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 issuer as specified in its charter)
Delaware 63-0713665
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4040 Memorial Parkway, South, Huntsville, Alabama 35802-1326
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(Address of principal executive offices, including Zip Code)
Incentive Stock Option Plan of 1988 of Welkin Associates, Ltd.
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(Full Title of the Plan)
Michael J. Mruz
Nichols Research Corporation
4040 Memorial Parkway, South
Huntsville, Alabama 35802-1326
(256)883-1140
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(Name, Address and Telephone Number, including
area code, of Agent for Service)
With a Copy to:
John R. Wynn, Esq.
Lanier Ford Shaver & Payne, P.C.
P.O. Box 2087
Huntsville, Alabama 35804
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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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Proposed
Title of Proposed Maximum
Securities Amount Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered Per Share (1) Price Fee
- ---------- ---------- -------------- --------- ------------
Common Stock 28,335 $23.375 $662,331 $196
$.01 par shares
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 $23.375 per share, the average of the high and low price of a share
of common stock on August 3, 1998, as reported on the Nasdaq National
Market.
(2) Pursuant to an Agreement and Plan of Merger dated as of June 26, 1998,
among Registrant, Welkin Associates, Ltd. ("Welkin"), and WAL Acquisition
Company, Inc., Registrant assumed, effective as of July 28, 1998, all of the
outstanding options to purchase common stock of Welkin under the Incentive
Stock Option Plan of 1988 of Welkin Associates, Ltd., 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 Section 10(a) Prospectus
Item 1. PLAN INFORMATION.
This Registration Statement relates to the registration of 28,335 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 Welkin Associates, Ltd. ("Welkin") under the Incentive Stock
Option Plan of 1988 of Welkin Associates, Ltd. (the "Plan"). Documents
containing the information specified in Part I of Form S-8 promulgated by the
Securities and Exchange Commission (the "Commission") will be sent or given to
participants in the Plan 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") with the Commission 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 quarters ended
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
registration statement on Form 8-A filed with the Commission on January 14,
1987, as amended by Form 8 filed with the Commission on August 18, 1989; and
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
securites 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
(4) attorneys of Lanier Ford Shaver & Payne, P.C., including Mr. Wynn,
beneficially 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 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 Incentive Stock Option Plan of 1988 of Welkin
Associates, Ltd.
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
Securities Act.
(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 informa-
tion 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 maxi-
mum 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
plan of distribution not previously disclosed in the registration
statement 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 perio-
dic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by refer-
ence 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
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
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant 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 of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
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
5th day of August, 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
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Chris H. Horgen
_________________________ Chairman of the Board August 6, 1998
Chris H. Horgen (Principal Executive Officer)
Michael J. Mruz
_________________________ Chief Executive Officer, August 5, 1998
Michael J. Mruz President, Chief Operating
Officer and Director
Roy J. Nichols
_________________________ Senior Vice President and Vice- August 6, 1998
Roy J. Nichols Chairman of the Board
Patsy L. Hattox
_________________________ Chief Administrative Officer, August 6, 1998
Patsy L. Hattox Corporate Vice President,
Secretary and Director
Thomas L. Patterson
_________________________ President of NicholsTXEN August 6, 1998
Thomas L. Patterson Corporation and Director
<PAGE>
Roger P. Heinish
_________________________ Director August 6, 1998
Roger P. Heinish
John R. Wynn
_________________________ Director August 10, 1998
John R. Wynn
_________________________ Director
William E. Odom
James R. Thompson, Jr.
_________________________ Director August 6, 1998
James R. Thompson, Jr.
_________________________ Director
Phil E. DePoy
_________________________ Director
Daniel W. McGlaughlin
_________________________ Director
David Friend
Allen E. Dillard
_________________________ Chief Financial Officer and August 6, 1998
Allen E. Dillard Treasurer (Principal Financial
and Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
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4 Incentive Stock Option Plan of 1988 of
Welkin Associates, Ltd.
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)
INCENTIVE STOCK OPTION PLAN OF 1988
OF
WELKIN ASSOCIATES, LTD.
THIS IS THE INCENTIVE STOCK OPTION PLAN OF 1988 ("the Plan") of Welkin
Associates, Ltd. ("the Corporation"), under which options may be granted
from time to time to eligible employees of the Corporation or any of its
subsidiary corporations ("the Subsidiaries") to purchase shares of the
Corporation, subject to the limitations, provisions and requirements
hereinafter stated. The Plan is as follows:
1. PURPOSE
The general purpose of the Plan is to aid in developing and retaining
key employees capable of assuring the future success of the Corporation.
The Plan is designed to aid the Corporation in attracting and retaining the
services of key employees by offering such personnel additional incentives
to put forth maximum efforts for the success of the business, to afford
them opportunities to obtain or increase a proprietary interest in the
Corporation on a favorable basis, and thereby to have an opportunity to
share in its success.
2. ADMINISTRATION
The Plan shall be administered by the Board of Directors of the
Corporation.
The interpretation and construction by the Board of any provisions of
the Plan or of any option granted under it shall be final. No member of
the Board of Directors shall be liable for any action or determination made
in good faith with respect to the Plan or any option granted under it.
3. ELIGIBILITY
The persons who shall be eligible to receive options shall be such key
employees (including officers, whether or not they are directors) of the
Corporation or its Subsidiaries (as such term is defined in Section 425 of
the Internal Revenue Code of 1954) existing from time to time as the Board
shall select from time to time. An optionee may hold more than one option,
but only on the terms and subject to the restrictions hereafter set forth.
No option shall be granted hereunder to any employee if, at the time
of the grant, such employee owns stock representing more than ten (10)
percent of the total combined voting power of all classes of stock of the
Corporation, its parent or Subsidiaries. This stock ownership limitation
will not apply if the option price is at least 110 percent of the fair
market value (at the time the option is granted) of the stock subject to
the option, and the option by its terms is not exercisable more than five
(5) years from the date it is granted.
4. STOCK
The stock subject to the options shall be shares of the Corporations's
authorized but unissued or reacquired $1.00 par value common stock,
hereafter sometimes called Capital Stock. The aggregate number of shares
which may be issued under such options shall not exceed 17,500. This
number shall be appropriately adjusted if the number of the Corporation's
issued shares shall be increased or reduced by change in par value,
combination, split-up, reclassification, distribution of dividend payable
in stock, or the like.
In the event that any outstanding option under the Plan for any reason
expires or is terminated, the shares of such option may again be subjected
to an option under the Plan.
5. TERMS AND CONDITIONS OF OPTIONS
Incentive Stock Options granted pursuant to the Plan by the Board
shall be evidenced by agreements in such form as the Board shall from time
to time approve, which agreements shall comply with and be subject to the
following terms and conditions:
(a) NUMBER OF SHARES
Each option shall state the number of shares to which it
pertains.
(b) OPTION PRICE
Each option shall state the option price, which shall be not less
than 100% of the fair market value of the shares of Capital Stock of
the Corporation on the date of the granting of the option, as
determined by the Board at the time of the grant in accordance with
applicable provisions of the Internal Revenue Code and Treasury
Department rulings and regulations thereunder.
(c) MEDIUM AND TIME OF PAYMENT
The option price shall be payable in United States dollars upon
the exercise of the option and may be paid by Cashier's, Certified or
other check.
(d) APPLICABILITY OF THE STOCK REPURCHASE AGREEMENT OF JUNE 10, 1988
As a condition of exercising an option granted under the Plan,
the optionee must understand and agree to execute and be bound by the
terms of the Welkin Associates, Ltd., Stock Repurchase Agreement dated
June 10, 1988, which provides that any Stockholder leaving the
Corporation or otherwise needing to dispose of his shares must offer
those shares for sale to the Corporation or other Stockholders.
Legends restricting the sale, transfer, pledge or hypothecation of the
stock will be affixed to each certificate representing stock acquired
through exercise of an option granted under this Plan.
(e) TERM AND EXERCISE OF OPTIONS
No option shall be exercised prior to the expiration of twelve
months from the date of granting thereof. Subject to the right of
cumulation provided in the last sentence of this Article 5(e), each
option shall be exercisable as to not more than twenty-five percent
(25%) of the total number of shares covered thereby during each
consecutive twelve-month period commencing on a date twelve months
after the granting of the option until all shares covered by the
option shall have been purchased. No option shall be exercisable
after the expiration of ten years from the date it is granted. (For
rules applicable to ten-percent shareholders, see Article 3 hereof.)
Not less than one hundred shares may be purchased at any one time
unless the number purchased is the total number at the time
purchasable under the option. During the life-time of the optionee,
the option shall be exercisable only by him and shall not be
assignable or transferable by him, and no other person shall acquire
any rights therein. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, in any subsequent
period but not later than ten years from the date the option is
granted.
(f) PRIOR OUTSTANDING OPTION
No option (for purposes of this Article 5(f) called New Option)
shall be exercisable while there is outstanding any Incentive Stock
Option (as defined in Section 422A of the Internal Revenue Code),
granted under this or any other Plan before the granting of the New
Option, to the person to whom the New Option is granted, to purchase
stock in the Corporation or in a corporation which, at the time the
New Option is granted, is a parent or subsidiary corporation (as those
terms are defined in Section 425 of the Internal Revenue Code of 1954)
of the Corporation, or is a predecessor corporation of the
Corporation, or of such parent or subsidiary corporation.
(g) MAXIMUM AMOUNT OF OPTIONS THAT MAY BE GRANTED
The aggregate fair market value (determined as of the time the
option is granted) of the stock for which any employee may be granted
options in any calendar year (under all Incentive Stock Option plans,
as described in Section 422A of the Internal Revenue Code of 1954, of
the Corporation, its parent or Subsidiaries) shall not exceed one
hundred thousand dollars plus any unused limit carryover to that year,
as defined in Article 5(h) hereof.
(h) CARRYOVER OF UNUSED LIMIT
If one hundred thousand dollars exceeds the aggregate fair market
value (determined as of the time the option is granted) of the stock
for which an employee was granted options in any calendar year (under
all Incentive Stock Option plans, as described in Section 422A of the
Internal Revenue Code of 1954, of his employer corporation and its
parent and subsidiary corporations), one-half of such excess shall be
unused limit carryover to each of the three succeeding calendar years.
The amount of the unused limit carryover from any calendar year which
may be taken into account in any succeeding calendar year shall be the
amount of such carryover reduced by the amount of such carryover which
was used in prior calendar years. For purposes of the previous
sentence the amount of options granted during any calendar year shall
be treated as first using up the $100,000 limitation of Article 5(g)
hereof, and then shall be treated as using up unused limit carryovers
to such year in the order of the calendar years in which the
carryovers arose.
(i) TERMINATION OF EMPLOYMENT EXCEPT DEATH
In the event that an optionee shall cease to be employed by the
Corporation or Subsidiaries for any reason other than his death and
shall be no longer in the employ of any of them, no option shall be
exercisable by such optionee. Whether authorized leave of absence or
absence for military or governmental service shall constitute
termination of employment, for purposes of the Plan, shall be
determined by the Board, which determination shall be final and
conclusive.
(j) DEATH OF OPTIONEE AND TRANSFER OF OPTION
If the optionee shall die while in the employ of the Corporation
or a Subsidiary and shall not have fully exercised the option, the
option may be exercised, subject to the condition that no option shall
be exercisable after the expiration of ten years from the date it is
granted, to the extent that the optionee's right to exercise such
option had accrued pursuant to Article 5(e) of the Plan at the time of
his death and had not been previously exercised, at any time prior to
one year after the date of the optionee's death, which date shall not
in any event be later than ten years from the date the option is
granted, by the executors or administrators of the optionee's estate
or by any person or persons who shall have acquired the option
directly from the optionee by bequest or inheritance.
No option shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution.
As a condition of exercising such option, the executor,
administrator, or inheritor must understand and agree to execute and
be bound by the terms of the Welkin Associates, Ltd., Stock Repurchase
Agreement dated June 10, 1988, which, among other things, specifically
provides that the estate of such deceased optionee must offer shares
of stock purchased pursuant to this Article 5(j) for sale to the
Corporation or other Stockholders within 210 days of exercise of the
option. Legends restricting the sale, transfer, pledge or
hypothecation of the stock will be affixed to each certificate
representing stock acquired through exercise of such option.
(k) RECAPITALIZATION, MERGER, LIQUIDATION, ETC.
Subject to any required action by the Stockholders, the number of
shares of Capital Stock covered by each outstanding option and the
price per share thereof in each such option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares
of Capital Stock of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend (but only
on the Capital Stock) or any other increase or decrease in the number
of such shares effected without receipt of consideration by the
Corporation.
Subject to any required action by the Stockholders, if the
Corporation shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain to and apply to
the securities to which a holder of the number of shares of Capital
Stock subject to the option would have been entitled. In the event
that the Corporation is succeeded by another corporation in a
reorganization, merger, consolidation, sale or acquisition of property
or stock, or liquidation, or in the event that the Corporation is
dissolved, each outstanding option will terminate, provided that each
optionee shall, in such event, if a period of two years from the date
of the option shall have expired, have the right immediately prior to
such reorganization, dissolution or liquidation, merger or
consolidation, sale or acquisition to exercise his option in whole or
in part without regard to the installment provisions of Article 5(e)
of the Plan.
In the event of a change in the Capital Stock of the Corporation
as presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from
any such change shall be deemed to be the Capital Stock within the
meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding and
conclusive, provided that each option granted pursuant to this Plan
shall not be adjusted in a manner that causes the option to fail to
continue to qualify as an Incentive Stock Option within the meaning of
Section 422A of the Internal Revenue Code of 1954.
Except as hereinbefore expressly provided in this Article 5(k),
the optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of any class or by reason of any dissolution, liquidation,
merger, or consolidation or spin-off of assets or stock of another
corporation, and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any
class, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Capital Stock
subject to the option.
The grant of an option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or
assets.
(l) RIGHTS AS A STOCKHOLDER
An optionee or a transferee of an option shall have no rights as
a Stockholder with respect to any shares covered by his option until
the date of the issuance of a stock certificate to him for such
shares. No adjustments shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in
Article 5(k) hereof.
(m) INVESTMENT PURPOSES
Each option under the Plan shall be granted on the condition that
the purchases of stock thereunder shall be for investment purposes,
and not with a view to resale or distribution except that in the event
that stock subject to such option is registered under the Securities
Act of 1933, as amended, or in the event a resale of such stock
without such registration would otherwise be permissible, such
condition shall be inoperative if in the opinion of counsel for the
Corporation such condition is not required under the Securities Act of
1933 or any other applicable law, regulation or rule of any
governmental agency.
(n) OTHER PROVISIONS
The option agreements authorized under the Plan shall contain
such other provisions, including, without limitation, restrictions
upon the exercise of the option, as the Board of Directors of the
Corporation shall deem advisable.
6. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time, within
a period of ten years from the date the Plan is adopted, or the date the
Plan is approved by the Stockholders, whichever is earlier.
7. INDEMNIFICATION OF THE BOARD OF DIRECTORS
In addition to such other rights of indemnification as they may have
as directors, the members of the Board shall be indemnified by the
Corporation against the reasonable expenses, including attorneys' fees
actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any option granted
thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected
by the Corporation) or paid by them in satisfaction of a judgement in any
action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such Board member
is liable for negligence or misconduct in the performance of this duties;
provided that within 60 days after institution of any such action, suit or
proceeding a Board member shall in writing offer the Corporation the
opportunity, at its own expense, to handle and defend the same.
8. AMENDMENT OF THE PLAN
The Board of Directors of the Corporation may, insofar as permitted by
law, from time to time, suspend or discontinue the Plan or revise or amend
it in any respect whatsoever except that without approval of the
Stockholders, no such revision or amendment shall change the number of
shares subject to the Plan, change the designation of the class of
employees eligible to receive options, decrease the price at which options
may be granted, or remove the administration of the Plan from the Board.
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of Capital
Stock pursuant to options will be used for general corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the optionee
to exercise such option.
11. APPROVAL OF STOCKHOLDERS
The Plan shall become effective on the date the Plan is adopted by the
Board of Directors of the Corporation, provided, however, any options
granted under the Plan shall be void and of no effect if the Plan is not
approved by the holders of a majority of the outstanding shares of Capital
Stock of the Corporation, which approval must occur within the period
beginning twelve months before and ending twelve months after the date the
Plan is adopted by the Board of Directors. Moreover, in the event such
options are granted under the Plan prior to approval of such Plan by the
holders of a majority of the outstanding shares of the Capital Stock of the
Corporation, such options shall not be exercisable until such approval is
obtained.
Date Plan adopted by the Board of Directors: June 10, 1988
Date Plan approved by Stockholders: June 10, 1988
EX-5
OPINION OF LEGAL COUNSEL RE: LEGALITY
LANIER FORD SHAVER & PAYNE, P.C.
P.O. Box 2087
Huntsville, Alabama 35804
August 10, 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 Incentive Stock Option Plan of 1988 of Welkin
Associates, Ltd. (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 opinion that the 28,335
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
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 1988
Incentive Stock Option Plan of Welkin Associates, Ltd., of our report dated
October 8, 1997, with respect to the consolidated financial statements 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
August 10, 1998
