<PAGE> 1
As filed with the Securities and Exchange Commission on June 11, 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)
1998 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>
====================================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE (1) AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
- ---------------- ---------- ---------------------------- ---------------------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 2,500,000 $4.12 $10,300,000 $2,863.40
share
====================================================================================================================================
</TABLE>
(1) Computed in accordance with Rules 457(h) under the Securities Act of 1933.
Such computation is based on the weighted average exercise price of $4.12
per share covering 2,500,000 outstanding options.
<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.
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 June 10, 1999, certain shareholders of Jaffe, Raitt, Heuer &
Weiss, P.C. beneficially owned 88,695 shares of Eltrax common stock.
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
-2-
<PAGE> 3
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
(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.
-3-
<PAGE> 4
(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 May 24, 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 May 24, 1999
- ----------------------------------------------
William P. O'Reilly
/s/ Don G. Hallacy Chief Executive Officer, President May 24, 1999
- ---------------------------------------------- (principal executive officer), and
Don G. Hallacy Director
/s/ Clunet R. Lewis Director May 24, 1999
- ----------------------------------------------
Clunet R. Lewis
/s/ James C. Barnard Director May 24, 1999
- ----------------------------------------------
James C. Barnard
/s/ Patrick J. Dirk Director May 24, 1999
- ----------------------------------------------
Patrick J. Dirk
/s/ Penelope A. Sellers Director May 24, 1999
- ----------------------------------------------
Penelope A. Sellers
/s/ Stephen E. Raville Director May 24, 1999
- ----------------------------------------------
Stephen E. Raville
/s/ Mack V. Traynor, III Director May 24, 1999
- ----------------------------------------------
Mack V. Traynor, III
/s/ Nicholas J. Pyett Chief Financial Officer (principal May 24, 1999
- ---------------------------------------------- financial officer and principal
Nicholas J. Pyett accounting officer)
</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 1998 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.
1998 STOCK INCENTIVE PLAN
(AS AMENDED ON MARCH 19, 1999)
1. PURPOSE OF PLAN
The purpose of the Eltrax Systems, Inc. 1998 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 4.3 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.
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
<PAGE> 2
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.
2.20. "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.
-2-
<PAGE> 3
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.
(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
-3-
<PAGE> 4
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 2,500,000 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).
4.2. 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
-4-
<PAGE> 5
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 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.
-5-
<PAGE> 6
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. Not withstanding 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
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 at 2000 Town Center, Suite 690, Southfield,
Michigan 48075, 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.
-6-
<PAGE> 7
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 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.
-7-
<PAGE> 8
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 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) provided, further, that
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.
-8-
<PAGE> 9
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 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.
-9-
<PAGE> 10
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).
-10-
<PAGE> 11
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 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 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
-11-
<PAGE> 12
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 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 11 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
-12-
<PAGE> 13
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, 4.3 and 13 of
the Plan.
15. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan is effective as of May 19, 1998, the date it was adopted by
the Board and the shareholders. The Plan will terminate at midnight on May 19,
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.
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.
-13-
<PAGE> 1
EXHIBIT 5.1
[LAW OFFICES OF JAFFE, RAITT, HEUER & WEISS LETTERHEAD]
June 10, 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
2,500,000 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 June 11, 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. 1998 Stock Incentive Plan (the
"1998 Plan");
C. Form of Stock Option Agreement for options to be issued pursuant to
the 1998 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
Eltrax Systems, Inc.
June 10, 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 1998 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 1998 Stock
Incentive Plan.
June 10, 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
PricewaterhouseCoopers LLP
Detroit, Michigan
June 8, 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
June 8, 1999
