- 1 -
FORM S-8
Filed With the Securities and Exchange Commission on August 27, 1999
Registration No. _____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
ARGONAUT GROUP, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 95-4057601
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 AVENUE OF THE STARS, SUITE 1175,
LOS ANGELES, CA 90067
(Address of Principal Executive Offices) (Zip Code)
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ARGONAUT GROUP, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
(Full title of the Plan)
JAMES B HALLIDAY Copies to:
Vice President and Treasurer Edmund M. Kaufman, Esq.
Argonaut Group, Inc. Richard C. Wirthlin, Esq.
1800 Avenue of the Stars, Suite 1175 Irell & Manella LLP
Los Angeles, California 90067 1800 Avenue of the Stars, Ste. 900
Telephone: (310) 553-0561 Los Angeles, California 90067
(Name and address of agent for service) Telephone: (310) 277-1010
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Securities to Amount to be Offering Price Aggregate Offering Registration
be Registered Registered per Share1 Price Fee
--------------- ---------------- -------------- --- ----- ----------
<S> <C> <C> <C> <C>
Common Stock Issuable upon 500,000 shares $23.938 $11,969,000 $3,327.38
exercise of options and/or
stock appreciation rights
</TABLE>
1 Estimated solely for the purpose of calculating the registration fee.
The fee has been calculated pursuant to Rule 457 (g) based upon the
closing price per share of the Registrants' Common Stock on the NASDAQ
National Market system on August 20, 1999, a date within 15 days prior to
the date of filing of this Registration Statement.
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EXPLANATORY NOTE
Argonaut Group, Inc. (the "Company") filed registration
statements on Form S-8 on February 13, 1987 (Reg. No.33-12034) and on December
9, 1997 (Reg. No. 333-10712) (collectively, the "Previous Registrations")
relating to the registration of shares of common stock, $0.10 par value
("Common Stock"), of the Company.
Pursuant to General Instruction E of Form S-8, this
Registration Statement on Form S-8 (the "Registration Statement") registers an
additional 500,000 shares of the Company's Common Stock which may be acquired
upon the exercise of stock options granted to employees of the Company.
The Previous Registrations are hereby incorporated by
reference pursuant to General Instruction E to Form S-8.
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II-12
II-1
PART II
Item 8. EXHIBITS.
-------------------------- ---------------------------------------------
EXHIBIT
NUMBER DESCRIPTION
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
5 Legal Opinion of Irell & Manella LLP(1)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
23.1 Consent of Independent Auditors - Arthur
Andersen LLP(1)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
23.2 Consent of Irell & Manella LLP (included in
legal opinion filed as Exhibit 5)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
24 Power of Attorney (included on the signature
pages filed herewith)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
99.1 Argonaut Group, Inc. Amended and Restated
Stock Option Plan(1)
-------------------------- ---------------------------------------------
(1) Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its be half by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on August 25, 1999.
ARGONAUT GROUP, INC.
By /s/ Charles E. Rinsch
Charles E. Rinsch
President and Director
(Principal Executive Officer)
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Argonaut Group,
Inc., a Delaware corporation, do hereby constitute and appoint Charles E. Rinsch
and James B Halliday, and each of them, the lawful attorney-in-fact and agent,
with full power and authority to do any and all acts and things and to execute
any and all instruments which said attorney and agent determines to be necessary
or advisable or required to enable said corporation to comply with the
Securities Act of 1933, as amended, and any rules or regulation or requirements
of the Commission in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement and to any and all instruments or
documents filed as part of or in connection with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms all that said attorney and agent shall do or cause to be done by
virtue hereof. This Power of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of August 25, 1999.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons on August
25, 1999 in the capacities indicated.
SIGNATURE TITLE
- --------- -----
/s/ Charles E. Rinsch President and Director
- ------------------------------------------
Charles E. Rinsch (Principal Executive Officer)
/s/ James B Halliday Vice President and Treasurer,
- --------------------------------------------
James B Halliday (Principal Accounting Officer)
/s/ George A. Roberts Director
- ------------------------------------------
George A. Roberts
/s/ Michael T. Gray Director
- --------------------------------------------
Michael T. Gray
/s/ Jerrold V. Jerome Director
- --------------------------------------------
Jerrold V. Jerome
/s/ Fayez S. Sarofim Director
- ------------------------------------
Fayez S. Sarofim
/s/ Mark B. Watson, III Director
- ------------------------------------
Mark B. Watson, III
4
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LIST OF EXHIBITS
-------------------------- ---------------------------------------------
EXHIBIT
NUMBER DESCRIPTION
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
5 Legal Opinion of Irell & Manella LLP(1)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
23.1 Consent of Independent Auditors - Arthur
Andersen LLP(1)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
23.2 Consent of Irell & Manella LLP (included in
legal opinion filed as Exhibit 5)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
24 Power of Attorney (included on the signature
pages filed herewith)
-------------------------- ---------------------------------------------
-------------------------- ---------------------------------------------
99.1 Argonaut Group, Inc. Amended and Restated
Stock Option Plan(1)
-------------------------- ---------------------------------------------
(1) Filed herewith
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EXHIBIT 5
LEGAL OPINION OF IRELL & MANELLA LLP
[LETTERHEAD OF IRELL & MANELLA LLP]
August 26, 1999
Argonaut Group, Inc.
1800 Avenue of the Stars Suite 1175
Los Angeles, California 90067
Ladies and Gentlemen:
We have acted as counsel for Argonaut Group, Inc. a Delaware
corporation (the "Company"), in connection with the proposed filing with the
Securities and Exchange Commission expected to be made on or about August 27,
1999 under the Securities Act of 1933, as amended, of a Registration Statement
on Form S-8 (the "Registration Statement") for the purpose of registering
500,000 shares of the Company's Common Stock, par value $0.10 per share (the
"Shares").
As your counsel in connection with this transaction, we have examined
such matters and documents as we have deemed necessary or relevant as a basis
for this opinion.
Based on these examinations, it is our opinion that the Shares, when
issued and paid for in the manner referred to in the Registration Statement,
will be legally and validly issued, fully-paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very Truly Yours,
/s/ Irell & Manella LLP
Irell & Manella LLP
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated January
7, 1999, incorporated by reference in Argonaut Group, Inc.'s Form 10-K for the
year ended December 31, 1998, and to all references to our firm included in this
registration statement.
/s/ Arthur Andersen
San Francisco, California
August 25, 1999
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EXHIBIT 99.1
ARGONAUT GROUP, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
(as amended and restated March 16, 1999)
1. Purpose.
The purpose of this amended and restated Stock Option Plan (the "Plan")
of Argonaut Group, Inc., a Delaware corporation (the "Company"), is to secure
for the Company and its stockholders the benefits arising from stock ownership
by selected executive and other key employees of the Company or its subsidiaries
and such other persons as the Board of Directors of the Company, or Committee
thereof constituted for the purpose, may from time to time determine. The Plan
will provide a means whereby (i) such employees may purchase shares of the
Common Stock of the Company pursuant to options which will qualify as "incentive
stock options" under Section 422 of the Internal Revenue Code, as amended (the
"Code"), (ii) such employees or other persons may purchase shares of the Common
Stock of the Company pursuant to "non-incentive" or "non-qualified" stock
options and (iii) such employees who are also officers of the Company or its
subsidiaries may receive shares of the Common Stock of the Company, or cash in
lieu thereof, pursuant to stock appreciation rights granted in tandem with such
options.
2. Administration.
The Plan shall be administered by the Board of Directors of the Company
(the "Board of Directors") or by a Committee consisting of two or more persons,
all of whom are "Non-Employee Directors", to whom administration of the Plan has
been duly delegated (the "Committee"). For these purposes, a "Non-Employee
Director" shall have the meaning set forth in Rule 16b-3 adopted pursuant to the
Securities and Exchange Act of 1934 (the "Exchange Act"). Any action of the
Board of Directors or the Committee with respect to administration of the Plan
shall be taken by a majority vote or written consent of its members.
Subject to the provisions of the Plan, the Board of Directors or
Committee shall have authority (i) to construe and interpret the Plan, (ii) to
define the terms used therein, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, (iv) to determine the individuals to whom and
the time or times at which options shall be granted, whether such options will
be incentive stock options or non-qualified stock options, whether to include a
stock appreciation right with an option and the terms of such rights, the number
of shares to be subject to each option, the option price, the number of
installments, if any, in which each option may be exercised, and the duration of
each option, (v) to approve and determine the duration of leaves of absence
which may be granted to participants without constituting a termination of their
employment for the purposes of the Plan, and (vi) to make all other
determinations necessary or advisable for the administration of the Plan. All
determinations and interpretations made by the Board of Directors or Committee
shall be binding and conclusive on all participants in the Plan and their legal
representatives and beneficiaries.
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3. Shares Subject to the Plan.
Subject to adjustment as provided in paragraph 16 hereof, the shares to
be offered under the Plan shall consist of the Company's authorized but unissued
Common Stock, and the aggregate amount of such stock which may be issued upon
exercise of all options under the Plan (including any options granted pursuant
to the Company's 1986 Stock Option Plan prior to its amendment and restatement)
shall not exceed Two Million five hundred thousand (2,500,000) of such shares.
If any option granted under the Plan (including any options granted pursuant to
the Company's 1986 Stock Option Plan prior to its amendment and restatement)
shall expire or terminate for any reason (other than surrender at the time of
exercise of a related stock appreciation right provided for in paragraph 8
hereof), without having been exercised in full, the unpurchased shares subject
thereto shall again be available for options to be granted under the Plan.
4. Eligibility and Participation.
All executive and other key employees of the Company or of any
subsidiary corporation (as defined in Section 424(f) of the Code) shall be
eligible for selection to fully participate in the Plan, except that only such
employees who are also officers of the Company or a subsidiary of the Company
shall be eligible to receive stock appreciation rights. Directors of the Company
who are not regular employees of the Company are not eligible to participate in
the Plan. Other non-employees may participate in the Plan with respect to
non-qualified stock options, but only selected executives and other key
employees of the Company or a subsidiary may receive incentive stock options
under the Plan. An individual who as been granted an option may, if such
individual is otherwise eligible, be granted an additional option or options if
the Board of Directors or Committee shall so determine, subject to the other
provisions of the Plan. No incentive stock option may be granted to any person
who, at the time the incentive stock option is granted, owns shares of the
Company's outstanding Common Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company (and of its
affiliates if applicable), unless the exercise price of such option is at least
110 percent (110%) of the fair market value of the stock subject to the option
and such option by its terms is not exercisable after the expiration of five
years from the date such option is granted.
All options granted under the Plan shall be granted within ten years
from March 16, 2009.
5. Duration of Options.
Each option and all rights associated therewith shall expire on such
date as the Board of Directors or Committee may determine, and shall be subject
to earlier termination as provided herein; provided, however, that in the case
of incentive stock options, each incentive stock option and all rights
associated therewith shall expire in any event within ten (10) years of the date
on which such incentive stock option is granted.
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6. Purchase Price.
The purchase price of the stock covered by each option shall be
determined by the Board of Directors or the Committee, but in the case of
incentive stock options, shall not be less than one hundred percent (100%) of
the fair market value of such stock on the date the incentive stock option is
granted. The purchase price of the shares upon exercise of an option shall be
paid in full at the time of exercise (i) in cash or by certified, cashier's or
personal check payable to the order of the Company or (ii) by delivery of shares
of Common Stock of the Company already owned by, and in the possession of the
option holder, or any combination thereof. Shares of Common Stock used to
satisfy the exercise price of an option shall be valued at their fair market
value determined (in accordance with paragraph 9 hereof) as of the close of
business on the date of exercise (or if such date is not a business day, as of
the close of the business day immediately preceding such date).
7. Exercise of Options.
The aggregate fair market value (determined at the time the options are
granted) of the shares covered by incentive stock options granted to any one
employee under this Plan or any other incentive stock option plan of the Company
which may become exercisable for the first time in any one calendar year shall
not exceed $100,000; provided, however, that if the Code or the regulations
thereunder shall permit a greater amount of incentive stock options to vest in
any calendar year, then such higher limit shall be applicable, subject to the
provisions of the specific option agreement. Subject to the foregoing, each
option granted under this Plan shall be exercisable in such installments during
the period prior to its expiration date as the Board of Directors or Committee
shall determine; provided that, unless otherwise determined by the Board of
Directors or Committee, if the option holder shall not in any given installment
period purchase all of the shares which the option holder is entitled to
purchase in such installment period, then the option holder's right to purchase
any shares not purchased in such installment period shall continue until the
expiration date or sooner termination of the option holder's option. Any option
may be exercised for a fraction of a share and no partial exercise of any option
may be for less than one hundred (100) shares.
8. Stock Appreciation Rights.
If deemed appropriate by the Board of Directors or the Committee, any
stock option granted to an officer of the Company or a subsidiary of the Company
may be coupled with a stock appreciation right at the time of the grant of the
option, or, the Board of Directors or Committee may grant a stock appreciation
right to any such officer at any time after granting an option to such officer
prior to the end of the term of such associated option. Such stock appreciation
right shall be subject to such terms and conditions not inconsistent with the
Plan as the Board of Directors or Committee shall impose, provided that:
(1) A stock appreciation right shall be exercisable to the extent, and only to
the extent, the associated option is exercisable and shall be exercisable only
for such period as the Board of Directors or Committee may determine (which
period may expire prior to the expiration date of the option);
(2) A stock appreciation right shall entitle the option holder to surrender to
the Company unexercised the option to which it is related, or any portion
thereof, and to receive from the Company in exchange therefor that number of
shares (rounded down to the nearest whole number) having an aggregate value
equal to the excess of the fair market value of one share (determined as
thereinafter provided) over the option price per share specified in such option
multiplied by the number of shares subject to the option, or portion thereof,
which is so surrendered; and
(3) The Board of Directors or Committee may elect to settle, or the stock
appreciation right may permit the optionee to elect to receive (subject to
approval by the Board of Directors or Committee), any part or all of the
Company's obligation arising out of the exercise of a stock appreciation right
by the payment of cash equal to the aggregate fair market value of that part or
all of the shares it would otherwise be obligated to deliver, provided that in
no event shall cash be payable upon exercise of a stock appreciation right
unless the transaction is exempt from the operation of Section 16(b) of the
Exchange Act.
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9. Fair Market Value of Common Stock.
The fair market value of a share of Common Stock of the Company shall
be determined for purposes of the Plan by reference to the closing price on the
principal stock exchange on which such shares are then listed or, if such shares
are not then listed on an exchange, by reference to the closing price (if a
National Market Issue) or the mean between the bid and asked price (if other
over-the-counter issue) of a share as supplied by the National Association of
Securities Dealers through NASDAQ (or its successor in function), in each case
as reported by The Wall Street Journal, for the date on which the option or
stock appreciation right is granted or exercised, or if such date is not a
business day, for the business day immediately preceding such date (or, if for
any reason no such price is available, in such other manner as the Board of
Directors or the Committee may deem appropriate to reflect the then fair market
value thereof).
10. Withholding Tax.
Upon (i) the disposition by an employee or other person of shares of
Common Stock acquired pursuant to the exercise of an incentive stock option
granted pursuant to the Plan within two years of the granting of the incentive
stock option or within one year after exercise of the incentive stock option,
(ii) the exercise of "non-incentive" or "non-qualified" options, or (iii) the
exercise of a stock appreciation right, the Company shall have the right to (a)
require such employee or such other person to pay the Company the amount of any
taxes which the Company may be required to withhold with respect to such shares
or (b) deduct from all amounts paid in cash with respect to the exercise of a
stock appreciation right the amount of any taxes which the Company may be
required to withhold with respect to such cash amounts.
11. Nontransferability.
An option (and any accompanying appreciation right) granted under the
Plan shall, by its terms, be non-transferable by the option holder, either
voluntarily or by operation of law, otherwise than by will or the laws of
descent and distribution, and shall be exercisable during option holder's
lifetime only by the option holder, regardless of any community property
interest therein of the spouse of the option holder, or such spouse's successors
in interest. If the spouse of the option holder shall have acquired a community
property interest in such option (or accompanying stock appreciation right), the
option holder, or the option holder's permitted successors in interest, may
exercise the option (or accompanying stock appreciation right) on behalf of the
spouse of the option holder or such spouse's successors in interest.
12. Holding of Stock After Exercise of Option.
At the discretion of the Board of Directors or Committee, any option
may provide that the option holder, by accepting such option, represents and
agrees, for the option holder and the option holder's permitted transferees (by
will or the laws of descent and distribution), that none of the shares purchased
upon exercise of the option or any accompanying stock appreciation right will be
acquired with a view to any sale, transfer or distribution of said shares in
violation of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, or any applicable state "blue sky" laws, and
the person entitled to exercise the same shall furnish evidence satisfactory to
the Company (including a written and signed representation) to that effect in
form and substance satisfactory to the Company, including an indemnification of
the Company in the event of any violation of the Securities Act of 1933 or state
blue sky law by such person.
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13. Termination of Employment.
If a holder of an option granted under this Plan who is employed by the
Company or one of its subsidiaries ceased to be so employed for any reason other
than the option holder's death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Code), the option holder's option (and any
accompanying stock appreciation right) shall immediately become void and of no
further force or effect; provided, however, that if such cessation of employment
shall be due to option holder's voluntary resignation with the consent of the
Board of Directors of the Company or such subsidiary, expressed in the form of a
written resolution, or to option holder's retirement under the provisions of any
pension or retirement plan of the Company or of such subsidiary then in effect,
then, such option shall be exercisable for a period of three (3) months after
the date option holder ceases to be an employee of the Company or such
subsidiary (unless by its terms it sooner expires) to the extent exercisable on
the date of such cessation of employment and shall thereafter expire and be void
and of no further force or effect. A leave of absence approved in writing by the
Board of Directors or Committee shall not be deemed a termination of employment
for the purposes of this paragraph 13, but no option may be exercised during any
such leave of absence, except during the first three (3) months thereof.
14. Death or Permanent Disability of Option Holder.
If the holder of an incentive stock option dies or becomes permanently
and totally disabled (as defined in paragraph 13) while option holder is
employed by the Company or one of its subsidiaries, option holder's option (and
any accompanying stock appreciation right) shall expire one (1) year after the
date of such death or permanent and total disability unless by its terms it
sooner expires. During such period after death, such option (and any
accompanying stock appreciation right) may, to the extent that it remained
unexercised (but exercisable by the option holder according to such option's
terms) on the date of such death, be exercised by the person or persons to whom
the option holder's rights under the option shall pass by option holder's will
or by the laws of descent and distribution. The death or disability of a holder
of a non-qualified stock option will have the effect specified in the individual
option agreement as determined by the Board of Directors or the Committee.
15. Privileges of Stock Ownership.
No person entitled to exercise any option or stock appreciation right
granted under the Plan shall have any of the rights or privileges of a
stockholder of the Company in respect of any shares of stock issuable upon
exercise of such option or stock appreciation right until certificates
representing such shares shall have been issued and delivered. No shares shall
be issued and delivered upon the exercise of any option or accompanying stock
appreciation rights unless and until there shall have been full compliance with
all applicable requirements of the Securities Act of 1933 (whether by
registration or satisfaction of exemption conditions), all applicable listing
requirements of any national securities exchange on which shares of the same
class are then listed and any other requirements of law or of any regulatory
bodies having jurisdiction over such issuance and delivery.
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16. Adjustments.
If the outstanding shares of the Common Stock of the Company are
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities of the Company through reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction, an appropriate and proportionate adjustment shall be made
in the maximum number and kind of shares as to which options may be granted
under this Plan. A corresponding adjustment changing the number or kind of
shares allocated to unexercised options or portions thereof, which shall have
been granted prior to any such change, shall likewise be made. Any such
adjustment in the outstanding options shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the option but
with a corresponding adjustment in the price for each shares or other unit of
any security covered by the option.
Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all the property or more than eighty percent
(80%) of the then outstanding stock of the Company to another corporation, the
Plan shall terminate, and all options and stock appreciation rights theretofore
granted hereunder shall terminate.
Notwithstanding the foregoing, the Board of Directors or the Committee
may provide in writing in connection with such transaction for any or all of the
following alternatives (separately or in combinations): (i) for the options and
any accompanying stock appreciation rights theretofore granted to become
immediately exercisable notwithstanding the provisions of paragraph 7; (ii) for
the assumption by the successor corporation of the options and stock
appreciation rights theretofore granted or the substitution by such corporation
for such options and rights of new options and rights covering the stock of the
successor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; (iii) for the
continuance of the Plan by such successor corporation in which event the Plan
and the options and any accompanying stock appreciation rights theretofore
granted shall continue in the manner and under the terms so provided; or (iv)
for the payment in cash or stock in lieu of and in complete satisfaction of such
options and rights.
Adjustments under this paragraph 16 shall be made by the Board of
Directors or Committee, whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive. No
fractional shares of stock shall be issued under the Plan on any such
adjustment.
At the discretion of the Board of Directors or the Committee, any
option may contain provisions to the effect that upon the happening of certain
events, including a change in control (as defined by the Board of Directors or
Committee in the option) of the Company, any outstanding options and
accompanying stock appreciation rights not theretofore exercisable shall
immediately become exercisable in their entirety, notwithstanding any of the
other provisions of the option.
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17. Amendment and Termination of Plan.
The Board of Directors or the Committee may at any time suspend or
terminate the Plan. The Board of Directors or the Committee may also at any time
amend or revise the terms of the Plan, provided that no such amendment or
revision shall, unless appropriate stockholder approval of such amendment or
revision is obtained, increase the maximum number of shares in the aggregate
which may be sold pursuant to options granted under the Plan, except as
permitted under the provisions of paragraph 16, or change the minimum purchase
price of incentive stock options set forth in paragraph 6, or increase the
maximum term of incentive stock options provided for in paragraph 5, or permit
the granting of options or stock appreciation rights to anyone other than as
provided in paragraph 6.
At any time that the federal tax law is changed or amended with respect
to incentive stock options, this Plan shall be deemed automatically amended to
provide to the holders of incentive stock options the full benefit of the law,
as amended, without any action being taken by the Board, the Committee or the
stockholders of the Company. Notwithstanding the foregoing, no amendment,
suspension or termination of the Plan shall, without specific actions of the
Board of Directors or the Committee and the consent of the option holder, in any
way modify, amend, alter or impair any rights or obligations under any option or
accompanying stock appreciation right theretofore granted under the Plan.
18. Effective Date of Plan.
Effectiveness of the Plan is subject to approval by the holders of the
outstanding voting stock of the Company as hereinafter provided within twelve
months from the date the Plan is adopted by the Board of Directors. The Plan
shall be deemed approved by the holders of the outstanding voting stock of the
Company by (i) the affirmative vote of the holders of a majority of the voting
shares of the Company represented and voting at a duly held meeting at which a
quorum is present or (ii) the written consent of the holders of a majority of
the outstanding voting shares of the Company. Any options granted under the Plan
prior to obtaining such stockholder approval shall be granted under the
conditions that the options so granted: (1) shall not be exercisable prior to
such approval, and (2) shall become null and void if such stockholder approval
is not obtained.
No options or stock appreciation rights may be granted under the Plan
unless and until (i) the options, rights and underlying shares have been
qualified with the California Corporation Commissioner or (ii) the Company has
been advised by counsel that such options, rights and shares are exempt from
such qualification.
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