<PAGE>
As filed with the Securities and Exchange Commission on April 28, 1997
Registration No. 333-________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ELTRAX SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1484525
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10901 RED CIRCLE DRIVE, SUITE 345 55343
MINNETONKA, MINNESOTA (Zip Code)
(Address of Principal Executive Offices)
-------------------------------------------
ELTRAX SYSTEMS, INC.
1995 STOCK INCENTIVE PLAN
AND
ELTRAX SYSTEMS, INC.
1997 STOCK INCENTIVE PLAN
(Full titles of the plans)
-------------------------------------------
MACK V. TRAYNOR, III
ELTRAX SYSTEMS, INC.
10901 RED CIRCLE DRIVE, SUITE 345
MINNETONKA, MN 55343891
(Name and address of agent for service)
(612) 945-0833
(Telephone number, including area code, of agent for service)
-------------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
IMMEDIATELY UPON THE FILING OF THIS REGISTRATION STATEMENT
-------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING AMOUNT OF
REGISTERED (1) (2) PRICE (2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value
$.01 per share 1,893,202 shares $6.0625 $11,477,537.13 $3,479
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933, as
amended, this Registration Statement includes an indeterminate number of
additional shares as may be issuable as a result of anti-dilution provisions
described herein.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee and calculated as follows: (i) with respect to options to
purchase shares previously granted under the plans, on the basis of the
weighted average exercise price of such option grants and (ii) with respect
to options and incentive awards to be granted under the plans, on the basis
of the average between the bid and asked prices of the Registrant's Common
Stock on April 21, 1997 on the Nasdaq SmallCap Market.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED
IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Eltrax Systems, Inc. (the "Company")
with the Securities and Exchange Commission (the "Commission") are incorporated
by reference in this Registration Statement: (1) the Company's Transition
Report on Form 10-KSB for the nine month transition period ended December 31,
1996; (2) the Company's Proxy Statement dated April 8, 1997 for the Company's
Annual Meeting of Shareholders held on May 15, 1997; (3) the Company's Current
Report on Form 8-K dated February 12, 1997; (4) all other reports filed by the
Company pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), since December 31, 1996; and (5) the
description of the Company's Common Stock contained in its Registration
Statement on Form 8-A dated August 24, 1993, including any amendments or reports
filed for the purpose of updating such description (File No. 0-22190).
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all shares of Common Stock offered pursuant to this
Registration Statement have been sold or that deregisters all shares of Common
Stock 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 of
such documents.
The financial statements of the Company incorporated by reference in
this Registration Statement have been audited by Coopers & Lybrand L.L.P.,
independent certified public accountants, for the periods indicated in such
firm's report thereon, which report is included in the Company's Transition
Report on Form 10-KSB for the nine month transition period ended December 31,
1996. The financial statements audited by Coopers & Lybrand L.L.P. have been
incorporated herein by reference in reliance on such firm's report given on
their authority as experts in accounting and auditing. To the extent that
Coopers & Lybrand L.L.P. audits and reports on the financial statements of the
Company issued at future dates, and consents to the use of their reports
thereon, such financial statements will also be incorporated by reference in the
Registration Statement in reliance upon their reports and said authority.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable. The Company's Common Stock to be offered pursuant to
this Registration Statement has been registered under Section 12 of the Exchange
Act as described in Item 3 of this Part II.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 302A.521 of the Minnesota Business Corporation Act provides
that a Minnesota business corporation shall indemnify any director, officer,
employee or agent of the corporation made or threatened to be made a party to a
proceeding, by reason of the former or present official capacity (as
1
<PAGE>
defined) of the person, against judgments, penalties, fines, settlements and
reasonable expenses incurred by the person in connection with the proceeding if
certain statutory standards are met. "Proceeding" means a threatened, pending
or completed civil, criminal, administrative, arbitration or investigative
proceeding, including one by or in the right of the corporation. Section
302A.521 contains detailed terms regarding such right of indemnification and
reference is made thereto for a complete statement of such indemnification
rights. Article V of the Company's Amended and Restated Articles of
Incorporation limits the liability of its directors to the fullest extent
permitted by the Minnesota Business Corporation Act. In addition, Article VII
of the Company's Bylaws provides that the Company will indemnify such persons,
for such expenses and liabilities, in such manner, under such circumstances, and
to such extent, as permitted by the Minnesota Business Corporation Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
No securities are to be reoffered or resold pursuant to this
Registration Statement.
ITEM 8. EXHIBITS.
4.1 Specimen Form of the Company's Common Stock Certificate
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-18 (File No. 33-51456)).
4.2 Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-18 (File No. 33-51456)).
4.3 Bylaws of the Company, as amended (incorporated by reference to
Exhibit 3.2 to the Company's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 1996 (File No. 0-22190)).
5.1 Opinion and Consent of Oppenheimer Wolff & Donnelly (filed
herewith electronically).
23.1 Consent of Oppenheimer Wolff & Donnelly (included in Exhibit
5.1).
23.2 Consent of Coopers & Lybrand L.L.P. (filed herewith
electronically).
24.1 Power of Attorney (included on page 5 of this Registration
Statement).
99.1 1995 Stock Incentive Plan (incorporated by reference to Exhibit
10.12 to the Company's Annual Report on Form 10-KSB for the year
ended March 31, 1995 (File No. 0-22190)).
99.2 1997 Stock Incentive Plan (filed herewith electronically).
2
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represents a
fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement.
PROVIDED, HOWEVER, that paragraphs (a)(1) and (a)(2) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in 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) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, except as to certain
insurance policies, 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
3
<PAGE>
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.
4
<PAGE>
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 Southfield, State of Michigan, on April 28, 1997.
ELTRAX SYSTEMS, INC.
By /s/ William P. O'Reilly
--------------------------------
William P. O'Reilly
Chief Executive Officer, Chairman of the
Board and Director
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William P. O'Reilly and Mack V. Traynor, III, and
each of them, as his true and lawful attorney-in-fact and agent, each with full
powers of substitution and re-substitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments (including
post-effective 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, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on April 28, 1997 by the following
persons in the capacities indicated.
/s/ William P. O'Reilly
- ------------------------- Chief Executive Officer, Chairman of the Board
William P. O'Reilly and Director
(Principal Executive Officer)
/s/ Nicholas J. Pyett
- ------------------------- Chief Financial Officer
Nicholas J. Pyett (Principal Financial Officer)
/s/ Mack V. Traynor, III
- ------------------------- President and Director
Mack V. Traynor, III
5
<PAGE>
/s/ Patrick J. Dirk
- ------------------------- Director
Patrick J. Dirk
/s/ Clunet R. Lewis
- ------------------------- Director
Clunet R. Lewis
/s/ Walter C. Lovett
- ------------------------- Director
Walter C. Lovett
/s/ Thomas F. Madison
- ------------------------- Director
Thomas F. Madison
/s/ Howard B. Norton
- ------------------------- Director
Howard B. Norton
6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
Item No. Description Method of Filing
- -------- ----------- ----------------
4.1 Specimen Form of the Company's Common Incorporated by reference to
Stock Certificate......................... Exhibit 4.1 to the Company's
Registration Statement on
Form S-18 (File No.
33-51456).
4.2 Amended and Restated Articles of Incorporated by reference to
Incorporation of the Company.............. Exhibit 3.1 to the Company's
Registration Statement on
Form S-18 (File No.
33-51456).
4.3 Bylaws of the Company, as amended......... Incorporated by reference to
Exhibit 3.2 to the Company's
Quarterly Report on Form 10-
QSB for the quarter ended
September 30, 1996 (File No.
0-22190).
5.1 Opinion and Consent of Oppenheimer Filed herewith
Wolff & Donnelly.......................... electronically.
23.1 Consent of Oppenheimer Wolff & Donnelly... Included in Exhibit 5.1.
23.2 Consent of Coopers & Lybrand L.L.P........ Filed herewith
electronically.
24.1 Power of Attorney......................... Included on page 5 of this
Registration Statement.
99.1 1995 Stock Incentive Plan................. Incorporated by reference to
Exhibit 10.12 to the
Company's Annual Report on
Form 10-KSB for the year
ended March 31, 1995 (File
No. 0-22190).
99.2 1997 Stock Incentive Plan................. Filed herewith
electronically..
</TABLE>
7
<PAGE>
Exhibit 5.1
April 28, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Eltrax Systems, Inc.
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Eltrax Systems, Inc., a Minnesota corporation (the
"Company") in connection with the registration by the Company of 1,893,002
shares of the Company's Common Stock, par value $.01 per share (the "Shares")
underlying the Eltrax 1995 Stock Incentive Plan and the Eltrax 1997 Stock
Incentive Plan (the "Plans"), pursuant to a Registration Statement on Form S-8
filed with the Securities and Exchange Commission on or about April 28, 1997
(the "Registration Statement").
In acting as counsel for the Company and arriving at the opinions expressed
below, we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein.
Based on the foregoing, it is our opinion that:
1. The Company has the corporate authority to issue the Shares in the manner
and under the terms set forth in the Registration Statement.
2. To the extent they previously have not been issued, the Shares, when
issued, delivered and paid for in accordance with the Plans as set forth in
the Registration Statement, will be validly issued, fully paid and
nonassessable.
The foregoing opinions are based upon and limited exclusively to the laws of the
State of Minnesota and the United States of America.
<PAGE>
Securitites and Exchange Commission
April 28, 1997
Page 2
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement as described above. It is not to be
used, circulated, quoted or otherwise referred to for any other purpose. Other
than the Company, no one is entitled to rely on this opinion.
Very truly yours,
/s/ Oppenheimer Wolff & Donnelly
<PAGE>
Exhibit 23.2
CONSENT OF COOPERS & LYBRAND L.L.P.
We consent to the incorporation by reference in this Registration Statement of
Eltrax Systems Inc. on Form S-8 of our report dated March 28, 1997, on our
audits of the consolidated financial statements of Eltrax Systems Inc. as of
December 31, 1996 and March 31, 1996 and for the nine month transition period
ended December 31, 1996, and for the year ended March 31, 1996 which report is
incorporated by reference in Eltrax Systems Inc. Annual Report on Form 10-KSB
for the nine month transition period ended December 31, 1996. We also consent
to the references to our firm as "Experts".
/s/ COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
April 25, 1997
<PAGE>
Exhibit 99.2
ELTRAX SYSTEMS, INC.
1997 STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN.
The purpose of the Eltrax Systems, Inc. 1997 Stock Incentive Plan (the
"Plan") is to advance the interests of Eltrax Systems, Inc. (the "Company") and
its shareholders by enabling the Company and its Subsidiaries to attract and
retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and by rewarding such individuals who contribute to
the achievement by the Company of its economic objectives.
2. DEFINITIONS.
The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:
2.1. "BOARD" means the Board of Directors of the Company.
2.2. "BROKER EXERCISE NOTICE" means a written notice pursuant to which
a Participant, upon exercise of an Option, irrevocably instructs
a broker or dealer to sell a sufficient number of shares or loan
a sufficient amount of money to pay all or a portion of the
exercise price of the Option and/or any related withholding tax
obligations and remit such sums to the Company and directs the
Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.
2.3. "CHANGE IN CONTROL" means an event described in Section11.1 of
the Plan.
2.4. "CODE" means the Internal Revenue Code of 1986, as amended.
2.5. "COMMITTEE" means the group of individuals administering the
Plan, as provided in Section 3 of the Plan.
2.6. "COMMON STOCK" means the common stock of the Company, par value
$.01 per share, or the number and kind of shares of stock or
other securities into which such Common Stock may be changed in
accordance with Section 4.3 of the Plan.
2.7. "DISABILITY" means the disability of the Participant such as
would entitle the Participant to receive disability income
benefits pursuant to the long-term disability plan of the Company
or Subsidiary then covering the Participant or, if no such plan
exists or is applicable to the Participant, the permanent and
total disability of the Participant within the meaning of
Section 22(e)(3) of the Code.
2.8. "ELIGIBLE RECIPIENTS" means all employees of the Company or any
Subsidiary and any non-employee directors, consultants and
independent contractors of the Company or any Subsidiary.
2.9. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
<PAGE>
2.10. "FAIR MARKET VALUE" means, with respect to the Common Stock, as
of any date (or, if no shares were traded or quoted on such date,
as of the next preceding date on which there was such a trade or
quote) (a) the mean between the reported high and low sale prices
of the Common Stock if the Common Stock is listed, admitted to
unlisted trading privileges or reported on any national
securities exchange or on the Nasdaq National Market; (b) if the
Common Stock is not so listed, admitted to unlisted trading
privileges or reported on any national securities exchange or on
the Nasdaq National Market, the closing bid price as reported by
the Nasdaq SmallCap Market, OTC Bulletin Board or the National
Quotation Bureau, Inc. or other comparable service; or (c) if the
Common Stock is not so listed or reported, such price as the
Committee determines in good faith in the exercise of its
reasonable discretion. If determined by the Committee, such
determination will be final, conclusive and binding for all
purposes and on all persons, including, without limitation, the
Company, the shareholders of the Company, the Participants and
their respective successors-in-interest. No member of the
Committee will be liable for any determination regarding the fair
market value of the Common Stock that is made in good faith.
2.11. "INCENTIVE AWARD" means an Option, Restricted Stock Award or
Stock Bonus granted to an Eligible Recipient pursuant to the
Plan.
2.12. "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan
that qualifies as an "incentive stock option" within the meaning
of Section 422 of the Code.
2.13. "NON-STATUTORY STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of
the Plan that does not qualify as an Incentive Stock Option.
2.14. "OPTION" means an Incentive Stock Option or a Non-Statutory Stock
Option.
2.15. "PARTICIPANT" means an Eligible Recipient who receives one or
more Incentive Awards under the Plan.
2.16. "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that
are already owned by the Participant or, with respect to any
Incentive Award, that are to be issued upon the grant, exercise
or vesting of such Incentive Award.
2.17. "RESTRICTED STOCK AWARD" means an award of Common Stock granted
to an Eligible Recipient pursuant to Section 7 of the Plan that
is subject to the restrictions on transferability and the risk of
forfeiture imposed by the provisions of such Section 7.
2.18. "RETIREMENT" means termination of employment or service pursuant
to and in accordance with the regular (or, if approved by the
Board for purposes of the Plan, early) retirement/pension plan or
practice of the Company or Subsidiary then covering the
Participant, provided that if the Participant is not covered by
any such plan or practice, the Participant will be deemed to be
covered by the Company's plan or practice for purposes of this
determination.
2.19. "SECURITIES ACT" means the Securities Act of 1933, as amended.
2
<PAGE>
2.20. "STOCK BONUS" means an award of Common Stock granted to an
Eligible Recipient pursuant to Section 8 of the Plan.
2.21. "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has
a significant equity interest, as determined by the Committee.
2.22. "TAX DATE" means the date any withholding tax obligation arises
under the Code for a Participant with respect to an Incentive
Award.
3. PLAN ADMINISTRATION.
3.1. THE COMMITTEE. The Plan will be administered by the Board or by
a committee of the Board. So long as the Company has a class of
its equity securities registered under Section 12 of the Exchange
Act, any committee administering the Plan will consist solely of
two or more members of the Board who are "non-employee directors"
within the meaning of Rule 16b-3 under the Exchange Act and, if
the Board so determines in its sole discretion, who are "outside
directors" within the meaning of Section 162(m) of the Code.
Such a committee, if established, will act by majority approval
of the members (including written consent of a majority of the
members), and a majority of the members of such a committee will
constitute a quorum. As used in the Plan, "Committee" will refer
to the Board or to such a committee, if established. To the
extent consistent with corporate law, the Committee may delegate
to any officers of the Company the duties, power and authority of
the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however,
that only the Committee may exercise such duties, power and
authority with respect to Eligible Recipients who are subject to
Section 16 of the Exchange Act. The Committee may exercise its
duties, power and authority under the Plan in its sole and
absolute discretion without the consent of any Participant or
other party, unless the Plan specifically provides otherwise.
Each determination, interpretation or other action made or taken
by the Committee pursuant to the provisions of the Plan will be
conclusive and binding for all purposes and on all persons, and
no member of the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any
Incentive Award granted under the Plan.
3.2. AUTHORITY OF THE COMMITTEE.
(a) In accordance with and subject to the provisions of the
Plan, the Committee will have the authority to determine all
provisions of Incentive Awards as the Committee may deem
necessary or desirable and as consistent with the terms of
the Plan, including, without limitation, the following:
(i) the Eligible Recipients to be selected as Participants;
(ii) the nature and extent of the Incentive Awards to be
made to each Participant (including the number of shares of
Common Stock to be subject to each Incentive Award, any
exercise price, the manner in which Incentive Awards will
vest or become exercisable and whether Incentive Awards will
be granted in tandem with other Incentive Awards) and the
form of written agreement, if any, evidencing such Incentive
Award; (iii) the time or times when Incentive Awards will be
granted; (iv) the duration of each Incentive Award; and
(v) the restrictions and other conditions to which the
payment or vesting of Incentive Awards may be subject. In
addition, the Committee will have the authority under the
Plan in its sole discretion to pay the economic value of any
Incentive Award in the form of cash, Common Stock or any
combination of both.
3
<PAGE>
(b) The Committee will have the authority under the Plan to
amend or modify the terms of any outstanding Incentive Award
in any manner, including, without limitation, the authority
to modify the number of shares or other terms and conditions
of an Incentive Award, extend the term of an Incentive
Award, accelerate the exercisability or vesting or otherwise
terminate any restrictions relating to an Incentive Award,
accept the surrender of any outstanding Incentive Award or,
to the extent not previously exercised or vested, authorize
the grant of new Incentive Awards in substitution for
surrendered Incentive Awards; provided, however that the
amended or modified terms are permitted by the Plan as then
in effect and that any Participant adversely affected by
such amended or modified terms has consented to such
amendment or modification. No amendment or modification to
an Incentive Award, however, whether pursuant to this
Section 3.2 or any other provisions of the Plan, will be
deemed to be a regrant of such Incentive Award for purposes
of this Plan.
(c) In the event of (i) any reorganization, merger,
consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination
of shares, rights offering, extraordinary dividend or
divestiture (including a spin-off) or any other change in
corporate structure or shares, (ii) any purchase,
acquisition, sale or disposition of a significant amount of
assets or a significant business, (iii) any change in
accounting principles or practices, or (iv) any other similar
change, in each case with respect to the Company or any
other entity whose performance is relevant to the grant or
vesting of an Incentive Award, the Committee (or, if the
Company is not the surviving corporation in any such
transaction, the board of directors of the surviving
corporation) may, without the consent of any affected
Participant, amend or modify the vesting criteria of any
outstanding Incentive Award that is based in whole or in
part on the financial performance of the Company (or any
Subsidiary or division thereof) or such other entity so as
equitably to reflect such event, with the desired result
that the criteria for evaluating such financial performance
of the Company or such other entity will be substantially
the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following
such event as prior to such event; provided, however, that
the amended or modified terms are permitted by the Plan as
then in effect.
4. SHARES AVAILABLE FOR ISSUANCE.
4.1. MAXIMUM NUMBER OF SHARES AVAILABLE. Subject to adjustment as
provided in Section 4.3 of the Plan, the maximum number of shares
of Common Stock that will be available for issuance under the
Plan will be 1,100,000 shares of Common Stock. Notwithstanding
any other provisions of the Plan to the contrary, no Participant
in the Plan may be granted any Options or any other Incentive
Awards with a value based solely on an increase in the value of
the Common Stock after the date of grant, relating to more than
200,000 shares of Common Stock in the aggregate in any fiscal
year of the Company (subject to adjustment as provided in Section
4.3 of the Plan); provided, however, that a Participant who is
first appointed or elected as an officer, hired as an employee or
retained as a consultant by the Company or who receives a
promotion that results in an increase in responsibilities or
duties may be granted, during the fiscal year of such
appointment, election, hiring, retention or promotion, Options or
such other Incentive Awards relating to up to 300,000 shares of
Common Stock (subject to adjustment as provided in Section 4.3 of
the Plan).
4
<PAGE>
4.2. ACCOUNTING FOR INCENTIVE AWARDS. Shares of Common Stock that are
issued under the Plan or that are subject to outstanding
Incentive Awards will be applied to reduce the maximum number of
shares of Common Stock remaining available for issuance under the
Plan. Any shares of Common Stock that are subject to an
Incentive Award that lapses, expires, is forfeited or for any
reason is terminated unexercised or unvested and any shares of
Common Stock that are subject to an Incentive Award that is
settled or paid in cash or any form other than shares of Common
Stock will automatically again become available for issuance
under the Plan. Any shares of Common Stock that constitute the
forfeited portion of a Restricted Stock Award, however, will not
become available for further issuance under the Plan.
4.3. ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS. In the event of any
reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off) or any other change
in the corporate structure or shares of the Company, the
Committee (or, if the Company is not the surviving corporation in
any such transaction, the board of directors of the surviving
corporation) will make appropriate adjustment (which
determination will be conclusive) as to the number and kind of
securities or other property (including cash) available for
issuance or payment under the Plan and, in order to prevent
dilution or enlargement of the rights of Participants, (a) the
number and kind of securities or other property (including cash)
subject to outstanding Options, and (b) the exercise price of
outstanding Options.
5. PARTICIPATION.
Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries. Eligible Recipients may be granted from time to time one or more
Incentive Awards, singly or in combination or in tandem with other Incentive
Awards, as may be determined by the Committee in its sole discretion. Incentive
Awards will be deemed to be granted as of the date specified in the grant
resolution of the Committee, which date will be the date of any related
agreement with the Participant.
6. OPTIONS.
6.1. GRANT. An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms
and conditions, consistent with the other provisions of the Plan,
as may be determined by the Committee in its sole discretion.
The Committee may designate whether an Option is to be considered
an Incentive Stock Option or a Non-Statutory Stock Option. To
the extent that any Incentive Stock Option granted under the Plan
ceases for any reason to qualify as an "incentive stock option"
for purposes of Section 422 of the Code, such Incentive Stock
Option will continue to be outstanding for purposes of the Plan
but will thereafter be deemed to be a Non-Statutory Stock Option.
6.2. EXERCISE PRICE. The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in
its discretion at the time of the Option grant, provided that (a)
such price will not be less than 100% of the Fair Market Value of
one share of Common Stock on the date of grant with respect to an
Incentive Stock Option (110% of the Fair Market Value if, at the
time the Incentive Stock Option is granted, the Participant owns,
directly or indirectly, more than 10% of the total combined
voting power
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of all classes of stock of the Company or any parent or
subsidiary corporation of the Company), and (b) such price will
not be less than 85% of the Fair Market Value of one share of
Common Stock on the date of grant with respect to a Non-Statutory
Stock Option.
6.3. EXERCISABILITY AND DURATION. An Option will become exercisable
at such times and in such installments as may be determined by
the Committee in its sole discretion at the time of grant;
provided, however, that no Option may be exercisable after 10
years from its date of grant or, in the case of an Eligible
Participant who owns, directly or indirectly (as determined
pursuant to Section 424(d) of the Code), more than 10% of the
combined voting power of all classes of stock of the Company or
any subsidiary or parent corporation of the Company (within the
meaning of Sections 424(f) and 424(e), respectively, of the
Code), five years from its date of grant.
6.4. PAYMENT OF EXERCISE PRICE. The total purchase price of the
shares to be purchased upon exercise of an Option will be paid
entirely in cash (including check, bank draft or money order);
provided, however, that the Committee, in its sole discretion and
upon terms and conditions established by the Committee, may allow
such payments to be made, in whole or in part, by tender of a
Broker Exercise Notice, Previously Acquired Shares, by tender of
a promissory note (on terms acceptable to the Committee in its
sole discretion) or by a combination of such methods.
6.5. MANNER OF EXERCISE. An Option may be exercised by a Participant
in whole or in part from time to time, subject to the conditions
contained in the Plan and in the agreement evidencing such
Option, by delivery in person, by facsimile or electronic
transmission or through the mail of written notice of exercise to
the Company (Attention: Chief Financial Officer) at its principal
executive office in Minneapolis, Minnesota and by paying in full
the total exercise price for the shares of Common Stock to be
purchased in accordance with Section 6.4 of the Plan.
6.6. AGGREGATE LIMITATION OF COMMON STOCK SUBJECT TO INCENTIVE STOCK
OPTIONS. To the extent that the aggregate Fair Market Value
(determined as of the date an Incentive Stock Option is granted)
of the shares of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by a Participant
during any calendar year (under the Plan and any other incentive
stock option plans of the Company, any subsidiary or any parent
corporation of the Company (within the meaning of Sections 424(f)
and 424(e), respectively, of the Code)) exceeds $100,000 (or such
other amount as may be prescribed by the Code from time to time),
such excess Incentive Stock Options shall be treated as
Non-Statutory Stock Options. The determination shall be made by
taking Incentive Stock Options into account in the order in which
they were granted. If such excess only applies to a portion of
an Incentive Stock Option, the Committee, in its discretion,
shall designate which shares shall be treated as shares to be
acquired upon exercise of an Incentive Stock Option.
6.7. OPTIONS TO PURCHASE STOCK OF ACQUIRED COMPANIES. After any
reorganization, merger or consolidation involving the Company or
a subsidiary of the Company, the Committee may grant Options in
substitution of options issued under a plan of another party to
the reorganization, merger or consolidation, where such party's
stock may no longer be outstanding following such transaction.
Subject to Section 424(a) of the Code, the Committee shall have
sole discretion to determine all terms and conditions of Options
issued under this Section 6.7, including, but not limited to,
their exercise price and expiration date.
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7. RESTRICTED STOCK AWARDS.
7.1. GRANT. An Eligible Recipient may be granted one or more
Restricted Stock Awards under the Plan, and such Restricted Stock
Awards will be subject to such terms and conditions, consistent
with the other provisions of the Plan, as may be determined by
the Committee in its sole discretion. The Committee may impose
such restrictions or conditions, not inconsistent with the
provisions of the Plan, to the vesting of such Restricted Stock
Awards as it deems appropriate, including, without limitation,
that the Participant remain in the continuous employ or service
of the Company or a Subsidiary for a certain period or that the
Participant or the Company (or any Subsidiary or division
thereof) satisfy certain performance goals or criteria.
7.2. RIGHTS AS A SHAREHOLDER; TRANSFERABILITY. Except as provided in
Sections 7.1, 7.3 and 12.3 of the Plan, a Participant will have
all voting, dividend, liquidation and other rights with respect
to shares of Common Stock issued to the Participant as a
Restricted Stock Award under this Section 7 upon the Participant
becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted
Common Stock.
7.3. DIVIDENDS AND DISTRIBUTIONS. Unless the Committee determines
otherwise in its sole discretion (either in the agreement
evidencing the Restricted Stock Award at the time of grant or at
any time after the grant of the Restricted Stock Award), any
dividends or distributions (including regular quarterly cash
dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will be subject
to the same restrictions as the shares to which such dividends or
distributions relate. In the event the Committee determines not
to pay such dividends or distributions currently, the Committee
will determine in its sole discretion whether any interest will
be paid on such dividends or distributions. In addition, the
Committee in its sole discretion may require such dividends and
distributions to be reinvested (and in such case the Participants
consent to such reinvestment) in shares of Common Stock that will
be subject to the same restrictions as the shares to which such
dividends or distributions relate.
7.4. ENFORCEMENT OF RESTRICTIONS. To enforce the restrictions
referred to in this Section 7, the Committee may place a legend on
the stock certificates referring to such restrictions and may
require the Participant, until the restrictions have lapsed, to
keep the stock certificates, together with duly endorsed stock
powers, in the custody of the Company or its transfer agent or to
maintain evidence of stock ownership, together with duly endorsed
stock powers, in a certificateless book-entry stock account with
the Company's transfer agent.
8. STOCK BONUSES.
An Eligible Recipient may be granted one or more Stock Bonuses under the
Plan, and such Stock Bonuses will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee. The Participant will have all voting, dividend, liquidation and
other rights with respect to the shares of Common Stock issued to a Participant
as a Stock Bonus under this Section 8 upon the Participant becoming the holder
of record of such shares; provided, however, that the Committee may impose such
restrictions on the assignment or transfer of a Stock Bonus as it deems
appropriate.
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9. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.
9.1. TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT. In the event
a Participant's employment or other service with the Company and
all Subsidiaries is terminated by reason of death, Disability or
Retirement:
(a) All outstanding Options then held by the Participant will
become immediately exercisable in full and will remain
exercisable for a period of one year after such termination
(but in no event after the expiration date of any such
Option);
(b) All Restricted Stock Awards then held by the Participant
will become fully vested; and
(c) All Stock Bonuses then held by the Participant will vest
and/or continue to vest in the manner determined by the
Committee and set forth in the agreement evidencing such
Stock Bonuses.
9.2. TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT.
(a) In the event a Participant's employment or other service is
terminated with the Company and all Subsidiaries for any
reason other than death, Disability or Retirement, or a
Participant is in the employ or service of a Subsidiary and
the Subsidiary ceases to be a Subsidiary of the Company
(unless the Participant continues in the employ or service
of the Company or another Subsidiary), all rights of the
Participant under the Plan and any agreements evidencing an
Incentive Award will immediately terminate without notice of
any kind, and no Options then held by the Participant will
thereafter be exercisable, all Restricted Stock Awards then
held by the Participant that have not vested will be
terminated and forfeited, and all Stock Bonuses then held by
the Participant will vest and/or continue to vest in the
manner determined by the Committee and set forth in the
agreement evidencing such Stock Bonuses; provided, however,
that if such termination is due to any reason other than
termination by the Company or any Subsidiary for "cause,"
all outstanding Options then held by such Participant will
remain exercisable to the extent exercisable as of such
termination for a period of three months after such
termination (but in no event after the expiration date of
any such Option).
(b) For purposes of this Section 9.2, "cause" (as determined by
the Committee) will be as defined in any employment or other
agreement or policy applicable to the Participant or, if no
such agreement or policy exists, will mean (i) dishonesty,
fraud, misrepresentation, embezzlement or deliberate injury
or attempted injury, in each case related to the Company or
any Subsidiary, (ii) any unlawful or criminal activity of a
serious nature, (iii) any intentional and deliberate breach
of a duty or duties that, individually or in the aggregate,
are material in relation to the Participant's overall
duties, or (iv) any material breach of any employment,
service, confidentiality or noncompete agreement entered
into with the Company or any Subsidiary.
9.3. MODIFICATION OF RIGHTS UPON TERMINATION. Notwithstanding the
other provisions of this Section 9, upon a Participant's
termination of employment or other service with the Company and
all Subsidiaries, the Committee may, in its sole discretion
(which may be
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exercised at any time on or after the date of grant, including
following such termination), cause Options (or any part thereof)
then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination
of employment or service and Restricted Stock Awards and Stock
Bonuses then held by such Participant to vest and/or continue to
vest or become free of transfer restrictions, as the case may be,
following such termination of employment or service, in each case
in the manner determined by the Committee; provided, however,
that no Option may remain exercisable beyond its expiration date.
9.4. BREACH OF CONFIDENTIALITY OR NONCOMPETE AGREEMENTS.
Notwithstanding anything in the Plan to the contrary, in the
event that a Participant materially breaches the terms of any
confidentiality or noncompete agreement entered into with the
Company or any Subsidiary, whether such breach occurs before or
after termination of such Participant's employment or other
service with the Company or any Subsidiary, the Committee in its
sole discretion may immediately terminate all rights of the
Participant under the Plan and any agreements evidencing an
Incentive Award then held by the Participant without notice of
any kind.
9.5. DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE. Unless the
Committee otherwise determines in its sole discretion, a
Participant's employment or other service will, for purposes of
the Plan, be deemed to have terminated on the date recorded on
the personnel or other records of the Company or the Subsidiary
for which the Participant provides employment or other service,
as determined by the Committee in its sole discretion based upon
such records.
10. PAYMENT OF WITHHOLDING TAXES.
10.1. GENERAL RULES.The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts that
may be due and owing to the Participant from the Company or a
Subsidiary), or make other arrangements for the collection of,
all legally required amounts necessary to satisfy any and all
federal, state and local withholding and employment-related tax
requirements attributable to an Incentive Award, including,
without limitation, the grant, exercise or vesting of, or payment
of dividends with respect to, an Incentive Award or a
disqualifying disposition of stock received upon exercise of an
Incentive Stock Option, or (b) require the Participant promptly
to remit the amount of such withholding to the Company before
taking any action, including issuing any shares of Common Stock,
with respect to an Incentive Award.
10.2. SPECIAL RULES. The Committee may, in its sole discretion and
upon terms and conditions established by the Committee, permit or
require a Participant to satisfy, in whole or in part, any
withholding or employment-related tax obligation described in
Section 10.1 of the Plan by electing to tender Previously
Acquired Shares, a Broker Exercise Notice or a promissory note
(on terms acceptable to the Committee in its sole discretion), or
by a combination of such methods.
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11. CHANGE IN CONTROL.
11.1. CHANGE IN CONTROL. For purposes of this Section 11, a "Change in
Control" of the Company will mean the following:
(a) the sale, lease, exchange or other transfer, directly or
indirectly, of substantially all of the assets of the
Company (in one transaction or in a series of related
transactions) to a person or entity that is not controlled
by the Company,
(b) the approval by the shareholders of the Company of any plan
or proposal for the liquidation or dissolution of the
Company;
(c) any person becomes after the effective date of the Plan the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of (A) 20% or more,
but less than 50%, of the combined voting power of the
Company's outstanding securities ordinarily having the right
to vote at elections of directors, unless the transaction
resulting in such ownership has been approved in advance by
the Incumbent Directors, or (B) 50% or more of the combined
voting power of the Company's outstanding securities
ordinarily having the right to vote at elections of
directors (regardless of any approval by the Incumbent
Directors);
(d) a merger or consolidation to which the Company is a party if
the shareholders of the Company immediately prior to
effective date of such merger or consolidation have
"beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act), immediately following the effective date of
such merger or consolidation, of securities of the surviving
corporation representing (i) more than 50%, but less than
80%, of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having
the right to vote at elections of directors, unless such
merger or consolidation has been approved in advance by the
Incumbent Directors (as defined in Section 11.2 below), or
(ii) 50% or less of the combined voting power of the
surviving corporation's then outstanding securities
ordinarily having the right to vote at elections of
directors (regardless of any approval by the Incumbent
Directors);
(e) the Incumbent Directors cease for any reason to constitute
at least a majority of the Board; or
(f) any other change in control of the Company of a nature that
would be required to be reported pursuant to Section 13 or
15(d) of the Exchange Act, whether or not the Company is
then subject to such reporting requirements.
11.2. INCUMBENT DIRECTORS. For purposes of this Section 11, "Incumbent
Directors" of the Company will mean any individuals who are
members of the Board on the effective date of the Plan and any
individual who subsequently becomes a member of the Board whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of
the Incumbent Directors (either by specific vote or by approval
of the Company's proxy statement in which such individual is
named as a nominee for director without objection to such
nomination).
11.3. ACCELERATION OF VESTING. Without limiting the authority of the
Committee under Sections 3.2 and 4.3 of the Plan, if a Change in
Control of the Company occurs, then, unless
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otherwise provided by the Committee in its sole discretion either
in the agreement evidencing an Incentive Award at the time of
grant or at any time after the grant of an Incentive Award, (a)
all outstanding Options will become immediately exercisable in
full and will remain exercisable for the remainder of their
terms, regardless of whether the Participant to whom such Options
have been granted remains in the employ or service of the Company
or any Subsidiary; (b) all outstanding Restricted Stock Awards
will become immediately fully vested and non-forfeitable; and (c)
all outstanding Stock Bonuses then held by the Participant will
vest and/or continue to vest in the manner determined by the
Committee and set forth in the agreement evidencing such Stock
Bonuses.
11.3. CASH PAYMENT FOR OPTIONS. If a Change in Control of the Company
occurs, then the Committee, if approved by the Committee in its
sole discretion either in an agreement evidencing an Incentive
Award at the time of grant or at any time after the grant of an
Incentive Award, and without the consent of any Participant
effected thereby, may determine that some or all Participants
holding outstanding Options will receive, with respect to some or
all of the shares of Common Stock subject to such Options, as of
the effective date of any such Change in Control of the Company,
cash in an amount equal to the excess of the Fair Market Value of
such shares immediately prior to the effective date of such
Change in Control of the Company over the exercise price per
share of such Options.
11.5. LIMITATION ON CHANGE IN CONTROL PAYMENTS. Notwithstanding
anything in Section 11.3 or 11.4 of the Plan to the contrary, if,
with respect to a Participant, the acceleration of the vesting of
an Incentive Award as provided in Section 11.3 or the payment of
cash in exchange for all or part of an Incentive Award as
provided in Section 11.4 (which acceleration or payment could be
deemed a "payment" within the meaning of Section 280G(b)(2) of the
Code), together with any other "payments" which such Participant
has the right to receive from the Company or any corporation that
is a member of an "affiliated group" (as defined in Section
1504(a) of the Code without regard to Section 1504(b) of
the Code) of which the Company is a member, would constitute a
"parachute payment" (as defined in Section 280G(b)(2) of the
Code), then the "payments" to such Participant pursuant to
Section 11.3 or 11.4 of the Plan will be reduced to the largest
amount as will result in no portion of such "payments" being
subject to the excise tax imposed by Section 4999 of the Code;
provided, however, that if a Participant is subject to a separate
agreement with the Company or a Subsidiary that expressly
addresses the potential application of Sections 280G or 4999 of
the Code (including, without limitation, that "payments" under
such agreement or otherwise will be reduced, that such "payments"
will not be reduced or that the Participant will have the
discretion to determine which "payments" will be reduced), then
this Section 11.5 will not apply, and any "payments" to a
Participant pursuant to Section 11.3 or 11.4 of the Plan will be
treated as "payments" arising under such separate agreement.
12. RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.
12.1. EMPLOYMENT OR SERVICE. Nothing in the Plan will interfere with
or limit in any way the right of the Company or any Subsidiary to
terminate the employment or service of any Eligible Recipient or
Participant at any time, nor confer upon any Eligible Recipient
or Participant any right to continue in the employ or service of
the Company or any Subsidiary.
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12.2. RIGHTS AS A SHAREHOLDER. As a holder of Incentive Awards (other
than Restricted Stock Awards and Stock Bonuses), a Participant
will have no rights as a shareholder unless and until such
Incentive Awards are exercised for, or paid in the form of,
shares of Common Stock and the Participant becomes the holder of
record of such shares. Except as otherwise provided in the Plan,
no adjustment will be made for dividends or distributions with
respect to such Incentive Awards as to which there is a record
date preceding the date the Participant becomes the holder of
record of such shares, except as the Committee may determine in
its discretion.
12.3. RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will
or the laws of descent and distribution or as otherwise expressly
permitted by the Plan, unless approved by the Committee in its
sole discretion, no right or interest of any Participant in an
Incentive Award prior to the exercise or vesting of such
Incentive Award will be assignable or transferable, or subjected
to any lien, during the lifetime of the Participant, either
voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise. A Participant will, however, be
entitled to designate a beneficiary to receive an Incentive Award
upon such Participant's death, and in the event of a
Participant's death, payment of any amounts due under the Plan
will be made to, and exercise of any Options (to the extent
permitted pursuant to Section 9 of the Plan) may be made by, the
Participant's legal representatives, heirs and legatees.
12.4. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to modify or rescind any previously approved
compensation plans or programs of the Company or create any
limitations on the power or authority of the Board to adopt such
additional or other compensation arrangements as the Board may
deem necessary or desirable.
13. SECURITIES LAW AND OTHER RESTRICTIONS.
Notwithstanding any other provision of the Plan or any agreements entered
into pursuant to the Plan, the Company will not be required to issue any shares
of Common Stock under this Plan, and a Participant may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.
14. PLAN AMENDMENT, MODIFICATION AND TERMINATION.
The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that Incentive Awards under the Plan will conform to any
change in applicable laws or regulations or in any other respect the Board may
deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the shareholders of
the Company if shareholder approval of the amendment is then required pursuant
to Section 422 of the Code or the rules of any stock exchange or Nasdaq. No
termination, suspension or amendment of the Plan may adversely affect any
outstanding Incentive Award without the consent of the affected Participant;
provided,
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however, that this sentence will not impair the right of the Committee to take
whatever action it deems appropriate under Sections 3.2, 4.3 and 11 of the Plan.
15. EFFECTIVE DATE AND DURATION OF THE PLAN.
The Plan is effective as of May 15, 1997, the date it was adopted by the
Board and the shareholders. The Plan will terminate at midnight on May 14,
2007, and may be terminated prior to such time to by Board action, and no
Incentive Award will be granted after such termination. Incentive Awards
outstanding upon termination of the Plan may continue to be exercised, or become
free of restrictions, in accordance with their terms.
16. MISCELLANEOUS.
16.1. GOVERNING LAW. The validity, construction, interpretation,
administration and effect of the Plan and any rules, regulations
and actions relating to the Plan will be governed by and
construed exclusively in accordance with the laws of the State of
Minnesota, notwithstanding the conflicts of laws principles of
any jurisdictions.
16.2. SUCCESSORS AND ASSIGNS. The Plan will be binding upon and inure
to the benefit of the successors and permitted assigns of the
Company and the Participants.
[This is the final Eltrax Systems, Inc. 1997 Stock Incentive
Plan adopted by the Eltrax Board of Directors on January 29, 1997]
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