shares that may be issued pursuant to
Awards made under the Plan on or after January 1, 1995, shall not exceed 500,000
and the maximum number of Shares that may be issued to any Participant pursuant
to Awards made under the Plan on or
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after January 1, 1995, shall not exceed 125,000. Shares of Stock used for
purposes of the Plan may be either authorized and unissued Shares, or previously
issued Shares held in the treasury of the Company, or both. Except as
provided below in this Section 4, the issuance of Shares in connection with the
exercise of, or as other payment for, Awards under the Plan shall reduce the
number of Shares available for future Awards under the Plan. If any Award
granted under this Plan terminates, expires, or lapses for any reason other than
by virtue of exercise of the Awards, or if Shares issued pursuant to Awards are
forfeited, any Shares subject to such Award or forfeiture again shall be
available for the grant of an Award under the Plan; provided that any such
Shares shall be available for the grant of an Award to a Section 16 Person only
if the forfeiting employee received no benefits of ownership such as dividends
(but excluding voting rights) from the Shares and Rule 16b-3 would in the
opinion of the Committee otherwise be satisfied. In the event that a
Participant pays the Option Price for Shares pursuant to the exercise of an
Option with previously acquired Shares, the number of Shares available for
future Awards under the Plan shall be reduced only by the net number of new
Shares issued upon the exercise of the Option, provided that the number of
Shares available for future Awards to Section 16 Persons under the Plan shall be
reduced only by the net number of new Shares issued upon the exercise of the
Option only if Rule 16b-3 would in the opinion of the Committee be satisfied.
5. ELIGIBILITY. Awards under the Plan may be granted to Key
Employees of the Company or any Subsidiary or Parent, including Key Employees
who are officers or directors of the Company or any Subsidiary or Parent.
Awards may be granted to eligible employees whether or not they hold or have
held Awards previously granted under the Plan or otherwise granted or assumed by
the Company. In selecting employees for Awards, the Committee may take into
consideration any factors it may deem relevant, including its estimate of the
employee's present and potential contributions to the success of the Company and
its Subsidiaries.
6. STOCK OPTIONS
(a) GRANT OF OPTIONS TO KEY EMPLOYEES. Subject to the terms and
provisions of the Plan, Options may be granted to Key Employees at any time and
from time to time as shall be determined by the Committee. Subject to Section 4
above, the Committee shall have complete discretion in determining the number of
Shares subject to Options granted to each
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Key Employee, provided, however, that the aggregate Fair Market Value
(determined at the time the Award is made) of Shares with respect to which a Key
Employee may first exercise ISOs granted under the Plan during any calendar year
may not exceed $100,000 or such amount as shall be specified in Section 422 of
the Code and the rules and regulations thereunder. The date of grant of an
Option shall be the date specified by the Committee in its grant of the Option.
(b) OPTION AGREEMENT. Each Option grant shall be evidenced by an
Agreement that shall specify the type of Option granted, the Option Price (as
hereinafter defined), the duration of the Option, the number of Shares to which
the Option pertains, any conditions imposed upon the exercisability of Options
in the event of retirement, death, disability, or other termination of
employment, and such other provisions as the Committee shall determine. The
Agreement shall specify whether the Option is intended to be an Incentive Stock
Option within the meaning of Section 422 of the Code, or a Non-qualified Stock
Option.
(c) OPTION PRICE. The exercise price per Share of Stock covered by
an Option ("Option Price") shall be determined by the Committee subject to the
following limitations. In the case of an ISO, the Option Price shall not be
less than 100% of the Fair Market Value of such Stock on the Grant Date, or in
the case of any Optionee who, at the time such Incentive Stock Option is
granted, owns Stock possessing more than 10% of the total combined voting power
of all classes of stock of his employer corporation or of its parent or
subsidiary corporation, not less than 110% of the Fair Market Value of such
Stock on the date the Incentive Stock Option is granted. In the case of a NQSO,
the Option Price shall not be less than 100% of the Fair Market Value of the
Stock on the Grant Date. In no event shall the Option Price of any Option be
less than the par value of the Stock.
(d) DURATION OF OPTIONS. Each Option shall expire at such time as
the Committee shall determine at the time of grant, provided, however, that no
Option shall be exercisable later than the tenth (10th) anniversary date of its
Award Date and no Incentive Stock Option which is granted to any Optionee who,
at the time such Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of his employer corporation
or of its parent or subsidiary corporation, shall be exercisable after the
expiration of five years from the date such Option is granted.
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<PAGE>
(e) EXERCISABILITY. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine, which need not be the same for all Participants.
(f) METHOD OF EXERCISE. In order to exercise an option, the holder
thereof (the "Optionee") shall deliver to the Company written notice specifying
the number of shares of Stock to be purchased, together with cash or a certified
or bank cashier's check payable to the order of the Company in the full amount
of the purchase price therefor, provided that: (i) if so provided in the Option
Agreement, the Participant may deliver a properly executed exercise notice
together with irrevocable instructions to a stockbroker to sell immediately some
or all of the Shares acquired by exercise of the Option and to promptly deliver
to the Company an amount of the sale proceeds (or in lieu of a pending a sale,
loan proceeds) sufficient to pay the purchase price, (ii) such purchase price
may be paid in Shares of Stock owned by the Optionee having a fair market value
on the date of exercise equal to the aggregate purchase price, or in a
combination of cash and whole Shares of Stock, and (iii) for the purpose of
assisting an Optionee to exercise an Option, the Company may make loans to the
Optionee or guarantee loans made by third parties to the Optionee on such terms
and conditions as the Board of Directors may authorize. If the Optionee so
requests, Shares of Stock purchased upon exercise of an option may be issued in
the name of the Optionee or another person provided that Optionee pays any
documentary, transfer or other tax applicable to such issuance. An Optionee
shall have none of the rights of a stockholder until the date as of which Shares
of Stock are issued to him. For purposes of payment described in (i) above, the
exercise shall be deemed to have occurred on the date the Company receives the
exercise notice, accompanied by the stockbroker instructions, unless the
Committee determines otherwise.
(g) NON-TRANSFERABILITY OF OPTIONS.
(i) Subject to Sections 6(g)(ii) and 19(b) below, no Option
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws
of descent and distribution. During the lifetime of a Participant to whom
an Incentive Stock Option is granted, the Incentive Stock Option may be
exercised only by the Participant or his guardian or legal representative.
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(ii) The Committee may grant Non-qualified Stock Options (with or
without tandem SARs) that are transferable during the lifetime of the
Participant, provided that (A) no consideration is paid for the transfer
and (B) no Options granted to Section 16 Persons may be transferable
unless and except to the extent such transferability would not result in
the loss of any Rule 16b-3 exemptions for nontransferable Options granted
or to be granted under the Plan. The transferee of an Option shall be
subject to all restrictions applicable to the Option prior to its
transfer. The Agreement granting the Option shall set forth the transfer
conditions and restrictions. The Committee may impose on any transferable
Option and on Stock issued upon the exercise of an Option such limitations
and conditions as the Committee deems appropriate.
7. STOCK APPRECIATION RIGHTS.
(a) GRANT OF STOCK APPRECIATION RIGHTS. Subject to the terms and
conditions of the Plan, Stock Appreciation Rights may be granted to
Participants, at the discretion of the Committee, in any of the following forms:
(i) In connection with the grant, and exercisable in lieu, of
Options ("Tandem SARs");
(ii) In connection with, and exercisable in addition to, the grant
of Options ("Additive SARs");
(iii) Independent of the grant of Options ("Freestanding SARs"); or
(iv) In any combination of the foregoing.
(b) EXERCISE OF TANDEM SARS. Tandem SARs may be exercised with
respect to all or part of the Shares subject to the Related Option. The
exercise of Tandem SARs shall cause a reduction in the number of Shares subject
to the Related Option equal to the number of Shares with respect to which the
Tandem SAR is exercised. Conversely, the exercise, in whole or part, of a
Related Option, shall cause a reduction in the number of Shares subject to the
Tandem SAR equal to the number of Shares with respect to which the Related
Option is exercised. Shares with respect to which the Tandem SAR shall have
been exercised may not be subject again to an Award under the Plan.
Notwithstanding any other provision of the Plan to the contrary, a Tandem
SAR shall expire no later than the expiration of the Related Option and shall be
exercisable only when
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the Related Option is eligible to be exercised. In addition, if the Related
Option is an ISO, a Tandem SAR shall be exercised for no more than 100% of the
difference between the Fair Market Value of Shares subject to the Related Option
at the time the Tandem SAR is exercised and the Option Price of the Related
Option.
(c) EXERCISE OF ADDITIVE SARS. Additive SARs shall be deemed to be
exercised upon, and in addition to, the exercise of the Related Option. The
deemed exercise of Additive SARs shall not reduce the number of Shares with
respect to which the Related Option remains unexercised.
(d) EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon such SARs.
(e) OTHER CONDITIONS APPLICABLE TO SARS. In no event shall the term
of any SAR granted under the Plan exceed ten years from the Grant Date. A SAR
may be exercised only when the Fair Market Value of a Share exceeds either (i)
the Fair Market Value per Share on the Grant Date in the case of a Freestanding
SAR or (ii) the Option Price of the Related Option in the case of either a
Tandem or Additive SAR. A SAR shall be exercised by delivery to the Committee
of a notice of exercise in the form prescribed by the Committee.
(f) PAYMENT UPON EXERCISE OF SARS. Subject to the provisions of the
Agreement, upon the exercise of a SAR, the Participant shall be entitled to
receive, without any payment to the Company (other than required tax withholding
amounts), an amount equal to the product of multiplying (i) the number of Shares
with respect to which the SAR is exercised by (ii) an amount equal to the excess
of (A) the Fair Market Value per Share on the date of exercise of the SAR over
(B) either (x) the Fair Market Value per Share on the Award Date in the case of
a Freestanding SAR or (y) the Option Price of the Related Option in the case of
either a Tandem or Additive SAR.
Payment to the Participant shall be made in Shares, valued at the Fair
Market Value of the date of exercise, in cash, or a combination thereof, as the
Committee may provide in the SAR Agreement. To the extent required to satisfy
the conditions of Rule 16b-3(e), or as otherwise provided in the Agreement, the
Committee shall have the sole discretion to consent to or disapprove the
election of any Participant to receive cash in full or partial settlement of
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an SAR. In cases where an election of settlement in cash must be consented to
by the Committee, the Committee may consent to, or disapprove, such election at
any time after such election, or within such period for taking action as is
specified in the election, and failure to give consent shall be disapproval.
Consent may be given in whole or as to a portion of the SAR surrendered by the
Participant. If the election to receive cash is disapproved in whole or in
part, the SAR shall be deemed to have been exercised for Shares, or, if so
specified in the notice of exercise and election, not to have been exercised to
the extent the election to receive cash is disapproved.
(g) NON-TRANSFERABILITY OF SARS. No SARs granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all
SARs granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant or his guardian or legal representative.
8. RESTRICTED STOCK
(a) GRANT OF RESTRICTED STOCK. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant Shares
of Restricted Stock under the Plan to such Participants and in such amounts as
it shall determine. Participants receiving Restricted Stock Awards shall not be
required to pay the Company therefor (except for applicable tax withholding)
other than the rendering of services and/or until other conditions are satisfied
as determined by the Committee in its sole discretion, unless required by
applicable law.
(b) RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall
be evidenced by an Agreement that shall specify the Period of Restriction, the
conditions which must be satisfied prior to removal of the restriction, the
number of Shares of Restricted Stock granted, and such other provisions as the
Committee shall determine.
(c) TRANSFERABILITY. Except as provided in this Section 8, the
Shares of Restricted Stock granted hereunder may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the termination
of the applicable Period of Restriction or upon earlier satisfaction of such
other conditions as may be specified by the Committee in its sole discretion and
set forth in the Agreement. All rights with respect to the Restricted Stock
granted to a Participant under the Plan shall be exercisable during his lifetime
only by such
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Participant or his guardian or legal representative.
(d) OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any Shares of Restricted Stock granted pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable Federal or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice of such restrictions.
Alternatively, the Committee, in its sole discretion, may have Shares of
Restricted Stock issued without legend and held by the Secretary until such time
that all restrictions are satisfied.
(e) CERTIFICATE LEGEND. In the event that the Committee elects to
legend the certificates representing Restricted Stock, and in addition to any
legends placed on certificates pursuant to Section 8(d) above, each certificate
representing shares of Restricted Stock granted pursuant to the Plan shall bear
the following legend:
The sale or other transfer of the Shares of Stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer set forth in the AEP Industries Inc. 1995
Stock Option Plan, as amended, effective January 1, 1995 and in a Restricted
Stock Agreement dated ____________________. A copy of the Plan and such
Restricted Stock Agreement may be obtained from the Secretary of AEP Industries
Inc.
(f) REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Section 8, Shares of Restricted Stock covered by each Restricted Stock Award
made under the Plan shall become freely transferable by the Participant after
the last day of the Period of Restriction and/or upon the satisfaction of other
conditions as determined by the Committee in its sole discretion. Once the
Shares are released from the restrictions, the Participant shall be entitled to
have removed any legend that may have been placed on the certificates
representing such Shares pursuant to Sections 8(d) and 8(e) herein.
(g) VOTING RIGHTS. During the Period of Restriction, Participants
in whose name Shares of Restricted Stock are granted hereunder may exercise full
voting rights with respect to those Shares.
(h) DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants in whose name Shares of Restricted Stock are granted
hereunder shall be entitled to receive all dividends and other distributions
paid with respect to those Shares. If any such
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dividends or distributions are paid in Shares, the Shares shall be subject to
the same restrictions on transferability as the Shares of Restricted Stock with
respect to which they were distributed and the Shares shall be so legended.
9. PERFORMANCE AWARDS
(a) GRANT OF PERFORMANCE AWARDS. Subject to the terms and
provisions of the Plan, Performance Awards in the form of either Performance
Units or Performance Shares may be granted to Participants at any time and from
time to time as shall be determined by the Committee. Subject to Section 4
above, the Committee shall have complete discretion in determining the number of
Performance Units or Performance Shares granted to each Participant, provided
that on each date that any cash is paid to any Participant pursuant to
Performance Units, the amount of cash shall be divided by the Fair Market Value
of a Share of Stock on such date, and the result shall be deducted from the
number of Shares that may be issued under the Plan in the aggregate or to any
Participant under Section 4 above. Participants receiving Performance Awards
shall not be required to pay the Corporation therefor (except for applicable tax
withholding) unless required by applicable law.
(b) VALUE OF PERFORMANCE AWARDS. The Committee shall determine the
number of Performance Units or Performance Shares granted to each Participant as
a Performance Award. The Committee shall set performance goals in its
discretion for each Participant who is granted a Performance Award. The extent
to which such performance goals are met will determine the value of the
Performance Unit or Performance Share to the Participant. Such performance
goals may be particular to a Participant, may relate to the performance of the
Division or Subsidiary which employs him, may be based on the performance of the
Company generally, or a combination of the foregoing. The performance goals may
be based on achievement of balance sheet or income statement objectives, or any
other objectives established by the Committee. The performance goals may be
absolute in their terms or measured against or in relationship to other
companies comparably, similarly or otherwise situated. The Committee shall
determine the time period during which the performance goals must be met
("Performance Period"). Each Performance Award shall be subject to such other
terms and conditions as the Committee may determine which shall be set forth in
an Agreement.
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<PAGE>
(c) SETTLEMENT OF PERFORMANCE AWARDS. After a Performance Period
has ended, the holder of a Performance Unit or Performance Share shall be
entitled to receive the value thereof based on the degree to which the
performance goals established by the Committee and set forth in the Agreement
have been satisfied.
(d) FORM OF PAYMENT. Payment of the amount to which a Participant
shall be entitled upon the settlement of Performance Award shall be made in
cash, Stock, or a combination thereof as determined by the Committee. Payment
may be made in a lump sum or installments as prescribed by the Committee.
(e) NON-TRANSFERABILITY. Unless the Committee provides otherwise
pursuant to Section 19(b) below, no Performance Units or Performance Shares
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution. All rights with respect to Performance Units and Performance
Shares granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant or his guardian or personal representative.
10. OTHER STOCK UNIT AWARDS
(a) GRANT. The Committee is authorized to grant to Participants,
either alone or in addition to other Awards made under the Plan, Other Stock
Unit Awards to be issued at such times, subject to or based upon achievement of
such performance or other goals and on such other terms and conditions as the
Committee shall deem appropriate and specify in the Agreement relating thereto,
which need not be the same with respect to each Participant. Stock or other
securities granted pursuant to Other Stock Unit Awards may be issued for no cash
consideration or for such minimum consideration as may be required by applicable
law.
(b) SALE AND TRANSFERABILITY. To the extent an Other Stock Unit
Award granted under the Plan is deemed to be a derivative security within the
meaning of Rule 16b-3, it may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution, unless the Committee provides otherwise pursuant to
Section 19(b) below. All rights with respect to such Other Stock Unit Awards
granted to a Participant under the Plan shall be exercisable during his lifetime
only by such Participant or his guardian or personal representative.
11. CHANGE IN CONTROL
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In the event of a Change in Control or immediately prior to a Change in
Control of the Company, the Committee may, in its complete discretion, cause:
(a) each Option then outstanding under the Plan to become fully exercisable and
remain so for the duration of the Option as specified in the Agreement; (b) all
restrictions or conditions related to grants of Restricted Stock to be deemed
immediately and fully satisfied and all certificates representing such Shares of
Restricted Stock to be released or issued free of any legend, and thereby become
freely transferable; and (c) any or all restrictions or conditions related to an
Award to be released and accelerated, in such a manner, in the case of Section
16 Persons, as to conform to the provisions of Rule 16b-3.
12. OPTION GRANTS TO OUTSIDE DIRECTORS
(a) OPTION GRANTS. Immediately following each annual meeting of
stockholders of the Company, commencing with the 1995 meeting and continuing
with each annual meeting of stockholders thereafter until the Plan is terminated
or expires pursuant to Section 16 below, or, if any such annual meeting is held
on a date for which Fair Market Value cannot be calculated (because Common Stock
is not traded on such date or for any other reason), then on the next date for
which Fair Market Value can be calculated, each person who is an Eligible
Director immediately following such annual meeting shall be granted a
Non-qualified Stock Option to purchase 1,000 shares of Stock. The price at
which shares may be purchased under any option granted pursuant to this Section
12(a) shall be their Fair Market Value on the date such option is granted.
(b) TERM OF OPTION AND LIMITATIONS ON RIGHT TO EXERCISE.
(i) Except as otherwise provided in Subsections 12(b)(ii), (iii),
and (iv) below, an Option granted to an Outside Director may be exercised at any
time for all or from time to time for any part of the shares which are subject
to purchase under the Option, before the tenth anniversary of the date on which
the Option was granted. If not sooner exercised or terminated pursuant to the
preceding sentence or the other provisions of this Subsection 12(b)(i), an
Option shall expire on the tenth anniversary of the date on which it was
granted.
(ii) An Option granted to an Outside Director may not be exercised
in whole or in part until the fifth anniversary of the grant date of the Option
except as follows:
Cumulative Percentage
Of Aggregate Number of
Shares of Stock Covered
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by Option Which May Be
Exercise Period Purchased
--------------- ---------------------
Within 1st year from date of grant 0%
Beginning one year from date of grant 20%
Beginning two years from date of grant 40%
Beginning three years from date of grant 60%
Beginning four years from date of grant 80%
Beginning five years from date of grant 100%
less, in the case of each exercise period, the number of Shares of Stock, if
any, previously purchased under the Option.
(iii) A Participant's right to exercise an Option that is otherwise
exercisable pursuant to the provisions of Subsections 12(b)(i) and (ii) above
shall terminate one year after the Participant's service on the Board of
Directors terminates for any reason other than cause within the meaning of the
Company's by-laws, and upon the termination of the Participant's service on the
Board of Directors for cause.
(iv) An Option may not be exercised for fewer than one hundred
Shares unless fewer than one hundred Shares remain subject to the Option at the
time, in which case the Option may not be exercised for less than the full
balance of the Shares that remain subject to the Option at the time.
(c) TIME AND MANNER OF OPTION EXERCISE. An Option granted under
this Section 12 shall be considered exercised if and when written notice, signed
by the person exercising the Option and stating the number of Shares with
respect to which the Option is being exercised, is received by the Secretary on
a form approved for this purpose by the Committee, accompanied by full payment
of the Option exercise price in one or more of the forms described in Section
12(d) below for the number of Shares to be purchased. No Option may at any time
be exercised with respect to a fractional Share.
(d) PAYMENT OF EXERCISE PRICE. The Option exercise price may be
paid in whole or in part (i) in cash, (ii) by bank-certified check, cashier's
check, or personal check subject to collection, (iii) in whole Shares valued at
their Fair Market Value on the date of exercise, provided that such Shares have
been held by the Participant for at least six months before the date of exercise
or satisfy such other requirement(s) as the Committee may impose, or (iv) by
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delivering to the Company a properly executed exercise notice together with a
copy of irrevocable instructions to a stockbroker to sell immediately some or
all of the Shares acquired by exercise of the Option and to deliver promptly to
the Company an amount of sale proceeds (or, in lieu of or pending a sale, loan
proceeds) sufficient to pay the purchase price.
(e) EXERCISE AFTER DEATH. Following the death of an Outside
Director any Options that were exercisable at the time of his death may be
exercised prior to their expiration or termination pursuant to the provisions of
Section 12(b) above by the Participant's beneficiary designated pursuant to the
provision of Section 12(f) below or, if no such beneficiary has been designated
or survives the Participant, by the Participant's estate or the person or
persons to whom the Options passed by will or the laws of descent and
distribution.
(f) TRANSFERABILITY. An Option granted to an Outside Director under
the Plan is not transferable by the Participant other than by will or the laws
of descent and distribution and, during the lifetime of the Participant, is
exercisable only by him or his legal representative. Notwithstanding the
foregoing, a Participant may designate a beneficiary to whom his Options shall
pass in the event of his death, provided that such beneficiary is designated in
writing on a form approved for that purpose by the Committee and such form is
received by the Secretary prior to the Participant's death and, provided
further, that the Committee consents to any beneficiary so designated.
13. ADJUSTMENT FOR CHANGE IN STOCK SUBJECT TO PLAN AND OTHER EVENTS.
In the event of a reorganization, recapitalization, stock split, stock dividend,
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or Shares of the Company, the Committee shall
make such adjustments, if any, as it deems appropriate in the number and kind of
Shares subject to the Plan, in the number and kind of Shares covered by
outstanding Awards, in the Option price per Share of outstanding Options, in the
maximum number of Shares that may be issued to any Participant pursuant to
Awards made under the Plan, and in the number of Shares which shall be optioned
annually to each Outside Director pursuant to Section 12 hereof. If the
adjustment would produce fractional Shares with respect to any then outstanding
Awards, the Committee may adjust appropriately the number of Shares covered by
the outstanding Awards so as to eliminate the fractional Shares. Any adjustment
to be made with respect to Incentive Stock Options shall comply with Sections
422 and 424 of the Code.
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<PAGE>
In connection with any merger or consolidation in which the Company is not
the surviving corporation or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for, or the
acquisition, directly or indirectly, by any person or group of all, or a
majority of the then outstanding voting securities of the Company, all
outstanding Options under the Plan shall become exercisable in full,
notwithstanding any other provision of the Plan or of any outstanding Options
granted thereunder, on and after (a) 15 days prior to the effective date of such
merger, consolidation, sale, transfer or acquisition or (b) the date of
commencement of such tender offer or exchange offer, as the case may be.
14. (a) REGISTRATION, LISTING, AND QUALIFICATION OF SHARES OF
Stock. Each Award shall be subject to the requirement that if at any time the
Committee shall determine that the registration, listing, or qualification of
the Shares covered thereby upon any securities exchange or under any Federal or
state law or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the granting of
such Award or the purchase, issuance, or transfer of Shares thereunder, no such
Award may be exercised unless and until such registration, listing,
qualification, consent, or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. The Company may require that
any person exercising an Option shall make such representations and agreements
and furnish such information as it deems appropriate to assure compliance with
the foregoing or any other applicable legal requirement.
(b) OTHER TERMS AND CONDITIONS. The Committee may impose such other
terms and conditions, not inconsistent with the terms hereof, on the grant or
exercise of Awards, as it deems advisable.
15. EFFECTIVENESS OF PLAN. The Plan will not be effective unless
approved by a majority of the votes cast by the stockholders of the Company at a
meeting of stockholders duly called and held for such purpose within twelve
months of adoption by the Board, and no Award granted hereunder shall be
exercisable prior to such approval.
16. AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN
(a) AMENDMENT, MODIFICATION, AND TERMINATION. Unless the Plan shall
theretofore have been terminated as hereinafter provided, the Plan shall
terminate on, and no
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Award shall be granted hereunder after, the earlier of (i) the close of business
on the next day preceding the tenth anniversary of the date of adoption of the
Plan by the Board of Directors or (ii) the date on which all Shares available
for issuance under the Plan shall have been issued pursuant to the exercise or
cancellation of Options granted under the Plan. If the date of termination is
determined under (i) above, then Options outstanding on such date shall continue
to have force and effect in accordance with the provisions of the instruments
evidencing such Options. At any time and from time to time, the Board may
terminate, amend, or modify the Plan. The Board is specifically authorized to
amend the Plan and take such other action as it deems necessary or appropriate
to comply with Code Section 162(m) and regulations issued thereunder, or with
Rule 16b-3. Such amendment or modification may be without shareholder approval
except to the extent that such approval is required by the Code, pursuant to the
rules under Section 16 of the Exchange Act, by any national securities exchange
or system on which the Stock is then listed or reported, by any regulatory body
having jurisdiction with respect thereto, or under any other applicable laws,
rules, or regulations. The Plan provisions that determine the amount, price and
timing of Option grants to Outside Directors may not be amended more than once
every six months, other than to comply with changes in the Code, the Employee
Retirement Income Security Act, or the rules thereunder, unless the Board
determines that Rule 16b-3 will not be rendered unavailable thereby.
(b) AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan, shall adversely affect any Award theretofore granted
under the Plan, without the written consent of the Participant.
17. WITHHOLDING
(a) TAX WITHHOLDING. The Company shall have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, an
amount sufficient to satisfy Federal, state, and local taxes (including the
Participant's FICA obligation) required by law to be withheld with respect to
any grant, exercise, or payment under or as a result of this Plan.
(b) STOCK WITHHOLDING. To the extent that the Code requires
withholding upon the exercise of Non-qualified Stock Options, or upon the lapse
of restrictions on Restricted Stock, or upon the occurrence of any other similar
taxable event, the Committee may permit
27
<PAGE>
or require, subject to any rules it deems appropriate, the withholding
requirement to be satisfied, in whole or in part, with or without the consent of
the Participant, by having the Company withhold Shares having a Fair Market
Value equal to the amount required to be withheld from the Shares issuable to
the Participant. The value of the Shares to be withheld shall be based on Fair
Market Value of the Shares on the date that the amount of tax to be withheld is
to be determined.
18. SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
19. GENERAL
(a) REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies as may be
required. No Shares shall be issued or transferred pursuant to this Plan unless
and until all legal requirements applicable to such issuance or transfer have,
in the opinion of counsel to the Company, been complied with. In connection
with any such issuance or transfer, the person acquiring the Shares shall, if
requested by the Company, give assurances satisfactory to counsel to the Company
in respect to such matters as the Company may deem desirable to assure
compliance with all applicable legal requirements.
(b) EFFECT OF PLAN. The establishment of the Plan shall not confer
upon any Participant any legal or equitable right against the Company, a
Subsidiary, a Parent, or the Committee, except as expressly provided in the
Plan. The Plan is does not intended to constitute a contract of employment
between the Company or any of its Subsidiaries or Affiliates and any
Participant. Participation in the Plan shall not give any Participant any right
to be retained in the service of the Company or any of its Subsidiaries or
Affiliates. No Award and no right under the Plan, contingent or otherwise,
shall be subject to any encumbrance, pledge or charge of any nature or shall be
assignable except that, under such rules and regulations as the Committee may
establish pursuant to the terms of the Plan, a beneficiary may be designated in
respect to the Award in the event of the death of the holder
28
<PAGE>
of the Award and except, also, that if the beneficiary shall be the executor or
administrator of the estate of the holder of the Award, any rights in respect to
such Award may be transferred to the person or persons or entity (including a
trust) entitled thereto under the will of the holder of such Award or under the
laws relating to descent and distribution.
(c) CERTAIN HARDSHIP DISTRIBUTION PROVISIONS. No Participant may
exercise an Award or engage in any other transaction with respect to an Award or
the Plan during the balance of the calendar year after the Participant receives
a hardship distribution from a plan of the Company or a related party within the
provisions of Code sections 414(b),(c), (m) or (o) containing a cash or deferred
arrangement under Section 401(k) of the Code, or during the following calendar
year, if such exercise or other transaction would constitute an elective
contribution or employee contribution to the Plan within the meaning of Treasury
Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4). The preceding sentence shall not
apply if and to the extent that the Committee determines it is not necessary to
qualify any such plan as a cash or deferred arrangement under Section 401(k) of
the Code.
(d) CREDITORS. The interests of any Participant under the Plan or
any Agreement shall not be subject to the claims of creditors and may not, in
any way, be assigned, alienated, or encumbered.
(e) GOVERNING LAW. The Plan, and all Agreements made pursuant
hereto, shall be governed, construed, and administered in accordance with and
governed by the laws of the State of New Jersey and the intention of the Company
that ISOs granted under the Plan qualify as such under Section 422 of the Code.
(f) SEVERABILITY. In the event that any provision of the Plan shall
be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.
(g) RULE 16B-3 REQUIREMENTS; CODE SECTION 162(m). Any provision of
the Plan to the contrary notwithstanding: (i) the Committee may impose such
conditions on any Award as the Committee may determine, on the advice of
counsel, are necessary or desirable to satisfy the provisions of Rule 16b-3;
(ii) transactions by and with respect to Section 16 Persons shall comply with
any applicable conditions of Rule 16b-3 unless the Committee determines
otherwise; (iii) transactions with respect to persons whose remuneration is
subject
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to the provisions of Section 162(m) of the Code shall conform to the
requirements of Section 162(m)(4)(C) of the Code unless the Committee determines
otherwise; (iv) the Plan is intended to give the Committee the authority to
grant Awards that qualify as performance-based compensation under Code Section
162(m)(4)(C) as well as Awards that do not so qualify; and (v) any provision of
the Plan that would prevent the Committee from exercising the authority referred
to in clause (iv) hereof or that would prevent an Award that the Committee
intends to qualify as performance-based compensation under Code Section
162(m)(4)(C) from so qualifying shall be administered, interpreted and construed
to carry out the Committee's intention, and any provision that cannot be so
administered, interpreted and construed shall to that extent be disregarded.
20. OTHER ACTIONS. Nothing contained in the Plan shall be construed
to limit the authority of the Company to exercise its corporate rights and
powers, including but not by way of limitation, the right of the Company to
grant or issue options for proper corporate purposes other than under the Plan
with respect to any employee or other person, firm, corporation, or association.
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EXHIBIT 5
OPINION OF COUNSEL
<PAGE>
BACHNER, TALLY, POLEVOY & MISHER
380 Madison Avenue
New York, New York 10017-2590
(212) 687-7000
`
April 20, 1995
AEP Industries Inc.
125 Phillips Avenue
South Hackensack, NJ 07606
Re: AEP INDUSTRIES INC. 1995 STOCK OPTION PLAN
Gentlemen:
We have served as your counsel in connection with the preparation of your
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, representing the
offering and issuance to certain persons under the AEP Industries Inc. 1995
Stock Option Plan (the "Plan") of an aggregate of 500,000 shares of your common
stock, $.01 par value (the "Common Stock").
We have examined such corporate records, documents and matters of law as
we have considered appropriate for the purposes of this opinion.
Based upon such examination and our participation in the preparation of
the Registration Statement, it is our opinion that the Common Stock, when issued
in the manner described in the Plan will be validly issued, fully paid and
non-assessable.
We consent to the reference made to our firm in the Registration Statement
and to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
BACHNER, TALLY, POLEVOY & MISHER
<PAGE>
EXHIBIT 23(a)
Consent of Arthur Andersen LLP
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our report dated
December 13, 1994, included in the AEP Industries Inc.'s Form 10-K for the year
ended October 31, 1994, and to all references made to our firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
April 19, 1995
<PAGE>
EXHIBIT 23(b)
CONSENT OF COUNSEL
The consent of Bachner, Tally, Polevoy & Misher is contained in their
opinion filed as Exhibit 23(b) to this Registration Statement.
