<PAGE> 1
As filed with the Securities and Exchange Commission on August 13, 1999
Registration No. 333-
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 governing instrument)
MINNESOTA 41-1484525
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
---------------
2000 TOWN CENTER
SUITE 690
SOUTHFIELD, MICHIGAN 48075
(Address of Principal Executive Offices)
1999 STOCK INCENTIVE PLAN
(Full title of the plan)
WILLIAM P. O'REILLY
CHAIRMAN OF THE BOARD
ELTRAX SYSTEMS, INC.
2000 TOWN CENTER
SUITE 690
SOUTHFIELD, MICHIGAN 48075
(248) 358-1699
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
Copies of all correspondence to:
JEFFREY L. FORMAN, ESQ.
JAFFE, RAITT, HEUER & WEISS, P.C.
ONE WOODWARD AVENUE
SUITE 2400
DETROIT, MICHIGAN 48226
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Per Aggregate Offering Amount of
To be Registered Registered Share (1) Price (1) Registration Fee
- ------------------- ------------ ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 5,500,000 $3.3125 $18,218,750.00 $5,065
share
======================================================================================================================
</TABLE>
(1) Computed in accordance with Rules 457(h) and 457(c) under the Securities
Act of 1933. There are no options currently outstanding and the estimated
exercise price of $3.3125 per share was computed in accordance with Rule
457(c) based upon the average of the high and low prices of the
Registrant's common stock on August 10, 1999 on the NASDAQ SmallCap Market.
<PAGE> 2
PART I
ITEM 1. PLAN INFORMATION
The documents containing the information specified in this Item 1 will
be sent or given to employees, officers, directors or others as specified by
Rule 428(b)(1). In accordance with the rules and regulations of the Securities
and Exchange Commission (the "Commission") and the instructions to Form S-8,
such documents are not being filed with the Commission either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424.
ITEM 2. REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
The documents containing the information specified in this Item 2 will
be sent or given to employees, officers, directors or others as specified by
Rule 428(b)(1). In accordance with the rules and regulations of the Commission
and the instructions to Form S-8, such documents are not being filed with the
Commission either as part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
1. Eltrax's Annual Report on Form 10-K for the year ended December 31,
1998, filed with the Commission on March 27, 1999, as amended by
Form 10-K/A filed April 30, 1999.
2. The description of the Common Stock contained in Eltrax's
Registration Statement on Form 8-A (File No. 0-22190).
3. Eltrax's Current Report on Form 8-K dated March 25, 1999 and filed
with the Commission on March 30, 1999.
4. Eltrax's Current Report on Form 8-K dated March 31, 1999 and filed
with the Commission on April 12, 1999.
5. Eltrax's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999 and filed with the Commission on May 14, 1999.
In addition, all documents filed by Eltrax pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated herein
by reference and to be a part hereof from the date of filing of such documents.
Any statement contained in this Registration Statement or in a document
incorporated, or deemed to be incorporated, by reference herein shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein modifies or
supersedes such statement. Except as so modified or superseded, such statement
shall not be deemed to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares of Eltrax common stock to be issued pursuant
to this registration statement will be passed upon by Jaffe, Raitt, Heuer &
Weiss, P.C. As of July 31, 1999, certain shareholders of Jaffe, Raitt, Heuer &
Weiss, P.C. beneficially owned 88,695 shares of Eltrax common stock
-2-
<PAGE> 3
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article V of Eltrax's Amended and Restated Articles of Incorporation
limits the liability of its directors to the fullest extent permitted by the
Minnesota Business Corporation Act (the "MBCA"). Specifically, directors of
Eltrax will not be personally liable for monetary damages for breach of
fiduciary duty as directors, except liability for (1) any breach of the duty of
loyalty to Eltrax or its shareholders, (2) acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, (3)
dividends or other distributions of corporate assets that are in contravention
of certain statutory or contractual restrictions, (4) violations of certain
Minnesota securities laws, or (5) any transaction from which the director
derives an improper personal benefit.
Article IV of Eltrax's Amended and Restated Articles of Incorporation
gives Eltrax the power and authority to provide indemnification to officers,
directors, employees and agents of Eltrax to the fullest extent permissible
under the MBCA. Section 302A.521 of the MBCA requires that a company indemnify
any director, officer or employee made or threatened to be made a party to a
proceeding, by reason of the former or present official capacity of the person,
against judgments, penalties, fines, settlements and reasonable expenses
incurred 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 a derivative
action in the name of the company. Reference is made to the detailed terms of
Section 302A.531 of the MBCA for a complete statement of such indemnification
rights.
Article VII of Eltrax's Restated Bylaws provides that Eltrax shall
indemnify such persons, for such expenses and liabilities, in such manner, under
such circumstances, and to such extent, as permitted by the MBCA, as now enacted
or hereafter amended, provided that a determination is made in each case, in the
manner required by such statute, that the person seeking indemnification is
eligible therefor.
Eltrax maintains directors' and officers' liability insurance,
including a reimbursement policy in favor of Eltrax.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
ITEM 8. EXHIBITS
The exhibits filed herewith are set forth on the exhibit index filed as
part of this Registration Statement.
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;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table set forth in this registration
statement; and
-3-
<PAGE> 4
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in this registration statement or any material change to such
information in this registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) 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
Eltrax pursuant to Section 13 or Section 15(d) of the Exchange Act that
are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to section 13(a) or 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-4-
<PAGE> 5
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
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 August 9, 1999.
ELTRAX SYSTEMS, INC., a Minnesota corporation
By: /s/ William P. O'Reilly
--------------------------------------------
William P. O'Reilly, Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, hereby constitutes and appoints William P. O'Reilly, Don G.
Hallacy, and Clunet R. Lewis, or any of them, his attorneys-in-fact and agents,
with full power of substitution and resubstitution for him in any and all
capacities, to sign any or all amendments or post-effective amendments to this
Registration Statement, and to file the same, with exhibits thereto and other
documents in connection therewith or in connection with the registration of the
Common Stock under the Securities Act of 1933, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary in connection with such matters as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that each
of such attorneys-in-fact and agents or his substitute or substitutes may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<S> <C> <C>
/s/ William P. O'Reilly Chairman of the Board of Directors August 9, 1999
----------------------------------------------
William P. O'Reilly
Chief Executive Officer, President
/s/ Don G. Hallacy (principal executive officer), and July 16, 1999
---------------------------------------------- Director
Don G. Hallacy
Director
/s/ James C. Barnard August 9, 1999
----------------------------------------------
James C. Barnard
Director
/s/ Patrick J. Dirk July 20, 1999
----------------------------------------------
Patrick J. Dirk
Director
/s/ Penelope A. Sellers July 30, 1999
----------------------------------------------
Penelope A. Sellers
Director
/s/ Stephen E. Raville August 9, 1999
----------------------------------------------
Stephen E. Raville
Director
/s/ William G. Taylor August 9, 1999
----------------------------------------------
William G. Taylor
Chief Financial Officer (principal
/s/ Nicholas J. Pyett financial officer and principal August 9, 1999
---------------------------------------------- accounting officer)
Nicholas J. Pyett
</TABLE>
-5-
<PAGE> 6
ELTRAX SYSTEMS INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
------- ----------- ----------------
<S> <C> <C>
4.1 Specimen Form of Eltrax's Common Stock Incorporated by reference to Exhibit 4.1 to
Certificate Eltrax's Registration Statement on Form S-18
(File No. 33-51456)
4.2 Amended and Restated Eltrax Articles of Incorporated by reference to Exhibit 3.1 to
Incorporation, as amended Eltrax's Registration Statement on Form S-18
(File No. 33-51456)
4.3 Eltrax Bylaws, as amended Incorporated by reference to Exhibit 3.2 to
Eltrax's Quarterly Report on Form 10-QSB for
the quarter ended September 30, 1996
4.4 Eltrax 1999 Stock Incentive Plan Filed herewith.
5.1 Opinion of Jaffe, Raitt, Heuer & Weiss, P.C. Filed herewith.
with respect to the validity of the shares of
Common Stock being registered
23.1 Consent of Jaffe, Raitt, Heuer & Weiss, P.C. Filed herewith.
(included as part of Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP, Filed herewith.
independent accountants
23.3 Consent of Crowe, Chizek and Company LLP, Filed herewith.
independent accountants
24.1 Power of Attorney (included on the signature Filed herewith.
page of this Registration Statement)
</TABLE>
-6-
<PAGE> 1
EXHIBIT 4.4
ELTRAX SYSTEMS, INC.
1999 STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN
The purpose of the Eltrax Systems, Inc. 1999 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 Section 11.1
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 4.5 of the Plan.
2.7. "COMPANY" means Eltrax Systems, Inc., a Minnesota corporation.
2.8. "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.
2.9. "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. An
Incentive Award may be granted to an employee, in connection
with hiring, retention or otherwise, prior to the date the
employee first performs services for the Company or the
Subsidiaries, provided that such Incentive Awards shall not
become vested prior to the date the employee first performs
such services.
-1-
<PAGE> 2
2.10. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
2.11 "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.
2.12. "INCENTIVE AWARD" means an Option, Restricted Stock Award or
Stock Bonus granted to an Eligible Recipient pursuant to the
Plan.
2.13. "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.
2.14. "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.
2.15. "OPTION" means an Incentive Stock Option or a Non-Statutory
Stock Option.
2.16. "PARTICIPANT" means an Eligible Recipient who receives one or
more Incentive Awards under the Plan.
2.17. "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.
2.18. "PRIOR PLANS" means the Company's 1995 Stock Incentive Plan,
1997 Stock Incentive Plan, and 1998 Stock Incentive Plan.
2.19. "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.
2.20. "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-
<PAGE> 3
2.21. "SECURITIES ACT" means the Securities Act of 1933, as amended.
2.22. "STOCK BONUS" means an award of Common Stock granted to an
Eligible Recipient pursuant to Section 8 of the Plan.
2.23. "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.
2.24. "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
-3-
<PAGE> 4
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.
(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 4.5 of the Plan, the maximum number of shares of Common
Stock that will be available for issuance under the Plan will be
10,000,000 shares of Common Stock less the number of shares of Common
Stock issued pursuant to the Prior Plans. Notwithstanding any other
provisions of the Plan to the contrary other than Section 6.7, 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
-4-
<PAGE> 5
of the Common Stock after the date of grant, relating to more
than 300,000 shares of Common Stock in the aggregate in any
fiscal year of the Company (subject to adjustment as provided
in Section 4.5 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 500,000 shares of Common Stock (subject to
adjustment as provided in Section 4.5 of the Plan).
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, or used to satisfy the applicable tax
withholding obligation 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. GENERAL RESTRICTIONS. Delivery of shares of Common Stock or
other amounts under the Plan shall be subject to the
following:
(a) Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any shares
of Common Stock under the Plan or make any other
distribution of benefits under the Plan unless such
delivery or distribution would comply with all
applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the
applicable requirements of any securities exchange or
similar entity.
(b) To the extent that the Plan provides for issuance of
stock certificates to reflect the issuance of shares
of Common Stock, the issuance may be reflected on a
non-certificated basis, to the extent not prohibited
by applicable law or the applicable rules of any
securities exchange or similar entity.
4.4. SHARES OF COMMON STOCK ISSUED PURSUANT TO INCENTIVE STOCK
OPTIONS. Subject to Section 4.5, the maximum number of shares
of Common Stock that may be issued by Options intended to be
Incentive Stock Options pursuant to the Plan shall be
10,000,000 less the number of shares of Common Stock issued
pursuant to the Prior Plans.
4.5. 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
-5-
<PAGE> 6
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
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. Notwithstanding
the foregoing, each Option granted to a participant shall vest
at a rate of at least 20% per year over 5 years from the date
the Option is granted.
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
-6-
<PAGE> 7
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 office at 2000 Town Center, Suite 690,
Southfield, Michigan 48075 (or such other office as the
Company may designate), 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.
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
-7-
<PAGE> 8
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 10 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.
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.
-8-
<PAGE> 9
9.2. TERMINATION FOR REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT.
(a) Subject to the second sentence of this Section
9.2(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. However, (i) if such termination is due to
any reason other than termination by the Company or
any Subsidiary for "cause," all outstanding Options
or Stock Appreciation Rights 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), and
(ii) if such termination is due to termination by the
Company or any Subsidiary for "cause", all
outstanding Options then held by such Participant
will remain exercisable as of such termination for a
period of one month 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 exercised at any time on or after the
date of grant, including following such termination), cause
Options and Stock Appreciation Rights (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, Performance Units 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 or Stock Appreciation Right 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
-9-
<PAGE> 10
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 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.
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
-10-
<PAGE> 11
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 4.5 of the Plan, if a Change
in Control of the Company occurs, then, unless 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.
11.4. 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
-11-
<PAGE> 12
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.
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 as otherwise provided in this
Section 12.3, a Participant's rights and interest under the
Plan may not be assigned or transferred other than by will or
the laws of descent and distribution, or pursuant to the terms
of a domestic relations order, as defined in Section
414(p)(1)(B) of the Code, which satisfies the requirements of
Section 414(p)(1)(A) of the Code (a "Qualified Domestic
Relations Order"). During the lifetime of a Participant, only
the
-12-
<PAGE> 13
Participant personally (or the Participant's personal
representative or attorney-in-fact) or the alternate payee
named in a Qualified Domestic Relations Order may exercise the
Participant's rights under the Plan. The Participant's
Beneficiary may exercise a Participant's rights to the extent
they are exercisable under the Plan following the death of the
Participant. Notwithstanding the foregoing, or any other
provision of this Plan, a Participant who holds Non-Qualified
Stock Options may transfer such Options to his or her spouse,
lineal ascendants, lineal descendants, or to a duly
established trust for the benefit of one or more of these
individuals. Options so transferred may thereafter be
transferred only to the Participant who originally received
the Options or to an individual or trust to whom the
Participant could have initially transferred the Option
pursuant to this Section 12.3. Options which are transferred
pursuant to this Section 12.3 shall be exercisable by the
transferee according to the same terms and conditions as
applied to the Participant.
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, however, that this sentence will not impair the right of the Committee
to take whatever action it deems appropriate under Sections 3.2, 4.5 and 13 of
the Plan.
-13-
<PAGE> 14
15. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan is effective as of June 24, 1999, the date it was adopted by
the Board and the shareholders. The Plan will terminate at midnight on June 24,
2009, 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.
16.3. ANNUAL REPORT. Each year the Company will provide a copy of
its Annual Report to Shareholders on Form 10-K (or Form
10-KSB, as applicable) to all Participants.
-14-
<PAGE> 1
EXHIBIT 5.1
[JAFFE, RAITT, HEUER & WEISS LETTERHEAD]
August 11, 1999
Eltrax Systems, Inc.
2000 Town Center, Suite 690
Southfield, MI 48075
Gentlemen:
We have acted as counsel to Eltrax Systems, Inc. (the "Company"), a
Minnesota corporation, in connection with the registration by the Company of
5,500,000 shares (the "Shares") of Common Stock, $.01 par value per share
("Common Stock"), pursuant to a Registration Statement on Form S-8 to be filed
with the Securities and Exchange Commission on or about August 13, 1999 (the
"Registration Statement"). This opinion letter is furnished to you at your
request to enable you to fulfill the requirements of Item 601(b)(5) of
Regulation S-K, 17 C.F.R. 229.601(b)(5), in connection with the Registration
Statement.
We do not purport to be experts on or to express any opinion in this
letter concerning any law other than the laws of the State of Michigan and the
Minnesota Business Corporation Act, and this opinion is qualified accordingly.
This opinion is limited to the matters expressly set forth in this letter, and
no opinion is to be inferred or may be implied beyond the matters expressly so
stated. In rendering the opinion contained in this letter, we have assumed
without investigation that the information supplied to us by the Company is
accurate and complete.
For purposes of this opinion letter, we have examined copies of the
following documents:
A. An executed copy of the Registration Statement;
B. A copy of the Eltrax Systems, Inc. 1999 Stock Incentive Plan
(the "1999 Plan");
C. Form of Stock Option Agreement for options to be issued
pursuant to the 1999 Plan;
D. The Company's Amended and Restated Articles of Incorporation;
E. The Bylaws of the Company;
F. The Company's corporate minute book; and
G. An Officer's Certificate (the "Certificate"), a copy of which
is attached to this letter as Exhibit A.
The documents listed in items A-G above are collectively referred to as
the "Documents".
In rendering our opinion, we have assumed, without independent
verification, that: (i) all signatures are genuine; (ii) all Documents submitted
to us as originals are authentic; (iii) all Documents submitted to us as copies
conform to the originals of such Documents; and (iv) the consideration received
by the Company in connection with each issuance of Shares will include an amount
in the form of cash that exceeds the aggregate par value of such Shares. Our
review has been limited to examining the Documents and applicable law.
<PAGE> 2
JAFFE, RAITT, HEUER & WEISS
Eltrax Systems, Inc.
August 11, 1999
Page 2
To the extent that any opinion in this letter relates to or is
dependent upon factual information, we have relied exclusively upon the factual
representations and warranties set forth in the Certificate, and we have not
undertaken to independently verify any such facts or information.
Based upon, subject to and limited by the foregoing, we are of the
opinion that, as of the date hereof:
1. The Shares that may be issued in the future upon exercise of
options (as described in the 1999 Plan) have been duly
authorized.
2. Upon issuance of the Shares that are to be issued upon
exercise of options in accordance with such option agreements,
such Shares will be validly issued, fully paid, and
non-assessable.
We hereby consent to the filing of this opinion letter as Exhibit 5.1
to the Registration Statement, and to the use of the name of our firm in the
Prospectus under the caption "Legal Matters".
Very truly yours,
JAFFE, RAITT, HEUER & WEISS
Professional Corporation
/s/ Jeffrey L. Forman
---------------------
Jeffrey L. Forman
<PAGE> 3
EXHIBIT "A"
OFFICER'S CERTIFICATE
The undersigned, the duly elected and acting Chairman of the Board of
Eltrax Systems, Inc., a Minnesota corporation ("Eltrax"), hereby represents and
warrants the following to Jaffe, Raitt, Heuer & Weiss, Professional Corporation
("JRH&W"):
1. Eltrax is a corporation formed under the laws of the State of
Minnesota.
2. The Amended and Restated Articles of Incorporation of Eltrax
have not been amended since July 23, 1996.
3. As of the date of this Officer's Certificate, no shares of
Eltrax common stock, $0.01 par value per share, have been
issued upon the exercise of stock options granted pursuant to
Eltrax's 1999 Stock Incentive Plan.
August , 1999 ------------------------------------------
William P. O'Reilly, Chairman of the Board
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated March 12, 1999, except for the
information in Notes 9 and 13 to which the date is March 26, 1999, relating to
the financial statements and financial statement schedule, which appears in
Eltrax Systems, Inc.'s Annual Report on Form 10-K for the year ended December
31, 1998.
/s/ PricewaterhouseCoopers LLP
Detroit, Michigan
August 11, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in this Registration Statement of
Eltrax Systems, Inc. (Eltrax) on Form S-8 of our report dated March 26, 1999
appearing in Eltrax's Current Report on Form 8-K dated March 25, 1999.
/s/Crowe, Chizek and Company LLP
--------------------------------
Crowe, Chizek and Company LLP
Columbus, Ohio
August 11, 1999
