SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Nichols Research Corporation
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(Exact name of Registrant as specified in its charter)
Delaware 63-0713665
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(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) No.)
4040 Memorial Parkway, South, Huntsville, Alabama 35802-1326
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(Address of principal executive offices, including Zip Code)
Nichols TXEN Corporation Key Employee Incentive Stock Option Plan
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(Full Title of the Plan)
Michael J. Mruz
Nichols Research Corporation
4040 Memorial Parkway, South
Huntsville, Alabama 35802-1326
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(Name and Address of Agent for Service)
(256)883-1140
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(Telephone Number, including area code, of agent for service)
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The Registrant requests that the Registration Statement become
effective immediately upon filing pursuant to Securities Act Rule
462.
<PAGE>
CALCULATION OF REGISTRATION FEE
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Title of Proposed Maximum
Securities Amount Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share (1) Offering Price (1) Fee
- ---------- ---------- ---------------- ------------------ ------------
Common 16,861 $23.9375 $403,610 $119
Stock, shares
$.01 par
value(2)
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(1) This calculation, which is made solely for the purpose of determining the
amount of the registration fee, is made pursuant to Rule 457 and is based on a
price of $23.9375 per share, the average of the high and low prices of a share
of common stock on July 27, 1998, as reported on the Nasdaq National Market.
(2) Pursuant to an Agreement of Merger dated August 27, 1997, among
Registrant, TXEN, Inc. (now known as Nichols TXEN Corporation and hereinafter
referred to as "Nichols TXEN"), Nichols SELECT Corporation, and the
shareholders of Nichols TXEN, Registrant assumed, effective as of August 31,
1997, all of the outstanding options to purchase common stock of Nichols TXEN
under the Nichols TXEN Corporation Key Employee Incentive Stock Option Plan,
and such options became exercisable to purchase shares of Registrant's Common
Stock, with appropriate adjustments to the number of shares and exercise price
of each assumed option.
<PAGE>
PART I
Information Required in the Section 10(a) Prospectus
Item 1. PLAN INFORMATION.
This Registration Statement relates to the registration of 16,861 shares
of $.01 par value common stock of Nichols Research Corporation (the "Common
Stock") to be sold pursuant to the exercise of stock options granted to
employees of Nichols TXEN Corporation (formerly known as TXEN, Inc., and
hereinafter referred to as "Nichols TXEN") under the Nichols TXEN Corporation
Key Employee Incentive Stock Option Plan (the "Plan"). Documents containing
the information specified in Part I of Form S-8 promulgated by the Securities
Exchange Commission (the "Commission") will be sent or given to employees as
specified by Commission Rule 428(b).
Item 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
See response to Item 1 above.
PART II
Information Required in the Registration Statement
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Nichols Research Corporation (the
"Company") are hereby incorporated by reference as of their respective dates:
1) The Company's Annual Report on Form 10-K for the year ended August 31,
1997, and the Company's Quarterly Reports on Form 10-Q for the quar-
ters ended November 30, 1997, February 28, 1998, and May 31, 1998.
2) The description of the Company's Common Stock contained in the Company's
Form 8-A filed with the Commission on January 14, 1987, as amended by Form
8 filed with the Commission on August 18, 1989.
3) The Company's Current Report on Form 8-K dated August 31, 1997, and filed
with the Commission on September 11, 1997, as amended by Form 8-K/A filed
with the Commission on November 10, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934 after the date hereof and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES.
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the Common Stock issuable upon the exercise of options
granted under the Plan has been passed upon for the Company by the law firm of
Lanier Ford Shaver & Payne, P.C., 200 West Court Square, Suite 5000,
Huntsville, Alabama 35801. John R. Wynn, a member-stockholder of Lanier Ford
Shaver & Payne, P.C., is a director of the Company. As of July 27, 1998,
four attorneys of Lanier Ford Shaver & Payne, P.C., including Mr. Wynn, bene-
ficially owned 23,773 shares of the Company's Common Stock.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits
indemnification by the Company of any director, officer, employee or agent of
the Company or any person who is serving or was serving at the Company's
request as a director, officer, employee or agent of another corporation or
other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him
in connection with the defense of any threatened, pending or completed action
(whether civil, criminal, administrative or investigative), to which he is or
may be a party by reason of having been such director, officer, employee or
agent, provided that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The Company also has the power under Section
145 to indemnify persons set forth above from threatened, pending or completed
actions or suits by or in the right of the Company to procure a judgment in its
favor by reason of the fact that such person was a director, officer, employee
or agent of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or enterprise
against expenses actually and reasonably incurred by him in connection with the
defense or settlement of the action if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company, except that no indemnification can be made with regard to any claim,
issue or matter as to which the person has been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Company unless
and only to the extent that the Delaware Court of Chancery or the court in
which the action was brought determines that the person was fairly and
reasonably entitled to indemnity. Any indemnification (unless ordered by a
court) must be made by the Company only as authorized in the specific case upon
a determination that indemnification of the person is proper in the
circumstances because he has met the applicable standards of conduct. The
determination must be made by the Board of Directors by a majority vote of a
quorum consisting of directors who are not parties to the action, or if a
quorum is not obtainable or, even if obtainable, a quorum of disinterested
directors so directs, by independent counsel in a written opinion, or by the
stockholders. The Company may pay the expenses of an action in advance of
final disposition if authorized by the Board of Directors in a specific case,
upon receipt of an undertaking by the person to be indemnified to repay any
such advances unless it shall ultimately be determined that such person is
entitled to be indemnified by the Company as authorized by law.
Article Nine of the Company's By-laws provides for indemnification of the
Company's directors, officers, employees or agents to the extent permitted by
Section 145 of the Delaware General Corporation Law. Article Nine of the
Company's By-laws further provides that the Company may purchase and maintain
insurance on behalf of those persons described above as eligible for
indemnification for liability arising out of such person's duties or status
with the Company whether or not indemnification in respect of such liability
would be permissible.
The Company has in effect an officers and directors liability insurance
policy with Royal Insurance Company. The policy provides indemnity to the
directors and officers of the Company for the loss arising from any claim by
reason of a wrongful act where there is no corporate indemnification. The
insurance provides for the Company to be reimbursed for any indemnification it
may be required by statute or the Company's By-laws to make to any of its
directors and officers in connection with a claim by reason of a wrongful act.
Pursuant to exclusions, the policy covers negligent acts, errors, omissions or
breach of duty by a director or officer. The principal exclusions from
coverage include the following: (i) claims involving various violations of
Section 16(b) of the Securities Exchange Act of 1934; (ii) dishonest acts; and
(iii) libel, slander, or non-monetary damages. The policy has no deductible
amount per director or officer for each loss. A $500,000 deductible self-
insurance retention applies to the Company. The limit of liability under the
policy is $5,000,000 in the aggregate annually in excess of deductibles and
participations.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
Item 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION
4 Nichols TXEN Corporation Key Employee
Incentive Stock Option Plan
5 Opinion and Consent of Lanier Ford
Shaver & Payne, P.C.
23.1 Consent of Ernst & Young, LLP,
Independent Auditors
23.2 Consent of Lanier Ford Shaver &
Payne, P.C. (included in Exhibit 5)
Item 9. UNDERTAKINGS.
The Company 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 Secur-
ities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the 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 the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration state-
ment or any material change to such information in the 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 the periodic reports filed by the regis-
trant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed 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.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pur-
suant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8, and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Huntsville, State of Alabama, on the
27th day of July, 1998.
NICHOLS RESEARCH CORPORATION
Michael J. Mruz
By:__________________________________
Michael J. Mruz
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
Chris H. Horgen
_______________________ Chairman of the Board (Principal July 27, 1998
Chris H. Horgen Executive Officer)
Michael J. Mruz
_______________________ Chief Executive Officer, July 27, 1998
Michael J. Mruz President, Chief Operating
Officer and Director
_______________________ Senior Vice President and Vice
Roy J. Nichols -Chairman of the Board
Patsy L. Hattox
_______________________ Chief Administrative Officer, July 27, 1998
Patsy L. Hattox Corporate Vice President,
Secretary and Director
Roger P. Heinish
_______________________ Director July 27, 1998
Roger P. Heinish
John R. Wynn
_______________________ Director July 27, 1998
John R. Wynn
William E. Odom
_______________________ Director July 27, 1998
William E. Odom
James R. Thompson, Jr.
_______________________ Director July 27, 1998
James R. Thompson, Jr.
Phil E. DePoy
_______________________ Director July 27, 1998
Phil E. DePoy
Thomas L. Patterson
_______________________ President of Nichols TXEN July 27, 1998
Thomas L. Patterson Corporation and Director
Daniel W. McLaughlin
_______________________ Director July 27, 1998
Daniel W. McLaughlin
_______________________ Director
David Friend
Allen E. Dillard
_______________________ Chief Financial Officer and July 27, 1998
Allen E. Dillard Treasurer (Principal Financial
and Accounting Officer)
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4 Nichols TXEN Corporation Key Employee Incentive
Stock Option Plan
5 Opinion and Consent of Lanier Ford Shaver & Payne, P.C.
23.1 Consent of Ernst & Young, LLP, Independent Auditors
23.2 Consent of Lanier Ford Shaver & Payne, P.C.
(included in Exhibit 5)
NICHOLS TXEN CORPORATION
(formerly TXEN,Inc.)
KEY EMPLOYEE INCENTIVE STOCK OPTION PLAN
RECITALS
A. Pursuant to that certain Agreement entitled: "Stock Purchase Option
Agreement" by and among Nichols Research Corporation ("Nichols"),
TXEN, Inc. ("Company") and the Shareholders of the Company dated
December 16, 1994 as amended, Nichols has been granted an option to
acquire all of the outstanding shares of capital stock of the Company
for a price per share based upon a formula calculated with respect to
the net earnings of the Company for its fiscal year ending June 30,
1997.
B. This Plan is to provide incentive to certain key employees of the
Company to contribute to the profits of the Company by their ability,
industry, loyalty and exceptional service through making them
participants in the Company's success, provided that Nichols deems the
net earnings of the Company for the year to be sufficient and it
acquires all of the outstanding capital stock of the Company.
C. The Plan makes available 40,000 shares for key employees which will be
exercisable only if the Company's net earnings for its fiscal year
ending June 30, 1997 exceed $2,285,000.00 and Nichols acquires all of
the Company's outstanding shares of capital stock.
D. It is anticipated that holders of options to purchase the Company's
shares under this Plan will become entitled to purchase Nichols shares
in lieu of the Company's shares after Nichols has exercised its said
option with the option price per Nichols' share to be set to give the
holder the benefit of the appreciation of the value of the Company's
shares at the time of the acquisition by Nichols over the employee's
option price. No options to be granted hereunder will be exercisable
unless and until Nichols exercises its said option.
1. DEFINITIONS.
"Plan" means this Key Employee Incentive Stock Option Plan.
"Committee" means the Stock Option Plan Committee of the Board of
Directors described in paragraph 3 hereof.
"Class A Common Stock" means shares of the Company's Class A Common
Stock with par value as authorized on the date of adoption of this
Plan ($0.002), except as this definition may be modified as provided
in paragraph 6 hereof.
"Company" means TXEN, Inc., an Alabama corporation.
"Effective Date" means this plan shall be effective as of July 31,
1996.
"Employees" means persons (including officers, whether or not they are
also directors) employed by the Company or a subsidiary thereof, on a
full-time basis.
"Fair Market Value" means the fair market value per share as
established from time to time by the Committee.
"Nichols" means Nichols Research Corporation, a Delaware corporation.
"Option" means an Option, granted by the Company pursuant to the Plan,
to purchase shares of Class A Common Stock.
"Option Agreement" means a written agreement between the Company and a
Participant evidencing an Option.
"Option Period" means the period from the date of granting of an
Option to the date after which such Option may no longer be exercised.
"Option Price" means the price to be paid for shares of Class A Common
Stock being purchased pursuant to an Option.
"Participant" means an eligible Employee, as described in paragraph 4
hereof, who accepts an Option, or the estate, personal representative
or beneficiary thereof having the right to exercise an Option pursuant
to the provisions of paragraph 8(f) hereof, as the case may be.
2. PURPOSE.
The Plan is intended as an incentive and to encourage the holders of
the Options to increase their proprietary interest in the Company's success
and to induce them to enter the employment of the Company or encourage them
to remain in the employ of the Company.
3. ADMINISTRATION.
(a) The Plan shall be administered by a Stock Option Plan Committee,
made up of not less than two (2) persons, all of whom shall be members of
the Board of Directors and all of whom shall be "disinterested persons,"
designated by resolution of the Board of Directors. Committee members
shall not be eligible to receive Options under this Plan.
(b) Subject to the provisions of the Plan, the Committee shall have
authority in its discretion: (i) to construe and interpret the Plan and
all Options granted hereunder, and to determine the terms and provisions
(and amendments thereof) of the Options granted under the Plan, including
such terms and provisions (and amendments) as shall be required in the
judgment of the Committee to provide that Options under the Plan will be
incentive stock options under <section>422A of the Internal Revenue Code of
1986 as it now exists or may from time to time be amended and/or superseded
or to conform to any change in any law or regulation applicable thereto,
and as shall be required in the judgment of the Committee to satisfy the
conditions of Rule 16b-3 under the Securities Exchange Act of 1934 as it
now exists or may from time to time be amended and/or superseded or to
conform to any change in any law or regulation applicable thereto; (ii) to
define the terms used in the Plan and in the Options granted thereunder;
(iii) to prescribe, amend and rescind rules and regulations relating to the
Plan; (iv) to determine the individuals to whom and the time or times at
which Options shall be granted, the price, and the duration of leaves of
absence which may be granted to Participants without constituting a
termination of their employment for the purposes of the Plan; and (v) to
make all other determinations necessary or advisable for the administration
of the Plan. All determinations and interpretations made by the Committee
shall be binding and conclusive on all Participants in the Plan and on
their legal representatives and beneficiaries.
(c) A quorum for the transaction of business of the Committee shall
be two (2) members, and any action of the Committee with respect to the
Plan shall be taken by unanimous vote of the members present at a duly
constituted meeting of the Committee or by written consent of all of the
members of the Committee without the holding of a meeting.
4. ELIGIBILITY.
Subject to the exclusions relating to "disinterested persons" set
forth in paragraph 3 hereof, the individuals who shall be Participants
shall be (a) such Key Employees who are recommended by the Committee from
time to time; and (b) employees of corporations which are merged or
consolidated with the Company, or whose assets or stock is acquired by the
Company, who become Employees and who are similarly recommended.
5. STOCK AND NUMBER OF SHARES AVAILABLE FOR OPTIONS.
The shares of Class A Common Stock subject to Options and the
provisions of the Plan shall be shares of Class A Common Stock reacquired
by the Company. Subject to the provisions of paragraph 6 hereof, 40,000
shares of the Class A Common Stock of the Company will be reserved for
issue upon exercise of Options granted under the Plan. If any such Options
shall expire or terminate for any reason without having been exercised in
full, the unpurchased shares subject to Options heretofore granted shall
again be available for purposes of the Plan.
No Participant shall receive Options, first exercisable during any
single calendar year, for shares, the Fair Market Value of which
(determined at the time of grant of the Options) exceeds $100,000.
Accordingly, no Participant shall be entitled to exercise Options in any
single calendar year, except to the extent first exercisable in previous
calendar years, for shares of Class A Common Stock the value of which
(determined at the time of grant of the Options) exceeds $100,000.
Subject to the provisions of this paragraph 5, Participants shall be
granted Options for such number of shares of Class A Common Stock as may be
recommended by the Committee.
6. RECAPITALIZATION OR CHANGE IN PAR VALUE OF CLASS A COMMON STOCK.
The number of shares and the Option Price for the shares covered by
each outstanding Option shall all be proportionately adjusted for any
increase or decrease in the number of shares of Class A Common Stock
resulting from a subdivision or consolidation of the issued shares of Class
A Common Stock or the payment of a stock dividend on Class A Common Stock
or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Company. In the event of a change
in the Company's presently authorized Class A Common Stock which is limited
to a change of all of its presently authorized shares with par value, or
any change of the then authorized shares with par value into the same
number of shares without par value, or any change of the then authorized
shares with par value, the shares resulting from any such change shall be
deemed to be Class A Common Stock as defined in paragraph 1. In the event
that the outstanding shares of Class A Common Stock of the Company shall be
changed into or exchanged for a different number or kind of shares of stock
or other securities of the Company, of Nichols, or of another corporation,
whether through reorganization, recapitalization, stock split-up,
combination of shares, sale of assets, merger or consolidation, whether or
not the Company shall be the surviving corporation then, there shall be
substituted for each share of Class A Common Stock subject to any such
Option and for each share of Class A Common Stock reserved for issuance
pursuant to the Plan but not yet covered by an Option the number and kind
of shares of stock or other securities into which each outstanding share of
Class A Common Stock shall be so changed or for which each such share shall
be exchanged. In the event there shall be any change, other than as
specified above in this paragraph 6, in the number or kind of shares then
subject to an Option or Options and of the shares theretofore reserved for
issuance pursuant to the Plan but not yet covered by an Option, such
adjustment shall be made by the Committee and shall be effective and
binding for all purposes of the Plan and of each Option hereunder and each
Stock Option Agreement hereunder entered into in accordance with the Plan.
No adjustment or substitution provided for in this paragraph 6 shall
require the Company to buy or sell a fractional share under any Stock
Option Agreement, and the total substitution or adjustment with respect to
each Stock Option Agreement hereunder shall be limited accordingly.
7. EFFECTIVE AND EXPIRATION DATES OF THE PLAN.
Options may be granted for five years from the date of the approval of
the Plan as provided in paragraph 12 or the date on which the Plan is
adopted by the Board of Directors, whichever date is earlier. Any Option
outstanding under the Plan at the time of termination of the Plan shall
remain in effect until such Option shall have been exercised, shall have
expired in accordance with its terms, or shall have been terminated by
mutual consent of the parties.
8. TERMS AND CONDITIONS OF OPTION AGREEMENTS.
Option Agreements shall be in such form as the Committee shall, from
time to time, recommend and all Option Agreements (other than substitute
stock options) shall comply with and be subject to the following terms and
conditions:
(a) MEDIUM AND TIME OF PAYMENT: An Option shall be exercised in the
manner set forth in the Option Agreement relating thereto and payment in
full for all shares being purchased at the time shall be made
coincidentally therewith. Such payment shall be in United States dollars
effected by means of cash, certified check, bank draft, promissory note, or
a combination of the foregoing all in the sole discretion of the Committee.
Alternatively, such payment may be made, in whole or in part, in shares of
Class A Common Stock of the Company, and any such shares so tendered in
payment shall be valued for such purpose at the then Fair Market Value.
(b) OPTION PRICE: Subject to the provisions of paragraph 6 hereof,
no Option Price shall be less than one hundred percent (100%) of the Fair
Market Value of the shares of Class A Common Stock on the date of the
granting of the Option, provided that in the case of an Option granted to
any person then owning more than 10% of the voting power of the Company's
stock, the purchase price shall be not less than one hundred ten percent
(110%) of the Fair Market Value of the shares subject to the Option.
(c) OPTION PERIOD: The Option Period shall not be more than five
years from the date the Option is granted.
(d) DATE AND AMOUNT OF EXERCISE: A Participant must remain in the
employ of the Company for two years from the date the Option is granted
before he can exercise any part of it, and he may thereafter exercise the
Option during the remaining three year term of the Option Period, provided
that Nichols must have acquired all of the capital stock of the Company.
The Options granted to key employees shall only be exercisable if the
Company's net earnings after income taxes exceed $2,285,000 for its fiscal
year ending June 30, 1997 as shown in its audited financial statement for
such period. The Committee shall have the authority to waive or modify
such requirement from time to time as to one or more Participants.
(e) CESSATION OF EMPLOYMENT OF A LIVING PARTICIPANT: In all cases of
cessation of employment of a living Participant after two years from the
date of grant other than by reason of normal retirement, the Participant
must exercise his Options within thirty (30) days after the date he ceases
to be an Employee of the Company or any subsidiary of the Company or such
Options shall automatically terminate; in the event of normal retirement a
Participant shall have ninety (90) days in which to exercise his Options.
(f) DEATH OF A PARTICIPANT: In the event of the death of a
Participant during employment after two years from the date of his Option,
or within the thirty or ninety day periods mentioned in paragraph 8(e),
whichever is applicable, his estate or personal representative, as the case
may be, shall have the right to exercise his Option at any time within
twelve (12) months from the date of his death unless such time is shortened
by the requirements of paragraph 8(c). In the event of the death of a
Participant, a condition of exercising any Option shall be the delivery to
the Company of such tax waivers and other documents as the Committee shall
determine to be necessary or desirable.
(g) COMPLIANCE WITH LAWS RELATING TO THE SALE OF SECURITIES: The
exercise of any Option shall, at the election of the Company, be contingent
upon receipt by the Company of a written representation by the Participant
that at the time of such exercise it is the intention of the Participant
exercising the Option to acquire the shares being purchased for investment
and not with a view to, or in connection with, resale or distribution of
any Stock of the Company, and to hold said shares indefinitely, or, in the
alternative, at the Company's sole election, such action shall be taken by
the Company and the Participant prior to the issuance of the shares as the
Company shall consider necessary to comply with applicable laws and
regulations relating to the sale of securities.
(h) MERGER AND DISSOLUTION: Subject to any required action by the
stockholders of the Company, if the Company shall participate in any merger
or consolidation, whether or not the Company is the surviving corporation
in such merger or consolidation, any Option shall pertain to and apply to
the number and class of the securities to which the Participant would have
been entitled pursuant to the terms of the agreement of merger or
consolidation, if, immediately prior to such merger or consolidation, the
Participant had been the holder of record of a number of shares of Class A
Common Stock equal to the number of shares covered by such unexercised
portion of his Option. In a dissolution or liquidation of the Company
every outstanding Option shall terminate.
(i) ASSIGNABILITY: No Option shall be assignable or transferable
except by will or by the laws of descent and distribution. During the
lifetime of a Participant, the Option shall be exercisable only by him.
The executors, administrators, legal representatives, distributees and
legatees of a Participant are, after the death of such Participant,
referred to as the "Participant" with respect to any Options granted to
such Participant.
(j) RIGHTS AS A STOCKHOLDER: A Participant shall have no rights as a
stockholder with respect to shares covered by his Option until the date of
the issuance or transfer of shares to him. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date
such shares are issued or transferred.
(k) EFFECT OF OTHER OUTSTANDING OPTIONS: An Option shall be
exercisable whether or not there is outstanding (within the meaning of the
applicable provisions of the Internal Revenue Code) any stock option
theretofore granted to the Participant to purchase stock in the Company or
any corporation which on the date of the grant of the Option is a parent or
subsidiary corporation of the Company or any predecessor corporation of any
such corporation.
(l) DISPOSITION OF SHARES PRIOR TO TWO YEARS: If a Participant shall
dispose of any of the shares purchased pursuant to an Option within two (2)
years from the date of the granting of the Option or within one (1) year
from the date the shares were acquired by him, then, in order to provide
the Company with the opportunity to claim the benefit of any income tax
deduction which may be available to it under the circumstances, the
Participant shall promptly notify the Company of the dates of acquisition
and disposition of such shares, the number of shares so disposed of, and
the consideration, if any, received for such shares.
(m) OTHER PROVISIONS: Option Agreements shall contain such other
terms and conditions not inconsistent with the provisions of this paragraph
8 or the other provisions of the Plan as the Committee shall recommend and
the Board of Directors shall deem advisable.
9. INDEMNIFICATION AND EXCULPATION.
(a) Each person who is or shall have been a member of the Board of
Directors or of the Committee shall be indemnified and held harmless by the
Company against and from any and all loss, cost, liability or expense that
may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit or proceeding to which he may be a
party or in which he may be involved by reason of any action taken or
failure to act under this Plan and against and from any and all amounts
paid by him in settlement thereof (with the Company's written approval) or
paid by him in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding
of his bad faith; subject, however, to the condition that upon the
institution of any such claim, action, suit or proceeding against him, he
shall in writing give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on
his behalf. The foregoing right of indemnification shall not be exclusive
of any other right to which such person may be entitled as a matter of law
or otherwise, or any power that the Company may have to indemnify him or
hold him harmless.
(b) Each member of the Board of Directors or of the Committee, and
each officer and employee of the Company shall be fully justified in
relying or acting upon any information furnished in connection with the
administration of this Plan by any person or persons other than himself.
In no event shall any person who is or shall have been a member of the
Board of Directors or of the Committee, or an officer or employee of the
Company be liable for any determination made or other action taken or any
omission to act in reliance upon any such information or for any action
(including the furnishing of information) taken or any failure to act, if
in good faith.
10. DISCONTINUANCE AND AMENDMENT OF THE PLAN.
The Board of Directors may, from time to time, alter, amend, suspend,
or discontinue the Plan with respect to any shares as to which Options have
not been granted. The Board of Directors may not without the consent of
the Participant to whom any Option shall theretofore have been granted,
alter, amend, suspend or discontinue the Plan with respect to shares as to
which Options have been granted to such Participant, if the effect of such
alteration, amendment, suspension or discontinuance would be to adversely
affect the rights of such Participant under such Option. The Board of
Directors may not amend the Plan without the affirmative votes of the
holders of a majority of the securities of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with
the applicable laws of the state in which the Company is incorporated, if
such amendment would (a) materially increase the benefits accruing to
Participants under the Plan; (b) materially increase the number of shares
which may be issued under the Plan; or (c) materially modify the
requirements as to eligibility for participation in the Plan.
11. APPLICATION OF PROCEEDS.
The proceeds received by the Company from the sale of stock pursuant
to Options will be used for general corporate purposes.
12. TIME OF GRANTING OF OPTIONS.
Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board of Directors or the shareholders of the Company and no
action taken by the Committee shall constitute the granting of any Option
hereunder. The granting of an Option pursuant to the Plan shall take place
only when a written Option Agreement shall have been duly executed and
delivered by or on behalf of the Company and the employee to whom such
Option is granted.
13. SHAREHOLDER APPROVAL OF PLAN.
This Plan shall become effective upon the adoption by the Board of
Directors, either at a meeting or by unanimous written consent, subject to
the approval thereof by Nichols and by holders of a majority of the
Company's voting shares present in person or by proxy at a duly constituted
meeting or by unanimous written consent. Such shareholder approval must be
within twelve months after the Plan is adopted by the Board of Directors.
14. SAVING CLAUSE.
Any provision of this Plan which, if given effect, would disqualify
any Option granted hereunder as an "incentive stock option" under the terms
of the Internal Revenue Code of 1986, or would disqualify the Plan from
exemption from the operation of <section>16(b) of the Securities Exchange
Act of 1934, shall be null and void and of no effect, and any such
provision shall be deemed not to be a part of this Plan for purposes of
construction hereof.
EX-5
OPINION OF LEGAL COUNSEL RE: LEGALITY
Lanier Ford Shaver & Payne, P.C.
P.O. Box 2087
Huntsville, AL 35804
July 27, 1998
Nichols Research Corporation
4040 Memorial Parkway, S.
Huntsville, Alabama 35802
Gentlemen and Ladies:
As counsel for Nichols Research Corporation (herein called the
"Corporation"), we are familiar with the records of the proceedings by
which its Certificate of Incorporation has from time to time been amended,
the records of the proceedings by which the shares of its common stock have
from time to time been issued, and the proceedings by which the outstanding
options granted under the Nichols TXEN Corporation Key Employee Incentive
Stock Option Plan (herein called the "Plan") were assumed by the
Corporation.
We have also reviewed such documents and records as we have deemed
necessary to enable us to express an informed opinion with respect to the
matters covered hereby.
Based upon the foregoing, we are of the option that the 16,861 shares
of common stock of the par value of $.01 each of the Corporation that may
be issued and sold from time to time upon the exercise of options granted
in accordance with the Plan will be duly authorized for issuance and will,
when issued, sold and paid for in accordance with the Plan and for a price
of not less than $.01 per share, be validly issued, fully paid and
nonassessable, and no personal liability will attach to the holders thereof
under the laws of the State of Delaware in which the Corporation is
incorporated and in the State of Alabama in which its principal place of
business is located.
We hereby consent to the use of our name in the Registration Statement
(Form S-8), pertaining to the Plan as counsel who has passed upon the
legality of the shares of common stock that may be issued and sold under
the Plan, and to the use of this opinion as a part of such Registration
Statement as required by Section 7 of the Securities Act of 1933, as
amended.
Sincerely,
LANIER FORD SHAVER & PAYNE P.C.
Elizabeth W. Abel
By:_______________________________
Elizabeth W. Abel
Member-Shareholder
EX-23.1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8, No. 333-___________) pertaining to the Nichols TXEN
Corporation Key Employee Incentive Stock Option Plan of our report
dated October 8, 1997, with respect to the consolidated financial state-
ments of Nichols Research Corporation included in its Annual Report
(Form 10-K) for the year ended August 31, 1997, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Birmingham, Alabama
July 30, 1998
