SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
IMO INDUSTRIES INC.
(Exact name of registrant
as specified in its charter)
Delaware 21-0733751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1009 Lenox Drive, Building Four West
Lawrenceville, New Jersey 08648
(Address of Principal Executive Offices) (Zip Code)
____________________
IMO INDUSTRIES INC.
EQUITY INCENTIVE PLAN FOR KEY EMPLOYEES
(Full title of plan)
____________________
Thomas J. Bird, Esquire
Executive Vice President, General Counsel and Secretary
1009 Lenox Drive, Building Four West
Lawrenceville, New Jersey 08648
(Name and address of agent for service)
(609) 896-7600
(Telephone number, including area code,
of agent for service)
___________________
Copy to:
Kathleen M. Shay, Esquire
Duane, Morris & Heckscher
One Liberty Place
Philadelphia, PA 19103-7396
CALCULATION OF REGISTRATION FEE
Title of Proposed Proposed
securities Amount maximum maximum Amount of
to be to be offering aggregate registration
registered registered price per share offering price fee
__________ __________ _______________ ______________ ____________
Common Stock, 850,000 $8.9375(1) $7,596,875(1) $2,620
$1.00 par shares
value
(1) Pursuant to paragraph (h) of Rule 457, the proposed maximum
offering price per share and the proposed maximum aggregate offering
price have been computed on the basis of $8.9375 per share, the average
of the high and low sales prices of the Common Stock of the Company on
the New York Stock Exchange on June 19, 1995.
IMO INDUSTRIES INC.
Cross Reference Sheet
Pursuant to Item 501(b) of Regulation S-K
with respect to
Part I of Form S-8
Item Number and Caption Heading in Prospectus
1 Plan Information *
2 Registrant Information and Employee
Plan Annual Information *
_______________
* Omitted because the documents containing the information specified
in Part I of this Registration Statement, Information Required in
the Section 10(a) Prospectus, are not required to be filed
herewith. All information required in the Section 10(a) Prospectus
will be furnished to plan participants pursuant to a memorandum, as
supplemented or amended from time to time, and the documents
incorporated by reference therein.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following material is incorporated herein by reference:
(a) The Company's annual report filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), for the fiscal year ended December 31, 1994.
(b) The Company's current report filed pursuant to Section 13 or
15(d) of the Exchange Act dated February 1, 1995.
(c) The Company's quarterly report filed pursuant to Section 13
or 15(d) of the Exchange Act for the quarterly period ended March 31,
1995.
(d) The Company's current report filed pursuant to Section 13 or
15(d) of the Exchange Act dated June 19, 1995.
(e) The description of the Company's Common Stock set forth in
the Company's Form 10 Registration Statement dated October 15, 1986, as
amended on December 5, 1986 and December 8, 1986.
All reports or other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment that indicates that
all securities offered have been sold or that deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of
filing of such reports and documents. Any statement contained in a
document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for the 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 herein by reference, modifies or supersedes such
statement. Any 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.
No answer to this item is required because the class of securities
to be offered is registered under Section 12 of the Exchange Act.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware empowers a Delaware corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon plea of
nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was
unlawful.
In the case of an action or suit by or in the right of the
corporation to procure a judgment in its favor, Section 145 empowers a
corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by reason of the fact that he is or was acting in any of
the capacities set forth above against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that indemnification is not
permitted in respect of any claim, issue or matter as to which such
person is adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought determines upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court deems proper.
Section 145 further provides: that a Delaware corporation is
required to indemnify a director, officer, employee or agent against
expenses (including attorney's fees) actually and reasonably incurred by
him in defense of any action, suit or proceeding referred to above or in
defense of any claim, issue or matter therein to the extent that such
person has been successful on the merits or otherwise; that the
indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be
entitled; that the indemnification provided for by Section 145 shall,
unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of such person's heirs, executors and
administrators; that expenses (including attorneys' fees) incurred by an
officer or director in defending any action, suit or proceeding referred
to above may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such officer or director to repay such
amount if it is ultimately determined that such person is not entitled
to be indemnified as authorized under Section 145; and that the
corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted
against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power
to indemnify him against such liability under Section 145. A Delaware
corporation may provide indemnification only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has
met the applicable standard of conduct. Such determination is to be
made (i) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion or (iii) by the
stockholders.
Article XIII of the By-Laws of the Company provides that each
person who was or is made a party to, or is involved in, any action,
suit or proceeding by reason of the fact that such person is or was a
director, officer or employee of the Company (or was serving at the
request of the Company as a director, officer or employee for another
entity) while serving in such capacity shall be indemnified by the
Company, to the full extent authorized by Delaware law, against all
expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in
connection therewith. Article XIII of the By-Laws provides that rights
conferred thereby are contract rights and include the right to be paid
or reimbursed by the Company for expenses incurred in defending such
proceedings in advance of their final disposition upon receipt by the
Company from the indemnified party of an undertaking to repay all
amounts so advanced if it is ultimately determined that the person
receiving such payments is not entitled to be indemnified.
Article XIII of the By-Laws provides that the rights conferred
therein to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition are not
exclusive of any other right which any person may have or acquire under
any statute, provision of the Company's Restated Certificate of
Incorporation, contract, agreement or By-Laws, or otherwise. Finally,
Article XIII of the By-Laws provides that the Company may maintain
insurance, at its expense, to protect itself and any of its directors,
officers, employees or agents against any expense, liability or loss,
whether or not the Company would have the power to indemnify such person
against such expense, liability or loss under Delaware law.
The Company's Restated Certificate of Incorporation, as permitted
by the General Corporation Law of the State of Delaware, provides that a
director of the Company shall not be personally liable to the Company or
to its stockholders for monetary damages for breach of fiduciary duty as
a director except (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 General Corporation Law
of the State of Delaware or (iv) for any transaction from which the
director derived an improper personal benefit.
The Company has purchased liability insurance under two policies
for directors and officers for certain losses up to an aggregate of $20
million arising from claims or charges made against them while acting in
their capacities as directors or officers of the Company and/or its
subsidiaries.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
4.1 Imo Industries Inc. Equity Incentive Plan for Key Employees,
as amended.
5.1 Opinion of Duane, Morris & Heckscher
23.1 Consent of Duane, Morris & Heckscher (included in their
opinion filed as Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
Item 9. Undertakings.
The 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 the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(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.
The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant, 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 Securities
Act of 1933 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 of 1933 and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Lawrenceville, New Jersey on
June 21, 1995.
IMO INDUSTRIES INC.
By: /s/ DONALD K. FARRAR
Donald K. Farrar,
Chairman, President and
Chief Executive Officer
Know all men by these presents, that each person whose signature
appears below constitutes and appoints Donald K. Farrar, David C.
Christensen and Thomas J. Bird, and each or any of them, as 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 or all amendments or post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
any of them or their substitutes, may lawfully 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 below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
Chairman, President, Chief
Executive Officer and Director
/s/ DONALD K. FARRAR (principal executive officer) June 21, 1995
Donald K. Farrar
Executive Vice President and
Chief Financial Officer
/s/ WILLIAM M. BROWN (principal financial officer) June 21, 1995
William M. Brown
Vice President and
Corporate Controller
/s/ ROBERT A. DERR II (principal accounting officer) June 21, 1995
Robert A. Derr II
/s/ JAMES B. EDWARDS Director June 21, 1995
James B. Edwards
/s/ J. SPENCER GOULD Director June 21, 1995
J. Spencer Gould
Director June 21, 1995
Richard J. Grosh
/s/ CARTER P. THACHER Director June 21, 1995
Carter P. Thacher
/s/ DONALD C. TRAUSCHT Director June 21, 1995
Donald C. Trauscht
/s/ARTHUR E. VAN LEUVEN Director June 21, 1995
Arthur E. Van Leuven
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Exhibit No. Exhibit
4.1 Imo Industries Inc. Equity Incentive
Plan for Key Employees, as amended
5.1 Opinion of Duane, Morris & Heckscher
23.1 Consent of Duane, Morris & Heckscher
(included in their opinion filed as
Exhibit 5.1)
23.2 Consent of Ernst & Young LLP
AMENDED AND RESTATED
EQUITY INCENTIVE PLAN
FOR KEY EMPLOYEES
As Amended Through May 18, 1995
IMO INDUSTRIES INC., a corporation organized under the laws of the
State of Delaware, hereby sets forth the Equity Incentive Plan for Key
Employees. The Plan permits the grant of stock options, stock
appreciation rights, restricted stock and restricted unit awards. The
Committee of the Board of Directors that administers the Plan may select
and grant to key employees of the Company and its Affiliates, the type of
option, stock appreciation right or award which the Company determines to
be most effective in advancing the interests of the Company through the
motivation and retention of those key employees upon whose judgment,
initiative and continued efforts the Company is largely dependent for the
successful conduct of its business.
1. DEFINITIONS
Whenever the following terms are used in the Plan they shall have
the meaning specified below unless the context clearly indicates to the
contrary.
"Affiliate" shall mean any corporation in which the Company owns,
directly or indirectly, 25% or more of the voting stock.
"Award" shall mean an award of restricted stock or restricted units
granted under the provisions of Section 5 of the Plan.
"Board" shall mean the Board of Directors of the Company.
"Change of Control" shall mean a change in the power to direct or
cause the direction of the management and policies of the Company,
whether through the ownership of voting securities, contract, or
otherwise.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section,
any valid regulation promulgated thereunder and any comparable provision
of any future legislation amending, supplementing or superseding such
section.
"Committee" shall mean the committee appointed by the Board
(pursuant to Section 2(a) of the Plan) to administer the Plan.
"Company" shall mean Imo Industries Inc., a Delaware corporation.
"Director" shall mean a member of the Board.
"Employee" shall mean any salaried, full-time employee of the
Company, or of any corporation which is then an Affiliate, whether such
employee is so employed at the time the Plan is adopted or becomes so
employed subsequent to the adoption of the Plan.
"Fair Market Value" shall be either (i) the mean between the highest
and lowest sale prices of the Company's Common Stock quoted in the New
York Stock Exchange Composite Transactions Index (the "Index") for the
date in question, as published in The Wall Street Journal, or (ii) the
closing price of the Company's Common Stock quoted in the Index for the
date in question. If no sale prices are quoted in the Index for such
date, the next preceding date for which such sale prices are quoted shall
be used. The Committee shall determine in each case which definition
shall apply.
"Grantee" shall mean an Employee to whom an Award is granted.
"Incentive Stock Option" shall mean an Option designated as such by
the Committee which meets the requirements of Section 422 of the Code.
"Option" shall mean an option to purchase Common Stock of the
Company granted under the provisions of Section 4 of the Plan and, where
applicable, shall include an Incentive Stock Option.
"Optionee" shall mean an Employee to whom an Option is granted.
"Plan" shall mean this Amended and Restated Equity Incentive Plan
for Key Employees.
"Restricted Stock Award" shall mean an award of restricted Common
Stock of the Company granted under the provisions of Section 5(d) of the
Plan.
"Restricted Unit Award" shall mean an Award of restricted units
granted under the provisions of Section 5(e) of the Plan.
"Retirement" shall mean a Termination of Employment by reason of the
Employee's retirement at or after his or her earliest permissible
retirement date pursuant to and in accordance with his or her employer's
regular retirement plan or practice.
"Secretary" shall mean the Corporate Secretary or an Assistant
Secretary of the Company.
"Stock Appreciation Right" shall mean a right granted under the
provisions of Section 6 of the Plan.
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain then owns stock
possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"Termination of Employment" shall mean a cessation of the employee-
employer relationship between an Employee and the Company or an Affiliate
for any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, Total Disability or Retirement or the
disaffiliation of an Affiliate, but excluding any such termination where
there is a simultaneous reemployment by the Company or an Affiliate.
"Total Disability" shall mean permanent and total disability as
determined in accordance with Section 72(m)(7) of the Code.
2. ADMINISTRATION
(a) Appointment of Committee. The Committee shall consist of at
least three Directors, appointed by and holding office at the pleasure of
the Board. No Options, Stock Appreciation Rights or Awards may be
granted to any member of the Committee during the term of his or her
membership on the Committee. A Director shall be eligible to serve on
the Committee only if he or she is not then eligible and has not at any
time within one year prior thereto been eligible for selection as a
person (i) to whom Options or Awards may be granted or (ii) to whom stock
may be allocated or (iii) to whom stock options may be granted pursuant
to any other plan of the Company or of any Affiliate entitling the
participants therein to acquire stock of the Company or any Affiliate;
provided, however, that a Director may participate in and be eligible to
receive stock, awards and/or options pursuant to any other plan of the
Company or of any Affiliate if such participation or eligibility would
not disqualify the Director from being a "disinterested person" for
purposes of Rule 16b-3 under the Securities Exchange Act. The duties and
responsibilities of the Committee may be assigned by the Board to a
standing committee of the Board; provided, however, that all of the
members of such standing committee must satisfy all of the eligibility
requirements set forth above for membership on the Committee.
(b) Duty and Power of Committee. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance
with its provisions. The Committee shall have the power to determine
which Employees are key Employees and to interpret the Plan, the Options,
the Stock Appreciation Rights and the Awards, and to adopt rules for the
administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
(c) Matters Relating to Termination of Employment. The Committee,
in its absolute discretion, shall determine the effect of all matters and
questions relating to Termination of Employment, including, but not by
way of limitation, the question of whether a Termination of Employment
resulted from Retirement or Total Disability, and all questions of
whether particular leaves of absence constitute Terminations of
Employment.
(d) Transfer Restrictions. The Committee, in its absolute
discretion, may impose such restrictions on the transferability of the
stock issued upon the exercise of an Option or issued as an Award as it
deems appropriate, and any such restrictions shall be set forth in the
respective Option or Award agreement and may be referred to on the
certificates evidencing such shares.
(e) Committee Actions. The Committee may act either by vote of a
majority of its members at a meeting or by a memorandum or other written
instrument signed by all members of the Committee.
(f) Compensation; Professional Assistance; Good Faith Actions.
Members of the Committee may receive reasonable compensation for their
services as members, and all expenses and liabilities they incur in
connection with the administration of the Plan shall be borne by the
Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, or other persons. The Committee,
the Company and officers and directors of the Company shall be entitled
to rely upon the advice, opinions or valuations of any such persons. All
actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Optionees,
Grantees, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination, or
interpretation made in good faith with respect to the Plan, the Options,
the Stock Appreciation Rights or the Awards, and all members of the
Committee shall be fully protected by the Company in respect to any such
action, determination or interpretation.
3. SHARES SUBJECT TO THE PLAN
(a) Limitations. The shares of stock issuable pursuant to Options,
Stock Appreciation Rights, Restricted Stock Awards or Restricted Unit
Awards shall be shares of the Company's $1.00 par value Common Stock.
The total number of such shares that may be subject to Options, Stock
Appreciation Rights and Awards granted under the Plan shall not exceed
3,050,000 in the aggregate. Moreover, no key Employee shall be granted
Options, Stock Appreciation Rights or Awards with respect to a number of
shares, determined on a cumulative basis, that exceeds 90% of the
aggregate number of shares that are available to be issued under the Plan
pursuant to this Section 3(a).
(b) Effect of Unexercised or Cancelled Options or Stock
Appreciation Rights, Unvested Restricted Stock or Unit Awards. If an
Option, Stock Appreciation Right or Award expires or is cancelled for any
reason without having been fully exercised or vested, the number of
shares or units subject to such Option, Stock Appreciation Right or Award
that were not purchased or did not vest prior to such expiration or
cancellation may again be made subject to an Option, a Stock Appreciation
Right or an Award granted hereunder (to the same Optionee or Grantee or
to a different Optionee or Grantee), provided that a surrender of all or
part of an Option in connection with the exercise of a Stock Appreciation
Right shall not be considered a termination and the shares covered by
such Option or the surrendered portion may not be reallocated by the
Committee.
(c) Changes in Company's Shares. In the event that the outstanding
shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company, or of another corporation by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend, spin-off or combination
of shares, appropriate adjustments shall be made by the Committee in the
aggregate number and kind of shares and units that may be issued on
exercise of Options or Stock Appreciation Rights or granted as Awards.
4. STOCK OPTIONS
(a) Granting of Options.
(1) Eligibility. Any key Employee of the Company or of any
corporation which is then an Affiliate shall be eligible to be granted
Options.
(2) Granting of Options.
(A) Subject to the provisions of Section 4(a)(2)(C), the
Committee shall from time to time, in its absolute discretion:
(i) Select from among the eligible key Employees
Employees to whom Options should be granted and determine the number of
shares to be subject to such options.
(ii) Determine the terms and conditions of such
Options, consistent with the Plan.
(iii) Determine whether such Options are to be Incentive
Stock Options or not, provided any Incentive Stock Option must meet all
the applicable requirements of Section 422 of the Code.
(B) Upon the selection of a key Employee to be granted an
Option, the Committee shall authorize the Company to grant such Option
and may impose such conditions on the grant of such Option, as it deems
appropriate.
(C) Among the factors that the Committee shall take into
account in determining to whom Options should be granted and the number
of shares to be subject to such Options shall be the losses, if any,
incurred by eligible key Employees due to the cancellation of their non-
vested and unexercised vested options previously issued under the stock
option plans maintained by Transamerica Corporation.
(b) Terms of Options.
(1) Option Agreement. Each Option shall be evidenced by a
written stock option agreement which shall be executed by the Optionee
and the Company and which shall contain the terms and conditions
determined by the Committee. Notwithstanding anything to the contrary in
the Plan, stock option agreements evidencing Incentive Stock Options
shall contain such terms and conditions, among others, as may be
necessary in the opinion of the Committee to qualify them as Incentive
Stock Options under Section 422 of the Code.
(2) Option Price. The price of the shares subject to each
Option shall be set by the Committee; provided, however, that the price
shall not be less than 100% of the Fair Market Value for such shares on
the date the Option is granted as determined by the Committee. The option
price shall be subject to adjustment only as provided in Section 4(b)(8)
of the Plan; subsequent to grant, no option shall be repriced, regranted
or amended so as to effect a change in the option price.
(3) Date of Grant. The date on which an Option shall be
granted shall be the date of the Committee's authorization of such grant
or such later date as may be determined by the Committee at the time such
grant is authorized.
(4) Commencement of Exercisability.
(A) Except as may be otherwise provided in the stock
option agreement evidencing an Option or as may be otherwise determined
by the Committee, no Option may be exercised in whole or in part during
the first year after such Option is granted.
(B) Subject to the provisions of Section 4(b)(4)(A) and
(C), Options shall become exercisable at such times and in such
installments (which may be cumulative) as the Committee shall provide in
the terms of each individual Option; provided, however, that in the stock
option agreement evidencing an Option or after an Option is granted, the
Committee may, on such terms and conditions as it may determine to be
appropriate and notwithstanding the provisions of Section 4(b)(4)(A) and
(C), accelerate the time at which such Option or any portion thereof may
be exercised.
(C) No portion of an Option which is unexercisable
(except an Incentive Stock Option which is unexercisable solely by virtue
of the sequential exercise restriction contained in Section 4(b)(10)(C))
at the time of the Optionee's Termination of Employment shall thereafter
become exercisable; provided, however, that this does not limit the
discretion of the Committee to provide in the terms of an Option that
there will be an acceleration of exercisability upon the occurrence of
certain types of Terminations of Employment.
(5) Replacement Options. The Committee, in its absolute
discretion, may grant to holders of outstanding Options, in exchange for
the surrender and cancellation of such Options, new Options having option
prices lower (or higher) than the option price provided in the Options so
surrendered and cancelled and containing such other terms and conditions
as the Committee may deem appropriate.
(6) Expiration of Options.
(A) Except as otherwise provided in Section 4(b)(6)(B),
each Option shall terminate on the expiration of ten years from the date
the Option was granted. Notwithstanding the foregoing or any other
provision of the Plan, no Incentive Stock Option may be exercised after
the expiration of ten years from the date the Option was granted.
(B) Each Option or portion thereof which has become
exercisable may be exercised until the first to occur of the following
events:
(i) The expiration of three months from the date of
the Optionee's Termination of Employment unless such Termination of
Employment results from the Optionee's death, Total Disability or
Retirement, and except as provided in (iv) below; or
(ii) The expiration of three years from the date of
the Optionee's Termination of Employment by reason of Total Disability;
provided no Incentive Stock Option may be exercised after the expiration
of one year from the Optionee's Termination of Employment by reason of
Total Disability, and except as provided in (iv) below; or
(iii) The expiration of three years from the date of
the Optionee's Retirement; provided no Incentive Stock Option may be
exercised after the expiration of three months from the date of the
Optionee's Retirement, and except as provided in (iv) below; or
(iv) The expiration of one year from the date of the
Optionee's death, if such death occurs while the Optionee is in the
employ of the Company or an Affiliate or within the three-month, one-year
or three-year period referred to in (i), (ii) or (iii) above, whichever
is applicable.
(C) Subject to the provisions of subparagraphs (A) and (B)
of this Section 4(b)(6), the Committee shall provide, in the terms of
each individual Option, when such Option expires and becomes
unexercisable.
(7) Consideration. In consideration of the granting of the
Option, the Optionee shall agree, in the written stock option agreement,
to remain in the employ of the Company or an Affiliate for a period of at
least one year after the Option is granted.
(8) Adjustments in Outstanding Options. In the event that the
outstanding shares of the stock subject to Options are increased or
decreased or changed into or exchanged for a different number or kind of
shares of the Company, or other securities of the Company, or of another
corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend, spin-
off or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be
exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the occurrence of
such event. Such adjustment in an outstanding Option shall be made
without change in the total price applicable to the Option or the
unexercised portion of the Option (except for any change in the aggregate
price resulting from rounding-off of share quantities or prices) and with
any necessary corresponding adjustment in option price per share and
provided that any such adjustment in respect to an Incentive Stock Option
shall be made in such manner as not to constitute a "modification" as
defined in Section 425 of the Code. Any such adjustment made by the
Committee shall be final and binding upon all Optionees, the Company and
all other interested persons.
(9) Change of Control. In its absolute discretion and on such
terms and conditions as it deems appropriate, and notwithstanding the
provisions of Section 4(b)(4), the Committee may provide in the terms and
conditions of any Option that such Option may be exercised at any time on
or following a Change of Control.
(10) Certain Additional Provisions for Incentive Stock Options.
Notwithstanding anything to the contrary in the Plan, each Incentive
Stock Option must meet the following requirements:
(A) The Optionee at the time the Option is granted is an
Employee of the Company or a Subsidiary of the Company.
(B) The Optionee (together with persons whose stock
ownership is attributed to the Optionee pursuant to Section 425(d) of the
Code) at the time the Option is granted does not own stock possessing
more than 10% of the total combined voting power of all classes of stock
of the Company or of any of its Subsidiaries.
(C) If granted prior to January 1, 1987, the Option by
its terms is not exercisable while there is outstanding (within the
meaning of Section 422 of the Code) any other Incentive Stock Option
which was granted before the granting of such Option to the Employee to
purchase stock in the Company or any Subsidiary of the Company (within
the meaning of Section 425 of the Code) or in a predecessor corporation
of any such corporations.
(D) If granted prior to January 1, 1987, the aggregate
Fair Market Value (determined as of the time the Option is granted) of
the stock for which any Employee is granted Incentive Stock Options in
any calendar year prior to January 1, 1987 (under all plans of the
Company and its Subsidiaries) shall not exceed $100,000 plus any unused
limit carryover in such year as determined under Section 422 of the Code.
(E) If granted after December 31, 1986, no Option may be
granted to an Employee which, when aggregated with all other Incentive
Stock Options granted after December 31, 1986 to such Employee by the
Company and its Subsidiaries, would result in stock having an aggregate
Fair Market Value (determined for each share of stock as of the time the
Option covering such share is granted) in excess of $100,000 becoming
first available for purchase upon exercise of the Option during any
calendar year.
(F) The Option may not be exercised after the expiration
of three months after the Optionee ceases to be employed by the Company
or a Subsidiary.
(11) Substitute Options. Options may be granted under the
Plan from time to time in substitution for Options held by employees of
other corporations who are about to become Employees of the Company as
the result of a merger or consolidation of the employing corporation with
the Company or the acquisition by the Company or any Affiliate of the
assets of the employing corporation or the acquisition by the Company or
any Affiliate of stock of the employing corporation as a result of which
it becomes an Affiliate of the Company. The terms and conditions of
substitute Options so granted may vary from the terms and conditions set
forth in the Plan to such extent as the Committee at the time of grant
may deem appropriate in order to conform, in whole or in part, to the
provisions of the options in substitution for which Options are being
granted, but no such variation shall be such as to affect the qualified
status of any such Option which has been granted in substitution for an
incentive stock option under Section 422 of the Code.
(c) Exercise of Options.
(1) Person Eligible to Exercise. During the lifetime of the
Optionee, only he or she may exercise an Option granted to him or her or
any portion thereof. After the death of the Optionee, any exercisable
portion of an Option may be exercised by his or her personal
representative or by any person empowered to do so under the deceased
Optionee's will or under the then applicable laws of descent and
distribution. The Company may require appropriate proof from any such
other person of his or her right or power to exercise the Option or any
portion thereof.
(2) Fractional Shares; Partial Exercise. The Company shall
not be required to issue fractional shares on exercise of an Option and
the Committee may, by the terms of the Option, require any partial
exercise thereof to be with respect to a specified minimum number of
shares.
(3) Manner of Exercise. An exercisable Option, or any
exercisable portion thereof, may be exercised solely by delivery to the
Secretary or his or her office of all of the following:
(A) Notice in writing signed by the Optionee or other
person then entitled to exercise such Option or portion thereof, stating
that such Option or portion is exercised, such notice complying with all
applicable rules established by the Committee;
(B) Full cash payment for the shares with respect to
which such Option or portion is thereby exercised and which are to be
delivered to him or her pursuant to such exercise; provided, at the
discretion of the Committee, payment may be made in whole or in part in
shares of Common Stock of the Company which Common Stock will be valued
at its then Fair Market Value as determined by the Committee or in whole
or in part pursuant to such other arrangement, including any deferred
payment arrangement or simultaneous exercise and sale arrangement, as the
Committee, in its absolute discretion, determines; and
(C) Such representations and documents as the Committee,
in its absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act of 1933,
as amended, and any other federal or state securities laws or
regulations. The Committee may, in its absolute discretion, also take
whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and
registrars.
(4) Right to Elect to Pay Profit or to Credit Profit in Lieu
of Delivering Option Shares. The Committee, in its absolute discretion,
may elect (in lieu of delivering all or a portion of the shares of Common
Stock as to which an Option has been exercised) if the Fair Market Value
of the Common Stock exceeds the exercise price of the Option (i) to pay
the Optionee in cash or in shares of the Company's Common Stock, or a
combination of cash and Common Stock, an amount equal to the excess of
the Fair Market Value of the Company's Common Stock on the exercise date
over the option price or, in the case of an Option which is not an
Incentive Stock Option, (ii) to defer payment and to credit the amount of
such excess on the Company's books for the account of the Optionee and
either (a) to treat the amount in such account as if it had been invested
in the manner from time to time determined by the Committee, with
dividends or other income thereon being deemed to have been so reinvested
or (b) for the Company's convenience, to contribute the amount in such
account to a trust, which may be revocable by the Company, for investment
in the manner from time to time determined by the Committee and set forth
in the instrument creating such trust. The election pursuant to this
Section 4(c)(4) shall be made by giving written notice to the Optionee
(or other person exercising the Option). Shares of the Company's Common
Stock paid pursuant to this subparagraph will be valued at the Fair
Market Value on the exercise date. For purposes of any cash payment to
an Optionee who is subject to Section 16(b) of the Securities and
Exchange Act of 1934 and who exercises an Option during a "window
period," for purposes of this Section 4(c)(4) the Fair Market Value of
the Common Stock on the exercise date shall be deemed to be that value
determined by the Committee in its discretion which is not less than the
lowest Fair Market Value, nor more than the highest Fair Market Value, of
a share of Common Stock on any day during such "window period." "Window
period" shall mean the ten-day period defined in Rule 16b-3(e)(3) under
the Securities and Exchange Act of 1934. For purposes of the limitations
in Section 3(a), the number of shares which are paid or credited pursuant
to this Section 4(c)(4) shall not be counted, but the full number of
shares as to which the Option was exercised shall be counted even though
the Committee has made an election under this Section 4(c)(4) in respect
to some or all of the shares.
(5) Conditions to Issuance of Stock Certificates. The shares
of Common Stock deliverable upon exercise of an Option, or any part
thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of Common Stock purchased upon the exercise of
any Option or portion thereof prior to fulfillment of all of the
following conditions:
(A) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(B) The completion of any registration or other
qualification of such shares under any state or federal law or under the
rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, which the Company shall, in its
absolute discretion, deem necessary or advisable;
(C) The obtaining of any approval or other clearance from
any state or federal governmental agency which the Company shall, in its
absolute discretion, determine to be necessary or advisable;
(D) The provision for any income tax withholding which
the Company shall, in its absolute discretion, determine to be necessary
or advisable; and
(E) The lapse of such reasonable period of time following
the exercise of the Option as the Company may determine, in its absolute
discretion, from time to time to be necessary or advisable for reasons of
administrative convenience.
(6) Rights of Stockholders. An Optionee shall not be, nor
have any of the rights or provisions of, a stockholder of the Company in
respect to any shares which may be purchased upon the exercise of any
Option or portion thereof unless and until certificates representing such
shares have been issued by the Company to such Optionee.
5. AWARDS
(a) Eligibility. Any key Employee of the Company or of any
corporation which is then an Affiliate shall be eligible to be granted
awards.
(b) Award Procedure. The Committee shall from time to time in its
absolute discretion:
(1) Select from among the eligible key Employees the Employees
to whom awards shall be granted, determine whether such awards are to be
Restricted Stock Awards or Restricted Unit Awards (or both) and determine
the number of shares or units to be covered by such awards; and
(2) Determine the terms and conditions of such Awards,
consistent with the Plan.
(c) Award Agreements. Each Award shall be evidenced by a written
agreement, executed by the Grantee and the Company, which shall contain
such restrictions, terms and conditions as the Committee may require and
(without limiting the generality of the foregoing) such agreements
reflecting Restricted Stock Awards may impose an escrow condition and/or
require that an appropriate legend be placed on share certificates.
(d) Restricted Stock Awards.
(1) Shares Subject to Award. The shares of Common Stock
awarded as a Restricted Stock Award may be either previously authorized
but unissued shares or issued shares which have then been reacquired by
the Company. Such awarded shares shall be issued in the name of the
Grantee and delivered to him or her (or the escrow holder, if any) as
soon as reasonably practicable after the Award is made (and after the
Grantee has executed the Award agreement and any other documents which
the Committee, in its absolute discretion, may require) without the
payment of any cash consideration by such Grantee. Unless and until the
shares so awarded to the Grantee shall have vested in the manner set
forth in Section 5(f), below, such shares shall not be sold, transferred
or otherwise disposed of and shall not be pledged or otherwise
hypothecated. Upon the Termination of Employment of the Grantee, all of
such shares which are not then vested shall thereupon be forfeited and
automatically transferred to and reacquired by the Company at no cost to
the Company. The Committee may also impose such other restrictions and
conditions on the shares as it deems appropriate.
(2) Rights as Stockholder.
(A) Upon delivery of the shares of Common Stock awarded
to the Grantee (or the escrow holder, if any) as a Restricted Stock
Award, the Grantee shall have all the rights of a stockholder with
respect to such shares, including the right to vote the shares and
receive all dividends, or other distributions paid or made with respect
to the shares.
(B) In the event that as a result of a stock dividend,
stock-split, reclassification, recapitalization, combination of shares or
the adjustment in the capital stock of the Company or otherwise, or as a
result of a merger, consolidation, spin-off or other reorganization, the
Company's Common Stock shall be increased, reduced or otherwise changed,
and by virtue of any such change a Grantee shall in his or her capacity
as owner of unvested shares of stock which have been awarded to him or
her as a Restricted Stock Award (the "prior shares") be entitled to new
or additional or different shares of stock or securities (other than
rights or warrants to purchase securities); such new or additional or
different shares or securities shall thereupon be considered to be
unvested Restricted Stock Awards and shall be subject to all of the
conditions and restrictions which were applicable to the prior shares
pursuant to the Plan.
(C) If a Grantee receives rights or warrants with respect
to any shares which were awarded to him or her as Restricted Stock
Awards, such rights or warrants or any shares or other securities
acquired by the exercise of such rights or warrants may be held,
exercised, sold or otherwise disposed of by the Grantee free and clear of
the restrictions and obligations provided in the Plan.
(3) Conditions. Each Restricted Stock Award shall contain
either performance-based criteria to be met prior to vesting or require a
minimum time period of five years over which the shares comprising such
Restricted Stock Award shall vest in annual increments as the Board, in
each case, shall determine.
(e) Restricted Unit Awards.
(1) Restricted Unit Account. In the case of Restricted Unit
Awards, no shares of Common Stock shall be issued to the Grantee at the
time the Award is made, and no fund shall be set aside by the Company for
the payment of any such Award; but rather the Company shall establish and
maintain a separate written account for each Grantee and shall record in
such account the number of Restricted Units awarded to such Grantee.
Whenever the Company pays a cash dividend upon its Common Stock, there
shall be credited to each such Grantee's account an amount equal to the
cash dividend paid upon one share of Common Stock for each Restricted
Unit then in his or her account (hereinafter referred to as "Dividend
Equivalents").
(2) Payment of Restricted Units. Each Restricted Unit Award
agreement shall specify a date or dates on which payment of the value of
vested Restricted Units (and Dividend Equivalents with respect to such
vested Restricted Units) in the Grantee's account is to be made. As soon
as reasonably practicable after the payment date, the Company shall
deliver to the Grantee one share of the Company's Common Stock for each
vested Restricted Unit credited to his or her account and cash equal to
the vested Dividend Equivalents credited to his or her account; provided,
however that the Committee may, in its absolute discretion, elect to pay
the Grantee cash or part cash and part Common Stock in lieu of delivering
only Common Stock for the vested Restricted Units. If a cash payment is
made in lieu of delivering Common Stock the amount of such cash payment
shall (in respect to each vested Restricted Unit for which a cash payment
is to be made) be equal to the Fair Market Value of the Company's Common
Stock on the payment date. The shares of Common Stock delivered in
payment, in whole or in part, of a Restricted Unit may be either
previously authorized but unissued shares or issued shares which have
then been reacquired by the Company. Payments to be made hereunder
shall, if the Grantee is then deceased, be made to the Grantee's estate
or others as may be designated in writing by the Grantee, with the
approval of the Committee.
(3) Deferral of Payment. The Restricted Unit Award agreement
may permit a Grantee to request the payment of vested Restricted Units
(and Dividend Equivalents with respect to such Restricted Units) be
deferred beyond the payment date specified in the agreement. It shall be
at the Committee's sole discretion whether or not to permit such
deferment and to specify the terms and conditions which are not
inconsistent with the Plan, to be contained in the agreement. In the
event of such deferment, the Committee may determine that interest shall
be credited annually on the Dividend Equivalents at a rate to be
determined by the Committee. The Committee may also determine to
compound such interest.
(4) Adjustments in Capitalization. The Committee shall make
an appropriate adjustment in the number of kind of Restricted Units then
credited to the account or accounts of any Grantee due to changes in the
Company's outstanding Common Stock by reason of a merger, consolidation,
spin-off or other reorganization, recapitalization, reclassification,
stock split-up, stock dividend, or combination of shares and any such
adjustment made by the Committee shall be final and binding upon all
Grantees, the Company and all other interested persons.
(5) No Trust Fund. Grantees of Restricted Unit Awards shall
not have any interest in any fund or specific asset of the Company by
reason of such Award. No trust fund shall be created in connection with
the Plan or any Restricted Unit Award thereunder, and there shall be no
required funding of amounts which may become payable under any such
Award.
(f) Vesting of Awards. Shares awarded as Restricted Stock Awards
and units awarded as Restricted Unit Awards (including Dividend
Equivalents with respect to such Restricted Unit Awards) shall vest at
such time or times and on such terms, conditions and performance
criteria, as the Committee may determine; provided, however, that (i) no
such shares or units shall vest until 12 months from the date of Award
and (ii) the vesting of such shares or units shall occur only if the
Grantee on the date of the vesting is then and has continuously been an
Employee from the date of the Award. In the event of Termination of
Employment as a result of the death or Total Disability of a Grantee, the
Committee, in its absolute discretion, may determine that the unvested
portion of some or all shares awarded to him or her as Restricted Stock
Awards and some or all units awarded to him or her as Restricted Unit
Awards (including unvested Dividend Equivalents) shall thereupon
immediately vest. The Committee may also decide at any time in its
absolute discretion and on such terms and conditions as it deems
appropriate, to accelerate the vesting of shares awarded as Restricted
Stock Awards and units awarded as Restricted Unit Awards (including
unvested Dividend Equivalents).
6. STOCK APPRECIATION RIGHTS
(a) Eligibility. Any key Employee of the Company or of any
corporation which is then an Affiliate shall be eligible to be granted
Stock Appreciation Rights.
(b) Grant of Stock Appreciation Rights. Stock Appreciation Rights
may be granted by the Committee under the Plan in connection with an
Option, either at the time of grant or by amendment to the related stock
option agreement. Each Stock Appreciation Right shall be subject to the
same terms and conditions as the related Option and to such additional
conditions as the Committee shall determine, shall be exercisable only to
the extent the Option is exercisable and shall become nonexercisable and
be forfeited if and to the extent the related Option is exercised or
becomes unexercisable.
(c) Exercise of Stock Appreciation Rights. A Stock Appreciation
Right shall entitle the Optionee to surrender to the Committee
unexercised the related Option, or any portion thereof, and to receive
from the Company in exchange therefor a cash payment and/or Common Stock
having an aggregate Fair Market Value equal to the excess of the Fair
Market Value of one share of Common Stock over the option price per share
provided for in the related Option, multiplied by the number of shares
called for by the Option, or portion thereof, which is surrendered. The
Committee shall have the sole discretion to determine the form in which
payment is to be made upon the exercise of a Stock Appreciation Right
(i.e., whether in cash, in shares of Common Stock or partly in cash and
partly in shares). In no event will fractional shares be issued but cash
will be paid in lieu thereof.
(d) Window Period Exercises for Cash. Notwithstanding the
provisions of Section 6(c), above, the Committee shall have the ability,
in its discretion, to fix the Fair Market Value of a share of Common
Stock for purposes of determining the amount of cash and the number of
shares, if any, to be received upon the exercise of a Stock Appreciation
Right during any "window period" (which consists of a period beginning on
the third business day following the date of release of quarterly or
annual sales and earnings information by the Company and ending on the
twelfth business day following such release date) for payment wholly or
partly in cash at an amount not greater than the highest Fair Market
Value, nor less than the lowest Fair Market Value, of a share of Common
Stock during such window period.
(e) Relation to Options. Stock Appreciation Rights shall be
exercisable at such time as may be determined by the Committee, provided
that a Stock Appreciation Right shall not be exercisable prior to the
time the related Option could be exercised and, except in the event of
death or Total Disability, shall not be exercisable for a period of six
months from the date of grant of such right. A Stock Appreciation Right
may be exercised in whole or in part only upon surrender of a
proportionate part of the related Option by the Optionee.
(f) Expiration or Termination. Each Stock Appreciation Right and
all rights and obligations thereunder shall terminate and may no longer
be exercised upon the termination or exercise of the related Option.
(g) Shares May Be Used Only Once. Shares subject to an Option to
which a Stock Appreciation Right is related shall be used not more than
once to calculate the cash or shares to be received by the Optionee
pursuant to an exercise of such Stock Appreciation Right.
(h) Effect of Death or Other Termination of Employment. In the
event of the Termination of Employment of a recipient of a Stock
Appreciation Right, his or her Stock Appreciation Right shall be
exercisable only to the extent and upon the conditions that the related
Option is exercisable under the applicable provisions of Section 4(b)(6)
hereof.
(i) Adjustment in Outstanding Options. In the event that the
Options to which any Stock Appreciation Rights are related are adjusted
pursuant to the provisions of Section 4(b)(8), then the Committee shall
make an appropriate and equitable adjustment in the number of such Stock
Appreciation Rights, to the end that after such event the Optionee shall
be in the same position with respect to the Options as he or she was
prior to the occurrence of such event.
7. MISCELLANEOUS PROVISIONS
(a) Options, Stock Appreciation Rights and Awards Not Transferable.
No Option or interest or right therein or part thereof and no Stock
Appreciation Right, Restricted Stock Award or Restricted Unit Award shall
be liable for the debts, contracts, or engagements of the Optionee,
Grantee or his or her successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means, whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void
and of no effect; provided, however, that nothing in this Section 7(a)
shall prevent transfers by will or by the applicable laws of descent and
distribution.
(b) Employment. Nothing in the Plan or in any Option, Stock
Appreciation Right or Award shall confer upon any Employee the right to
continue in the employ of the Company or any Affiliate or shall interfere
with or restrict in any way the rights of the Company and Affiliates to
discharge any Employee at any time for any reason whatsoever, with or
without good cause.
(c) Effect of a Change of Control. The Committee may, in its
absolute discretion, provide that in the event of a Change of Control,
some or all shares and units awarded under the Plan as Restricted Stock
Awards or Restricted Unit Awards including unvested Dividend Equivalents
shall immediately vest.
(d) Amendment, Suspension or Termination of the Plan. The Plan may
be wholly or partially amended or otherwise modified, suspended or
terminated at any time or from time to time by the Board or the
Committee. However, without approval of the Company's stockholders given
within 12 months before or after the action by the Board or the
Committee, no action of the Committee or Board may, except as provided in
Section 3(c), increase the limits imposed in Section 3(a) on the maximum
number of shares which may be the subject of Options, Stock Appreciation
Rights and Awards granted under the Plan, amend Section 4(b)(6)(A) or (B)
to permit the exercise of an Option after expiration of ten years from
the date the Option was granted, or extend the limit imposed in this
subsection on the period during which Incentive Stock Options may be
granted or otherwise materially increase the benefits accruing to
participants under the Plan. Neither the amendment, suspension, nor
termination of the Plan shall, without the consent of the Optionee or the
Grantee, alter or impair any rights or obligations under any Option,
Stock Appreciation Right or Award theretofore granted. No Option, Stock
Appreciation Right or Award may be granted during any period of
suspension nor after termination of the Plan, and in no event may any
Option intended to be an Incentive Stock Option be granted under the Plan
more than ten years after the date the adoption of the Plan was approved
by the Board.
(e) Effect upon Other Compensation Plans. The adoption of the Plan
shall not affect any other stock option, compensation or incentive plans
in effect for the Company or any Affiliate and the Plan shall not
preclude the Board from establishing any other forms of incentive or
compensation for Employees of the Company or any Affiliate.
(f) Compliance with Rule 16b-3. To the extent that Rule 16b-3
under the Securities Exchange Act of 1934 applies to Options or Awards
granted under the Plan, it is the intent of the Company that the Plan
comply in all respects with the requirements of Rule 16b-3, that any
ambiguities or inconsistencies in construction of the Plan be interpreted
to give effect to such intention and that if the Plan shall not so
comply, whether on the date of adoption or by reason of any later
amendment to or interpretation of Rule 16b-3, the provisions of the Plan
shall be deemed to be automatically amended so as to bring them into full
compliance with such rule.
(g) Titles. Titles are provided herein for convenience only and
are not to serve as a basis for interpretation or construction of the
Plan.
Adopted by Board of Directors on October 14, 1986.
Approved by Stockholders on December 5, 1986.
Amended by Board of Directors on February 10, 1988, February 16, 1995 and
May 18, 1995.
Amendments Approved by Stockholders on April 28, 1988 and May 18, 1995.
Duane, Morris & Heckscher
Attorneys at Law
One Liberty Place
Philadelphia, PA 19103-7396
June 23, 1995
The Board of Directors of
Imo Industries Inc.
1009 Lenox Drive
Building Four West
P.O. Box 6550
Lawrenceville, NJ 08648-0550
Gentlemen:
We have acted as counsel to Imo Industries Inc. (the "Company")
in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, of a
registration statement on Form S-8 (the "Registration Statement")
relating to the offer and sale by the Company of up to 850,000 shares
(the "Shares") of Common Stock, $1.00 par value, of the Company,
pursuant to the Company's Equity Incentive Plan for Key Employees (the
"Plan").
As counsel to the Company, we have supervised all corporate
proceedings in connection with the preparation and filing of the
Registration Statement. We have also examined the Company's Certificate
of Incorporation and By-laws, as amended to date, the corporate minutes
and other proceedings and the records relating to the authorization, sale
and issuance of the Shares, and such other documents and matters of law
as we have deemed necessary or appropriate in order to render this
opinion.
Based upon the foregoing, it is our opinion that each of the
Shares, when issued in accordance with the terms and conditions of the
Plan and any option, right or award granted
thereunder, will be duly authorized, legally and validly issued and
outstanding, fully paid and nonassessable.
We hereby consent to the use of this opinion in the Registration
Statement.
Sincerely,
/s/DUANE, MORRIS & HECKSCHER
Duane, Morris & Heckscher
Duane, Morris & Heckscher
Attorneys at Law
One Liberty Place
Philadelphia, PA 19103-7396
June 23, 1995
The Board of Directors of
Imo Industries Inc.
1009 Lenox Drive
Building Four West
P.O. Box 6550
Lawrenceville, NJ 08648-0550
Gentlemen:
We have acted as counsel to Imo Industries Inc. (the "Company")
in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, of a
registration statement on Form S-8 (the "Registration Statement")
relating to the offer and sale by the Company of up to 850,000 shares
(the "Shares") of Common Stock, $1.00 par value, of the Company,
pursuant to the Company's Equity Incentive Plan for Key Employees (the
"Plan").
As counsel to the Company, we have supervised all corporate
proceedings in connection with the preparation and filing of the
Registration Statement. We have also examined the Company's Certificate
of Incorporation and By-laws, as amended to date, the corporate minutes
and other proceedings and the records relating to the authorization, sale
and issuance of the Shares, and such other documents and matters of law
as we have deemed necessary or appropriate in order to render this
opinion.
Based upon the foregoing, it is our opinion that each of the
Shares, when issued in accordance with the terms and conditions of the
Plan and any option, right or award granted
thereunder, will be duly authorized, legally and validly issued and
outstanding, fully paid and nonassessable.
We hereby consent to the use of this opinion in the Registration
Statement.
Sincerely,
/s/DUANE, MORRIS & HECKSCHER
Duane, Morris & Heckscher
EXHIBIT 23.2 -- CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 dated June 23, 1995) pertaining to the Imo Industries
Inc. Equity Incentive Plan for Key Employees of our report dated February
15, 1995, with respect to the consolidated financial statements and
schedules of Imo Industries Inc. included in the Annual Report (Form 10-
K) for the year ended December 31, 1994.
ERNST & YOUNG LLP
Princeton, New Jersey
June 21, 1995
