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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MICROLOG CORPORATION
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(Exact name of registrant as specified in its charter)
VIRGINIA 52-0901291
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(State or other jurisdiction (I.R.S. Employer Identification No.
of incorporation or organization)
20270 GOLDENROD LANE
GERMANTOWN, MARYLAND 20876
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(Address of Principal Executive Offices) (Zip Code)
MICROLOG CORPORATION
1995 STOCK OPTION PLAN,
AS AMENDED AND RESTATED
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(Full title of the plan)
STEPHEN D. SMITH
PRESIDENT
MICROLOG CORPORATION
20270 GOLDENROD LANE
GERMANTOWN, MARYLAND 20876
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(Name and address of agent for service)
Copy to:
STEVEN M. KAUFMAN, ESQ.
HOGAN & HARTSON L.L.P.
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004
(202) 637-5736
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE (1)
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<S> <C> <C> <C> <C>
COMMON STOCK,
PAR VALUE $.01 600,000(2) $1.53125 $918,750 $256
PER SHARE
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(1) Estimated pursuant to Rule 457(c) solely for purposes of calculating the
amount of the registration fee, based on the average of the high and low
prices per share of Microlog Corporation common stock, par value $.01 per
share, on July 28, 1999, as reported on The Nasdaq National Market.
(2) As permitted by Rule 429 promulgated under the Securities Act of 1933, as
amended, the prospectus related to this Registration Statement also covers
1,000,000 shares registered under Registration No. 333-07981 on Form S-8,
filed with the Securities and Exchange Commission on July 11, 1996. The
registration fee for such shares has previously been paid.
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<PAGE>
EXPLANATORY NOTE
As permitted by General Instruction E to the Form S-8, this Registration
Statement incorporates by reference the information contained in the
registration statement on Form S-8 filed by Microlog Corporation (the "Company")
with the Securities and Exchange Commission on July 11, 1996 (Registration No.
333-07981) relating to the Corporation's 1995 Stock Option Plan, as amended and
restated (the "Plan").
On May 12, 1999, the Board of Directors of the Company adopted an
amendment to the Plan, subject to stockholder approval, to increase by 600,000
the number of shares of common stock, par value $.01 per share (the "Common
Stock"), available for issuance thereunder to 1,600,000 shares from 1,000,000
shares. The Company's stockholders approved the amendment to the Plan at the
annual meeting of stockholders held on July 2, 1999. Accordingly, as amended,
the total number of shares of Common Stock available under the Plan is
1,600,000, of which 600,000 shares are being registered hereunder.
Except for the foregoing amendment, the Plan remains unchanged.
There are filed with the Registration Statement the following exhibits:
EXHIBIT
NUMBER DESCRIPTION
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4.1 Microlog Corporation 1995 Stock Option Plan, as amended and
restated.
4.2 Amended and Restated Articles of Incorporation of Registrant, as
amended (incorporated by reference to an Exhibit to Registration
Statement on Form S-1 (File No. 33-31710)).
4.3 Bylaws of the Registrant, as amended (incorporated by reference to
an Exhibit to Registration Statement on Form S-1 (File No.
33-31710)).
4.4 Form of Common Stock Certificate (incorporated by reference to an
Exhibit to Registration Statement on Form S-1 (File No. 33-31710)).
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of the
securities being registered.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Hogan & Hartson L.L.P. (included in its opinion filed as
Exhibit 5.1 hereto).
24.1 Power of Attorney (included on signature pages).
99.1 Article VII of the Bylaws of Microlog Corporation (incorporated by
reference to Exhibit 99.1 to Registration Statement on Form S-8
(File No. 333-07981)).
99.2 Sections 13.1-692.1, 13.1-697, 13.1-698, 13.1-702, 13.1-703 and
13.1-704 of the Virginia Stock Corporation Act.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Germantown, State of Maryland, on the 14th day of
July, 1999.
MICROLOG CORPORATION
By: /s/ Stephen D. Smith
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Stephen D. Smith
President, Chief Executive Officer and
Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen D. Smith, Steven R. Delmar and Joe J.
Lynn, jointly and severally, each in his own capacity, as true and lawful
attorneys-in-fact, with full power of substitution, for him and in his name,
place and stead, in any and all capacities, to sign any amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
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SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ Stephen D. Smith
- -------------------------- President, Chief Executive Officer July 14, 1999
Stephen D. Smith and Director
/s/ Steven R. Delmar
- -------------------------- Executive Vice President and Chief July 14, 1999
Steven R. Delmar Financial Officer (Principal
Accounting Officer)
/s/ Joe J. Lynn
- -------------------------- Director July 14, 1999
Joe J. Lynn
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<S> <C> <C>
/s/ David M. Gische Director July 14, 1999
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David M. Gische
/s/ Robert E. Gray, Jr. Director July 14, 1999
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Robert E. Gray, Jr.
/s/ David B. Levi Director July 14, 1999
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David B. Levi
Director July __, 1999
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John J. Sickler
</TABLE>
4
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION PAGE
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4.1 Microlog Corporation 1995 Stock Option Plan, as amended and
restated.
4.2 Amended and Restated Articles of Incorporation of Registrant,
as amended (incorporated by reference to an Exhibit to
Registration Statement on Form S-1 (File No. 33-31710)). *
4.3 Bylaws of the Registrant, as amended (incorporated by
reference to an Exhibit to Registration Statement on Form S-1
(File No. 33-31710)). 4.4 Form of Common Stock Certificate
(incorporated by reference to an Exhibit to Registration
Statement on Form S-1 (File No. 33-31710)). *
5.1 Opinion of Hogan & Hartson L.L.P. regarding the legality of
the securities being registered.
23.1 Consent of PriceWaterhouse LLP.
23.2 Consent of Hogan & Hartson L.L.P. (included in their opinion
filed as Exhibit 5.1 hereto).
24.1 Power of Attorney (included on signature pages).
99.1 Article VII of the Bylaws of Microlog Corporation
(incorporated by reference to Exhibit 99.1 to Registration
Statement on Form S-8 (File No. 333-07981)). *
99.2 Sections 13.1-692, 13.1-697, 13.1-698, 13.1-702, 13.1-703 and
13.1-704 of the Virginia Stock Corporation Act.
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* incorporated by reference
5
EXHIBIT 4.1
MICROLOG CORPORATION
1995 STOCK OPTION PLAN
Microlog Corporation (the "Corporation") sets forth herein the terms of
this 1995 Stock Option Plan (the "Plan") as follows:
1. PURPOSE
The Plan is intended to advance the interests of the Corporation by
providing eligible individuals (as designated pursuant to Section 4 below) with
an opportunity to acquire or increase a proprietary interest in the Corporation,
which thereby will create a stronger incentive to expend maximum effort for the
growth and success of the Corporation and its subsidiaries, and will encourage
such eligible individuals to remain in the employ of the Corporation or one or
more of its subsidiaries. Each stock option granted under the Plan (an "Option")
is intended to be an "incentive stock option" within the meaning of Section 422
of the Internal Revenue Code of 1986, or the corresponding provision of any
subsequently-enacted tax statute, as amended from time to time (the "Code")
("Incentive Stock Option"), except (i) to the extent that any such Option would
exceed the limitations set forth in Section 7 below; and (ii) for Options
specifically designated at the time of grant as not being "incentive stock
options."
2. ADMINISTRATION
(a) Board. The Plan shall be administered by the Board of Directors
of the Corporation (the "Board"), which shall have the full power and
authority to take all actions, and to make all determinations required or
provided for under the Plan or any Option granted or Option Agreement (as
defined in Section 8 below) entered into hereunder and all such other
actions and determinations not inconsistent with the specific terms and
provisions of the Plan deemed by the Board to be necessary or appropriate
to the administration of the Plan or any Option granted or Option
Agreement entered into hereunder. All such actions and determinations
shall be by the affirmative vote of a majority of the members of the Board
present at a meeting at which any issue relating to the Plan is properly
raised for consideration or without a meeting by written consent of the
Board executed in accordance with the Corporation's Certificate of
Incorporation and By-Laws, and with applicable law. The interpretation and
construction by the Board of any provision of the Plan or of any Option
granted or Option Agreement entered into hereunder shall be final and
conclusive.
(b) Committee. The Board may from time to time appoint a Stock
Option Committee (the "Committee") consisting of not less than two members
of the Board, none of whom shall be an officer or other salaried employee
of the Corporation or any of its subsidiaries, and each of whom shall
qualify in all respects as a "disinterested person" as defined in Rule
l6b-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Board, in its
sole discretion, may provide that the role of the Committee shall be
limited to making recommendations to the Board concerning any
determinations to be made and actions to be taken by the Board pursuant to
or with respect to the Plan, or the Board may delegate to the Committee
such powers and authorities related to the administration of the Plan, as
set forth in Section 2(a) above, as the Board shall determine, consistent
with the Certificate of Incorporation and By-Laws of the Corporation and
applicable law. The Board may remove members, add members, and fill
vacancies on the Committee from time to time, all in accordance with the
<PAGE>
Corporation's Certificate of Incorporation and By-Laws, and with
applicable law. The majority vote of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall
be the valid acts of the Committee.
(c) No Liability. No member of the Board or of the Committee shall
be liable for any action or determination made in good faith with respect
to the Plan or any Option granted or Option Agreement entered into
hereunder.
(d) Delegation to the Committee. In the event that the Plan or any
Option granted or Option Agreement entered into hereunder provides for any
action to be taken by or determination to be made by the Board, such
action may be taken by or such determination may be made by the Committee
if the power and authority to do so has been delegated to the Committee by
the Board as provided for in Section 2(b) above. Unless otherwise
expressly determined by the Board, any such action or determination by the
Committee shall be final and conclusive.
(e) Action by the Board. The Board may act under the Plan with
respect to any Option granted to or Option Agreement entered into with an
officer, director or shareholder of the Corporation who is subject to
Section 16 of the Exchange Act other than by, or in accordance with the
recommendations of, the Committee, constituted as set forth in Section
2(b) above, only if the Board satisfies the requirements of Rule 16b-3 of
the Securities and Exchange Commission under the Exchange Act relating to
"disinterested administration."
3. STOCK
The stock that may be issued pursuant to Options granted under the Plan
shall be shares of Common Stock, par value $.01 per share, of the Corporation
(the "Stock"), which shares may be treasury shares or authorized but unissued
shares. The number of shares of Stock that may be issued pursuant to Options
granted under the Plan shall not exceed in the aggregate 1,600,000 shares. The
foregoing number of shares are subject to adjustment as provided in Section 17
below. If any Option expires, terminates, or is terminated or canceled for any
reason prior to exercise in full, the shares of Stock that were subject to the
unexercised portion of such Option shall be available for future Options granted
under the Plan.
4. ELIGIBILITY
Options may be granted under the Plan to any employee of the Corporation
or any "subsidiary corporation" (a "Subsidiary") thereof within the meaning of
Section 424(f) of the Code (including any such employee who is an officer or
director of the Corporation or any Subsidiary) as the Board shall determine and
designate from time to time prior to expiration or termination of the Plan. The
maximum number of shares of Stock subject to Options that may be granted under
the Plan to any executive officer or other employee of the Corporation or any
Subsidiary is 500,000 shares (subject to adjustment as provided in Section 17
hereof). An individual may hold more than one Option, subject to such
restrictions as are provided herein.
5. EFFECTIVE DATE AND TERM OF THE PLAN
(a) Effective Date. The Plan shall be effective as of the date of
adoption by the Board, which date is set forth below, subject to approval
of the Plan within one year of such effective date by the affirmative
votes of the holders of a majority of the Stock of the Corporation
present, or represented, and entitled to vote at a meeting duly held in
accordance with applicable law; provided, however, that upon approval of
the Plan by the shareholders of the Corporation as set
<PAGE>
forth above, all Options granted under the Plan on or after the effective
date shall be fully effective as if the shareholders of the Corporation
had approved the Plan on the effective date. If the shareholders fail to
approve the Plan within one year of such effective date, any options
granted hereunder shall be null and void and of no effect.
(b) Term. The Plan shall terminate on the date ten years from the
effective date.
6. GRANT OF OPTIONS
Subject to the terms and conditions of the Plan, the Board may, at any
time and from time to time, prior to the date of termination of the Plan, grant
to such eligible individuals as the Board may determine ("Optionees"), Options
to purchase such number of shares of the Stock on such terms and conditions as
the Board may determine, including any terms or conditions which may be
necessary to qualify such Options as Incentive Stock Options. The date on which
the Board approves the grant of an Option (or such later date as is specified by
the Board) shall be considered the date on which such Option is granted.
7. LIMITATION ON INCENTIVE STOCK OPTIONS
An Option (other than an Option described in exception (ii) of Section 1)
shall constitute an Incentive Stock Option to the extent that the aggregate fair
market value (determined at the time the option is granted) of the stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Optionee during any calendar year (under the Plan and all other plans of the
Optionee's employer corporation and its parent and subsidiary corporations
within the meaning of Section 422(d) of the Code) does not exceed $100,000. This
limitation shall be applied by taking Options into account in the order in which
they were granted.
8. OPTION AGREEMENTS
All Options granted pursuant to the Plan shall be evidenced by written
agreements ("Option Agreements"), to be executed by the Corporation and by the
Optionee, in such form or forms as the Board shall from time to time determine.
Option Agreements covering Options granted from time to time or at the same time
need not contain similar provisions; provided, however, that all such Option
Agreements shall comply with all terms of the Plan.
9. OPTION PRICE
The purchase price of each share of the Stock subject to an Option (the
"Option Price") shall be fixed by the Board and stated in each Option Agreement,
except that the Option Price of a share of Stock subject to an Option that is
intended to constitute an Incentive Stock Option shall be not less than 100
percent of the fair market value of a share of the Stock on the date the Option
is granted (as determined in good faith by the Board); provided, however, that
in the event the Optionee would otherwise be ineligible to receive an Incentive
Stock Option by reason of the provisions of Sections 422(b)(6) and 424(d) of the
Code (relating to stock ownership of more than ten percent), the Option Price of
an Option that is intended to be an Incentive Stock Option shall be not less
than 110 percent of the fair market value of a share of Stock at the time such
Option is granted. In the event that the Stock is listed on an established
national or regional stock exchange, is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System, or is publicly
traded on an established securities market, in determining the fair market
<PAGE>
value of the Stock, the Board shall use the closing price of the Stock on such
exchange or System or in such market (the highest such closing price if there is
more that one such exchange or market) on the trading date immediately before
the Option is granted (or, if there is no such closing price, then the Board
shall use the mean between the high and low prices on such date), or, if no sale
of the Stock had been made on such day, on the next preceding day on which any
such sale shall have been made.
10. TERM AND EXERCISE OF OPTIONS
(a) Term. Each Option granted under the Plan shall terminate and all
rights to purchase shares thereunder shall cease upon the expiration of
ten years from the date such Option is granted, or on such date prior
thereto as may be fixed by the Board and stated in the Option Agreement
relating to such Option; provided, however, that in the event the Optionee
would otherwise be ineligible to receive an Incentive Stock Option by
reason of the provisions of Sections 422(b)(6) and 424(d) of the Code
(relating to stock ownership of more than ten percent), an Option granted
to such Optionee that is intended to be an Incentive Stock Option shall in
no event be exercisable after the expiration of five years from the date
it is granted.
(b) Option Period and Limitations on Exercise. Each Option shall be
exercisable, in whole or in part, at any time and from time to time, over
a period commencing on or after the date of grant and ending upon the
expiration or termination of the Option, as the Board shall determine and
set forth in the Option Agreement relating to such Option. Without
limiting the foregoing, the Board, subject to the terms and conditions of
the Plan, may in its sole discretion provide that an Option may not be
exercised in whole or in part for any period or periods of time during
which such Option is outstanding; provided, however, that any such
limitation on the exercise of an Option contained in any Option Agreement
may be rescinded, modified or waived by the Board, in its sole discretion,
at any time and from time to time after the date of grant of such Option,
so as to accelerate the time at which the Option may be exercised. Each
Option shall be exercisable, in whole or in part, at any time and from
time to time, over a period commencing on the date of grant and ending
upon the expiration of the Option. Notwithstanding any other provision of
the Plan, no Option granted to an Optionee under the Plan shall be
exercisable in whole or in part prior to the date the Plan is approved by
the shareholders of the Corporation as provided in Section 5 above.
(c) Method of Exercise. An Option that is exercisable hereunder may
be exercised by delivery to the Corporation on any business day, at its
principal office, addressed to the attention of the Committee, of written
notice of exercise, which notice shall specify the number of shares with
respect to which the Option is being exercised. The minimum number of
shares of Stock with respect to which an Option may be exercised, in whole
or in part, at any time shall be the lesser of 100 shares or the maximum
number of shares available for purchase under the Option at the time of
exercise. Except as provided below, payment in full of the Option Price of
the shares for which the Option is being exercised shall accompany the
written notice of exercise of the Option and shall be made either (i) in
cash or in cash equivalents; (ii) through the tender to the Corporation of
shares of Stock, which shares shall be valued, for purposes of determining
the extent to which the Option Price has been paid thereby, at their fair
market value (determined in the manner described in Section 9 above) on
the date of exercise; or (iii) by a combination of the methods described
in (i) and (ii); provided, however, that the Board may in its discretion
impose and set forth in the Option Agreement such limitations or
prohibitions on the use of shares of Stock to exercise Options as it deems
appropriate. If shares of Stock that are acquired by the Optionee through
exercise of an Option or an option issued under another stock option plan
maintained by the Corporation are surrendered in payment of the Option
Price, the Stock surrendered in payment must have been (i) held by the
Optionee for more than six months at the time of surrender, or (ii)
acquired under an Option granted not less than six months prior to the
time of surrender. Unless the Board shall provide otherwise in the case of
an Option Agreement, payment in full of the Option Price need not
<PAGE>
accompany the written notice of exercise provided the notice of exercise
directs that the Stock certificate or certificates for the shares for
which the Option is exercised be delivered to a licensed broker acceptable
to the Corporation as the agent for the individual exercising the Option
and, at the time such Stock certificate or certificates are delivered, the
broker tenders to the Corporation cash (or cash equivalents acceptable to
the Corporation) equal to the Option Price for the shares of Stock
purchased pursuant to the exercise of the Option plus the amount (if any)
of federal and other taxes which the Corporation may, in its judgment, be
required to withhold with respect to the exercise of the Option. An
attempt to exercise any Option granted hereunder other than as set forth
above shall be invalid and of no force and effect. Promptly after the
exercise of an Option and the payment in full of the Option Price of the
shares of Stock covered thereby, the individual exercising the Option
shall be entitled to the issuance of a Stock certificate or certificates
evidencing his ownership of such shares. A separate Stock certificate or
certificates shall be issued for any shares purchased pursuant to the
exercise of an Option which is an Incentive Stock Option, which
certificate or certificates shall not include any shares which were
purchased pursuant to the exercise of an Option which is not an Incentive
Stock Option. An individual holding or exercising an Option shall have
none of the rights of a shareholder until the shares of Stock covered
thereby are fully paid and issued to him and, except as provided in
Section 17 below, no adjustment shall be made for dividends or other
rights for which the record date is prior to the date of such issuance.
(d) Restrictions on Transfer of Stock. If an Option is exercised
prior to the date that is six months from the later of (i) the date of
grant of the Option or (ii) the date of shareholder approval of the Plan
and the individual exercising the Option is a reporting person under
Section 16(a) of the Exchange Act, then such certificate or certificates
shall bear a legend restricting the transfer of the Stock covered thereby
until the expiration of six months from the later of the date specified in
clause (i) above or the date specified in clause (ii) above.
11. TRANSFERABILITY OF OPTIONS
During the lifetime of an Optionee to whom an Option is granted, only such
Optionee (or, in the event of legal incapacity or incompetence, the Optionee's
guardian or legal representative) may exercise the Option. No Option shall be
assignable or transferable by the Optionee to whom it is granted, other than by
will or the laws of descent and distribution.
12. TERMINATION OF EMPLOYMENT
Upon the termination of the employment of an Optionee with the Corporation
or a Subsidiary, other than by reason of the death or "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, any Option granted to an Optionee pursuant to the Plan shall
terminate, and such Optionee shall have no further right to purchase shares of
Stock pursuant to such Option; provided, however, that in the event that such
termination of employment is by reason of the Optionee's retirement in
accordance with the normal retirement policies of the Corporation or a
Subsidiary, as the case may be, then such Optionee shall have the right, at any
time within three months after the date of such retirement (or such shorter
period as may be specified in an Option Agreement), and prior to termination of
the Option pursuant to Section 10(a) above, to exercise, in whole or in part,
any Option held by such Optionee at the date of such retirement, whether or not
such Option was exercisable immediately before such retirement; provided,
further, that the Board may provide, by inclusion of appropriate language in any
Option Agreement, that the Optionee may (subject to the general limitations on
exercise set forth in Section 10(b) above), in the event of termination of
employment of the Optionee with the Corporation or a Subsidiary, exercise an
Option, in whole or in part, at any time subsequent to such termination of
employment and prior to termination of the Option pursuant to Section 10(a)
above, either subject to or without regard to any installment limitation on
exercise imposed pursuant to Section 10(b)
<PAGE>
above. Whether a termination of employment is to be considered by reason of
retirement in accordance with the normal retirement policies of the Corporation
or a Subsidiary, as the case may be, and whether a leave of absence or leave on
military or government service shall constitute a termination of employment for
purposes of the Plan shall be determined by the Board, which determination shall
be final and conclusive. For purposes of the Plan, a termination of employment
with the Corporation or a Subsidiary shall not be deemed to occur if the
Optionee is immediately thereafter employed by the Corporation or any
Subsidiary.
13. RIGHTS IN THE EVENT OF DEATH, DISABILITY OR CHANGE IN CONTROL
(a) Death of an Employee. If an Optionee dies while in the employ of
the Corporation or a Subsidiary or within the period following the
termination of employment during which the Option is exercisable under
Section 12 above or Section 13(b) below, the executors or administrators
or legatees or distributees of such Optionee's estate shall have the right
(subject to the general limitations on exercise set forth in Section 10(b)
above), at any time within one year after the date of such Optionee's
death and prior to termination of the Option pursuant to Section 10(a)
above (or such shorter period as may be specified in an Option Agreement),
to exercise any Option held by such Optionee at the date of such
Optionee's death, whether or not such Option was exercisable immediately
prior to such Optionee's death; provided, however, that the Board may
provide by inclusion of appropriate language in any Option Agreement that,
in the event of the death of the Optionee, the executors or administrators
or legatees or distributees of such Optionee's estate may exercise an
Option (subject to the general limitations on exercise set forth in
Section 10(b) above), in whole or in part, at any time subsequent to such
Optionee's death and prior to termination of the Option pursuant to
Section 10(a) above, either subject to or without regard to any
installment limitation on exercise imposed pursuant to Section 10(b)
above.
(b) Disability of an Employee. If an Optionee terminates employment
with the Corporation or a Subsidiary by reason of the "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, then such Optionee shall have the right (subject to the general
limitations on exercise set forth in Section 10(b) above), at any time
within one year after such termination of employment and prior to
termination of the Option pursuant to Section 10(a) above (or such shorter
period as may be specified in an Option Agreement), to exercise, in whole
or in part, any Option held by such Optionee at the date of such
termination of employment, whether or not such Option was exercisable
immediately prior to such termination of employment; provided, however,
that the Board may provide, by inclusion of appropriate language in any
Option Agreement, that the Optionee may (subject to the general
limitations on exercise set forth in Section 10(b) above), in the event of
the termination of employment of the Optionee with the Corporation or a
Subsidiary by reason of the "permanent and total disability" (within the
meaning of Section 22(e)(3) of the Code) of such Optionee, exercise an
Option in whole or in part, at any time subsequent to such termination of
employment and prior to termination of the Option pursuant to Section
10(a) above, either subject to or without regard to any installment
limitation on exercise imposed pursuant to Section 10(b) above. Whether a
termination of employment is to be considered by reason of "permanent and
total disability" for purposes of this Plan shall be determined by the
Board, which determination shall be final and conclusive.
(c) Change in Control. Except as otherwise provided in Section 17(f)
below, in the event of the occurrence of a Change in Control (as defined
below) or in the event that the Board, in its sole and absolute
discretion, determines that there exists a threat of a Change in Control,
each Option issued before the date of such occurrence or such
determination, which Option has not theretofore terminated as provided in
Section 10(a) above, shall immediately become exercisable in full as of
the date of such occurrence or such determination, whether or not such
Option was otherwise exercisable immediately before such occurrence or
such determination. For
<PAGE>
purposes of this Plan, a "Change in Control" shall be deemed to occur if,
at any time, any person (including, without limitation, any individual,
sole proprietorship, partnership, trust, corporation, association, joint
venture, pool, syndicate or other entity, whether or not incorporated), or
any two or more persons acting as a syndicate or group and thereby deemed
collectively to be a "person" within the meaning of Section 13(d)(3) of
the Exchange Act, shall acquire shares of stock of the Corporation, which
acquisition results in such person or persons owning in the aggregate
shares of stock of the Company possessing 20 percent or more of the total
combined voting power of all classes of stock of the Corporation, unless
prior to such acquisition the full Board shall by at least a two-thirds
vote have specifically approved such acquisition and determined that such
acquisition shall not constitute a Change in Control for purposes of the
Plan. Whether there exists a threat of a Change in Control for purposes of
this Plan shall be determined by the Board, which determination shall be
final and conclusive.
14. USE OF PROCEEDS
The proceeds received by the Corporation from the sale of Stock pursuant
to Options granted under the Plan shall constitute general funds of the
Corporation.
15. REQUIREMENTS OF LAW
(a) Violations of Law. The Corporation shall not be required to sell
or issue any shares of Stock under any Option if the sale or issuance of
such shares would constitute a violation by the individual exercising the
Option or the Corporation of any provisions of any law or regulation of
any governmental authority, including without limitation any federal or
state securities laws or regulations. Specifically in connection with the
Securities Act of 1933 (as now in effect or as hereafter amended), upon
exercise of any Option, unless a registration statement under such Act is
in effect with respect to the shares of Stock covered by such Option, the
Company shall not be required to sell or issue such shares unless the
Board has received evidence satisfactory to it that the holder of such
Option may acquire such shares pursuant to an exemption from registration
under such Act. Any determination in this connection by the Board shall be
final, binding, and conclusive. The Company may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the
Securities Act of 1933 (as now in effect or as hereafter amended). The
Corporation shall not be obligated to take any affirmative action in order
to cause the exercise of an Option or the issuance of shares pursuant
thereto to comply with any law or regulation of any governmental
authority. As to any jurisdiction that expressly imposes the requirement
that an Option shall not be exercisable unless and until the shares of
Stock covered by such Option are registered or are subject to an available
exemption from registration, the exercise of such Option (under
circumstances in which the laws of such jurisdiction apply) shall be
deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.
(b) Compliance with Rule 16b-3. The intent of this Plan is to
qualify for the exemption provided by Rule 16b-3 under the Exchange Act.
To the extent any provision of the Plan does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative to the extent
permitted by law and deemed advisable by the Board and shall not affect
the validity of the Plan. In the event Rule 16b-3 is revised or replaced,
the Board, or the Committee acting on behalf of the Board, may exercise
discretion to modify this Plan in any respect necessary to satisfy the
requirements of the revised exemption or its replacement.
<PAGE>
16. AMENDMENT AND TERMINATION OF THE PLAN
The Board may, at any time and from time to time, amend, suspend or
terminate the Plan as to any shares of Stock as to which Options have not been
granted; provided, however, that no amendment by the Board shall, without
approval by a majority of the votes present and entitled to vote at a duly held
meeting of the shareholders of the Corporation at which a quorum representing a
majority of all outstanding voting stock is, either in person or by proxy,
present and voting on the amendment, or by written consent in accordance with
applicable state law and the Certificate of Incorporation and By-Laws of the
Corporation, materially increase the benefits accruing to participants under the
Plan, change the requirements as to eligibility to receive Options or increase
the maximum number of shares of Stock in the aggregate that may be sold pursuant
to Options granted under the Plan (except as permitted under Section 17 hereof).
Except as permitted under Section 17 hereof, no amendment, suspension or
termination of the Plan shall, without the consent of the holder of the Option,
alter or impair rights or obligations under any Option theretofore granted under
the Plan.
17. EFFECT OF CHANGES IN CAPITALIZATION
(a) Changes in Stock. If the outstanding shares of Stock are
increased or decreased or changed into or exchanged for a different number
or kind of shares or other securities of the Corporation by reason of any
recapitalization, reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Corporation,
occurring after the effective date of the Plan, the number and kinds of
shares for the purchase of which Options may be granted under the Plan
shall be adjusted proportionately and accordingly by the Corporation. In
addition, the number and kind of shares for which Options are outstanding
shall be adjusted proportionately and accordingly so that the
proportionate interest of the holder of the Option immediately following
such event shall, to the extent practicable, be the same as immediately
prior to such event. Any such adjustment in outstanding Options shall not
change the aggregate Option Price payable with respect to shares subject
to the unexercised portion of the Option outstanding but shall include a
corresponding proportionate adjustment in the Option Price per share.
(b) Reorganization in Which the Corporation Is the Surviving
Corporation. Subject to Subsection (c) hereof, if the Corporation shall be
the surviving corporation in any reorganization, merger, or consolidation
of the Corporation with one or more other corporations, any Option
theretofore granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to
such Option would have been entitled immediately following such
reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the Option Price per share so that the
aggregate Option Price thereafter shall be the same as the aggregate
Option Price of the shares remaining subject to the Option immediately
prior to such reorganization, merger, or consolidation.
(c) Reorganization in Which the Corporation Is Not the Surviving
Corporation or Sale of Assets or Stock. Upon the dissolution or
liquidation of the Corporation, or upon a merger, consolidation,
reorganization or other business combination of the Corporation with one
or more other entities in which the Corporation is not the surviving
entity, or upon a sale of all or substantially all of the assets of the
Corporation to another entity, or upon any transaction (including, without
limitation, a merger or reorganization in which the Corporation is the
surviving corporation) approved by the Board which results in any person
or entity (or persons or entities acting as a group or otherwise in
concert) owning 80 percent or more of the combined voting power of all
classes of stock of the Corporation, the Plan and all Options outstanding
hereunder shall terminate, except to the extent provision is made in
writing in connection with such transaction for
<PAGE>
the continuation of the Plan and/or the assumption of the Options
theretofore granted, or for the substitution for such Options of new
options covering the stock of a successor entity, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and
kinds of shares and exercise prices, in which event the Plan and Options
theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan, each
individual holding an Option shall have the right (subject to the general
limitations on exercise set forth in Section 10(b) above and except as
otherwise specifically provided in the Option Agreement relating to such
Option), immediately prior to the occurrence of such termination and
during such period occurring prior to such termination as the Board in its
sole discretion shall determine and designate, to exercise such Option in
whole or in part, whether or not such Option was otherwise exercisable at
the time such termination occurs and without regard to any installment
limitation on exercise imposed pursuant to Section 10(b) above. The Board
shall send written notice of an event that will result in such a
termination to all individuals who hold Options not later than the time at
which the Corporation gives notice thereof to its shareholders.
(d) Adjustments. Adjustments under this Section 17 related to stock
or securities of the Corporation shall be made by the Board, whose
determination in that respect shall be final, binding, and conclusive. No
fractional shares of Stock or units of other securities shall be issued
pursuant to any such adjustment, and any fractions resulting from any such
adjustment shall be eliminated in each case by rounding downward to the
nearest whole share or unit.
(e) No Limitations on Corporation. The grant of an Option pursuant
to the Plan shall not affect or limit in any way the right or power of the
Corporation to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, consolidate,
dissolve or liquidate, or to sell or transfer all or any part of its
business or assets.
(f) Parachute Payments. Notwithstanding any other provision of the
Plan, if any payment, grant or acceleration of exercisability of an Option
or other benefit to an Optionee under this Plan (a "Plan Benefit") would
otherwise constitute a "parachute payment" within the meaning of Code
Section 280G(b)(2) and if, after reduction for any applicable federal
excise tax imposed by Code Section 4999 (the "Excise Tax") and federal
income tax imposed by the Code, the Optionee's net proceeds from receiving
the Plan Benefit would be less than the amount of the Optionee's net
proceeds resulting from the receipt of the Reduced Amount described below,
after reduction for federal income taxes, then the Optionee's Plan Benefit
shall be limited to the Reduced Amount. The "Reduced Amount" shall be the
largest Plan Benefit that could be received by the Optionee such that no
Plan Benefit and no other payment or other benefit under any other
agreement, contract, or understanding heretofore or hereafter entered into
between the Optionee and the Corporation or any Subsidiary (the "Other
Agreements") and any formal or informal plan or other arrangement
heretofore or hereafter adopted by the Corporation or any Subsidiary for
the direct or indirect provision of compensation to the Optionee
(including groups or classes of participants or beneficiaries of which the
Optionee is a member), whether or not such compensation is deferred, is in
cash, or is in the form of a benefit to or for the Optionee (a "Benefit
Plan") would be subject to the Excise Tax. In the event that the Plan
Benefit to the Optionee shall be limited to the Reduced Amount, then the
Optionee shall have the right, in the Optionee's sole discretion, to
designate the Plan Benefit and those payments or benefits under any Other
Agreements and any Benefit Plans that should be reduced or eliminated so
as to avoid having the Plan Benefit be subject to the Excise Tax.
18. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Option granted or Option Agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ of the Corporation or any
Subsidiary, or to interfere in any way with the right and authority
<PAGE>
of the Corporation or any Subsidiary either to increase or decrease the
compensation of any individual at any time, or to terminate any employment or
other relationship between any individual and the Corporation or any Subsidiary.
19. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan nor the submission of the Plan to the
shareholders of the Corporation for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or individuals) as the Board in its discretion determines desirable,
including, without limitation, the granting of stock options or stock
appreciation rights otherwise than under the Plan.
* * *
This Plan was (i) duly adopted and approved by the Board of Directors of
the Corporation by resolution at a meeting held on the 28th day of September,
1995, (ii) amended by the Board of Directors of the Corporation by resolution at
a meeting held on the 20th day of December, 1995 and (iii) amended, subject to
stockholder approval, by the Board of Directors of the Corporation by resolution
at a meeting held on the 12th day of May, 1999.
/s/ Arlene A. France
----------------------------------
Secretary of the Corporation
This Plan was duly approved by the shareholders of the Corporation at a
meeting held on the 26th day of March, 1996 and an amendment to the Plan was
duly approved by the shareholders of the Corporation at a meeting held on the
2nd day of July, 1999.
/s/ Arlene A. France
----------------------------------
Secretary of the Corporation
EXHIBIT 5.1
August 3, 1999
Board of Directors
Microlog Corporation
20270 Goldenrod Lane
Germantown, Maryland 20874
Dear Gentlemen:
This firm has acted as special counsel to Microlog Corporation (the
"Company"), a Virginia corporation, in connection with its registration,
pursuant to a registration statement on Form S-8 filed on or about the date
hereof (the "Registration Statement"), of 600,000 shares (the "Shares") of
common stock, par value $.01 per share of Microlog Corporation ("Common Stock"),
issuable upon the exercise of options granted under the Microlog Corporation
1995 Stock Option Plan, as amended and restated (the "Plan"). This letter is
furnished to you pursuant to the requirements of Item 601(b)(5) of Regulation
S-K, 17 C.F.R. ss. 229.601(b)(5), in connection with such registration.
For purposes of this opinion, we have examined copies of the following
documents:
1. An executed copy of the Registration Statement.
2. A copy of the Plan, as certified on the date hereof by the Secretary
of the Company as then being complete, accurate and in effect.
3. The Amended and Restated Articles of Incorporation of the Company, as
amended, as certified on July 21, 1999 by the Commonwealth of
Virginia State Corporation Commission and on the date hereof by the
Corporate Secretary of the Company as then being complete, accurate
and in effect.
4. The By-laws of the Company, as amended, as certified on the date
hereof by the Secretary of the Company as then being complete,
accurate and in effect.
5. Resolutions of the Board of Directors of the Company adopted at
meetings held on September 28, 1995, December 20, 1995, May 12, 1999
and July 14, 1999, all of the foregoing resolutions as certified by
the Secretary of the Company on the date hereof as then being
complete, accurate and in effect.
6. Resolutions of the shareholders of the Company adopted at meetings
held on March 26, 1996 and July 2, 1999, as certified by the
Secretary of the Company on the date hereof as then being complete,
accurate and in effect.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents, and the conformity to authentic original documents of
all documents submitted to us as copies (including telecopies). This opinion
letter is given, and all statements herein are made, in the context of the
foregoing.
<PAGE>
This opinion letter is based as to matters of law solely on the corporate
law of the Commonwealth of Virginia. We express no opinion herein as to any
other laws, statutes, ordinances, rules, or regulations.
Based upon, subject to and limited by the foregoing, we are of the opinion
that following (i) effectiveness of the Registration Statement, (ii) issuance of
the Shares pursuant to the terms of the Plan, and (iii) receipt by the Company
of the consideration for the Shares specified in the resolutions of the Board of
Directors or a committee of the Board of Directors authorizing the issuance
thereof, the Shares will be validly issued, fully paid, and nonassessable.
This opinion letter has been prepared for your use in connection with the
Registration Statement and speaks as of the date hereof. We assume no obligation
to advise you of any changes in the foregoing subsequent to the delivery of this
opinion letter.
We hereby consent to the filing of this opinion letter as Exhibit 5.1 to
the Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus constituting a part of the Registration
Statement. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Securities Act of 1933, as amended.
Very truly yours,
HOGAN & HARTSON L.L.P.
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated March 17, 1999 appearing on page 30 of
the 1998 Annual Report to Shareholders of Microlog Corporation, which is
incorporated by reference in Microlog Corporation's Annual Report on Form 10-K
for the year ended October 31, 1999. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules, which appears on
page F-2 of such Annual Report on Form 10-K.
/s/ PriceWaterhouseCoopers LLP
- ------------------------------
PriceWaterhouseCoopers LLP
McLean, Virginia
August 3, 1999
EXHIBIT 99.2
Sections 13.1-692, 13.1-697, 13.1-698, 13.1-702, 13.1-703 and 13.1-704 of
the Virginia Stock Corporation Act, which governs the Registrant. Such sections
provide as follows:
13.1-692 LIABILITY FOR UNLAWFUL DISTRIBUTIONS.-A. Unless he complies with
the applicable standards of conduct described in ss. 13.1-690, a director who
votes for or assents to a distribution made in violation of this chapter or the
articleS of incorporation is personally liable to the corporation and its
creditors for the amount of the distribution that exceeds what could have been
distributed without violating this chapter or the articles of incorporation.
B. A director held liable for an unlawful distribution under subsection A
of this section is entitled to contribution:
1. From every other director who voted for or assented to the distribution
without complying with the applicable standards of conduct described in ss.
13.1-690; and
2. From the shareholders who received the unlawful distribution in
proportion to the amounts of such unlawful distribution received by them
respectively.
C. No suit shall be brought against any director for any liability imposed
by this section except within two years after the right of action shall accrue.
13.1-697 AUTHORITY TO INDEMNIFY.-A. Except as provided in subsection D of
this section, a corporation may indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in the
proceeding if:
1. He conducted himself in good faith; and
2. He believed:
a. In the case of conduct in his official capacity with the corporation,
that his conduct was in its best interests; and
b. In all other cases, that his conduct was at least not opposed to its
best interests; and 3. In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful. B. A director's conduct
with respect to an employee benefit plan for a purpose he believed to be in the
interests of the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subdivision 2b of subsection A of this section.
C. The termination of a proceeding by judgment, order, settlement or
conviction is not, of itself, determinative that the director did not meet the
standard of conduct described in this section.
D. A corporation may not indemnify a director under this section:
1. In connection with a proceeding by or in the right of the corporation
in which the director was adjudged liable to the corporation; or
2. In connection with any other proceeding charging improper personal
benefit to him, whether or not involving action in his official capacity, in
which he was adjudged liable on the basis that personal benefit was improperly
received by him.
E. Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
13.1-698 MANDATORY INDEMNIFICATION.-Unless limited by its articles of
incorporation, a corporation shall indemnify a director who entirely prevails in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding.
13.1-702 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.- Unless
limited by a corporation's articles of incorporation,
1. An officer of the corporation is entitled to mandatory indemnification
under ss. 13.1-698, and is entitled to applY for court-ordered indemnification
under ss. 13.1-700.1, in each case to the same extent as a director; and
2. The corporation may indemnify and advance expenses under this article
to an officer, employee, or agent of the corporation to the same extent as to a
director.
13.1-703 INSURANCE.-A corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, or agent of
the corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, or agent,
whether or not the corporation would have power to indemnify him against the
same liability under ss. 13.1-697 oR ss. 13.1-698.
13.1-704 APPLICATION OF ARTICLE.-A. Unless the articles of incorporation
or bylaws expressly provide otherwise, any authorization of indemnification in
the articles of incorporation or bylaws shall not be deemed to prevent the
corporation from providing the indemnity permitted or mandated by this article.
B. Any corporation shall have power to make any further indemnity,
including indemnity with respect to a proceeding by or in the right of the
corporation, and to make additional provision for advances and reimbursement of
expenses, to any director, officer, employee or agent that may be authorized by
the articles of incorporation or any bylaw made by the shareholders or any
resolution adopted, before or after the event, by the shareholders, except an
indemnity against (i) his willful misconduct, or (ii) a knowing violation of the
criminal law. Unless the articles of incorporation, or any such bylaw or
resolution expressly provide otherwise, any determination as to the right to any
further indemnity shall be made in accordance with ss. 13.1-701B. Each such
indemnity may continue as to a person who has ceased to have the capacity
referred to above and maY inure to the benefit of the heirs, executors and
administrators of such a person.
C. No right provided to any person pursuant to this section may be reduced
or eliminated by any amendment of the articles of incorporation or bylaws with
respect to any act or omission occurring before such amendment.
