AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 14, 1999
REGISTRATION NO. 333-______
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 52-0991911
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
11019 McCORMICK ROAD
HUNT VALLEY, MARYLAND 21031
(Address, including Zip Code, of Principal Executive Offices)
1999 LONG-TERM INCENTIVE PLAN
(Full Title of the Plan)
DONALD A. DEIESO, Ph.D.
PRESIDENT and CHIEF EXECUTIVE OFFICER
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
11019 McCORMICK ROAD
HUNT VALLEY, MARYLAND 21031
(410) 584-7000
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent For Service)
----------------------
With a copy to:
JOSEPH LUNIN, ESQ.
PITNEY, HARDIN, KIPP & SZUCH
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962
(973) 966-6300
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered(1) Per Share(2) Offering Price Fee
- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 250,000 $1.375 $343,750 $100
par value
Total Registration Fee
$100
- ----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
(1) In addition, pursuant to Rule 416 under the Securities Act of 1933,
this Registration Statement also covers an indeterminate number of
shares of Common Stock that may be issuable pursuant to anti-dilution
provisions contained in the 1999 Long-Term Incentive Plan (the "Plan").
(2) Estimated solely for the purpose of calculating the registration fee.
Such estimate has been computed in accordance with Rule 457(c) and Rule
457(h)(1) based on the average high and low prices of the Registrant's
Common Stock as reported on the NASDAQ National Market on January 11,
1999.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. Plan Information
Not filed with this Registration Statement.
ITEM 2. Registrant Information and Employee Plan Annual Information
Not filed with this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
The following documents filed by EA Engineering, Science, and
Technology, Inc. Inc. (the "Registrant") with the Securities and Exchange
Commission (the "Commission") are incorporated by reference in this Registration
Statement:
1. Annual Report on Form 10-K for the year ended August 31, 1998
filed on November 24, 1998.
2. Quarterly Report for the quarter ended November 30, 1998 filed
on January 13, 1999.
3. The Description of the Registrant's Capital Stock contained in
the Registration Statement on Form S-1 (No. 33-8958).
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, 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, hereby are incorporated herein by reference and shall be deemed a part
hereof from the date of filing of such documents. Any statement contained 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 other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. Description of Securities.
Not applicable.
ITEM 5. Interests of Named Experts and Counsel.
Not applicable.
ITEM 6. Indemnification of Directors and Officers.
(a) Limitation of Liability of Directors and Officers. Section 102 of
the Delaware General Corporation Law permits a corporation to provide
in its Certificate of Incorporation that a director or officer shall
not be personally liable to the corporation or its shareholders for
breach of any duty owed to the corporation or its shareholders, except
that such provisions shall not relieve a director or officer from
liability for any breach of duty based upon an action or omission (a)
in breach of such person's duty of loyalty to the corporation or its
shareholders, (b) not in good faith or involving intentional misconduct
or a knowing violation of law, (c) involving the payment of unlawful
dividends or expenditure of funds for unlawful stock purchases or
redemptions, or (d) resulting in receipt by such person of any improper
personal benefit. Article EIGHTH of the Company's Certificate of
Incorporation includes limitation on the liability of officers and
directors to the fullest extent permitted by Delaware law.
(b) Indemnification of Directors, Officers, Employees and Agents. Under
Article TENTH of its Certificate of Incorporation, the Company shall
indemnify and advance expenses to its directors and officers to the
fullest extent permitted by the Company's Bylaws and the Delaware
General Corporation Law. Article VIII of the Company's Bylaws provides
that a director or officer shall be indemnified to the fullest extent
permitted under the Delaware General Corporation Law. Section 145 of
the Delaware General Corporation Law provides that a corporation may
indemnify its directors, officers, employees and agents against
judgments, fines, penalties, amounts paid in settlement and expenses,
including attorneys' fees, resulting from various types of legal
actions or proceedings if the actions of the party being indemnified
meet the standards of conduct specified therein. Determinations
concerning whether or not the applicable standard of conduct has been
met can be made by (a) a disinterested majority of the Board of
Directors, (b) independent legal counsel, or (c) an affirmative vote of
a majority of shares held by the shareholders. No indemnification is
permitted to be made to or on behalf of a corporate director, officer,
employee or agent if a judgment or other final adjudication adverse to
such person establishes that his acts or omissions (a) were in breach
of his duty of loyalty to the corporation or its shareholders, (b) were
not in good faith or involved a knowing violation of law or (c)
resulted in receipt by such person of an improper personal benefit.
Pursuant to Section 102(b)(7) of the Delaware General
Corporation Law, Article EIGHTH, Paragraph 9 of the Company's
Certificate of Incorporation provides that no director of the Company
shall be liable to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the Delaware General Corporation Law, or (iv) for
any transaction from which the director derived an improper personal
benefit.
ITEM 7. Exemption from Registration Claimed.
Not applicable.
ITEM 8. Exhibits.
5 Opinion of Pitney, Hardin, Kipp & Szuch, as to the legality of
the securities being registered.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Pitney, Hardin, Kipp & Szuch (included in Exhibit 5
hereto).
24 Power of Attorney (included on signature page hereto).
99 1999 Long-Term Incentive Plan.
ITEM 9. Undertakings.
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement to include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) 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.
2. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference
in this 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.
3. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Hunt Valley, Maryland on this 14th day of
January, 1999.
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
(The Registrant)
DONALD A. DEIESO
By: ____________________________________
Donald A. Deieso, Ph.D.
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Loren D. Jensen, Ph.D. and
Donald A. Deiseo, Ph.D., and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution for him and in
his name, place and stead in any and all capacities, to sign any and all
amendments to this Registration Statement (including post-effective
amendments), and to file the same with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming what said attorneys-in-fact and agents or their substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
LOREN D. JENSEN
--------------------------
Loren D. Jensen, Ph.D. Chairman of the Board of Directors January 14, 1999
DONALD A. DEIESO
--------------------------
Donald A. Deieso, Ph.D. President, Chief Executive Officer January 14, 1999
and Director
BARBARA L. POSNER
--------------------------
Barbara L. Posner Senior Vice President, Finance and January 14, 1999
Administration (principal financial officer)
EDMUND J. CASHMAN, JR.
--------------------------
Edmund J. Cashman, Jr. Director January 14, 1999
RUDOLPH P. LAMONE
--------------------------
Rudolph P. Lamone, Ph.D. Director January 14, 1999
CLEAVELAND D. MILLER
--------------------------
Cleaveland D. Miller, Esq. Director January 14, 1999
GEORGE G. RADCLIFFE
--------------------------
George G. Radcliffe Director January 14, 1999
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Plan administrators have duly caused this Registration Statement to be
signed on behalf of the Plan, thereunto duly authorized, in Hunt Valley,
Maryland, on this 14th day of January, 1999.
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
1999 LONG-TERM INCENTIVE PLAN
(The Plan)
MEREDITH N. CONKLIN
By:____________________________________
Meredith N. Conklin, V.P. Human Resources,
as Plan Administrator
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
5 Opinion of Pitney, Hardin, Kipp & Szuch, as to the
legality of the securities being registered.
23(a) Consent of Arthur Andersen LLP.
23(b) Consent of Pitney, Hardin, Kipp & Szuch (included in
Exhibit 5 hereto).
24 Power of Attorney (included on signature page hereto).
99 1999 Long-Term Incentive Plan.
PITNEY, HARDIN, KIPP & SZUCH
(MAIL TO)
P.O. BOX 1945
MORRISTOWN, NEW JERSEY 07962-1945
------
(DELIVERY TO)
200 CAMPUS DRIVE
FLORHAM PARK, NEW JERSEY 07932-0950
(973) 966-6300
FACSIMILE (973) 966-1550
January 14, 1999
EA Engineering, Science, and Technology, Inc.
11019 McCormick Road
Hunt Valley, Maryland 21031
Re: Registration Statement on Form S-8
1999 Long-Term Incentive Plan
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by EA Engineering, Science, and
Technology, Inc. (the "Company") with the Securities and Exchange Commission
in connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of 250,000 shares of Common Stock of the Company, $0.01
par value (the "Shares") issuable pursuant to the 1999 Long-Term Incentive
Plan (the "Plan").
We have also examined originals, or copies certified or otherwise
identified to our satisfaction, of the Plan, the Certificate of Incorporation
and By-laws of the Company, as currently in effect, and relevant resolutions
of the Board of Directors of the Company; and we have examined such other
documents as we deemed necessary in order to express the opinion hereinafter
set forth.
In our examination of such documents and records, we have assumed
the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and conformity with the originals of all
documents submitted to us as copies.
Based on the foregoing, we are of the opinion that, when the
Registration Statement has become effective under the Act, and the Shares
shall have been duly issued in the manner contemplated by the Registration
Statement and the Plan, the Shares will be legally issued, fully paid and
non-assessable.
The foregoing opinion is limited to the federal laws of the United
States and the laws of the State of New Jersey, and we are expressing no
opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to use of this opinion as an Exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that
we come within the category of persons whose consent is required under
Section 7 of the Act, or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
PITNEY, HARDIN, KIPP & SZUCH
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 30, 1998,
included in EA Engineering, Science, and Technology, Inc.'s Form 10-K for the
year ended August 31, 1998, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Baltimore, Maryland
January 14, 1999
EA ENGINEERING, SCIENCE, AND TECHNOLOGY, INC.
1999 LONG-TERM INCENTIVE PLAN
1. PURPOSE. The purpose of the EA Engineering, Science, and Technology,
Inc. 1999 Long-Term Incentive Plan (the "Plan") is to benefit and advance the
interests of EA Engineering, Science, and Technology, Inc., a Delaware
corporation (the "Company"), and its subsidiaries by rewarding certain key
employees of the Company and its subsidiaries for their contributions to the
financial success of the Company and thereby motivate them to continue to make
such contributions in the future. The Plan provides for grants of Phantom Shares
(as defined in Section 4(a) hereof), the value of which is determined by
reference to the fair market value of the common stock, par value $0.01 per
share, of the Company (the "Common Stock"), and for subsequent payment of cash
with respect to such Phantom Shares based, subject to certain limits, on their
appreciation in value over stated periods of time.
2. ADMINISTRATION OF THE PLAN.
(a) Members of the Committee. The Plan shall be administered, and Phantom
Shares shall be granted hereunder, by the Compensation Committee of the Board of
Directors of the Company (the "Committee"), which shall consist of at least
three individuals.
(b) Authority of the Committee. The Committee shall adopt such rules as it
may deem appropriate in order to carry out the purpose of the Plan. All
questions of interpretation, administration and application of the Plan shall be
determined by a majority of the members of the Committee then in office, except
that the Committee may authorize any one or more of its members, or any officer
of the Company, to execute and deliver documents on behalf of the Committee. The
determination of such majority shall be final and binding in all matters
relating to the Plan.
3. ELIGIBLE PERSONS. Phantom Shares may be awarded only to key employees of
the Company and its Subsidiaries. An individual shall not be deemed an employee
for purposes of the Plan unless such individual receives compensation from
either the Company or a subsidiary of the Company for services performed as an
employee of the Company or any of its subsidiaries. The Committee shall have the
authority to select the individual participants (the "Participants") from among
such class of eligible persons to whom Phantom Shares may be granted and to
determine the number of Phantom Shares to be granted to each Participant.
4. TERMS OR PHANTOM SHARES.
(a) Definitions. As used in the Plan, the following terms shall have the
following meanings:
(i) "Agreement" shall mean the written agreement governing the
grant of Phantom Shares and the payment of the Appreciation Value of
such Phantom Shares, in a form approved by the Committee, which shall
contain terms and conditions not inconsistent with the Plan and which
shall incorporate the Plan by reference.
(ii) "Appreciation Value" shall mean the excess, it any, of the
Value of a Phantom Share on the applicable Early Valuation Date,
Valuation Date or termination date (in the event of a termination of
employment as described in Section 7(b) hereof), as the case maybe over
the Initial Value of such Phantom Share.
(iii) "Date of Grant" shall mean the date of a grant of Phantom
Shares as set forth in the applicable Agreement.
(iv) "Early Valuation Date" shall mean a date (which, unless
otherwise provided by the Committee, shall be December 15) on which a
Participant may elect the early measurement and fixing of the
Appreciation Value of a Phantom Share in accordance with Section 4(f)
hereof.
(v) "Initial Value" shall mean the value of a Phantom Share as
specified by the Committee as of the Date of Grant or the Value of a
Phantom Share calculated as of the Date of Grant or such earlier date
as the Committee may determine; provided, however, that in no event
shall the Initial Value be less then 50% of the Value of the relevant
Phantom Share as of the Date of Grant.
(vi) "Phantom Share" shall mean a contractual right to receive an
amount equal to the Appreciation Valuation at such time, and subject to
such terms and conditions, as are set forth in the Plan and the
applicable agreement.
(vii) "Valuation Date" shall mean the date on which the
Appreciation value of a Phantom Share shall be measured and fixed in
accordance with Section 4(c) hereof.
(viii) The "Value" of a Phantom Share on a given date shall be the
average closing price of a share of Common Stock on the NASDAQ National
Market Exchange or such other national securities exchange as may be
designated by the Committee or, in the event that the Common Stock is
not listed for trading on a national securities exchange but is quoted
on an automated quotation system, the average closing bid price per
share of Common Stock on such automated quotation system or, in the
event that the Common Stock is not quoted on any such system, the
average of the closing bid prices per share or Common Stock as
furnished by a professional market maker making a market in the Common
Stock designated by the Committee (the "Average Closing Price"), for
the 30-day period ending on such date or such other period as the
Committee may determine shall be applicable to a grant of Phantom
Shares prior to the relevant Date of Grant. The Average Closing Price
of a share of Common Stock shall be determined by dividing (X) by (Y),
where (X) shall equal the sum of the closing prices for the Common
Stock on each day that the Common Stock was traded and a closing price
was reported on such national securities exchange or on such automated
quotation system or by such market maker, as the case may be, during
such period, and (Y) shall equal the number of days on which the Common
Stock was traded and a closing price was reported on such national
securities exchange or on such automated quotation system or by such
market maker, as the case may be, during such period.
(ix) To "vest" a Phantom Share held by a Participant shall mean to
render such Phantom Share nonforfeitable other than in the event of a
termination of such Participant's employment by the Company or any of
its subsidiaries for Cause (as defined in Section 7(d) hereof).
(b) Agreement. Each Agreement (i) shall state the Date of Grant, the name
of the Participant and the Participant's employing company, (ii) shall specify
the number of Phantom Shares granted and the Initial Value of such Phantom
Shares, (iii) shall specify the Valuation Dates and any Early Valuation Dates,
the number of Phantom Shares whose Appreciation Value shall be determined an
each such Valuation Date or Early Valuation Date, and any applicable vesting
schedule (as provided for in Section 4(d) hereof) for such Phantom Shares, (iv)
shall be signed by the Participant and a person designated by the Committee, and
(v) shall be delivered to the Participant. The Agreement shall contain such
other terms and conditions as are required by the Plan and, in addition, such
other terms not inconsistent with the Plan as the Committee may deem advisable.
(c) Valuation Dates; Measurement of Appreciation Value. The Committee shall
provide in the Agreement for one or more Valuation Dates on which the
Appreciation Value of the Phantom Shares granted pursuant to the Agreement shall
be measured and fixed, and shall designate in the Agreement the number of such
Phantom Shares whose Appreciation Value is to be calculated on each such
Valuation Date. Unless otherwise determined by the Committee, each Valuation
Date shall be December 15 and no Valuation Date shall occur later than the year
in which the eighth (8th) anniversary of the Date of Grant occurs.
(d) Vesting. The Committee may in its sole discretion provide in the
Agreement that Phantom Shares granted thereunder shall vest (subject to such
terms and conditions as the Committee may provide in the Agreement) over such
period of time, not in excess of five years from the Date or Grant, as may be
specified in a vesting schedule contained therein.
(e) Payment of Appreciation Value. Except as provided in Section 7 hereof,
and subject to the limitations contained in Section 6 hereof, the Appreciation
Value of a Phantom Share shall be paid to a Participant in cash in a lump sum as
soon as practicable following the Valuation Date or Early Valuation Date, as the
case may be, applicable to such Phantom Share.
(f) Early Formation Dates.
(i) Election. In its sole discretion, the Committee may provide a
prospective Participant an election to establish an Early Valuation
Date with respect to a portion or the Phantom Shares granted on a Date
of Grant by so notifying the prospective Participant promptly following
the determination by the Committee to grant Phantom Shares to such
prospective Participant. Such prospective Participant shall inform the
Committee in writing whether such Participant elects to avail himself
of such Early Valuation Date within fifteen (15) business days of
receipt of such notice. Such election is irrevocable once made. Unless
the Committee in its sole discretion determines otherwise, no more than
twenty-five percent (25%) of the Phantom Shares granted pursuant to the
Agreement shall have their Appreciation Value measured on an Early
Valuation Date and no Early Valuation Date shall occur prior to either
August, 1990 or the vesting of the Phantom Shares whose Appreciation
Value is to be fixed on such Early Valuation Date.
(ii) Payment Restrictions. In the event that the Committee in its
sole discretion, determines in good faith that the payment of
Appreciation Value with respect to Early Valuation Dates in a calendar
year would not be in the best interest of the Company from a financial
point of view, the Committee shall defer until such time as it shall
determine (which shall in no event be later than the original Valuation
Date applicable to such Phantom Shares) the Early Valuation Date with
respect to such number, determined proportionally, of the Participants'
Phantom Shares with an Early Valuation Date during such calendar year
as it shall deem appropriate. An Early Valuation Date that has been
deferred to a subsequent calendar year shall in all respects under the
Plan be treated like any other Early Valuation Date occurring during
such subsequent calendar year; provided, however, that an Early
Valuation Date that is deferred into the calendar year in which the
Phantom Shares to which it relates would otherwise have had their
Valuation Date (if no election had been made under this Section 4(f)
shall in all respects under the Plan be treated like a Valuation Date
occurring during such calendar year.
5. PLAN LIMIT ON GRANTS OF PHANTOM SHARES. The maximum aggregate number of
Phantom Shares that may be granted under the Plan is 250,000; provided, however,
that Phantom Shares that are forfeited hereunder shall not be deemed granted for
purposes of such limit and shall be thereafter available for reissuance under
the Plan.
6. LIMITATIONS ON ANNUAL PAYMENTS.
(a) Initial Aggregate Annual Limits. Subject to Section 6(b)
below, the maximum aggregate dollar amount payable under the Plan in a
single calendar year shall not exceed an annual limit for such calendar
year (the "Annual Limit"). The Annual Limit for a given calendar year
(or the method by which such Annual Limit shall be calculated) shall be
established by the Committee prior to the date of the execution of an
Agreement with respect to a grant of Phantom Shares having a Valuation
Date or Early Valuation Date occurring in such calendar year, and shall
be set forth in the Agreement together with the Maximum Annual Limit
(as defined in Section 6(b) below) and the formula to be used in
increasing such Annual Limit. For purposes of the limitations imposed
by this Section 6, the Appreciation Value of a Phantom Share shall be
deemed payable on its Valuation Date or Early Valuation Date, as the
case may be.
(b) Maximum Aggregate Annual Limit. Prior to the date of the
execution of an Agreement with respect to a grant or Phantom Shares
having a Valuation Date or Early Valuation Date occurring in a given
calendar year, the Committee shall also establish a maximum annual
limit (the "Maximum Annual Limit") for all amounts payable under the
Plan in such calendar year and the formula by which the Annual Limit
may be increased up to such Maximum Annual Limit. Such formula shall be
based on the amount by which cumulative cash flow of the Company
exceeds projections or such other factors as the Committee shall deem
relevant, and shall be employed by the Committee to make one or more
upward adjustments in the Annual Limit for such calendar year as
appropriate; provided, however, that the Annual Limit for any calendar
year shall not exceed the Maximum Annual Limit established for that
calendar year.
(c) Application of Annual Limit. To the extent that the aggregate
dollar amount payable under the Plan in a calendar year exceeds the
applicable Annual Limit (taking into account, applicable any increases
in the Annual Limit effected in accordance with Section 6(b)), the
Appreciation Value payable teach Participant shall be reduced pro rata
and the Company shall not be required to pay the amount of any such
reduction: provided, however, that the Committee may, in special
circumstances, in its sole discretion exempt any Participant from such
pro rata reduction.
7. EMPLOYMENT REQUIREMENT.
(a) Termination of Employment. For purposes of the Plan, the
employment of a Participant shall be deemed terminated if the
Participant is no longer employed by the Company or any of its
subsidiaries. As used in this Section 7, he term "Outstanding Phantom
Shares" shall mean a Phantom Share granted to a Participant for which
the applicable Early Valuation Date or Valuation Date, as the case may
be, has not yet occurred (or, in the case of an Early Valuation Date,
has been deferred pursuant to Section 4(f) hereof).
(b) Death, Retirement, Permanent Disability, Voluntary Termination
or Termination by the Company Other Than for Cause. If the employment
of a Participant terminates before the occurrence of one or more Early
Valuation Dates or Valuation Dates applicable to the Participant's
Outstanding Phantom Shares for reason or such Participant's death,
Retirement or Permanent Disability, voluntary termination by the
Participant or termination by the Company or any of its subsidiaries
other than for Cause (as such terms are defined in Section 7(d) below),
then, unless the Committee in its sole discretion determines otherwise,
the Appreciation Value of Outstanding Phantom Shares as to which the
Participant's rights are vested as of the termination date shall be
calculated and fixed on such termination date. Unless the Committee in
its sole discretion determines otherwise, the Appreciation Value so
determined shall then be payable to the Participant or the
Participant's Beneficiary (as defined below) following the originally
scheduled Valuation Dates or Early Valuation Date, as the case may be,
in accordance with Section 4(e) hereof. Upon a termination described in
this Section 7(b), the Participant shall relinquish all rights with
respect to Phantom Shares that are not vested as of such termination
date.
(c) Termination for Cause. If a Participant's employment is
terminated by the Company or any of its subsidiaries for Cause, then,
unless the Committee in its sole discretion determines otherwise, all
Outstanding Phantom Shares, whether or not vested, and any and all
rights to the payment of Appreciation Value with respect to such
Outstanding Phantom shares shall be forfeited effective as of the date
of such termination.
(d) Definitions. As used in this Section 7, the following terms
shall have the following meanings:
(i) "Retirement" shall be defined as resignation or
termination of employment after attainment of an age required
for payment of an immediate pension pursuant to the terms of
any qualified retirement plan maintained by the Company or a
subsidiary in which the Participant participates; provided,
however, that no resignation or termination prior to a
Participant's 60th birthday shall be deemed a retirement
unless the Committee so determines in its sole discretion;
(ii) "Permanent Disability" shall be defined in the same
manner as such term or a similar term is defined in the
long-term disability policy maintained by the Company or a
subsidiary thereof for the Participant and in effect on the
date of the Participant's termination of employment with the
Company or any subsidiary thereof, unless the Committee
determines otherwise in its sole discretion and sets forth an
alternative definition in the applicable Agreement;
(iii) "Termination for Cause" shall be defined as a
termination of employment with the Company or any subsidiaries
which, as determined by the Committee, is by reason of (A)
"cause" as defined in any employment agreement applicable to
the Participant, or (B) for Participants who do not have an
employment agreement that defines "cause," (x) a material
breach by the Participant of any employment agreement where
"cause" is not defined, or a failure or refusal by a
Participant to substantially perform a material duty of such
Participant's employment, in the case or a Participant whose
employment is not subject to an employment agreement, (y) the
commission by the Participant of a felony or the perpetration
by the Participant of a dishonest act or common law fraud
against the Company or any subsidiary thereof, or (z) any
other act or omission which is materially injurious to the
financial condition or business reputation of the Company or
any subsidiary thereof, and
(iv) "Beneficiary" or "Beneficiaries" shall be defined as
the person(s) designated by the Participant pursuant to the
provisions of the Agreement to receive payments pursuant to
such Agreement upon the death. If no Beneficiary is so
designated by the Participant or if no Beneficiary is living
at the time a payment is due pursuant to such Agreement,
payments shall be made to the estate of the Participant. The
Agreement shall provide the Participant with the right to
change the designated Beneficiaries from time to time by
written instrument executed by the Participant and filed with
the Committee in accordance with such rules as may be
specified by the Committee.
8. EFFECT OF CERTAIN CORPORATE CHANGES AND CHANGES IN CONTROL.
(a) Effect of Reorganization. In the event that (i) the Company is
merged or consolidated with another corporation, (ii) one person
becomes the beneficial owner of more than fifty percent (50%) of the
issued and outstanding equity securities of the Company (for purposes
of this Section 8(a), the terms "person" and "beneficial owner" shall
have the meanings assigned to them in Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), (iii) all or substantially all of the assets
of the Company are acquired by another corporation, person or entity
(each such event in (i), (ii) or (iii) or any other similar event or
series of events which results in an event described in (i), (ii) or
(iii), being hereinafter referred to as a "Reorganization Event") or
(iv) the Board of Directors of the Company (the "Board") shall propose
that the Company enter into a Reorganization Event, then the Committee
shall take one of the following actions, the choice of which being in
its sole discretion, with respect to the Plan, unless, in the case of
any Participant, the Participant agrees otherwise: (A) cause the
surviving entity or new owner, as the case may be, to agree to adopt
the Plan and to maintain it, with respect to all grants outstanding
under the Plan as of the date of the Reorganization Event, in
accordance with the terms in effect as of the date of the
Reorganization Event, and to agree to adopt the Agreements and to
continue in effect their respective terms as such terms were in effect
as of the date of the Reorganization Event, except that (x) the Plan
and related Agreements may be modified to utilize the stock of such
surviving entity or new owner, in lieu of the Common Stock, to measure
the Value of the Phantom Shares, if equitable adjustments are made to
reflect the relative values of such stock immediately prior to the
occurrence of the Reorganization Event or (y) if the Common Stock
continues to be utilized to measure the value of the Phantom Shares,
equitable adjustments are to be made to reflect the relative values of
such stock immediately prior to and following the Reorganization Event,
if appropriate, or (B) determine the Appreciation Value of the Phantom
Shares by reference to the consideration to be paid for the Common
Stock in such Reorganization Event, and modify the Plan and the related
Agreements, if appropriate, to provide that when and if the Participant
is entitled to a payment under the provisions of the Plan and related
Agreement (including, without limitation, the provisions regarding
vesting, payment, limitations on annual payments and employment
requirements) as they were in effect prior to the proposal of the
Reorganization Event, such payment shall be computed on the basis of
such Appreciation Value as so determined. Notwithstanding the
provisions of the preceding sentence, in the event that the effect of
the provisions contained in the preceding sentence should become a
material impediment, either from a financial point of view or
otherwise, to the consummation of a proposed Reorganization Event, the
Committee may take such action as it deems equitable and appropriate to
provide each Participant with a benefit equivalent to that which he
would have been entitled had such event not occurred. Further, for the
purposes of the first sentence of this Section 8, no event or series of
events involving EA Engineering, Science, and Technology, Inc., the
Company or any of its respective subsidiaries or affiliates shall be
deemed to be a Reorganization Event unless such event or series of
events results in there being no class of equity securities of the
Company which is publicly traded. Any action taken by the Committee may
be made conditional upon the consummation of the applicable
Reorganization Event. Further, in the event that a division or
subsidiary of the Company is acquired by another corporation, person or
entity, the Company is reorganized, dissolved or liquidated, an event
or series of events involving a corporate restructuring not described
in the first sentence of this Section occurs, or the Board shall
propose that the Company enter into any such transaction, event or
series of events, then the Committee will take such action as it, in
its sole discretion, deems equitable or appropriate to provide each
Participant with a benefit equivalent to that which he would have been
entitled had such event not occurred.
(b) Dilution and Other Adjustments. In the event of a stock
dividend or split, issuance or repurchase of stock or securities
convertible into or exchangeable for shares of stock, grants of
options, warrants or rights to purchase stock, recapitalization,
combination, exchange or similar change affecting the Common Stock, the
Committee may, in its sole discretion, make any or all of the following
adjustments to provide each Participant with a benefit equivalent to
that which he would have been entitled had such event not occurred: (i)
adjust the number of Phantom Shares granted to each Participant, (ii)
adjust the Initial Value of such Phantom Shares, and (iii) make any
other adjustments, or take such action, as Committee, in its sole
discretion, deems appropriate. Such adjustments shall be conclusive and
binding for all purposes. In the event of a change in the Common Stock
which is limited to a change in the designation thereof to "Capital
Stock" or other similar designation, or to a change in the par value
thereof, or from par value to no par value, without increase or
decrease in the number of issued shares, the shares resulting from any
such change shall be deemed to be Common Stock within the meaning or
the Plan.
9. SOURCE OF PAYMENTS. The general funds of the Company shall be the sole
source of payments of Appreciation Value under the Plan, and the Company shall
not have any obligation to establish any separate fund or trust or other
segregation of assets to provide for payments under the Plan. Nothing contained
in this Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship, between
the Company and a Participant or any other Person. To the extent any person
acquires any rights to receive payments hereunder from the Company, such rights
shall be no greater than those of an unsecured creditor.
10. MISCELLANEOUS.
(a) No Rights to Grants or Continued Employment. No Employee shall
have any claim or right to receive grants of Phantom Shares under the
Plan. Neither the Plan nor any action taken hereunder shall be
construed as giving any Employee any right to be retained by the
Company or any of its subsidiaries.
(b) Restrictions on Transfer. The rights of a Participant with
respect to Phantom Shares shall not be transferable by the Participant
to whom such Phantom Shares are granted, otherwise than by will or the
laws of descent and distribution.
(c) Tax Withholding. The Company or a subsidiary thereof, as
appropriate, shall have right to deduct from all payments made under
the Plan to a Participant or to a Participant's Beneficiary any
Federal, state or local taxes required by law to be withheld with
respect to such payments.
(d) Stockholder Rights. No grant of Phantom Shares under the Plan
shall entitle a Participant or Beneficiary to rights of a holder of
shares of Common Stock.
(e) No Restriction on Right of Company to Effect Corporate Change.
The Plan shall not affect in any way the right or power of the Company
or its stockholders to make or authorize any or all adjustments,
recapitalization, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of stock or of options, warrants or rights to
purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Common Stock or the
rights thereof or which are convertible into or exchangeable for Common
Stock, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
11. AMENDMENT. The Board may at any time and from time to time alter,
amend, suspend or terminate the Plan in whole or in part. No termination or
amendment of the Plan may, without the consent of the Participant to whom any
Phantom Shares shall previously have been granted, adversely affect the rights
of such Participant in such Phantom Shares.
12. EFFECTIVE DATE. The Plan shall be effective as of January 14, 1999 (the
"Effective Date") and shareholder approval shall be sought at the first annual
meeting of stockholders on or following such date.
13. TERMINATION. Unless previously terminated pursuant to Section 11
hereof, the Plan shall terminate on the tenth anniversary of the Effective Date,
and no further Phantom Shares may be awarded hereunder after such date.
14. HEADINGS. The headings of sections and subsections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Plan.
15. GOVERNING LAW. The Plan and all rights hereunder shall be construed in
accordance with and governed by the laws of the State of Delaware.
