As filed with the Securities and Exchange Commission on July 26,1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
ADVANCED TECHNOLOGY LABORATORIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 91-1353386
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
22100 Bothell-Everett Highway
P.O. Box 3003
Bothell, WA 98041-3003
(Address of principal executive offices, including zip code)
1992 NONOFFICER EMPLOYEE STOCK OPTION PLAN
AMENDED 1992 OPTION, STOCK APPRECIATION RIGHT, RESTRICTED
STOCK, STOCK GRANT AND PERFORMANCE UNIT PLAN
(Full title of the plans)
W. BRINTON YORKS, Jr.
Vice President, General Counsel and Secretary
ADVANCED TECHNOLOGY LABORATORIES, INC.
22100 Bothell-Everett Highway
P.O. Box 3003
Bothell, WA 98041-3003
(206) 487-7000
(Name, address and telephone number, including area code, of
agent for service)
______________________
Copy to:
EVELYN SROUFE, ESQ.
PERKINS COIE
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
______________________
Page 1 of 39
Exhibit Index is on page 6
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CALCULATION OF REGISTRATION FEE
Title of Number to Proposed Proposed Amount
Securities Be Maximum Maximum of
to Be Registered Offering Aggregate Registra-
Registered Price Per Offering tion Fee
Share(1) Price(1)
Common 550,000(2) $13.88 $7,634,000 $2,632.43
Stock, par
value $.01
per Share
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(h). The price per share is estimated to
be $13.88 based on the average of the bid and asked prices for
the Common Stock in the over-the-counter market on July 25, 1994
as reported on the NASDAQ National Market.
(2) Of this number, 100,000 are being registered for issuance
pursuant to the 1992 Nonofficer Employee Stock Option Plan, and
450,000 are being registered for issuance pursuant to the Amended
1992 Option, Stock Appreciation Right, Restricted Stock, Stock
Grant and Performance Unit Plan, together with an indeterminate
number of additional shares which may be necessary to adjust the
number of shares reserved for issuance pursuant to such plans as
the result of any future stock split, stock dividend or similar
adjustment of the outstanding Common Stock of the Registrant.
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PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the
year ended December 31, 1993 filed on March 3, 1994, which contains
audited financial statements for the most recent year for which such
statements have been filed;
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), since the end of the fiscal year covered
by the Annual Report referred to in (a) above; and
(c) The description of the Registrant's Common Stock
contained in the Registration Statement on Form 10 (Registration No. 0-
15160) filed with the Commission on December 31, 1986 under Section
12(g) of the Exchange Act, including any amendments or reports filed
for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof, and
prior to the filing of a post-effective amendment which indicates that
the securities offered hereby have been sold or which deregisters the
securities covered hereby then remaining unsold, shall also be deemed
to be incorporated by reference into this Registration Statement and
to be a part hereof commencing on the respective dates on which such
documents are filed.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that
a corporation may indemnify directors and officers as well as other
employees and individuals against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement in connection
with specified actions, suits or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation--a "derivative action"), if they acted in
good faith and in a manner they 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
their conduct was unlawful. A similar standard is applicable in the
case of derivative actions, except that indemnification only extends
to expenses (including attorneys' fees) incurred in connection with
the defense or settlement of such action, and the statute requires
court approval before there can be any indemnification where the
person seeking indemnification has been found liable to the
corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-
laws, disinterested director vote, stockholder vote, agreement or
otherwise.
Article XI of the Registrant's By-Laws requires indemnification
to the fullest extent permitted under applicable law. Subsection 11.1
provides a right to indemnification for all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by any person who is or was involved
or is threatened to be made so involved in any threatened, pending or
completed proceeding by reason of the fact that such person is or was
a director, officer, employee or agent of the Registrant or is or was
serving at the request of the Registrant as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including an employee benefit plan.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a
director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability for (i) any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) payments of unlawful dividends or unlawful stock repurchases or
redemptions, or (iv) any transaction from which the director derived
an improper personal benefit.
Article Sixth of the Registrant's Restated Certificate of
Incorporation provides that the personal liability of each director of
the Registrant to the Registrant or to its stockholders for monetary
damages for breach of fiduciary duty as a director is limited to the
fullest extent permitted by the Delaware General Corporation Law.
The Registrant also maintains an insurance policy insuring its
directors and officers against liability for certain acts or omissions
while acting in their official capacities.
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Item 8. EXHIBITS
Exhibit
Number Description
5.1 Opinion of Perkins Coie regarding legality
of the Common Stock being registered
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Perkins Coie (included in
opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signature page)
99.1 1992 Nonofficer Employee Stock Option Plan
99.2 Amended 1992 Option, Stock Appreciation
Right, Restricted Stock, Stock Grant and
Performance Unit Plan
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in this Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;provided, however, that paragraphs (1)(i) and (1)(ii)
above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act (and, where applicable, each filing of an employee
benefits plan's annual report pursuant to Section 15(d) of the
Exchange Act) 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.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
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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 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 the City of Bothell, State of
Washington, on July 22, 1994.
ADVANCED TECHNOLOGY LABORATORIES, INC.
By /s/ W. Brinton Yorks, Jr.
W. Brinton Yorks, Jr., Vice President General
Counsel and Secretary
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
authorizes Dennis C. Fill,and W. Brinton Yorks Jr., and each of them as
attorneys-in-fact, with full power of substitution, to execute in the name
and on behalf of such person, individually and in each capacity stated below,
and to file, any and all amendments to this Registration Statement, including
any and all post-effective amendments.
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 indicated on July 22, 1994.
Signature Title
/s/Dennis C. Fill Chairman of the Board, Chief
Dennis C. Fill Executive Officer
/s/Harvey N. Gillis Senior Vice President, Chief
Harvey N. Gillis Financial Officer and
Treasurer
/s/David M. Perozek President and Chief Operating
David M. Perozek Officer, Director
/s/Edward Ray President, Interspec. Inc., Director
Edward Ray
/s/Kirby L. Cramer Director
Kirby L. Cramer
/s/Harvey Feigenbaum, M.D. Director
Harvey Feigenbaum, M.D.
/s/Eugene A. Larson Director
Eugene A. Larson
/s/John R. Miller Director
John R. Miller
/s/Harry Woolf, Ph.D. Director
Harry Woolf, Ph.D.
/s/Richard S. Totorica Corporate Controller (Chief
Richard S. Totorica Accounting Officer)
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INDEX TO EXHIBITS
Exhibit Sequentially
Number Description Numbered
Page
5.1 Opinion of Perkins Coie regarding legality 7
of the Common Stock being registered
23.1 Consent of KPMG Peat Marwick 8
23.2 Consent of Perkins Coie (included in 7
opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signature page) 5
99.1 1992 Nonemployee Director Stock Option Plan 9 - 21
99.2 Amended 1992 Option, Stock Appreciation 22 - 37
Right, Restricted Stock, Stock Grant and
Performance Unit Plan
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Exhibit 5.1
(Perkins Coie Letterhead)
July 26, 1994
Advanced Technology Laboratories, Inc.
22100 Bothell-Everett Highway, S.E.
P.O. Box 3003
Bothell, WA 98041-3003
Re: 550,000 Shares of Common Stock
($.01 par value) of Advanced Technology Laboratories, Inc.
("ATL")
Gentlemen and Ladies:
We have acted as counsel to you in connection with the preparation of a
Registration Statement on Form S-8 (the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act"), which you are filing
with the Securities and Exchange Commission with respect to 550,000 shares of
Common Stock, $.01 par value (the "Shares"), 450,000 of which are to be
issued pursuant to the Amended 1992 Option, Stock Appreciation Right,
Restricted Stock, Stock Grant and Performance Unit Plan and 100,000 of
which are to be issued pursuant to the Advanced Technology Laboratories,
Inc. 1992 Nonofficer Employee Stock Option Plan (together, the "Plans").
We have examined the Registration Statement and such other documents as we
have deemed relevant and necessary for the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that
the Shares that will be issued pursuant to the Plans, upon the due
execution by ATL and the registration by its registrars of the Shares and
the issuance thereof by ATL in accordance with the terms of the Plans, and
the receipt of the consideration therefor in accordance with the terms of
the Plans, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
/s/ Perkins Coie
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Exhibit 23.1
(KPMG Peat Marwick Letterhead)
CONSENT OF INDEPENDENT
CERTIFIED ACCOUNTANTS
The Board of Directors
Advanced Technology Laboratories, Inc.:
We consent to the use of our reports incorporated by reference herein.
/s/KPMG Peat Marwick
KPMG PEAT MARWICK
Seattle, Washington
July 25, 1994
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Exhibit 99.2
May 16, 1994
ADVANCED TECHNOLOGY LABORATORIES, INC.
Amended 1992 Option, Stock Appreciation Right, Restricted Stock,
Stock Grant
and Performance Unit Plan
1. Definitions
The following terms have the corresponding meanings for
purposes of the Plan:
"Award Cycle" means a period of not less than three fiscal
years over which performance units granted during a particular
year are to be earned out.
"Change of Control" means
(a) a "Board Change." For purposes of the Plan, a Board Change
shall have occurred if a majority of the seats (other than vacant
seats) on the Corporation's Board of Directors (the "Board") were
to be occupied by individuals who were neither (i) nominated by a
majority of the Incumbent Directors nor (ii) appointed by
directors so nominated. An "Incumbent Director" is a member of
the Board who has been either (i) nominated by a majority of the
directors of the Corporation then in office or (ii) appointed by
directors so nominated, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(b) The acquisition by any individual, entity or group (within
the meaning of Section 13(d) (3) or 14(d) (2) of the Exchange
Act) (a "Person") of "Beneficial Ownership" (within the meaning
of Rule 13d3 promulgated under the Exchange Act) of (i) 20% or
more of either (A) the then outstanding shares of common stock
(the "Outstanding Corporation Common Stock") or (B) the combined
voting power of the then outstanding voting securities of the
Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities"), in
the case of either (A) or (B) of this clause (i), which
acquisition is not approved in advance by a majority of the
Incumbent Directors or (ii) 33% or more of either (A) the
Outstanding Corporation Common Stock or (B) the Outstanding
Corporation Voting Securities, in the case of either (A) or (B)
of this clause (ii), which acquisition is approved in advance by
a majority of the Incumbent Directors; provided, however, that
the following acquisitions shall not constitute a Change of
Control: (x) any acquisition by the Corporation, (y) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any corporation
controlled by the Corporation, or (z) any acquisition by any
corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and
(iii) of the following subsection (c) are satisfied; or
(c) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more
than 60% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to
such reorganization, merger or consolidation in substantially the
same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (ii) no Person (excluding the
Corporation, any employee benefit
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plan (or related trust) of the
Corporation or such corporation resulting from such
reorganization, merger or consolidation and any Person
beneficially owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, 33% or more of
the Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the
election of directors, and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were Incumbent
Directors at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation; or
(d) Approval by the stockholders of the Corporation of (i) a
complete liquidation or dissolution of the Corporation or (ii)
the sale or other disposition of all or substantially all of the
assets of the Corporation, other than to a corporation, with
respect to which following such sale or other disposition, (A)
more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of
the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (B) no Person (excluding the
Corporation and any employee benefit plan (or related trust) of
the Corporation or such corporation and any Person beneficially
owning, immediately prior to such sale or other disposition,
directly or indirectly, 33% or more of the Outstanding
Corporation Common Stock or Outstanding Corporation Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, 33% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors, and (C) at least a majority of the members of the
board of directors of such corporation were approved by a
majority of the Incumbent Directors at the time of the execution
of the initial agreement or action of the Board providing for
such sale or other disposition of assets of the Corporation.
"Committee" means the Committee provided for in Section 4,
which shall administer the Plan.
"Common Stock" means common stock, par value $0.01 per share,
of the Corporation.
"Corporation" means Advanced Technology Laboratories, Inc., a
Delaware corporation.
"Designated Beneficiary" means any person designated in writing
by a Participant as a legal recipient of payments due under an
award in the event of the Participant's death, or in the absence
of such designation, the Participant's estate. Such designation
must be on file with the Corporation in order to be effective
but, unless the Participant has made an irrevocable designation,
may be changed from time to time by the Participant.
"Fair Market Value" of the Common Stock as of any trading day
means the average (rounded to the next highest cent in the case
of fractions of a cent) of the high and low sales prices of the
Common Stock as reported on such trading day by the NASDAQ
National Market System. If no sales price is reported for the
Common Stock on such trading day, then "Fair Market Value" shall
mean the highest bid price reported for the Common Stock on such
trading day by the National Quotation Bureau Incorporated or any
similar nationally recognized organization. The Committee, in
its sole discretion, shall make all determinations required by
this definition.
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"Participant" means an employee, consultant or independent
contractor who has received an award under the Plan.
"Payment Schedule" means the schedule adopted by the Committee
in accordance with Section 10 with respect to an Award Cycle to
govern determination of the Payment Value of a performance unit
at the end of such Award Cycle in accordance with Section 10.
"Payment Value" means the value, expressed in dollars, of a
performance unit at the conclusion of an Award Cycle, determined
in accordance with Section 10.
"Plan" means this Advanced Technology Laboratories, Inc.
Amended 1992 Option, Stock Appreciation Right, Restricted Stock,
Stock Grant and Performance Unit Plan.
"Restricted Stock" means the shares of Common Stock referred to
in Section 8.
"Retirement" means the termination of the services of a
Participant because of early or normal retirement as defined in
the Westmark Retirement Plan.
"Withholding Tax" means any tax, including any federal, state
or local income tax, required by any governmental entity to be
withheld or otherwise deducted and paid with respect to the
transfer of shares of Common Stock as a result of the exercise of
a Nonqualified Stock Option or stock appreciation right, the
payment of performance units or the award of Restricted Stock or
stock grants.
2. Stock Subject to the Plan
There are reserved for issuance upon the exercise of options,
for issuance of Restricted Stock and stock grant awards and for
issuance upon the payment of performance units and stock
appreciation rights under the Plan 2,150,000 shares of Common
Stock, of which no more than an aggregate of 550,000 shares may
be issued as Restricted Stock awards and stock grants under the
Plan. Such shares may be authorized and unissued shares of
Common Stock or previously outstanding shares of Common Stock
then held in the Corporation's treasury. If any option or stock
appreciation right granted under the Plan shall expire or
terminate for any reason (including, without limitation, by
reason of its surrender, pursuant to the provisions of Section
6(f) or the third paragraph of Section 6(b) or otherwise, or
cancellation, in whole or in part, pursuant to the provisions of
Section 6(c) or otherwise or pursuant to Section 7(f), or the
substitution in place thereof of a new option or stock
appreciation right) without having been exercised in full, the
shares subject thereto shall again be available for the purposes
of issuance under the Plan. If shares of Restricted Stock shall
be forfeited and returned to the Corporation pursuant to the
provisions of Section 8, such shares shall again be available for
the purposes of issuance under the Plan. In no event shall
shares of Common Stock which, under the Plan, are authorized to
be used in payment of performance unit awards be deemed to be
unavailable for purposes of the Plan until such shares have been
issued in payment thereof in accordance with the provisions of
Section 10(g). Stock appreciation rights and performance unit
awards providing for payments only in cash are not subject to the
overall limitations referred to above.
3. Administration
The Plan shall be administered by the Committee. Subject to
the express provisions of the Plan, the Committee shall have
plenary authority, in its discretion, to determine the
individuals to whom, and the time or times at which, performance
units or Restricted Stock shall be awarded and stock appreciation
rights or options shall be granted (including, without
limitation, whether such options shall be Incentive Stock Options
or Nonqualified Stock Options or a combination thereof, as such
terms are defined in Section 6(a)) and the number of units and/or
shares to be covered by each such award or grant. In making such
determinations, the Committee may take into account the nature of
the services rendered by the respective Participants, their
present and potential contributions to the Corporation's
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success and such other factors as the Committee in its discretion
may deem relevant. Subject to the express provisions of the Plan,
the Committee shall have plenary authority to interpret the Plan,
to prescribe, amend and rescind rules and regulations relating to
it, to determine the terms and provisions of Restricted Stock,
performance unit, stock appreciation right and option agreements
(which need not be identical) and to make all other
determinations necessary or advisable for the administration of
the Plan. The Committee's determinations of the matters referred
to in this Section 3 shall be conclusive. It is the intention of
the Corporation that the Plan and the administration hereof
comply in all respects with Section 16(b) of the Exchange Act,
and the rules and regulations promulgated thereunder, and if any
Plan provision is later found not to be in compliance with
Section 16(b), the provision shall be deemed null and void, and
in all events the Plan shall be construed in favor of its meeting
the requirements of Rule 16b-3. Notwithstanding anything in the
Plan to the contrary, the Board, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to persons who are subject to
Section 16 of the Exchange Act without so limiting or
conditioning the Plan with respect to other persons.
4. The Committee
The Board shall designate a Committee of members of the Board
which shall meet the requirements of Section 16(b) of the
Exchange Act. Currently, the Committee shall consist solely of
two or more members of the Board who are disinterested. If at
any time an insufficient number of disinterested directors is
available to serve on such Committee, interested directors may
serve on the Committee; however, during such time, no options,
stock appreciation rights or Restricted Stock shall be granted
under the Plan to any person if the granting of such options,
stock appreciation rights or Restricted Stock would not meet the
requirements of Section 16(b) of the Exchange Act.
For purposes of this Section 4, a "disinterested director" is a
person who meets the definition of "disinterested person" as set
forth in the rules and regulations promulgated under Section
16(b) of the Exchange Act. Currently, a disinterested director
is a member of the Board who is not (and, during the 12-month
period preceding his appointment as a member of the Committee has
not been) granted or awarded stock, stock appreciation rights or
other equity securities of the Corporation or any affiliated
corporation pursuant to the Plan or any other plan of the
Corporation or any affiliated corporation except for formula
plans (as such term is defined in Rule 16b-3 (c) (2) (ii) issued
under the Exchange Act) or ongoing securities acquisition plans
(as described in Rule 16b-3 (d) (2) (i) issued under the Exchange
Act). The Committee shall be appointed by the Board, which may
from time to time appoint members of the Committee in
substitution for members previously appointed and may fill
vacancies, however caused, in the Committee. The Committee shall
select one of its members as its Chairman and shall hold its
meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced
to writing and signed by all the members shall be fully as
effective as if it had been made by a majority vote at a meeting
duly called and held. The Committee may appoint a secretary,
shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
5. Eligibility
The Committee may award performance units and Restricted Stock
and grant options and stock appreciation rights only to
employees, consultants or independent contractors (which term as
used herein includes officers) of the Corporation and of its
present and future subsidiary corporations ("subsidiaries"). Any
person eligible under the Plan may receive one or more awards of
performance units or Restricted Stock or one or more grants of
options or stock appreciation rights, or any combination thereof,
as the Committee shall from time to time determine, and such
determinations may be different as to different Participants and
may vary as to different awards and grants.
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The maximum number of shares of Common Stock with respect to
which an option or options or a stock appreciation right or stock
appreciation rights may be granted to any eligible employee in
any one fiscal year of the Company shall not exceed ten percent
of the aggregate number of shares of Common Stock authorized for
issuance under the plan (the "Maximum Annual Employee Grant").
6. Option Grants
(a) The Committee is authorized under the Plan, in its
discretion, to issue options as "Incentive Stock Options" (as
defined in Section 422 of the United States Internal Revenue Code
of 1986, as amended (the "Code")) or as "Nonqualified Stock
Options" (all other options granted hereunder) and the options
shall be designated as Incentive Stock Options or Nonqualified
Stock Options in the applicable option agreement. The purchase
price of the Common Stock under each option granted under the
Plan shall be determined by the Committee but shall be not less
than 100% of the Fair Market Value of the Common Stock at the
time such option is granted. Notwithstanding the previous
sentence, any Nonqualified Stock Option may provide that the
purchase price be equal to the average Fair Market Value of the
Common Stock over any continuous period of trading days beginning
and ending no more than 30 business days before or after the date
such option is granted.
(b) The Committee shall be authorized in its discretion to
prescribe in the option grant the installments, if any, in which
an option granted under the Plan shall become exercisable,
provided that no option shall be exercisable prior to the first
anniversary of the date of grant thereof except as provided in
Sections 6(c), (d), (h), (i) and (j) or except as the Committee
otherwise determines. In no case may an option be exercised as
to less than 100 shares at any one time (or the remaining shares
covered by the option if less than 100) during the term of the
option. The Committee shall also be authorized to establish the
manner of the exercise of an option. The term of each option
shall be not more than 10 years from the date of grant thereof.
In general, upon exercise, the option price is to be paid in
full in cash; however, the Committee can determine at the time
the option is granted for Incentive Stock Options or at any time
prior to exercise for Nonqualified Stock Options, that additional
forms of payment will be permitted. To the extent permitted by
the Committee and applicable laws and regulations (including, but
not limited to, federal tax and securities laws and regulations
and state corporate law), an option may be exercised (i) in
Common Stock owned by the option holder having a Fair Market
Value on the date of exercise equal to the aggregate option
price, or in a combination of cash and stock; provided, however,
that payment in stock shall not be made unless such stock shall
have been owned by the option holder for a period of at least
three months prior thereto; or (ii) by delivery of a properly
executed exercise notice, together with irrevocable instructions
to a broker designated by the Corporation, all in accordance with
the regulations of the Federal Reserve Board, to deliver promptly
to the Corporation the amount of sale or loan proceeds to pay the
exercise price and any federal, state or local withholding tax
obligations that may arise in connection with the exercise.
In lieu of requiring an option holder to pay cash or stock and
to receive in turn certificates for shares of Common Stock upon
the exercise of a Nonqualified Stock Option, if the option so
provides, the Committee may elect to require the option holder to
surrender the option to the Corporation for cancellation as to
all or any portion of the number of shares covered by the
intended exercise and receive in exchange for such surrender a
payment, at the election of the Committee, in cash, in shares of
Common Stock or in a combination of cash and shares of Common
Stock, equivalent to the appreciated value of the shares covered
by the option surrendered for cancellation. Such appreciated
value shall be the difference between the option price of such
shares (as adjusted pursuant to Section 15) and the Fair Market
Value of such shares, which shall for this purpose be determined
by the Committee taking into consideration all relevant factors,
but which shall not be less than the Fair Market Value of such
shares on the date on which the option holder's notice of
exercise is received by the Corporation. Upon delivery to the
Corporation of a notice of exercise of option, the Committee may
avail itself of its right to require the option holder to
surrender the option to the Corporation for cancellation as to
shares
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covered by such intended exercise. The Committee's right
of election shall expire, if not exercised, at the close of
business on the fifth business day following the delivery to the
Corporation of such notice. Should the Committee not exercise
such right of election, the delivery of the aforesaid notice of
exercise shall constitute an exercise by the option holder of the
option to the extent therein set forth, and payment for the
shares covered by such exercise shall become due immediately.
(c) In the event that a Participant's services for the
Corporation or one of its subsidiaries shall cease and the
termination of such individual's service is for cause, the option
shall automatically terminate upon first notification to the
option holder of such termination of services, unless the
Committee determines otherwise, and such option shall
automatically terminate upon the date of such termination of
services for all shares which were not purchasable upon such
date. For purposes of this Section 6(c), "cause" is defined as a
determination by the Committee that the option holder (i) has
committed a felony, (ii) has engaged in an act or acts of
deliberate and intentional dishonesty resulting or intended to
result directly or indirectly in improper material gain to or
personal enrichment of the individual at the Corporation's
expense, or (iii) has willfully disobeyed the Corporation's
appropriate rules, instructions or orders, and such willful
disobeyance has continued for a period of 10 days following
notice thereof from the Corporation.
In the event of the termination of the services of the holder
of an option because of Retirement or disability, he may (unless
such option shall have been previously terminated pursuant to the
provisions of the preceding paragraph or unless otherwise
provided in his option grant) exercise such option at any time
prior to the expiration of the option, (i) in the event of
disability or normal Retirement, to the extent of the number of
shares covered by such option, whether or not such shares had
become purchasable by him at the date of the termination of his
services and (ii) in the event of early Retirement, to the extent
of the number of shares covered by such option at such time or
times as such option becomes purchasable by him in accordance
with its terms. (Although the option may be exercised after
Retirement or disability, under Section 422 of the Code, if the
option has been designated as an Incentive Stock Option, it must
be exercised within three months after the date of Retirement or
one year after the termination of employment due to disability in
order to qualify for incentive stock option tax treatment.)
In the event of the death of an individual to whom an option
has been granted under the Plan, while he is performing services
for the Corporation or a subsidiary, the option theretofore
granted to him (unless his option shall have been previously
terminated pursuant to the provisions of this Section 6(c) or
unless otherwise provided in his option grant) may, subject to
the limitations described in Section 6(g), be exercised by his
Designated Beneficiary, by his legatee or legatees of the option
under his last will, or by his personal representatives or
distributees, at any time within a period of one year after his
death, but not after the expiration of the option, to the extent
of the remaining shares covered by his option whether or not such
shares had become purchasable by such an individual at the date
of his death. In the event of the death of an individual (i)
during the one-year period following termination of his services
or (ii) following termination of his services by reason of
Retirement or disability, then the option (if not previously
terminated pursuant to the provisions of this Section 6(c) ) may
be exercised during the remainder of such one-year period or
during the remaining term of the option, respectively, by his
Designated Beneficiary, by his legatee under his last will, or by
his personal representative or distributee, but only to the
extent of the number of shares purchasable by such Participant
pursuant to the provisions of Section 6(d) at the date of
termination of his services.
In the event of the termination of the services of the holder
of an option, other than by reason of Retirement, disability or
death, he may (unless his option shall have been previously
terminated pursuant to the provisions of this Section 6(c) or
unless otherwise provided in his option grant) exercise his
option at any time within one year after such termination, but
not after the expiration of the option, to the extent of the
number of shares covered by his option which were purchasable by
him at the date of the termination of his services, and such
option shall automatically terminate upon the date of such
termination of services for all shares which were not purchasable
upon such date.
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(d) Notwithstanding the foregoing provisions, the Committee
may determine, in its sole discretion, in the case of any
termination of services, that the holder of an option may
exercise such option to the extent of some or all of the
remaining shares covered thereby whether or not such shares had
become purchasable by such an individual at the date of the
termination of his services and may exercise such option at any
time prior to the expiration of the original term of the option,
except that such extension shall not cause any Incentive Stock
Option to fail to continue to qualify as an Incentive Stock
Option without the consent of the option holder. Options granted
under the Plan shall not be affected by any change of
relationship with the Corporation so long as the holder continues
to be an employee, consultant or independent contractor of the
Corporation or of a subsidiary; however, a change in a
participant's status from an employee to a nonemployee (e.g.,
consultant or independent contractor) shall result in the
termination of an outstanding Incentive Stock Option held by such
participant in accordance with Section 6(c). The Committee, in
its absolute discretion, may determine all questions of whether
particular leaves of absence constitute a termination of
services; provided, however, that with respect to incentive stock
options, such determination shall be subject to any requirements
contained in the Code. Nothing in the Plan or in any option
granted pursuant to the Plan shall confer on any individual any
right to continue in the employ or other service of the
Corporation or any other person or interfere in any way with the
right of the Corporation or any other person to terminate his
employment or other services at any time.
(e) The date of grant of an option pursuant to the Plan shall
be the date specified by the Committee at the time it grants such
option, provided that such date shall not be prior to the date of
such action by the Committee and that the price shall be
determined in accordance with Section 6(a) on such date. The
Committee shall promptly notify a grantee of an award and a
written option grant shall promptly be duly executed and
delivered by or on behalf of the Corporation.
(f) The Committee shall be authorized, in its absolute
discretion, to permit option holders to surrender outstanding
options in exchange for the grant of new options or to require
option holders to surrender outstanding options as a condition
precedent to the grant of new options. The number of shares
covered by the new options, the option price (subject to the
provisions of Section 6(a)), the option period and other terms
and conditions of the new options shall all be determined in
accordance with the Plan and may be different from the provisions
of the surrendered options.
(g) In the event an optionee is granted Incentive Stock
Options that in the aggregate entitle the optionee to purchase,
in the first year such options become exercisable (whether under
their original terms or as a result of the occurrence of an
Acceleration Event, as defined below), Common Stock of the
Corporation, any parent corporation or any subsidiary of the
Corporation having a Fair Market Value (determined as of the time
such options are granted) in excess of $100,000, such portion in
excess of $100,000 shall be treated as a Nonqualified Stock
Option. Such limitation shall not apply if the Internal Revenue
Service publicly rules, issues a private ruling to the
Corporation, any optionee of the Corporation or any legatee,
personal representative or distributee of an optionee or states
in proposed, temporary or final regulations that provisions which
allow the full exercise of an optionee's Incentive Stock Options
upon the occurrence of the relevant Acceleration Event do not
violate Section 422(d) of the Code. An "Acceleration Event"
means (i) a determination of the Committee to allow an optionee
to exercise his options in full upon termination of his
employment or other service as provided in Section 6(c) or (d),
(ii) the death of an optionee while he is employed by the
Corporation or a subsidiary, (iii) any Change of Control, or (iv)
the optionee's termination of employment or other service under
circumstances that will allow him to exercise options not
otherwise exercisable pursuant to Section 6(j).
(h) Notwithstanding any contrary waiting period, installment
period or other limitation or restriction in any option agreement
or in the Plan, in the event of a Change of Control, each option
outstanding under the Plan shall thereupon become exercisable at
any time during the remaining term of the option, but not after
the term of the option, to the extent of the number of shares
covered by the option, whether or not such shares had become
purchasable by the Participant thereunder immediately
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prior to such Change of Control, subject, however, to the
limitations described in Section 6(g), by the holder of the option.
(i) Anything in the Plan to the contrary notwithstanding,
during the 90-day period from and after a Change of Control (x)
an optionee (other than an optionee who initiated a Change of
Control in a capacity other than as an officer or a Director of
the Corporation) who is an officer or a Director of the
Corporation (within the meaning of Section 16 of the Exchange Act
and the rules and regulations promulgated thereunder) with
respect to an option that was granted at least six months prior
to the date of exercise pursuant to this sentence and is
unaccompanied by a stock appreciation right and (y) any other
optionee who is not an officer or a Director with respect to an
option that is unaccompanied by a stock appreciation right shall,
unless the Committee shall determine otherwise at the time of
grant, have the right, in lieu of the payment of the full
purchase price of the shares of Common Stock being purchased
under the option and by giving written notice to the Corporation,
to elect (within such 90-day period) to surrender all or part of
the option to the Corporation and to receive in cash an amount
equal to the amount by which the amount determined pursuant to
Section 7(d) hereof on the date of exercise (determined as if the
optionee had exercised a limited stock appreciation right on such
date) shall exceed the purchase price per share under the option
multiplied by the number of shares of Common Stock granted under
the stock option as to which the right granted by this sentence
shall have been exercised. Such written notice shall specify the
optionee's election to purchase shares granted under the option
or to receive the cash payment referred to in the immediately
preceding sentence.
(j) Notwithstanding the foregoing provisions, the optionee's
employment or other contract with the Corporation may provide
that upon termination of his employment or other services for
other than cause or for "good reason" (as defined in his
contract), all stock options shall become immediately
exercisable.
7. Stock Appreciation Rights
(a) Stock appreciation rights may be paid upon exercise in
cash, Common Stock or any combination thereof, as the Committee
in its sole discretion may determine. A stock appreciation right
is an incentive award that permits the holder to receive (per
share covered thereby) an amount equal to the amount by which the
Fair Market Value of a share of Common Stock on the date of
exercise exceeds the Fair Market Value of such share on the date
the stock appreciation right was granted.
(b) The Committee may grant a stock appreciation right
separately or in tandem with a related option and may grant both
"general" and "limited" stock appreciation rights. A general
stock appreciation right granted in tandem with a related option
will generally have the same terms and provisions as the related
option with respect to exercisability, and the base price of such
a stock appreciation right will generally be equal to the option
price under the related option. Upon the exercise of a tandem
stock appreciation right, the related option will be deemed to be
exercised for all purposes of the Plan and vice versa.
(c) A general stock appreciation right granted separately and
not in tandem with any option will have such terms as the
Committee may determine. The base price of a stand-alone stock
appreciation right may not be less than the Fair Market Value of
the Common Stock, determined as in Section 6(a) in the case of a
Nonqualified Stock Option; the term of a stand-alone stock
appreciation right may not be greater than 10 years from the date
it was granted.
(d) A limited stock appreciation right may be exercised only
during the 90 calendar days immediately following the date of a
Change in Control. For the purpose of determining the amount
payable upon exercise of a limited stock appreciation right, the
fair market value of the Common Stock will be equal to the higher
of (x) the highest Fair Market Value of the Common Stock during
the 90-day period ending on the date the limited stock
appreciation right is exercised and (y) whichever of the
following is applicable:
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(i) the highest per share price paid in any tender or
exchange offer which is in effect at any time during the 90
calendar days preceding the exercise of the limited right;
(ii) the fixed or formula price for the acquisition of
shares of Common Stock in a merger or similar agreement approved
by the Corporation's stockholders or Board, if such price is
determinable on the date of exercise; and
(iii) the highest price per share paid to any stockholder of
the Corporation in a transaction or group of transactions giving
rise to the exercisability of the limited right. In no event,
however, may the holder of a limited stock appreciation right
granted in tandem with a related Incentive Stock Option receive
an amount in excess of the maximum amount which will enable the
option to continue to qualify as an Incentive Stock Option
without the consent of the Participant.
(e) Limited stock appreciation rights are payable only in
cash. General stand-alone stock appreciation rights are payable
only in cash, unless the Committee provides otherwise at the time
of grant. General stock appreciation rights granted in tandem
with a related option are payable in cash, Common Stock or any
combination thereof, as determined in the sole discretion of the
Committee. Notwithstanding the foregoing, and to the extent
required by Rule 16b-3 promulgated under Section 16(b) of the
Exchange Act, a payment, in whole or in part, of cash upon
exercise of a stock appreciation fight may be made to an optionee
who is an officer or director of the Corporation (within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) only if (i) the fight was
granted at least six months prior to the date of exercise (except
that in the event of the death or disability of the optionee
prior to the expiration of the sixmonth period, this limitation
shall not apply) and (ii) the optionee's election to receive cash
in settlement of the fight and the exercise of the right are made
(a) during the period beginning on the third business day
following the date of release for publication of the quarterly or
annual summary statements of sales and earnings of the
Corporation and ending on the twelfth business day following such
date, (b) six months prior to the date the stock appreciation
right becomes taxable or (c) during the 90-day period from and
after a Change of Control.
(f) Unless otherwise provided by the Committee at the time
of grant, the provisions of Section 6 relating to the termination
of the service of a holder of an option shall apply equally, to
the extent applicable, to the holder of a stock appreciation
right.
8. Restricted Stock Awards
(a) The consideration to be received for shares of Restricted
Stock issued hereunder out of authorized but unissued shares or
out of treasury shares shall be equal to cash in an amount equal
to the par value thereof and past services for the Corporation.
The recipient of Restricted Stock shall be recorded as a
stockholder of the Corporation, at which time the Corporation, at
its discretion, may either issue a Restricted Stock Certificate
or make a book entry credit in the Corporation's stock ledger to
evidence the award of such Restricted Stock, and the Participant
shall have, subject to the provisions hereof, all the rights of a
stockholder with respect to such shares and receive all dividends
or other distributions made or paid with respect to such shares;
provided, that the shares themselves, and any new, additional or
different shares or securities which the recipient may be
entitled to receive with respect to such shares by virtue of a
stock split or stock dividend or any other change in the
corporate or capital structure of the Corporation, shall be
subject to the restrictions hereinafter described.
(b) During a period of years following the date of grant, as
determined by the Committee, which shall in no event be less than
one year (the "Restricted Period"), the Restricted Stock or any
rights thereto may not be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of by the
recipient, except in the event of death or the transfer thereof
to the Corporation under the provisions of the next succeeding
paragraph. In the event of the death or normal Retirement
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<PAGE>
of the recipient during the Restricted Period, such restrictions
shall immediately lapse, and the recipient or, in the case of the
recipient's death, his Designated Beneficiary, the legatee under
his last will or his personal representative or distributee shall
be free to transfer, encumber or otherwise dispose of the
Restricted Stock. In the event of the early Retirement of the
recipient during the Restricted Period, such restrictions shall
continue until they lapse in accordance with the terms of the
grant.
Except as provided in Section 8(c), in the event that, during
the Restricted Period, the service of the recipient by the
Corporation or one of its subsidiaries is terminated for any
reason (including termination with or without cause by the
Corporation or such subsidiary or resignation by the recipient),
other than termination of service due to the Retirement or death
of the recipient, then the shares of Restricted Stock held by him
shall be forfeited to the Corporation and the recipient shall
immediately transfer and return to the Corporation the
certificates, if any have been issued to him, representing all
the Restricted Stock and the recipient's rights as a stockholder
with respect to the Restricted Stock shall cease, effective with
such termination of service. Notwithstanding the foregoing, the
recipient's service contract with the Corporation may provide
that upon termination of his service for other than cause or for
good reason, all Restricted Stock shall cease to be subject to
such restrictions.
A recipient's rights to Restricted Stock may not be assigned or
transferred except upon death by will, descent or distribution.
In the event of any attempt by the recipient to sell, exchange,
transfer, pledge or otherwise dispose of shares of Restricted
Stock in violation of the provisions hereof, such shares shall be
forfeited to the Corporation.
(c) Notwithstanding the Restricted Period contained in the
grant of Restricted Stock, in the event of a Change of Control
(as defined in Section 1), all restrictions on shares of
Restricted Stock shall immediately lapse and such Restricted
Shares shall become immediately transferable and nonforfeitable.
(d) Notwithstanding anything contained in the Plan to the
contrary, the Committee may determine, in its sole discretion, in
the case of any termination of a recipient's service, that the
restrictions on some or all of the shares of Restricted Stock
awarded to a recipient shall immediately lapse and such
Restricted Shares shall become immediately transferable and
nonforfeitable.
9. Stock Grant Awards
(a) Each nonofficer employee of the Corporation is eligible to
receive a grant of Common Stock as a stock bonus (i) at the end
of each fiscal year or (ii) if the employee terminates prior to
year-end, at the time of termination. The number of shares to be
granted shall be determined by setting a percentage of the
employee's salary at the fiscal year-end or time of termination
and dividing that amount by the price per share of the Common
Stock or by any other method determined by the Committee. For
this purpose, the price for the Common Stock shall be the Fair
Market Value on the date of grant and each grant shall be for
full shares only; any fractional shares resulting from this
calculation shall be disregarded. The consideration to be
received for shares of Common Stock issued under this Section
9(a) shall be cash in an amount equal to the par value thereof
and past services for the Corporation.
(b) In addition, each recipient of a stock grant under Section
9(a) may be granted a cash award at the time the shares are
issued in an amount sufficient to offset the recipient's
estimated tax liabilities arising from the issuance of the Common
Stock under Section 9(a).
(c) Determinations regarding eligibility for grants under
Section 9 (a), the amount of individual grants of Common Stock,
the amount of the cash offset award, the interpretation of
Section 9 and all other matters relating to the administration of
Section 9 are within the sole discretion of the Committee.
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10. Performance Unit Awards
(a) Performance units which are awarded to a Participant shall
have a "unit base value," expressed in dollars, determined by the
Committee on the day on which the award is granted and generally
determined to be the Fair Market Value of the Common Stock on
such day. The performance units will also have a Payment Value
at the end of the applicable Award Cycle contingent upon the
performance of the Corporation and/or of such Participant's
subsidiary, division or department during the Award Cycle. The
performance measures may include, but shall not be limited to,
cumulative growth in earnings per share or pretax profits, return
on stockholders' equity, asset management, cash flow or return on
capital employed. Such measures may be applied on an absolute
basis or relative to industry indices and shall be defined in a
manner which the Committee shall deem appropriate. For each
performance unit awarded, the Committee shall determine the
length of the Award Cycle, which shall be a period of not less
than three fiscal years, and shall establish a Payment Schedule
based upon the performance measures determined for such
performance unit and the length of the Award Cycle, setting forth
a range of Payment Values corresponding to performance levels
targeted for the Corporation or such subsidiary, division or
department. If during the course of an Award Cycle there should
occur, in the opinion of the Committee, significant changes in
economic conditions or in the nature of the operations of the
Corporation or a subsidiary, division or department which the
Committee did not foresee in establishing the performance
measures for such Award Cycle and which, in the Committee's sole
judgment have, or are expected to have, a substantial effect on
the performance of the Corporation or of a Participant's
subsidiary, division or department during such Award Cycle, the
Committee may revise the Payment Schedule and performance
measures formerly determined by it in such manner as the
Committee, in its sole judgment, may deem appropriate except as
otherwise provided in Section 10(1).
(b) In determining the number of performance units to be
awarded, the Committee shall take into account a person's
responsibility level, performance, potential, cash compensation
level and such other considerations as it deems appropriate.
(c) Except as otherwise provided in Section 10(l), an award of
performance units to a Participant shall terminate for all
purposes if the services of the Participant for the Corporation
or one of its subsidiaries ceases during the Award Cycle, except
in the case of death, disability or retirement under the
Corporation's pension plan (including early retirement at the
request of the Corporation), in which case (and provided that the
Participant at the time of death, disability or retirement as
aforesaid shall have maintained his employment or other
qualifying relationship with the Corporation or one of its
subsidiaries continuously during the period commencing on the
date the award was granted and ending on the first anniversary
thereof) the Participant will be entitled to payment (such
payment to be made in accordance with the provisions of Section
10(d)) of the same portion of the Payment Value of the award the
Participant would otherwise have been paid (such Payment Value,
if any, to be determined at the conclusion of the applicable
Award Cycle in accordance with the provisions of Sections 10(a)
and 10(e) unless otherwise provided in Section 10(l)) as the
portion of the Award Cycle during which the Participant
maintained such relationship with the Corporation bears to the
full Award Cycle. Under particular circumstances, the Committee
may make other determinations with respect to Participants whose
services do not meet the foregoing requirements, including the
waiver of any of the requirements of this subsection (c) relating
to periods of continuous service.
(d) Except as otherwise provided in Section 10(l), unless the
Committee otherwise determines, no payment with respect to
performance units will be made to a Participant prior to the end
of such Participant's Award Cycle; provided, however, that if a
Participant should die during an Award Cycle and his award shall
not have been terminated hereunder prior to his death, such
Participant's Designated Beneficiary, the legatee under the
Participant's last will, his personal representative or his
distributee may elect instead, subject to the approval of the
Committee, to have the pro rata portion of the Participant's
Payment Value determined by the Committee as of the end of the year
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during which such Participant's death occurred, based upon
application of the Payment Schedule to the part of the Award
Cycle which shall have elapsed (for such purpose, the cumulative
growth rate or improvement achieved in the applicable performance
measures to the end of the fiscal year in which death occurs will
be assumed to continue for the Award Cycle), in which event such
pro rata portion shall be paid in cash or Common Stock, as
provided in Section 10(g), as soon as practicable following such
year (or in such number of installments as shall have been
requested by the Participant and approved by the Committee) to
such Participant's Designated Beneficiary or legal
representative.
(e) Except as otherwise provided in Section 10(d) in the case
of death, or in Section 10(l) in the case of a Change in Control,
a Participant's interest in any performance units awarded to him
shall mature on the last day of the Award Cycle for such award.
The Payment Value of a performance unit shall be the dollar
amount calculated on the basis of the Payment Schedule applicable
to such Award Cycle.
(f) The total amount of Payment Value due a Participant at the
conclusion of an Award Cycle shall be paid on such date following
the conclusion of such Award Cycle as the Committee shall
designate, except as specifically otherwise provided in the Plan;
provided, however, that the Committee shall have authority, if it
deems appropriate, to defer payment (in cash or in stock or both
in specified percentages) of the Payment Value due a Participant
if the Participant shall request the Committee to do so at any
time prior to the last year of the Award Cycle for such award.
In respect of awards made or to be made in one or more deferred
installments in cash, interest shall be credited semiannually on
each such award at a rate to be determined semiannually by the
Committee, but in no event shall such rate be less than the
average rate on 10-year AAA new industrial corporate bonds during
each such semiannual period as calculated on the basis of the
average of such rates for each calendar week ending during the
period January 1 through June 30 and July 1 through December 31;
provided that awards made during any such six-month period shall
be credited on the basis of the average rate for that period; and
provided further that installments paid during any six-month
period shall be credited with interest on the basis of the
average rate for the next preceding six-month period. in each
case adjusted for the number of days such award was to be
credited. Unless paid to the recipient of such award at the time
credited, interest at the foregoing rate shall be credited on the
interest so credited until so paid. The foregoing minimum
interest rate for any award that is payable in one or more
deferred installments under the Plan may not be modified without
the prior written consent of the Participant.
Whenever an award is made in one or more deferred installments
in Common Stock, the Committee may determine that there shall be
credited on such award an amount equivalent to the dividends
which would have been paid with respect to such shares of Common
Stock if they had been issued and outstanding. Such dividend
equivalents shall be credited on the dividend record dates until
certificates for such shares shall have been delivered to the
recipient of such award or until such earlier date as the
Committee may determine.
Such interest and dividend equivalents shall be paid to the
recipient of any such award in cash (or in property if the
related dividend shall have been in property) at such time or
times during the deferred period of such award or at the same
time as the cash or shares of Common Stock to which such interest
and dividend equivalents apply, all as the Committee shall
determine. The Committee may also determine that any such
dividend equivalents may be used to purchase additional shares of
outstanding Common Stock (such shares to be valued for such
purpose at Fair Market Value on the dividend record date) to be
added to the shares of Common Stock covered by such award and
held subject to the same terms and conditions, including
provisions relating to the payment of amounts equivalent to
dividends thereon.
(g) Except as otherwise provided in Section 10(l), the
Committee in its discretion may determine at the time of grant or
at the end of the Award Cycle as to each Participant whether the
payment of the Payment Value due a Participant shall be made (i)
in cash, (ii) in shares of Common Stock (valued at the average
Fair Market Value of the Common Stock for the five trading days
immediately preceding the date of payment), or (iii) in a
combination of cash and shares of Common Stock so valued.
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(h) If the payment of any award shall be deferred until after
the termination of the services of the recipient by the
Corporation or one of its subsidiaries, the cash or Common Stock
covered by such award, together with any deferred interest or
dividend equivalents thereon, shall be delivered in not more than
20 annual installments, commencing not later than the January 31
after such termination of services (or such other date as the
Committee from time to time shall determine), all as the
Committee may determine. If the payment of an award under the
Plan is deferred, such payment thereafter may be accelerated so
that such payment shall be made immediately or at such earlier
time or in such less number of installments, in each case as the
Committee may from time to time determine, but only with the
prior written consent of the Participant.
(i) A Participant to whom any award has been made shall not
have any interest beyond that of a general creditor of the
Corporation in the cash or Common Stock awarded, or in any
interest or dividend equivalents credited to him until the cash
has been paid to him or the certificates for the Common Stock
have been delivered to him, as the case may be, in accordance
with the provisions of the Plan.
(j) In the case of the death of the recipient of an award,
before or after the termination of his services, any unpaid
installments of such deferred award shall pass to the Designated
Beneficiary, the legatee under the Participant's last will, his
personal representative or his distributee. Unpaid installments
of a deferred award shall be paid either in the same installments
as originally provided or otherwise as the Committee may
determine in individual cases.
(k) Subject to the provisions of Section 10(l), in any case in
which payment of an award is to be made in Common Stock, the
Corporation shall have the right, in lieu of delivering the
certificate or certificates for any or all of the stock which
would otherwise be deliverable to the Participant pursuant to the
Plan, to pay to such Participant on the date on which such
certificate or certificates would otherwise be deliverable an
amount in cash equal to the Fair Market Value of such Common
Stock on such date or dates as may be determined by the
Committee, but not more than five trading days prior to such
date, all as the Committee may determine in individual cases.
(l) Anything herein to the contrary notwithstanding, in the
event of a Change of Control, with respect to any unmatured
performance unit awards which a Participant held immediately
prior to such Change of Control, the Participant will be entitled
to immediate payment in cash (unless payment of such performance
unit awards shall be deferred in accordance with Section 10(f),
in which event the amount provided to be payable by this Section
10(l) shall also be so deferred) in an amount equal to the value
of such units determined in accordance with the Payment Schedule
applicable to such awards, based on the cumulative, growth rate
in the Corporation's reported earnings per share for all
previously elapsed fiscal years, if any, included in the Award
Cycles for such awards and the actual or presumed cumulative
growth rate in the earnings per share for the balance of each
Award Cycle, determined as follows: (i) if such Change of Control
occurs prior to the completion of the first fiscal year of an
Award Cycle, the cumulative growth rate to be utilized for the
balance of the Award Cycle shall be the cumulative growth rate in
the Corporation's earnings per share in the four fiscal years
preceding the first year and (ii) if such Change of Control
occurs during any subsequent fiscal year of an Award Cycle, the
cumulative growth rate to be utilized for the balance of the
Award Cycle shall be the cumulative growth rate of the preceding
fiscal year(s) in that Award Cycle prior to the fiscal year in
which occurs the Change of Control. In the event that a
performance measure other than earnings per share is employed,
similar adjustments shall be made for such holders of unmatured
performance units. The Committee may in its discretion determine
that such historical financial data are not appropriate or not
available and may use the latest budgets, projections, forecasts
or plans for the Corporation or its business units or
subsidiaries. Except as expressly set forth in this Section
10(l), upon the occurrence of a Change of Control, no change(s)
shall be made in the terms of any performance unit (including,
without limitation, its unit base value, Payment Value or
performance criteria) or in the underlying accounting assumptions
or practices for purposes of determining the amount due
thereunder, which change(s) would lessen the value of any
performance unit to the holder thereof
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11. Withholding Taxes
In connection with the transfer of shares of Common Stock as a
result of the exercise of a Nonqualified Stock Option or stock
appreciation right, the payment of performance units or the award
of Restricted Stock or stock grants, the Corporation (a) shall
not issue a certificate for such shares until it has received
payment from the Participant of any Withholding Tax in cash or by
the retention or acceptance upon delivery thereof by the
Participant of shares of Common Stock sufficient in Fair Market
Value to cover the amount of such Withholding Tax and (b) shall
have the right to retain or sell without notice, or to demand
surrender of, shares of Common Stock in value sufficient to cover
any Withholding Tax. The Corporation shall have the right to
withhold from any cash amounts due from the Corporation to the
award recipient pursuant to the Plan an amount equal to the
Withholding Tax. In either case, the Corporation shall make
payment (or reimburse itself for payment made) to the appropriate
taxing authority of an amount in cash equal to the amount of such
Withholding Tax, remitting any balance to the Participant. For
purposes of this Section 11, the value of shares of Common Stock
so retained or surrendered shall be equal to the Fair Market
Value of such shares on the date that the amount of the
Withholding Tax is to be determined (the "Tax Date"), and the
value of shares of Common Stock so sold shall be the actual net
sale price per share (after deduction of commissions) received by
the Corporation.
Notwithstanding the foregoing, the Participant may elect,
subject to approval by the Committee, to satisfy the obligation
to pay any Withholding Tax, in whole or in part, by providing the
Corporation with funds sufficient to enable the Corporation to
pay such Withholding Tax or by having the Corporation retain or
accept upon delivery thereof by the Participant shares of Common
Stock sufficient in Fair Market Value to cover the amount of such
Withholding Tax. Each election by a Participant to have shares
retained or to deliver shares for this purpose shall be subject
to the following restrictions: (i) the election must be in
writing and made on or prior to the Tax Date and (ii) if the
Participant is subject to Section 16 of the Exchange Act, an
election to have shares retained to satisfy the Withholding Tax
must be an irrevocable election made at least six months prior to
the Tax Date or the withholding election must become effective
during the ten-businessday period beginning on the third business
day following the date on which the Corporation releases for
publication its annual or quarterly summary statements of sales
and earnings and ending on the twelfth business day following the
date of release thereof.
12. Transferability and Ownership Rights of Options, Stock
Appreciation Rights and Performance Units
No option or stock appreciation fight granted or performance
unit awarded under the Plan shall be transferable otherwise than
pursuant to the designation of a Designated Beneficiary or by
will, descent or distribution, and an option or stock
appreciation fight may be exercised, during the lifetime of the
holder thereof, only by him. The holder of an option, stock
appreciation right or performance unit award shall have none of
the rights of a stockholder until the shares subject thereto or
awarded thereby shall have been registered in the name of such
holder on the transfer books of the Corporation.
13. Holding Periods
(a) If a director or officer subject to Section 16 of the
Exchange Act sells shares of Common Stock obtained upon the
exercise of a stock option within six months after the date the
option was granted, the option grant will no longer be exempt
from Section 16(b) and will retroactively be deemed a nonexempt
purchase as of the date of the option grant.
(b) In order to obtain certain tax benefits afforded to
incentive stock options under Section 422 of the Code, an
optionee must hold the shares issued upon the exercise of an
incentive stock option for two years after the date of grant of the
option and one year from the date of exercise. An optionee may be
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subject to the alternative minimum tax at the time of
exercise of an incentive stock option. The Committee may require
an optionee to give the Corporation prompt notice of any
disposition in advance of the required holding period of shares
Of Common Stock acquired by exercise of an incentive stock
option. Tax advice should be obtained when exercising any option
and prior to the disposition of the shares issued upon the
exercise of any option.
14. Section 16(b) Compliance and Bifurcation of Plan
It is the intention of the Corporation that, if any of the
Corporation's equity securities are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, the Plan shall comply
in all respects with Rule 16b-3 under the Exchange Act and, if
any Plan provision is later found not to be in compliance with
such Section, the provision shall be deemed null and void, and in
all events the Plan shall be construed in favor of its meeting
the requirements of Rule 16b-3. Notwithstanding anything in the
Plan to the contrary, the Board, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to participants who are officers and
directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to
other participants.
15. Adjustments Upon Changes in Capitalization
Except as otherwise provided in Section 6(h) and Section 10(l),
in the event of any changes in the outstanding stock of the
Corporation by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or
exchanges of shares, split-ups, split-offs, spin-offs,
liquidations or other similar changes in capitalization, or any
distribution to stockholders other than cash dividends, the
Committee shall make such adjustments, if any, in light of the
change or distribution as the Committee in its sole discretion
shall determine to be appropriate, (i) in the number and class of
shares or rights subject to options and stock appreciation rights
and the exercise prices of the options and stock appreciation
rights covered thereby, (ii) in the number of shares of Common
Stock covered by a performance unit award for which certificates
have not been delivered, any dividend equivalents to which
deferred awards of Common Stock are entitled, and the performance
measures established by the Committee under Section 10(a), and
(iii) in the Maximum Annual Employee Grant. In the event of any
such change in the outstanding Common Stock of the Corporation,
the aggregate number and class of shares available under the Plan
and the maximum number of shares as to which options may be
granted and stock appreciation rights or performance units
awarded and the maximum number of shares of Restricted Stock
which may be awarded shall be appropriately adjusted by the
Committee.
16. Amendment and Termination
Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate on, and no awards
of performance units, stock appreciation rights, or Restricted
Stock or options shall be made after, June 26, 2002; provided,
however, that such termination shall have no effect on awards of
performance units, stock appreciation rights, Restricted Stock or
options made prior thereto. The Plan may be terminated, modified
or amended by the stockholders of the Corporation. The Board of
Directors of the Corporation may also terminate the Plan, or
modify or amend the Plan in such respects as it shall deem
advisable in order to conform to any change in any law or
regulation applicable thereto, or in other respects; however, to
the extent required by applicable law or regulation, stockholder
approval will be required for any amendment which will (a)
materially increase the total number of shares as to which
options may be granted or which may be used in payment of
performance unit awards or stock appreciation right awards under
the Plan or which may be issued as Restricted Stock, (b)
materially change the class of persons eligible to receive awards
of performance units or Restricted Stock and grants of stock
appreciation rights or options, (c) materially increase the
benefits accruing to participants under the Plan, or (d)
otherwise require stockholder approval under any applicable law
or regulation. The amendment or termination of the Plan shall not,
36
<PAGE>
without the consent of the recipient of any award under the
Plan, alter or impair any rights or obligations under any award
theretofore granted under the Plan.
17. Effectiveness of the Plan
The Plan shall become effective on June 26, 1992. The
Committee may in its discretion authorize the awarding of
performance units and Restricted Stock and the granting of
options and stock appreciation rights, the payments, issuance or
exercise of which, respectively, shall be expressly subject to
the conditions that (a) the shares of Common Stock reserved for
issuance under the Plan shall have been duly listed, upon
official notice of issuance, upon each stock exchange in the
United States upon which the Common Stock is traded and (b) a
registration statement under the Securities Act of 1933, as
amended, with respect to such shares shall have become effective.
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Exhibit 99.1
May 5, 1994
ADVANCED TECHNOLOGY LABORATORIES, INC.
1992 Nonofficer Employee Stock Option Plan
1. Definitions
The following terms have the corresponding meanings
for purposes of the Plan:
"Change of Control" means
(a) a "Board Change." For purposes of the Plan, a
Board Change shall have occurred if a majority of the seats
(other than vacant seats) on the Corporation's Board of
Directors (the "Board") were to be occupied by individuals
who were neither (i) nominated by a majority of the
Incumbent Directors nor (ii) appointed by directors so
nominated. An "Incumbent Director" is a member of the Board
who has been either (i) nominated by a majority of the
directors of the Corporation then in office or (ii)
appointed by directors so nominated, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(b) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of "Beneficial Ownership" (within
the meaning of Rule 13d-3 promulgated under the Exchange
Act) of (i) 20% or more of either (A) the then outstanding
shares of common stock (the "Outstanding Corporation Common
Stock") or (B) the combined voting power of the then
outstanding voting securities of the Corporation entitled to
vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"), in the case of
either (A) or (B) of this clause (i), which acquisition is
not approved in advance by a majority of the Incumbent
Directors or (ii) 33% or more of either (A) the Outstanding
Corporation Common Stock or (B) the Outstanding Corporation
Voting Securities, in the case of either (A) or (B) of this
clause (ii), which acquisition is approved in advance by a
majority of the Incumbent Directors; provided, however, that
the following acquisitions shall not constitute a Change of
Control: (x) any acquisition by the Corporation, (y) any
acquisition by
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any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any
corporation controlled by the Corporation, or (z) any
acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in clauses
(i), (ii) and (iii) of the following subsection (c) are
satisfied; or
(c) approval by the stockholders of the Corporation of
a reorganization, merger or consolidation, in each case,
unless, immediately following such reorganization, merger or
consolidation, (i) more than 60% of, respectively, the then
outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation
and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities immediately
prior to such reorganization, merger or consolidation in
substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities, as the case
may be, (ii) no Person (excluding the Corporation, any
employee benefit plan (or related trust) of the Corporation
or such corporation resulting from such reorganization,
merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the
Outstanding Corporation Common Stock or Outstanding
Corporation Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger
or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors, and (iii)
at least a majority of the members of the board of directors
of the corporation resulting from such reorganization,
merger or consolidation were Incumbent Directors at the time
of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(d) approval by the stockholders of the Corporation of
(i) a complete liquidation or dissolution of the Corporation
or (ii) the sale or other disposition of all or
substantially all of the assets of the Corporation, other
than to a corporation, with respect to which immediately
following such sale or other disposition, (A) more than 60%
of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then
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outstanding voting securities of such corporation
entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such sale or other
disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other
disposition, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may
be, (B) no Person (excluding the Corporation and any
employee benefit plan (or related trust) of the Corporation
or such corporation and any Person beneficially owning,
immediately prior to such sale or other disposition,
directly or indirectly, 33% or more of the Outstanding
Corporation Common Stock or Outstanding Corporation Voting
Securities, as the case may be) beneficially owns, directly
or indirectly, 33% or more of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors, and (C) at least a majority of
the members of the board of directors of such corporation
were approved by a majority of the Incumbent Directors at
the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of
assets of the Corporation.
"Committee" means the Committee provided for in Section
4, which shall administer the Plan.
"Common Stock" means common stock, par value $0.01 per
share, of the Corporation.
"Corporation" means Advanced Technology Laboratories,
Inc., a Delaware corporation.
"Designated Beneficiary" means any person designated in
writing by a Participant as a legal recipient of payments
due under an award in the event of the Participant's death,
or in the absence of such designation, the Participant's
estate. Such designation must be on file with the
Corporation in order to be effective but, unless the
Participant has made an irrevocable designation, may be
changed from time to time by the Participant.
"Fair Market Value" of the Common Stock as of any
trading day means the average (rounded to the next highest
cent in the case of fractions of a cent) of the high and low
sales prices of the Common Stock as reported on such trading
day by the NASDAQ National Market System. If no sales price
is reported for the Common Stock on such trading day, then
"Fair Market Value" shall mean the highest bid price reported
11
<PAGE>
for the Common Stock on such trading day by the
National Quotation Bureau Incorporated or any similar
nationally recognized organization. The Committee, in its
sole discretion, shall make all determinations required by
this definition.
"Participant" means an employee who has received an
award under the Plan.
"Plan" means this Advanced Technology Laboratories,
Inc. 1992 Nonofficer Employee Stock Option Plan.
"Retirement" means the termination of the services of a
Participant because of early or normal retirement as defined
in the Westmark Retirement Plan.
"Withholding Tax" means any tax, including any federal,
state or local income tax or payroll tax, required by any
governmental entity to be withheld or otherwise deducted and
paid with respect to the transfer of shares of Common Stock
as a result of the exercise of an option.
2. Stock Subject to the Plan
There are reserved for issuance upon the exercise of
options under the Plan 150,000 shares of Common Stock. Such
shares may be authorized and unissued shares of Common Stock
or previously outstanding shares of Common Stock then held
in the Corporation's treasury. If any option granted under
the Plan shall expire or terminate for any reason
(including, without limitation, by reason of its surrender,
pursuant to the provisions of Section 6(f) or the third
paragraph of Section 6(b) or otherwise, or cancellation, in
whole or in part, pursuant to the provisions of Section 6(c)
or otherwise, or the substitution in place thereof of a new
option) without having been exercised in full, the shares
subject thereto shall again be available for the purposes of
issuance under the Plan
3. Administration
(a) The Plan shall be administered by the Committee.
Subject to the express provisions of the Plan, the Committee
shall have plenary authority, in its discretion, to
determine the individuals to whom, and the time or times at
which options shall be granted and the number of shares to
be covered by each such grant. In making such
determinations, the Committee may take into account the
nature of the services rendered by the respective
Participants, their present and potential contributions to
the Corporation's success and such other factors as the
Committee in its discretion may deem relevant. Subject to
the express provisions of the Plan, the Committee shall have
plenary authority to interpret the Plan, to prescribe, amend and
12
<PAGE>
rescind rules and regulations relating to it, to
determine the terms and provisions of option agreements
(which need not be identical) and to make all other
determinations necessary or advisable for the administration
of the Plan. The Committee's determinations of the matters
referred to in this Section 3 shall be conclusive. It is
the intention of the Corporation that the Plan and the
administration hereof comply in all respects with Section
16(b) of the Exchange Act, and the rules and regulations
promulgated thereunder, and if any Plan provision is later
found not to be in compliance with Section 16(b), the
provision shall be deemed null and void, and in all events
the Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3.
(b) The Committee may in its discretion delegate to a
committee appointed by the Board consisting of one or more
officers of the Corporation (the "Grant Committee") the
authority to grant, pursuant to this Plan, options for a
total number of shares of Common Stock determined by the
Committee, and under terms, conditions and criteria which
are approved by the Committee. Such authorization may
include the ability to determine the Participants to whom,
the number of shares in respect of which, and the time or
times at which, such options shall be granted. In the event
the Committee shall grant such authority to the Grant
Committee, the Grant Committee shall report to the
Committee in writing, at times determined by the Committee,
(i) the names of Participants who have received any such
grants, (ii) the number of shares covered by each option so
granted, (iii) the date upon which each such option was
granted and (iv) such other information as the committee may
request. Any action of the Grant Committee pursuant to
authority granted by the Committee under this Section 3(b)
in accordance with the Committee resolution granting such
authority shall be deemed to be the action of the Committee.
4. The Committee
(a) The Board shall designate a Committee of members
of the Board which shall meet the requirements of Section
16(b) of the Exchange Act. Currently, the Committee shall
consist solely of two or more members of the Board who are
disinterested. If at any time an insufficient number of
disinterested directors is available to serve on such
Committee, interested directors may serve on the Committee;
however, during such time, no options shall be granted under
the Plan to any person if the granting of such options would
not meet the requirements of Section 16(b) of the Exchange
Act.
(b) For purposes of this Section 4, a "disinterested
director" is a person who meets the definition of
"disinterested person" as set forth in the rules and
regulations promulgated under Section 16(b) of the Exchange
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Act. Currently, a disinterested director is a member of the
Board who is not (and, during the 12-month period preceding
his appointment as a member of the Committee has not been)
granted or awarded stock, stock appreciation rights or other
equity securities of the Corporation or any affiliated
corporation pursuant to the Plan or any other plan of the
Corporation or any affiliated corporation except for formula
plans (as such term is defined in Rule 16b-3(c)(2)(ii)
issued under the Exchange Act) or ongoing securities
acquisition plans (as described in Rule 16b-3(d)(2)(i)
issued under the Exchange Act). The Committee shall be
appointed by the Board, which may from time to time appoint
members of the Committee in substitution for members
previously appointed and may fill vacancies, however caused,
in the Committee. The Committee shall select one of its
members as its Chairman and shall hold its meetings at such
times and places as it may determine. A majority of its
members shall constitute a quorum. All determinations of
the Committee shall be made by not less than a majority of
its members. Any decision or determination reduced to
writing and signed by all the members shall be fully as
effective as if it had been made by a majority vote at a
meeting duly called and held. The Committee may appoint a
secretary, shall keep minutes of its meetings and shall make
such rules and regulations for the conduct of its business
as it shall deem advisable.
5. Eligibility
The Committee may grant options only to employees of
the Corporation and of its present and future subsidiary
corporations ("subsidiaries") who, at the time of the grant,
are not officers or directors (within the meaning of Section
16 of the Exchange Act and the rules and regulations
promulgated thereunder) of the Corporation or any of its
present and future subsidiary corporations. Any person
eligible under the Plan may receive one or more grants of
options as the Committee shall from time to time determine,
and such determinations may be different as to different
Participants.
6. Option Grants
(a) The Committee is authorized under the Plan, in its
discretion, to issue only options which do not qualify as
"incentive stock options" as defined in Section 422 of the
United States Internal Revenue Code of 1986, as amended
("Nonqualified Stock Options") and the options shall be
designated as Nonqualified Stock Options in the applicable
option agreement. The purchase price of the Common Stock
under each option granted under the Plan shall be determined
by the Committee but shall be not less than the average Fair
Market Value of the Common Stock over any continuous period
of trading days beginning and ending no more than 30
business days before or after the date such option is
granted.
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<PAGE>
(b) The Committee shall be authorized in its
discretion to prescribe in the option grant the
installments, if any, in which an option granted under the
Plan shall become exercisable, provided that no option shall
be exercisable prior to the first anniversary of the date of
grant thereof except as provided in Section 6(c), (d), (g),
and (h) or except as the Committee otherwise determines. In
no case may an option be exercised as to less than 100
shares at any one time (or the remaining shares covered by
the option if less than 100) during the term of the option.
The Committee shall also be authorized to establish the
manner of the exercise of an option. The term of each
option shall be not more than 10 years from the date of
grant thereof. In general, upon exercise, the option price
is to be paid in full in cash; however, the Committee can
determine at any time prior to exercise that additional
forms of payment will be permitted. To the extent permitted
by the Committee and applicable laws and regulations
(including, but not limited to, federal tax and securities
laws and regulations and state corporate law), an option may
be exercised (i) in Common Stock owned by the option holder
having a Fair Market Value on the date of exercise equal to
the aggregate option price, or in a combination of cash and
stock; provided, however, that payment in stock shall not be
made unless such stock shall have been owned by the option
holder for a period of at least three months prior thereto;
or (ii) by delivery of a properly executed exercise notice,
together with irrevocable instructions to a broker
designated by the Corporation, all in accordance with the
regulations of the Federal Reserve Board, to deliver
promptly to the Corporation the amount of sale or loan
proceeds to pay the exercise price and any Withholding Tax
obligations that may arise in connection with the exercise.
In lieu of requiring an option holder to pay cash or
stock and to receive in turn certificates for shares of
Common Stock upon the exercise of an option, if the option
agreement so provides, the Committee may elect to require
the option holder to surrender the option to the Corporation
for cancellation as to all or any portion of the number of
shares covered by the intended exercise and receive in
exchange for such surrender a payment, at the election of
the Committee, in cash, in shares of Common Stock or in a
combination of cash and shares of Common Stock, equivalent
to the appreciated value of the shares covered by the option
surrendered for cancellation. Such appreciated value shall
be the difference between the option price of such shares
(as adjusted pursuant to Section 15) and the Fair Market
Value of such shares, which shall for this purpose be
determined by the Committee taking into consideration all
relevant factors, but which shall not be less than the Fair
Market Value of such shares on the date on which the option
holder's notice of exercise is received by the Corporation.
Upon delivery to
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the Corporation of a notice of exercise of
option, the Committee may avail itself of its right to
require the option holder to surrender the option to the
Corporation for cancellation as to shares covered by such
intended exercise. The Committee's right of election shall
expire, if not exercised, at the close of business on the
fifth business day following the delivery to the Corporation
of such notice. Should the Committee not exercise such
right of election, the delivery of the aforesaid notice of
exercise shall constitute an exercise by the option holder
of the option to the extent therein set forth, and payment
for the shares covered by such exercise shall become due
immediately.
(c) In the event that a Participant's services for the
Corporation or one of its subsidiaries shall cease and the
termination of such individual's service is for cause, the
option shall automatically terminate upon first notification
to the option holder of such termination of services, unless
the Committee determines otherwise, and such option shall
automatically terminate upon the date of such termination of
services for all shares which were not purchasable upon such
date. For purposes of this Section 6(c), "cause" is defined
as a determination by the Committee that the option holder
(i) has committed a felony, (ii) has engaged in an act or
acts of deliberate and intentional dishonesty resulting or
intended to result directly or indirectly in improper
material gain to or personal enrichment of the individual at
the Corporation's expense, or (iii) has willfully disobeyed
the Corporation's appropriate rules, instructions or orders,
and such willful disobedience has continued for a period of
10 days following notice thereof from the Corporation.
In the event of the termination of the services of the
holder of an option because of Retirement or disability, he
or she may (unless such option shall have been previously
terminated pursuant to the provisions of the preceding
paragraph or unless otherwise provided in the option grant)
exercise such option at any time prior to the expiration of
the option, (i) in the event of disability or normal
Retirement, to the extent of the number of shares covered by
such option, whether or not such shares had become
purchasable by him or her at the date of the termination of
his or her services and (ii) in the event of early
Retirement, to the extent of the number of shares covered by
such option at such time or times as such option becomes
purchasable by him or her in accordance with its terms.
In the event of the death of an individual to whom an
option has been granted under the Plan, while he or she is
performing services for the Corporation or a subsidiary, the
option theretofore granted to him or her (unless the option
shall have been previously terminated pursuant to the
provisions of this Section 6(c) or unless otherwise provided
in the option grant) may, subject to the limitations
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described in Section 6(g), be exercised by his or her
Designated Beneficiary, by his or her legatee or legatees of
the option under his last will, or by his or her personal
representatives or distributees, at any time within a period
of one year after his or her death, but not after the
expiration of the option, to the extent of the remaining
shares covered by the option whether or not such shares had
become purchasable by such an individual at the date of
death. In the event of the death of an individual (i)
during the one-year period following termination of his or
her services or (ii) following termination of his or her
services by reason of Retirement or disability, then the
option (if not previously terminated pursuant to the
provisions of this Section 6(c)) may be exercised during the
remainder of such one-year period or during the remaining
term of the option, respectively, by his or her Designated
Beneficiary, by his or her legatee under his or her last
will, or by his or her personal representative or
distributee, but only to the extent of the number of shares
purchasable by such Participant pursuant to the provisions
of Section 6(d) at the date of termination of services.
In the event of the termination of the services of the
holder of an option, other than by reason of Retirement,
disability or death, he or she may (unless the option shall
have been previously terminated pursuant to the provisions
of this Section 6(c) or unless otherwise provided in the
option grant) exercise the option at any time within one
year after such termination but not after the expiration of
the option, to the extent of the number of shares covered by
the option which were purchasable by him or her at the date
of the termination of services, and such option shall
automatically terminate upon the date of such termination of
services for all shares which were not purchasable upon such
date.
(d) Notwithstanding the foregoing provisions, the
Committee may determine, in its sole discretion, in the case
of any termination of services, that the holder of an option
may exercise such option to the extent of some or all of the
remaining shares covered thereby whether or not such shares
had become purchasable by such an individual at the date of
the termination of his services and may exercise such option
at any time prior to the expiration of the original term of
the option. Options granted under the Plan shall not be
affected by any change of relationship with the Corporation
so long as the holder continues to be an employee of the
Corporation or of a subsidiary; however, a change in a
Participant's status from an employee to a nonemployee shall
result in the termination of an outstanding option held by
such Participant in accordance with Section 6(c). The
Committee, in its absolute discretion, may determine all
questions of whether particular leaves of absence constitute
a termination of service. Nothing in the Plan or in any
option granted pursuant to the Plan shall confer on any
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individual any right to continue in the employ or other
service of the Corporation or any other person or interfere
in any way with the right of the Corporation or any other
person to terminate his or her employment or other services
at any time.
(e) The date of grant of an option pursuant to the
Plan shall be the date specified by the Committee, or the
Grant Committee acting pursuant to authority granted under
Section 3(b), at the time it grants such option, provided
that such date shall not be prior to the date of such action
by the Committee or the grant Committee, and that the price
shall be determined in accordance with Section 6(a) on such
date. The Committee or Grant Committee shall promptly
notify a grantee of an award and a written option grant
shall promptly be duly executed and delivered by or on
behalf of the Corporation.
(f) The Committee shall be authorized, in its absolute
discretion, to permit option holders to surrender
outstanding options in exchange for the grant of new options
or to require option holders to surrender outstanding
options as a condition precedent to the grant of new
options. The number of shares covered by the new options,
the option price (subject to the provisions of Section
6(a)), the option period and other terms and conditions of
the new options shall all be determined in accordance with
the Plan and may be different from the provisions of the
surrendered options.
(g) Notwithstanding any contrary waiting period,
installment period or other limitation or restriction in any
option agreement or in the Plan, in the event of a Change of
Control, each option outstanding under the Plan shall
thereupon become exercisable at any time during the
remaining term of the option, but not after the term of the
option, to the extent of the number of shares covered by the
option, whether or not such shares had become purchasable by
the Participant thereunder immediately prior to such Change
of Control.
(h) Anything in the Plan to the contrary
notwithstanding, during the 90 calendar days from and after
a Change of Control (x) an optionee (other than an optionee
who initiated a Change of Control in a capacity other than
as an officer or a Director of the Corporation) who is an
officer or a Director of the Corporation (within the meaning
of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) with respect to an
option that was granted at least six months prior to the
date of exercise pursuant to this sentence and (y) any other
optionee who is not an officer or a Director with respect to
an option shall, unless the Committee shall determine
otherwise at the time of grant, have the right, in lieu of
the payment of the full purchase price of the shares of
Common Stock being purchased under the option and by giving
written notice to the
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Corporation, to elect (within such 90-
day period) to surrender all or part of the option to the
Corporation and to receive in cash an amount equal to the
amount by which the Fair Market Value of the Common Stock on
the date of exercise shall exceed the purchase price per
share under the option multiplied by the number of shares of
Common Stock granted under the stock option as to which the
right granted by this sentence shall have been exercised.
Such written notice shall specify the optionee's election to
purchase shares granted under the option or to receive the
cash payment referred to in the immediately preceding
sentence.
7. Withholding Taxes
In connection with the transfer of shares of Common
Stock as a result of the exercise of an option the
Corporation (a) shall not issue a certificate for such
shares until it has received payment from the Participant of
any Withholding Tax in cash or by the retention by the
Corporation or acceptance by the Corporation upon delivery
thereof by the Participant of shares of Common Stock
sufficient in Fair Market Value to cover the amount of such
Withholding Tax and (b) shall have the right to retain or
sell without notice, or to demand surrender of, shares of
Common Stock in value sufficient to cover any Withholding
Tax. The Corporation shall have the right to withhold from
any cash amounts due from the Corporation to the Participant
pursuant to the Plan an amount equal to the Withholding Tax.
In either case, the Corporation shall make payment (or
reimburse itself for payment made) to the appropriate taxing
authority of an amount in cash equal to the amount of such
Withholding Tax, remitting any balance to the Participant.
For purposes of this Section 7, the value of shares of
Common Stock so retained or surrendered shall be equal to
the Fair Market Value of such shares on the date that the
amount of the Withholding Tax is to be determined (the "Tax
Date"), and the value of shares of Common Stock so sold
shall be the actual net sale price per share (after
deduction of commissions) received by the Corporation.
Notwithstanding the foregoing, the Participant may
elect, subject to approval by the Committee, to satisfy the
obligation to pay any Withholding Tax, in whole or in part,
by providing the Corporation with funds sufficient to enable
the Corporation to pay such Withholding Tax or by having the
Corporation retain or accept upon delivery thereof by the
Participant shares of Common Stock sufficient in Fair Market
Value to cover the amount of such Withholding Tax. Each
election by a Participant to have shares retained or to
deliver shares for this purpose shall be subject to the
following restrictions: (i) the election must be in writing
and made on or prior to the Tax Date and (ii) if the
Participant is subject to Section 16 of the Exchange Act, an
election to have shares retained to satisfy the Withholding
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Tax must be an irrevocable election made at least six months
prior to the Tax Date or the withholding election must
become effective during the 10-business-day period beginning
on the third business day following the date on which the
Corporation releases for publication its annual or quarterly
summary statements of sales and earnings and ending on the
twelfth business day following the date of release thereof.
8. Transferability and Ownership Rights of Options
No option awarded under the Plan shall be transferable
otherwise than pursuant to the designation of a Designated
Beneficiary or by will, descent or distribution, and an
option may be exercised, during the lifetime of the holder
thereof, only by him or her. The holder of an option shall
have none of the rights of a stockholder until the shares
subject thereto shall have been registered in the name of
such holder on the transfer books of the Corporation.
9. Section 16(b) Compliance and Bifurcation of Plan
It is the intention of the Corporation that, if any of
the Corporation's equity securities are registered pursuant
to Section 12(b) or 12(g) of the Exchange Act, the Plan
shall comply in all respects with Rule 16b-3 under the
Exchange Act and, if any Plan provision is later found not
to be in compliance with such Section, the provision shall
be deemed null and void, and in all events the plan shall be
construed in favor of its meeting the requirements of Rule
16b-3. Notwithstanding anything in the Plan to the
contrary, the Board, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the
use of any provision of the Plan to participants who are
officers and directors subject to Section 16 of the Exchange
Act without so restricting, limiting or conditioning the
Plan with respect to other participants.
10. Adjustments Upon Changes in Capitalization
Except as otherwise provided in Section 6(h) and
Section 6(i), in the event of any changes in the outstanding
stock of the Corporation by reason of stock dividends, stock
splits, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, split-ups, split-offs,
spin-offs, liquidations or other similar changes in
capitalization, or any distribution to stockholders other
than cash dividends, the Committee shall make such
adjustments, if any, in light of the change or distribution
as the Committee in its sole discretion shall determine to
be appropriate, in the number and class of shares or rights
subject to options and the exercise prices of the options
covered thereby. In the event of any such change in the
outstanding Common Stock of the Corporation, the aggregate
number and class of shares available under the Plan and the
maximum number of shares as
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to which options may be granted shall be appropriately
adjusted by the Committee.
11. Amendment and Termination
Unless the Plan shall theretofore have been terminated
as hereinafter provided, the Plan shall terminate on, and no
awards of options shall be made after, October 31, 2002;
provided, however, that such termination shall have no
effect on awards of options made prior thereto. The Plan
may be terminated, modified or amended by the stockholders
of the Corporation. The Board of Directors of the
Corporation may also terminate the Plan, or modify or amend
the Plan in such respects as it shall deem advisable in
order to conform to any change in any law or regulation
applicable thereto, or in other respects. The amendment or
termination of the Plan shall not, without the consent of
the recipient of any award under the Plan, alter or impair
any rights or obligations under any award theretofore
granted under the Plan.
12. Effectiveness of the Plan
The Plan shall become effective on November 1, 1992.
The Committee may in its discretion authorize the granting
of options, the exercise of which shall be expressly subject
to the conditions that (a) the shares of Common Stock
reserved for issuance under the Plan shall have been duly
listed, upon official notice of issuance, upon each stock
exchange in the United States upon which the Common Stock is
traded and (b) a registration statement under the Securities
Act of 1933, as amended, with respect to such shares shall
have become effective.
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